By Stacey Moncrieff, editor in chief, REALTOR® magazine
Nearly 4,000 people joined us online or by telephone yesterday to hear tips on short sales from Scott Thompson, senior vice president of Mortgage Resolution Services in Sacramento, Calif. Thompson was the speaker at REALTOR® magazine's March 12 webinar, "Short Sales: Finding Income in a Tough Market." Listeners we heard from afterward gave Thompson rave reviews.
If you missed Thursday's webinar, when you click on the link, you can hit "Playback" and listen right away or "Download" and listen at your leisure.
A lot of listeners wrote to Rob Freedman and me after the session asking for a copy of Thompson's prequalification form and for information on what should be included in a hardship package. We're working on getting those documents posted at REALTOR® magazine online by the end of the day today. Stay tuned.
The War Stories About Short Sales Just Keep Coming
By Robert Freedman, Senior Editor, REALTOR® Magazine
A piece about the Wild West nature of short sales that we ran yesterday in our Business Tips Newsletter generated almost two dozen letters from readers. They wanted to add their own war stories to the ones we talked about in the piece. The article, called "Taming the Wild West of Short Sales," described hard-sell tactics by lenders, complicated deals by investors that often leave sellers feeling short-changed, incompetent third-party negotiators, and problems caused by practitioners who advise buyers to make offers on multiple short-sale properties at once.
The over-arching theme of the reader comments was that we could have gone much further in recounting what's happening.
One reader asked us to develop a follow-up story on short-sale charlatans. These are sales people who take a short-sale class and then position themselves as a specialist even if they haven't closed any transactions. "I'm finding in my local market that over half of our [sales] community is now running around claiming to be a short sale specialist," the reader says. "While some of them base this off of a three-hour short sale education class they may have taken (which by no means qualifies them as a specialist), most haven't even taken a course or completed a single short sale. In the overwhelming majority of these cases, these agents make a bad situation worse for homeowners and are doing a disservice to our profession."
Several readers brought up the issue of the listing price in the MLS. "Since the bank has 'approval' over the list price negotiated between the agent and seller, that price, which is then advertised to the general public through the MLS, is meaningless," one person says. "Most of the time the listing agent doesn't know what the bank will approve, and even when they do know, they list the property lower to attract offers in the hope they can sell that offer to the bank."
One reader asked whether standardized rules are in place. To my knowledge there are no industry-wide standards but I do know Fannie Mae and Freddie Mac, among others in the mortgage industry, have put out policy directives on the issue. One that has come out recently, from Fannie Mae, prohibits lenders from conditioning approval of a short sale on an agent's agreement to lower the selling commission. If you want to get more information on that you can do so at a third-party site that references the directive. Note that this Web site is not a Fannie Mae site, so you would have to check with Fannie Mae to validate what's said.
More broadly, a work group within NAR has developed a workflow guide which outlines the generally accepted steps in a short-sale transaction. That document is in the legal section of REALTOR.org, and requires a REALTOR.org user name and password to access.
Practitioners clearly have a lot of questions and concerns. For that reason you might find it useful to attend a free webinar on short sales hosted by REALTOR® magazine and conducted by a veteran short-sale specialist, Scott Thompson of Mortgage Resolution Services. The webinar will be held March 12 at 3 p.m. Eastern Time. If you're interested in registering you can do so here.
By Katherine Tarbox, Senior Editor, REALTOR® Magazine
Gary Vaynerchuk — best-known for his viral videos on wine tasting, in which he encourages viewers to "spread the thunder" — took the stage yesterday as the keynote speaker of Real Estate Connect NYC ’09. The self-made millionaire detailed how he was able to transform his family liquor store from a $4 million business into a $50 million national industry leader.
Vaynerchuk takes a no-holds-barred approach to reviewing wine — an approach that has won him more than 100,000 fans on YouTube — and says the real estate business could use the same candor and passion he displays at Wine Library TV. He urged practitioners to redirect their ad dollars and efforts toward social media. “Twitter is the new fax machine,” said Vaynerchuk. He told the audience he receives more than 20 times the response from a Twitter promotion than he gets from a traditional billboard.
Vaynercuk said practitioners trying to overcome a slow market should think about other revenue streams by carving out a niche and exploiting their expertise. He’s used his online platform, for example, to garner high speaking fees, book deals, and even a potential television show. You can see Vaynerchuk’s unique brand of online pitchmanship at Wine Library TV or at http://garyvaynerchuk.com .
By Katherine Tarbox, Senior Editor, REALTOR® Magazine
More than 1,200 hungry real estate professionals gathered for Real Estate Connect NYC, Jan. 5–8, at New York City’s Marriott Marquis to talk about the future of the business.
Real Estate Connect was more or less my formal introduction to the real estate business—I’ve been with REALTOR® magazine for just one month—and it was both a sobering and an exhilarating three days.
It was sobering because it was hard to find anyone who’d had a particularly good 2008, and many practitioners are uncertain about their prospects for 2009. Speakers said there was room for optimism in terms of the number of transactions expected for 2009. However, they warned that recovery prices would likely take the form of an L shape, not a V shape. Among the speakers were NATIONAL ASSOCIATION OF REALTORS® chief economist Lawrence Yun, Yale Professor Robert Shiller, and New York Times business reporter and columnist Andrew Ross Sorkin.
The exhilarating part was witnessing all the innovation that’s taking place in this business. The conference set a strong tone that it’s time for the real estate industry to embrace social media — such as Twitter, Facebook, and, most important, blogs — as a way to network and establish your expertise. In fact, the conference was teeming with social networkers who were blogging about the sessions and communicating through Facebook, LinkedIn, and other online communities.
Several sessions were geared toward helping practitioners build international business during a time when exchange rates are still favorable for foreign buyers. One tip: Those who want to break into the international arena should list prices in foreign currencies and state dimensions in meters instead of square feet. Learn about NAR’s International programs at REALTOR.org.
By Stacey Moncrieff, Editor in Chief, REALTOR® Magazine
Last week, I posted an entry about the technical difficulties that were preventing Remodeling magazine from posting the latest Cost vs. Value Report. Problem solved. The 2008-2009 Cost vs. Value Report is now live. By registering at the site, you can download a free PDF of city-level data on the value of remodeling projects at resale.
Why Aren't the Latest Cost vs. Value Numbers Online?
By Stacey Moncrieff, Editor in Chief, REALTOR® magazine
Every December, we publish Remodeling magazine's Cost vs. Value Report, a report that aggregates the opinions of thousands of REALTORS® on what value various remodeling projects will have at resale.
REALTOR® magazine plays a key role in coordinating the survey each year, but we don't hold rights to post the complete survey online. For that, readers need to go to Remodeling's Cost vs. Value Web site.
Unfortunately, Remodeling had a serious technology setback this year, and as of today, the magazine still has last year's number's posted at the site. For now, you can turn to REALTOR® magazine online for the national averages on 30 remodeling projects.
When the Cost vs. Value site is updated, you'll be able to register at the site and download a free 2008-2009 Cost vs. Value Report for your market (if your market was among the 79 included in the survey).
One more note on the latest report: I had quite a few letters this year from readers who said the job costs were way out of line with reality. Those costs are produced by a estimating company based on a set of specs developed by the team at Remodeling. In other words, we have no control over the costs. However, we'll share your concerns with our friends at Remodeling. Also, note that our own Cost vs. Value coverage this year includes brief case studies of four actual remodeling jobs, each of which cost far less than the estimates specified in the survey.
An article in Sunday's New York Times echoes what the National Association of REALTORS has been asserting for months: That for consumers in the right financial position, home-buying is an attractive option now.
"Five or 10 years from now, when the financial crisis has ended and housing prices are up smartly once more, we will look in the rearview mirror and realize that we missed a golden age for first-time home buyers." The article goes on to talk about investing in a down payment vs. leaving that money in a savings account, as well as the availability of rentals in certain parts of the country. Aind first-time home buyers have advantages -- they don't need to sell a place before they buy -- and create additional movement in the housing marketing by opening up opportunities for other homeowners to move on.
Author Ron Lieber also mentions that since real estate is local, this is not the case everywhere, but overall, this article is worth sharing with prospective home buyers, especially first-timers. Continue reading the article.
I just read a thought-provoking piece by Sean Carpenter about how to use some of same techniques that retailers and shoppers use in order to generate more excitement for listings:
"As I stood in line at Wal Mart to get my 'Door Buster Deals' early on the Friday morning after Thanksgiving," Carpeneter wrote, "I began to realize all the things a Realtor can learn from shopping's Super Bowl."
By Bob de Camara, CRS, GRI, Broker/Owner, Prudential Mountain Properties, Boone, N.C.
A few months back I found myself with more time than buyers. The buyers I had also were more difficult, with demanding requirements often not found in the MLS. It seemed like I was trying too hard, approaching the problem wrong, straining to reach buyers when I thought, “I wonder if there isn’t another way.” The thought occurred to me that another segment and avenue right under our noses was being overlooked. Sellers were in need, often more so than we as agents were. Having last cultivated this segment about 7-8 years ago in a strong sellers’ market, I was surprised to find how much more conducive sellers now were to our assistance!
Having a few buyers in my pocket, I went looking for their properties in the online newspaper classified “homes for sale” ads. With a legitimate buyer prospect in my pocket, I had a valid basis to contact them, even if they were on the Do-Not-Call list. After asking the sellers about the details of their home to see if it met the qualifications of my buyer, I would identify myself as a REALTOR® and ask to preview their home on behalf of my buyer client. I would always disclose that I was representing the buyer and refer them to our state’s mandatory agency disclosure at our Web site. I'd review the requirement in person with them at our first meeting. More often than not, the seller was delighted to have someone call expressing interest in their home.
Once at the home, I would find out much more about the home and whether or not it would likely suit my buyer-client's interest or not. If it did, I would discuss a non-representation fee agreement with the seller and arrange to show the property to my prospect. In the process of visiting the home and talking with the sellers, a natural rapport often developed. If the property would not suit my prospects, I would inform the seller of this and discuss the possibility of assisting them with the marketing of their property. In this situation, we offer sellers the option of continuing to try to sell their homes by themselves. If they're successful, they owe us no fee. Meanwhiile we work in the background, using our professional skills to “beat them to the finish line.” We also offer them the right to cancel the agreement at any time if they're dissatisfied with our services. It is truly a risk-free arrangement for the seller, a win-win for both of us.
In the short time we have been pursuing this strategy of seller assistance, we have garnered nine listings priced from $99,000 to $650,000 and have discovered many wonderful properties, which benefits both the sellers and current as well as prospective buyers. But the remarkable benefit has been the increase in buyer activity from yard signs and ad responses that benefit all our sellers, listed and otherwise.
These are tough times in the real estate business, but it comes down as always to serving people. Through reaching out to an overlooked, seemingly saturated segment – the sellers – we’ve found the right road to reach buyers, fulfill duty to sellers, and secure our own destiny in a time of unparalleled uncertainty.
Bob de Camara also holds the e-PRO certification and is a member of the REALTORS® Political Action Committee's President’s Circle and a Golden R. He's currently enrolled in the NAR Leadership Academy and a member of the NAR Communications Committee. He served as president of the Avery-Watauga (N.C.) Association of REALTORS® 2005. In 2007 he was named North Carolina CRS® of the Year, and in 2009 he'll be North Carolina CRS® President-Elect. Before entering real estate, de Camara owned a Midas Muffler franchise in Chicago. He's a graduate of Loyola University of Chicago with a B.A. in English, and holds an MBA from Northwestern University.
Do listing agents need to be at showings? John Capomaccio, a broker with New Age Real Estate in Haverhill, Mass., says emphatically no.
This has happened to me a number of times: A listing agent insists on being present at showings but can’t make it when my buyers want to see the property. So, I show the buyers similar properties, and they make an offer on one of those properties that’s accepted and eventually closes. The property with the accompanied showing was never viewed by my buyers. I wonder if the sellers of that property realize that if their property was on a lockbox it would have been shown.
Do the listing broker or the home seller believes they have a better chance of selling the property if the listing agent is there? Not only do I think it doesn’t help, I believe it hurts. Many buyers have told me they are uncomfortable with the listing agent there. I have had a few buyers tell me not to make appointments with properties where the listing agent is present. Let buyers’ agents do their job! They know the buyers’ wants and needs. Buyers tend to stay longer in a property when they are with their agent alone. They pay more attention to the details. If they have any questions, they can always have their agent contact the listing agent.
Accompanied showings limit the number of times a property can be shown, and in this market they’re a big disservice to sellers.
Now that sub agency is almost totally eliminated, liability should not be an issue. And, personally, when I list a property, I don’t want to do buyer’s agents’ job for them.
No one really disputes the importance of the Internet in the home search process anymore. The latest NAR research shows that 8 out of 10 buyers go online to hunt for property. A new Yahoo! survey similarly finds that 77 percent of respondents used an online source during their research for a home, while only 34 percent used newspapers or other print sources.
However, when it comes to advertising dollars, there's a gaping disconnect between consumer and industry behavior. The Yahoo! study reports that real estate advertising dollars are not even close to catching up to where the buyers are: on the Internet.
Though online ad spending has doubled since 2005, making up 32 percent of total spending, newspapers are still getting a higher share with 40 percent, according to the media research firm Borrell Associates.
These lopsided stats make me wonder what's holding you all back. Is it a lack of familiarity or comfort with online advertising oportunities? Or something else? And if you have adapted a smart and consistent online media strategy, please tell us about it and how well it's working.
Many REALTOR® Magazine Readers are telling us they’ve never experienced a more challenging time to be in residential real estate. One reader wrote to say she opened the newly redesigned magazine and asked herself, “Is this all you’ve got?” She urged us to dig deeper to find strategies to help her and her fellow practitioners weather the slow market.
So I did just that, finding an article I wrote back in 1990 when my last name was still Waldron. The country was in a recession, and NAR membership had dropped below 700,000. California was seeing significant home price declines, the “Massachusetts Miracle” was derailing, and the Gulf States were still recovering from the 1980s oil bust.
Much of the advice that brokers and salespeople offered at that time is still germane today, so I’ve posted the text of the article, “Turn Up the Heat on a Cold Market” here.
One point you may find refreshing: In 5,000+ words, there's nary a mention of the Internet!
Of course, we're also working on more modern-day guidance for you — but still with a focus on the fundamentals.
Mark Lefanowicz, president of mortgage Web site E-Loan, discussed at Real Estate Connect last week how much more difficult it’s becoming to find financing for people with low credit scores. Last summer, E-Loan could counsel people who had scores around 540 (620 is generally considered the subprime cut-off level) on how to raise their scores to 600 and qualify for mortgages, Lefanowicz recounted.
These days, those scores need to be raised to 620 to 640 to get lender interest.
At the same time that lending standards have tightened, more people in the subprime score range are looking online for mortgages, he noted.
Roughly 70 percent of applications to E-Loan in the past were from people with scores above 620. Today, 50 percent of applications are from those with scores below 620.
Lefanowicz theorized the shift was coming because people with low scores feel less intimated looking for mortgages online as opposed to seeing a mortgage broker or other lender face-to-face.
Speaking on the same panel with Lefanowicz, Patrick F. Stone, chairman of The Stone Group, a commercial brokerage and development company headquartered in Austin, Texas, said one of the most important services a real estate professional can provide clients is to make sure they understand the provisions of any mortgage they’re taking on.
Borrowers don’t like asking questions at a closing when one document after another is being shoved in their faces, but that’s exactly when they should slow things down and understand the financial obligation they’re taking on, Stone argued.
By Bob de Camara, CRS, GRI, Broker/Owner, Prudential Mountain Properties, Boone, N.C.
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