S.E.C. Real Estate Observer

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S.E.C. founder Richard Reno used to suggest that exchangors should not spend effort on any clients other than “counseled don’t wanters.” His most animated protestation was to never represent “thieves.” Recent analysis of package exposure in exchange marketing meetings has found that while many “don’t wanters” seem to own property they wish to transact, most have not been properly counseled to accept what the market will bring to them. They just think an exchange meeting is another “for sale” market.

Additionally, far too many of the packages are owned, at least partially, by the broker presenting. The rule that used to be enforced was that broker-owned packages could only be presented by a non-invested broker with written fee agreement or that the owner/broker could offer in but not present.

Careful analysis of the marketing meeting presenters now reveals that many have not been required to attend counseling courses as a prerequisite to attending a meeting, and they really have no skill, or no inclination, to do a proper withholding of representation until the client has committed to solutions that might logically be found in the real exchange market. The consequence is that much valuable marketing meeting time is wasted on “shooting blanks” because the owner is not in reality and the meeting will not produce a result for them. Marketing meetings should not be training grounds. Prior education and the use thereof should be the prerequisite.

I didn’t research the details of the process, but when I visited Australia, I discovered that most home listings went for only 30 days before the property was automatically auctioned. True market value was established very quickly.

The exchange market is sometimes regarded by those who seldom participate as a less productive market than the “for sale” market. That philosophy is not shared by experienced exchangors who use the exchange marketplace to close many more transactions than they would sell in a “for sale” market, while solving their clients’ problems as well.

Listing packages that do not convey realistic owner objectives (that the client has committed to do) should not be presented until those conditions are satisfied. An inventory of property available on the market can be handled by printings and website databases and doesn’t deserve a concentration of knowledgeable transaction creators unless the counseling has been done. Additionally, “I just got this over the phone and don’t have a package and haven’t done any counseling yet” situations should be banned from exposure.

Suffice it to say that the first priority to have only educated “Exchange Counselors” in attendance at marketing meetings has been left adrift and must be reestablished to save the efficacy of any exchange group. “If the discipline is not enforced, the prisoners will rule and chaos will prevail.”