INDIANA
Real Estate News
Uniting and Growing Real Estate Professionals in Indiana.
THE 3 TYPES OF
BROKERAGES Page 6
DESIGN
DELEGATION Page 15
AARON HENZE Editor -in- Chief
ARE OPEN HOUSES
DYING? Page 18
January/February 2018
Iwww.indiana-realestate-news.com
EDITOR IN CHIEF Aaron Henze
EDITORS Aaron Henze Tera Moore Jerry Wright
WRITERS Aaron Henze Tera Moore Jerry Wright
PHOTOGRAPHERS Tera Moore Stephanie Carson
CONTACT aaron@indiana-realestate-news.com
Aaron Henze Editor-in-Chief Hello Readers! Thank you for picking up our first issue of the Indiana Real Estate News magazine. At Indiana Real Estate News (IREN), our goal is to help connect professionals and educate patrons within the real estate industry in Indiana. The inspiration for IREN happened several years ago when I was living in a house with my brother in South Broad Ripple. The house was repossessed from our landlord by the bank, and we had the option to buy the house at an incredible price. Unfortunately, because my brother was in graduate school at the time, his income didn’t count toward our approval application, and we eventually had to move into another renting situation for a significantly higher cost than our potential mortgage, despite the new house being literally across the street from the old one. I had reached an age of making important financial decisions, and I didn’t know most of the rules to play the game. I then thought about how many other people were in situations like mine, and what I could do to help. When I formed IREN two years ago, it was barely more than a blog website and YouTube series. As an actor with a background in writing and forensics, I started interviewing professionals in different fields of the industry and writing blogs about topics that I found interesting. I discovered that the best way to unite and grow real estate professionals in Indiana was to pass this newfound information along to you, and so the magazine was born. Thank you to our sponsors who helped make this vision a reality, and thanks to you, our readers. Whether you’re a realtor, home inspector, mortgage lender, or potential home-buyer, we hope to provide an educational and entertaining tool to strengthen your relationship with your industry and community. Another important aspect of IREN is your feedback. We want to provide the highest possible quality content to as many people as we can. I don’t claim to be an expert, and frankly have a long way to go before I can make that claim, but with your help we can continue to do better. I hope you enjoy our journey, and maybe you’ll learn a thing or two along the way as well. Feel free to contact us on our website (Indiana-realestate-news.com), email (aaron@indiana-realestate-news.com), Facebook (Indiana Real Estate News), or Twitter (@Indiana_RE_News). We will also continue to post articles and videos on these sites, so be sure to follow us to stay up to date. Happy Reading!
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Table Of
CONTENTS 06
The 3 Types of Brokerages
09
Top 150 Standings
15
4
18
Internet searches are competing with this original tradtion.
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National Brokerages From January 1, 2017-December 31, 2017
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Learn about all the local happenings in Indiana
Are Open Houses Dying?
Top 150 Standings
Community Events
National and small agencies can’t compare to the independent brokerages.
Independent Brokerages From January 1, 2017 to December 31, 2017
Design Delegation
The importance of making sure everyone is repsonsible for the work that is done.
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Is it time to take the
Leap?
THE 3 TYPES OF
BROKERAGE FIRMS You need to know about. Are you starting out as a real estate agent in the industry, or looking to make a change, and wondering where you should look? We’ve broken down the three types of brokerage firms to help you with your search.
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“The Mom and Pop” Brokerage What They Are: These brokerages, which are also called Hometown Brokerages or Family Brokerages, are usually identified by having the owner’s name as part (if not all) of the company’s title. The smallest of the three types, Mom and Pop Brokerages are typically limited to no larger than 15 agents. Pros: Mom and Pop Brokerages usually offer a more intimate environment for learning and easier access to the managing broker than that of National Companies. Mom and Pops also generally have a slightly better compensation program compared to National Company plans. Cons: Unfortunately, Mom and Pop Brokerages offer little room to grow because they are not designed to support an agent’s growth into a team, or the ability for agents to own their own offices. Another major disadvantage: the brokerage’s name being the same as the owner’s may have a negative impact on any branding possibilities for an individual agent within a Mom and Pop company.
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Independent brokerages represent the highest quality of excellence and expertise in the real estate world.
Mega/Franchise Brokerages What They Are: These brokerages, which are often referred to as National or Regional Brokerages, are the most commonly known and recognizable names in the industry. As you’d expect, these are the biggest of the three types, and they typically have more than 25 agents with multiple offices across multiple states. National Brokerages are where most agents start their real estate careers. Pros: National Brokerages offer room for growth by encouraging agents to develop a team concept. They also inherently provide big name brand recognition. Compared to their smaller counterparts, National Companies make more money, which they can then use to purchase better technology. Cons: An “other side” seems to exist for each of the pros listed above. National Brokerages DO offer room for growth, but they also generally charge franchise fees to anyone who branches out and opens an individual office. National Companies are big on selling the idea of a brand, but recent studies show strong proof that agents don’t necessarily sell more houses simply because they are with a big brand. Furthermore, National Companies used to be able to leverage their money to buy great technology, but as technology has improved and prices have decreased, National Companies no longer have the advantage of better technology that they once enjoyed. On top of all that, numerous National Companies have become publicly traded, which has shifted their primary focus toward selling more franchises rather than focusing on quality control. While one agent in an office may have beautiful listings and excellent pictures, another could have horrible listings with bad photos. These inconsistencies can hurt the overall brand, which can likely trickle down to the agents within the company and impact them negatively as well.
Independent/Hybrid Brokerages What They Are: These brokerages, sometimes called Boutique Brokerages or Local Brokerages, usually have no more than 25 agents in one office and they generally do not have offices outside of one state. Pros: When compared to National Companies and Mom and Pop Companies, Independent Brokerages are usually able to offer more competitive compensation plans, equal or greater technology, and better training programs. Additionally, Independent Brokerages offer room for agents to grow whether their aspirations are to start a team or open a branch office, and there are no franchise fees associated with these activities. In fact, Independent Brokerages are legally not allowed to charge franchise fees. Cons: We’re having difficulty with this one. Seriously, Independent Brokerages seem to have the best of both worlds. And we don’t seem to be the only ones who have noticed. Many of the previously mentioned agents who started their careers at National Brokerages have left to continue their careers at either Mom and Pop Brokerages or Independent Brokerages either because of the poor training or the high commission splits or fees. And given the greater opportunity for independent growth, it makes more sense to transition to Independent Brokerages.
Obviously, where you decide to start or continue your real estate career is ultimately up to you. If you have a close personal relationship with an owner of a Mom and Pop or a great lead with a National Company, it may make more sense for you personally to pursue one of those avenues. However, there appears to be a shift in dynamics fueling a real estate revolution where for the first time in the history of the industry there are more Independent Brokerages than National Brokerages. And the agents are following suit: more agents are switching to Independent Brokerages while saving money in settings that often offer better technology and training, leading to more fulfilling careers. 7
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TOP 150 Independent Brokerage Standings
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Independent Brokerage Standings January 1, 2017 - December 31, 2017
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TOP 150 Independent Brokerage Standings
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TOP 150 Independent Brokerage Standings
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Independent Brokerage Standings January 1, 2017 - December 31, 2017
* All Data Included IN THIS LIST DEEMED ACCURATE BUT NOT RELIABLE. *All Data Included IN THIS LIST PROVIDED IS FROM MIBOR BETWEEN JANUARY 1 2017 TO DECEMBER 31 2017.
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The Importance of
Design Delegation 15
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hen finishing a significant amount of building projects, it’s almost guaranteed that two things will happen: there will be issues with the structure built, and it’s uncertain when the problem will finally be brought to light. Everyone involved with the building project will point the finger to someone else. With the pressure of these building projects to be completed quickly and done correctly, architects and engineers are seeking out contractors and subcontractors to finish the work for them. This route helps them save money and unload the stress of the complexity of the structures they are working with. However, when things go wrong during the construction, either it was made poorly, wasn’t done correctly, or wasn’t done on time, so the owner of the property, the architects, and the engineers need a formal contract to make sure they are not held liable for the work that the contractors and subcontractors completed. Daniel King, a construction and contract lawyer at Frost Brown Todd LLC in Indianapolis says the best way to avoid these issues is to have a formal contract written up before the project begins. Doing this will outline the specifics of what each contractor is responsible for, and ensure the project is done properly. Sam Laurin, the chair of construction law group at Bose McKinney & Evans LLP in Indianapolis believes that distributing tasks should not be the only factor when considering design delegation. Contracts should also mandate liability insurance for each party responsible in the building process, in case of injury or damage if errors appear present when the project is complete.
“Design delegation is
unavoidable and has become the norm. It will continue to be a practice of many building projects in the future and is to be expected when starting a new project.” 16
Brian Clifford, a construction partner at Faegre Baker Daniels LLP in Fort Wayne, states the importance of making sure any outside fabricated construction work is regulated by these contracts to make sure they fit in with construction perfectly, like a tinkertoy. If these requirements are not met, then the project will face safety hazards and possible damage. To begin the process of design delegation, owners, architects, and contractors use forms that are provided by the American Institute of Architects. This form allows architects to distribute design work and hold the contractor responsible for meeting deadlines and expectations for the project. Although these forms can get lost among many pages of blueprints, it is critical that these forms do not go ignored. Design delegation is unavoidable and has become the norm. It will continue to be a practice of many building projects in the future and is to be expected when starting a new project.
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Are Open Houses
Dying?
According to NAR, 43% of buyers use the Internet for their initial home search. These buyers get to know the prices, finishes, school districts, and comparable sales before they ever talk to an agent. Thanks to the Internet, today’s buyers are better informed than ever before.
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Anyone who knows anything about real estate knows that the most efficient way to sell a property is to host an open house so that potential homebuyers will come flooding in and start fighting over who can spend the most money to make this place their new home, right? Ok, so maybe it’s not that easy, and surprisingly, that’s not even the point. The real reason behind open houses is to recruit clients. Open houses are essentially training and recruiting platforms for new agents, or for agents who do not yet have listings of their own. Brokers don’t base the success of an open house on whether the property is sold. Instead, they want unrepresented buyers to fall in love with their charm, their knowledge of the neighborhood, and their marketing prowess. Weekend open houses are basically rookie camps for new realtors. Years ago, hosting an open house was the best way to practice with potential buyers and learn a little something about the market. But today, open houses are the least useful method for selling a home. Most buyers find houses online in the middle of the night, viewing photo tours and slideshows. Qualified buyers simply won’t waste time visiting houses they haven’t already checked out online.
If you’re really trying to sell that property, an open house is likely not the answer. According to the National Association of Realtors®, as reported in 2014, only 9% of buyers found the home they eventually purchased at an open house. That’s down 16% from reports in 2004. Open houses are a relic of pre-technological days when they were a good way for buyers to see as many properties as possible in one day and get to know a community. Now however, according to NAR, 43% of buyers use the Internet for their initial home search. They get to know the prices, finishes, school districts, and comparable sales before they ever talk to an agent. Thanks to the Internet, today’s buyers are better informed than ever before. Open houses are just not what they used to be, developers rely on model homes and unsuspecting novices to fall in love with fancy finishes. Homebuilders are masters in the art of luring and closing. Don’t mourn the dying of open houses, embrace the fact that the roles of realtors are changing. Home buyers are gaining knowledge, so now agents need to work smarter. And don’t worry, buyers and sellers: as agents get smarter and adapt to these changes, your home buying and selling process should get easier. 19
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TOP 150 National Brokerage Standings
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National Brokerage Standings January 1, 2017 - December 31, 2017
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TOP 150 National Brokerage Standings
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TOP 150 National Brokerage Standings
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National Brokerage Standings January 1, 2017 - December 31, 2017
* All Data Included IN THIS LIST DEEMED ACCURATE BUT NOT RELIABLE. *All Data Included IN THIS LIST PROVIDED IS FROM MIBOR BETWEEN JANUARY 1 2017 TO DECEMBER 31 2017.
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COMMUNITY CALENDAR Mamma Mia!
February 1st - April 8th
Beef & Boards Dinner Theatre The enchanting tale of love, laughter and friendship. ABBA’s greatest hits tell the hilarious story of a bride’s search for her birth father on a Greek island paradise. Nominated for 5 Tony Awards!
16th Annual Bowl Benefiting Helping Challenged Children
March 3rd
Woodland Bowl (Indianapolis, IN) The 16th Annual Bowl for HCCI is a fun night for adults and families, raising money for Helping Challenged Children Inc. This event funds the majority of the grants HCCI is able to fulfill each year. Two games of bowling, shoes, dinner, a silent auction and more make this a night to remember and one people come back to year after year.Helping Challenged Children, Inc. is committed to enhancing the lives of mentally and physically challenged children throughout Indiana by providing financial assistance in securing durable medical equipment when other avenues have failed. HCCI’s grants are offered as a last resort for the recipient. HCCI researches each case to ensure that all other possible sources of funding have been exhausted, then work to meet the needs of the child through gifting.
The Masks We Wear
March 16th - 17th
The Cat Theatre The Indiana Theatre Company, in association with the awardwinning Nickel Plate Players, is thrilled to present an exciting new theatrical endeavor – one that has the makings of a powerful commentary on our modern-day society. THE MASKS WE WEAR explores the very real challenges faced by those who suffer from depression, anxiety, and the societal stigmas surrounding them.
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And Then There Were None
March 23rd - April 8th
Civic Theatre Ten strangers are summoned to a remote island. All that the guests have in common is a wicked past they’re unwilling to reveal and a secret that will seal their fate. For each has been marked for murder. As the weather turns and the group is cut off from the mainland, the bloodbath begins and one by one they are brutally murdered in accordance with the lines of a sinister nursery rhyme. One of Christie’s darkest tales and a masterpiece of dramatic construction, its growing sense of dread and unfaltering tension will keep you guessing to the very end.
Inaugural Hot Chocolate 15K/5K
March 24th
American Legion Mall This first-ever event features the best goodies bags in running, free instantaneous race photos, and post-race treats. Proceeds benefit Make-a-Wish.
Looking Over The President’s Shoulder
March 27th - May 6th
Indiana Repertory Theatre (Upper Stage) Hoosier Alonzo Fields spent two decades as Chief Butler at the White House, serving Presidents Hoover, Roosevelt, Truman and Eisenhower. A hit in theatres across the country, this funny, poignant, uplifting memoir returns to the IRT by popular demand.
Cancer Support Communitiy Presents: Laughing Matters
April 14th
Hilbert Circle Theatre Enjoy a fun-filled evening on Monument Circle at the 18th annual Laughing Matters! Start the night with a block party on the circle, then Hilbert Circle Theatre will welcome Academy Award winning comedienne, actress, and TV host Whoopi Goldberg as headliner of the event.
Know of any other community events in Indiana? Please let us know so we can add them to the next issue! Email Aaron Henze at aaron@indiana-realestate-news.com 28
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THANKS FOR READING OUR FIRST ISSUE OF INDIANA REAL ESTATE NEWS MAGAZINE!
If you have any questions, comments, suggestions, or ideas for stories, send us an email at aaron@indiana-realestate-news.com.
INDIANA REAL ESTATE NEWS IS MORE THAN A MAGAZINE. To stay up to date on the latest news, opinions, videos, and events, be sure to regularly visit our website at http://indiana-realestate-news.com/, Like us on Facebook at https://www.facebook.com/indianarealestatenews/ Follow us on Twitter at https://twitter.com/Indiana_RE_News.