Real Blogging

The Short Sale Blame Game!

Robyn Hardy — Sun, 08 Nov 2009 20:46:49 +0000

Whose fault is it that your buyer’s short sale didn’t close in time for their needed move date and they walked from the deal….and you….forever? Well, it’s the lender’s fault of course. NOT!!! Sorry but the blame starts and ends with you. You should have never even gotten your client into that situation in the first place. We all know the nightmares of getting short sales to close in a timely manner. If you have a buyer who absolutely MUST be in a new home by or around a certain date, then you should have never written a contract on a short sale. I don’t care if the client was adamant about purchasing a short sale, I would have strongly advised them not to and told them that you are not comfortable representing them in that option should they want to continue down that slippery path.

If they do, your options are:

Turn them over to a competing agent you don’t particularly care for.

Suggest they be prepared to rent when their move time comes and goes.

Represent them in the short sale and lose a client for life.

Be real, unless your buyers are investors with a permanent roof over their heads and no cares regarding closing dates, then you run the risk of losing the deal and making a very nice enemy of your buyers who will not have nice things to say about you. Even those agents who proclaim to be experts in short sales and agencies who promise to get the job done in time are having difficulty with this process. If you have no training or true, top level relationships with the lenders you really shouldn’t give it a try. Reality is, we have no control over these closings at this time. You run a very high risk of not being someone’s hero.

We keep pointing fingers at the lending institutions and their inept way of getting these deals closed. Truth is those lenders are scrambling with overworked, underpaid and sometimes inexperienced help. VERY IMPORTANT! Keep in mind that the remaining lenders have absorbed huge quantities of unfinished files from desks of administrators whose offices closed and who are now out of work. Those files land on another person’s desk that has never even seen the file. Even though the offer was presented to the defunct lender months prior, it must go through the entire process yet again with a new representative and even then, the employees at these shifting institutions, are being moved from department to department to sustain the changes needed to keep the organization running.

The lending industry has been swept up in a whirlwind and has yet to be able to catch it’s breath from the changes manifested over 24 months ago and it isn’t getting any better…yet. They can’t even keep up with the foreclosures they need to process that should have been processed a year ago. The issues with the FSBE 157 market to market valuation is also another huge stumbling block where appraisals and bank portfolios are concerned. Yes, the bail out was necessary.

It doesn’t matter how we got here….we are here. Trying to point backwards and blame non-conforming loan originators etc. is a waste of time. I have a very strong opinion regarding lending institutions receiving government financial support to get through these challenging times. No matter how you look at it, when they get funding, they have the ability to hire more people to get the job done and have the means to offer consumers more help and flexibility allowing them affordable options that help them stay in their homes.

Contrary to popular belief, the banks don’t want to take homes back, however, and this is my opinion, I do believe we will start to see banks holding onto properties and drastically reducing the amount of short sales they are willing to negotiate and close. The market has created a false sense of security that most lenders would be happy to take a short sale. Don’t rely on that when educating your buyers. Have back-up offers prepared or a rental ready for move in if you do. By short selling, the lender loses its ability to maintain strong viable portfolios for international investors. REO property has more value than a reduced loan buy out. If you haven’t taken NAR’s Short Sale and Foreclosure Resource course, you should think strongly about it or find third party courses that will get you the certification and knowledge you need to capture this ever expanding niche. NAR’s webinar classes are FREE http://www.realtorsfr.org/webinars.html

Here are a couple other options:

http://www.theagentcenter.com/

http://www.realtyuonline.com/cspcourse/splash_page.htm

Next article will take a look at the Seller pitfalls of short sales and what other options they have before they get too deep into the spiral downward.

Attract More High Net Worth Clients with Abbondanza! -the Abundant State of Mind

Ron & Alexandra Seigel — Fri, 06 Nov 2009 17:08:29 +0000

The most successful luxury real estate marketing professionals have understood and acquired a mindset that matches the general state of mind of their typical clients. As a result, they attract more high net worth clients than their competitors do. That way of thinking can be summed up in a single word that sounds even better in Italian than it does in English: ABBONDANZA! (Abundance)

The holiday of Thanksgiving is a celebration of abundance at harvest time that is often symbolized with a cornucopia, the horn of plenty or harvest cone. Here in Santa Barbara, California we are surrounded by agriculture and are thus very fortunate to have a Farmer’s Market six days a week, all year long.

This time of year is particularly exceptional. The market is overflowing with colorful organic fruits and vegetables that are truly a feast for the eyes. Shrimp and Pacific lobster, caught right off the coast, near the Channel Islands, is also abundant this time of year and sold at the market. Just walking through the market and appreciating the profusion of bright, multi-hued flowers can send you into a state of abbondanza.

Evidence of abundance is all around us if we take the time to appreciate it. Have you ever just stopped to appreciate having hot and cold running water and water that is safe to drink? We often take it for granted. Have you ever noticed the ever present power that runs everything in our homes including our computers? How do you feel when there is a power outage?

Here are some fun musings about the abbondanza mindset and the cornucopia:

Did you know that a cornucopian is a futurist who believes that continued progress and provision of material items for mankind can be met by similarly continued advances in technology?

In Greek mythology Zeus was raised by a goat and accidently broke one of its horns. Feeling bad, Zeus returned her horn with supernatural powers that would give whoever possesses it whatever he or she wants.

Perhaps that is what defines the abbondanza mindset of affluent consumers: They expect to get what they want. They are more optimistic than pessimistic. If you want to attract more high net worth clients, isn’t it worth getting yourself in the abbondanza state of mind? All it takes is the time to appreciate the abundance that is already in your life. You do not need to wait for Thanksgiving!

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I Heard The News Today, Oh Boy

John Tuccillo — Fri, 06 Nov 2009 13:58:55 +0000

The October numbers for employment were disappointing. We lost nearley 120,00 jobs, and the unemployment rate rose above 10. This was the twenty-second consecutive month of job losses, but, in a shorter time frame, the jobs picture is getting less bad each month. We would hope–and I expect–that we will be creating jobs by next summer. All this comes a day after the Congress renewed and expanded the home buyer tax credit, an event that provoked huge rejoicing in the real estate community. But this is not necessarily good news. Given the overhang of excessive new construction and the number of distressed properties, the credit does not constitute additional stimulus to the economy, and is at the least a very expensive way to subsidize real estate. Since history shows that we get more of what we subsidize, I would have thought that we learned the effects of too much building and buying during the last boom. By pushing real estate now, more importantly, we are setting up increasingly severe cycles down the road. As far as the industry is concerned, what happens when the real estate sector hasn’t responded by next June? Do we go and beg for more Federal handouts? And what about commercial real estate? That part of the industry is slumping and will continue to do so. How about a commercial buyer tax credit? We are on the road to becoming an industry fully dependent on the moods of Congress for survival. I, for one, don’t want to go near that.

Quick Answer Series: What Do You Think about Social Media?

Matt Jones — Fri, 06 Nov 2009 10:11:13 +0000

In answering this question, I realize that many of you who read it will likely never read another thing I write. Nevertheless, I think it’s important that somebody tell the emperor about his new clothes, and I guess I will have to be “that guy”.

I believe that the social media fad, as a marketing tool, is “the great distraction”. What do I mean by that? I mean today agents are spending — no wasting — far more time playing on Facebook, MySpace, and Twitter, all the while telling themselves that they are being productive, than they are at legitimate prospecting activities. And today’s agent production numbers reflect as much.

When I came in the business in 2002, the average agent closed 12 deals a year. Last year, 6 short years later, the average agent closed only 7, or in other words, agent productivity is down by 42% in only 6 years. No, I don’t believe that it’s all Facebook’s fault. But neither do I believe that you can Twitter your way to success as an agent.

Let’s analyze today’s social media. At its very core it is simply Internet empowered networking. Using powerful tools like Facebook and Twitter, you can electronically work your Sphere of Influence. Here is the problem, though. In typical SOI marketing, you are able to limit your activities to your actual sphere.

In today’s social media, there is a pseudo-friendship phenomenon that doesn’t translate into referral business at all. In fact, you really ought to watch the powerful Seth Godin interview on this very subject. In his interview, he makes the following statement that echoes my feelings well: “Networking is always important when it’s real, and it’s always a useless distraction when it’s fake.” And much of the “networking” going on with social media is fake.

Another difference and disadvantage to traditional SOI marketing is that, using a disciplined approach, an agent could methodically and systematically stay in touch with his sphere in a specific window of time each day. Very manageable.

The ability to keep one’s sphere of influence marketing activities focused and systematic doesn’t seem to carry over to this new media. Show me an agent that spends much time with social media, and I will show you an agent who is totally consumed with it, and as a result is also a low producer.

But agents love it because it makes them feel like they are being productive. Let’s be honest: It’s much easier to tell a joke on Twitter than it is to call back an Internet lead and turn them into a prospect. But at the end of the day, one makes you busy and the other makes you money. Since real estate is a business for me, you can imagine which one I would recommend. And that’s my quick answer.

We Need To Be More Like Mollusks When It Comes To Our Commissions!

Robyn Hardy — Fri, 06 Nov 2009 03:08:39 +0000

Well actually, to be precise, when it comes to our commissions, we need to be more like oysters. Picture it, I am running to the market to get fresh oysters in those convenient little glass bottles with the screw top and oh my, go figure, they are out. All they have are the oysters still in the shell. I am CRAVING them. I ask the kid behind the counter if he can shuck them for me and he looks at me like I am on crack.

Oh well, I’ve seen those guys at the oyster bars slipping their knives in and easily revealing those luscious little gems. Yeah right….I get them home and immediately sense they are on the defense. I get out my knife and proceed to try to pry one open. It resists so strongly that I end up banging it with my meat mallet just to get it to crack. Nothing!! Will not budge. I put the little resister on the butcherblock and get eye level with it just waiting for it to have to breathe or something….just a little hint of a crack and I am going in for the kill. My dream of succulent oyster fritters is quickly waning and my frustration level with these little b%*&*&*&s is getting the best of me. I finally resort to a pot of boiling water and steam the suckers open.

Think about it, the oyster is protecting itself with all it’s might and (almost) won against my efforts to snuff out it’s life. When we are able to break the protective seal of the oyster, we are able to kill it. When clients break your commissions protective seal they kill your income potential and make it virtually impossible to maintain your value to future clients. Word gets around fast if you cave at the table. Stay strong in your confidence in your value. Besides, if a potential client wants to pry me open, bang my head on the concrete and eventually throw me in boiling water to take away my ability to provide for my family…do I really want them as a client?

I don’t care if your rate is 2%, 5%, 8% or 10% why would you want to bargain at the listing table? You haven’t even brought the property to market yet. I am not really keen on a list of services either. I feel like, as an agent, you know what activities it will take to sell the home. That should be your standard package at your going commission rate, period. If you want to have other little goodies that sellers “believe” will sell their home then offer them as an upsell, not as part of your initial offering.

There doesn’t have to be any manipulative explanation to the seller about why you charge what you do…the minute you start explaining yourself, you lose! You are showing that you don’t have the confidence in your offering or the systems you have chosen to get their property sold. Basically, if you net the seller what they want in the shortest amount of time, what difference does it make what you get paid? That is what I would say…and if, at the end of the day, at the closing table, you feel like there is some flexibility because the house sold quickly or you were able to secure the buyer, then consider a good faith gesture on this closing or on ”future” business and put it in writing. If they use your services again, they will get X discount.

Think about the impact just a 1/2% can have on an sale averaging $258,000. That is $1,290. Do that 10 times this year and that is $12,900. Now think about what it could mean to a career of discounting? Not chump change to most people.

Happy Holidays to All!!

Business Planning Tip: the Production Plan can be more effective if you plan for the stuff behind the numbers

Cheri Alguire — Thu, 05 Nov 2009 00:30:04 +0000

By Cheri Alguire

Like the budget, writing a production plan for success is a lot about numbers. Black and white. Hours, dollars, and widgets. There is a sensible layout to follow. You map out the big picture by breaking down your transactions to quarterly and monthly goals. You examine the buyer sales, listing sales, and number of new listings it takes to produce the income needed to support the budget. Easy, right?

Well, straightforward, maybe. Easy, no.

Production planning is as much about problem solving and perspective as it is about the numbers. Why? Because you know you will not always hit your numbers. (If you do, you probably were not challenging yourself enough during the visioning process.) And not hitting the numbers obviously means you have a problem. You may be overspending the budget and/or underproducing the income. Not hitting the numbers for an entire quarter might not just mean a problem, but a genuine crisis.

So it is important when production planning to focus not just on target numbers, but on the potential problems related to production so that you can plan proactively to stay in business with a smile. Lets look at some Givens.

#1 You are in control of more than you think. If you chart the numbers for first quarter and fall short, what do you do? (First of all, you always review the numbers.) If first quarter is lean, be prepared for you and others to blame outside influences. Oh, the market. Oh, those fickle buyers. Oh, those unrealistic, so-and-so sellers. Oh, those banks. Slap yourself and your teammates awake! The market is what the market is. Buyers and Sellers are simply responding to it. YOU are the expert. YOU need to take control. Take control of their expectations. Take control of your own emotions. Adjust your numbers if necessary for the rest of the year, but take control of your sales. If you were successful before this market, there is absolutely no reason you can’t be successful now. You have the experience and the skills. If you are new to this market, you have no excuse to be anything but successful because you don’t know the difference! If you were three sales short in the first quarter, plan now what it takes to make up those three in quarter two.

#2 There are some things you cannot control. Let go! A teammate’s sudden divorce is going to affect your business. No doubt about it. Can you influence that event? No. (Even if you offer the unhappy couple an all-paid expenses weekend at the Poconos in a heart-shaped tub, their relationship will not change because of your generosity and desperate attempt at keeping your top buyer agent happy and productive.) Curse fate all you like, but know that the teammate will have court dates, down days, and need extra time off to be with the kids. Let go off the idea that life is unfair and provide as best you can for the loss in production through your own efforts or added staff. Know that these things happen. Deal.

#3 Not to overuse and abuse the often quoted, Attitude is Everything, but it is. The mindset you get up with every day determines the success of your production plan. Is the market everything you read about in the papers or hear about on the TODAY SHOW? Is the sky really falling? If you believe it, your numbers certainly will reflect that view, (and you will need to hope that your spouse doesn’t mind supporting you for some time to come.) On the other hand, if you wake up each day seeing opportunity and, yes, fun in the current real estate market, your numbers will bloom and grow with every positive step. It’s not a Pollyanna world, but neither is it Oscar the Grouches. Your perspective determines outcome.

Plan for the numbers. Plan for the problems. Plan for success.

———————

Coach Cheri Alguire has helped hundreds of Super Small Business Owners, Realtors, Managers and Coaches create Business and Life Plans. Check out http://RealEstateBusinessPlanningGuide.com or http://www.SmallBusinessPlanningGuide.com/ contact us today at http://www.CheriAlguire.com

Luxury Real Estate Marketing: The Secret Advantage of Being The Popular Choice

Ron & Alexandra Seigel — Wed, 04 Nov 2009 17:00:35 +0000

The advantage to being top of mind, as a luxury real estate marketing professional, in your marketplace is getting the lion’s share of the business. There is also a secret advantage of being the popular choice. Although, Cherry Garcia ice cream, from Ben & Jerry’s, has many raving fans vanilla, chocolate and strawberry ice cream are by far the favorite choices with vanilla winning hands down as “most popular”.

Ranking top of mind in luxury branding is even more important that ranking #1 on a Google search, because the overwhelming majority of affluent consumers rely on referrals from friends, family and colleagues when choosing products and services. Any real estate agent with enough funds can hire a search engine optimization expert to help him or her secure the #1 position in a Google search query. But, will the website visitor who clicks through the top listing actually hire the top ranking agent on Google at the end of the day if they are not accomplished and competent–or popular?

There is a lesser known factor that influences the choices of high net worth consumers when selecting a luxury real estate marketing professional. That is, taking into consideration what others will think of them based on the agent they select. While some consumers are “inner-referred”, meaning that they rely on their own judgment more so than others, a significant number of people care more about what others think of them. The “outer-referred” consumer will bypass their gut instincts (and taste buds if they prefer Jerry Garcia) just to look good in the eyes of their peers, neighbors or family (who prefer vanillla).

Have you ever been in a restaurant when the server suggests a menu item and adds, “This is a very popular choice”? Studies have shown that when it comes to choosing brands of food to serve at a party the host will purchase the “popular choice”, e.g., Coke vs.. Pepsi even if the host prefers the taste of a generic brand that is cheaper.

To summarize, if you want to gain or sustain market leadership you need to stand out and achieve “top of mind” status for three important reasons: 1) most potential referral sources can only remember a few brand names (vanilla, chocolate and strawberry) when asked for a recommendation for a luxury real estate agent ( see more detail on this); 2) Top of mind generates more leads than qualified search engine leads because affluent consumers rely on personal referrals more than Google, and; 3) The popular choice is a hidden influence in selecting an agent

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Luxury Real Estate Branding: Connecting through Emotional Branding

Ron & Alexandra Seigel — Tue, 03 Nov 2009 17:24:41 +0000

As a luxury real estate professional, it is important that your brand resonates emotionally with your target market. If you strike an emotional chord with potential clients and referral sources they will remember you much better especially if you tell a compelling story. Here are two example of what Pepsi has done to reach its target audience on an emotional level. One works better than the other.

This commercial is very funny, but did it connect with the people who are viewing it? Will they go out and be moved to buy Pepsi next time, because they identify with this story? Are there enough young people in ashrams practicing martial arts?

In contrast, this second commercial, produced a few years back, hits a bull’s eye. It also has a humorous side to it. However, it makes a strong emotional connection with its audience. Music is an important part of the lives of teens and young adult. This story also speaks to adults who grew up in the sixties and are still young at heart.

Do you remember the Pepsi slogan: “Come Alive—you are in the Pepsi Generation? Pepsi out-sells Coke in the younger demographic. They need to stay firmly on this sweet spot to continue this trend. The first commercial was nebulous about this important brand position which needs to be communicated and amplified with laser sharp precision in order to strike the right emotional chord.

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DO YOUR LEADS IN YOUR DATABASE HAVE VALUE?

Dirk Zeller — Tue, 03 Nov 2009 14:29:42 +0000

There seems to be a feeling of security in having a lead. We feel warm and good about our situation and ourselves if we have leads. The problem is leads don’t put braces on kids’ teeth, put food on the table, or make the house payment, let alone allow that exotic trip to a secluded South Pacific island. When we truly evaluate leads, they have little value in dollars.

What are the leads you currently have worth? What are the leads you have in your database, the ones you mail to constantly, worth? What would someone pay you for those leads? When I say “pay” I mean in cash, today.

Most leads are worth very little. The reason is they have rarely been qualified or picked over with the ones that are not worth saving being given their unconditional release. Often, we handle and hang on to our leads as we would our grandmother’s china. But leads should be put under fire to see how strong they are. When you put something under fire, you find out if it’s pure. If you were to heat gold up to a very high temperature, you would see the impurity in it. You could then work to remove the impurity or decide to throw the whole thing out and start over. Leads need to be handled the same way.

If you don’t put your leads under the fire of scrutiny, you will never know their value. The quality of your business is not in the number of leads you have; the quality of your business is based on the quality of the leads you have today, right now! I would rather have two strong, qualified leads that want to buy or sell in the next week than twenty-five leads that I have not qualified. The two are worth money; they will allow me to get paid now. The twenty-five are worth nothing. The two are mine; they are working with me. The twenty-five are probably in twenty other Agents’ databases, as well. Think about it — what client will generate enough income for twenty Agents?

We all struggle with complacency in our lives; complacency is part of human nature. But complacency is something we must guard against at all times. The best guard is to remove yourself from situations that could increase your complacency. Having twenty-five leads will make you think, “I have enough.” But if you have only two leads, you will go out and look for more; you will put effort into finding other good leads. Truly, you have more with the two than with the twenty-five. Not investing your time into people who are not going to buy or sell separates “Champion” Agents from the rest.

Being highly skilled at qualifying the people you come into contact with really means the difference between just making a living in real estate and becoming wealthy. Time is our most precious commodity, and if you invest your time in people who will not give you a financial return, you will have periods of struggle in your sales career.

You must have the courage to qualify your leads. It takes courage to ask the questions that will ferret out those leads that lead nowhere. It takes courage to walk away from someone who may buy a home in the next millennium, while you look for someone who will buy or sell now. It takes courage to ask the tough questions that may cause your prospect to squirm and feel uncomfortable. But for the sake of your finances, your self-respect, and your family, you must have the courage to qualify your leads daily. And if you find that, after qualifying your leads, you don’t have enough of them, go and find more leads and qualify them all.

We all wish there were an easy path to the top of the mountain. Ultimately, though, to get to the top, or even to begin to move up the mountain, you have to climb. You have to risk where you are today to get where you want to go. You have to qualify and get rid of the poor leads, so you can really focus in on the good ones. Remember, no one ever stole second base while having one foot still on first.

Luxury Real Estate Marketing: Finding Leads in Closets

Ron & Alexandra Seigel — Fri, 30 Oct 2009 16:49:11 +0000

How is your return on investment based on the time you have spent with online social networking from a business perspective? Here is a very specific and focused application of online networking that cuts through the confusion and can yield outstanding measurable results.

In luxury real estate marketing, there is an important difference between professional networking and social networking. It is true that social networking can yield referrals. But, professional networking with synergistic non-competitive professionals within your marketplace is more deliberate and focused when it comes to generating business faster.

Here is an example. In your marketplace, are there any luxury homes with pools? Doesn’t it make sense to meet the heads of the most successful pool maintenance companies in your area? How about taking the heads of the companies that design and install custom closets to lunch? Think of potential home sellers and buyers who reside in their address books! These professionals are looking for more business too, and you may be able to introduce them to your contacts, as well.

Business networking has been around since commerce began. The more non-competitive professionals you know the more potential referrals you get, and give. This may sound simple, but it is extremely important because it is easy to lose sight of the fundamentals with all of the hoopla of social networking. Take the internet out of the picture for a moment and consider this: Who you know has always been key factor in your success.

So, if increasing the number of quality professional contacts you have is a major key to success doesn’t it make sense to spend more time developing more professional relationships in a focused way, giving more referrals, and staying in contact with your sphere of influence consistently?

Bring the internet back in the picture. Can you see how using tools like Linked In for professional networking can exponentially increase the number of potential referral sources you have and actually save you time? It is simply a matter of focusing on finding and developing great relationships with more professionals within your local market.

Now that you are getting measurable results from deliberate professional online networking, have a field day on social networking sites. Without the pressure of monetary expectations you probably with spontaneously generate referrals from all the new friends you meet.

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