America's #1 Mortgage Broker

Russell Shaw is an associate broker with John Hall and Associates in Phoenix, AZ.  He is a mega-producer who stumbled along, paycheck to paycheck, for seven years as a Realtor.  He woke up one day and said that enough was enough, he was going to be a huge producer.  Russell is a huge producer; he closed over 400 sides last year.  If you've ever lived in Phoenix, you know Russell Shaw.  He is all over the television and has been for a number of years.  He practices real estate with a flair and consistency I have not seen in my thirteen years of lending.

RUSSELL SHAW HAS "STREET CRED" (from Craig Ernst's comment)

urbandictionary.com allows people to post their definition of urban slang terms.  You can read about what street cred is by clicking here but I've highlighted my favorite of the entries:

Commanding a level of respect in an urban environment due to experience in or knowledge of issues affecting those environments

EG: He's been through it all.  His street cred is undeniable. 

Bloodhound Blog did a series of interviews with Russell Shaw that clearly display Russell's street cred.  He narrates his career from struggle to meteoric rise and shares that "one simple thing" that helped him turn it around.  You can listen to them by clicking below.  I'll caution you, Russell speaks like I do which means he's not scared to liberally use the vernacular of the English language.  He's not profane but he can be "earthy".

Russell Shaw Podcast:  Part One

Russell Shaw Podcast:  Part Two

Russell Shaw Podcast:  Part Three

Now, Russell is crafting his legend with his FREE Sales Success Training.  Here is an excerpt from his post on Bloodhound Blog:

Most agents who enter the business (13 out of 14 by actual count) will be gone in a year or two. Can that be changed by “learning about success”? I really doubt it, as most of them didn’t have much commitment to ever really apply themselves. But that doesn’t include everyone – there are a LOT of people in the real estate business who want to do better and aren’t sure what to do next.

I’m planning on doing something about that. Over the years I have figured out what is involved – exactly – to go from “0 – 60” and I also know what is not involved. We are going to make that information broadly available. Free. Free, in the sense that we won’t be charging any money for any of it. Period. We won’t be endlessly attempting to get new people to listen to the audio or watch the videos because it makes us more money. Our only goal will be to see each person
who desires it to do better.

It will be fun. Please let me know any and all questions you might have. If I don’t know the correct answer I promise I will say just that.

Why am I so excited?  I get to be a part of it !  So do YOU !  We'll be having 4-5 video sessions with Russell to come up with ideas about his training series. If you want to come, great!  If you don't, post your suggestions here

This is like talking to Ted Williams about how to hit a baseball.

Just ask Glenn Kelmann of Redfin.com.

Redfin issued a press release today with MLS statistics PROVING that Redfin agents are superior negotiators to everyone else.  Superior by a differential of over 2%; an average savings of over $4000.  They cite:

1- The compensation structure allows a Redfin agent to be unbiased whereas the traditional Realtor has an incentive to let his client chase a bad deal.

Agents do what you pay them to do, we reasoned, and we believed our agents would be more likely to get the price our customers wanted.

2- There may be a better way to analyze the performance of an agent but the MLS data is all they have for now. 

What makes this noteworthy is that the data did not come from Redfin, but from data that any brokerage can validate by following the instructions available in the appendix ...

Well, you (meaning the real estate weblogging community)  jumped in with your two cents: (from Matt Goyer, a Redfin employee's post)

• Freakonomics, More data on real estate agents
• Future of Real Estate Marketing, Redfin Agents More Effective?
• Inman, Redfin claims low-cost model is working
• SF Curbed, Redfin: Anno Numero Uno
• Purple Vision, the real estate process under attack
• Marlow Harris, Has Redfin jumped the shark?
• Real Estate Technology Blog, Who’s the best negotiator? and can you base it on Real Estate Data?
• Transparent RE, Redfin Validates its Negotiation Capabilities with MLS Statistics
• Greg Swann,Thinking skeptically to rain on Redfin.com’s parade . . .

I love this stuff!  I'm a complete numbers geek and loved Statistics class in B-school.  There are so many problems with the data cited it is laughable:

1- The data don't exclude transactions from "part-time" agents (and probably can't).  Redfin claims superiority to the experienced full-time agent.

2- They cite data but refuse to republish it citing that it would be an MLS infraction.  Marlow Harris calls them on fuzzy math.  (Come on, Glenn!  When have you ever played by the MLS rules?)

3- Finally, Glenn's non-responsive response on Bloodhound Blog (That's my story and I'm sticking to it) was challenged by the resident logician, Greg Swann.

Back in November, I wrote a predictive article about Manhattan real estate called:

Boom Time in the Big Apple

An excerpt: 

Real estate is a local business driven by local market conditions and bought and sold (mostly) by local people.

How about a market that is fueled by an industry that has experienced steady wage/earnings growth since 2003 and is about to have its best year in ten years?   That would be the securities industry and that industry is headquartered in New York City.

This article, published today in the Wall Street Journal, highlights that investment bankers, traders, and brokers have experienced a boom this year.  They're about to be rewarded in early 2007 with HUGE bonuses!  Where do you think those bonuses will go?  Art?  Maybe.  Fancy Cars? Well, maybe but parking is so tough it seems almost silly to buy a Bentley in NYC.  Exotic Travel?  Maybe, but it's hard to believe that the investment bankers will spend a month or two in Fiji when the market is heating up.  You gotta make hay when the sun shines.

Over on Curbed.com, I saw this piece:

Ask Curbed: Is There a 'Frenzy' in the Market?

It doesn't always happen that quickly.  When it does, I toot my horn. 

READ:  Reminder:  Real Estate Really Is LOCAL by Kaushik Sirkar

Brian Brady is announcing the first Economics of Real Estate Carnival.  This Blog Carnival is open to Active Rain Members who post submissions to the Economics of Real Estate Group dated Friday, February 23, 2006 through Wednesday, February  28, 2006.  Entries will be closed for posts after 11:59PM on the 28h (CST).

There are no prizes nor mentions for second place; this is winner take all.  The Grand Prize will be a 17 week subscription to Forbes Magazine (a $19.99 value).  You must be a member of The Economics of Real Estate Group and can join for FREE right here.

All posts in the group during the time frame will be considered but the winner will be chosen for his/her ability to communicate basic economic principles to the field of real estate.  Posts that will not be considered but are worthy examples include:

The Taxman Commeth: "And You're Working For No One, But Me"

Want to Make $1,000,000 The Easy Way? - Bet Against The Lending Sector

Is Walmart Getting Involved in a Job Opportunity Zone Near You??

Eminent Domain: How It's Used and How It Sometimes Mobilizes a Community

Foreclosures and Short Sales: Deal or No Deal?

Meet the Jetsons - Why Real Estate is Changing

Mortgage Brokers Will Get The Blame for Rising Foreclosures - Is it True?

Don't Invest in Texas...But Consider Moving There

Touchdown in Greensboro: What makes a good investment?

I hope to make this a monthly event.  Should the winner already have a subscription to Forbes Magazine, an appropriate substitution will be offered.  The moderator is ineligible for the contest.

PS:  There is no limit to how many entries you submit.  You can post 5-56 entries as long as they are posted to the group before midnight on March 1st.

Everyone loves to point to California as the prime example of the excessive greed of the recent real estate boom. Media, bubble bloggers, and pundits predict that California will plummet to new lows and bring on a lengthy recession akin to the Great Depression. Even home-grown and respected PIMCO of Newport Beach predicts a heavy fog for the state’s real estate forecast.

Why are these developers choosing to build up instead of out? 

The answer is that demographics are still favorable.  Here are four reasons why. 

I'm in the middle of posting a series about the profitability of brokerage compensation models on Bloodhound Blog.

My first was about traditional brokerage compensation, or split models (think Brown Franchise).  An excerpt from

Is Your Broker Profitable?- Traditional Brokerage

Here is the deep, dark truth about traditional real estate brokerage as a business; it’s just not that profitable in its purest sense of practice unless (a) the broker produces (which brings up a whole host of issues) or (b) the brokerage is really HUGE.  Let’s analyze the typical medium-sized brokerage (25 producers) in a typical American city ($250,000 median value).  
There are A, B, and C agents.  There will be five “A” agents who close 20 transactions per year or $5,000,000.  Assume they average a fee of $7,500 per transaction.... click here for the post (opens in a new window)

My second was about 100% shops (think balloon franchise).. An excerpt from:

Is Your Broker Profitable? - “Rent-A-Broker” Shops

Essentially, the business model is along the lines of “rent-a-broker” for a flat fee per month. The term “rent-a-broker“, really isn’t fair because it implies that the designated broker isn’t supervising the transactions but I’ll use it for the sake of illustration.

The compensation proposition to the agent is that you get to keep 100% of your commissions and pay a monthly fee to the brokerage. There is an mutation of that model that charges a flat-fee per transaction but I think I’ll focus on the “rent-a-broker” model for this post. The best analogy for this model is one of a landlord and tenant. Like a property lease, there is a contract outlining the rights, responsibilities, and financial consideration expected from each party. In most markets with a median sales price of $250,000, the monthly “desk fee” would be approximately $1,000. click here for the post (opens in a new window)

My last posts will examine the hybrid model (think red franchise) and the per transaction model. 

I had a chance to talk to Mark Sennott, President of Home Gift, this week. Home Gift is an affinity marketer much like MBNA. MBNA started as a credit card marketing division of the old Maryland National Bank. Their model was to offer credit cards to alumni association members that were “branded” as the official card. MBNA then rebated a portion of their income to the alumni association. Joe College felt good about racking up the old debt because he was supporting State U.

It was a wildly successful idea. It was so successful that MBNA spun-off from Maryland National Bank in 1991 in a public offering.. They grew to a 12% market share of all credit card customers before being bought by Bank of America in 2005.

Enter Mark Sennott. His company offers a consumer access to a network of real estate agents and mortgage companies who are...

CLICK HERE TO CONTINUE (opens in a new window) 

Have you ever analyzed the business model your broker has?  Try to run the numbers sometime and see just how much profit the owners(s) of your real estate brokerage really earn. 

I learned a lot about running a mortgage brokerage and real estate brokerage from 1999-2002.  I’ve owned both and was successful with the former and a walking disaster with the latter.

 
Here is the deep, dark truth about traditional real estate brokerage as a business;

CLICK HERE FOR THE DEEP DARK SECRET 

I'm sure with the big game tomorrow, many of you have forgoten to submit an entry to this week's Carnival of Real Estate.  This week's Carnival will be hosted by the crew at Bloodhound Blog.  Greg has devised a secret "blind" judging system for all of us to judge your entries.  I, nor Jeff Turner, will be aware of the authors.

Read about this week's carnival at Blood Hound Blog and submit your entry by NOON (pacific Standard Time) tomorrow by clicking here.

Good Luck!

PS-  I like Bud Light, steak dinners, and third base side tickets for those of you considering a bribe.  I am completely corruptible. 

Do you want to look into the crystal ball through the eyes of  Federal Reserve Chairman, Ben Bernanke?   Will that help you predict mortgage rates and housing prices for 2007?

The answer is usually buried in paragraph three or four of government reports.  The economic benchmark that is oft overlooked is the nominal GDP growth rate.  The nominal GDP growth rate includes the effect of inflation.  Nominal GDP growth reflects the ability of the US economy to pay our debts.  The Fed Funds rate reflects the interest the economy pays on its debt.  When the two are imbalanced, runaway inflation or its opposite effect, asset deflation, occurs.  When nominal GDP exceeds the Fed Funds rate, we have a capital surplus which leads to inflationary pressures.  When nominal GDP is less than the Fed Funds rate, asset deflation occurs.  Leveraged assets, notably stocks and houses, decline.

So where are we headed now?  Well, the third quarter of 2006 produced an annualized nominal GDP rate of 3.8%, well under the 5% target. This means that if Fed Funds ...

READ THE REST OF THE EXPLANATION AND PREDICTIONS. (will open in a new window)