For a great explanation of the current mortgage market conditions and its historical context, click here. (This is a streaming audio file, so make sure you’ve got speakers on your computer.)

Achieve Realty is proud to announce that The Bob Cenk Group has joined the company.   

Bob Cenk of The Bob Cenk Group and Lawton and Kristen Stokes of Achieve Realty are thrilled with the move and look forward to The Bob Cenk Group continuing their real estate success under the Achieve Realty name.

Bob Cenk comes with just over 2 years in the business and quite a reputation.  Previously with RE/MAX Select Realty Bob was awarded the 2006 Rookie of the Year Award as well as the 2007 Top Commission Earner for the company.  Bob recently received the Titanium Award from the Realtors Association of Metropolitan Pittsburgh, which puts him in the most elite group of agents in Pittsburgh with over 36 million in sales volume for 2007.

Bob and his team of professionals take a different approach in their philosophy.  From their attention to customer care, marketing and ability to think outside the box, the real estate community in the Pittsburgh area have taken notice.  As the team and their business grew Bob realized that his business model had changed dramatically from when he first started, and a change was needed.  Achieve Realty was a great fit for that model. 

“Bob’s group is a tremendous addition to our team,” said Kristen Stokes.  He brings a spirit and business approach right in line with our company.  Bob is highly successful, with a winning style, and that’s extremely valuable to a young growing company like ours; it is contagious.” 

Kristen plans continued growth for Achieve Realty, and points out that the core elements of their model appeal to successful businesses like The Bob Cenk Group.  “We are independent, not a franchise, and we hold ourselves to the highest standards of customer service and professionalism.  We believe strongly in Agent branding and we offer an unbeatable commission package.”    

The Bob Cenk Group and the team at Achieve Realty are looking forward to a mutually beneficial relationship for 2008 and the years to come.

Achieve Realty has offices in Wexford, Butler, and Beaver.

“Leadership is based on inspiration, not domination; on cooperation, not intimidation.” -William Arthur Wood

“You do not lead by hitting people over the head - that’s assault, not leadership.” Dwight D. Eisenhower

The Pittsburgh Business Times book of lists for the residential real estate industry is very informative. There are just enough statistics reported by brokers about their own companies to draw some conclusions about our market. I conclude that there is plenty of room for competition within the Pittsburgh residential real estate market and the point of this article is to persuade agents to start their own brokerage.

The top four residential real estate brokerages in Pittsburgh have over 80% share of the market. This situation did not happen overnight. It happened over a period of many years, as larger firms bought or merged with smaller firms.

During my 15 years in this business, I’ve witnessed Coldwell Banker real estate buy Metro Realty and Century 21 Scott Rodgers. CB Pittsburgh was bankrolled by their then-parent company, NRT, the largest franchisee of Cendant (now Realogy) brands. Howard Hanna has been on a merger and acquisition spree for at least 10 years, fueled by a $10 million line of credit.

More than 15 residential real estate brokerages reported to the Pittsburgh Business Times. After the top five (by sales volume) reporting brokers, every other brokerage has 1% or less share of the market. Many of these small firms have been in business for 10 years or more. What does this say? A firm can have a tiny, even less than 1% share of the market, and still be profitable real estate business.

But why would anyone do that? If you’re asking yourself this question, you don’t understand entrepreneurship. (By the way, that is not meant to be an insult.) REALTORS® have an identity conflict. They’re not quite sure where their place is in business. That’s because REALTORS® wear many “hats,” like salesperson, financial advisor, lawyer, independent contractor, small business owner. (Note that I didn’t use the word “employee.”) It’s very confusing. Frankly, you’re fortunate if you can afford the time to ponder this conflict.

What’s the difference between a REALTOR® and an entrepreneur? A REALTOR® is someone who has a real estate sales or brokers license and is a dues-paying member of the National Association of REALTORS®. Most commonly, the term entrepreneur applies to someone who creates value by offering a product or service in order to obtain certain profit. Business entrepreneurs often have strong beliefs about a market opportunity and are willing to accept a high level of personal, professional or financial risk to pursue that opportunity.

Here’s something that may sound shocking to you: it is possible to be both a REALTOR® and an entrepreneur. In fact, many REALTORS® are entrepreneurs already. If you are a REALTOR® who invests your money in order to market your own name (as opposed to your broker’s name), you are an entrepreneur. How can it be that easy? Well, for starters, you already own your own business. (Remember, you are an independent contractor. Pennsylvania law requires you to affiliate with a broker but you are not that broker’s employee.) Since you are taking financial risk to pursue a market opportunity (for example, trying to attract homeowners who want to sell their house), you have met the criteria for entrepreneurship.

Now that we’ve established that many REALTORS® are entrepreneurs, it’s time to discuss market opportunities. My father, who was a lawyer in Pittsburgh for 40+ years used to tell me, “Lawton, there are way too many lawyers in Pittsburgh, but there are never enough good ones.” I feel the same way about REALTORS®. The real estate market in Pittsburgh has plenty of room for good REALTORS® and good brokerages.

Once you’ve made the decision to start your own real estate brokerage, here are 10 tips to follow in order to get your brokerage up and running:

1) start small. lease a minimal amount of office space – just enough for you and a few other agents; overflow agents can work from home.

2) avoid the temptation of purchasing a franchise. Franchising creates a layer of cost that you don’t need. Unfortunately, there are plenty of good examples of agents who purchased a franchise but were unable to recruit other agents to their firm. Wait until you’re successful to even ponder a franchise. By then, you won’t see the need to have one anyway.

3) Guerilla market. If you spend your money on billboards, radio or print advertising, you’ll be out of business in no time. Again, this mistake has been exemplified very recently in the Pittsburgh market.

4) Only recruit fellow-agents who share your business ethics and philosophy. After all, your recruits are out on the street representing you every day.

5) Differentiate yourself from the competition. If you can’t create a niche of some sort, don’t bother. In other words, why do you see the opportunity?

6) Affiliate with a real estate lawyer. You and your agents are going to need a lot of advice.

7) Hire an accountant to handle the money properly. Escrow accounts must be handled meticulously. You don’t have the time to do this.

8.  Don’t hire an administrative assistant. Again, keep your overhead low. Use an answering machine if you’re all out of the office. Or lease a high-tech telephone system to route your calls. Let your accountant keep your files organized. You can QC your own files until you can cost-justify hiring an AA.

9) Don’t hire new agents unless you can afford to waste an awful lot of time training someone who doesn’t necessarily have what it takes to be successful in the business.

10) Create a web site that’s first class and includes IDX. After all, the web surfer’s don’t care what your office looks like – they just want to look at the listings.

If you’re thinking about starting your own brokerage in Greater Pittsburgh and you want some more gratuitous advice, call me at (724) 321-1495 anytime. I love this business and I love to talk about it.

-Lawton

The latest e-flash from respanews.com has a headline that reads: “Eleventh Circuit drops bombshell in RESPA case over brokerage fee.” Long story short, the U.S. District Court for the Northern District of Alabama refused class action status to a plaintiff* who claimed that an administrative fee of $149.00 violates section 8(b) of RESPA (the Real Estate Settlement and Procedures Act, which bars payment at closing for anything unearned). On January 17^th, the U.S. Court of Appeals for the Eleventh Circuit reversed this ruling. This is a major bombshell!

The decision by the U.S. Court of Appeals for the Eleventh Circuit paves the way for the U.S. District Court for the Northern District of Alabama to grant class action status. It also gets the class action bar one step closer to pursuing these type of cases throughout the rest of the nation.

It has always been the policy of Achieve Realty to not charge the administrative fee. Achieve Realty holds the position that brokers who charge the fee are not doing any additional work to justify the imposition of the fee. In the event that additional work is being performed, the amount of the fee charged dramatically over-compensates the broker. I am confident that the courts will agree. There are class action attorneys who must think so too.

The downside for Achieve Realty is that we’ll lose our competitive advantage as our competitors stop charging the fee when they finally realize they’re going to get sued.

The upside for Achieve Realty is that some of our competitors who charge this fee will be unable to both absorb the loss incurred from legal fees, penalties and reimbursement of the fees and stay in business.

So which brokerage do you think will be the first to stop charging the fee?

*Vicki V. Busby v. JRHBW Realty Inc (full text of decision)

Click here for more details.

Click here to listen.

A recent survey of our agents reveals the following information:

75% say listings are taking longer to sell than this time last year.
76% say this is a "buyers’ market"
70% think interest rates are not high enough to impact buyers’ purchasing decisions.

One respondent noted that the multi-list is tracking similar to this time last year.

Tribune-Review Article here.

Click here for Pittsburgh Information from Sperling’s Best Places.