Tim Duvall

With the new year fast approaching many professionals in our industry are working on their 2010 business plans, some are thinking they should be working on their plans and are putting them off, and probably the majority of our industry knows they should be working on a business plan and have no idea where to start.

I must confess that until 2 years ago I fell into the latter category, and was lucky if I even jotted down a few projects or ideas for the next year. For the past 2 years I have utilized a written plan, and in 2009, I not only had a written plan but actually managed and actively worked that plan, which has made all the difference. Personally, having a plan and working that plan has helped me to meet and/or exceed every written goal that was set forth for 2009. This included hiring a full-time production partner, exceeding production goals (by almost 100%), building new business relationships and strengthening existing relationships. This plan has largely been responsible for my best and most rewarding year in the industry in 7 years in the business, and this during one of the toughest years in recent history for the industry as a whole. If I wasn't a believer in the power of planning before, I certainly am now!

My boss Ruth Vogt has developed a great system that my team has adapted for the past 2 years, for which I am grateful. Ruth has posted a great presentation with more details about why you should have business plan. You can view the business plan presentation online for more info.

When creating a business plan the key is to not get too bogged down with details, but to focus on the big picture. The presentation mentioned above has some great info on how to do this. You should start with a Mission Statement, and a Vision Statement and Values Statement are also recommended. Then identify 3-5 specific and measurable goals. Your goals should be your "big picture" items for the year. A good example would be a specific production goal that you can measure and track. Then assign objectives for each goal, which are the major projects you will need to work on to accomplish each goal. You can then assign tasks for each objective, and the tasks become the "calendar items" that you can work on and assign to yourself as "to do" items.

I am sure many of you have been pondering a business plan for next year, and I hope that this blog will encourage you to get off the fence and spend some time working on your business, not just in your business. 2010 will be another year with many challenges for our industry, and although none of us can control the economy, interest rates, foreclosures, etc. we can control how we spend our time and energy and having a written business plan will certainly help you to stay focused and positive in 2010!

The Power of Networking

Learning about the "brave new world" of social media and online networking has certainly be fun for me and my team this year, and for the first time we have added a goal to our business plan for 2010 to continue to expand our online presence. With that being said, I still think that it is important to focus on good old fashioned face-to-face networking as well.

I was fortunate enough to be asked to join a BNI (Business Networking International) group earlier this year, and have really enjoyed meeting weekly with other business professionals from about 30 different industries to learn more about each others' businesses and to learn new strategies for referring business to these new business partners. I have been a part of other networking groups in the past, but this particular organization and our group in particular really grasps the power of word of mouth referrals. During my few short months in this group I've already closed 3 transactions and I am currently working on 3 more new transactions from recent referrals in this group.

One concept that BNI talks about all of the time is the philosophy of "Givers Gain". I love this mantra and it certainly holds true in my experience. If you work hard to build strong alliances with professionals in various industries that you can trust to take great care of your clients, and are able to send business their way, you will soon find that many of these professionals will become very interested in sending their clients your way whenever the opportunity presents itself.

Our team has become very deliberate about screening potential referral partners and then actively referring those partners to our clients and sphere of influence. I carry the cards for professionals in over 30 industries with me wherever I go and try to always be listening for opportunities to help meet my client's needs be referring them to one of my business partners. This applies to Realtors as well. I have worked with well over a hundred different Realtors during my career in the mortgage business, and most of these agents have told me that they've never received a lead from a mortgage lender or mortgage broker. We keep a list of all agents that refer us closed business in a year, and based on the way they do business and the volume of leads that they refer to us, we then add them to a referral out list to receive referrals from us for our clients needing help from a Realtor. This system, and our strong relationships with financial advisors, CPA's and other financial industry professionals allows us to refer about 10-15 clients to our Realtor partners in a given year. It is very fun and rewarding for us to be able to call one of our great Realtor partners to refer them a pre-approved client who is ready to purchase a home. This give and take also strengthens our relationships with our business partners and provides a valuable service to our clients, so everyone wins!

So I think for me the goal in 2010 will be to expand my knowledge and presence in the online world but I will continue to have a strong focus on face-to-face time with my business partners and clients as well. Keep in mind the concept of Givers Gain as you go about your business the next few days and see what happens!

Colorado Springs Economic Recovery

The data below compiled by Forbes magazine shows some interesting information. As a resident of Colorado Springs, I am very pleased to see that Colorado Springs economic recovery is number 14 on the list! The economic recovery here should be a good sign for the local Real Estate market as well. The numbers below for our area's economic recovery suggest that our local marketplace benefits from a strong economic output as evidenced by our high ranking in GMP (Gross Municpal Product), which is a measure of the size of our city's economy. This should help our local economic recovery in the future. Home sales are also fairly strong according to this analysis even though our median home prices are higher than in many other parts of the country. My personal theory is that our local marketplace will continue this economic recovery because of the high amount of local military bases (and civilian contractor jobs), non-profits, and defense contractors that will continue to provide a steady base of employment for the Colorado Springs area.

Moving into 2010 it will be interesting to keep an eye on these statistics, and my hope is that the signs of economic recovery that we are seeing here and in other areas will lead to lower foreclosure rates, higher home sales rates, and other factors that will have a positive impact on the continued improvement in our local Real Estate market. Although we have a long way to go before a complete economic recovery I am cautiously optimistic that we will see some stability and possibly a small amount of growth in our local market next year. Let's hope the economic recovery will gain momentum in 2010.

None of us can individually control the economic recovery for our nation, but each of us can do our part to contibute to this economic recovery by continuing to work hard and be productive. One of my friends has a bumper sticker that says it all- "I refuse to participate in a recession". This is probably a good attitude for all of us to adapt in the future!

The Full Story

http://www.forbes.com/2009/11/19/cities-recovery-unemployment-lifestyle-real-estate-top-ten.html

Ranking by city (below)

http://www.forbes.com/2009/11/19/cities-recovery-unemployment-lifestyle-real-estate-top-ten-chart.html?partner=relatedstoriesbox

The list above was formed by Forbes and reviewed info for the 100 largest Metropolitan Statistical Areas in the US. The categories reviewed above included unemployment rate, Gross Metropolitan Product (a measure of the size of a city's economy), foreclosures, home prices, and sales rates.

If you haven't heard by now, FHA loans have seemingly overnight gone from relative obscurity to the spotlight. I regularly partner with the Federal Housing Administration (FHA) office in Denver, CO to teach Realtor CE Courses, and at our CE course last week our FHA representative stated that over 70% of loans for first-time homebuyers this year have been FHA loans.

Why the overnight rise to fame? FHA loans only require 3% down, and allow borrowers with less than perfect credit (most lenders want to see a 580 or better credit score on FHA loans) to secure a 30-year fixed loan at a competitive rate. FHA loans also have a reduced monthly Mortgage Insurance Premium which helps keep your client's monthly mortgage payment affordable.

A few important things to know about FHA loans:

• As of 10/01/08 all FHA loans require a 1.75% Funding Fee (up-front mortgage insurance) that is rolled into the new loan balance, and is not required to be paid by your clients at closing.
• FHA allows for gift funds from family members to cover the 3% down-payment requirement
• FHA can be used in conjunction with a number of down-payment assistance programs (city, county and state bond programs are good examples) to effectively offer 100% financing
• FHA loans allow for non-occupant co-borrowers, meaning that family members can co-sign without having to live in the new home or calling the home an investment property
• FHA offers some great information on their website for home buyer education (www.hud.gov)
• FHA appraisal requirements have been brought inline with conventional loan appraisal requirements (I will write a seperate post with more info on this soon).

This is just the "tip of the iceberg" with FHA lending, but I thought some of you might find this info helpful as most Realtors will be dealing with more and more FHA loans in the future.

You have probably seen the news by now that Ben Bernanke and the Fed cut the Federal Funds Rate and Discount Rate by .50% yesterday in an emergency move that is aimed at breathing some life into ailing financial markets. In an unprecendented move, Central Banks in many European countries followed suit with rate cuts of their own, and today were joined by Central Banks in several Asian countries.

This financial down-turn has become a global phenomenon, but I want to take a brief moment to talk about how these rate cuts may impact the Mortgage Market here in the US.

Mortgage rates have benefitted from the uncertainty and instability in our financial sector as investors have flocked to bonds, which are normally seen as a "safer" investment than the stock market. A good rule of thumb is that if stock are down, bonds are up. Mortgage rates are tied closely to bond markets (especially mortgage-backed securities) so in most cases, a bad day for the stock market is a good day for mortgage rates.

If consumer confidence returns to the stock markets as a result of all of the government's current efforts to stabilize the economy, this could usher in higher interest rates for mortgages.

Finally, it's important to note that homeowners who are currently on an ARM (Adjustable Rate Mortgage) may want to consider refinancing. Over 6 million American households currently have ARM's that are tied to the LIBOR (London Interbank Offered Rate) Index which has soared upwards recently as a result of the uncertainty in financial institutions. This means that millions of Americans will be facing another rate increase on their mortgages soon.