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10 Keys to Credit Card Processing

Top 10 Keys to Lower your Credit Card Processing Costs

1. Switch to Interchange Plus Pricing
2. Know your Business Type
3. Get set up under the correct Visa/MasterCard Program
4. Know your card mix and average transaction
5. Use Latest Processing Technology
6. Review your statements (at least every 6 months)
7. Accept All Card Types and transaction methods
8. Be in Contact with your account executive
9. Get multiple bids for card processing service
10. Buy value – not price


Credit card processing continues to become more complicated with new fees, technology and regulations. We realize that you can be overwhelmed with all the changes.

As a small business owner, you are inundated with offers from credit card processing companies that promise to save you money. Usually most offers start with a low rate. Each merchant services provider tries to trump another with that lower rate to win your business. If you have been in business for some time and switched processors, you might have realized that these low offers do not always pan out.

In fact from 2000 to 2010, the average credit card processing rates for retail have risen from about 2.00% to 2.66% not including extra fees like statement fees, batch fees and PCI fees. This rise is despite a huge drop in debit card rates and increase in debit card usage. Why the increase? Rewards cards are one of the main culprits. Banks are passing on the cost of those fancy rewards, airline miles, etc, to the merchants.

The second main reason is a lack of merchant processing education. Merchants are trained by the banks to respond to low rates. The problem is that there are 440 Visa/MasterCard/Discover rates and the banks are only showing you the lowest transaction rates.

The correct question to ask is not “what is your rate?” but “what is your effective rate?” The effective rate takes into account all the possible Visa/MasterCard/Discover categories for which a transaction may qualify. Knowing your effective rate will give you a more accurate estimate as to the true cost of your processing. You can figure out your effective rate by using a simple formula.

Effective Rate = Monthly Processing Charges/ Monthly Processing Volume.

For example: If you process $10,000 dollars a month in volume and your processor charges you $300, your effective rate is

$300/$10,000 = 3.00%

This guide outlines 10 key strategies to lower your card processing costs. Below is a detailed explanation of each key strategy. By following these steps, you will be an expert in credit card processing and you will do yourself a favor by lowering your processing cost to the maximum extent and saving substantial amounts of money.

10 Keys
1. Interchange Plus Pricing (IC Plus)
This type of pricing used to be reserved for Fortune 500 companies. Not any more. Now, even Mom and Pop shops can take advantage of IC plus pricing savings. Banks are hesitant and sometimes outright refuse to give IC plus Pricing to small businesses because the banks are unable to maximize their profits. They would rather sell you the much more lucrative Enhanced BillBack or 3-Tier pricing, which is much more lucrative.

The recent Durbin Amendment makes it imperative that you switch to Interchange plus pricing to ensure you realize the cost reduction savings. Merchants that are not on interchange plus pricing will see their savings go to the processor, which is not compelled by law to lower the rates. (Please see Durbin Amendment Savings at the end for more details.)

There are many independent credit card processing organizations (ISO) that will offer you IC Plus pricing. You should take them up on their offer. There are many reputable ISO’s in the market.

Why Interchange Plus Pricing?

As mentioned before, there are 440 different Visa/MasterCard/Discover Categories and you want each one of your sales transactions to qualify for the lowest possible rate category. IC Plus Pricing places each transaction in the appropriate category and charges the corresponding rate. No other pricing method does this. For example, the most common pricing method, 3-Tier, places each transaction according to the processors’ preferences. The processors prefer placing most transactions in the mid- and non-qualified tiers as opposed to a qualified tier. Yet, these same processors will sell you on the qualified rate tier. This is an example of bait and switch.

IC Plus pricing is pretty simple. There are three components that make up your rate.

Interchange + Visa/MasterCard/Discover Assessment Fee + Processor Rate

Interchange consists of 440 rate categories. For most businesses, only about 60 categories will apply. That is still a lot. The range of rates varies widely from 0.95% + $0.10 for debit cards to 3.25% + $0.10 for certain corporate cards.

Assessment fee is the rate Visa/MasterCard/Discover charge for each transaction. Currently this fee is 0.11% + $0.02 and does not vary by card or transaction types.

The processor fee is the rate and/or transaction fees your processor charges. This is the only negotiable part of the interchange fee available to the merchant. Please keep this in mind when negotiating with potential processors. This fee does not vary by card or transaction types.

To get the final rate, you simply add up all the components. For example, a
Visa Retail Transaction Rate would look like this:

1. 54% + $0.10 + 0.11% + $0.02 + 0.10% + $0.13 = 1.75% + $0.25

Always remember that swiped transactions have lower rates than keyed transactions. Swiped or keyed business card transactions have higher rates than swiped or keyed consumer card transactions. Debit card transactions have lower rates than credit card transactions.

Please remember in choosing your pricing method, you want to lower your effective rate. The rate range is more important than the lowest rate. The lowest rate only applies to one transaction type. The rate range applies to all the cards and, ultimately, determines your effective rate.

2. Know your Business Type
Visa/MasterCard use pricing indicators or business types to apply discounts to your rates. In the beginning, Visa/MasterCard used to charge one rate for every industry. Some industries refused to accept credit cards because they thought the rates were too high and cut into the profit margin. Supermarkets were one of the biggest holdouts. So, Visa/MasterCard began offering discount rates to specific industries, card types, and processing methods. This is why there are 440 different rate categories. These discounts paved the way for credit card acceptance at supermarkets, gas stations, and fast food restaurants.

Your business may qualify for one of Visa/MasterCard’s special programs.

For example, if your business has an average transaction of less than $15, you may qualify for the small ticket program. If you are paying 1.64% + $0.25 per transaction now, then under the small ticket program you could get your rates as low as 1.65% + $0.04. Now your processor will probably tack on another six cents to cover its costs. Still, you would save fifteen cents a transaction or 1.5% on a $10 transaction.

Visa/MasterCard has programs for most industries like restaurant, B2B, MOTO, quick serve restaurants, convenience store, hotel, gas stations, supermarkets, charities, insurance, utilities, government etc.

3. Get Set Up Properly
Once you know your business type, make sure that you are processing under that correct business type to take advantage of the savings. You will need to call your processor and ask. If you are not set up properly, you need to find out why and fix it. Your processor may not have intentionally set you up under the wrong business type, but it has reaped a financial reward from you. This is why you need to constantly be pro active in accepting bids for your merchant services. Do not become complacent with your current provider because, like it not, many have their best interests at heart.

4. Know Your Card Mix and Average Transaction
There are dozens of card types such as personal cards, rewards cards, corporate cards, debit cards, purchase cards. Each type of card has a direct impact on the rate that you pay. Having a break down of the card types effectively minimizes your processing charges.

You will also need to know the percentage of swiped transactions, keyed in transactions, and business card transactions. Let’s say your processor provides you with a super low swiped rate but you key in most of your transactions. Another situation is if you are set up with a low consumer card rate even though you take mostly business cards. Remember many processors will sell you a low rate to get your business but that rate may not apply to the majority of transactions. A higher rate may apply. For this reason, you need to know your mix of card transactions.

If you are not sure of your card mix, your processor should have a website so that you can review your transactions. Some processors’ websites provide in depth analyses of your transactions. Use this valuable information to your advantage.

Although IC Plus pricing offers the greatest savings for most businesses, there are some exceptions. For example if you accept 95% personal cards swiped through your credit card terminal, you would be better off with a low 3-Tier pricing. The reason is that you can predict that nearly all of your transactions will qualify at the lowest qualified rate and only a few transactions will qualify at the higher mid- and non-qualified rates.

If you take a majority of business cards, you might be better off with a special B2B pricing program. Most small business owners are not sure of their card mix. Usually, the card mix is all across the board. In this case, you are better off with IC Plus pricing.

Knowing your average transaction will save you money. You can find your average transaction on your statement or simply divide your monthly volume by the monthly number of transactions. This is important to know, because if your average transaction is below $15, you may qualify for the small ticket program. If you have a high average ticket, your business may benefit from pin debit savings.

5. Use Latest Technology
A few years back, there was the story of the merchant who had purchased one of the first credit card terminals, the VeriFone Zon Jr. XL, which was very expensive. He had heard so many stories about his fellow merchants getting swindled on terminals that he vowed never to buy another terminal again.

One day a merchant services rep walked into his store and analyzed his statement. He noticed that his rates were extremely high. When he saw the Zon Jr. terminal, he realized that the obsolete equipment was the cause for the surcharges. The sales rep tried to convince the merchant that to save money he needed new equipment. The sales rep explained that the Zon only read the one track of information embedded on the back of magnetic strip of credit cards. Visa/MasterCard required that both tracks be read. The merchant would not budge.

Another five years passed and the Zon finally gave out. The merchant coughed up the money to purchase a new machine. The next month, he noticed that his processing charges per transaction were nearly two percent less than the month before. The sales rep was right. The merchant saved a few hundred dollars on keeping his old equipment, but lost thousands of dollars in unnecessary fees because he was incorrectly processing transactions. The moral of the story is that to ensure you maximize your savings you need to use the latest equipment and technology.

Another factor to consider is PCI Compliance. PCI Compliance is the credit card processing industry’s program to eliminate fraud by compelling merchants to follow their security regulations. Some older terminals are no longer PCI compliant and merchants who continue to use those terminals will face heavy fines if their terminals are compromised.

6. Review Your Statements
Most merchants seldom, if ever, review their statements on a monthly basis which is not a good idea. Do not expect your accountant to review and pick up irregularities from your statement as many CPA’s are unfamiliar with statements.

When you look at the statement, look for any changes in rates and fees and any other irregularities.

April and October are the two months out of the year when you must review your statements. These months are when Visa/MasterCard Association meets to set rates for the year and when your rates are most likely raised. If they are raised, talk to your dedicated account executive or your processor’s retention department and kindly ask them to lower your rates. If they are resistant, then switch processors because it is obvious that they value those few extra pennies over your business.

7. Accept All Card Types and Transaction Methods
There is an old adage in business – if you want more sales, make it as easy as possible for your customers to pay. That means accepting all the cards – Visa, MasterCard, Discover, American Express, JCB and debit cards.

Some merchants refuse to accept American Express because the rate is too high. The question you need to ask yourself is if you mind paying the higher transaction costs to gain a sale or mind losing the sale to save on the higher transaction cost. If the former is more important to you, accept American Express.

A few years ago, pin debit used to be the best way to cut your processing costs. That is not always the case anymore. Visa/MasterCard have cut the interchange rates for signature debit transactions. The debit networks have raised their transaction fees. But for merchants with high average transactions, pin debit is still a great tool to save money because the debit transaction costs are so much less.

If you are a retail business, ask your processor if they offer check guarantee. If you truly want to lower your transaction costs many check guarantee companies like Telecheck and Certegy offer rates below 1%. Then put up a sign that you welcome checks because some people still write checks.

8. Be In Contact With Your Account Executive
Do you have a dedicated account executive? Do you know who your account executive is? If not, then you need to get a new processor with an account executive assigned to your business. There are so many changes occurring in credit card processing industry that you need to be pro active in your response. You need a go to guy to help you. That’s your dedicated account executive.

A good merchant services account executive can help you analyze your statement; ensure that you are set up under the correct business type; help you decide the best pricing method; advise you on the latest technology; help you win charge backs; and, resolve other issues.

9. Get Multiple Bids for Card Processing Service
When was the last time you had your statement analyzed? More importantly, when was the last time you even looked at your statement. If your business is like most businesses, 50 percent or more of your revenue is generated through credit card payments. It pays to know what you are paying and ensuring that you are not paying too much.

The best way to the best deal on credit card processing is to get multiple bids. When banks compete, “you win” is not just a slogan but good advice. Getting multiple bids may appear on the surface to be time consuming.

10. Buy Value – Not Price
There is a famous saying that goes “price is a one time thing, cost is ongoing.” Many merchants are lured into bad processing agreements by artificially low rates and/or “free terminals.” These offers are constantly advertised on the Internet. “Rates as low as…” and “free terminal with every account” are just some of the offers. Don’t be fooled. If you have reached this point in the guide, then you have educated yourself pretty well.

You know that rate means nothing. Effective rate is everything. (Effective rate is all your processing costs divided by your volume.) Rate is what got you to sign. Effective rate is what you actually pay.

Go with a company that offers the latest technology. Do not pay extra fees or PCI compliance penalties because of obsolete equipment. Look for added value like loyalty programs, gift cards, check guarantee, online account access, POS systems. Other services and products like these can give you a competitive advantage. If you do not take advantage of them, your competitors certainly will.

Go with a company with a dedicated account executive. Ask the processor what happens if your account executive leaves? Can you be assigned a new one? A good account executive can save you much time and money which is worth a little extra fee for that service.

Go with a reputable company that tailors its processing to your business needs. Many merchants think they can solve this problem by going to their banks. Banks do not have the same control over merchant services like other products they sell. Most banks outsource their merchant services to big processors like First Data, Elavon, and Paymentech. As mentioned before, the banks want to profit off of you by making a profit from your business. Do not expect to get a good deal from your local bank. But do expect to get a sympathetic ear when something goes wrong. Do not expect your banker to be able to do something about it.

Second, your processor should be able to accommodate your needs. If you need next day funding, have large transactions, take advanced payments, or want to accept health savings cards or fleet cards, your processor should be able to work with you to create a plan that will meet your needs. If not, find a processor who can help you with these objectives.

Be wary of free terminal offers. As the sayings go, you get what you pay for and there are no free offers. Credit card terminals are not free to the processor and the processor will make sure it gets a return on the “free” terminal it gave to you. Find out what that cost is. The cost could be an obsolete terminal, a long-term commitment, or excessive penalties for non-return of equipment.

Keep searching. If you are not completely satisfied with your current processor, then change processors. The competition for merchant service accounts is fierce. You are in the driver’s seat. The best advice when choosing a credit card processing company is picking a company which you believe has the most integrity and honesty. This will keep you in a good position over the long run.

The Durbin Amendment Savings

Small businesses have received the biggest reduction in their credit card processing charges in the history of the electronic payment industry, but if they are set up correctly.

The Dodd – Frank Wall Street Reform and Consumer Protection Act of 2010 included an amendment, the Durbin Amendment, which greatly impacts your credit card processing or more specifically your debit card processing charges. This Durbin Amendment affects both signature and pin based debt interchange rates by drastically lowering them as of October 1, 2011.

Prior to October 1, 2011, the debit card processing rates (debit interchange rates) were set by Visa/MasterCard at 0.95% + $0.20 for Visa and 1.05% + $0.15 for MasterCard. The Federal Government led by Senator Richard Durbin intervened and under the Dodd Frank Wall Street Reform and Consumer Protection Act reduced the debit interchange rates to 0.05% + $0.22.

Merchants that process debit cards whether signature debit or pin debit will see huge savings on their merchant account processing statements in the future. Debit, both pin and signature, comprise nearly 50 to 70 percent off all card transactions. Merchants could see their credit card processing charges cut in half. That equals real savings.

Unfortunately, many merchants, who do accept a high percentage of debit cards, may not see any savings, because their current credit card processing plan does not allow for the Durbin Amendment reduction. Instead their debit interchange savings will be going to their processors.

This is especially true for merchants who are on 3-Tier and Enhanced BillBack pricing. Processors are not compelled by law to reduce the rates. They are only reducing one component of your rate, Interchange, but not the other two components, Visa/MasterCard assessment and the processor’s percentage.

There is away around this dilemma to ensure that your company realizes the debit interchange savings. This requires the merchant to switch to interchange plus pricing. This will guarantee that you will receive the reduction.

The reason is that under IC plus pricing, the processor is compelled to set the interchange rate at the current bank rate and then add his percentage on top.

Dominik Bjegovic – A Copywriter Who Made Me Rich


I’ll begin my article session by reviewing each of the top-gun copywriters such as…

Gary Bencivenga, John Carlton, Dominik Bjegovic, Dan Kennedy, Michel Fortrin etc.

First, I will start with Mr. Dominik Bjegovic as he is probably the most unknown of the “All-Star Team”.

For the purpose of this article I had to contact several business owners who were working (or still are) with Dominik Bjegovic. I was surprised.

All six of them I’ve contacted told me basically the same:

He is arrogant.

He is honest.


I was amazed.

First of all, not all of you realize that he is b2b copywriter, not a b2c. He has his crew that work for other projects (b2c included) and advertise on different websites, but Dominik personally is working only on large, high-stakes b2b proposals, promotions and CEO-to-CEO letters.

That’s why it is so hard to get his swipe file (but I am speaking with one Oil company CEO about getting a hold of one of the promotions Dominik did for him).

A $10,000 for 542 words!

One of the amazing stories I’ve heard from the head of one large, actually huge construction company group from the UAE.

He was closing one deal and he had only one shoot, one guy to get to the negotiation table and close the deal. He wanted to maximize his chances. So he hired Dominik Bjegovic.

CEO of that company didn’t want to go in much of details, but he told me this: they spent six hours in research and Dominik has spend maybe an hour and half writing the ad itself.

Once the ad was done, it was less than one page long and it came with 49 pounds heavy piece of railroad as a gimmick. Wow, what a gimmick, huh? :)

And guess what? It worked.

This CEO did get a phone call notifying him he is crazy for sending out that piece of metal and that he wants to sit down with him on the negotiations table. Long story short: $10,000 for a later-closed 340M USD deal is a smart investment (although 1k for one page is big bucks).

That makes Dominik probably the highest-paid copywriter per-word in the world. Maybe second only to legendary Gary Halbert (RIP) and his famous Coat-Of-Arms promotion.

In the next article in the cycle, I will review John Carlton, an amazing b2c copywriter, a genius and an entrepreneur.

If you would like to contact Mr. Dominik Bjegovic, I wasn’t able to find any direct-contact information to reach him. Maybe you could dig something out. Admittedly, I was tired after getting through all these secretaries and appointment settings with CEOs for the interview I made to provide you with this info. I didn’t paste transcript of the interviews simply because they (CEOs) seemed to be extremely busy and we were able to exchange just a couple of words.

So, stay tuned, the next article is about The Marketing Rebel, the genius himself, Mr. John Carlton.

For Advertising Secrets,


Real Estate Investing – FSBOs vs. Agent Listings?

Many would-be real estate investing professionals face discouragement because of the assumption that acquisitions require deep-pockets. Some even believe the myth that nothing-down purchases are impossible.

The early 1980s era in real estate investing known as the Zero Down Real Estate Movement was initiated by Robert Allen with his best-seller, “Nothing Down.” After observing how commercial properties were acquired with no money down, Allen applied 50 techniques from the commercial real estate industry to the residential property marketplace. He was reportedly paid $1 million advance royalties for his publication, and began holding real estate investing conventions across the country.

The Nothing Down era was a startling eye-opener to the public. Very few were aware of Allen’s predecessors, like Nick Nickerson, Al Lowry and Mark Haroldsen who wrote books on real estate investing requiring no money. Allen popularized the notion, and it was a strong public draw for his real estate investing seminars.

However, some of Allen’s convention speakers were ultimately revealed as “con men,” and some bellied up. Robert Allen himself went bankrupt in 1996. The public generally concluded that Allen was probably a fraud, and that real estate investing was impossible without deep-pockets.

The Wall St.Journal got wind of the Nothing Down Real Estate Investing Movement, and interviewed many investors who were using “Zero Money Down” techniques. The business editor of the Wall St.Journal interviewed me repeatedly (and others who knew of my real estate investing), and featured me in an editorial as one of the most successful investors in the nation who had purchased millions of dollars in rental property without any money.

These previous unfolding events are pertinent to the conclusion of how to buy real estate properties with limited funds.

I proved that properties could be acquired without cash (or credit) to the tune of $10 million in real estate investments during my first 4 years. I used a $10 bill in the acquisition of many of my properties.

Purchases from FSBOs (For Sale By Owners) were possible through negotiations with motivated sellers. I bought millions of dollars in real estate properties without cash or credit by learning acquisition skills that required no money down.

On the other hand, real estate properties listed by real estate agents minimally require a down payment that covers the agent’s listing fee. These listed properties were no more valuable than the FSBO properties, but the agent fees demanded cash upon acquisition. In the intervening years since the 1980s, I have purchased some agent-listed properties, but my target acquisition continues to be FSBO real estate property from a motivated seller.

Real Estate Investing Requires Education

I really believe in getting an education in real estate investing, especially before launching a real estate investing career. I have been investing in real estate for 25 years, but I still spend thousands of dollars each year to learn more about real estate investing. To avoid unnecessary risks, you need to know as much as possible. If you make a wrong move in buying, managing or selling your property, you can lose everything, and your efforts will be flushed down the toilet. On the other hand, if you have what I call know-how savvy, you can weather almost any of the financial storms that will inevitably brew around your real estate investing venture.

Here are some of the critical essentials to make real estate investing pay off.

1.You’ve got to have a solid overview of the business.

You just can’t go out and start making offers – even if you have some money. I guarantee you’ll lose your money if this is your approach.

Don’t think that fixing up houses is a piece of cake. You’ve got to know what you’re doing.

2.You’ve got to have a good contract.

Picking up a crinkled ole contract document from your friendly real estate agent won’t cut it. Most contracts are NOT written to give you the slight edge as a real estate investing professional.

A good contract means the difference in walking away from a closing with money out of your pocket or in your pocket. I have taken home thousands and thousands of dollars from closings – up to $75,000 from my best closing on just a cheap little house. But a fistful of bills at closing is not your only reward for having a good contract. You can get your seller to take care of some or all of your closing costs if you have a good contract. And you can avoid some of the usual buyer costs if you have a good contract. Have a good BUYER’S contract as a real estate investing professional.

3.You’ve gotta have a good working model as a pattern for your fix-up project.

If you have never tackled the job of remodeling or even fixing up a house, you don’t have any idea what needs to be done and what should NOT be done.

Let me tell you from experience, you will be tempted to spend far more than necessary if you want the perfect house to sell. I know, because my wife is always suggesting what we need to do to our houses. Sometimes she is right, but often she wants to dress up a house with items that do not bring return on investment. It’s a very thin line of distinction.

You need a model for your fix-up project to establish a working formula.

Let’s face it. You can spend a bank full of money in fixing up a cheap little house. And it’s easy to over-spend with money you will never get back. But, on the other hand, if you don’t spend the right money on the right things, no one will buy your house. The margin of difference is close.

4.You have got to put on the hat of salesman when you get into this real estate investing business.

Your remodeled house will not sell itself. You have to polish to a spit-shine, and make the finished appearance of your house come off as the most desirable house in the neighborhood.

Don’t fix up a cheap little house if you are unwilling to show it and sell it. You will lose a big chunk of your profit if you have to list it with a real estate agent.

It’s O.K. to sell your makeover house through a real estate agent if you feel deficient as a salesman. But it is important to see your house AS a salesman in order to do your best job.

The key to success in real estate investing is in knowing what you are doing when you sell.

5.Real estate investing is a business.

Real estate investing is not a hobby and it’s not a game. It is, however, a slam-dunk, dead-serious, rock-solid way of making money when you learn the ropes. And it just may be the easiest way you have ever earned a living.

But you have to know what you’re doing.

You can make money investing in real estate,but you must learn how to do it right.

Boston Real Estate – Choosing the Right Boston Real Estate Agent

As a successful Boston real estate agent, it always puzzled me how and why some people choose particular Boston real estate agents to sell their homes. For most of us, a real estate purchase is the single largest investment we will ever make in our lives. Still, when it comes time to capitalize on this investment many home sellers are much too casual and have very low standards for the person they choose to handle the sale of their property.

I can cite many examples of poor decision making when it comes to home-sellers choosing a real estate agent, but there is one example from my experience that really boggled my mind.

I received a call from a woman about six months ago who asked me to do a Comparable Market Analysis (CMA) of her Boston Condo. (I gladly obliged and confirmed a time to meet with her and to tour her property.) The CMA process typically entails an initial tour of the subject property, comprehensive market research to produce a report, and an in-depth, in-person listing presentation. After meeting the client, viewing the property, doing the necessary research and presenting my report, I was certain that this woman would list her property with me. She disclosed to me that she had interviewed five other Boston realtors and that she was “by far” most impressed with my presentation and me. She cited my track record selling Boston real estate and Boston condos, my knowledge of the Boston real estate market, and my professionalism as the reasons she viewed me as the most qualified real estate agent to sell her home. She also disclosed to me that my service charge was identical to the five other agents she interviewed so “price” wasn’t an objection I would have to overcome.

After giving her forty-eight hours to review her options (I of course sent her a thank you card for considering my services), I followed up with a phone call to see if she had any outstanding questions. To my surprise she told me that she had decided to list her property with a friend, who is also her hairdresser, and sells real estate part-time in a suburb of Boston. My initial shock came from the fact that she decided to list her property with an out-of-town broker, someone who had very little knowledge of the Boston real estate market. But what really blew me away was her decision to list her property with a friend, who not only had very little total real estate experience, but who works part-time in real estate and had never sold a property before! Her exact words were: “She is a very nice person and I would like to help her jumpstart her real estate career.”

At this point she had already made her decision and the last thing I was going to do was to disqualify her friend as a competent real estate agent, so I wished her the best of luck and told her that I would try my best to cooperate with her friend to sell the unit. She thanked me and recognized my professionalism. What I really wanted to ask her was this: If I told you that you had $150,000 to invest, (which is approximately what she stood to profit from the sale of her home), and your friend, who is also your hairdresser, called you and told you that she just started selling stocks part-time and she wanted you to invest your money with her, would you do it?

Fortunately, most of the people I have actually posed this question to have thought about it and answered no. Unfortunately, there are too many people who do not think about their real estate investment in these terms and are essentially answering yes! For some unknown reason many people are much too casual when it comes time to sell their real estate investment, when if fact, most people look to the equity they have in their homes to pay for important things like major home improvements and educational expenses while they own their home.

It turns out, the woman I used in the example above ended up calling me in a panic after her property sat on the market for six months, overpriced by almost 10%. She had to sell the property within 60 days of calling me as she had been carrying two mortgages for four months and was running out of money. I ended up selling the property three weeks later for a reduced price because the property had become “stale” in the eyes of buyers in the market and she had very little bargaining power when it came to negotiating price.

You must have high expectations when choosing your Boston real estate agent and must truly think of your real estate investment as the largest single investment you will ever make in your life. The following is a list of 25 questions that you must ask all of the realtors you interview before choosing one to sell your Boston home:

1. Are you a licensed sales person/broker in the state of Massachusetts?

2. Do you have a licensed broker in your office?

3. How long have you been selling real estate?

4. Do you strictly work as a seller’s agent?

5. Do you have buyer’s agents working in your office?

6. Will you offer compensation to sub-agents, buyer agents, or facilitators, or all?

7. What is my liability if you offer compensation to and welcome sub-agents and he or she misrepresents my property?

8. Will you ever allow a buyer or another agent to enter my home without you being present?

9. Is selling real estate your full-time job?

10. How much real estate have you sold in my neighborhood in the past year?

11. Can you provide 5 references of people you have sold for in the last year?

12. How many listings do you currently have under contract?

13. What is the “average days on market” for all of your listings over the past year?

14. What is the average ratio of asking price to sales price for the last 10 properties you have listed?

15. What differentiates you and your company from your competition?

16. How will you arrive at an appropriate suggested asking price for my home?

17. How and where will you market my property?

18. What is your service fee?

19. What services are included in your fee?

20. What is the length of your listing contract?

21. Is your contract an exclusive listing contract?

22. Are your real estate forms in compliance with the laws in Massachusetts?

23. What professional real estate organizations do you and your company belong to?

24. What is the state of the Boston real estate market? Is this a good time to sell?

25. What properties would I be directly competing with if I put my property on the market today?