Assist-2-Sell Franchise

The Potential Effects of the DOJ vs. NAR lawsuit on REALTOR®

by Jason Roberts

In back offices of major real estate companies all across the country, REALTORS® are talking about the DOJ lawsuit and the potential consequences it may have on the �traditional' 6% and 7% model. Many are worried that if the DOJ is successful, it will open the door to virtual offices all over the country. Although a resounding defeat to NAR is a possibility, my opinion is that very rarely does the government destroy an institution such as what has been standard for over 50 years. More importantly, if this happens, do we really believe that the masses will make one of the biggest purchases of their life sitting behind a computer without professional guidance?

Do I think that discounters across the country have been unfairly treated by 'big brother'? Absolutely! It is almost impossible to build a model around all of the national, state, and local regulations, not to mention the overwhelming cost associated with opening several locations. On top of that, you will likely not be welcomed with open arms by your peers at MLS cocktail parties. It is a cut throat business to say the least. NAR claims that they accept all business models that promote real estate transactions thru their network of MLS organizations. I'm not sure the members of NAR feel the same way though, thus the DOJ lawsuit.

However, I do believe, at least in the past, REALTORS® provided a valuable service to justify their 7%, and took a lot of risk doing it. Think about it, how many other industries does the entire cost of marketing something for sale fall directly in the salespersons lap? Newspaper ads, marketing material, and countless hours spent showing property to buyers that may never buy, all with the hope of completing a sale in order to get paid. And if the property is found to be overpriced or have a material defect, the REALTOR® has invested money and time that they will never get back. The kicker, if they were lucky enough to complete the sale, they have the privilege of splitting their hard earned money four ways in most cases. Not a perfect system, if you ask me, but it worked well for a long time.

What does the future hold? In my opinion, the advice provided by professionals is a fixed cost. The variable cost in the equation is marketing the property for sale to potential buyers. If that is true, then the internet is the great equalizer. Buyers can look at hundreds of houses from the comfort of their computers before picking a few that meet their criteria. And as their REALTOR®, why do you care? Doesn't this save you time? The days of showing 50 to 60 homes to a buyer are slowly fading into the sunset. The obvious result is that because the process has become more productive, the cost will come down. Hasn't that happened in various industries all across the country since the Mayflower came to this great land? Why hasn't our economy crashed? It will happen in the real estate industry as well, it just may take a little longer because the powers that be are fighting it with every fabric in their bodies.

What does that mean to the average REALTOR®? I believe the industry will go back to its mean of fewer Agents controlling more listings. They will have to in order to make money. The days of surviving on 3 active listings will follow in the footsteps of the prolific house hunters. The cost to market houses for sale will continue to come down as the internet expands further into the real estate industry. However, the cost of providing advice will always be a constant. REALTORS® are not going away any time soon. They can't. The public needs REALTORS® because the average buyer has no idea what an inspection or home warranty can mean if they buy a lemon.

My advice to REALTORS®; grasp the future now and begin utilizing the internet in your business. Open your eyes to new companies and models that pay you a fair commission while providing a lead system that helps their Agents find clients. What is 80% of zero closings anyway? Now throw a desk fee and expenses on top of that and you know why many are quitting the business. Find a company that increases your chances of attracting a large active listing base. Keep in mind, the client is the real reason we are in the business. They are demanding a lower cost for selling their home. Most are happy to pay a reasonable fee for your help. Many are also eager to help in the process as seen in the rise of FSBO sellers all over the country. Are they doing it because they hate REALTORS®? I don't think so. They are doing it because they want to save some of the hard earned equity they have spent a lifetime building. Can you blame them?

As we know, the client is always right. Drive the streets of Detroit and ask the locals if they wished the 'Big 3' would have listened to the public 15 years ago when they begged for quality built cars to come out of that city. Japan was listening. How long do you believe the public will continue to buy gas guzzling SUV's at $3.50 a gallon? Do we actually believe that those rules don't also apply to the real estate industry? Ask me in 15 years.

Top of Its Class

Valley's Assist 2 Sell franchise is nation's No. 1 for the past 18 months

By Beth W. Orenstein | Special to The Morning Call
August 12, 2007

In early July, George and Carol Krause sold their 3,350-square-foot home in South Whitehall for $350,000, $100 over asking price. It sold quickly, too, in 41/2 weeks.

Had the Krauses used a traditional broker, they typically would have paid a 6 percent commission on the sale price or $21,000.

However, on a friend's recommendation, they chose a discount broker, Assist 2 Sell, and opted for its flat-rate plan. Under the flat-rate option which Assist 2 Sell calls direct-to-buyer, they paid $3,495 to the agent at closing, a savings of more than $17,500.

Their agent was Dale Sadler, who opened his first Assist 2 Sell office in the Lehigh Valley in 1997, when the concept of discount brokerage was relatively new, especially in this area.

His original office was in a tiny building near his home in Allen Township. He since moved that office to a former greenhouse in East Allen Township and opened two more -- one in South Whitehall and one in Palmer.

Today, Sadler has 38 agents who work as independent contractors and is planning to open a fourth office in New Jersey.

For the past 18 months, Sadler's has been No. 1 in sales among the 615 Assist 2 Sell franchises in the United States and Canada. Recently, he even topped the company-owned office in Reno, Nev., where Assist 2 Sell was founded and is based.

''Dale was No. 1 for all of 2006 and is consistently at the top of Assist 2 Sell's Top 10 each month,'' says Erin Campbell, spokeswoman for Assist 2 Sell.

''Results for May 2007 just came out, and he ranked No. 1 again,'' Campbell adds. Office rankings are based on the number of sales for each individual office.

How is Sadler's discount franchise able to sell so many homes?

Campbell points out that Sadler's is one of the larger Assist 2 Sell offices. ''In general, offices have anywhere from two to 10 agents once they get established. The Assist 2 Sell system is designed to operate with smaller offices,'' she says.

Also, she says, Sadler's style is a good match for the Assist 2 Sell system for running the day-to-day operations and handling a high volume of business. All franchisees are taught the system at their weeklong training in Reno.

''Mary LaMeres-Pomin and Lyle Martin, the founders and co-CEOs of Assist 2 Sell, have known Dale for a very long time. He is a very good business man. Dale has succeeded because he uses the system he learned at training, and gives his clients good service,'' Campbell says.

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