¶ Understanding Real Estate Brokers
Hello , this is Brad Wiseman . You'll listen to Real Estate and You . We are back in the studio and we have a special guest here . This is gonna be an interesting show , because we just threw this together in about I'm gonna say 30 seconds , something like that , which is kind of how all the shows end up going . Right , hugo , that's right . That's right .
Yeah , so we got Mark Chaknas . He's the broker of record for Kelly Williams Platinum Realty , of course , and we brought him in here because there's a lot of question or a lot of misconception , a lot of confusion around what the hell is a broker .
So I'm here to set the record straight . You're here to set the record straight .
Yeah , i'm having a hard time getting this microphone set right today , so now we're good . Yeah , like everybody says , oh broker , they'll just call you a broker sometimes and you're not . You are a broker , correct , and we can kind of explain what's the difference between a broker and a realtor . What did you do to get this super cool title ?
So you know , having a broker's license is like , maybe equivalent to getting a master's in something like that . It's not to that extent of education , although it is a pretty significant , absolutely added layer of education , as you know a little bit as you're going through some of these classes .
But you acquire a broker's license to do really one of three things You want to own your own brokerage , you want to manage a brokerage or you want to get more involved with property management . I'd say Yeah , at the basic real estate level , when you get your license you can do some property management .
but if you really want to get more involved with it , you have to get your broker's license . Gotcha And goes along with . obviously , you know managing an office as well . When you start up , you know your own company and you have your broker's license . then you have to have a broker of record , and that's what I am for , keller Williams .
Right Now can you be a broker of record for ?
other companies In Pennsylvania . yes , you can . You can not be an agent for multiple companies in the same state , but yes , i could be the broker for multiple companies . Yeah , because .
I've seen other companies in the area that the broker you know the other companies that we have in our area here the broker is not even in the office , Right Like it's a broker somewhere else , and they're the broker for maybe many of the franchise's offices Exactly . So it's an interesting situation there , It is .
Yeah , and we have like , for example , we have our referral company , which is like really just a side entity , but it is a brokerage . I have to be the broker of record for that . So those are agents that are , you know , licensed in escrow but can be referral agents to agents that are fully actively licensed , right ?
So I am a broker for record for two companies . Two companies , yeah .
Amazing . So when ? what kind of studying ? I mean , how much time did this take to get this ? I mean , i've been a realtor for 30 years And I think what they should do is they should have a 30 year and you get the broker , maybe America .
You should just get it . You should just get , like see exactly .
Yeah , it's something different because I'm going through the classes now . Yeah , and it gives you a whole new respect for what you had to learn in order to become , or to take the test to become , a broker . Sure , it's a lot of schooling , yeah .
So technically you need only three years of experience . but it is tied to production Right . So you have to have , I believe , a hundred sides , which is either a buyer or a seller , or a lease .
So you have to add that all up , which is actually pretty much in the first in three years , and that's what it is . If somebody's new , yeah , if somebody's new .
You're probably not doing a hundred sides of first three years . Maybe you are , yeah , but you know , locally speaking I would say it's uncommon . So I would say about year five actually in my career is when I got my broker's license .
Yeah , Yeah , i know , as soon after you got your license , you got your broker's license , which is which is not . I don't think it's as common . I think a lot of times people are in 10 , maybe 12 years or so and then decided to do it . Or the slow guy here like me Yeah , i'm in 30 years .
Yeah , i think I'm ready to get that master's degree in real estate , still getting through those classes . I'll tell you what it's a pain in the butt It really is . It's the law , it's all the different things that you have to learn , but it's all stuff that keeps us out of trouble Yeah , keeps us out of lawsuits and things like that .
Shouldn't say keeps us out , reduces the possibility . Reduces the risk and liability , because , as a broker , you know very well that we there's liability , and that's something that you deal with .
Yeah , so that's really the main objective as a broker of record of a company is to kind of supervise all the agents and have an oversight of all the deals that are happening between our buyers and sellers . So a lot of what I do on a day-to-day basis is just problem solving .
Yeah , whether it's something that occurred within the transaction or on an agreement contract , what have you . But that's pretty much what I do every day of the week .
And then you also get sometimes where people decide that they're going to go after either A the buyer , the seller , the agent , whoever , or everybody , sure , and then you have to deal with that . Yeah , the notices from the courts come to you .
They do They do ? I mean our Pennsylvania agreements of sale have a mediation process in line first before someone takes it right to court . You could go straight to court , but oftentimes the mediation process is the best first available option . But yeah , the buck kind of stops me when it comes to that kind of thing . So I get the lawsuits landed on my desk .
That's good , And then I have to deal with the attorney .
Susan and I are very happy about that , actually , that you get those letters and not us .
Yeah , Well , you know , oftentimes you know we're getting them dropped off by a sheriff . Yes , not fun .
Not a fun , nobody ever wants to see that coming to the office ?
Yeah , exactly , getting served .
We know what it is And we're not called we're not when we say getting served , it's not a Vokantan . Just so you know we're talking about .
Yeah , nasty paperwork And for the general viewership out there they should know like these . it's a very limited case is like I could count on the on my one hand , how many we receive throughout the year , and not all of them to go to court .
No , you know , a lot of times it's getting settled outside of court or it's something that probably shouldn't have been proposed in the first place , but we also have insurances and things like that in place , so , yeah , it's .
Yeah , we don't want to make it sound like it happens a lot for our , for our company here . It does not , and a lot of that's you setting up the parameters for what we call compliance . I mean you , you set up what you feel is the right , are the right forms that need to be signed and done .
You also have it set up that basically , as realtors , as agents in this company and I'm including myself I have to live by this too , that if it's not in the file , i don't get my commission check Correct .
So you know , i think there's a lot of companies out there that don't do that , that kind of fly more the seat of the pants , and there doesn't work out so well .
Yeah , we're pretty strict here on compliance , but for good reason , because it really limits them and there's no number of lawsuits that could potentially come in . I mean , i'm probably toughest on our seller's property disclosure . I think any attorney out there would say you know , that's the one thing .
They kind of look at first outside of the agreement , in terms of what was on there , what wasn't , because oftentimes when these lawsuits come about it's about misrepresentation or non-disclosure .
It could be something within the contract itself , but a lot of times it's a problem that accrues , arose after the fact , and then they kind of look to that document to see okay , what did the seller tell you at that time And was it accurate , was it truthful or did they misrepresent ?
So no water in the basement and first three inches of rain . There's four foot of water in the basement .
That's right . That's a common one . That's a problem . Yeah , or ?
I love , I love small trickle , small trickle during heavy rain .
Minor rainstorm in 2015 . Yeah , only had a drop in the basement Only happened during hurricane .
So you get , and we get like a little bit of mist outside in the four foot of water in the basement . That's a problem , yeah , but that happens And that's why we tell people , I tell people all the time , my seller clients , you know , when in doubt , disclose , if you're , if you're thinking about it , mm , hmm , disclose it
¶ Importance of Disclosure in Real Estate
100 . What do you have to lose ? I mean , you have nothing to lose , you only you have to lose when later on it comes up and it's an issue . And you know , i wish I would have said something . Yeah , you know .
So disclose , disclose , disclose always Yeah , i'll give , i'll give one more quick tip . Yeah , go ahead , sellers like if you ever had a contractor out or any licensed company of any sort . They looked at an issue in the past and maybe you say you didn't repair it back , then You should probably still disclose it , especially it hadn't been fixed .
Because those are the type of things where they'll say , no , you know , we never dealt with that , and then something does happen to that particular item And then they hire that same contracting companies . I told these people five years ago I've heard that so many times .
Oh yeah , all wait , They're like . Well , yeah , we were in here last week before settled and we told him , We told him the heaters system to work , he's you a loss in the suit .
You're not gonna win on that one .
Yeah , one of my first deals when I first got in the business was was kind of like that , actually much worse .
It was a semi-detached and I'll never forget it the like four weeks after settlement and they had put down you know , small trickle during , yeah , storms , whatever , but never had an accumulation of any kind of rain like you know it's just moisture , whatever .
so when they move into the , the buyer moves in , i get a call from the buyer's agent after they moved in and It's like six weeks later we had had major rain , like like three , four inches of rain in a day , and And next thing , you know , i get this call and they said I said well , they said oh , by the way , when they called the fire company to come
pump out the water out of their basement That's how much water was in the basement Yeah , they said Oh , yeah , we've been here eight or nine times before . Yeah , there you go right , Yeah , yeah so that just shows you that you're never gonna get away with it . No , on a self disclosure statement , it's gonna come back to bite in the butt at some point .
So it's a big part of what you do , though , which is interesting . It is a big part , yeah , it's amazing . Well , so what is ?
this clothes , man ? What is that So ?
that's , that's a state a document It's yes , required form .
So every seller has to fill one out and It essentially tells you a little bit of backstory . The house you know , talk about who's lived here , when did you buy it ? Have you had any pets ? how old's your heat , your AC , and then disclose any issues that you've had current or past .
It actually prompts you , which is what I like . Yeah , you know , when you think about , like years ago , when I first got in the business , disclosure was in this form Mr Mrs Seller , do you have anything to disclose about the house ?
No , okay , so then let's get this listing contract done .
That's the way it went . So what happened is with the seller disclosure statement , which was brought into effect , you know , years ago , was because it made you think . Sure , it makes you think you'll sit there because maybe you wouldn't think about the electrical problem . That was a problem . But if it's asking you , was there a problem , you're gonna go .
Oh yeah , we did , you know to me .
So it's funny how it's evolved you know It's not a bad thing at all And I think the the hardest part right now in the market that we're in currently is that most deals are getting done without inspections . Yeah so if you have an inspection paired with a properly filled out Seller's disclosure , you've got pretty good confidence going absolutely .
But what we're seeing more often than not now is no inspection , yes , and a so-so filled out disclosure .
Yes , and that's where problems are eyes absolutely , and I think that's , but I think it's really good that you're very strict on that , and it Made makes us very strict on it , obviously and telling our sellers look , you need to have this all filled out .
Yeah , and then what's nice is we have really good transaction coordinators here that for our agents and They end up making sure that that's all filled out also . Yeah there's a lot of steps in the compliance . I think it's good for people to know that we're we're following the letter of law from PA . No doubt about what we're doing .
It's not that we're trying to be a pain in the ass . We're doing it because it's it's the right things to do . Well , we're looking to protect our clients interest . Yeah , exactly , not only our own , you know ?
Yeah , really it's really our clients . Yeah , exactly in order to be strict on that .
We don't want it . We don't want them getting wrapped up into something you know later on . I always say when you walk away from this house , you don't want to have to look back . Yeah , you know people want to walk away and go . Okay , i took my memories with me , but I don't want to look back at any problems . That's right . You know positive or negative .
Yeah , exactly deal with it , you'd be very mostly attached to home . You just sold it and then , the next thing you know , you're caught up in a lawsuit . Or perhaps you went through a divorce And it was a chapter in your life now you wanted to close . Next thing you know it's back open . Yeah , exactly those , probably so not fun .
Those are the type of things .
Yeah , not fun . What other things can you think about that that you can do as a broker Or versus a realtor ? I'm trying to think of anything else . So you can open your own company , correct , you can run your own company , manage it , run it , whatever . You don't have to be something that most people think too .
You don't have to own the company to be the broker of record .
That's correct . Yeah , so the broker of record is really just like the head of compliance is what we just talked about , but you could just be a broker within that company and then consider an associate broker . Yeah , So that's different levels of licensure at the broker level .
An associate broker back in the day I would say it was more renowned as someone that was just further educated in the industry Yeah . Yeah , and we don't see that as much anymore , and I think it's because people view it as well that education doesn't pay , unless I'm going to be the main broker or a manager or property manager Or open my own thing ?
Yeah , So like when I did my brokers classes in 2015 , I'm trying to think I think there was two people in our class Crazy . And now I know , when people are trying to get their broker's license , it's extremely limited and they don't even have as many classes .
They don't , And that's one of the things I've noticed . They don't have as many classes , But I would suggest anybody out there to get it Especially . Here's the thing . I've told myself this , and I've never followed it in real estate but always be prepared for an opportunity . Yeah , You might think , oh , why would I ever need my brokers ?
But you never know when somebody's going to say , hey , you know what , we're starting a new real estate company . You will never be looked at if you don't have your brokers . Yeah , If you have your brokers you're one of the few that does And if your personality fits theirs , they might say , hey , we want you on board .
Well , there's no doubt it , It should help you in your business Absolutely , in attaining new business . I mean , it's that added layer of education that everyone should respect that you went through .
Absolutely . So what do you think about taking the broker hat off ? What do you think about this market ? What do you think is going on So ?
you know , what I've been seeing mostly as of late is prices are continuing to appreciate , i'd say particularly under the $500,000 mark Totally , and then we're starting to see things to slow down a little bit as far as activity on the 500 plus . They're still selling , but it feels like those houses have kind of reached a peak now .
Yeah , i agree , you know , if we got 30 showings on our $300,000 listing , we might only have five on our $600,000 listing .
I know exactly what you mean . Yeah , And we're seeing price reductions . I mean that's $600 and plus man , $600 plus , $550 plus is starting to see price reductions And I think that's a that I do think is a direct result of interest rates . I think , i think , because when you start getting into that realm it definitely affects your payment .
I mean , it's not about
¶ Maximizing Home Value Through Improvements
it .
And at some point you just kind of have to run out of buyers for these type of properties that have been selling for so much money .
Absolutely .
Just based on our demographics in Berks County in general . But you know we're still a pretty affordable place to live . We talked about this before . You know that's why that price under $500,000 still goes . You know pretty quickly because you know $500,000 in some of these other areas closer to the Philadelphia markets to condo it could be . It could even be .
I saw a townhouse listed for sale down in Ivy Land , pa , which is a warm and stir . Okay . 975,000 for a townhouse , yeah , that's just it looks like you know , like the ground day ones that they just built here in Osmo , which are beautiful , yes , but , but they're not three times the price .
Yeah , what's crazy .
Four times .
We still have a really good market for here , for that affordability And that's the affordability Absolutely So I think , hugo , you had a question . Did you have another question ?
Oh yeah , i was wondering , like what is the thing or improvement that you can do to your home prior to selling that will give you the greatest return on investment ? Yeah , prior to selling , i would say , if you got carpets in any of your place , replace the carpets , and paint goes a long way .
Absolutely , because a lot of times you know the buyers go into a house to determine whether or not they feel as though the sellers lived in it hard . You know you might have four kids and two dogs and every piece of trim in that house is torn off and the carpets are stinky . Have you been in my house ? No , yeah , just kidding .
Specifically referencing Brad's house , but I am . But it's amazing what a Bernie's Mountain dog can do . Yeah .
But you know they won't have any clue if those carpets are brand new and you just actually painted the place . And then their mindset changes .
Absolutely .
And those dollars that you just spent could equate to , I'd say , two and a half times what you put into it . I agree with that 100% .
And if you're looking for that short term , i think , if you're looking for long term and you're thinking you know we're thinking about redoing our kitchen I think those are decisions that you'd want to wait . You'd want to know that you're going to be there for at least five years more .
Yeah , kitchen and master bath .
Yeah , like that . Yeah , because those are pricey , pricey items and I don't know if you're going to get it back in a year or two , but I think if you wait that five years , you probably at least break even or make a little bit of money .
Yeah , i agree , and it's also a little dependent on location , you know what I mean , absolutely So , if you're round zero for real estate in Berks County , wherever you determine that to be , and you need to put the kitchen in , you'll get your money back and maybe then some . But in other areas that maybe you're pricing yourself out of that market .
it doesn't make sense .
Yeah , And I always think it's funny too . People will ask the question , like about finished basements and things . If the whole community like Warner Farm , if everybody in there are 99% of them have finished basements and you don't , yes , it's going to affect your value .
It's something Right . It's going to affect you .
You're not going to be able to get what the person just sold for . It's just not going to happen , absolutely . So those things do matter . You know it's not like you're going to get a ton more . You're just not going to get market value , right You ?
know it really is what it is , And finished basements aren't cheap to do , especially now , no , they're not , so I know they're not . you know , these people could have done that for 30 grand 10 years ago And now it's costing you 70 grand . Yeah . It's so true So did that answer your question Here you go ?
Yep , all right , cool , anything else you want to end with ? Believe it or not , we spoke for 18 minutes . 18 minutes . It's a good conversation , though . We now know what a broker does . We know what a broker , what a realtor , can't do , which is which is good to know , and all that of stuff . Anything else you can think of ? No , thanks for having me on .
No problem , you're going to go golfing golf in the day .
Golf into the men's league today , 15 . All right , good , good , all right , sounds good , man .
All right , that's it . There we have it . Broker versus realtor . What the hell is a broker ? Now we know , thank goodness we know , because I know a lot of people ask that question and now we know . So we will see you next Thursday at 7 pm . All right , that's it , thank you .