My Email Exchange With Five Star Professonal's Media Manager

NOTE: I sent an email to Five Star Professional seeking answers to several questions.  The answers by Media Manager Jennifer Alexander appear in red below.

First, could you mail me a copy of the advertising insert from 5280 Magazine last September?  I don't subscribe to the magazine and I have never seen the insert.

I have attached a watermarked pdf of the section for you to review. [Posted at www.JimSmithColumns.com.]

Second, you mentioned adding a "minimum production requirement" this year, but you didn't indicate what that requirement is.  No, we don’t. The minimum production requirements are set once we have gathered all the data from each market. This keeps the research values relative to each market. How many seller sides and how many buyer sides must an agent have produced, and how do you get that information without access to the MLS? We contact all recent homebuyers in a given timeframe and ask them to evaluate up to two real estate agents. This gives each recent homebuyer the opportunity to evaluate an agent on both the buy side and the sell side.  

Third, do you provide any data or information to the awardee him/herself as to the responses you receive on that awardee?  No, we do not. Our standard research process encourages respondents to provide an evaluation of their real estate agent, either favorable or unfavorable. To encourage this kind of response, the respondent is assured anonymity. 

Fourth, is it not true that your only phone call to the awardee is by a telemarketer seeking the purchase of advertising space, reprints, plaques, etc.? No, this is not true. We reach out to each award candidate during the research phase, sometimes 3-5 times, before they are ever named a Five Star Professional.

 

Fifth, can you provide me with the rate card for each of those upsells?  (price for each size display ad in the supplement, plus other products they can purchase) I have attached an order form from the 2012 program in Denver. Please note that no one ever pays to be included on the list. We provide the listing in the magazine and on our website at no charge to the winners. The items contained on the attached order form are optional. [Posted at www.JimSmithColumns.com.] 

Sixth, do you inform awardees that they should not say they were selected "by 5280 Magazine" for this honor, that they may only say they are a "5280 Five Star Agent".  (This is from 5280 Publisher Dan Brogan's email, saying that would be wrong.)  Could you provide me with the written instructions you give to all awardees (not just the upsells) as to how they may promote their award? Our award guidelines are similar among all of our programs. Our standard guideline for how to refer to the award reads:  “Do not imply endorsement from Five Star Professional or the magazine. Correct use: Jane Doe is featured in 5280 Magazine as a 2012 Five Star Real Estate Agent. Incorrect Use: 5280 Magazine selected Jane Doe as a 2012 Five Star Real Estate Agent.”  Our Real Estate Award Guidelines are currently being improved and will be finalized shortly.

Seventh, I understand that 5280 Magazine provides you with a subscriber list so that you can mail all subscribers a survey form, apparently without knowing in advance that any given subscriber had a transaction within the study's timeframe.  Is that correct?  No. At one time we included a portion of magazine subscribers in our research activities, along with the complete list of recent homebuyers. We stopped doing this in Denver in 2011.  

If so, what percentage of your survey responses come from such a mailing versus other outreach.  All evaluations of real estate agents came from recent home buyers. For the 2012 program in Denver, we surveyed all homebuyers with a transaction of $150,000+  between February 2011 and October 2011. 

Assuming you have other outreach, who is your vendor for providing the contact info for buyers and sellers of homes in the target area and during the target timeframe?  All of our research is done internally. Information regarding the list vendor we use is proprietary to Crescendo Business Services. 

Eighth, what exactly is meant by "partnering" with 5280 Magazine?  It seems to me that the magazine is simply selling you advertising space.  Is the provision of their subscriber database for mailings (if true) the extent of your partnership, or is there some other aspect to it?   Again, we did not utilize the subscriber list in our research. Our partnership with magazines is a mutually beneficial relationship. The magazine provides an outlet for showcasing our award winners, and the magazine benefits by having high-quality content readers enjoy. Our program creates an opportunity for the magazine to set their reputation as a resource when looking for real estate-related content, which tends to be popular among readers.

Comments from 2012 Five Star Professionals About This Week's Column

NOTE: Prior to uploading this week's column to the newspapers, I sent a draft of it to 25 fellow Realtors -- many of them personal friends -- who had been named "Five Star Professionals."  I did this to make sure my column was accurate.  Here are their comments, edited for space and readability.

Jeri Groves, Groves Homes, LLC:

I think the whole 5280 thing IS a massive rip-off.  I have it on my signature, but won’t bother with the “extra” promotion in 2013.  It’s just another gimmick, I think.  I’m not a member of QSC, but it sounds like a very interesting program.  Since I get 99% of my business from referrals, I guess THAT’S the best “endorsement” anyone could ever want, right?

I just got the news that I’d been “selected”.  I did, in fact ASK how I was selected and they never presented an intelligible answer.  I have to think it’s on listing or sales volume.

 

Steve Kinney, RE/MAX Professionals:

I wasn’t aware that RatedAgent.com existed - and LOVE the concept.  I do very much like the 5-Star Program and feel that I get a good return on my $500ish annual investment for a minimally–upgraded ad. 

Like you, I often think the 5-Star Award is somewhat lacking in the way of credibility.   There are a number of consistently lousy brokers who are included there and it surprises me that they are invited to participate. 

Last year I was tempted to count the number of various ads and then do the calculations you did to see what the revenue they generated was.  My guess is that the 5-Star program is paying 5280 magazine something to participate since there is a significant additional cost to print a much-larger magazine – but at the same time, these lists for Realtors, doctors and other professionals surely drives traffic to the 5280 site and sells some copies of the magazine too.  

It’s been more than three years since I received the "award" the first time.  At that time I did have a brief conversation with the 5-Star representative, which may have been an interview of sorts, but that has not occurred again for the two subsequent "awards" as far as I can remember.  I'm pretty sure that the subsequent calls were solely sales calls. The first year, I asked who nominated me and I'm certain that I never heard who it was because I would have mailed them a thank you card – and I often wonder who nominated me and what the selection criteria was. 

I have REALLY wished that there was a better resource for information for prospective Buyers and Sellers to easily turn to for objective information and it appears that QSC will do that – and I'll put that on my e-mail footer.  And, I intend to participate.  If that information was more easily available, I think that the choices people make about who they chose to represent them would be significantly different. 

Interestingly – and maybe it’s sad — when I've mentioned in conversations or on e-mail footers my various accomplishments and designations, the one that gets the most attention, or "congratulations" comments is the 5-Star program!  The fact that I'm a part of the Realtor Roundtable, various fairly-impressive designations for repeatedly making RE/MAX's Platinum Club, consistently doing 50+ transactions a year, my volunteer work, etc., don’t command as much attention…   

 

Scott Matthias, RE/MAX Professionals:

I never have bought much into the 5280 Five Star Professional rating.  I have done QSC now for 3 years and feel it is the best rating service out there!  It is a true 3rd party getting our clients true opinion of our service!  

I did read your column and am in agreement.  I haven’t been contacted lately from 5280 because I never did agree to any of their upsell requests.  So, no, they have not contacted me recently or interviewed me.

 

Eric Mott, Innovative Real Estate:

We only heard from some of our clients who were contacted by 5280 asking if it was "for real", no data given to us as to "who" was included in surveys or anything from 5280 besides the upsell packages.

 

Joann Perito-Gonzalez, Avenues Unlimited:

As a professional involved in sales, I will always embrace an opportunity to get exposure.  As we all know, in any advertising it is seeing that ad, logo, whatever numerous times.  I have been able to capitalize on a very small budget to get exposure and it really does not matter to me who endorsed me or what they had to say.  That comes back in the form of repeat business and referrals, and the fact that they know they can pick up the phone and call me for any number of reasons AFTER our transaction.  Five Star Professional came to me and had a very affordable cost.  I chose a very small ad that I did NOT get to create, and I ordered some postcards.  So, for me, the cost to be in the Magazine and toot my horn a bit, was well worth it.  I use a

very subtle form of promoting it and am not out there yelling and screaming it to get listings.  I rarely, if ever, compete for my listings.  Just the nature of MY business.

The way it went down was I was contacted by the company that handles the Five Star search, so to speak, and they explained how they got my name.  I immediately asked them “what is this going to cost me,” as I am extremely skeptical of these type of phone calls.  They said it technically could cost me nothing, but that it would allow me to buy some space in the advertising section to further illuminate my being selected.  They explained how the process goes with the surveys to clients within a period of time. They said you must get a survey back with accolades and that they then contact the other people in the transaction and verify you are in good standing with DORA. 

They really did not push the advertising.  It made sense that it was worth going back to those clients within that time period and acknowledging the award and thanking “whoever” for filling out the survey.  Another way to stay in front of your folks.  I never felt pressured to purchase anything.  I chose to. 

When I did ask if you had to have a certain number of surveys returned, she said no.  She indicated I had a few, but she was not privy to those particular clients as she was at the latter end of the process at that point.  It did not really matter to me.  One, two, three, seven returned was not the issue.  It was that SOMEONE had taken the time, and the others became aware of that, as did the one or few that took the time.

Ann Connelly, Your Castle Real Estate:

I would agree with what you said about 5280 Five Star Professional.  Glad to see QSC getting more exposure.  I routinely refer clients to other QSC members across the nation and find the agent list extremely helpful on QSC's website.  Interestingly, last year 24 brokers (including me) at Your Castle Real Estate knew they were receiving the 5280 award and tried to get Five Star to let us have a group photo and pay for a half page ad.  They refused.  Don't know what will happen this year.  Good luck with your articles and thanks for contacting me.  

 

Jim Carroll, Keller Williams Avenues Realty:

The QSC program sounds like a good idea.  The question I would have is what would keep an agent from turning over his transactions that were not good and giving only the good ones.  I was not aware of the QSC program and have not signed up yet.  Thanks for the info.

I did not hear back from 5280 Magazine but their printed information says it is taken from surveys mailed out to past clients, title companies, & lenders.  I have a client & title company both tell me they received this survey about me & they filled it out giving high awards (of course) about me.  So I do know surveys were sent out.  Maybe all they need is one but I don’t know.

 

Buyers & Sellers Are Now Being Asked to Rate Agents at Participating Firms

[Printed Mar. 28, 2013, in the Jeffco editions of the Denver Post's YourHub section and in five Jeffco weekly newspapers -- with some added content]

In my Dec. 27th column I announced that the Denver Metro Association of Realtors (DMAR) had signed up with Quality Service Certification, Inc. (QSC) for its program under which participating brokerages provide the names and email addresses of all agents’ clients — both buyers and sellers — so that QSC can solicit feedback for the purpose of creating a valid rating system.  The results are published at www.RatedAgent.com. The program started Jan. 1st for DMAR members.  Some members of other metro area Realtor associations have been participating in the QSC program for about 3 years. 

Well, here we are at the end of March, and Denver agents are beginning to show up on that website. If you search Golden or other Jeffco cities on that website, you'll see my own rating.

Those agents who have had two or more surveys returned by their clients are being given numerical ratings on a scale of 1 to 5.  Very few agents have a rating of 5. Most have ratings in the high 4’s, which adds to the credibility of the system, unlike the Five Star Professional program touted by 5280 Magazine, where every agent is rated “Five Star.”

 

In the QSC program, you see actual ratings given by each client on a couple dozen criteria, which are different for buyers and sellers. Written comments are shown when provided in the survey responses.

Each agent who is rated gets to see the full response from each buyer and seller so that he or she can learn from their feedback. We do not get to delete unfavorable responses.  It’s all or nothing. We can’t pick and choose the good ones.

In the Five Star Professional program, the agent is not told who rated them and what they said. Instead they are simply told they have been awarded the designation and then asked if they would like to buy different size ads (written by the agent himself) in the advertising supplement which will appear in 5280 Magazine. A barebones listing without contact info is free, but the awardee can purchase a directory listing for $445 up to a 2-page spread for $9,295,  Based on their rate card, Five Star Professional’s earnings from its 58-page insert in September’s 5280 Magazine was just under $300,000 — not counting the hefty fees for wall plaques ($195-250), reprints ($1.95 each), extra copies ($5 each), postcards ($195-895), the license to display their award emblem ($295-395), and seven other items/services. 

 

The QSC program is supported financially by the National Association of Realtors and by the local Realtor associations, such as DMAR.  For DMAR members, participation is free.  The QSC program does have a $50 upsell to become “QSC Certified.”  Elsewhere, The QSC certification costs $199, but it has been reduced to $50 for DMAR members.  There is no other upsell, and no other fees.  I'm not charged, for example, to have the QSC widget on our website or on my email signature, linking to my online rating.

 

Participation is on the company level.  Individual Realtors only get to participate if their company signs up for it. 

 

As you hopefully already know, not all real estate agents are Realtors -- that is, members of a Realtor association.  Five Star Professional doesn't distinguish between Realtors and non-Realtors, but QSC is strictly a Realtor program, so you can be certain that any agent on www.RatedAgent.com is a Realtor.

 

If you'd like to see the 2012 Five Star Professional insert published in last September's 5280 Magazine, I have posted it at www.JimSmithColumns.com, along with the rate card referred to above. In separate posts on this blog, I'll share the feedback I got from several Five Star Professional awardees who got to preview this week's column before it was published.  In another post, I'll also share the email exchange I had with Five Star Professional's media manager, from whom I had hoped to get answers to such questions as how they acquire the buyer and seller lists for their surveys.  (That information is "proprietary.")

 

I invite readers of this blog -- especially those who disagree with this posting -- to use the comment option to add their own experiences and opinions on this subject.

Housing Is Recovering So Quickly, Might the Federal Reserve Raise Rates?

[Published Mar. 21, 2013, in the Denver Post and in five Jefferson County weekly newspapers]

First, let’s look at some market statistics.  No doubt you’ve heard — and maybe experienced — that homes started selling like hot cakes in January. This hot streak is still in evidence, with multiple offers on many listings driving up prices above what you’d think homes could appraise for. 

You’ve also heard that the average “days on market” is falling, but it’s actually falling faster than the statistics would indicate, because the average days on market is inflated by the number of houses that have been on the market for a long time but are suddenly selling.

For a more accurate picture of this turn-around, look at the days on market statistic for just those homes that have gone on the market since the first of the year:

About 60% of the homes listed and sold since Jan. 1st went under contract in 7 days or less. Roughly the same percentage of those that haven’t yet closed also went under contract in 7 days or less.  The average is 10 days on market.

But if you include all homes that closed in the last 30 days, the average is 81 days on market because of all those old listings that weren’t selling — until now.  My statistical analysis included only central Jeffco listings but the same dynamic is at work throughout the metro area.

The Federal Reserve, which has kept interest rates exceptionally low to spur the real estate market — which it considers essential to economic recovery as a whole — surely must be noticing this runaway market and reassessing its policies. I wouldn’t be surprised if interest rates will soon be allowed to rise more quickly than planned just a few months ago.

Once buyers get the feeling that the Fed is about to make such a change of policy, you can guess what will happen.  Even more buyers will get off the fence, and listings will be snapped up even quicker than they are being snapped up now — if that is possible.

We keep hearing that inventory is low, and that’s true. But consider this: as of March 18th, 16,731 new listings had been entered on Metrolist since Jan. 1st, but 8,887 of them (53%) are already sold or under contract. During the same period a year ago, 17,207 listings were entered, but only 5,452 of them  (32%) had sold or were under contract by March 18th of that year.

Is this a good time to put a home on the market? What do you think?

This Week's Featured New Listing Is a Bungalow Near Denver's City Park

[Published Mar. 21, 2013, in the Denver Post and in five Jefferson County weekly newspapers]

 

3011 Elizabeth Street, Denver CO

$185,000

Going on the MLS on March 20, 2013

 

Broker associate Jim Swanson just listed this short sale at 3011 Elizabeth Street, a few blocks north of Denver’s City Park golf course. It has a detached 1-car garage with access from both a driveway to the left of the house and from the alley. There is also a storage shed in the back yard.  As we like to say, this home has “great bones,” including hardwood floors under the wall-to-wall carpeting.  Some might consider this a fixer-upper, but the house has been well-maintained and most major systems have been updated, including furnace and windows. Basement is partially finished. Call 303-929-2727 for a showing.

 



New Recruiting Incentive at Golden Real Estate

Golden Real Estate has developed a reputation for its sustainable practices.  Our office is solar powered, and we accept Styrofoam 24/7/365 for recycling.  In 2010 we won Golden's Sustainability Award for Businesses.  Now we are providing free charging of agents’ plug-in cars.  This is intended to attract even more “green” agents.  (Broker/owner Jim Smith drives a Chevy Volt, which he charges both at home and office.)

 

Lenders Hire ‘Property Preservation’ Firms to Break Into Vacant Homes

[Published Mar. 14, 2013, in the Denver Post and in five Jefferson County weekly newspapers]

Lenders who suspect that a property on which they hold a mortgage may be abandoned (and the homeowner is behind on payments) routinely hire “property preservation” companies to break into the property, winterize it (to prevent damage from frozen pipes) and install new locks to secure the property. Such a property is considered “pre-foreclosure.”

“We call it a drill-out, not a break-in,” an asset manager for one such firm told me.  She said, “A break-in denotes a crime, but we’re authorized in the note to drill-out the lock and secure the property.”  She was referring to that lengthy promissory note which all homebuyers sign (without reading) at the closing table.

To the homeowner, and to me as the listing agent, such action is borderline criminal, especially when the company knows it is listed and doesn’t call the listing agent first.  Last week a neighbor of one of my listings — a lender-approved short sale that is closing soon — called me to report that a man was trying to break in. She gave me his name (Joe) and cell number and I reached him before he had finished breaking in.  Joe stopped what he was doing but had already done so much damage that my seller could only get in by using her garage remote. “My sign is in front. Why didn’t you call me,” I asked Joe. He said that his work order said not to call me. The asset manager I spoke with verified that this is Fannie Mae’s policy.

I have reached out to agents who list more distressed properties than I do. You can read some of their horror stories, including thefts of appliances, and submit your own horror stories on my blog, at www.JimSmithBlog.com.   [See posting below]

Other Agents Share Horror Stories with "Property Preservation" Teams

From Hussein Garcia, Brokers Guild Cherry Creek:

I had a listing that was owned by Bank of America. Of course you know that banks usually require 72 hours to approve the HUD. The buyer did their final walk through before closing and seen that plumbing as missing in the basement. He wouldn't close so I notified the asset manager. After a week of waiting (2 weeks went by) I got approval to repair through one of my vendors, it was repaired. We scheduled closing and buyer was doing walk through and guess what, it was stolen again! We had to go through another week of waiting for approval to repair before closing, and as you know Bank of America doesn't work in a timely fashion and using an out of state title company doesn't help any. I repaired again but this time with plastic piping and ask the neighbor to keep an eye out. The neighbor told me it was the company that did the initial trash out and they would visit the property frequently at night! I called them but could not prove anything. Finally got the house closed. The problem isn't the actual preservation company. The problem is the people they sub contract out to! Call me with any questions! Hope this helps your column as I sure do enjoy it and look for it every Thursday. 

From Kristal Kraft, The Berkshire Group

Last year I had a vendor for BofA going into a house to winterize.  He was given the lock box code to do so.  He changed the locks and instead of leaving my lockbox for me to pick up, he took it.  When I called him on it he said he didn't take it and to never call this number again!  I complained to BofA's vendor, they said they would replace the box but never did.

To make matters worse, the winterzation was never done.  The vendor merely taped over the sink and left a sign stating the house was winterized.  When I visited, I was compelled to turn on the faucet to check. The water came flowing out.  It was appalling to think this guy got paid for basically making a mess out of things.


From Jeri Groves, Groves Homes, LLC:
 
I just closed a single-loan short sale (Bank of America)—800 days after listing it!  And, the “property preservation” team from BOA went in and STOLE the washer, dryer and stove/oven/range (all part of the contract) sometime within the last 72 hours prior to closing.  They had changed the locks, so NO ONE knew the lock box code except my son (who actually was the listing broker), and we gave it to the Buyer’s agent for the walk-through.  The Sellers had moved and didn’t have access, we were paying the utilities so as to get it through inspections, etc., and there was no sign of forced entry.  I’m so tired of the criminality within the distressed property market.

Love to read your excellent, thought-provoking columns, and hope all is well with you--

More from Jeri Groves:

 
Hi, Jim.  You already have the instance in Brighton where the washer, dryer and stove/oven/range were stolen out of the property by the property preservation staff at Safeguard within 72 hours of closing—after 800 days on the market!  Before they stole the appliances, they had changed the locks AFTER it was under contract for the SEVENTH time, and AFTER I had told the negotiator at Bank of America that we were maintaining the property for inspections and appraisals.   We had installed batteries in all the smoke/fire detectors, and when they “winterized” and turned off the power, the batteries all went dead.  It’s not the fact that Brighton requires fire detectors in every room, so we had to replace batteries in all 10 fire detectors, it’s THE PRINCIPAL of WHY, WHY, WHY are you undoing what needs to be done to CLOSE this short sale transaction?  Then, when we bought four new carbon monoxide detectors and installed them, they came in and stole them right off the screws.  We had to AGAIN buy carbon monoxide detectors and install them…

On another transaction, the Seller had moved out after her husband committed suicide in the home because he was so distraught about losing the home to foreclosure.  Safeguard's contractor, again, went in and stole the washer and dryer.  The widow had moved to an apartment where there was a stack washer and dryer, and she had been very explicit about leaving the washer and dryer.  Well, they were gone, and the dust bunnies were ONLY present where they had been removed.  Interesting, huh?  Because no one goes into the house BEFORE property preservation, in most cases, unless the home is listed as a short sale, no one would know WHAT the sellers had left in the home.  To the property preservation people, what the banks don’t know won’t hurt them, right?  It’s illegal, it’s unfair, it’s unethical, but who ever said the banks (or their property preservation companies) would act legally, morally, fairly or ethically, right?  They’ve shown their true colors since 2008, and now that they’ve been deemed “too big to prosecute”, who knows what the next few years will bring.  As long as their profits increase 37% per QUARTER (Denver Post, 2/27/13, p. 17A), they have PLENTY of money to use for lobbying, so I don’t see any changes in the foreseeable future.

Two North Golden Bungalows Just Listed by Jim Smith

[Published Mar. 14, 2013, in the Denver Post and in five Jeffco weekly newspapers]

 

As I write this, there isn’t a single bungalow currently for sale in north Golden, so these two will probably sell quickly when they go on the MLS this week.  The one above is at 17 Washington Avenue and sits on a 6,935-sq.-ft. lot. It has 1,012 square feet of living space with 3 bedrooms and 1 bath (no basement). The detached garage is a 2-car tandem garage (or a 1-car garage with a large workshop space at the rear). There is also a storage shed in the spacious backyard. The front yard is graveled and can be used (as demonstrated in this picture) as extra off-street parking.  Listed at $280,000.

The other bungalow (above) is at 717 Iowa Street and sits on a 1/4-acre lot with a detached  2-car garage facing the side alley.  (There is another alley at the back.) The main floor has 911 sq. ft. of living space, with 2 bedrooms and one bath. There is an unfinished basement measuring 811 sq. ft. The parcel is legally two lots and could, with proper zoning approvals, accommodate a couple modern duplexes of the kind found on two adjoining parcels. Listed at $309,000.

Both properties are rentals with tenants currently in place, but could also, in time, be owner occupied.

For additional pictures and information on each of these bungalows, visit www.NorthGoldenHome.com. Then call your agent or me to arrange a showing.

Hot Market Makes ‘Pocket’ Listings and ‘Coming Soon’ Signs More Common

[Published Mar. 7, 2013, in the Denver Post and in five Jefferson County weekly newspapers]

Every listing agent lives for the opportunity to “double-end” a transaction — that is, to avoid giving up half his or her commission to a buyer’s agent. 

At, say, a 6% listing commission on a $400,000 home, that could mean earning $24,000 instead of less than $13,000.

Now that listings are selling quicker, we’re seeing agents even more eager to reduce the likelihood of paying that “co-op” commission.

Overall, less than 5% of transactions are double-ended.  Said another way, listing agents share their listing commission with a buyer’s broker more than 95% of the time. 

So, how do listing agents increase the chances of selling their own listings and doubling their earnings?

For me, increased direct marketing has been the primary technique.  Advertising my listings in this space, putting video tours on YouTube, and offering the free moving truck (and free labor if the buyer has no agent) have worked nicely for me, but once a listing is on the MLS, the chances are that one of the thousands of other agents out there is likely to find a buyer before I do.

Only by keeping a listing off the MLS does a listing agent significantly boost his or her chances of selling a listing.

MLS rules, however, say that a listing must be entered on the MLS within three days of signing the listing agreement. Nevertheless, by inserting a provision in the listing agreement that the broker shall keep the listing off the MLS until a specified date, the listing agent can override that requirement.

When an agent uses this technique, it is called a “pocket listing,” meaning that the listing is in his or her “pocket” and not available to other agents.

Is such a listing in the seller’s best interest (which agents are required to put ahead their own)?  Wouldn’t it be in the seller’s best interest to expose the listing as widely as possible?  Absolutely — unless the agent reduces his or her commission when there is no buyer’s agent to pay. This is called a “variable commission.”  Most agents would agree to a variable commission if asked, but most sellers don’t know to ask.  At Golden Real Estate, our practice is to offer it without the seller asking.

There are good and honorable reasons to have a pocket listing.  I just listed two homes in Golden as pocket listings because the seller doesn’t want to move until late summer, but at the same time doesn’t want to miss out on the current seller’s market.  I suggested that both sellers let me promote their home and even show it to prospective buyers for whom waiting until late summer might work. To do that, however, I needed the protection of an exclusive listing agreement — hence, they became pocket listings, at least for now.

With a pocket listing, there is no sign in the ground and no advertising of the listing —  or else you’d see my two pocket listings sharing this week’s advertising space!

Some agents with pocket listings do something that is increasingly annoying to fellow agents — they put a sign in the ground with a sign rider that says “Coming Soon.”  This strategy works especially well at a time like now when buyers are scouring their favored neighborhoods for signs and call the listing agents whose names and numbers are on those signs. A less than honorable agent will gladly show the home to an unrepresented buyer while telling inquiring agents, “It will be on the MLS next week.”

The Rules & Regulations Committee of Metrolist, on which I sit, has been debating this issue for ages, but has yet to adopt a rule I favor, which would be to require any MLS member who puts a sign in the ground, with or without the “Coming Soon” sign rider, to put it in the MLS within three days, where the listor can specify when showings will begin.  When I have had listings not ready for the MLS, that’s what I have done so buyers will know it’s going to be available and they can choose to wait for it.