John Murphy Reports

Below please find my sales performance statistics for the 3 years that I have been a full time real estate agent.  One of the things that consumers find very frustrating is that there is little transparency in this business.  While I do not pretend to think I can change an entire industry, I will do my part to be transparent to the buying public and my clients.

Please take the information below in the spirit in which it was intended.  As a real estate consumer, you have the choice of nearly 18,000 real estate agents in the Twin Cities or you could choose to buy and sell your home or investment property on your own.  I believe my previous experience of 18 years as a corporate sales executive leading national sales and marketing teams in the highly competitive and fast changing fields of technology media and advertising allows me a competitive advantage in the real estate marketplace which translates in to a more enjoyable, professional and ultimately more successful experience and outcome for my clients.

There are plenty of agents who have sold more than I have.  Some of you may speak with or interview agents who have been selling for 20-30 years and perhaps they are used to selling $20,000,000 – $30,000,000 in transactions each year.  Very few agents are doing that kind of sales volume today except perhaps for the listing agents who are selling bank owned property.  It’s been a massive bull market for them the past 18 months.   What I would encourage you to think about is not whether or not someone has 20-30 years experience and used to sell $20-$30 million per year in houses, but what kinds of success are they having in today’s marketplace?  The game has change. The market is different.  The rules are being re-written as we speak in 2008 going in to 2009.  Is the agent you’re considering on the leading edge?  Are they aggressive?  Are they truly in tune with the market?  Are they able to adapt to the rapid pace of change, be flexible responsive and decisive?

The real estate marketplace is now a consumer driven marketplace.  I would contend that most of the agents you speak with in the business won’t be able to articulate this change and explain how it impacts their business nor how this transformational shift has affected how they engage with consumers and clients. Agents are important…I should say good agents are important.  Please don’t get me wrong.  It’s my profession and I get paid handsomely and am worth every penny of it to help people successfully buy and sell houses.  It’s my experience that good agents who understand the change in the market are rare.

You will often hear from agents that they can help you sell your home for more money in less time, but how many can actually back up those statements?  Isn’t it all just smoke and mirrors?  Well, there are some agents who are rising to the top in this new marketplace and it’s my intention is to be one of those agents.  This is not to pound my chest but you have to know there is a difference in agents.  It would be impossible for me to deliver this kind of performance highlighted below without my happy clients whom I’ve helped successfully buy and sell homes.

I can honestly say that I will help you sell your home for more money in a much faster period of time than the typical agent.  My marketing plan and strategy is superior to what you’ll find in the marketplace.  It’s working.

Below are my market statistics compared to the Board of Realtors which is made up of several boards including the Minneapolis, St. Paul, North and South metro boards.

My seller’s net 1.65% more than the Board of Realtors.  It’s the little things that can make a big difference.  In fact, that 1.65% translates in to $3,969 more in my sellers pocket for an average sales price home ($241,000).  However, that 1.65% translates in to $8,188 more for my average sales price home which is twice the board average ($496,242).  The slides for those figures are below.

My listings do sell 60 days faster than the board and my average priced home is twice that of the board.  So, I’m helping my sellers not only in the entry level market, but also in the mid to luxury end of the market sell their homes two months faster and for money money.  That translates in to not only more money in my seller’s pocket but a much better selling experience due to less time on the market.  (BTW, all 9 of my listings that have sold in 2008 received offers either within 2 weeks of the initial asking price or within 2 weeks of the last price adjustment.  For the importance of that, see this entry on pricing.  Also, 5 of the 9 had offers, went through inspection and pended within 21 days of being listed).

My sellers have had to pay $3,898 on average for seller paid closing costs.  This represents less than 1% (.72%) of the sale price based upon my average sale price for listings of $543,378.  (There are no statistics to compare this to with the Board of Realtors.  However, when comparing this data point to how my buyers fare when I’m negotiating on their behalf, you can see down below a few slides that I have been able to get my buyers $6,000 on average or 1.42% of my average buyer side transaction of $426,800).  I am able to maximize my sellers profit while minimizing the out of pocket costs for my buyers.

My business has continued to grow rapidly growing to 17 transactions worth $8.3 million in sales for 2008.  Click here for the listings I’ve sold in 2008 and click here for my sales in 2008.

Below shows my listings and sales breakdown over the past 3 years:

Below is a breakdown of the average prices of my listings and sales over the past three years:

How have my buyers fared?  On average my buyers achieve a purchase price that is 9.06% off of the original list price whereas the Board of Realtors average discount is 7.9%.  That’s a savings of 1.16 percentage points for my buyers.  On an average sale price of $241,000, that’s a savings of $2,795 for my buyers.  On an average sale price of $500,000 that’s a savings of just over $5,000.  That’s real money in your pocket.  (Note that I have been involved in several bank owned transactions this year where many of those properties were priced very aggressively so often times those buyers did not achieve a 9% disount.  However, that means the others did get substantial discounts to offset some of these bank deals).

In addition, my buyer’s have been able to get $5,500 of seller paid closing costs on average.  This $5,500 is in addition to the 9% discount off of the original list price.

There are approximately 18,000 real estate agents in the Twin Cities according to the Minneapolis Area Association of Realtors.  In 2008, we expect that about 38,000 transactions will be completed leaving a total of 76,000 transaction sides.  That means that in 2008, the average agent will successfully close 4.2 transactions worth $1,012,200.  Most of these agents are on 50/50 commission splits with their brokers so if on average they earn 2.9% per transaction side that equals less than $15,000 in gross commissions for each agent.

Real estate is a relatively easy business to get in to, but a very difficult one to achieve any kind of recognizable success.

If you’re thinking about buying and selling your home, it’s most likely the single largest transaction you’ll make in your lifetime.  It’s also highly emotional and can be stressful.  Do you want to trust that this important transaction will go well with a sales person who makes on average, $15,000 per year?

Everyone has a brother, sister, aunt or uncle who’s a real estate agent.  In the booming market from 2002-2005 that was probably just fine to hire those folks.  But in this kind of market, you are best to do your homework and hire the best you can to get this important job done right.  There are too many agents out there who are not doing a service to this industry and certainly not to the consumers.  Hire a professional who has proven abilities to sell in this new market.