Saturday, October 31, 2009

Top 7 Strategies for Real Estate Sales Success

Top 7 Strategies for Real Estate Sales Success

With over 2 million real estate agents according to the National Association of Realtors (NAR), becoming a successful real estate agent takes more than just a license and a knowledge of current laws and regulations. The first year drop out range estimated to be from 40% to 80% demonstrates that many real estate agents are not as successful as they could be and research suggests that 90% give up after 3 years. The following 7 tips may help you avoid becoming one of these statistics.

First and Foremost YOU are a business!

Real estate agents work for a broker, but are independent, commissioned sales people. This means that you are a small business and must run your practice as a business. Again, remember you are a small business owner.

Embrace a Planning Attitude

If you don’t have a plan, then you are on some else’s plan – usually the successful real estate agent. Most people place more value in planning a trip to the grocery store or a vacation than planning their lives either professionally or personally.

Research Your Market Plan

Since you as the real estate agent are responsible for your own expenses, do your research specific to your marketing plan within your strategic plan. Time spent in constructing your marketing plan is definitely well spent. NOTE: Remember a business plan usually is data driven, while a strategic plan identifies who does what by when.

Establish Sales Goals

Using your strategic plan, establish sales goals. If you are new to this industry, it may take 6 months before the first sale. HINT: Use the W.H.Y. S.M.A.R.T. criteria for goal setting.

Create a Financial Budget

Budgeting is critical given the up and down of this volatile market place. Your financial budget should plan for your marketing costs, any additional costs such as education and your forecasted income.

Make Managing Yourself a Priority

Building a business is not easy. You must learn how to manage yourself especially in the area of time management, ongoing real estate sales training (continuing education units), real estate coaching and personal life balance. Real estate is said to be a 24/7 business much like any small business. However, it is important not to lose sight of your personal life including family, friends, physical health, etc.

Find a Mentor or Real Estate Coach

Going it alone is not easy. Take the time to find a mentor who can help you steer through some of the known obstacles and help you during the “peaks and valleys.” If you have the resources, you may wish to hire a real estate coach, small business coach or an executive coach who specializes in small business help.

Read this today to have Sales Success Tomorrow

Creating Daily Success in Real Estate

The journey to a successful life should be enjoyed. True success comes from accomplishing the activities daily that will lead you to your ultimate goals in life. Failing or neglecting to accomplish the daily disciplines will lead you down the path of lost opportunities and lost income. If the penalty for not accomplishing your daily activities or disciplines was implemented or assessed today, we would look at neglecting them differently. The truth is that the penalty for neglect is more visible in the future than it is today. The person who eats fried foods does not pay the penalty at 35, he pays at 55. The person who fails to save 10% of his income for retirement is not penalized at 40, but at 60. The prospecting we fail to do today does not hurt our income today, but 90 to 120 days from now.

If we were zapped today from neglecting the daily disciplines rather than in the future, our daily disciplines would change. We need to associate pain today with not doing our daily disciplines in the real estate business. We have to make the neglect more painful than the activity pain. The truth is we have a tendency to move away from pain and towards pleasure.

There are three disciplines that must be done daily in real estate for success. They are working on growth, administration, and working ON your business. Let’s look at each individual area comprehensively.


Growth is the part of the business that brings in the revenue for your business. The more time you spend of your day in growth, the more income that you will make. Most agents focus little time on growth activities daily. They work on growth activities at the last minute, when they are running short on funds. The problem is that is too late. To have a steady business income you need a steady approach to growth.

Growth is the prospecting that you do daily. It is the listing appointments that you have for the day. It is the lead follow-up that you are doing on the people who want to buy or sell. It is the meeting with your lender to work on your competitive advantage in the marketplace.

Growth is the critical part to any business. Without growth a business will fail. I know a lot of agents who are highly skilled in growth and poorly skilled in administration and working on their business who earn large amounts of money. I know of very few successful agents who are not highly skilled at growth. You can have huge deficiencies in administration and working on your business but still win the game. You can not be deficient in growth and win. My focus is to help our clients achieve a high level of skill in all three areas. Growth is the engine that powers the train; you must first pay attention to growth.

Growth demands a minimum of three hours daily in the activities of growth: prospecting, appointments, lead follow-up, and meeting with affiliates. Prospecting should comprise 65% of the growth time daily. If the prospecting does not happen, the other growth areas will wither. Remember the higher the hours spent on growth, the higher the income and profit.


These are the activities that complete the income stream:

Processing the listing so agents can find it in the MLS
Processing the sold property through escrow
Communicating with your clients on a regular basis
Directing your staff and monitoring their progress

These activities done well will enable you to turn clients into fans who will look for new business for you. You will need one to two hours daily for administration. If you create a good system and have a highly trained and skilled staff, your time spent in this area will be reduced. In the perfect system administration gets done well, but the agent spends little of his personal time on it.

On your business:

This is the time that most people neglect. This working on your business really separates long-term success and growth from just running faster on the treadmill of life. Long-term financial success lies in this section of your day. The ability to earn more profit is also located here.

We are all really employees of our own little real estate business. We are the ones who bring in the business and make the system go. The more time we plan, read, strategize, practice, role play, and implement our ideas, the more ownership we gain. Becoming the owner of your real estate business only happens through diligent work on your business. Instead of being the employee who works to draw a salary and pay the bills, why not become the one who orchestrates the company? Be the one who has something to sell when he wants to try something else and/or retire.

Working on your business is truly taking a step back from the daily rat race and to look at your growth and administration areas for ways to improve them. Look at your productivity and profitability then evaluate your progress. You cannot make meaningful change without evaluation as an owner, rather than as an employee on a tread mill.

Working on your business is critical to helping you move to the next level of production, or to decrease time worked without reducing income, or finding where to cut expenses by 10%. Working on your business will help you create economies of scale in administration and new ways to produce growth and income in your business. You need one hour per day of working on time. For every minute you plan you will save ten minutes in implementation.

What do you think your business would look like in 90 days or even six months if you were to implement the below daily routine?

Growth: 3 hours

Administration: 1 to 2 hours

Business: 1 hour

Time block these activities into your daily routine. You will be amazed at the results you will achieve, even in one week. Do not allow the distractions to overtake you and your new daily focus. Do not neglect to do the things that will lead you to success. Do them daily without fail.

Friday, October 30, 2009

Types of Lenders

Today's choices include banks, mortgage brokers, home builders, and Internet lenders. Each has its advantages and disadvantages, and rates vary from lender to lender.

Types of Mortgage Lenders
Type Advantages Disadvantages
Banks Regulated by state and federal agencies
Current banking relationship can get you a reduced mortgage rate
Numerous branches provide you with face-to-face access
Limited to products only the bank has to offer
May not have the best rates
May lack negotiation leverage when it comes to publicized rates

Mortgage Brokers Access to a variety of mortgages and lenders
Can save you money by shopping for the best rates
Can quickly find another lender if your loan initial application is turned down
Some function as the lender's agent and have the lenders best interest at heart
Free to set their own pricing and may mark-up wholesale rates to whatever they want
Service may vary from broker to broker

Home Builders Good way for the first-time home buyer to qualify
The buyer does not take title to the property until the home is completed
May favor certain lenders who offer higher rates
Can pressure you into getting their loan instead of using a different lender

Internet Lenders Allows you to shop for competitive rates online
A greater learning curve for the borrower to understand the lending process

Typically, most lenders do not keep money on hand but instantly sell conforming loans to third parties like the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). The most common source of home lending is a retail financial institution or credit union. They offer specific loan products and handle their own direct financing by taking consumer deposits and lending them to home buyers.

Mortgage brokers, on the other hand, act as the middleman and don't fund the loans themselves, but handle the mortgage financing for the borrower. Most earn their fees directly as a percentage from the lender and some from the borrower, or a combination of both. Since mortgage brokers have access to a wide variety of lenders they are usually on top of the latest rates, fees and lending practices.

Home builder financing is common in new developments where there is a single builder. The builder carries the construction costs until the homes are built. The builder works with a lender to set-up financing for the buyer and finances the construction costs. The buyer doesn't make mortgage payments until the property is finished.

The popularity of finding a mortgage on the Internet mortgage has grown in recent years. Many lenders offer competitive rates and the convenience of tracking your application through the approval process. Some can save you a significant amount in closing costs, since everything is automated and the time to get approved can be shortened.

Thursday, October 29, 2009

Buying your First Home

Finding the right first home starts with a price range and a short list of desirable neighborhoods. But there are many other factors you'll need to consider before investing in what may be your biggest asset.

Before You Start:

Grab your current household budget so you can consider your financial situation and your ability to make mortgage payments.
Ask family and friends if they can recommend experts, like a lawyer and an inspector, who can help with the home buying process.
Think about your lifestyle and how it might affect your choice of home and neighborhood.
Do a little research on current home prices in the neighborhoods you plan to target.

Buying Your First Home
Home ownership is the cornerstone of the American Dream. But before you start looking, there are a number of things you need to consider. First, you should determine what your needs are and whether owning your own home will meet those needs. Do you picture yourself mowing the lawn on Saturday, or leaving your urban condo for the beach? The best advice is to look at buying a home as a lifestyle investment, and only secondly as a financial investment.

Even if housing prices don't continue to increase at the torrid pace seen in recent years in many areas, buying a home can be a good financial investment. Making mortgage payments forces you to save, and after 15 to 30 years you will own a substantial asset that can be converted into cash to help fund retirement or a child's education. There are also tax benefits.

Like many other investments, however, real estate prices can fluctuate considerably. If you aren't ready to settle down in one spot for a few years, you probably should defer buying a home until you are. If you are ready to take the plunge, you'll need to determine how much you can spend and where you want to live.

How Much Mortgage Can You Afford?
Many mortgages today are being resold in the secondary markets. The Federal National Mortgage Association (Fannie Mae) is a government-sponsored organization that purchases mortgages from lenders and sells them to investors. Mortgages that conform to Fannie Mae's standards may carry lower interest rates or smaller down payments. To qualify, the mortgage borrower needs to meet two ratio requirements that are industry standards.

The housing expense ratio compares basic monthly housing costs to the buyer's gross (before taxes and other deductions) monthly income. Basic costs include monthly mortgage, insurance, and property taxes. Income includes any steady cash flow, including salary, self-employment income, pensions, child support, or alimony payments. For a conventional loan, your monthly housing cost should not exceed 28 percent of your monthly gross income.

The total obligations to income ratio is the percentage of all income required to service your total monthly payments. Monthly payments on student loans, installment loans, and credit card balances older than 10 months are added to basic housing costs and then divided by gross income. Your total monthly debt payments, including basic housing costs, should not exceed 36 percent.

Many home buyers choose to arrange financing before shopping for a home and most lenders will "pre-qualify" you for a certain amount. Prequalification helps you focus on homes you can afford. It also makes you a more attractive buyer and can help you negotiate a lower purchase price. Nothing is more disheartening for buyers or sellers than a deal that falls through due to a lack of financing.

In addition to qualifying for a mortgage, you will probably need a down payment. The 28 percent to 36 percent debt ratios assume a 10 percent down payment. In practice, down payment requirements vary from more than 20 percent to as low as 0 percent for some Veterans Administration (VA) loans. Down payments greater than 20 percent generally buy a better rate. Lowering the down payment increases leverage (the opportunity to make a profit using borrowed money) but also increases monthly payments.

How Much Home Can You Afford?
Bob and Janet's combined income is $50,000 a year, or $4,166 a month. Their housing expense ratio of 28 percent yields a monthly maximum of $1,166 for mortgage, insurance, and taxes ($4,166 x 0.28 = $1,166).

Their total debt ceiling of 36 percent is $1,583 (4,166 x 0.36 = $1,500). Their monthly debt payments include a $200 car payment, credit card payments of $100, and student loan payments of $200. Subtracting this total of $500 from the $1,500 permitted leaves $1,000 in monthly housing payments.

Costs of Buying a Home
Many home buyers are surprised (shocked might be a better word) to find that a down payment is not the only cash requirement. A home inspection can cost $200 or more. Closing costs may include loan origination fees, up-front "points" (prepaid interest), application fees, appraisal fee, survey, title search and title insurance, first month's homeowners insurance, recording fees and attorney's fees. In many locales, transfer taxes are assessed. Finally, adjustments for heating oil or property taxes already paid by the sellers will be included in your final costs. All this will probably add up to be between 3 percent and 8 percent of your purchase price.

Ongoing Costs
In addition to mortgage payments, there are other costs associated with home ownership. Utilities, heat, property taxes, repairs, insurance, services such as trash or snow removal, landscaping, assessments, and replacement of appliances are the major costs incurred. Make sure you understand how much you are willing and able to spend on such items.

Condominiums may not have the same costs as a house, but they do have association fees. Older homes are often less expensive to buy, but repairs may be greater than those in a newer home. When looking for a home, be sure to check the actual expenses of the previous owners, or expenses for a comparable home in the neighborhood.

Choosing a Neighborhood
Before you start looking at homes, look at neighborhoods. Schools and other services play a large part in making a neighborhood attractive. Even if you don't have children, your future buyer may. Crime rates, taxes, transportation, and town services are other things to look at. Finally, learn the local zoning laws. A new pizza shop next door might alter your property's future value. On the other hand, you may want to run a business out of your home.

Look for a neighborhood where prices are increasing. As the prices of the better homes increase, values of the lesser homes may rise as well. If you find a less expensive home in a good neighborhood, make sure you factor in the cost of repairs or upgrades that such a house may need.

Finding a Broker
If you are a first-time home buyer, you will probably want to work with a broker. Brokers know the market and can be a valuable source of information concerning the home buying process. Ask lots of questions, but remember that most brokers are working for the seller, and in the end, their primary obligation is to the seller and not to you. An alternative is a so-called buyer's broker. This individual does work for you, and therefore is paid by you. Seller's brokers are paid by the seller.

Make sure that the broker has access to the Multiple Listing Service (MLS). This service lists all the properties for sale by most major brokers across the country. Brokerage commissions average 5 percent to 7 percent and are split between the listing broker and the broker that eventually sells the home. Don't be surprised if your broker is eager to sell you their own listing since they would then earn the entire commission.

Home Buying Costs
Down Payment 0% - 20% of purchase price
Home Inspection $200 - $500
Points $1,000 and up for 1% - 3%
Adjustments 3% - 8% of purchase price

Once you've determined a price range and location, you're ready to look at individual homes. Remember that much of a home's value is derived from the values of those surrounding it. Since the average residency in a house is seven years, consider the qualities that will be attractive to future buyers as well as those attractive to you.

Although it can be difficult, try to remember that you will probably want to sell this home someday. The more research you do today, the better your decision will look in the years to come.


Buying a home can mean building significant value through the years.
Think carefully about how much you can afford to spend and consider borrowing guidelines like those used by Fannie Mae.
Pre-qualifying with your lender is a good way to determine how much house you can afford.
You will need cash for a down payment and closing costs. Generally speaking, the higher the down payment, the lower the interest rate and monthly mortgage payment.
In addition to your mortgage payments, you will also need to consider the other costs of home ownership.
Schools, taxes, services, crime rates, transportation, and zoning are important considerations when selecting a neighborhood.
Brokers usually represent the seller, but they can be valuable sources of information for buyers as well. A broker that belongs to the Multiple Listing Service will be able to offer a wider variety of homes to choose from.
Remember to consider resale value when buying your home.

How Does Escrow Work?

If you've ever made an informal bet with a friend, you may have asked a third person to hold the money until the wager was resolved. When you take out a mortgage to buy a home, you're doing something similar by opening an escrow account.

How it works
When you put money in escrow it is held by a neutral third party (called an escrow agent) who works for both the lender and the borrower. The agent's role is to carry out the instructions agreed upon by both parties. The money is released when all the terms of the agreement are met. Escrow can be involved in anything from multimillion-dollar building projects to purchases made on online auction sites.

When it's used
When your mortgage closes, your lender will usually require you to open an escrow account to cover property taxes and homeowner's insurance. You'll make an initial deposit, followed by payments to the account every month. (Usually these are added to your regular mortgage payment.) The escrow agent will then release these funds as your taxes and insurance premiums come due.

Its purpose
The idea is to protect the lender by ensuring that you pay your taxes and insurance on time. If you default on your property tax, for example, your municipality can put a lien on the house, which would make it difficult to sell. Or if your house burns down and you've neglected to pay the insurance, the lender would be left with no collateral.

How you benefit
Escrow can benefit borrowers by helping them spread insurance and tax expenses evenly over 12 payments. For example, assume your yearly property taxes are two payments of $1,000 each, and your insurance is $400 annually. If you paid these directly, it would mean three large payments a year; your escrow costs, however, would be a manageable $200 a month.

Escrow payments
Your escrow account will have a built-in cushion -- if you miss a payment, the lender must still be able to pay your accounts on time. However, federal law prohibits lenders from requiring more than two months. expenses in escrow. And because your tax and insurance costs will change slightly from year to year, the lender will review and adjust your escrow payments annually.

When escrow may be waived
In most states, the money you place in an escrow account earns no interest for you. For that reason, many borrowers prefer to pay their taxes and insurance directly. Lenders may agree to this if your down payment is more than 20 percent, although some will raise your interest rate slightly to compensate. Once you agree to putting funds into an escrow account, however, it is difficult to cancel it, so make sure you fully understand the arrangement before your mortgage closes.

Thursday, October 15, 2009

10 Things I Wish My First Broker Had Told Me

It's never to late to learn. Experienced salespeople share their valuable, and hard-won, knowledge with you. Ever wish you had a time machine test and could start your real estate career over-with all the experience and skills it's taken you years to develop? Well, you can't turn back the clock, but you move forward- with the benefits of your own knowledge, plus these great lessons learned.

Here are some of the challenges experienced real estate practitioners faced and overcame, plus some advice from practitioners, brokers, and trainers on how to leap those hurdles.

1. You can't ever know enough.
Cheryl Schlehuber, GRI, ABR, e-PRO® associate broker/owner of the Mackinac Properties Team, St. Ignace, Mich., wished she'd obtained her GRI (Graduate REALTOR ® Institute) earlier in her career. "Having the designation increased my knowledge and made me a better practitioner," she says. "Knowing you're in control and having the answers-or knowing where to get them- ;boost confidence, believability, and trust." She intends to be a lifelong learner and believes new skills can translate into more sales.

They can also translate into more dollars. Salespeople holding the GRI earn at least 35 percent more than those without it, says the Professional Realty Institute, Pasadena. Calif. NAR figures show that the 33 percent of its members who've earned a professional designation earned a median salary of $73,100, compared to $38,700 without.

"Only a tiny part of what people learn in licensing school has any bearing on what salespeople actually do. The bottom line is that brokers need to teach concrete skills-how to find clients, how to work FSBOs and expireds, how to close. Many new licensees have no idea what to even say once they get a client," comments Lynn Madison, Lynn Madison Seminars, Palatine, Ill.

2. You only have 15 seconds to sell yourself.
"It's fine to say that a salesperson should gather leads through open houses and floor time, but I wasn't adequately trained to know how to be persuasive and get critical information in a 15-second encounter," says Jeff Auen of Heritage Real Estate-Century 21, Lafayette, Calif."Without proper training, these are lost opportunities."

Personality profiling-learning to read people-is one way to build rapport quickly. "Practitioners can adapt their communications style to mirror prospects'demeanor, so there's feeling of a deeper connection. Attending continuing education classes that expand your knowledge of personality types can be beneficial," comments Joeann Fossland, a master certified coach who specializes in real estate through her company, Joeann Fossland Advantage Solutions Group, LLC, Cortaro, Ariz. Developing good listening skills and focusing on the prospects interests instead of yours will also help you make a good instant impression.

3.Some deals will fall apart.
"You can't always figure out who is ‘for real.' Someone may say they're writing an offer and will call in an hour, and then disappear," says Ruth Friedman, Troop Real Estate, Inc., Westlake, Calif. "Flaky buyers just come with the job. If they get you down or you quit, you're the one who loses."

"Even experienced salespeople sometimes miss red flags that indicate unmotivated buyers," says Harley Rouda, Jr. of Real Living, Columbus, Ohio. "For example, an unwillingness to get preapproved or to put their current home on the market before finding a new one are signals that buyers aren't committed to you or the home-buying process. "When practitioners are hungry, they're sometimes willing to work on more of a hope than a certainty. That's when they get disappointed," he adds. If buyers can't seem to make a commitment, it may be time to cut your losses and refer them to another associate-hopefully for a referral fee.

4. Don't confuse experience with skill.
"When you're new and unsure of your knowledge, it's natural to hang around more experienced practitioners, but be careful who you emulate," observes David Oliverson,e-PRO® , associate broker, West USA Realty, Phoenix, Ariz. In his early days, he discovered that successful practitioners were out hustling business, not sitting around the office. He picked a handful of top performers in his market and used them as his models. Oliverson interviewed the clients of top salespeople to find out what clients liked, then incorporated it into his business. For example, he found that clients valued salespeople who stay in constant touch. Now, he makes it a point to call them regularly. He also found that clients gave top salespeople high marks for the wealth of knowledge and statistics about the market they provided. Today, Oliverson never goes to a listing without a book full of market stats.

5. You're selling yourself as much as the home.
"I never really realized that clients had to buy you before you get the chance to sell their home," said Tony Hawkins ABR , broker and instructor, Realty World/Investment Marketing, Raleigh, N.C. As a former radio announcer, Hawkins considered himself a good talker, but " what I missed was a method to transition existing skills into techniques to help real estate clients," he says.

"A broker shouldn't paint too rosy picture of the job," says Bob Scholz, regional director of corporate training, Hunt Real Estate ERA, Williamsville, N.Y. He advises brokerage companies to spend time during training teaching skills such as personal money management and budgeting as well as listing skills. And whatever your skill level, it's critical to chose a brokerage company with regular training on both the basics and on new
industry trends.

6. Hook up with a mentor
"There is so much to learn that it's quite often overwhelming to face each day, " says Mary Pat Yarusites, RE/MAX Classic, Falmouth, Mass. "Having someone who knows the ropes can shed a light on areas that are seem unclear." Seek mentors who have demonstrated credibility in the business and are geographically accessible so you can have regular face time.

"With a mentor, you can see concepts in motion, emulate their techniques, and tailor them to fit your personality and business," says Gayle Bailey, RE/MAX Preferred Properties, Vienna, Va. "People hear good ideas in a class but can't always apply them." Even 30 years later, he considers his mentor, Harold Helm of RE/MAX Commercial, Louisville, Ky., "the key that turned the lock in my career." Mentoring isn't just for newcomers either. Two experienced people can team up, mentor each other- often referred to as parallel mentoring--and take both their businesses to the next level. "With parallel mentoring, it's not a matter of learning new skills, but finding how something old can be done better," says Bailey.

7.A transaction is made up of a million details, and you can't forget any of them.
"When you start out and you have only one transaction, you may be able to do it all. But when you have multiple transactions, it's even more difficult to keep track of every date and deadline," says Gwynn Teal Carpenter, broker, co-owner, and vice president of Home and Hearth Realty, Inc., Austin, Tex.

To help herself stay on top of transactions, Teal Carpenter developed a series of simple forms and checklists, such as "Getting From Contract to Possession" and "Contract Timeline," to give buyers, sellers, and herself an outline for every step of a transaction. "The approach not only saves me time, but also gives clients guidelines to follow," says Carpenter. The checklists also reduce phone calls between her office and clients and make her look professional and organized. And she never misses a deadline.

8. Don't overspend on technology you won't use.
"At first I thought that the ones with the best gizmos would get the farthest, the fastest," says Lori Bee, a broker with Helen Adams Realty, Charlotte, N.C. After getting her e-PRO® certification, she thinks the best technologies are the ones you understand and will use.

Stephen Canale CRB, CRS, GRI, an instructor for GRI programs for a number of state associations as well as a speaker and a technology columnist for REALTOR® Magazine, cautions that indiscriminate spending can drain precious financial resources and that time invested in learning new hardware or software can never be recovered. He suggests making an inventory of what technologies you have and use regularly. Seek their common traits (such as an indication that you're dependent on mobile devices like PDAs and cell phones) to help you decide which technologies are making the biggest contributions to your productivity.

Canale also suggests looking for holes or inefficiencies in your current technology lineup. Perhaps there's a tool that can automate what you do and boost productivity. An autoresponder, for example, might help you reply to clients quickly. Look for programs that combine two functions-managing mailing lists and creating brochures, for instance. But be leery about buying the latest technologies. They're expensive and manufacturers usually need time to work out the bugs. A year after a technology's debut often means a product is less expensive and more refined. Also, buy only what you can implement immediately.

9. Don't work without a business plan.
Marilyn Urso, CRB, e-PRO®, owner/broker of Long Island Village Realty, Inc., Syosset, N.Y. , "My husband and I got very involved in working in our business-taking listings, show homes, and other day-to-day task--and lost sight of our goals," she comments. "I can say I want to do $10,000,000 in sales this year, but if I don't have a plan to get the listings and I don't have a handle on what I spend, I'll never reach the goal."

"So many people just try to fly by the seat of their pants," observes Fossland. "A business plan helps you align your strengths and values with your business." It's also critical to create long- and short-term goals. You can make a plan quantifiable by nailing down the number of transactions, sales, and weekly working hours necessary to reach the goals. It can even include a schedule for vacations and time off.

"Check the goals monthly to see what's working and what's not and shift course if something isn't effective. From the time you set a goal, market conditions-and your plan of action--could change," says coach Joeann Fossland. She also recommends looking at weekly activities to see what has been most effective in getting you closer to your goals and what steps you can take that will provide the highest payoff.

10.Sometimes you have to say "no."
"I had a need to give clients the best service and the highest degree of expertise, says Patty Johnston, ABR, GRI , broker RE/MAX Elite, Brentwood, Tenn. "I put so much pressure on myself that I nearly burned myself out of real estate."

Patti Brotherton, who manages the Prudential California Realty offices in Santa Barbara and Montecito and is the company's district manager for Santa Barbara County, suggests managing your time efficiently and sticking to your schedule as much as possible. For instance, rather than answering each call when it comes in, she suggests answering calls in clusters--returning morning calls at 11 a.m. and afternoon calls at 3 p.m., for example.

"I think practitioners let clients dictate to them," she says. " If you control your time and efforts, everyone wins and the service you provide is exceptional." There were years when she planned her schedule so she could take summers off to be with her children. If you're booked up or want to take time off, consider referring incoming business to others in the office. And remember, the approach can yield a hefty chunk in referral fees.

Wednesday, October 7, 2009

#1 Homes Selling Mistake

There's a great saying in the real estate business. To succeed in life, you want to be:
The First Child
The Second Spouse
The Third Realtor
And like with most sayings, there is some truth in that statement, as agents who pick up listings after sellers have made major mistakes will attest.

But We Want More Money

When the average seller sits down to interview real estate agents, it's easy to get caught up in the excitement over choosing a sales price. More money means more financial opportunities for the homeowner. Perhaps it means the seller can afford to buy a more expensive home, help pay for her child's college education or take that greatly overdue vacation. Unfortunately, uninformed sellers often choose the listing agent who suggests the highest list price, which is the worst mistake a seller can make.

Establishing Value

The truth is it doesn't really matter how much money you think your home is worth. Nor does it matter what your agent thinks or ten other agents just like her. The person whose opinion matters is the buyer who makes an offer. Pricing homes is part art and part science. It involves comparing similar properties, making adjustments for the differences among them, tracking market movements and taking stock of present inventory, all in an attempt to come up with a range of value, an educated opinion. This method is the same way an appraiser evaluates a home. And no two appraisals are ever exactly the same; however, they are generally close to each other. In other words, there is no hard and fast price tag to slap on your home. It's only an educated guess and the market will dictate the price.

Is it Too Low?

Homes sell at a price a buyer is willing to pay and a seller is willing to accept. If a home is priced too low, priced under the competition, the seller should receive multiple offers to drive up the price to market value. So there is little danger in pricing a home too low. The danger lies in pricing it too high and selecting your agent solely on opinion of value.

How It Starts To Go Wrong

The seller of the Spanish home pictured on this page didn't even interview her real estate agents. She plucked the first one off the Internet because, "He looked like such a nice guy." He priced her home at $1.3 million. This agent never heard the local agents chuckling behind his back because he worked in a different city. After 90 days, the listing expired.

Continues To Go Wrong

The next agent, also from another town, listed the home at $1.1 million. Months passed. Eventually the price dropped to just under $900,000. Still no takers. A few lookie-loos, but no serious buyers.

More Than a Year Later

By the time the last agent was hired to list this home, the seller had grown weary and exhausted. It was now 12 months later. Together, the seller and her agent priced the home at $695,000. It immediately sold for all cash. The sad part is the comparable sales in the neighborhood fully justified a price of $835,000, but the home had been on the market for too long at the wrong price, and now the market had softened.

Agents Specialize in Expired Listings

There is an agent in my office whose basic real estate practice is comprised of calling sellers of expired listings and relisting them at market value. He sits in a small room with a phone, desk and chair, dialing number after number. Last year he sold more than 34 homes valued at more than $13,600,000, and he has 18 active listings right now. He makes a pretty good living repackaging overpriced homes.

Protect Yourself

The question is how much money have those expired listings cost the sellers? The financial loss often exceeds the extra mortgage payments paid and goes beyond the uncompensated hassle factor of trying to keep a home spotless during showings. It affects the value that a buyer ultimately chooses to pay because it's not a fresh listing anymore. It's now stale, dated, a market-worn home that was overpriced for too long. Don't let it happen to you. Don't be that seller of an expired listing.

Are For Sale Signs Importanty?

Hardly a day goes by that I don't receive a call from an interested buyer on one of my For Sale Signs. In some markets, buyers drive by a home, spot a For Sale Sign and slam on the brakes. The question isn't whether you should have a For Sale Sign in the yard, unless you want to keep secret the fact that your home is for sale -- and some sellers do. It's whether the For Sale Sign will generate buyer calls.

Types of For Sale Signs
Some homeowner associations do not allow For Sale Signs in the yard, or the HOA may have restrictions about size and placement. If you live in a planned community, you may want to read your HOA regulations before putting a sign in your yard.

Standard types of For Sale signs vary depending on inherent weather conditions where you live, type of brokerage that has listed your home and, in some cases, simply personal preference.

For Sale By Owner Signs
Sellers who try to sell without representation generally don't want to spend a lot of money on signage. In fact, a less expensive sign may play to a For Sale By Owner's advantage because a buyer might believe the seller is desperate to sell and the buyer can get a great deal.
You can buy a For Sale By Owner sign at a hardware store, some Boards of REALTORS or online. Most of these For Sale Signs are made from metal or plastic and secure to the ground through the usage of stakes or wires.

Real Estate Agent For Sale Signs
The two most common types are small signs with stakes, which are pounded into the ground, or larger sign panels, which generally hang from a sign post. Materials for the signage can range from wood to plastic to metal. Sandwich boards are inexpensive but portable enough that some kid might run off with them.

For Sale Sign Content
A REALTOR'S For Sale Sign will catch the eye of a buyer, and promote the real estate brokerage and the agent. It may contain the following:

Name of the brokerage
Office phone number with area code
Web site
Company logo
Brokerage address
Some agents utilize space on top of the sign post and below the sign panel. They may secure a smaller sign on top. Examples for the top of the post are:

Virtual tour web site
The actual asking price
Price reduction
Buyer benefit such as a home warranty
Here are examples of a sign rider, which may hang by hooks below the sign panel:

Agent's cell phone number
Co-Agent's name / number
Home feature such as number of bedrooms / pool / horse property

Placement of For Sale Signs
The For Sale Sign should be easily visible from the street. If I don't like where the installers place my For Sale Signs, I call them and submit a move order. Sometimes signs can be blocked by cars parked on the street, trees or telephone poles.

It seems less intrusive to place the For Sale Sign near the sidewalk or street than close to the home.
If the home is located on a corner, consider installing a sign on each street.
For out-of-the-way homes such as those on secluded streets or in an area where traffic is limited, you might ask home owners who live on a busy street if you can place a directional sign in their yard.

Number of For Sale Signs
Sometimes problems crop up when the listing expires with one agent and the seller signs a listing agreement with a new agent. It's possible that the first agent may be reluctant or slow to remove that agent's For Sale Sign. A delay could mean more sign calls for that agent.

I'm not suggesting that you yank the sign out of the yard yourself, but if calling the brokerage leads to a dead end, you might have to do it. The absolutely last thing that you want to happen is for a buyer to call your former listing agent.

Sometimes, when agents lose listings, they develop a bitter attitude. If a buyer calls your former agent by mistake, it's possible that agent may do everything in his or her power to talk the buyer out of viewing your home.