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Tag Archive: The Rest of the Story
Your Data…..Use It or Lose it!: The Rest of the Story Series
I always admire real estate agents that are using their current resources to generate new business. You know, the type of agent that is looking ahead and proactively ASKING for more business. Lots of times we assume that past clients, friends and family know we are real estate agents so, of course, they would think of us first. The truth is people love to be asked so the more you ask the better chance you have of hearing.YES!! The rest of the story is spreading the positive news; people are getting enough of the negative stuff. We need to start taking more responsibility for our own “press”.
One agent that is doing both very effectively is Burton Cagen in the Tempe office of John Hall & Associates. Right after the New Year Cagen bundled up community sales and median price statistics from the Arizona Republic, his client’s 1099′s, their year-end rental statements and a great letter and sent them out to his landlords around the world. The letter encourages his clients to look at the statistics and quotes, amongst other sources, the Today Show as well as the Arizona Republic. Cagen found a simple yet effective statistical analysis on the John Hall intranet and used it to his advantage. The analysis compares overall median prices against the 2003 medians rather than the usual 2006-2007 medians. The five (5) year holding pattern more nearly matches Cagen’s investors’ profiles and shows an increase in value rather than a decline. That mailing will be followed up with emails on particularly good deals for Cagen’s investors. This more proactive approach is working for Cagen, “I realized midway through last year that I needed to try new prospecting techniques. I needed to be more proactive and not let my past clients, landlords and sphere of influence forget who I am and what I can do for them.” Using his database of more than 1,700 names he mails post cards, newsletters and uses phone calls, both of which increased his business exponentially.
No picture is all rosy, Cagen explained that financing maybe a hang-up if an investor has more than four (4) mortgages but absent those minor issues and with 20% to 25% down investors can still get some smokin’ deals. “Not only that” says Cagen, ” but sellers are getting more and more realistic every day.” Burton Cagen’s new listings are testament to his aggressive pricing strategies and his business increase in general benefited from his proactive prospecting. So can yours!
DF
Real Estate Agent's Job One – Educate: The Rest of The Story Series
flickr photo credit: iainrbanks
We are deluged with information daily especially data and statistics in charts, graphs, pie charts etc. There appears to be no shortage of statistical information. We are also used to instant answers many of which are simply thrown out there without much thought or reason. I am sure it has created problems on many levels and in many industries but none more so than the real estate industry. Making local real estate decisions based on national housing headlines is a little bit like trying to dress for national weather, even Willard Scott wouldn’t suggest it. What real estate consumers need is someone who can provide Information Analysis! Someone like Scott and Sandy Farmer of John Hall & Associates’ Scottsdale office.
I talked to Scott at length last week about his methods of conveying and analyzing data for his clients and customers. Scott says that people come to him with vague impressions about what is going on in the market. Seldom can they quote the source of their perceptions, only that it is negative. For example, take the constant comparison of the stock market with housing prices. A share of stock is priced the same whether you buy it in Phoenix or Houston, location doesn’t matter. Additionally, stock doesn’t require maintenance, insurance, monthly payments or property taxes. People resist selling their present house if it’s lost value thinking that they can “get back” the lost equity. Actually, selling now to buy something with greater value potential makes much more sense. Consumers that would not hesitate to dump a stock that wasn’t performing are trying to hold on to their houses until the “market comes back”.
In order to help clients and customers “get real” about housing decisions, Scott narrows their 360-degree view down to their own property. Localizing the housing facts is the first step in helping consumers analyze their position and make solid decisions based on those numbers that are relevant. Scott says that comparable sales that are even 3 weeks old are no indication of successful pricing of the subject property. Scott prefers the absorption method of determining value and helping the prospect understand the market. Absorption pricing takes into consideration the number of listings currently on the market in a given market area and then looks at the rate at which those houses are selling. For example, if there are 120 similar properties for sale in the market area and they are selling at an average of 10 per month, you have a one-year inventory. Your seller will have to price the property near the bottom in order to sell it. And, that’s only if no new listing come on the market. According to Scott, absorption pricing also applies to price ranges. Examples include properties under $200,000 have a current supply of approximately five months or less while homes over $1,000,00 have a six year supply. Sobering information for any seller.
For more information about Scott and Sandy’s information analysis check out www.scottsdalescott.com. You’ll find lots of great information and solid advise about the current real estate market.
DF
Do You Dress For The National Weather?: The Rest of the Story Series
I just read a news item on azcentral.com entitled “Pending home sales plunge to record low”. If you only read the headlines, like most people, it leads you to believe that all housing markets are in tragically poor condition. Better stay in that rental as long as possible, all markets are going under! But think about this for a moment, what if you switched on the local news and it gave you only the “national weather”? The forecaster says, “Our weather here today will be 47 degrees with rain which is based on the median weather reports for 20 metro indices over the last 6 months.” Did that give you any indication of what the weather is like right NOW or how you need to dress for the day? Of course not, nor does a “national housing” report give you any viable information about the greater Phoenix real estate market.
The report goes on to concentrate on “plunging sales” in November. Of course there were fewer reported closings in November, there were only 16 1/2 business days in one of the shortest working months of the year. The figures don’t explain the “why” of the market or the fact that real estate sales are highly localized. Arizona Regional Multiple Listing Service (ARMLS) which services the greater Phoenix area indicates that home sales for December 2008 were UP 60% over home sales in December of 2007 a nice peak for sales that have showed a year over year monthly increase since June of 2008.
One of the biggest problems that agents and consumers face is the “bald” numbers tossed out by various news sources. Frequently, the numbers are inadequate, incomplete and irrelevant. Numbers alone don’t tell the “Rest of the Story”. Like it or not consumers need a local real estate expert to help them with the information analysis necessary to take advantage of the extraordinary opportunities in this LOCAL market.
DF
Scottsdale REALTOR® Success: The Rest of the Story Series
Brrrrrrrrrrrr! It was 43 degrees this morning with a high of 64 degrees today and we think that’s cold! Have you seen the weather back east? They would undoubtedly think this is paradise right now. How do you remind them that The Valley of the Sun is THE place to be? Well, if you are D. Patrick Lewis in our Scottsdale office, you do extensive electronic marketing featuring beautiful sunsets, sunny parks and people in shorts and sandals. His photography talent landed him a primo spot on The Scottsdale Convention and Visitors Bureau website. He also uses Twitter, blogging, Flickr, Linkedin and Facebook. With that much electronic exposure I just had to know how it was working for him. “This is my 7th year in real estate and I’ve tried farming, calling, postcards, newsletters and this by far has a better return and it’s more fun”, said Patrick. Already three of his classmates found him on Facebook and have asked him to find them homes.
According to Patrick electronic marketing and social networking IS different, the anonymity and the fact that you are only a click away leads to more shoppers. So, he has developed scripts and questioning techniques that help him probe for motivation and get to the core of people’s requests and needs. Follow-up is just as important in electronic marketing and social networking as in other types of prospecting. Patrick tries to provide insightful information analysis, he says that shoppers come to him with incomplete and frequently irrelevant information. His ability to help them make sense of all those numbers is what makes him valuable to his clients.
Electronic marketing aside, it all comes down to people skills. “The higher the tech, the higher the touch needs to be”, Patrick remarked. You still need to let people know that you care about them and their goals. You need to create rapport along with all that market knowledge.
I think what Patrick said about electronic marketing and social networking is true of life in general and real estate sales in particular, “No matter what you do, do it passionately and consistently.”
Tempe REALTOR® Success: The Rest of the Story Series
As I talk to more and more successful John Hall & Associates agents, I am struck by their humility and their true servant’s mentality. I am beginning to think it is a big part of their continuing success. Take Kathy Moum in our Tempe office for example. On a community level Kathy, an accomplished rower, co-founded the non-profit organization Tempe Rowers Association. She is also involved in other community activities which give her both exposure and neighborhood information. A great way to get and keep prospects and clients.
Kathy is a self-admitted perfectionist with a real “control thing”. Monthly she (personally) sends out Arizona Highways Magazine, to all past clients as well as her doctor, dentist and escrow personnel. The “compliments of” sticker on the front identifies her and for about $24.00 per client, she knows it is something they will keep.
Mailing is something Kathy has always done but in this market, she is going back to the basics. She liberally uses the MLS portals. “People LOVE to buy but hate to be sold,” Kathy says. Staying in touch with consistent but subtle contact is obviously working for her as a business strategy. She is also sitting open houses whenever possible, something she didn’t need to do in prior years. Note writing is also high on her agenda; she is constantly sending little notes out to her sphere of influence.
The “secret” of her success? Work like its 1999 before the market got too easy and agents got lazy. Get back to basics.
DF
Is it better to rent or buy?: The Rest of the Story Series
John Hall & Associates isn’t the only one with good news about this real estate market. I was recently talking to John Rapasky with Counsel Mortgage Group and asked him if the market had hit the “bottom” everyone is searching for. He had his usual intelligent and well thought out answer; I thought you might like it too. It is good news indeed and might be of interest to your clients, customers and prospects.
A common question in today’s market is whether the market has bottomed. I will be the first to say that I cannot state that this is the bottom, nor can I predict when the bottom will (or has) occurred. However, as a mortgage broker, I do follow the interest rates and payments for a home. Right now is a time where monthly mortgage payments appear to be similar to rental payments thus creating a buying opportunity.
Let me give you an example. Assuming the purchase of a $175,000 home, using a conventional mortgage, a borrower can obtain financing with 5% down payment, i.e. $8,750, leaving a loan amount of $166,250. Assuming an interest rate of 5.5% on a 30-year fixed mortgage, the monthly principal and interest payment is $943.95. Adding estimated mortgage insurance of $130/month, homeowners insurance of $50/month, and real estate taxes of $125/month, the total monthly payment is approximately $1,250. After tax benefits, assuming a 25% tax bracket, this is similar to a renter paying $1,030 per month in rent.
In the first year of the mortgage, the borrower will pay $9,087.85 in interest and $1,500 in real estate taxes in the above example. This totals $10,587.85 of deductible items on the tax return (this is not including mortgage insurance, which may also be deductible for certain taxpayers). At a 25% tax rate, this results in a tax savings of $2,646.95. Dividing this tax savings by 12 months results in $220.58 in monthly tax savings. Subtracting this from the total monthly payment of approximately $1,250 above, results in approximately a $1,030 monthly rent payment.
Thus, if a renter is making a rent payment of $1,030 or more, they can purchase a $175,000 home and have a similar monthly payment, after tax benefits. When buyers recognize they can purchase a home and make effectively the same monthly payment as they do in rent, they typically make the choice to buy.
I would be happy to discuss this or other scenarios with you. I would also like to work with you and help you or your client qualify for a loan. You can call me at 480-502-1000 or e-mail me at rapaskyj at aol dot com. I look forward to helping you!
(More on the rest of the story series)
DF
Phoenix REALTOR® Success: The Rest of the Story Series
Mailing consistently really works!! How do we know? Leif Swanson says so, that’s how.
Leif credits his upcoming closing to two prospecting techniques that he uses:
1) Mail “something of value” every month. Things like
tax information, household tips and property values
are well received by his Sphere of Influence and keeps
his name in front of his target market.
2) He has become a neighborhood specialist who
thoroughly researches his clients possible purchases and
even points out the “pros and cons” of purchasing. He
educates his clients which not only makes them more
realistic but also sets their expectations. He builds
confidence, trust and credibility.
Leif says this transaction required great patience. This was an REO property and the bank was slow in responding to the offer and slower in returning the signed contract after the seller’s verbal acceptance. Even though this was a cash transaction, the response was less than speedy. Leif says that frequent communication, even if there is no news, is an important part of his customer service. Furthermore, Leif says to review those screwy addenda on REO property, it is vital in order to protect your buyers’ interests.
The birth of a series… by Diane Flannigan
Tired of all the negative news that panders to those individuals that would rather feel like victims? Yeah, us too! The press has determined that bad news sells newspapers and really bad news sells even more newspapers. They go out of their way to put a negative spin on almost everything. The Sunday after “Black Friday”, they practically apologized that retail sales were markedly “UP” and there wasn’t a parking spot to be had at most retail outlets. “Sorry folks but business was good.” That was followed by the announcement that they would be running a 12 part series on foreclosures! Talk about relentless!
We believe it is time that the real estate industry, especially in Arizona, take responsibility for some of its own press. We also believe that what we focus on expands. Put those two beliefs together and you get ……The Rest of the Story.
We’ve decided to spend some time talking to individual agents who have had successes. What did they do to motivate sellers to sell and buyers to buy? What prospecting and marketing techniques have worked for them in finding business in this market? We’ll also dig down into “the numbers” to try and help you make sense of them and what they really mean. What price ranges are selling? How will new lower interest rates spur sales? What do foreclosures really do to the market?
Why explore these topics? So that you can tell your clients and customers………The Rest of the Story.
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