The Paradoxical World Of Real Estate
How You Are Sabotaging Your Business By Following Commonly Accepted Opinion.....

 

It's not politics, sex or religion. No! there are other topics that top producers dare not bring up within a mile radius of so called 'old-school-real-estate-agents'.

Ok, here it goes......

the topic is "Open Houses"...

 There are many aspects of real estate that are pretty clear but our perception distorts it, and we sabotage our business because we can't seem to operate in a gray area (or colorful as I like to think of it). It's either black or white....

Question: Are Open Houses a Good Practice For Real Estate Agents?

There are those who say "yes I've sold multiple homes by holding open houses and love them..." and then there are those who say "Open Houses are a waste of time!".... Oh, and we are defiant.

I personally hate open houses, but I shall admit and will not regret that the first home I sold was from a buyer who I met while holding an open house. At the time I did not know anything about marketing. I was taught the 'old school' way of making a list of all the people I knew, go knock on doors and sit open houses. Honestly, I found this to be an impossible way to make a career out of real estate since most people I talked to had absolutely no interest in buying or selling. It was like trying to sell a book on abstinence to Paris Hilton's fans....

Now did you find yourself taking sides at this point on whether open houses are good or not? (If you did you're right either way, YES - open houses suck.... or NO - you just don't know). Well, welcome to the paradoxical world of real estate. I have met people who have been able to make a career out of open houses, and I'm glad it works for them. So, if you are starting out don't disqualify open houses. However, I have found that spending $100 to advertise will get me more leads than sitting four hours in a house where I get to meet the neighbors and a few other people looking for design ideas and steal your cookies, candy and bottled water (leaving you dry in 120 degree weather here in Phoenix.... How inconsiderate). And best of all, it only takes me minutes to generate the same amount of leads I would sitting an open house.

"All Real Estate Agents Are Created Equal....... With The Opportunity To Become Unequal"

We all start pretty much the same way. Take our licensing course, pass the test and off on our own to a new and exciting (more like crazy) career.

Maybe we did not expect to have to take clients out to lunch, get random phone calls at late hours of the night from a buyer who wants to know how wide is the window in the living room where the sellers should have installed wood blinds instead of curtains... Oh, and we all thought that people were nice and would never betray us by having us show them around town, only to have their friend write up the purchase contract...

C'mon, is it really necessary to ask buyers to marry us by means of a buyer's broker contract? Here's another topic for a great debate that leads to, uhh, nowhere....

Also, why do we have to convince buyers that they are not the only ones making cash offers and that offering 50% of market value is not realistic even in today's market (unless it needs major repairs of course, but we all know they want move-in ready).... If you think sellers are any better, they are not.... They want top dollar and sold today.... Oh, and add 10% above market because they spent countless hours painting the living room and decorating the kitchen which they consider improvements on the house...

Then there's short sales and bank owned listings..... My god, these are a lot of work...

There are great buyer's agents, great seller's agents, great short sale agents, REO agents, etc. These are few, and what separates them from the rest is training and a positive outlook in the future. Many of them don't see real estate as a job, but a passion (almost a hobbie). Yes, there are those of us who are actually excited to wake up early to answer all the emails and plan the greatest showing in the city. We all like cashing our checks, but only some love the work that it takes to get those checks to begin with (and typically these are the most succesful agents)

Point being is that people will always complain about whatever they are doing not wanting to admit that some things are as clear as black and white, but that our perception makes all these topics either good or bad. So my question to all of you is what kind of color are you adding to the black and white world of real estate?

Mine is positive..... short sales rock! I'm having a great year! 

Have a great week!

Marketing YOUR Videos Can Be Profitable

 

I wanted to share this video which has actually improved my credibility in my market. Few people understand social networking and completely miss the point of social networking. There's different kinds of marketing. I classify them as

• Direct Response Marketing
• Branding Awareness
• Communication Marketing (information marketing)

Neither one is better than the other one. They should be taken into consideration equally and pay enough attention to them. If I could start all over again and had a chance to focus on one type of marketing, it would be direct response marketing. It is the hardest one to master, but once it's running it is effective and requires little or no time. Agents who've learned how to use Direct Response marketing will not be seen holding open houses since they understand that they can get 10 times or more leads with a small ad than they can sitting 6 hours getting to know the neighbors.

Branding is expensive and unless you are a big company I wouldn't worry about it too much (yet). There are some that say branding is a waste of money and you can't trace back results like you can with direct response marketing, but how can you argue that the best franchise (McDonald's) built their business on branding?

There are lessons to be learned and this is what I call the paradox of life. People can't live in a gray area. To most, one of these methods has to be better. In some cases it is, but the problem is that the context must be taken into consideration.

Communication marketing Social networking is changing the way we do business. Some have caught up and some are still blind and overwhelmed by Facebook, MySpace, Twitter, etc.

In order to understand communication marketing, you must first understand and adopt the mentality that "you must first give without want." The purpose of communication marketing is to position yourself as an expert, that's it. If you are keeping your secrets to yourself, that's as good as having the cure for cancer and not telling anyone about it?

Let me tell you how I use social networking sites. I do a combination of all three types of marketing, but most importantly I'm putting my face out there for people to know that I exist (branding if you will).

I wrote a blog "Photography and Selling Homes" and it got such a good response that I can now use it to show potential sellers that I am an expert in my field. I have other experts agreeing with me and that's better than me bragging about myself.

How To Sell Your Home Faster
Using Photography As A Tool

Quick! There's a big one. Get close, blur the back ground - Snap!

The I-do-not-believe-in-photography listing agents are on to me again. My client requested pictures of a home that had no pictures on MLS. Doesn't it feel like they are laughing at you knowing you'll get those emails? Sometimes I feel like it's a conspiracy. They post pictureless listings and send demanding buyers your way. Ha ha, now you have to go look at the house and take pictures yourself or tell your clients that it probably is an ugly house and therefore it has no pictures. But the description doesn't say so and we are not going to lie...

Experiences like this have made me appreciate photography more. I know I'm supposed to outsource little meaningless things and non dollar-producing activities, but what if you like the activities? So what if they don't make you money, you get to enjoy life and that's what it's all about....

One thing about pictures when it comes to selling your home is that the picture itself won't sell the home. It will simply let the buyer make a decision whether or not they want to look at the house or not. The question then becomes, how many pictures to use?

The answer obviously varies depending on the house, location, price and yes your camera. I used a point-and-shoot sony camera when I first got started in real estate and it did a great job at taking pictures. My upgrade to a better camera came when I started seeing the plethora of it-is-not-about-the-pictures agents who use their mobile phone (did I really just say mobile phone instead of cell phone or camera phone?) to take pictures of the house they intend to sell. These pictures are smaller than my thumb and blurry so I don't really know what the point of uploading them really is.

Or what about those who take pictures of a room using a standard lens and therefore you get a nice shot of two walls and the corner of a room. If this is the picture you are hoping will get the buyer to jump out of their seat, call their agent and arrange a showing, trust me you are better off to just have a picture of the front of the house. At least it builds curiosity on what the rest of the house looks like. So, unless you have a wide angle lens, I would stay away from taking pictures of small rooms and bathrooms.

What makes good photography, umm.... good? Well it's not so much about the camera, it's more about the lens and the lighting. I personally use a Nikon D60, but if you don't want to look like a tour guide (or where's waldo), and if you are not into photography then a good point-and-shoot camera should be sufficient. Keep in mind that with point and shoot cameras you don't have to worry about ISO settings, shutter speed, aperture, etc. We have enough to learn as agents to even bother....

Yeah it's nice to take good pictures, but really you don't have to go spend hundreds to promote a listing as long as you keep in mind what pictures are doing for you and how they are helping you sell the listing. It's as simple as looking at your own listing and thinking to yourself "if I were a buyer, would I want to go look at this home based on the picture(s)?". If your answer is no then you need a better picture or you are selling a home that doesn't need more than a picture of the front.

Good pictures can really help you drive traffic to your listing, but I think that more pictures and better quality should be left for higher end listings that really require more attention to detail.

Pictures are like the SAT's. If you get them right you get points towards selling a home. If you don't use them well you don't get points, but if you get it wrong, you can actually lose points. So use pictures to drive traffic and know that some pictures can actually cause you to lose traffic. (It's worth repeating)

Now get out there and sell some houses.....

To Buy or Not To Buy a Short Sale.....

I have come across more knowledgeable real estate agents lately, which is good news for the industry. It seems that only those who are serious about their profession and those who are seeking education are the ones left in the industry....

There is still plenty of confusion with the whole short sale process and it really bothers me that we haven't got a good handle on it yet. I don't mean that we don't understand the process, I mean that there's no standarized way of going through with a short sale.

So, I'm going to do my best at describing the short sale process for consumers and newbies....

Some are under the misconception that a Short Sale is always a better option, but is it really? We can't let consumers think that this is their only option besides foreclosure and as professionals we must adress this and tailor a short sale to homeowner's spefic situations. If they own the house as an investment property, have a HELOC or their income is high (this is relative of course), careful consideration must be taken when doing a short sale. These are just a few things to consider and the owner should seek their own legal advice. As buyer representatives, you want to know this information as it may put a stop on the transaction two, three plus months from now. Better to find out early on to decide whether or not to submit an offer.

So let's get started....

Step 1 - Make sure that all paperwork has been gathered to complete a short sale package. For the most part it's very similar for all banks, but there are a few that do like the paperwork to be in a certain order and may have their own financial statements and/or short sale applications.

The list normally will include at a minimum:

• 2 most recent bank statements
• 2 most recent pay stubs
• 2 most recent W-2's
• Letter of Authorization (to allow 3rd party to negotiate th short sale on behalf of the owner)
• Hardship letter
• Estimated Hud-1 net sheet
• Listing Agreement
• Signed Purchase Contract

Now... I've tried to get a short sale approved without a purchase contract, but haven't had much luck. I've found that it confuses banks when you attempt this because if you get an offer that will yield a different net amount to the bank, you'll have to send a new HUD-1..... and it seems that some banks can't handle extra paperwork. Some are pretty good, but if you can make sure the short sale package is complete before you send it out.

Step 2 - The bank gets the 'complete short sale package' and assign a negotiator. The negotiator will then do a quick review to qualify the owner for the short sale and if they do qualify they'll order a BPO or an appraisal. This is one of the most important steps of the short sale. Most short sales that I've seen fall through are because the appraiser was either from the opposite side of town, was new or just gave a bad appraisal/BPO. Luckily I haven't had one..... just heard of horror stories.

Step 3 - Once the appraisal gets back to the bank, they'll 'run the numbers' and send for approval of the short sale. This varies a little depending on whether or not the loan is conventional, FHA, etc.... This is pretty much invisible to the buyer but this is pretty much the final step.

From step one to step three, it can take anywhere from two weeks to one or two months. This is where most confusion happens. The bank may ask the owner to send in the best offer before they send for final approval. This is where it's left to the person handling the short sale what they want to do.... I tend to honor the first offer and at least give them a chance, even if I have higher offers as long as it doesn't affect the seller. Some agents will take the best offer even if the first offer has been waiting longer.

I think this is why some agents will steer buyers away from short sales. It happened to me once, where an agent took our offer, negotiated the short sale and then when it came to approval, they sent another offer into the bank without even giving us a chance to come up in price in our offer. That to me is ummm... not right (but who am I to say, right)...

Well don't be discouraged.... simply find out how the listing agent is handling the short sale and come to some sort of agreement before submitting an offer.

In arizona our short sale addendum states in lines 13-15 that "seller can accept back up offers and submitt those to the bank for consideration and they can sell only to the holder of the contract with terms and conditions most acceptable to creditors..."

So in essence.... if you can communicate with all parties and come to an agreement as far as how the short sale will be handled, then short sales are a great way to purchase properties in a down market. Before you discard all short sales, know that some agents are getting better at working with buyers and their agents.

What do you think?

****Home Featured - 297 W Libert Ln, Gilbert AZ 85233****

Nouveau Riche Real Estate Drive By's

 

I don't know who came up with the name "Nouveau Riche Real Estate Drive By's", but coming from a mexican (me) that doesn't sound right..... Anyhow, I haven't been too active here on not-so-ActiveRain lately, not just because of the holidays, family and my clients for whom I'm staying up late to make sure their transactions are running smoothly, but because I've found a new passion - Video Blogs!

I have to admit, it is time consuming and it takes a lot of patience to do them unless they come out all sloppy.

Let me cut to the chase.....
We are doing what I like to call "Nouveau Riche Investor Tour of Homes", where we are going to homes that current real estate investors are working on or have recently closed - here in the valley - where they've earned significant amounts of money in today's rotten market!! These tours are FREE and are very informative.

 

Here's what it looks like

Hope you've enjoyed this.....