If you are engaged in the real estate industry, chances are, at one time or another, you will find yourself in need of professional help to repair, improve, or maintain real estate.The purpose of this post is to introduce and explain these professionals to you and give you an idea of what services they might provide. Please understand that each municipality has different laws regulating the construction, repair, and renovation of a home. Please check with your local building department for your specific laws and ordinances.

General Contractor

If your contracting team were playing football, the General Contractor (GC) would be the quarterback. Any project that needs permits associated with structural changes, the GC will be the person you would call. Also, on larger projects, the GC may act as a “one stop shop” and bid out an entire just and then bring in sub-contractors like electricians, plumbers, etc. to work under him/her.

Some Jobs where a GC is Needed:

• Additions or Garage Conversions
• Replace Doors or Windows
• Replace Kitchen Cabinets and/or Countertop
• Frame in New Walls

Electrician

When it comes to dealing with anything that can kill you instantly , like electricity, we always recommend calling in a professional to do the job. Most will call a handyman for minor electrical issues such as replacing an outlet or switch and changing a light fixture , or just do the job themselves. But when it come to running new wiring, changing service to the property, or messing around with the electrical panel, your first call should be to a licensed electrician.

Some Jobs where an Electrician is Needed:

• Upgrade Service
• Change out from fuse to breaker
• Update from aluminum wire to copper
• Install new lines, outlets, or switches

Plumber

Anyone who has lived in an older house has had to call a plumber at one time or another. When most people think of plumbers, they think of Rotor-Rooter or someone coming to fix a drain that has backed up. Plumbers do that very well, but their jobs do not end there. Anything in your property that has water running though it was most likely installed by your plumber. Just remember if you do not know who to call to install or fix something, when it has water, the plumber should be your first call.

Some Jobs where a Plumber is Needed:

• Backup of drain or leaking pipes
• Installation of toilet, showers, and vanities
• Replace hot water heater
• Run sewer connections or fix septic tank problems

Roofer

Here is another professional that usually requires no introduction. From the trusses that form your roof, to the final product you choose to cover the decking, roofers are responsible for every step of the construction that make our home remain watertight. Since every part of the country has different issues related to weather, Northeastern snowfall, Southeastern hurricanes, Midwest winds and tornados, and West Coast earthquakes, roofers must be specialized in their particular area.

Some Jobs where a Roofer is Needed:

• Leak detection and fix
• Replace existing roof
• Install news roof and trussing
• Repair soffit and fascia

HVAC Contractor

HVAC stands for heating, ventilation, and air conditioning. In a single family home, the HVAC system is made up of primarily 3 main parts. First is the air handler that is usually located inside the home in a closet, or sometimes in the ceiling. The second part is the compressor that is usually located on the exterior of the home. The third part of the system is the ductwork that stretches throughout he home in the ceiling or floorboards that distributes the heat or cool air.

Some Jobs where a HVAC Contractor is Needed:

• Replacement of the HVAC System
• Repair tear or break in ductwork
• Cleaning of handler coils and ducts
• Refill Freon in compressor

Pool Contractor

If you fortunate to have or want a swimming pool or spa at your home, your pool contractor would be the first call is there are any problems. Pool contractor are not to be confused with pool maintenance professionals. Although some large pool contractors also have maintenance teams for their customers, in order to install or repair pools and spas, you must be licensed. You will also find that many pool contractors are also plumbing contractors.

Some Jobs where a Pool Contractor is Needed:

• Install a new pool or spa
• Repair a leak
• Replace pool pump
• Refinish pool surface

Painting Contractor

Although you most likely do not need a state contractor’s license to be a painter, I put this specialty in a category of its own. The reason is that while some homeowners choose, or even like, to paint their own homes, having contact with a professional painter is invaluable. Not only do professional painters do a better job than many “do it yourselfers”, they do it quicker and oftentimes cheaper.

Some Jobs where a Painting Contractor is Needed:

• Interior and Exterior painting
• Cabinet refinishing
• Resurface blacktop driveway
• Stain or refinish woodworking

Termite and Pest Control

Let me start this introduction by saying I hate bugs. If you are like me, you will have your favorite termite and pest control experts on your speed dial. While there are bugs in any environment and some can be quite nasty, it is generally agreed that termites are some of the worst insects to worry about when talking about your home. Whether you are hiring these professional for a one time treatment or ongoing service, their expense is worth the fee.

Some Jobs where Termite and Pest Control is Needed:

• Termite detection and treatment or tenting
• Rodent removal
• Preventative spraying and maintenance

Handyman

Everyone should have the name and number of a good handyman in their area. Most small maintenance tasks around the home can be handled by the handyman. It is important to remember however, that most handymen operate independently, are not licensed, and may not be an expert in the field you are hiring them for. They cannot pull permits and often work alone. For these reasons, make sure to use your handyman for those small housekeeping jobs.

Some Jobs where a Handyman is Needed:

• Small drywall repairs
• Replace door or window hardware
• Hang shelves or pictures
• Replace a cracked or broken tile

The list for a handyman could be quite comprehensive.

Although this list does not represent every type of professional you might come across, it does highlight the most used in our business.

It’s no secret to most Realtors that the housing market is in the toilet right now, but there is still a group of aggressive buyers who are still quite active. The Real Estate Investor.

While the mere thought of working with investors causes some Realtors to cringe, it’s time for the vinegar and oil relationship to end.

Investors are willing to work with anyone that can bring them a deal. They use birddogs, postal workers, bankruptcy attorneys, court clerks and yes, they will use the services of a Realtor.

However, the breakdown in communication usually comes when the parameters of a real estate investor are not met. A real estate investor, if they are experienced, will have a very defined set of criteria that must be met if they are going to pull the trigger on a deal.

While condition and neighborhood often are irrelevant, the numbers have to absolutely make sense. Most investors that we work with will not look at any deal unless it either cash flows if it is held or provides for significant return if it is to be re-sold.

Cashflow means the property must provide for at minimum a zero balance after income and expenses are taken into account. That is to say that after the projected rental amount on the property, less expenses can not be a negative number. Here is a calculator that you can use to determine cash flow BEFORE presenting a deal to an investor.

On a re-sale deal, the property has to be purchased at a price that is at minimum 60% or below what is perceived to be current market value. Some more aggressive investors will take a deal at 70% below perceived current market value but the pool gets really thin at LTV levels above this number.

Where do you find properties like this to sell to investors? Everywhere! I wrote a post a couple of days ago referencing the productivity level of Realtors in this market. It became pretty clear that there are a lot of Realtors whose productivity level is below 5 or so sides for all of this year. I personally know some investors who are averaging 5-10 transactions…per month!

Many Realtors are reluctant to do what it takes to find the deals that investors are looking for. It is understandable if one chooses not to work with investors because as a group we can be very demanding. You’re not going to sell or convince an investor. You’re also not going to hide anything from them either.

Investors, experienced ones anyways, are trained to exploit any imperfection that they can in a property because that exploitation usually equates to higher profits. So when dealing with an investor, be prepared to disclose everything you know about a property and expect the investor to find even more issues and for the investor to put a dollar amount on those issues found.

In this market, you can find properties for investors by speaking to listing agents who are managing REO properties for lenders. Often times these properties need work and are not suitable for most “retail” end user buyers. These properties, if the numbers make sense, are the types of deals that most investors are looking for.

Here’s another caveat…don’t expect an investor to run all over town looking at deals. When we buy property we often do so sight unseen. Like I stated earlier, it’s all about the numbers. An experienced investor can perform all of his due diligence from the comfort of his office. He can run comparables, check out the neighborhood, obtain market rent analysis, find out about any liens or code violations, check out the status of the current owners and even have repairs estimated for him right from his office.

As any offer submitted will be based upon a right of inspection, it’s not necessary to waste time running around looking at individual properties. Don’t worry a thorough inspection will most assuredly be completed but it will be done so after acceptance of the contract and the contract is subject to inspection anyway so what’s the reason to go running all over town.

A lot of Realtors used to selling to end users are often surprised by this. Often times we get asked by agents, “Don’t you even want to see the property before putting this offer in?” No, we don’t need to. We know the area, we have probably already seen the house at one time or another and we have people in the field and other associates who will or have gione by the house already and taken a look on our behalf.

That’s another great point to remember. An experienced professional investor can probably tell you about any neighborhood in his working area. He has been working that area for some time and already has information relative to the demographics and may have already bought and sold properties or may be holding properties in that very vicinity.

What a good agent is needed for is to professionally negotiate the offer with the REO agent. An agent who understands the needs of an investor and works diligently on behalf of an investor will have more business than they can handle.

How many Realtors reading this even know how to find investors? Word spreads quick when an agent is found to be investor friendly. Investors are often cash buyers and when they find the deal they want they move quickly. Some can close in as little as 24 hours from clear title. Just think, after you read this you could look up some properties on the MLS, run the numbers, and speak to some investors and have a closing by Friday! It can and does work like that.

So where do you find investors. You just have to look. There are investment clubs that meet regularly in most metropolitan areas. These clubs can be as few as 50 or so investors all the way up to some of the largest which may have as many as 5,000 active members. Additionally there are a number of large websites that specifically cater to investors. Here is a list of investment clubs from across the Country.

Working with investors is not for everyone. Investors can often be tough and brazen. Reason being is most don’t have the time to deal with the usual Realtor pitch or the unprepared Realtor.

Many Realtors think that some of the techniques that investors utilize are either unethical or illegal. While there are sure to be some con artists in the bunch, for the most part investors who have been around are very knowledgeable and are willing to listen if a deal makes sense.

When you approach an investor with a deal have your ducks in a row. Prepare thoroughly, expect to be challenged on your numbers, understand that you are dealing with a savvy and shred professional buyer who will do whatever it takes to maximize his or her profit.

Just because you may not understand a strategy or technique does not mean it’s illegal. An investor will buy a property today, if not from you, from somebody. If you want to approach the investor market as a way of increasing your income, understand that this market is viable but you need to have your ducks in a row.

In the next week or so I’ll be explaining some of the techniques an investor uses to maximize his profit and how a Realtor can also ethically and legally become an investor and earn more money investing than waiting for a commission.

Lastly, no…I am not advocating flipping or speculating haphazardly. There is a proper and conservative way that investors are making money right now. It is in these times that millionaires are made.

This is the best real estate market for experienced real estate investors. Those Realtors who are not actively and aggressively pursuing real estate investors are leaving a lot of money on the table.

Note:This article was initially written in April of 2008. At the time, some commenters wrote that what you are about to read was akin to sci-fi. That these types of transactions were “one in a million”. Well since this article was written we can confirm that the future is here and that these types of transaction are the norm for us and not the exception.

If you are a real estate investor, do not limit yourself to deals in your backyard. Create a network wherein any deal, anywhere, can be taken down.

Over the last couple of months we have spoken to hundreds of agents who when asked, most can not easily articulate what they do in a transaction. Yet worse, justifying why they receive 6% commission on the transaction is even harder to define.

More often than not their answers have been based upon mantra-like rhetoric that centers around the ignorance of the consumer. One of my favorites, “I don’t get paid for what I do, I get paid for what I know” is representative of the kind of inanity surrounding an industry whose players for the most part are reluctant to provide great detail into what they do.

In this Web 2.0 world, many who are resistant to a culture of transparency and fear disintermediation believe they are beyond reproach and that the technologically savvy consumer could never do without a Realtor’s involvement in a transaction. The misguided belief that “there will always be a need” for a Realtor is ignorant at best.

While true, there may be quite a great number of consumers who DESIRE to have an agent involved in a transaction, much more for convenience sake then anything else, it is big mistake to think that they are NEEDED in a transaction.

The former implies that an agent’s services are thought of by some to be much like that of a “real estate concierge”,while that latter implies some form of prerequisite dependence. This article is written to dispel the rumor that an agent is needed in a transaction.

So from start to finish I will outline a recently closed transaction.

1. Property Selection: A property was found online through tax records as being owned by a bank. The bank had not as of the time of contact contacted or retained an agent. The bank was contacted and the decision maker at the bank communicated their willingness to receive an offer.

2. Due Diligence: Data was reviewed and it was concluded that this would be a great buy. All of the vital signs were reviewed online and required about 2 hours of time. It only took this long because it was located in another state that we were unfamiliar with.

3. Contract Offer: Offer was submitted via email and the bank received it, struck a few paragraphs, required an addendum and sent back to our office for review.

4. Contract Accepted: After one revision and a counter offer in price, the deal was accepted and it was time to prepare for closing

5. Contract Delivery: Contract and all associated paperwork was scanned, and emailed to attorney / Title Company to prepare for closing. Electronic signatures were accepted on the contract and originals were obtained via Fed Ex directly to closing rep

6. Transaction Tracking: Within 2 hours of submitting contract we were given a password to track file activity online…password sent via email to REO department as well.

7. Inspection: A local inspector was obtained online who went to the property, met the bank representative, took pictures, video and presented a full report online in under 24 hours.

8. Municipal Background: A lien was found on the property and there was a cloud on title. We forwarded this information to our attorney who had it resolved in 24 hours. Clear title was available and we were given an abstract for review.

9. Survey: The Hard money lender wanted a survey and an engineer’s report which were ordered and completed within 48 hours.

10. General Contractor Report: A general contractor was given the assignment to prepare a report showing a detailed review as to what repairs, if any, would be needed on the subject property. Took some time on this one as the GC was backed up. Report received within 5 days and nothing major beyond cosmetics found.

11. Greenlight: based upon all of the data, the closing was green-lighted.

12. Clear to Close: Transaction agent sent out email notifications that the deal was ready to be closed and that funds were on hand.

13. Mobile Closers:Mobile Closer sent to our office to execute all closing documents and loan papers from the Hard Money lender as well as an original HUD. Another mobile closer in Maryland was contacted forwarded the necessary documents and met with the designated bank official in Maryland and signed the previously executed docs from here. Closer Fed Ex’d closing docs back to the title company and the transaction was concluded.

14. Time Frame: From the time the property was located through to the time that the deal closed was 9 calendar days.

15. Commission Savings: REO Bank saved $18,000.00 in commissions and liquidated a property they wanted off of their books.

We never even visited the property!

While this type of transaction may be, at this point in time, beyond the scope or understanding and ability of most end users, to think that an end user can’t learn to do this or won’t want to do this, is unrealistic.

Many FSBO’s may not be able to coordinate this type of transaction…yet. However for a Realtor to say that they will never be able to, is quite foolish.

It’s not an if, it’s a when. Very soon various companies will begin marketing their services to the consumer that will enable the consumer to buy and sell real estate without the NEED for a real estate agent. This is irrefutable and not even remotely debatable.

What can be concluded is that there will most likely be an ongoing desire for a Realtor to be involved in a transaction. Yet, this desire is borne of convenience, not need.

As such, the seemingly sacrosanct commission will even be more scrutinized. Although it makes for good discussion and debate, I would not worry all that much about disintermediation.

If I was a real estate agent I would instead wonder if I was prepared for what lies beyond disintermediation.

Nearly 90% of consumers recently polled say they are not interested in buying a home any time soon.  A joint poll of the Associated Press and AOL indicated that the recovery of the housing sector will not be any time soon if the retail American consumer has anything to say about it.

60% of those polled stated that they were DEFINITELY not going to buy a home anytime soon while just 0ver 10% said they would be looking to purchase a new home in the near future.

You don’t have to be a mathematical genius to see that there is a tremendous amount of inventory available for a very slim and decreasing demand. If supply and demand ideology is true, then it is safe to say that there are going to be an overwhelmingly increasing number of unsold homes.

Since unsold homes equates to unearned commissions, what are the majority of real estate agents going to do? Almost two years ago, we wrote what was viewed as an inflammatory article announcing the NAR Going Out Of Business Sale. Doesn’t sound too far fetched anymore does it? You see the herd is thinning by the day and everywhere you look another agency bites the dust.

Don’t Believe It’s A Going Out Of Business Sale…Then Somebody’s Lying To You!

While this news of prospective buyers not wanting to purchase any homes is somewhat disconcerting, it’s not the main reason to be alarmed. It’s merely a by product of a continued misunderstanding of the simple economic precept of supply and demand.

Many current home sellers do not understand it, and many listing agents do not understand it. It is my opinion that if this theory was more understood and accepted, then it is possible that the housing market would not be in the state that it is.

The Laws of Supply and Demand represent the cornerstone of economics and these laws are the basis for a free market economy. DEMAND is based upon how many buyers are interested in acquiring a certain product or service AND how much of that service or product they are interested in consuming. The latter part of that statement is often overlooked.

When planning to bring a product or service to market it is prudent to have a good understanding on not only the consumer’s desire for a product, but also knowing how much of that product the consumer is willing to…well consume.

When you go to a movie, you come to the theater and take a seat and wait for the film to begin. As you sit with your popcorn and soda, you see the room begin to fill up. The theater owner knows there is a certain part of the neighborhood that will be interested in a certain film, what is harder to forecast is how many of those in the neighborhood are actually willing to purchase a ticket at that particular time and in the near future to see THAT particular film.

In real estate, with a tremendous amount of inventory, there are less and less buyers willing to even purchase a home and the Realtor working in that particular market can not determine which home any prospective buyer will purchase at any particular price at any given time. The irrefutable laws of supply and demand are working negatively on the pricing of inventory in the real estate industry.

While certainly there are SOME buyers out there looking for homes in any given market, and that is a given, what has now been determined by the latest AP/AOL poll is that the market of available buyers willing to consume at the present time and foreseeable future has dwindled considerably.

The “law of demand” is important for those in the real estate industry to understand. This basis of enterprise states that the higher the retail or asking price of a good, the less consumers will DEMAND that product or service. In black and white this is an undeniable fact, point blank…the higher the price, the lower the quantity of the demand. Add in to the mix a perceived decline in value and you have a recipe for economic disaster.

In the present real estate market, there exists a declining consumer base willing to purchase any home, at any price at any time in the foreseeable future, while you have an incredible, growing supply of product flooding the market and FURTHER influencing prices downwards.

In is incomprehensible how any seller or any agent can be utilizing the obsolete CMA or comparable system of pricing homes on the market right now. Real estate seems to be one of the only businesses wherein price is not determined by an accurate and intelligent assessment of supply and demand. Why?

Real estate professionals are either not understanding the proven laws of supply and demand or are seeking to ignore them. The former is remedied by an actual study of economics and business, the latter spells certain supplantation for those unlearned.

Maybe the NAR should have saved the $40 Million it spent on the “Great Time To Buy Campaign” which was DOA when it was unveiled. While I agree it is indeed a great time to buy, the message was futile and lost. It should have been the “Great Time To Buy At A Price People Are Willing To Pay – No Such Thing As A Low Ball Offer - No Offer Refused Campaign”, maybe that campaign would have had some legs.

I am sure there are some top producing agents out there that will indeed weather this storm, but if approximately 90% of the consumers WILL NOT be buying a home in the foreseeable future, is the Great Realtor Famine upon us?

Do you know that the Realtor who you have your house listed with is actually still earning their living as a Realtor? That was the concern recently voiced and posed to us by a concerned agent in Poinciana, Florida.

“In Central Florida, for example, over 50% of real estate agents are not actively working their listings. (That’s an approximation based on the number of agents who never return my calls and/or are know to now have full-time jobs doing something else.) Seems to me that there is something inherently unethical about REALTORS who don’t disclose to their customers that they aren’t working full-time to sell their properties.”

While I understand that this agent is probably a bit frustrated with her Central Florida colleagues and may be embellishing a bit, this comment gave me reason to ponder the implications of her statement.

A real estate agent approaches a homeowner and seeks to obtain a listing, prepares a listing presentation, and obtains a listing, all the while knowing that they will only be working part-time to sell the homeowner’s property. The homeowner, of course thinking they are hiring a professional, would probably not think to ask this “professional” if they are only in the game on a part-time basis.

Obviously this is not something the part-time “professional” is going to offer or disclose willingly, so therein lies the dilemma. Is there an inherent misrepresentation if an agent does not inform the homeowner that they are not earning enough of a living as a real estate agent and is not a full-time agent?

Does the homeowner have the right to know in order to make a fully informed and properly represented hiring decision that could possibly involve the signing of a binding contract?

In reviewing the National Association of Realtors Code of Ethics there seems to be some evidence to support the notion that an agent should indeed inform a homeowner of their status as a part-time agent.

Article 12 REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.

In a real estate market that provides its own challenges, should a homeowner not be entitled to know whether or not a real estate agent is truly making his or hers best efforts to sell and market their home?

Is this why so many calls to agents go unanswered? Is this why so many offers go without a response? I wonder with so many agents leaving the business, how many have stayed, only to be working in a part-time status?

How many have taken listings and already have moved on to their “day job” never informing the homeowner of their career change?

In this litigious climate wherein lawyers are lining up to take shots at Realtors, should agents be giving homeowners more lawsuit fodder?

As I am not an agent, and in light of recent articles I have written that have been seen as inflammatory, I am going to step back and just ask the questions this time. My opinion does not matter in this regard, I don’t have a listing with an agent and I am not a Realtor. I am however very interested to hear from other real estate professionals as to what they think about this. I’ll reserve comment for a follow-up article.

I would also like to hear comments from consumers as to what they think about this. When you hire an agent, do you think you are hiring a full-time professional? What would you think if you found out that the Realtor you had hired had another day job?

We won’t even ask the question as to whether a “part-time” agent should be entitled to 3%-4% commission on a second job gig…not yet anyways.

What say you all on this?

The last time I checked, the short sale was on the gurney headed for the emergency room. I looked through the windows and saw the priest administering last rites so I am not sure if it’s going to survive. I can tell you though, it doesn’t look good.

What happened? Well, doing some investigative journalism, I crossed the police caution tape and started asking the witnesses what hey saw. “Bank took to long to respond and my buyer walked”, remarked one distraught Realtor.

“My homeowner could not compile or would not compile all of the information the bank needed”, lamented another Realtor; while a third said she could not even find any pulse…the bank did not even respond. It was as if they simply gave up on life.

Yet, I could not understand why one Realtor, off in the distance taking pictures, seemed to be smiling, almost guffawing at the tragedy that other Realtors have endured.

I followed closely behind as he hurried away in his newly polished Mercedes. He did not seem to notice that I was following or if he did, he did not care. Either way, he drove for a while and showed up at a property. This property looked familiar.

It appeared similar to the property wherein the short sale was just shot down. The same weedy, tall grass, the same unkempt yard, even from my vantage point I could see the curtain-less windows that indicated that there was no one home. The property was vacant. Was this another short sale prospect ready to meet an untimely end? Was the Mercedes driver the Short Sale Killer?

I had to get a closer look. I moved up closer and closer until I was in view of the suspect. Just as he turned to see me, a bus drove up. From the bus emerged a bevy of other suspects who have been on the lam for some time. I recognized these perps.

They were BUYERS! They have been hiding for what seems like years!What were they doing here? Was the killing of a short sale some kind of gang initiation? Was it some crazy Mansonish cult that got their willies knocking off short sales?

And then it happened. I was spotted. The Cheshire cat smiling Mercedes driver headed over to see me. I froze, not knowing whether to pull my business card or my blackberry. Something had to give, this might get ugly ..what to do..closer..OMG..he’s reaching for something..it’s was going to be either him or me and I had to move on this.

I jumped out the car and shouted, “Hey bud, what’s going on here? I know what you’re doing. You’re not going to get away with killing another short sale”.

The man responded and what he pulled from his bag wasn’t a loaded blackberry at all. He was loaded with something much more powerful. He had a prospectus with everything you wanted to know about this property and asked me to join them.

I looked down somewhat bewildered at the document before me. It was page after page of pertinent information on the house that we were standing in front of. “What is this?” “What are all these Buyers doing here?” “This isn’t how to do a short sale?” “Why are you killing short sales?” These were some of the questions that I peppered the man with.

He laughed ..almost bellowing and said “Haven’t you heard…Short Sales are dead, REO deals are the way to go.”

With that light bulbs began going off in my head. That’s why the Buyers have returned. Of course, that’s it! Buying properties with clear title at prices of 35%-50% off of current market value were bringing the buyers out in droves.

Deals being cut and accepted in days instead of weeks and months. Properties that actually cash flowed from day 1. It was as if there had been some kind of real estate epiphany.

Looking around at the throngs of enthusiastic buyers I realized this man was not to be feared. He was to be revered. He wasn’t the real estate Lucifer, no he was the REO guy. The keeper of profit, The gatekeeper of capitalism. I like Mr. REO.

If you, like me, have been waiting for the ninth wave , the return of yesteryear…it is here and it’s yours for the taking. Good bye short sale!

Viva la REO!

With the median age of real estate agents being 52 years of age (source NAR), new Realtors hoping to make their mark in the real estate business are casting aside conventional wisdom.

New Real Estate Agents Seeking Gen X And Gen Y Buyers Break From The Mold

New real estate agents, cognizant of the fact that 84% of homebuyers start their home buying journey on the Internet and that the median age of first time home buyers is 32, now realize that what may have worked for the elder-statesmen of the industry is not what their clientele are looking for.

In a demographic wherein 50% of which use social networking websites, the axioms of traditional real estate sales is not viewed as being prudent.

Young agents are now finding that chaperoning prospective buyers from house to house and acting as the veritable liaison between the Buyer and Seller is not generating sales among the Gen X and Gen Y hip and technologically advanced home buyer.

“People, especially my peers, aren’t looking for a ride to the property or a go-between; they want to IM me to find out how big the basement is,” said Lisa Johnson, 33, who works for Coldwell Banker in Haverhill. “They often have more information on the properties than most realtors. They don’t want a new friend; they want answers fast and will make decisions quickly when you provide them. I know this because I’m the same way.” (As reported recently in the Boston Globe.)

It is becoming more and more apparent that a fresh, younger, breed of real estate agent is in great demand in an aging industry struggling to keep pace with a market populated with an emerging younger homebuyer. The dilemma? The real estate industry continues to get older while the industry’s consumer base begins to skew younger.

This widening gap poses a great conundrum for traditional real estate agents.Younger prospective home buyers seek to do their own research, on their own time, and in their own manner. They expect a real estate agent to “chill-out” and just be there when they are ready. They definitely do not want to be involved in any form of hard sell ethos.

The recent run-up in agents entering the business in the boom times of the last few years had little effect on closing the age gap between younger agent and older agent.

“The rapid rise in the number of agents in the early years of this century has done little to affect this median age, as the bulk of new entrants are late career transfers taking either early retirement or those made redundant by recession and technological change.” (Stefan Swanepoel from RE Trends)

The gap between the traditional real estate agent and the Gen X, Gen Y homebuyer is much larger than simply an age problem. It is an impediment of even greater proportions.

“Clearly these are two different generations with their own concepts of value, preferred channels of communications and preconceived views of how the world works. Often the sales methods most comfortable to the agent, which have worked for that agent for years, fall flat with younger buyers and sellers, who see the market and the sales process differently. ” (Stefan Swanepoel from RE Trends)

In an October 2007 study, Deloitte Research urged the real estate industry to attract new talent from the Gen Y demo (those born between 1982 and 1993), or the industry would not only not be in a position to service this market, but that the industry would begin to see a marked decrease in real estate professionals in the very near future. The Deloitte study states that nearly 60% of those in the real estate profession will be 65 years or older by 2010.

Swanepol says this might not be as bad as one may think. “Technological change has increased agent productivity so the number of agents necessary to service the market will be less. But demographic change is going to leave a large hole in the industry labor force.”

The Deloitte study mentions three salient admonitions to those running real estate businesses:

1. Generation Y is coming into the market with a set of values that differs from their predecessors’. This value set, which includes flexibility and work/life balance, are key career motivators for this generation.

2. To successfully recruit members of Generation Y, real estate companies must develop and communicate their vision and differentiate themselves from their competition. Based on Gen Y’s interests, companies should promote their sound values, technologically advanced workplaces and global scope.

3. Real estate companies need to adjust their talent management strategies to better suit the needs of the incoming workers, developing practices that add the most value to their employees and the customers of this process.

The National Association of Realtors, the industry’s trade organization must have missed all of this information. Just recently the NAR in an attempt to bring the traditional real estate office into the technological era, completely fell flat on their face with the introduction of Realtor Confidential.

This is clearly not going to help the traditional real estate company reach the Gen X or Gen Y buyer, nor the type of person who wants to be an agent who happens to be in that same demo.

How many brokers who will read this are actively recruiting young real estate agents who are well versed in IM, text-mesaging, social networking, Twitter, My Space, Facebook and similar new technologies?

Need proof of how this younger generation rolls out there? After working in the business for over three months utilizing traditional, somewhat obsolete methodology, Johnson decided to kick in what she and her associates regularly utilize to communicate.

“Instead of face-to-face or phone calls, I now stay connected to my customers the way they prefer, which tends to be through chat and text messages,” she said. “I even started working with some buyers and sellers through online news groups.”

It certainly worked. From toiling with no sales for months, Johnson has risen to Rockstar status. She has had so much success selling homes that she was named her office’s “Rookie of the Year”.

One of the reasons that younger agents like Johnson are needed is that they bring a fresh perspective and innate knowledge of the Gen X and Gen Y buyer or seller because they are well…in that demo.

While older, traditional agents have to rely on second hand information to understand what young single women are looking for, or possibly what the needs of a buppie may be, or possibly what appeals to a gay buyer or seller, the younger Gen Y agent already knows and more than likely has friends and many associates in those demos.

Accordingly, the Gen Y market also wants agents who are honest and open with them. The question they really want to know? Why are they paying so much commission?

I’ll leave that question for another time, but suffice it to say, this generation is viable. They know what they want and they want agents that can serve them in the manner they expect to be served.

Lisa Johnson and many like her understand this and they are breaking from the mold of conventional wisdom and are not looking back.

She recently sold another house on a street where many others remain on the market, sitting idle waiting for someone to market them. Her secret?

“The buyers saw a posting on my blog and came to our open house that weekend and then wrote their offer,” she said. “No blog post, no buyer. Technology sold this one.”

Amazing, is the wisdom out of the mouths of babes!

Ok Mr. & Mrs. Homeowner. Your house is on the market and has been for quite some time. You hired a real estate agent. You have held the open houses. You have had the home staged for optimum presentation. But it still will not sell. What’s the problem?

Well we have done the research for you and here are the Top 5 Reasons Your House Is Not Selling:

1. You Are Overpriced
The most famous words in real estate are Location, Location, Location. That may have been true some time back but in a Buyer’s eyes, the 3 most important words are Price, Price, Price. It may be hard to believe that you are overpriced but you are.

What you paid for your home is entirely irrelevant. Let’s talk basic economics. The Law of Supply and Demand most assuredly applies here. Don’t listen to any agent, advisor, friend, neighbor or family member who tells you otherwise. Learn and understand this basic fundamental of economics.

Simply put, the more supply there is of a product, the less the price must be. If there are a lot of houses available for Buyer’s to purchase, then you must be competitive in price.

Don’t let your home become an emotional albatross. Drop the price in line with similar, comparable homes and then drop it further to be the most appealing product. You know..actually have a sale!

When retailers have a sale, they don’t drop their prices just to be at the same price, they drop them further because they are having a sale and they are trying to get people to actually buy.

If you hire a Realtor, make sure you can get out of the listing agreement if they do not perform. Tie some kind of performance clause in their contract that gets them to price the property correctly at the outset.

Don’t rely on fancy CMA presentations to set your price. Most agents of course will tell you they can get you a very good price. They will tell you fanciful stats from the National Association of Realtors and their expert market analysis. Fine, then tell them to back it up!

Hey Mr. Super Realtor, for every 1 percent I drop the List Price, you agree to drop your commission the same amount. that will either get them to price the home correctly or you’ll scare off an agent that just wanted to tie you up.

Value is based upon what someone is willing to pay! Banks are tightening their standards and you had better be spot on in your pricing or your home will never sell.

2. You Are Not Truly Motivated
If you don’t NEED to sell then take your home off the market for now. Every Buyer thinks it’s Seller desperation time right now and if you don’t want to be lumped into the financially distressed, super motivated, “I’ll take anything” Seller category then take your home off of the market. If you want top dollar, now is not the time to be selling.

3. Nobody Knows It’s For Sale
Your property is not being marketed correctly. Listen up…an MLS listing, a yard sign and an open house is not marketing. While you may get some calls from Craigslist you need to be doing a lot more. Ask yourself a few questions.

When you go to the store, why are you buying the items you are putting in your shopping cart? When you go out to eat, how did you find out about that restaurant? When you go out to the movies, how did you know it was playing? Well if you and / or your agent are not executing a comprehensive marketing campaign, how do you expect anyone to know your home is for sale? You’re paying an agent big money. Get your money’s worth or fire him!

They are supposed to be marketing your home. If they aren’t, then get rid of them. Most agents think the sale is complete when they get you to list the home with them. Most agents are taught to get the listing and let someone else find the Buyer. So they put your home on the MLS and hopefully somebody else will have a Buyer in tow.

Find a professional agent who REALLY knows how to market your home. . There are some really good agents out there. However you have to know what questions to ask in order to find the right one.

Can’t find one..let us know and we’ll recommend someone in your area.

4.You’re Hung Up On What You Did To Improve The Property
So you remodeled your bathroom and kitchen and you think that matters. Well it might look nice but just as with everything else in this economy, it isn’t worth all that much either. In fact you will be lucky if you can expect to recoup even half of what you spent.

Have you seen the latest Cost vs. Value Report. it’s quite sobering to read. While you may have splurged and installed the finest granite counter-top or jacuzzi tub, right now it does not mean all that much. Sorry.

5. Neither You Nor Your Agent Understands Who Your Buyer Is
There are Buyers out there and they are indeed looking to buy now. But not every Buyer is right for your home…and believe it or not, your house is not right for every Buyer. Back to the restaurant analogy above, I hear monkey brains are a delicacy somewhere, but I don’t care. I am never putting monkey brains in my mouth. Not going to happen.

Marketing wasted on selling me monkey brains is never going to see any return. Just as there are some people that will NEVER buy your house. You and or your agent need to determine through demographic analysis who your target market is and concentrate your marketing efforts there. Just like the monkey brains salesman does.

As for Location, Location, Location….don’t worry about your location if you have the house priced correctly. There is the opportunistic Buyer out there that will buy just about anything if he can cash flow it. (i.e. Rent it out for a profit).

You must realize that you are looking to sell in an extremely competitive market right now. Everyone, it seems is looking to sell their home. You are competing with people who have to move their piece of the real estate pie. Give them a reason to buy your house…and by all means, if you don’t need to sell take it off of the market and wait for the real estate market to turn around.

Unfortunately you can not have it both ways.

Why do Realtors fail at short sales? There are arguably hundreds of excuses, but really only 10 or so REAL reasons.

Update: You may also want to find out what happens when short sales fail.

1. Lack of Ability and Knowledge
Short Sales for most agents represented the new chic way of making money in a volatile, foreclosure laden real estate market. So, they took a 2 hour class at the board, became duly knighted “short sale experts” and off they were to conquer the masses. Unfortunately most found that trying to perform short sales without the knowledge to do so was like picking up a baseball bat and trying to hit a Roger Clemens fastball.

You can take all the baseball classes you want and unless you have the knowledge and ability to perform, you are never going to hit that fastball. People train for years to become great at their “profession”. A (2) hour class does not qualify you as a short sale expert.

2. Lack of Experience
Experience is the best teacher. I believe I have read that somewhere. there is no substitute for experience. I believe I have read that somewhere before as well. How can one call themselves and expert without having any experience in the chosen field of expertise. I have changed the oil in my car before, it hardly makes me a mechanic.

However, at least I have changed the oil! How many real estate agents decided to get involved in short sales without ever having completed one in their real estate career? Here’s a hint…over 90% of the licensed real estate agents had NEVER successfully completed a short sale prior to 2007 (source: MBA). Where did all the experts come from?

3. Laziness
In order to be an expert at anything you have to continually train and practice. Have you ever played a competitive sport? Training and practicing are not paid activities. But they are absolutely necessary for you to complete in order to raise the level of your game. No slow, fat, weak kid ever succeeded in football. No slow, weak, fat realtor is going to succeed in short sales.

What amount of training and practice have you engaged in prior to attempting a short sale? What was you daily regimen of fine tuning your game? Yet, you bought some business cards and slapped the words “short sale expert” on them and bamboozled your way through the last 7 months trying to feign being a “short sale expert”. How did that work out for you?

4. Trying to Find The Shortcut
There is no short cut for success. As the great Vince Lombardi once said, “the only place success comes before work is in the dictionary”. Short sales are a lot of work. It is not a field for the faint of heart. You need the knowledge, the strength, the ability and the perseverance to succeed. There are no shortcuts except to failure. Sending all offers to the bank for “3rd party approval” is a fools game and an immediate sign that you do not know what you are doing.

Where’s your comprehensive short sale package? Where’s your loss severity analysis? Where’s your regression analysis? Why did you list the property incorrectly? What’s this stupid addendum your broker is telling you to have singed?

If you have not prepared all of the requisite documents and reports and submitted them correctly you are destined to absolute failure.

5. Lack of Personal Incentive
Everybody already knows that the commission is one of the first items that the bank is going to try and knock down. Well, if you know that going into the deal and that’s the sole source of your revenue then you need to be prepared that you may make a little bit of money or none at all if your commission needs to be struck in order to save the Client from foreclosure.

That’s a cold hard reality pill to swallow but if you decide to be a “short sale expert” then you should not be surprised by this at all. don’t take a short sale listing if you are not prepared to possibly reduce or eliminate your commission.

What we see and hear quite often is Realtors saying that”it’s too much work” for what you get paid doing a short sale. Too bad! You’re the expert, if you don’t know how to make money in short sales, stay out of the game! If you are truly an expert and have the knowledge and experience, you’ll make money.

It’s those who do not that have commission issues. But..who cares…not our problem. Accept it or get out of the short sale game and do your best to sell something else…LOL

6. Picking The wrong Properties To Represent
Despite what you think..every property is NOT a short sale candidate. There are very specific properties that make for ideal short sale candidates. Do you know how to find them, what to look for? I thought you were an “expert”. Short sales have to be identified via prospecting based upon a very strict criteria. Most of the agents whiffing on their short sale deals are doing so because they are finding the right deals to work on. They are spinning their wheels hoping to put a square peg in a round hole.

Let me ask you a question, do you know anything about demographics, psychographics ans statistical analysis? If you do are you applying that knowledge to your selection criteria of short sale deals that you want to get involved in. Simply put, with millions of people in foreclosure, cherry-picking is not a bad thing.

Our closing ratio is so very high because we are EXTREMELY selective in the short sale transactions we decide to get involved in. We don’t go rushing out the door to take every listing just because someone calls. Our time is much more valuable than that. Besides, we already know the most likely of short sale opportunities will be accepted.

7. Subscribing to The Rumor Mill
Would you ask your friend, neighbor, or broker to tell you how to open a parachute if they never have skydived before? Heck no! So why are you asking associates, friends and other brokers how to do short sales..they don’t know either! I read so many postings on Active Rain and other real estate blogs about short sales and it amazes me how many people ask for advice and how many people proffer advice on a subject they know nothing about. Unplug and learn how to do short sales correctly from people who can PROVE to you that they know what they are talking about.

8. Lack of Adequate Due Diligence
Have you read the annual report of the bank that you will be asking acceptance of your short sale from? Do you know the level of their non-performing asset base? Has Moody’s lowered their credit rating? What are their stockholders saying? (there’s an easy way to know) How many REO’s are they sitting on..nationally and in your area? How many foreclosures do they have pending? Have they properly filed their Court documents? Was the mortgage sold?

I could go on and on and on with the amount of data that a true short sale expert obtains to validate and support their request for a short payoff. If you are not doing at least the minimum of what has been asked in this section then you are truly not being an expert and you are showing that you have not even performed a cursory level of due diligence.

9. Lack of Focus
Short sales require a lot of communication and extensive follow-up. Many agents are not even affording their short sale clients a modicum of attention. They are either working on other deals, prospecting for new leads, working a second job…whatever! Short sales are time sensitive and require special attention. How many calls do you miss? How many offers do you not respond to? I can’t tell you how many times we have had to re-fax offers or incessantly track down agents who fail to respond. This is absurd. A homeowner is about to lose their property and they entrusted an agent who may or may not ever be available.

10. Playing God With Lives
This short sale dunce is the worst. This is the agent who actually calls back to tell you that he received your offer but he:
a. The offer is too low and the bank will not accept it
b. We need to place the offer on a form he understands
c. He has an addendum that he requires and it tells me we have no contract even after it’s signed (yes..received one and laughed)

These agents in my mind should be bound, gagged, flogged and left in the public square in stocks naked! They should be exposed. They represent distressed homeowners and try to inject themselves into the transaction as if they had some importance and time after time we see good people represented by crappy Realtors going to the gallows of foreclosure without so much as a concern by the Realtor. Shame.

They have nothing at stake, it’s not their loan, not their property, and if they do not make the commission they want then they could careless. I personally have seen this and have had read about it on numerous real estate related social networks. If you’d like I can send you the links to the posts attributed to these vermin posing as real estate agents.

Bonus!!!!!!! 11. Lack of Negotiation Skills
If you do not realize that you are in a negotiation you have already lost. Do you understand what the field of loss mitigation is? Do you know how many levels of collection there are and what goes on at each level? Do you know what each level is trained for? Do you know the experience level of your opponent?

Maybe you should go to Monster.com and search “loss mitigation executive” and see what kind of experience and knowledge you have to have in order to be a Senior Loss Mitigation rep at a mortgage lender. Then compare that criteria to your resume and let me know how you measure up.If you do not know the various techniques and strategies for negotiation and have not been trained as such then you are vastly unprepared to engage in such negotiation and you are hardly an expert.

Bonus: Fear of Reputation
I often hear from those involved with short sales that they are concerned with how foreclosures and short sales are affecting the overall real estate market and economy. They also fear that negotiating strongly with the bank for the best possible deal is some form of bad karma. this is business people.The short sale expert already knows how low a bank is willing to go.

The Short sale expert already has the knowledge that the loan amount is inconsequential to the amount of the discount or final judgment.As for the impact on the overall market? Hey..don’t we keep hearing that real estate is local? If all that is selling in a market is the REO’s and short sales then those sales represent the true market value.

Trying to stave off a short sale by not competently executing and negotiating the short sale ensures the continual drop in the market you seek to avoid.FYI…what do you think the bank is going to do with that property when your short sale fails? Do you think for an instant that the bank cares about your local real estate market and the impact their low priced REO is going to effect?

A true short sale expert understands that this type of property needs to be looked at as a commodity and it is apparent that MLS boards and the like are trying their best to bandage the wounds caused by the tsunami of foreclosures and it’s not working.

Bottom line, if you are not comfortable doing a short sale the right way, from listing the property correctly, to performing all the steps necessary to get the best price for your BUYER then you need to step out of the game. It’s the BUYER that you need to be kow-towing to in a short sale. A true short sale expert understands this wholly.

Super Bonus: Can’t Attract Buyers
Yes…it’s all about the Buyers. Without a Buyer in a short sale you don’t have a short sale. It’s that simple. If you are not marketing to Buyers properly..you’re done!

The Seller is DOA at your listing sit. They can’t make any money. Their only other alternative is bankruptcy. They have absolutely no control in the transaction. Their credit is going to be ruined if the property is foreclosed. The 1099 issue and deficiency judgment issues are what they are and a true short sale expert knows how to properly explain each. So what’s the problem?

Why are agents listing properties at full value or around full value? You are not going to draw out most buyers at that price. There is so much inventory the price has to be low enough to bring out a real Buyer. Notice I said “real Buyer”. A real Buyer does not and would not walk away from a great deal. He does not have to. Why? Because if the short sale is executed properly and is accepted he would be a fool to do so.

Short Sales are viable, they work and you can generate a great deal of revenue from them. The problem is that most agents will not take the time to obtain the skills to be successful in this arena. Unfortunately, they are slow to exit the game as well. If you are going to be involved in short sales, please, by all means, do them correctly or have the decency to get out of it completely.

Check out this update to this post regarding the prospect of real estate agents being sued for misrepresenting themselves as short sale experts to vulnerable homeowners.

Bexar County foreclosures climb San Antonio Express, on Fri, 12 Feb 2010 15:26:27 -0800 RealtyTrac is anticipating a national surge in foreclosures in the next few months as loan modifications or short sales fail. But in Texas, Roddy said he …

I Need To Sell My House Fast … Can You Help Me? http://www.realestateradiousa.com/ Well if you need to stop your foreclosure and you’re tired of waiting for something to happen (it probably won’t as over 80% of Short Sales fail), then give us a call or send us an email. We’re not at all interested in listing your …

The Right Bid Is Key To Closing Short Sales Bankaholic, on Sun, 07 Mar 2010 08:20:53 -0800 When you bid on a home, you usually open negotiations with a deliberately low offer. Lenders must approve any deal that allows a home to be sold for less …

HAMP has not prevented foreclosures, realtors say Credit.com News, on Sun, 07 Mar 2010 04:53:28 -0800″Foreclosures and short sales still appear to be driving home sales in several states,” Eric Adair, business development analyst for Homes & Land, said. …

The diet industry is a multi-billion dollar industry because people are always looking for the next fad weight loss program. I did not develop the ultimate weight loss plan but I will clue you in on what it is. It’s simple, very simple and does not cost a penny.

Expend more calories than you consume. Thank you very much.

If you’d like more details on my secret weight loss plan sent to you, send me a check. Expect delivery in 4-6 weeks.

Are you a real estate agent or real estate investor that operates your “business” hopelessly looking for that magic pill for real estate? Wondering what you can do to jumpstart your real estate career? Wondering how you can be like Mike? Thinking this whole foreclosure mess has got you down.

Well luckily for you, I spoke to our friends at Magic-Pill-4-You and we have come up with 10 ways to Increase Your Sales by 50..60..even 70% or more right away and still have all the time you need to do…whatever it is you do.

1. Answer your phone: It’s amazing how much business you will have if you just answer your phone during business hours. Can you imagine calling Walmart during business hours and not getting a hold of them? You are in a sales business, every missed call can cost you money. I can’t tell you how many houses I have pulled up in front of and called the number on the sign only to get voicemail. That’s absurd!

2. Make sure whoever answers the phone has the answers the customer needs or can immediately put them in touch with someone who does. If you answer the phone, make sure you do. It’s your listing and if you have ever sold a house before you should have the answers to the questions you are asked at your disposal. In fact, you should anticipate the questions you will be asked. I don’t know is not an answer a “professional real estate agent” should respond with. It does not matter where you are, with today’s technology you should be able to access any info about the property, anywhere.

3. Have business hours or coverage spanning multiple time zones. With the dollar weak and the Euro strong, you may have foreign buyers interested in a property you are marketing…you are marketing …aren’t you? No one expects you to be available 24 hours per day but that does not mean someone shouldn’t be.

4. Make sure you enter the right contact info on the MLS, your business cards, your website…etc. Agents seem to think that a prospective client wants to chase them down and spend time re-faxing and re-emailing. We don’t! Provide your prospective client with one point of contact. Again, with today’s technology this is absolutely no problem.

5. If someone does leave you a message, respond promptly. Not when you feel like it, not when you get around to it, PROMPTLY. Have you ever gone to a fine dining restaurant..or just about any restaurant for that matter? When you are done with your meal they bring you the check. It is placed on your table and the server waits until you insert your credit card or money. Once they see you have inserted the credit card they PROMPTLY come to your table. Point being never make anybody wait that is, or may be, spending money with you.

6. AOL is not the Internet. Repeat after me, AOL is not the Internet. Get a real Internet connection. AOL screens your email and does not allow certain emails to be sent to you. Here’s a hint…How many businesses that you work with have an AOL email address. It exposes you as being cheap and behind in technology. Keep the AOL account for Aunt Emma and Mom and Dad. Breakdown, spend the money and get a real Internet connection for your “business”. [and that goes for a real domain as well...heck why stop there, maybe you can be real adventurous and start a blog!]

7. I don’t know who sold it to you, I don’t know who mentioned it in the office…but lose the autoresponder on your email. It’s stupid and it’s the same as the voicemail. If a client sends you an email, they know you may not be sitting at your computer. Just respond PROMPTLY. By the way, promptly is not in a week or so.Which leads me to number 8 on the list.

8. Learn how to detach from the fax and embrace email as the technology it has become. Check it often. You don’t have to do so personally, but somebody should be able to check and respond to all of your email. Again, with the technology available today, there is no reason to make your client run to the printer, then over to the fax machine simply because you want to continue to be a dinosaur. The vertical integration of technology allows someone to go to your website or blog, search a property, and if they want to, you should have the technology available so that they can email you an offer right from their desktop. Lose your fax machine dependence. Embrace Web 2.0 and be a real estate agent in today’s world.

9. This might be a novel thought. Go to work everyday with a plan. Start by going to work everyday and then if you actually do that, then please have a plan as well. Although you are probably an independent contractor, let’s not fool ourselves. You have a job. Treat it as such and simply show up. It’s amazing how much you can accomplish by simply showing up. As Seth Godin stated…”Showing Up is underrated”.

10. Have fun and be enthusiastic. This is a fun business. If all you want to do is complain about the market and whine about Sellers being unrealistic, please by all means, take the day off. Take the week off. Maybe go ahead and just quit the business. We don’t need your malaise. Enthusiasm is infectious, whining is contagious. People want to be around those who are infectiously enthusiastic, they seek to avoid acrid whiners. Consciously decide to be enthusiastic.

Well that’s it. 10 simple steps you can immediately implement with very little cost and a modicum of effort. You can do this today and begin seeing results tomorrow. Just like dieting, you can subscribe to a million fads, or you can take control of your own destiny and simply eat less and exercise more. There is no magic pill that you need to take. You have the power to change your life anytime you decide to do so.

Parting Thought: Is the real estate market down because no one is buying, or is no one buying because no one is working the market? I believe the market is populated with able Buyers, but they need to be courted, marketed to and served. No one is just going to give you their business anymore. You have to earn it. You earn it by PROVING you have the goods.

Baseball’s top home run slugger Barry Bonds has struck out over 1,500 times in his career. He has hit an unbelievable 762 home runs but he has returned to the dugout in failure nearly twice as much as he has taken one out of the park.

Joe Montana, arguably one of the NFL’s top quarterbacks threw over 5,000 passes in his NFL career. Only 5% of those passes were touchdowns.

Michael Jordan, His Airness himself averaged…averaged, over 30 points per game over his stellar 15 year reign as basketball’s elite player. However Jordan only made 49% of the shots that he took.

Wayne Gretzky, the “Great One” revolutionized the game of hockey with his scoring, stick handling and skating prowess. In his 20 year career, Gretzky took over 5,000 shots on goal and scored an unbelievable 894 goals. His percentage of success…just 17%.

Success is a matter of perspective. Those at the top of their game have shown us that it is perserverance and a winning attitude are the attributes of a true champion.

In today’s real estate market, many real estate agents are throwing in the towel. Instead of upping their game, training for today’s challenges, embracing and implementing new strategies and techniques, availing themselves of technology and truly respecting their profession, they are simply hanging up the cleats.

I hear stories about low barriers to entry and other musings as to why so many agents fail. There is much less of a barrier to play a sport. Anybody can play baseball, football, basketball or hockey.

It’s the skill set and mindset that one develops that sets the high performers apart from the failures in sport, and it’s the lack of the same which causes the demise of the Realtor.

However, there was one attribute that each of these superstars benefited from that ensured their ongoing success. This one attribute is what really made each one of these athletes great. They were part of a team. Not one of these individuals would ever have succeeded if they were not surrounded by a number of other talented individuals who supported them, encouraged them, cried with them, fought with them and trained them.

As so many agents are floundering, what are you doing to help them? What are you doing to build the next superstar? Every championship ring these individuals have won allowed everyone of their teammates to win the same ring. Every award that they have been bestowed is because many others have contributed to their success.

If you are not creating your own dream team and helping others to succeed in business, then where do you think the real estate industry is headed?

Banks are failing, consumer confidence is low, foreclosures are at an all time high and we have people bailing out because they can’t make ends meet and it’s too tough to make it work in this business.

That’s when teams pull together…good ones anyways. Start your day differently. As we are about to commence March Madness, why not help someone become a Cinderella story? It will only serve to make you a better team player yourself.

Lastly, I mentioned Wayne Gretzky’s stats above and I would be remiss if I did not close with what I feel is one awesome quote by the Great One himself regarding futility and failure and not succumbing to either.

You always miss 100% of the shots you don’t take!

America is obsessed with dieting. Based on the multi-billion dollar industry that dieting has become, we can not be all that obsessed with actually losing the weight but rather it seems we are overwhelmed with just finding the easy way to do so.

Unless there is a medical condition that prohibits one’s body from working correctly, there’s no reason to ever go on a diet. Losing weight is a conscious decision to be made and carried out.

Simply expend more calories than you take in and you will most assuredly lose weight. It’s that simple, yet millions of Americans spend billions looking for the proverbial easier way. Present company included.

It seems that many professionals take a weight loss strategy, a failed one at that, and attempt to apply it to marketing. Too many marketers, look for the easy way out. The easy way around doing what is necessary is not necessarily the path of least resistance.

In real estate, we hear from many agents who simply want to use an outdated methodology and then are quite dissatisfied with the results. In essence the diet is not working and they wonder why they are not losing any weight. It’s not the diet. It’s the behavioral problems of trying to solve today’s problems with yesterday’s solutions.

Too many are reluctant to make the behavioral changes necessary to succeed in today’s real estate environment. There is no easy way to tell someone to lose weight..other than to tell them. So let me just tell you that you need to lose weight.

If you have Sellers who refuse to be realistic about today’s market, then do the unthinkable. Push away from the table and stop eating. In other words…release them from your listing agreement and concentrate on those Sellers who do understand that you are a professional and will take your expert advice.

Too many agents chase every call, take every listing and grow heavy with the weight of holding on to listings that just add too many unwanted pounds and never sell. Do you want to be known as the agent who can’t sell anything? Is that what you want for your brand identity?

Shed the dead weight! Educate your Seller and advise them that with all of the empirical data that you have at your disposal that you believe that their property will sell if it is lowered to $____.00. If they won’t lower it, then cancel the listing and move on.

All real estate will sell, and there are plenty of Buyers waiting for that bargain. Provide it and they will buy. Become known as the agent with the deals and your phone will ring off of the hook.

In time you will have all the Buyers you need, and you will have actually lost some weight in the process. Some excess weight that needed to be lost will have been shed and a new you will emerge.

Imagine how making money again will feel!

Much has been written on this subject and much more will be written as the application of the Long Tail theory is put into practice.

The real estate industry has been somewhat slow to embrace the Long Tail theory. Blogs that are out there supporting the Long Tail are seeing great traffic numbers. Our own blog at Real Estate Radio USA has certainly enjoyed a Long Tail boost.

What is the Long Tail? Back in October 2004, Chris Anderson of Wired Magazine authored what may arguably be the most influential magazine articles of recent times, “The Long Tail.” In the cover story, Anderson explored the impact that better online searching and filtering was having on the sale of various products and services. He found that the Internet was now making it viable to earn a profit from items that were not the mainstays. That is to say that a product need not be a Top 100 item in inventory for a profit to be made.

Anderson concluded that niche products and niche markets that by themselves sell relatively few units, combined with comprise the majority of sales for many businesses.

A review of his book that soon followed the Wired article by Business Week magazine( Who Needs Blockbusters?) cites several examples in support of Anderson’s claims…”Television’s top-rated show, CSI: Crime Scene Investigation, commands only 15% of TV households, compared with the 74% who were glued to I Love Lucy in the 1950s. The number of CDs reaching at least gold sales status has fallen by half since 2001 — double the decline of overall music sales. And on the online DVD rental site Netflix, only 30% of movie rentals are new releases.”

The LongTail theory most assuredly applies to real estate. Way back in 2002, the National Association of Realtors in their “Web Wizard Report” said that blogs can be ideal tools for real estate agents as the astute blogger can attract readers interested in niche markets who may be interested in niche or narrow, focused subjects. With laser precision, an articulate blog can zero in on your target market better than any other medium that has been previously utilized by a real estate agent.

As we are now in an era wherein 80%+ of those interested in buying or selling real estate begin their journey on the Internet, the need for specific niche blog marketing is greater than ever.

Mr. Internet, Michael Russer spoke to us at Real Estate Radio USA last week and underscored the virtue of narrow focus blogging by taking us to a couple of websites. One a site for armed forces personnel and the other a site for nudists. Talk about filling a niche! Your blog can be created to focus on the housing needs of pet lovers, retirees, single women, first time homebuyers, fly-in communities, island estates…just about any market you want to focus on.

Once set up correctly your blog costs pennies per day and your reach is the world. Global marketing for cents per day. This form of long tail marketing beats postcards, magazine ads, newspaper ads, radio ads ..it even beats open houses!

Think Long Tail is going away…hardly. It’s just beginning. Seth Godin, the marketing genius says that we will be talking about the Long Tail for the next ten years. It’s simply that groundbreaking and innovative of a principle.

The traditional IDX is already dead. The MLS is comatose and barely breathing. It’s time to unplug. Its eventual end is certain. We might as well have the funeral now. Those of you trying to keep it on life support might as well come to grips with it and be prepared to move on.

The consumer in this day and age wants to see ALL that is available. They don’t want to be spoon fed some kind of archaic pay per view listing. This is an on-demand world. We can see 500 channels of cable. We can basically buy any book printed on Amazon. I can download just about ANY song EVER recorded, when I want to. From the most obscure Tahitian chant, to Sinatra, to the White Stripes. If I want it, I can have it. These are all Long Tail examples.

I could go on as to how Long Tail will affect listings but that’s another article as their is so much written about it. This article is about marketing to the niche.

Utilizing a niche and narrowed blog subject matter, directed at a specific target audience, supported with the correct keywords and SEO, you will be soon harnessing the power of the Long Tail.

With over 1.3 million agents to choose from, give or take a few hundred thousand departees, how would a potential buyer or seller know that you are the one they need to call? Better yet, how would they know that you are the one they WANT to call? You are the “expert” in your market. You believe real estate is local, would it not make sense to make sure any potential customer, from anywhere in the world, knew that about you?

If you are going to stay in this business, then realize the changes needed and what exactly those changes can mean for your bottom line.

After all, we are in this business to make money aren’t we?

What sets truly successful investors apart from those who are only moderately successful or – worse – those who prematurely pack it in and decide to give up on real estate investing altogether?Mistakes do it every time.

However, all investors are prone to mistakes. The key to moving forward is recognizing those mistakes and working proactively to keep them to a minimum. Here are some of the most common mistakes – and how you can avoid them:

• Treating real estate investing as an unusual hobby – Real estate investing is serious business. Fortunes can be made in real estate investing, so treat it seriously. Get a business card and distribute it. Successful investors pass business cards out like Halloween candy. In addition, don’t neglect to establish yourself as a serious investor. Set up an LLC, get a Federal Tax ID number and open a business checking account. You can survive with a personal checking account, but doing so screams “amateur”. Be professional and take the steps necessary to prove that you’re serious about your success.
• Thinking that your need for education ended with your first property purchase – Your need for an ongoing real estate investing education is as real as the needs your physician or your children’s teachers have for ongoing education. It keeps you up-to-date on current strategies and techniques that you otherwise might never know about.
• Thinking the Internet is a passing fad – For too many investors, being steeped in the “old” way of doing things is costing you money, profits, and deals. 92% of all real estate sellers begin the sales process online. If you don’t have a website, you’re severely restricting your options – and your cash flow. If you have an artery with a 92% blockage you’re a prime candidate for a stroke. Don’t do this to your business. Solve this problem by visiting http://www.myreiwebsites.com/ and stepping into the 21^st century of real estate!
• Ignoring your business credit file – If you have a pulse you know you have a credit file, but did you know you can build business credit and expand your opportunities ten fold? Separating your personal credit file from your business credit file can help you to more quickly take advantage of opportunities, especially if your personal credit is less than stellar. Another benefit to working to build business credit is that all business creditors don’t require a personal guarantee by you. An added benefit is that you might be able to get better terms for a real estate transaction with your business credit than you could secure with your personal credit, and it won’t affect your ability to do future deals!
• Thinking real estate agents and brokers are for “uneducated investors” – A good real estate broker can be one of your best friends. The key is finding one who understands your investing strategy, works with investors currently, and truly understands your exit strategies and what it is you’re trying to accomplish. Sure, real estate brokers charge commissions, but if the value of what you receive is greater than the cost you’ll be money ahead – and it will be reflected in the value of your portfolio.
• Being secretive about what you do for a living – Let everyone know that you’re a real estate investor. Everyone. From your accountant to your veterinarian, it’s critical that you let as many people as you can know that you’re actively seeking property and great deals. The current credit crunch has some unlikely people in a world of hurt financially. Most people either know someone or know of someone that you might be able to help out of an embarrassing and time-sensitive situation. Your stock in your community will go up if you can help a friend or even a family member of someone in your sphere of influence. That can pay off dividends now and in the future, so don’t be tight-lipped. Get the word out!
• Hiding from the press – You may not think that what you have to say is noteworthy, but your local media may disagree. Newspapers and TV stations are always on the lookout for interview targets and sources for national news stories with a local spin. The press won’t come beating down your door – at first, but once they’re aware you exist and that you are an intelligent, articulate interview subject, they might. Get the process started. Send a reporter an email explaining a real estate-related concept or principle – keeping in mind that it has to have a local spin.

While it’s possible to have some success as a real estate investor even if you make some of these mistakes, why would you want to?  It doesn’t take much to set yourself apart from the crowd and increase your visibility and your credibility.  The fewer mistakes you make the better off you are.  Go ahead, correct these mistakes that many investors make and free the entrepreneur that’s struggling to rise to the surface.  It’s worth the effort.  Go ahead, give it a try!

Location, Location, Location are no longer the three words that are most important in real estate. That distinction is now been awarded to conversion, conversion, conversion!

While the catch phrases are resounding…you know them, Web 2.0, Real Estate 2.0, blogosphere, RE.net…there is a reason we all are engaging in this new technological era. That reason is simply to make money. Let’s not be ashamed of that fact but let’s not lose sight of it either.

While all of the aforementioned components of the new world are important, they amount to nothing if we are not making money. Maybe some aspire to change professions and become journalists, maybe some have decided to abandon their real estate endeavors to save the whales or stop global warming, the rest of us are blogging to make money.

Whether that revenue is derived from advertising sales, real estate sales, seminar enrollments, ebooks, or widgets, we are here to increase the bottom line. Simultaneously we all know we need eyeballs in order for any of that to happen. We all have our own techniques to drive traffic but once the controversial article is written, or last month’s market report divulged…what’s left is conversion. If you are not converting then you are not making any money. If you are not trying to convert..well then you are in real trouble.

Have you ever thrown a party and have no one show up? I think you would agree that it would be kind of embarrassing. What would be even much worse would be for you to throw a party, have 1,000 guests show up and to have them eat your food, dance on your carpet, run amok around your yard, then leave without so much as a thank you, never to be heard from again.

Is your blog throwing that kind of party? Are people showing up, reading your content, sniffing around and leaving without so much as even a comment or a opt-in? If so, you my friend have a conversion problem. either that or your SEO is fantastic and your site stinks…but that’s a whole other problem and article we’ll need you to read.

What is Visitor Conversion?

Conversion is the sales process of getting your blog’s visitors to heed your call to action and actually doing something you are leading them to do. Some common conversions may involve:

• a visitor reading a particular article or page on your site, web page
• downloading an ebook or file
• signing up for your RSS feed, newsletter or email list
• asking for more information on something product you are featuring
• buying something…that’s the end game isn’t it?

You can easily figure out your blogs conversion rate. You can take your conversion rate in different intervals depending upon your various calls to action. for sales you may want a monthly conversion, for downloads you may want a weekly conversion, and for email sign ups you may want a daily conversion. The choice is yours. I like to take a daily conversion on free downloads and a weekly conversion on sales.

The mathematical formula for calculating conversion rate is:

Conversion Rate (%) = Number of Sales*
Number of Visitors

(you can substitute “sales” with downloads, opt-ins, whatever you are measuring)

For example, if you get 1,000 unique visitors to your blog in a day, and 25 of them opt-in to your newsletter you have achieved a conversion rate of 2.5% for subscribers on that given day. As I previously stated, you can take a conversion sample based on your duration variable as you desire.

The most important thing to remember is that you indeed can measure your conversions and THAT should be your desired goal. Traffic is essential for the success of your blog and converting that traffic is essential to your bottomline.

So, how does all of this affect my real estate business. Unless you are running a social blog or commentary, an article on your kittens fur is not really going to make you any money…that is not if it isn’t tied into an overall plan to laser target the demographic you are trying to reach.

Real estate is about selling houses and as a real estate agent, you don’t get paid until the deals actually close. So it is absolutely imperative that you are able to quantify and track your conversion rate. We have read on many websites that an acceptable conversion rate for real estate agent websites is 2-5%. When this rate is discussed, they are talking about mere leads!

If you are only generating 2-5% conversion on leads, you have a lot of work to do to convert those leads into sales. Capture and conversion are two very distinct and separate items. While is may be good to “capture” 2-5% of the visitors on your site as leads, what are you doing to increase your conversion rate which will increase your revenue?

An upcoming article we are researching is going to talk about the methods of increasing your conversion rate. In the interim, it might be beneficial for today’s Web 2.0 real estate agent to take a look at their present conversion rate.

States shown in white indicate that rebates are allowed and states in yellow indicate states where they are not allowed. Now that we all know this, there are three quick questions that need to be asked before we go any further. (see large map blow)

Question 1. is for Real Estate Agents: Do you offer rebates?Question 2. is for Sellers: Do You know rebates have been proven to entice Buyers and that rebates are absolutely legal in all but 12 states?Question 3. is for Buyers: Are you aware that there is a way for you to save money on a home AND get cash back at closing?

In this dismal real estate market, it seems that all kinds of promotions and “out of the box” marketing needs to and should be happening to move property. Then why are we not seeing more of the rebates put in action to move the inventory that is just sitting there stagnating?The rebate marketing is available on any property that offers a commission to a real estate agent. So any property, REO, property in foreclosure, or anything listed can avail itself of this marketing vehicle. So why is it not being utilized on a mass basis?

Lee Iaccoca took over a failing automaker and turned Chrysler around with great marketing. Most of his marketing was built around consumer rebates. Iacocca helped establish the cash rebate as a major marketing tool in the U.S. auto industry when he appeared in over 60 commercials during the 1980s.

In September 2003 American Express in marketing the launch of its “Blue Card” offered rebates up to 5%.

While there may indeed be negative implications resulting from rebates utilized on an extended, long term basis, there is no doubt that when an industry is struggling in both sales and in public perception, that rebate offers excite consumers.

So Realtors..what gives? Why are so many adverse to implementing a rebate program to provide an incentive to Buyers? Why, if in all but a few states, this kind of campaign can be implemented are more houses not being sold with rebates to the Buyer?

Now don’t tow the party line and tell me or the American consumer that it ends up being more expensive, it’s simply not true. How many Sellers are even told that this is an option? I shudder to think how few Sellers even know this is available.

Let’s say I am selling my house. I put it on the market for $300,000.00. I, through my listing agreement am offering 6% commission. That means $18,000 is coming off of my net. Out of my bottom line. Now I find out my house is taking a long time to sell. I ask my agent if there is anything I can do. I am told it’s just a tough market and I need to lower my price.

No…what I need to do is lower the commission and offer the buyer an incentive to but my property. So here’s what we’re going to do.

1. We’re going to keep the price at $300,000.00
2. We are going to offer a qualified Buyer a cash rebate of $7,500.00
3. My Agent and the Buyer’s Agent (if any) are going to split the remainder of the commission
( as the Seller, I really don’t care how it gets split up)
4. If My listing Agent won’t do this, then I will terminate my listing Agreement

More than likely most homeowners are locked into a horrible listing agreement and they are at the mercy of the agent to bow out gracefully ..like that’s ever going to happen.

Then I can remarket my property with a cooperative agent and offer a real incentive to a Buyer.

Sound like a plan? Why Not? It’s better than sitting around waiting for something to happen and being told to keep lowering my price.

Fort Lauderdale Real Estate Blog is offering cash back on all its deal for new homebuers!

 

I wrote this post over 2 years ago. (on February 21, 2008)  I’m kicking it back to the top given the reason that things have gotten WORSE with Realtors…not better.

If there is a telling sign that the real estate business model is nearing a possible demise, you need to look no further than the reaction of most rank and file members of the National Association of Realtors when an attempt is made to engage them in spirited discourse.

In such engagement, the classically conditioned response seems to point out the opposing inquirer as some kind of interloper to be shunned and reviled. Is it that demeaning to answer questions about that what you do? Is the methodology of the traditional real estate business model so revered that it is beyond reproach?

Over the last 30 days or so we have inquired and discussed the notion that the sacrosanct real estate agent commission is not justified. Rather than make wild assumptions or broad sweeping statements we have posed an open question to tens of thousands of agents. We have posed these questions on blogs, we have discussed them on air on our radio show, we have asked the question on many social networks populated by real estate agents and we have even asked those agents we know and whom we have done business with.

While Plato, Socrates and Aristotle, deep thinkers all, wrote volumes as to the benefit of open dialogue and debate, real estate agents seem to follow a much different philosophical point of view.

Their point of view being, so it seems, is to be like the Machiavellian Prince. Machiavelli wrote in his most famous of works, the Prince, that one should be publicly above reproach but privately be ready to do things of an evil nature in order to achieve his goals.

Unlike Plato and the other great philosophers mentioned herein, Machiavelli believed in doing anything necessary to preserve the status quo.

The Machiavellian ideology displayed by many real estate agents is evidenced by the deeming of reasonable inquiry as being pejorative to the individual and to the “profession” as a whole.

Recently there was a post on the popular real estate oriented social network, Active Rain. In the post, an agent from Illinois, Kelly Sibilsky, asked a public question as to what clauses one would add or delete to effect a better listing agreement. Admittedly she stated that she is frustrated with her current listing agreement and that because of the small print it is often confusing to her Seller clients.

As we had previously written a story regarding the type of listing agreement we advise Sellers to seek from their agents, we recommended the same. The article was named, The Listing Addendum Every Seller Must Have And Most Agents Will Never Agree To. It is aptly named as most agents would never think of providing Seller’s with any great detail of what they will be doing to actually sell a property.

The document we drafted would actually hold the agent accountable for their actions and would be enforceable in the event of non-performance, misrepresentation or negligence. Ms. Sibilsky followed the party line and stated that while she indeed did agree with most of the document, she would never sign it either.

While she states that she “tells” her clients what she will do, it is obvious there is no way she wants to sign any agreement that obligates her or gives the Seller any enforcement options. More importantly she said that “I don’t believe that what I spend on advertising correlates to the fee I charge. Just like other professionals, we are being paid for our expertise, time, etc”

I have heard this nonsensical attempt at justification from many agents. So she was pressed to further justify her position. She refused. How unoriginal.

In comparing her status as a real estate agent to “other” professionals, we looked into how that comparison would  fare. While the criteria to become a physician, CPA or attorney are widely known, I wonder if her clients know that the criteria for becoming an agent in Illinois is :

a. having at minimum a GED
b. being a minimum of 21 years of age
c. taking a 45 hour course
d. and passing the licensing test.

In contrast, a nail technician in the State of Illinois has to take 350 hours of training. That being said, the law is what the law is, but the professional comparison is hardly relevant.

While I truly love a spirited debate and asked Ms. Sibilsky to please expound upon her answers, she tired quickly of our discourse and said “While I can certainly respect that you have a different opinion, if you would like to try to stir up something or engage in debate, use your own blog or radio show to express it”.

So we are. It’s not like we had a choice either as she quickly deleted our comments and ceased taking comments on the subject altogether from anyone. She believed and stated that her thread had been “hijacked”. Since when did debate become a synonym for a terrorist act? It must be that Machiavellian agent-speak we keep hearing about.

Without the ability to continue our discussion, we began to seek answers on our own. As has been par for the course, we can not seem to get anyone to tell us directly what they do to justify their commission. However this was the first time someone took their toys and went home. I doubt it will be the last time.

So we began to seek answers elsewhere. Recently we stumbled upon an article that referenced a study completed by Stanford University.

The article and the study, questioned the value of a real estate agent in a typical transaction. It attempted to quantify the role and monetize the value of the participating real estate agent.

With great specificity the study concluded that there were six areas of involvement in a transaction for which a real estate agent could justify a fee.

Those six services are:

1) Preparing homes for sales, circulating flyers, placing advertisements, holding open houses, and recommending the house to buyers

2) Assisting with negotiations

3) Matching buyers and sellers

4) Providing access to the Multiple Listing Service

5) Providing market information and recommendations on the asking price

6) Assisting with paperwork and legal documentation

The study went on to say that items 4, 5, and 6 were estimated to have a value of $1,400.00 in total. This would only justify a commission on a home with a sales price of just $23,000.

Finally, the study stated that for a real estate agent to warrant the continuation of the compensation as now exists in the current business model, it must mean that items 1, 2, and 3 listed above must be quite valuable, or in more likelihood, highly overpriced.

In reviewing items 1, 2, and 3 above it is easily seen that the bulk of the value would be predicated upon the degree to which a Listing agent markets a property.

Isn’t this what Seller’s expect? I believe that the consumer expects the agent they list with to market their property and find a buyer. Our listing agreement addendum that we spoke of would provide the Seller with a detailed, itemized and comprehensive marketing campaign so that the Seller would know for sure what the agent was doing to sell their property. Or what the agent was not going to be doing. I don’t care if an agent spends a single dime marketing a property if they don’t want to. That is, if they are open and honest with a Seller and tell them their intentions exactly.

Does anybody really think that actually happens. Or in a more sinister way, does the agent “tell” the Client they will market the property, while knowing full well they are not? Isn’t this starting to sound a lot like Machiavelli’s Prince?

In the case of Ms. Sibilsky, we took a look at her website. She mentions a tremendous 24/7 marketing plan that she commences for each of her clients. But while sounding great, there is no definitive way that the client could hold this agent accountable. Without the benefit of an actual written contract, the Seller would not have anything to challenge and enforce.

What becomes even more suspect about her marketing plan, is while the website, like so many other agents websites, states they will be performing yeoman efforts in the marketing arena, behind closed doors, or what many think are closed doors, the  agent tells a different story.

In a response to the comment we posted, she stated the following: “I don’t believe that what I spend on advertising correlates to the fee I charge”.

This is what so many consumers have a problem with. Are agents no different than the “Tin Men” of yesterday? Will they say anything that gets the Seller to agree to the listing without really telling the Seller what their real intentions are?

In reviewing the Stanford University study you can clearly see that most of an agent’s involvement in a transaction is quantifiable. How can any agent say that their marketing expenditures do not have any correlation to their fee? What do they think the Seller believes the agent’s job to be? Do real estate agents really think that Sellers are willing to part with 6% of the sales price because you enter data on the MLS, install a yard sign, and host a few wine and cheese parties?

We have begun talking to many homeowners and to an individual they have told us that they believed an agent’s primary role in a transaction was to market the property.

There has to be some oversight here, we know some extremely successful agents who make their mark everyday. I know first hand that they are out there, but it’s the other agents, the ones who promise the world in public and act to the contrary in private that are, in my opinion, causing the malaise of incredulity in the real estate industry.

The Machiavellian real estate agent is manipulative and not at all credible or trustworthy. This type of agent acts in a manner that allows them to maximize their financial gain while minimizing their relative expense, regardless if their actions are contrary to the best interests of their client. They believe that their actions are justified as being necessary to affect their needed result.

Mere questions and engaging debate is seen as a verbal attack not just upon their person but on the “profession” as well. Ms. Sibiliski wrote, that comments regarding her post that sought to find out the truth were “inflammatory” and were designed to “attack the real estate profession”.

Remember, our comments to Ms. Sibilsky were in RESPONSE to an open question she posed on a social network. When you ask for input do you wish only to hear from the choir?

True change can’t be found by ignoring empirical data and the contemplation of fact. Deduction and introspection are requisite to accepting and implementing change. Most agents we have found become quite reticent when a different position is brought to light regarding the real estate industry. Their reaction, as seen with Ms. Sibiliski, seems to be radical and often anti-intellectual in nature.

Opposing viewpoints of the current real estate business model are viewed as a personal attack on the status quo.

In tandem with the rise of the Internet and the fall of the housing market, there has been the emergence of new ideas and methods for selling real estate. Today’s real estate agent instead of wallowing in gloom may be better served by implementing innovation and accepting change.

There are many aspects to the divisive nature of discourse with real estate agents. There is obviously much to discuss about the business, and about the current state of the market.

It is in the course of heated exchange that new ideas are conceived. It becomes too hard to protect the status quo when irrefutable information regarding the need for overhauling of the current business model is presented.

So the unrepentant agent decides to meet open discourse with the armor of ignorance. As this defense continues to evolve it becomes increasingly difficult for the consumer, who is indeed watching AND reading as these events unfold, to keep what little faith and credibility that may remain in the real estate agent “profession”.

So was Ms. Sibilsky “attacked” as she alleged? Of course not. What she and many of her colleagues do not realize is that the scrutiny of the status quo is now, more than ever, unrelenting and inexorable. The rapid attrition of the real estate agent is most assuredly correlative to their inability to respond to change and spirited dialogue.

Machiavellli realized later in life that change was inevitable. What real estate agents do not realize is that you can be a Machiavellian businessperson, in the true sense of the word, without being Machiavellian, in the popular definition; that is, why don’t you actually try to be effective without being unethical.

I admire many real estate agents and there are many who I hold in great regard. It is unfortunate that they are on the endangered species list of Realtors. I need to cherish my relationship with them because it is becoming readily apparent that we are indeed reaching the end of relevant discourse with most Realtors.

It is a most unfortunate circumstance.

 

What are the top 10 reasons you would need to utilize the services of a traditional real estate agent? C’mon, you can think of a few..go ahead and try.

1. ?????

2. hmmmm

3. hold on..I’m thinking

4. just a second…it’ll come to me

5. man, this is a really tough

6. okay..I think I have one

7. naw..I just had to sneeze

8. can I get a hint?

9. I think I have got one…I really do

10. To show me how to get paid for doing nothing

Now before you get yourself in an uproar, this was in jest and the real intent of this post was to tell you about the effects of a good “buzz marketing” campaign. Buzz marketing can take your blog absolutely viral in a very short period of time. Imagine writing a post so compelling that 5,000, 10,000 even 30,000 people or more click on it to view it.

While this post may be a bit “toned down” as not to be too over the top, a really good buzz marketing campaign would be an article or post with the following:

1. A Headline that people just have to click on..I mean a KILLER headline. (i.e. ever pick up a copy of the National Enquirer, there’s a reason they have been around so long!)

2. Although we are in real estate, it has to have as massive of an appeal to as wide an audience as possible.

3. It should invoke some controversy or negativity…remember the cliche about news..”if it bleeds it leads”. If you are not comfortable with controversy, then AVOID buzz marketing. FYI…don’t slander or defame anyone or you could end up in a bit of hot water…and that’s not the kind of trouble and real estate agent operating a real estate blog wants to be in.

4. Remember..people love lists!

5. Let your imagination run wild! Sky’s the limit…expand your horizons and be as creative as possible

6. Enticement, Inducement..use these aspects to your benefit…people like being teased

7. You MUST find a great picture to punctuate and accentuate your post.

8. Be the triple threat.
a. write a great headline
b. write a compelling post and;
c. Make sure your blog has sizzle. Make sure it looks great and sets you apart from everyone else in your market.
“all the World’s a stage and we are merely players…each another’s audience”.

9. Try to do your best to write as if in the second person…this is sales…the customer believe it or not cares less about you, they want to know what you are going to do for them. Same thing with blog readers, what’s in it for them? They don’t care if you are a CRS, GRI..etc..etc..etc..

10. Think long term and try not to be dated. Once you post it, it’s out there..searchable..for what seems like forever. Ever look at your high school graduation picture…you want that floating around in cyberspace? Probably not so think about that when you are writing your buzz marketing article.

Lastly, don’t overdo it. As Brian Brady says…”you have to use every arrow in your quiver” and this is just one of those arrows, even if it is one of the sharpest.

Have fun with buzz marketing and drive some serious numbers to your blog.

I was reading a post on my favorite real estate social network and the writer was stating something I hear quite often. That you need to be very aggressive in making sure the bank does not reduce your commission. In fact the writer of the post I mentioned said:

“Who do they think they are to cut commissions? Negotiate for this! You work ten times harder on a short sale, so why should we be paid less. Fight for this commission. If you have to, take all listings at 8% and start there. Don’t let them push you around on this issue. They will break when you push!”

Great advice. Too bad it could put you on the other end of a massive lawsuit.

Short sales are not new. We have been doing short sales since before they became cool. We were doing short sales back when Sellers actually had equity. Aah..the good ole days! It’s not the short sale that is new, it’s the opportunistic real estate agent that’s new to the game.

Newly dubbed short sale experts are out there trying to do short sales and obviously the reason why is because the lure of a big payday. Most have found out that short sales are, from their jaded perspective, a lot of work, and have elected to forego short sales.

However some, who have decided to make it a go are learning from “instructors” that they need to watch out for the big bad lender who will try to reduce their commission. There’s a couple of reasons for that.

The first is obvious, they want to net more. The other is you are required to do so.

We have spoken to a number of prominent real estate attorneys. We have also spoken to a number of real estate boards in regards to this. Here’s what it boils down to and you may not like it.

If you are taking on a Seller in foreclosure you do so knowing full well they are in financial distress.You know they are about to lose their home if a short sale is not completed. You freely chose to market to this individual and some even have told the Sellers that they are “short sale experts”. Once you have taken that listing your fiduciary responsibility is magnified.

Not only are you charged with protecting their best interests, you must place their interests ahead of your own.

So let’s say you are “negotiating” with the bank and the bank says they need to reduce the commission in order to make the deal work. At once, the agent is going to do everything necessary to defend their commission. Uh oh…you have just breached your fiduciary responsibility.

In speaking with the attorneys for the State Board of Florida, FREC, we were informed on 3 separate occasions, that if you have to reduce your commission to ZERO to make the deal work then that’s exactly what you must do. YOU MUST TAKE NO COMMISSION IF IT MEANS GETTING THE HOMEOWNER OUT OF FORECLOSURE.

If it means you work for nothing and the Seller gets out of foreclosure, then that’s just the way it is. You chose to take on a client in financial distress and your fiduciary obligation is to protect their best interests ahead of your own.

I am not saying an agent that knows what they are doing should not be compensated. For that matter even the incompetent agent may need to be compensated based upon their listing agreement.

However, that may be a matter for you to collect upon outside the transaction in your own lawsuit. In the short sale transaction you may have to forego getting paid if the bank wants to reduce the commission to make the deal.I know..I know..I have heard it before, most agents will come back to the Buyer and say the bank rejected the offer and wants more money.

So you tell the Buyer they need to increase the offer in order to meet the banks requirements. Then when the Buyer won’t you tell the Seller that the bank and the Buyer are being unreasonable and there is nothing you can do.

Oops..there’s that fiduciary issue rearing it’s ugly head again.Don’t believe me, then call your local board..not your broker, not your friend, not another agent…but the State Board and ask this question exactly.

“Hello, I am working on a short sale. I have an offer and it’s well below what the bank will accept. The deal will close and the homeowner will be saved from a foreclosure if I agree to reduce my commission or eliminate my commission. I have been told that I have an extraordinary fiduciary obligation to a homeowner in distress and that I need to forego my commission if it is in the best interest of the Seller and it will keep him from losing his home. Is this true?”

Make sure you are sitting when you get the answer. One attorney told us that the mere negotiation of a commission and trying to “beat the bank” up over commission could be potentially actionable.

It makes a lot of sense when you think about it. You’re the one who decided to take on this listing, and you have obtained privileged, and confidential financial information that you would not normally have, and by negotiating a commission you are using that privileged information for your benefit. Kind of scary when you think about it.

But don’t worry, no one’s ever going to know about you killing a deal because the bank wanted you to take less commission. No one is going to know that the deal may have been able to be closed but the bank wanted $10,000 or $15,000 more. There is just no way anyone can say it’s your fault. In the end it just did not close and you can tell the homeowner that the Buyer would not go up in price and the bank wanted more than the Buyer was willing to pay.

Well…that’s not exactly true. We have spoken to 4 different attorneys in 3 different states and the next wave of real estate agent lawsuits are on their way.

You see, each and every time you call the bank to “negotiate”, those calls and everything you say on them are recorded. In fact, you AGREE to having those calls recorded as a condition to even being allowed to speak to a lender. Why do you think they record those phone calls? Did you ever think what the phone call waiver statement means and why they state it?

Lender reps are trained as to what they can and can’t say in regards to a client. More than likely in your newly read short sale expert manual, they failed to mention that little bit of information didn’t they.

Attorney’s that will be suing real estate agents can subpoena those phone records and in doing so can make a very compelling case for negligence. They can subpoena all of your notes, your short sale package…even your preliminary HUD-1 Statement showing your big fat commission on it. Yes, everything!

If that’s not bad enough, too many agents and brokers are chummy with their own title company or title agent and try and get “creative” with the paperwork. Unfortunately they used a title agent instead of a real estate attorney.

You see, that information can be brought in against the inexperienced, short sale expert as well. For if they used a real estate attorney, it’s possible another layer of protection would have been put in place per the attorney client privelege.

The two hour short sale expert class left out that tidbit of information as well.

Well, who knows, maybe the homeowner will just accept that he lost his home to foreclosure and believe that you did the best that you could. He probably will.

Here’s hoping for you that his attorney will too.

Check out this update to this post regarding the prospect of real estate agents being sued for misrepresenting themselves as short sale experts to vulnerable homeowners.

Foreclosures Rising In Most Major Metropolitan Areas

Reuters is reporting that foreclosures are climbing in 75% of the U.S. metro areas. It seems no community is immune to the continuing roll of the foreclosure tide.

Foreclosures rose in 3 of every four large U.S. metro areas in this year’s first half, likely ruling out sustained home price gains until 2013. Yep…a downward trending real estate market for at least the next three years.

Did you hear that? That noise you heard was the thump of thousands of hopeful Realtors collectively hitting the floor realizing there is no end in sight and the return to the glory days of 5 years ago will soon be a distant memory.

According to the Reuters article, urising unemployment was the main culprit driving foreclosure actions on more than 1.6 million properties.

“We’re not going to see meaningful, sustainable home price appreciation while we’re seeing 75 percent of the markets have increases in foreclosures,” RealtyTrac senior vice president Rick Sharga said in an interview.

Foreclosure actions — which include notice of default, scheduled auction and repossession — in the first half rose in 154 of the 206 metro areas with populations 200,000 or more.

“We’re not going to see real price appreciation probably until 2013,” said Sharga. “We don’t see a double dip in housing but we think it’s going to be a long painful recovery for the next three years.”

Painful??? Not for the opportunity seekers. While I surely empathize with the pain being felt by many, you have to understand that is in times like these that fortunes are made.

Repeatedly for 2 years now I have told you that John D. Rockefeller once said that fortunes are made and the “time to buy is when blood is running through the streets”, but for many the words are falling upon deaf ears. Deaf to the sound of the bell ringing loudly signaling tremendous opportunity.

There is no doubt to this fact. Someone WILL prosper from this foreclosure crisis. Actually many will prosper. But the only question that matters is will you?

Cities with the 20 highest foreclosure rates were all in Florida, California, Nevada and Arizona.

As long as unemployment hovers near 10 percent and unrelenting foreclosures hang over the market, prices cannot stage a lasting comeback. Home prices are about 29 percent lower, on average, than peaks set four years ago.

“If unemployment remains persistently high and foreclosure prevention efforts only delay the inevitable, then we could continue to see increased foreclosure activity and a corresponding weakness in home prices in many metro areas,” RealtyTrac chief executive James J. Saccacio said in a statement.

Foreclosure Filings Are Exploding In New Jersey It’s time to gas up the foreclosure tour bus and head to the Garden State. It seems there’s about to be a firesale in the Garden State. In news just released today, foreclosure filings are up…wait for it…163%. Yep…you read that right, 163%!! Citing research from the state judiciary, the Statehouse …

Still more home-cost declines predicted earlier this year, analysts said they thought home prices had finally reached their low point and were ready to start rising slowly in most areas of the …

Government Programs Only Save 1 Out Of 10 Homes From Foreclosure! “For every borrower who avoided foreclosure through HAMP last year, another 10 families lost their homes,” the panel said of the administration’s Home Affordable Modification Program. “It now seems clear that Treasury’s programs, even when they are fully operational, will not reach the overwhelming majority of homeowners in trouble.”Congressional Oversight …

Foreclosure activity up across most US metro areas The latest figures show the threat of foreclosures is spreading well beyond the top tier of metropolitan areas located in California, Florida, …