Radical "Change" (shiver) is coming to Real Estate???

Or so says "Inman News" in my morning inbox . . . though you may have to be a subscriber to read their entire article (to the tune of $199 per year!)......oh well, it's only money!  :(

Nonetheless, they question, "Will you survive it?"  It reminds me of a book that came out in about 1980 entitled, "The Real Estate Revolution -- Who Will Survive?"  And it discussed the major franchises as to which one(s) would be around by 2000.

In the last 40 years, all kinds of real estate models have come and gone, many have stayed.  But real estate is still bought and sold the same way today that it was in 1975 when I started.  Yes, there's more technology, but does technology replace people and relationships?  Some online services would like for you to think that it does.

After all, iPhones replaced Blackberry's.  Starbucks replaced donut shops.  Tablets and laptops replaced desktop computers.  All very radical......all very quickly.  These are some of the points that the author made in his Inman article.  (I guess he/she left out how the internet replaced travel agents, but that one has been repeated ad nauseum.)

So, they pointed out a terrific decision model for investing into the future (no matter what your business) -- the same model used by Steve Jobs to move toward iPads and away from desktops.  They took a risk and made some radical changes.

It made me think and question myself:  "what radical changes am I currently making to grow my business?"  "What radical changes am I willing to make to grow my business?"  "Do I have the cojones (at this late age) to do it?"  "If so, what would they be?"  The "old guard" wants to maintain the status quo . . . wants everything to stay "as is."  But that is certain death.  My business philosophy has always been, "grow" or "die."  There is no status quo.

And so . . . I'm going to make some radical changes going forward.  Interestingly, I've already made LOTS of them.  Once I started thinking about this, I realized my entire success in real estate has been because I've been willing to change and take risk.  Will you join me?

If the thought of "change" makes you shiver, get over it.  It's coming.  Be a part of it.  BecomeATopAgent.com . . . and be part of the movement.  -Sam Ferreri, Director of Vision at RE/MAX Top Realty, where "Top Realty" is our brand, "RE/MAX" is our cannon.  

Converting a Home to a Rental

A simple decision to rent your current home instead of selling it when moving to a new home could have far reaching consequences.

If you have a considerable gain, in a principal residence and you rent it for more than three years, it can lose the principal residence status and the profit must be recognized.

Section 121 provides the exclusion of capital gain on a principal residence if you own and use it as such for two out of the last five years.  This would allow a temporary rental for up to three years before the exclusion is lost.

Let’s assume there is a $100,000 gain in your principal residence.  If it qualifies for the exclusion, no tax would be owed. If the property had been converted to a rental so that it didn’t qualify any longer, the gain would be taxed at the current 20% long-term capital gains rate and it may incur a 3.8% surcharge for higher tax brackets.  At least $20,000 in taxes could be avoided by selling it with the principal residence exclusion.

Depreciation, a tax benefit of income property, is determined by the improvement value at the time of purchase or at the conversion to a rental whichever is less.  If the seller sold the home and took the exclusion and then, bought an identical home for the same price, he would be able to have 60% more cost recovery and avoid long term capital gains tax.

It is always recommended that homeowners considering such a conversion get advice from their tax professional as to how this will specifically affect their individual situation.

There are lots of people who hate me . . . surprised? Not surprised!

TEACHINGS OF A SUCCESSFUL REALTOR, by (prophet) Sam Ferreri  (lol)


And they usually fall into one of several categories.  But first, how did they get such a hate-on? Well I only have some theories, because I think I'm so lovable!  

The first is "jealousy and resentment."  There's an old saying, "it's lonely at the top."  My late (wealthy) aunt taught me this one . . . the more successful you get, the more people you leave behind who become jealous and resentful of your success.  Well, as touting myself as "Number 1" for years, I built up a plethora of haters.  

This is an interesting category of haters, because they fall into several sub-categories including those who work in competing offices, those who moved far away and work in other brokerages, and (my favorite) those who hate me but still work with me!  There are one or two entire brokerage companies that exist with nothing but Sam-haters!  It seems to fuel them.  

Sometimes, you may think, these guys aren't really "haters," they're just "competitive types." Maybe so, but they seem to feed on hating the number 1 guy.  I wonder if I'd be hated in such a fashion if I were a typical producing agent?  

I look around for the answer and realize that many (if not most or all) of the tip top producers in the Houston market are hated . . . hated by people who don't even know them!  Aha!  Aunt Joni was right!  They hate their success and the aura that it brings!  

But I guess I can't overlook another category of haters.  Those who know me, maybe have had a relationship with me, and have run away screaming, "I hate you, you @#$%@@!!!"  Hmmm....... maybe I better not go too deep with that one!  

Oh well, out of the adage, "if you're not pissing people off, you're not doing anything!"  

You told a little story . . . mama's gonna be mad!

TEACHINGS OF A SUCCESSFUL REALTOR, by (prophet) Sam Ferreri  (lol)


Not my mama!  She encouraged story-telling.  (Of course, she was a long-time real estate agent who began this business in 1961.)  In fact, the best salespeople in the world are those who "sell without selling," by rather "sell by telling."

You see, you and I can role-play all day long -- typically, a strategy for learning what to say in the real estate business.  And this is the first step toward becoming "professional."

So, let's look at the typical listing presentation role play......it goes something like this:

"Well, let me show you what we do to get your home sold:  first, we put a sign in the yard.  Then, we put it in MLS.  Then, we hold open house.  Then, we make pretty flyers -- with nice, smooth paper. We'll make sure it's in all the major websites.  Blah Blah Blah.  Now, can we get started?"

But ok, we, as good Realtors, MUST know what it is we do!  So this type of role play is important......to get started.

How do you tell YOUR story?

The best listing agents move into stories about how we helped others, not what we're going to do to help you!  For example, "I am about to close a listing on which I am the third Realtor.  The sellers were a bit aggressively unrealistic in their expectations, but with some time and finesse, I was able to secure an offer that met their needs when other Realtors before me couldn't.  The difference?  I listened to them, and didn't react the way they reacted.  When presented with an offer lower than they wanted, they were angry and upset.  I calmly told them a story about how we can get buyers to increase their offers if they consider the situation.  This calmed them down, and I was able to turn their "no" into an "ok."

It's about telling stories, folks.  Practice it.  Write a blog.  Tell your stories.  First, learn the scripts, then incorporate them into your true-life stories.  This is the winning combination.

Sam Ferreri, MTL, RAA, is a 40-year veteran of the real estate industry and is currently the Director of Vision for RE/MAX Top Realty, the largest RE/MAX office in Houston, Texas.  If you'd like to learn more, visit the Top Realty University Professional Development Center where agents work in a creative, collaborative culture daily.  713-558-2555.

To be successful at anything, you must learn to . . .

. . . turn "rejection" into "acceptance."  Never accept "maybe," always always always go for "yes" or "no."

TEACHINGS OF A SUCCESSFUL REALTOR, by (prophet) Sam Ferreri  (lol)


The corollary to that rule, from Tom Hopkins' early mentoring, is "never see failure as failure, but as an opportunity to learn and grow."  You will fail far more than you will succeed in the real estate business, so you must learn to grow from each experience.

I love to talk about my successes, but what failures did I learn from?  Very recently, a lady called me dissatisfied with her current real estate agent.  She needed to get her home sold, and he was dawdling. So she said that she'd terminate with him by Friday, and would call me back to meet with her.  (red flag)
A week went by, she didn't call.  So I called her, and left a lengthy voice mail.  (red flag 2)
Yesterday, the home was terminated by that prior agent and listed with another agent, all in the same day.  (failure on my part)

OK, I think of myself as a fisherman -- I never focus on the ones that get away, but the ones I catch. However, here is an opportunity to learn and grow.  What did I do wrong?  (I'm tempted to end this blog here, just to see what kind of responses/comments I'd get to this from fellow agents.)  But, in the interest of never dwelling on failure, let's diagnose, learn, grow, and move on.

The Leverage Summit - read the fine print below

First of all, I let this end on "maybe."  The cardinal rule of any telephone call is "set the face-to-face appointment."  I didn't do it, I didn't ask.  I did, however, follow up, but never asked for the appointment.  With leads, you must be relentless to obtain a yes or no.  We have methodologies in place for that with online, phone-number-less leads, but this should have been a score.  I didn't go for the appointment.

So now, I can discuss a success or I may mope all day!  (not!)  I'm in a face-to-face listing conversation, and the clients asked if they could call me next week and get started.  (In other words, this is the classic "we want to think it over" objection.)  This is one of the most common objections in any selling situation . . . think about it . . . I bet you've used it in department stores, car dealerships, from small items to large items . . . I need to think about it.  "OK, I'm sure you have many unanswered questions," I went on, "can you share those with me?"  (In other words, what do you want to think about?)

"Well since I'm here, why don't we save yourselves some time and get the paperwork completed, then we'll be ready for the market when you are?"  In other words, you need to sell your house, I'm here, most people (something like 70%) hire the first Realtor they meet, so the odds are in my favor to get this done.

(Frankly, I posed this objection to several agents, and most were satisfied to let these guys call them next week, and responded, "OK, I'll be ready when you are!"  Hmmm......

But, I took the "Sitting Bull" approach and thought, I'm here, I'm at your table, you like me, I like you, I'll just sit here until I gain agreement.  We did.  We laughed.  We hugged.  We became good friends.

What would YOU have done?  What will YOU do next time?

Want to learn more from the prophet?  (lol)  Join us on Monday, 1/26/15, from 2-4pm at the TopRealtyUniversity campus for our FREE program on Team Building.  Register here:  https://www.eventbrite.com/e/the-tru-advantage-leverage-summit-or-how-to-build-a-successful-real-estate-team-tickets-15451465750 . . . We'd love to have you attend!  

Live it up!

WHAT I'VE LEARNED IN 57 YEARS AS A MAN, part 6.


"Worry" is my most wasted emotion.  Why worry?  How will it help?  It won't.

Monthly, I face my own mortality each time I visit the kidney doctor.  The new one I met yesterday said, "your labs are crappy, but you look like a million bucks!"

To which I replied, "well, I take care of myself . . . I take my pills, I workout, I follow the kidney diet, and I'm not on dialysis."

But I'm only buying time toward the inevitable.  So, when the Astros ticket salesman called, I said, "yes, I'll take two season tickets in the club section, behind home plate, please."  Why not?  I love, love, love going to the Astros games . . . I have since I was a boy and the Astrodome first opened.

Last night, I went to see "Book of Mormon" that was touring with the Broadway Series.  I say, "Yes!  I love the theater!"  Why not?

Go.  Live it up.  Work hard.  Help others.

Go to that game.  Go see that play.  Why not?

If it walks like a duck . . .

WHAT I'VE LEARNED IN 57 YEARS AS A MAN, part 5:

. . . quacks like a duck . . . guess what?  It's a duck.

A corollary to that is that "if it seems too good to be true, it is."

Recently, in my office and at a real estate event, some carpetbaggers from the north came down offering to turn mole hills into mountains.  As the Houston economy is going through its Reconstruction Era, these guys came in to "partner" with us lowly agents to help poor renters become home owners.  In return, instead of miserly rental fees, we lowly agents were to get sales fees at substantially higher rates!  What else could an agent ask for?

The premise seemed "too good to be true!"  Uh oh.  First clue.    

The lowly agent is supposed to turn his/her client over to their new partners, with no further communication.  And, any further communication is punishable by this new kangaroo court's self-imposed judge and jury.  Further, the methodologies and the "rules" change on a whim.  Whatever one of them tells you is not upheld by the others.  

(The quacking begins here.)  After further examination, it appears that this could be a giant set-up, possibly a legal/insurance scam. I'm not sure . . . but it's quacking loudly.  

And then, the "good cop - bad cop" game begins.  (More quacking.)  

It meets all the tests -- walks, quacks, looks -- seems too good to be true (at first) -- good cop/bad cop -- insurance questions -- it's all there.  

I think I'm playing poker with Kenny Rogers:  "you got to know when to hold 'em, know when to fold 'em, know when to walk away, know when to run."  Read this prior blog: http://thesamteam.blogspot.com/2015/01/sometimes-you-have-to-burn-bridge.html