What is Market America Realty Group Thinking with this FREE thing?
Market America Realty started an advertising campaign today offering the next 50 listings on Siesta Key free of listing commission. The company, already a leader in Lee County real estate, recently opened an office here in Sarasota and ran the following advertisement:
The company’s founder, Gregg Fous, isn’t new to outside the box thinking. “Here is what I know,” exclaims Fous, “This business is about customers, not properties. Not only will we offer our listing services for free, boasts Fous, we will offer over the top service. I want our customers to be wowed.” The company will waive its 4% listing commission and the seller will just have to pay 3% selling commission plus a $295 fee. But these charges apply only if the house is sold. “Why are we doing this? Pretty simple,” says Fous. “We need the inventory and we believe we can sell most of the properties we list in house. In today’s market if a broker does not have the right inventory, he can’t attract the buyers, without buyers, we don’t sell houses. We will do an CMA (Comparative Market Analysis) and the listing free commission offer will only apply if the home is listed within 10% of this value. At this time we are limiting our offer to Siesta Key, if it works well here, we will expand to other, targeted markets.”
“Market America Realty Group has offices in nine locations throughout Florida, with a satellite office in Canada. The Foreign National Market, especially Canada and Asia, is huge. We are now offering Florida Properties’ in seminars in Toronto, Malaysia, Singapore, and Shanghai.”, declares Fous.
Fous got the inventory building concept from the foreclosed home business he is in. A little over two years ago Market America Realty Group got into selling foreclosed homes for banks and their asset managers. Through this their inventory ramped up very quickly. They are now one of the largest listors of foreclosed properties (REOS) in Lee County. The foreclosure market is hot. For every listing they post, they might get a few dozen phone calls and for sure multiple offers. But only one buyer can buy each house. “What do we do with the other buyers? Well, we find them another house of course.”
In order to manage this large number of inquiries that they receive they implemented integrated customer relationship manager (CRM) software into which client service coordinators input all the data on each client, their contact information, and what type of home they want to buy. They then keep in steady touch with that customer.
“You see, the REO business is not very profitable for most agencies; the commission percentages are very low as are the prices. We also have to fork over all the past due utilities and HOA fees, pay for securing the property and maintaining it, and account for all those expenditures accurately so we can assure that we get reimbursed properly and timely. So in addition to a CRM to keep track of inquiries on the REOs, we put in accounting and tracking systems to make certain that the slim margins were not eroded. There are quite a few independent REO agents that went out of business because they could not make it work. The systems we put in place, indeed attracted other REO agents to come work with us since we are able to support their business. They brought their REO inventory to Market America Realty.”
This is what gave us the concept of listing free commissions in Siesta Key, it’s about making the phone ring with the right type of listings.
“Which brings me back to my point: inventory. This increased inventory made our phone ring and brought email inquiries on our listings. Without the inventory, we would not grow. Without inventory we could not attack MORE inventory. I kind of think of our REO inventory as a loss leader, of sorts.”
An interesting thing has happened, however. The REO business is now a smaller percentage of our business. What I call standard retail – the conventional seller and buyer – are an increasing part of our business. The last two days we put 7 condos under contract. None were REO. All were our inventory; retail inventory. Normal margins. Not 70% of 50% of 5%, like the REO business.
It’s a great cycle, inventory gets us clients, clients get us inventory. As the cycle turns it gathers momentum and size like a snowball going down a wet snowy slope.
The quality of the inventory is also important. Tis is why we put the “within 10% of a CMA restriction on the free listings. I want inventory that will sell AND make the phone ring. An overpriced listing will do neither. Market America has a two BPO (Broker Price Opinion) departments that just do BPO’s, this way there is no way the price can be influenced by an anxious seller or his agent. (To order a BPO – contact email@example.com ) We charge $75 for a BPO – but this charge can be waived if we list your property. Currently we have two BPO departments on in our Fort Myers office and one in Sarasota.
“When I mention my free listing program to other agents, one of the comments I hear is, “By that will upset of a lot of agents!” smiles Fous. “ Why? Because they didn’t think of it first? The selling agents will still get their commission and I bet we sell at least half of our own listings. I am not really worried too much about the other agents. I think this is smart business. Do I want to work for free? Of course not. This is a limited time with a limited number of free listings, and they are in a concentrated market.