Russell Shaw says market conditions favor full fee, full service experienced brokers

BrokerIPTV: I am delighted to be with Russell Shaw at the BloodhoundBlog Unchained event sponsored by Zillow here in Phoenix, Arizona and Russell just gave a great talk about our market, about commissions, and you had some interesting lines up there you were talking about your production in regards to say Help-U-Sell.

Russell Shaw: My production from my group, I am a broker with my own office the Russell Shaw Group, with a company called John Hall & Associates. In the last 12 months, my business is down, I want to put that in perspective, I am 75 million in the last 12 months, where in 2006 it was a 105 millions. My business is way down compared to what its been. In the last 12 months, my 75 million is better than all of the Help-U-Sell you sell offices in the Valley combined. These are offices, there are 14 Help-U-Sell offices and their collective volume and units is not as good as mine.

BrokerIPTV: So, you attribute that to the fact that you charge less commissions than Help-U-Sell?

Russell Shaw: [Laughs] No. I attribute it to the fact that in this market, it is...this market favors me because what I am promoting is I can get the job done where what they are promoting is, they do it for less. Like all of those discount companies are all saying same service, same fantastic service, I am not giving

BrokerIPTV: I understand.

Russell Shaw: That same fantastic service for less, same wonderful results for less money, but the truth is it is not the same result, what they are doing is doing it for less. In the market we had three years ago, which was part of that prolonged sellers market...discount companies thrived and when the market turned, broke and the problem for them is that they continue going broke because this isn't the deal about who can charge less money, it is about who can get the job done.

BrokerIPTV: Right, we are seeing that in some of the trends I have seen across the country where discount brokerages are suffering big time.

Russell Shaw: Yes, they are doing worse than people like in traditional companies like RE/MAX have a few offices closed. Well, the number of agents in that office were the reason, just too few agents to make the office profitable, but if anyone thinks that traditional Realtors® were having a rough go, they have no concept of what is happening with the discount companies because the discount companies margin was already thin and there is no business for you. There was one of those offices that I said, that 14 offices, their total volume, I am not talking commissions, I am talking sales volume for the last year, under one million dollars.

BrokerIPTV: Wow.

Russell Shaw: That tells you...I mean this is...you cannot live on that. I mean when agents talking being a multimillion dollar producer, well, if they were getting the full commission at a million, that is 30,000; so, a multimillion dollar producer could be grossing 60,000; by the time they pay expenses, they make less than anyone who works for me in my office.

BrokerIPTV: Wow. So you are saying that consumers out there and really it has probably been true for a while, they you are not really looking for commissions. Commissions isn't...

Russell Shaw: Right, that is not the go button. The go button is can you sell my house? We want to move, can you sell my house? It is not that you are going to say when you got there, you would offer them a lower commission, they wouldn't take it, but that is not the go button. I find that most of the people I am talking to have already decided to do business with us and then they think to themselves, I never even asked how much you charge. They are then asking us what our fees are, but they have already made that decision to do business with us.

BrokerIPTV: What do you find your most effective marketing vertical is out there as far as reaching the selling and buying community?

Russell Shaw: For me it is radio and television, a big, big turn on, radio and television. That is without a doubt the number one source of business.

BrokerIPTV: Well, video, TV.

Russell Shaw: Yes sir. [laughs] Or network television?

BrokerIPTV: Well, Russell, it has been a pleasure.

Russell Shaw: It is my pleasure sir.

BrokerIPTV: Great seeing you here at Bloodhound.

Posted on May 28, 2008 04:08:40 by Blog Author