The residential housing market is recovering, but traditional real estate agents may not be, according to one agent who began at the height of the economic collapse.
Josh Hisaw of The Hisaw Team said that high-volume sales are now beyond the reach of individuals.
“A lot of people are moving toward teams,” said Hisaw, whose team works through Keller Williams Realty. “It’s getting to the point where (agents) are doing a lot of volume or they’re doing next to no volume at all. The regular, traditional real estate agent is dying.”
Hisaw, who previously owned three Memphis-area TCBY locations, teamed up with another restaurateur, Michael Mosteller, the owner of Pig-N-Whistle restaurants, in 2008 to form his real estate team, which also includes Nikki Perry, a personal trainer, and Roamy Kilmer, a former emergency department nurse manager.
The four rely on their business experience to make the buying and selling of real estate a leaner, faster process. The team is licensed in Tennessee and only works in residential sales.
Hisaw and Mosteller both work as listing specialists, while Kilmer and Perry work with buyers. Each has specifically defined roles within each transaction, which allows the team to work multiple sales at once.
“You can do much more volume, so you’re going to make more money, so you can allow better service,” Hisaw said.
The idea is that once a buyer or seller moves into closing, other members of the team take over and handle the many tasks, which often tie agents’ hands. That way the agents are always showing and listing houses instead of chasing down termite inspections.
“Once you put everyone in a defined position, you can eliminate that because you’re always working on selling homes,” Hisaw said.
Teams are not new to Memphis, but Hisaw said his team is based on models from larger real estate markets like Phoenix and Orlando where they are more prevalent.
The four spent the last half of 2008 getting organized and in 2009 closed 43 homes. In 2010 that jumped to 102 and in 2011 they reached 138. So far in 2012, they have closed 110, all with average marketing expenses of about $1,000 a week.
A good portion of their transactions have been in short sales, though Hisaw said that percentage is decreasing as the amount of distressed properties on the market decreases.
Currently about 30 percent of transactions have been short sales on the buyer’s side and about 50 percent with sellers.
But in 2008, short sales were low-hanging fruit.
“We learned real quick how to do short sales, that’s what Michael does, and we got heavy into them at the end of 2009,” Hisaw said. “That’s what the market was. Traditional sales weren’t really happening. Since 2009 we’ve done less and less.”
And he expects that to continue. With the last of the subprime mortgages adjusting in 2011, there are fewer homeowners waking up to find they can’t pay their mortgage anymore.
But Hisaw’s optimism goes a step further.
“Believe it or not, it’s been a seller’s market for six to eight months,” Hisaw said. “Inventory is extremely low, which is going to drive upward pressure on price.”
Nonetheless, frank discussions about pricing are part of Hisaw’s process. He said it makes more sense to turn down sellers who believe, perhaps sentimentally, that their homes are worth more than their appraisals suggest.
“When the buyer gets a loan, they’re going to have an appraiser come out,” Hisaw said. “If it appraises for $150,000, they’re not writing a loan for $175,000. It wouldn’t matter what we could sign for the property, the deal is what it’s going to appraise for and let’s get it as close to that as we possibly can.”
On traditional sales, The Hisaw Team guarantees to sell a house within 45 days or they will pay the monthly mortgage notes. So far that has only happened three times.
Many of their sellers have expired contracts with one or more real estate agents and are therefore looking to sell quickly.
Hisaw’s team coauthored a book available on Amazon titled “The New Rise in Real Estate,” which discusses how real estate agents can maximize prices in a market he expects to remain steady for the next few years.
“I think that the market we’re in now is the market that is going to continue for the next three to four years,” Hisaw said. “It’s moving in the right direction, but that doesn’t mean that the prices are going to go back to 2005 levels. In Memphis, prices increase with the rate of inflation somewhere around 3 to 4 percent per year.”