Real Estate Information

Top Tips from the 2012 CRS Sell-A-Bration

1)    In a transitional market, pricing is a process, not a point.

2)    The asking price may be the ‘opening bid’ price.

3)    Stress ‘global marketing’.

4)    Seek: recognition, reputation, relevance, and differentiation.

5)    Words matter. Use ‘unsold homes’ vs. ‘active listings’. Use ‘relevant properties’ vs. ‘comps’. Use ‘position’ vs. ‘price’.

6)    Master the ‘market of the moment’.

7)    Football script. There are 53 members on the team and 11 on the field. Do you want to be on the bench, or on the field?

8)    Ideal closing gift: Donate to Hospice on behalf of a client.

9)    Be an intelligent responder vs. an emotional reactor.

10)    www.websitegrader.com (free!)

11)    www.realtyjuggler.com

12)    Compare yourself to ‘ordinary agents’.

13)    65% of sellers interview 1 agent. 15% interview 2 agents. 20% interview  3+ agents and have difficulty making decisions.

14)    Consider calling around just solds after sending postcards.

15)    Not getting the listing or buyer? Practice your scripts on them.

Stay Sober My Friends

The most interesting man in the world is a spokesman for Dos Equis beer and suggests that you, “Stay thirsty my friends.” In my opinion, it’s more important to stay sober.

During the most recent holiday season I was introduced to an interesting middle aged man by his date at a party. He told a sad story about his son who is incarcerated in prison in Alabama for crashing a car while drunk. Two of the passengers were killed and he was charged with manslaughter.

On our way home, we gave him a ride to his house. After he left the car, a friend told me he was to be sentenced for his third DUI next month. There is a strong chance he will serve time in prison due to multiple offenses. I felt an urge to wonder if ‘the apple didn’t fall to far from the tree’.

My parents weren’t perfect. But, I can never recall seeing them drunk. They never smoked cigarettes. I’m sure they argued about issues, but never in front of their children. In retrospect this was a wonderful legacy that I’m only beginning to appreciate.

2012 is a great year to break bad habits, dysfunctional behavior, and generational sins. It’s a great year to act as a righteous role model to your spouse, your children, your friends, and peers at work.

There is an old Italian saying that ‘after a chess game all the pieces go back in the same box.’ Bob Buford who wrote the excellent book Half-Time asks the question, “What’s in your box”. If this question is intimidating, ask your children, significant other, or best friend. Hopefully the answer isn’t alcoholism, workaholism, anger, or drug use.

2012 is a great year to stay sober and leave a legacy without saying a word or writing a will. 

Goal Setting Sucks

Setting goals and making New Year’s resolutions sucks because it doesn’t work for most people. By the end of January most promises are broken. People have stopped going to the gym and are revisiting fast food restaurants. Most real estate agents are beginning to skip their prospecting promises and lead generating ‘hour of powers’.

What does work better than resolutions are commitments? Stop setting goals, and this year make commitments, or covenants to yourself, your family, your team, your colleagues at work, and your friends. Put your ‘money where your mouth is’. Make public pronouncements that are s.m.a.r.t. (specific, measurable, attainable, realistic, time sensitive).

My friend Russ asked me to hold him accountable for losing 40 pounds in four months. If he failed he would pay me $1,000 to be donated to my favorite charity. Several times each week I ask him if he weighed in that morning and what was the reading on the scale.

Several agents in our company made promises at an office meeting that they would achieve a listing or selling goal within 60 days or they would perform ‘random acts of kindness’. If one agent failed to meet his target he would hold an open house sign wearing only a bathing suit in front of our office for one hour.

My friend Mitch hasn’t been able to see his shoes for several years due to a bulging belly. He promised to shed more than a few pounds in two months or he would ride his bicycle to the top of South Mountain in the daytime wearing only a Speedo swimsuit. His Facebook friends have their cameras ready if he fails.

This year don’t set goals or resolutions. Make commitments with creative consequences. Ask people who care about you to hold you accountable. Be courageous and outrageous with your public pronouncements and it may become a contagious way to achieve new heights.

Sales Secrets from Santa

Every year in December Santa Claus is feverously assembling and distributing presents to all the good boys and girls. During the other months of the year, Santa is a top producing, million dollar real estate agent with an Alaskan firm.

Recently, Santa was asked to share a few of his sales secrets. Without hesitating, he began by mentioning his smile. Santa said a smile builds instant rapport with most buyers & sellers. “Sell it with a smile” is a slogan that Santa has on his magnetic sleigh signs.

Santa said his most powerful selling secret is listening. On every listing appointment, he asks the prospective client, “What are you looking for in an agent”. After the seller replies, Santa uses ‘active listening’ and repeats back what he just heard.

Santa also believes in dressing professionally. He said when he first obtained his real estate license, he felt inferior to some of the experienced elves that were in his realty office. Mrs. Claus told him if he dressed professionally he’d fool 50% of buyers & sellers until his confidence caught up to his enthusiasm.

Santa only brings toys to good boys and girls. He only works with buyers who are ready, willing, and able to buy. He only retains sellers who are ‘serious about selling’, and are willing to price their igloos in the correct market range. He would rather disappoint a seller up front by declining the listing, then letting them down later. Qualify, qualify, qualify are three of Santa’s favorite words.

Santa also believes in ‘matching & mirroring’ his clients. He said, “People like people who are like themselves”. If his buyer talks slowly, Santa speaks slowly. If his seller crosses their arms, Santa crosses his.

Santa’s final sales secret was to set yearly goals and focus. Santa himself farms an Eskimo community near the start of the Iditarod dog sled race. He mails monthly, calls quarterly, and visits his clients personally every Christmas eve.

Commissionectomy 101

A Realtor is entitled to receive a commission if they provide a seller with a ready, willing, and able buyer. An agent will refund all, or part of that fee if a client finds a ready, willing, and able attorney who proves the agent misrepresented some facts in the transaction.

Recently a friend of mine represented a seller who wanted to sell his townhouse. The MLS information said the property qualified for conventional, FHA, & VA financing. The buyer submitted an FHA offer that was accepted and the property was placed in escrow. The buyer’s lender determined that these units no longer qualified for FHA financing.

Rather than choosing to secure conventional financing, the buyer contacted an attorney. Imagine how surprised the seller and the listing agent were to find that they were being sued for misrepresentation. A higher down payment and interest rate for 30 years was determined to be a monumental financial hardship for the buyer.

The seller and agent lost in court. The seller was tagged for a $15,000 judgment, and the agent wrote a check for his E&O deductable. Materials facts should be checked before they are entered in MLS to avoid commissionectomies.

I just listed a townhome and was told by a credible source(the seller) that her unit did not qualify for FHA financing. The MLS info reflected cash or conventional for financing options. Within a few days I received an FHA offer. The buyer’s agent checked and found that this complex was just placed on the FHA approved list two weeks ago. Oops.

Even seasoned agents (that sounds better than stupid), should research materials facts themselves and not rely on old MLS info or inaccurate or untruthful sellers.

‘If in doubt, check it out’, is a great maxim to avoid costly commissionectomies, client complaints, and legal black holes.

OMG – You had a license?

Is it only me that finds that sellers that had real estate licenses are difficult to deal with? Do ex-bus drivers ask to help drive the bus they are riding in? Do ex-waiters help bus tables when they go out to dinner?

Recently, I viewed a property that had expired after being on the market for 444 days. The local days-on-market was about 3 months. The seller spoke with me because I had shown the property to some buyer clients a few weeks earlier.

During our conversation, she mentioned she had a real estate license “back in the 70’s”. She was clueless why her property remained unsold, or why she hadn’t received any offers. She was also adamant that price or staging had nothing to do with her dilemma.

When I arrived at her home I was greeted by three large greyhounds that gave me a reason to take my slacks to the dry cleaners. They seemed to enjoy sniffing certain parts of my anatomy more than others. The owner said they were “friendly”.

My first impression was how her property could cause a stager to faint. Her small den had a large organ, and enough books to excite a librarian. Each room had an “accent wall” with colors that were popular during the Civil War. Powder blue, light purple, and a shade of pink that resembled monkey vomit.

Her home had a premium price but few, if any, upgrades. Of course, she knew the comps before I took them out of my manila folder. Of course, her home was comparable, even though they sold and hers was rejected by the market. She had a real estate license back in the 70’s!

As I left her property, I said a little prayer. Dear Lord, help me realize that professionals use professionals. Give me the wisdom to realize that you gave me two ears and one mouth. Let me use them in that proportion.

--
Paul Pastore
ReMax Infinity

Exploding Escrows

Having a deal fall out of escrow is one of the most discouraging events for a real estate agent. Hopefully, studying industry best practices, and learning vicariously thru the mistakes of others, can keep agents away from any mortal mistakes.

Currently, I have an escrow on life support. The property is in escrow for 70k. The preliminary title report shows that my seller has a 554k IRS tax lien against the property. At this time the IRS is not interested in a partial payment. The seller seemed surprised that this ‘popped-up’! The buyer is ready to look at other investment homes.

One agent in our office said she has a title company ‘peek’ at the title when she takes any listings. She also has the seller complete the property disclosure immediately and uploads it into the document section in the MLS property info. Both of these practices might have helped avoid this dilemma.

Another way to avoid errant escrows is to ask a seller if any room additions were properly permitted. I have a friend (OK it’s really my deal) who represented a seller who had a major room addition that was not permitted. The home inspector brought it to the buyer’s attention. He also mentioned the add-on was a hazard and prevented proper egress in the event of a fire. The buyer walked and received a deposit refund.

If in doubt, check it out is a helpful maxim. Is the area known for having termites? Pre-order a termite inspection. Does the roof look worn? Have it pre-inspected or obtain a 2 year roof certification.

In this ‘new normal’ economic environment deals are harder to produce. It is important for the listing agent to avoid potential pitfalls that may occur in escrow. The best way to get paid for every escrow is look for potential problems before they arise.

Staging Isn’t magic

Home staging is not a substitute for proper pricing. It is only one leg of the ‘home selling stool’.

Pricing, staging, and marketing all must be correct for a property to sell.

This week I viewed a property owned by a seller who thought he could fool ‘all of the people all of the time’ with home staging. He hired a local expert and a stager from California to ‘cutify’ his property. The seller felt he could overprice the house by 50k after spending a few grand on staging cosmetics.

The seller purchased the property about a year ago for 390k & rolled his costs into a VA loan. His balance is around 400k. The current market value is 375k. After costs he is about 50k under water. He could short sale the house, bring cash to closing, or ‘doll it up’ and ask 425k in an effort to break even. He foolishly chose the latter strategy.

A sage once said that you can put lipstick on a pig, but you still have a pig. An agent can stage an overpriced home, hold open houses every day, give out free hotdogs on the weekends, dress up in a clown suit and spin a sign on the nearest corner, have the Boy Scouts hand out flyers, have the 13 dogs that set the Guinness book of records jumping rope for the neighbors, have the Blue Angels do a fly-over, use the property for a charity Christmas boutique, offer a free petting zoo in the back yard, free car washes in the front yard by scantily clad cheerleaders, and have the home featured at half-time on Monday night football.

If the home is overpriced it still will not sell.

Home staging is to selling as red robes are to Catholic cardinals. They both look great.

Few people buy a book based on its dust jacket. Few home buyers overlook relevant comps because the home looks great and smells like vanilla extract.

Feedback is Fundamental

One of the duties of a listing agent is to obtain accurate and timely feedback for seller clients. Most sellers expect and appreciate this service. In my opinion, not providing feedback is a dereliction of an agent’s duties.

Last weekend I showed a buyer client a dozen properties. On Monday I received two email requests for feedback and one call from an assistant asking how my buyer felt about their listing. When I received her call I was in a hot, vacant house with buyers. The agent did not ask if this was a good time to talk. My response was abrupt, and not complimentary.

In my buyer’s opinion, her listing was overpriced. It had an ugly add-on Arizona room that was neither heated or cooled. In addition, it had ceramic tile in every room. The tile was different colors, sizes, and patterns. If she was looking for positive comments, I had none to share. She was so offended at my negative feedback that she called my broker to complain about my insensitivity.

Did this feedback reach her seller? I doubt it.

I am still surprised that nine agents did not call, or send email feedback forms. The two agents that did send forms with a half dozen scripted questions received timely feedback that was most likely forwarded to their clients.

As a listing agent myself, I use a service that detects if a keysafe is opened and then sends that showing agent a scripted feedback form. I receive responses form from most agents. The forms are sent to the sellers and they appreciate knowing the buyer’s thoughts.

Accurate showing feedback can be used as a point of differentiation on listing appointments. Showing a prospective seller a copy of the feedback form is a way of saying that you care about communication, details, and that you have systems to service their needs.