Scott's Real Estate Market Update

It's all about continuous improvement!

Continuous improvement is a critical piece of the puzzle when putting together a successful career.  To be the best in any field, it requires practice, education, training/coaching and participation.  Let’s take a quick look at Tiger Woods.  Without question, he is the best in his field today.  Does he practice golf?  Does he study the golf course he is going to play and visualize each shot on the course?  Does he train and have a coach or multiple coaches? And does he go out and play or just sit back and watch?  I think we all know the answers to the questions.  If you want to be the best, why aren’t you doing what it takes?  Why do you only go half way?  Continuous improvement means you take risks, make mistakes and then learn and grow from those mistakes.

In order to determine where you need to improve, you must first analyze where you are today.  How is your business?  How are your marketing efforts?  What is your ideal client? How is your prospecting?  How is your follow up?  How are your results?  How is your knowledge of our business? How are your systems?  By careful, through thoughtful analysis of these areas, you can determine how, if you pay a little attention to what you can do to improve yourself and your business.

When looking at your business, are you working “on” your business or are you working “in” your business?  Do you study trends?  Meet with other industry experts?  Review and revise your business plan?  Do you educate yourself on what is currently happening in the marketplace?  Are you obtaining designations?  Are you involved in your association and hear different points of view on what is happening in the industry?  Do you have the right team members and are they in the right job to ensure your success?  Take a look and see where you can improve on your business.

Where are your marketing efforts, marketing dollars and time going and are you seeing results?  How do you know if you are getting results?  What tracking systems do you have in place?  Have you researched other advertising venues?  The question is – are you a secret agent?  Make yourself known in the market but do it wisely and inexpensively!

Have you determined who your ideal client is for you and your business?  Are you spending time or better yet, wasting time with people who don’t fit your profile?  If you are - why?  By working with those outside of your parameters can cause frustration, higher stress levels and drain your energy.  If people won’t help themselves, why should you help them?  Take the time to define your ideal client then spend your time finding and helping them.  You will be much happier and have more energy when working with them and your business will prosper.

We just hit on finding your ideal client so let’s review your prospecting strategies.  How are your sphere contacts?  How often are you communicating with them?  How are you communicating with them?  How are you building your database?  How broad is your database?  How are your networking skills?  Are you referring prior to asking to be referred?  Are you getting out in front of clients or are you hiding behind your desk either at home or in the office?

How do you measure results?  Is it number of leads?  Sales?  Hours worked?  Your pay per hour?  Have you analyzed and determined if you are getting the results you desire?

How is your education?  How is your knowledge of the contract?  The listing agreement?  Can you recite each paragraph and reference its number without having to see it?  Do you know what the right advice is to give your clients based upon how the contracts read?  What addendums are you using and are you intimately familiar with what they mean?  Are you obtaining designations in areas of our business that will help your clients buy and sell real estate in areas like distressed properties, green designations or with your Accredited Buyer Representation designation?  Are you attending training?  Seminars?  Are you building your educational base to help your clients?  You’ve got to learn more to earn more!

If you continuously improve in each of these areas – consistently – you will get results and obtain the success in our business you desire.  Get it?  Got it?  Good!

Now, go sell something!

Platinum Group - November

Don’t wait to put houses on the market – multiple contracts at $875,000 in Lansdowne – needs work but 7,500 sq ft on three levels – people waiting in line to buy

Reasons to list today – you know what prices are today, you know inventory levels, you know what  rates are today, buyers who are looking this time of year are serious buyers

Where do you price properties and why – psychology of buyers or internet strategies of being on the number for search engines – when market is hot, it doesn’t matter – analyze DOM and number of showings in first week in same area at same price

Agents continue to be agitated over short sales when expectations are not set up front.  When expectations are communicated from the beginning agents are easier to work with…also, don’t burn bridges with agents who pester you – don’t blow off agent because they are keeping your feet to the fire.

CDRS – America’s Home Rescue Short Sale process is the program to work with when dealing with short sales

Write addendum to contract outlining your process for handling the short sales – communication the time frame, your communication frequency and type, who communication is with and when and why then have buyer sign.  Are you committed?  Are you sure this is the right house for you?  Are you prepared for the process to take several months?  Will you be ok with not hearing from me, as the listing agent for sometimes weeks at a time?

The foreclosure report:  sense from Kent Eley and Fannie Mae is 2^nd quarter of 2010.  Administration is trying to be gentler on folks and not kicking them out in winter and around holidays as well as push loan modifications.  Also, money given in stimulus package, banks were told not to foreclose by try and work the loans out.  Other agents feel that it is the ignorance of the bank and no one moving fast enough because no one is giving them direction on what to do as banks are overwhelmed.

Is anyone specifically marketing to get move up buyers into the market?  What are you doing to get the word out because most people don’t know or understand what was in the extension.  Email campaigns, newsletters, phone calls – just do it. 

Quick analysis:  Market on upswing, foreclosures coming in second quarter, MBS are going to stop being purchased by the government in March, tax credit ends on April 30^th even though you have to close by June 30^th – therefore you will make a majority of your money in the first quarter of next year and you need to get busy today to take advantage of the future market.

What happens to Fannie and Freddie moving forward?  Who will absorb the secondary market funds?

RPAC

• President has signed the Tax Credit.  It passed by a vote of 403 to 12 in Congress and by a vote of 98 to 0 in the Senate.  Woohoo, it’s already done!  All the politicians in attendance broke bones over this – they broke their arms patting themselves so hard on their back voting to get this through when it was a no brainer to begin with in my opinion.
• $6500 credit to people who have lived in their house 5 of the last 8 years.  $225k combined income on properties up to $800k
• These measures will spur growth but credit needs to be easier to obtain to boost rest of the economy nationally
• Commercial Real Estate and retail is a concern – Federal government is only real lessee in town
• Raising funds for Metro Rail is and will be a challenge
• Must be CRS to appraise properties over $1,000,000 – I hadn’t heard this before
• Questions to ask appraisers
• Do you have contact
• Do you have comps
• Do you know the neighborhood
• Where are you located
• How long have you been appraising
• One agent has not had a local appraiser in listing for 6 months – take on at State level
• HVCC sunsets in June 2011 – I had not heard this before
• Must deal w/ deficit issues head on and match our deeds to words to stay ahead of China
• Leading Nations in the corresponding centuries
• 16^th – Spain
• 17^th – France
• 18^th – Britain
• 19^th – Britain
• 20^th – United States
• 21^st - ???  (Let’s hope it’s not China!!!)
• Local economy grew 3% Q3 unemployment is less than 5% in our area
• Stimulus $$ will benefit Tech and R&D industries in our area
• Knowledge based economy has helped our area – no smoke stacks,  plants or factories
• Heath care is a tremendous concern if you’re lucky enough to live long enough we will all have a pre-existing condition – things need to change
• Analyzing how the politicians throw around Billions, ½ trillions and trillions like it’s not real money
• Loan limit rate increase was extended through end of 2010 so it will remain at $729,750

Answering the 'Not So Simple Questions'

I was recently asked by an old friend, an innocent question in his mind I am sure but as you can see from my answer it is anything but a simple question.  He asked, “How will the market be in the spring?”. 

Here is the response: 

You ask an interesting question which requires me to pull out my crystal ball.  Here goes my best guess.  There is a lot of uncertainty of what can happen in the spring.  There is speculation that the extension of the Tax Credit will pass and be offered to all buyers (with restrictions) through April 30th, then reduce quarterly through the end of the year until it is gone.  This measure will help sustain momentum that we currently have in the market - especially in the under $400,000 market.  In all likelihood it should pass this week.  This, as previously mentioned will be good for our market. 

At this time we have very low inventory - it's down 54% from this time last year.  It has been rumored that foreclosures will be released into the market by the banks - the question is, how many are in NOVA and how will they be released?  Slowly or just dumped.  If we have a lot and they are released simultaneously, how far will prices fall?  We have seen the phenomenon of prices falling with low supply and high demand - it is a true economic anomaly in my opinion.  If they are released strategically and are allowed to be absorbed by the market naturally, we will continue to see a rebound price wise and have a healthier market.  Tying into this question is how soon will they be released?  This supply and demand aspect which is tied to pricing is also critical to the strength of new home sales.  With the cost of land, builders can’t build product and make money in many areas, they are “shut out” of being able to build.  Until we see an increase in prices, many builders will remain on the sidelines.  This carrot of foreclosures has been dangling in front of us for about a year now.  Stay tuned on this one as it may be a critical piece to our housing recovery depending upon how it is handled.

Mortgage interest rates are low now but have slowly increased upward the last few weeks.  The government has committed to buy Mortgage Backed Securities through next spring - to the tune of $1.2 trillion.  Who will step up to buy these securities in the future?  If no one does, how high will rates go and how quickly?  Additionally, it appears as if we see the high loan limit of $729,750 stay at this level for our area, if it doesn't, how drastically will it hurt the upper price points that are already experiencing a slower market.

Right now, we have buyers looking for homes, we have low inventory levels, low interest rates and loan programs to get buyers into houses.  It is a great time to be in the market.  Over the next few weeks, we will see how things play out for the spring - beyond that will require a second crystal ball.  Hope this helps!

How to Expedite the Loan Modification Process

As a Member of the Top 5 in Real Estate Network®, I am frequently asked these days for my advice on loan modification…specifically, how quickly new loan terms can be arranged. Waiting to find out if your application for loan modification has been accepted can be a nerve-wracking and frustrating experience—especially if you’re still receiving late payment notices and creditor calls. Here are some important insights into the loan modification process from consumer advocate and author Ralph R. Roberts.

1. The loan modification process typically takes 30 to 90 days, depending mostly on your lender. The loan modification timeline, however, is not set in stone. The more complex your situation, the longer the process takes. Borrowers with a lot of collateral issues can see their loans take longer than what has become the typical 30- to 90-day timeframe.

2. A professional can often reduce the amount of time required by processing your paperwork efficiently, presenting your application exactly the way the lender wants it, and knowing from past experience what the lender is able and typically willing to agree to. Find out how long the process is likely to take and mark the dates on your calendar.

3. Refer all matters to the professional who is representing your loan modification. Anything you say to the lender could confuse things or compromise your representative’s ability to negotiate the best deal on your behalf.

4. Log all phone calls and correspondence between you and your lender or representative. Keep track of important dates. Consistent follow up is paramount to a successful modification.

5. Explore other options. If the lender denies your request for a loan modification or presents an offer that you cannot accept, you will need a plan B. Consult a real estate agent about listing your home for sale. Talk to a mortgage broker or loan officer about refinancing. Speak with a bankruptcy attorney to find out whether filing bankruptcy would be a better choice.

6. You might continue to receive delinquency notices or late payment phone calls. Push to have all default and foreclosure actions put on hold while your workout attempts are underway.

The loan modification process can be long and trying, but doing your part to keep the process on track by remaining informed can increase your chances of a positive outcome and reduce stress. For more advice on loan modification, please e-mail me—I can point you in the right direction. Please also forward this important information to your social network; it just might help someone you know.

New Agent/Refresher Series Update

Our New Agent/Refresher Series was another big hit Tuesday.  Josh Burruss from Potomac Mortgage Group reviewed the second half of qualifying buyers to a packed conference room – again!  Yes, I said part 2 of qualifying because so many great questions were asked in the first session that we had to add a second.  It is amazing how our training started off as new agent training and how many experienced agents have participated in these trainings.  It is a testament to them wanting to refresh themselves, find out what is new on the horizon and pick up on a new technique or two in the process.  Josh had printed his presentation recently and, of course, some things had changed since.  It goes to show you how our industry changes so rapidly and how important it is for us to stay on top of these changes so client’s we serve get the right advice when buying or selling real estate.

       

Our New Agent/Refresher series features agents that excel in various segments of our business.  Upcoming events in November include:  Paul Hunter and prospecting by referral; Art Grace and the sales agreement which can be credited to post licensing or continuing education.  To learn more about our training programs check out this link or check out our calendar for upcoming events.  As we always preach – you gotta learn more to earn more.  Get it?  Got it?  Good!

 

Now, go sell something!

Demand Success Today

As you know, RE/MAX officials were in town yesterday.  Here is what was shared!  Click on the link for the presentation.

Demand Success Today

 

The Economy -

Right now our recovery is considered to be a jobless recovery because we continue to lose jobs yet; the economy is pulling out of the recession without creating jobs. The nation’s jobless rate won’t be back to 4.5 % until 2014.

 

Most companies have cut back and will not rehire people they let go.  The car business most definitely won’t hire their people back – everything is cheaper in China and a lot of production is being exported there.

 

Housing will have a hard time helping economy get out of recession because new home sales have plummeted so far down.

 

America is responsible for 27 % of the world’s GNP China is 7% within 30 years China will lead world in production.

 

Foreclosures -

Build your resume, contact the right people and give right presentation to get REO business

 

There are 3.5 million foreclosure filings per year expected in 2009 and 2010

 

25 % of homeowners with a mortgage are underwater

 

A huge number of commercial loan maturities are coming due in 2011 and 2012 which will put pressure on this sector.

 

Savings rate is 7 % today as a result of people’s fear over job loss, their property values being down, and they can’t use their house as a piggy bank anymore plus their 401K’s are down so consumers have become less likely to spend.

 

You can’t use yesterday’s business methods to make money in today’s market and expect to be in business tomorrow.

 

Number of Realtors -

800,000 in 2000

1,400,000 in 2006

1,100,000 in 2009

Need 900,000 for more agents to be successful

 

LIFO last in first out is a great rule for real estate when referring to Realtors

 

9.7 million Distressed properties right now,  4.7 million will sell over the next few years - many will renegotiate to stay in their properties.

 

RE/MAX has 6 % of agent total and handles 26 to 28 % of REO sales

 

Systemized and standardized process for short sales is expected to be announced within 2 business days.  This is coming from the government and discussions with Liniger.

 

NAR has a new designation to handle short sales – SFR.  RE/MAX agents can get discount on Mainstreet – contact me for details

 

Rebuild USA 203k specialists

 

There is a new foreclosure tab on remax.com.  Don’t forget to register as well as update your profiles email address, education, designation, specialties to get leads.  You must have a designation to receive leads for short sales and foreclosures – don’t delay, do it today!

 

Know your market and its dynamics –

 

Our market is predominantly 1^st time buyers and investors  - get into these business arenas.

 

Generations -

Baby boomers 3 more moves downsizing selling buying selling smaller house moving in with their kids or family members

 

Generation X –

50 % not married yet and most have no kids.  They are just now beginning to buy houses skeptical but loyal

 

Millennials –

Very different on line, no high pressure, knowledgeable, instant everything

 

 

When dealing with online leads, have the shot gun approach – send out response to 5 agents and the first to respond gets the lead.

 

80 % of Americans have nothing to retire on assisted living or nursing homes or moving in with family

 

Social media will take you to the next level take pictures of clients after settlement do portraits get busy getting involved with it today – don’t delay it is not going away.

 

The crowd was enthused – you should be too!  Get it?  Got it?  Good!

 

 

Breakfast with Dave Liniger and Krisi Graning

The purpose of the breakfast was to encourage open dialogue on our region to take back to policy leaders. Looking to get pulse on market to show congressman and governors what is happening in the trenches.  According to Dave, NAR has lost credibility with the government. 

 

One agent has 11 properties under contract and all have appraisal issues.

 

Inventory levels are low. Foreclosure process has been slowed by Obama’s policies on occupancy rules and how people who are living in properties are treated.  If a tenant can produce a lease, they can stay in the property until the lease term ends.  Issues are – who gets the rent and how can the lease they produce be validated – this is a bad policy people!

 

The media still creates problems by sending mixed messages to viewers which continues to wan consumer confidence on all levels.

 

Appraisers don’t understand market and understand reality of our pricing and trends.  It appears that too many are under qualified, unprofessional and unfamiliar with areas they are appraising.

 

Under $400,000.00 market is strong – upwards of 18 contracts on houses.

 

HVCC has lead to incompetent people appraising our property resulting in low appraisals

 

All real estate is local agents and appraisers need to be local.

 

Agent quality is low with REO’s across the board agent professionalism and ethics is not up to par with what the consumer demands.

 

Take new HUD 1 to your asset managers for a training session to build better relationships and get more assets to sell.

 

No FHA or VA contracts has hurt many first time home buyers trying to take advantage on $8,000.00 tax credit.

 

Extension of unemployment benefits was to be voted on last night the first time tax credit may be attached to that bill – stay tuned.  Tax credit extension would be the tiered down version.

 

Get up to speed with the market, understand its challenges and become a success – Get it?  Got it?  Good!

 

Now, go sell something!

Business Planning Retreat

A great time was had by all!  Our weekend at the Hyatt in Cambridge, MD started off with golf and spa treatments.  The course offered beautiful views, challenging holes, and plenty of opportunities to talk trash!  The spa offered hot stone massages, Swedish massages, facials, and sauna/steam showers.  It was an appropriate way to get everyone in the right frame of mind to take their business to the next level. 

The theme of this year’s business planning was Around the World.  We started off in our RE/MAX Hot Air Balloons in Middleburg, VA where we visualized our trip (our businesses).  We had to determine our course of action for our trip going forward by first reviewing where we had come from in 2009.  We analyzed what our key performance indicators are for 2010 and how we will measure success.  Additionally, we set short term and long range goals to set our course for success.

Our next stop was a crash landing in Greenland where we were kidnapped and had to participate in a dog sled race to get our balloon back.  In Greenland, we had to determine how to problem solve our way out of the mess we were in (short sales, unprofessional agents, foreclosures, etc), think strategically on how we were going to get ourselves out of these situations and continue to set our course for success by reviewing our “why” of being in business.

Luckily, we were able to get our balloon back and get back in the air to look at our business from a higher altitude!  But, guess what?  We got blown off course and crashed landed in a boat in Luxor, Egypt where we had to navigate the Nile 350 miles to get our balloon repaired.  We were on our way to accomplishing this by looking for new opportunities available to us and how to build upon them and grow them and ask ourselves if we have currently taken advantage of them in today’s market when we were arrested!  We had to analyze our negotiating skills and how to improve upon them based upon challenges we faced as well as realize we need to have contingency plans in place to handle each situation we encounter in our market.  As we handled these challenges, we were able to move on!

               

Believing we were going to sail smoothly home – we once again experienced a challenge – another crash as our balloon got a tear from high altitudes and we landed on the Great Wall of China.  While in China, we had to improve our communication skills – listening, being the first order of business in developing better communication skills.  Then we moved on to looking at non verbal communication, tonality and other forms of communication others use to communicate.  We considered the options available to redefine our business and reinvent ourselves in the process.  As markets change so must we.  Our balloon is repaired and we are back in flight and on our way to success again!

I think you know what happens, we have an emergency landing.  This time in Pago Pago!  It is an extremely poor island where it was time to reflect on what is important to us – our value system.  We reviewed what is important to us today and what values are going to carry us to where we want to be in the future.  Self analysis is a strategy to help us grow both personally and professionally!  This also incorporated accepting change in ourselves, our business, and why this is a critical piece to success in any endeavor we undertake.

On the last leg of our trip home, we realized at our high altitude that flying high isn’t the only key to success.  We must have the right attitude to get us there.  It is important to manage our thoughts and actions to develop the right habits to lead us to a successful career! 

Finally, we were home with a our travel log that included short term goals, long term goals and an action plan to get us to success.  We set a meeting to discuss our trip and review our progress in 90 days.  Our travel logs were shared and we are going to hold others accountable to their success in our next meeting! 

We discussed the importance of getting away, putting things in writing, and being held accountable to our objectives we can attain much greater success.  We hope that you will join us on our next journey because by failing to plan, you are planning to fail.  Get it?  Got it?  Good!

Now, go sell something!

 

Here We Go Again

Platinum Club October

Asset managers are checking up on their listers to make sure properties are being marketed properly.  If you are listing foreclosure properties – tighten up if you want to keep your listings!

2^nd quarter is when the next “wave” of foreclosures is to be released – here we go again!

3 month moratorium on foreclosures is more here say yet properties are going to foreclosure in November.  Apparently, the banks are going to do away “stages” of appraisals.

Ekko works well with short sales, S5 is OK –nothing above the others, and Advanced Title gets them done.

Banks have stacks of short sales to work through – Bryan had 4 approved in the last week – 1 in 70 days, 2 in 3 to 4 months and 1 in 6 months.  It seems as if the Asset Manager makes all of the difference not necessarily the bank. 

Take short sale listings to generate buyer s leads and close them because chances are your listing
won’t close.  Short sales make the agents look incompetent.

Buyers are indecisive and becoming unrealistic – coming up with excessive home inspection lists.

Upper bracket prices continue to fall and those buyers are more cautious.  People are backing out of remodeling contracts as well – the economy is their excuse of why they aren’t moving forward.  National news and lack of details about our market is making them uncomfortable in both scenarios.

Are there more listings coming on the market?  The answer is yes – inventory is low put it on now.

Builder activity is on the rise.  One builder, Van Metre is up 40% and is raising their prices – NVR posted a 50% increase over last year’s sales.

We all believe Tax Credit for first time buyers will be extended.  As previously discussed each real estate transaction “touches” 29 different industries and generates $62,000 in capital to the economy.

We also believe that the loan limit will go back to $625,500 and remain there as prices are lower – we all have had fewer sales above the $700,000 price range.  Also, the government may want to diminish their exposure and not raise it back up.

Condo associations need to be proactive to get their properties approved FHA after November 2, 2009 – no one has heard of any associations taking the lead.  Be sure to make sure the project is in process of approval prior to finalizing contacts.  No more spot approvals with FHA after this date.  Here are the outlines of the program – lots of questions are still unanswered.  Will this kill the condo market?

What does all of this mean?  Professional Realtors are more valuable and more needed today more than ever.  Get it?  Got it?  Good!

Now, go sell something!