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Delinquency rates up

2009-10-30T11:11:00.001-07:00

Delinquency rates up

According a report from California-based real estate market consulting firm Foresight Analytics, total delinquencies for first-lien residential mortgages grew to an estimated 11% during Q309. The final figures for the third quarter are not due until the end of November, but Foresight’s report bases its data on earnings reports and call report filings from banks. Residential delinquencies increased from 10.2% in Q209 and from 6.4% from the second quarter of 2008, according to the report. The delinquency rate rose approximately 1% every quarter since the Q108, except for a quick blip in Q408. “We have been expecting the rate of increase to slow, but clearly this has not yet occurred,” said the report.

Nonaccrual rates for residential mortgages also jumped to 4.7% in Q309 from 3.8% in the previous quarter, and delinquencies in commercial mortgages also ballooned for the quarter. The rate hiked to 4.7% in Q309 from 4.1% in the previous quarter and more than doubled the 2.1% rate a year ago, according to the report. “The delinquency rate has been increasing at an accelerated rate since Lehman Brothers’ collapse in September 2008 and the ensuing severe credit crunch and economic downturn.” The delinquency rate in commercial loans is still well below the 8% delinquency rate in the third quarter of 1991, but the rate still worries analysts in light of a weak economy, constricted credit availability and a large number of commercial mortgages coming due the next few years.

Interest rates up

Freddie Mac’s weekly survey said the 30-year fixed-rate mortgage (FRM) interest rate inched up last week to 5.03% for the week ending Oct. 29, up from 5% in the previous week. A yevar ago, the rate was 6.46%. A separate survey of large US banks and thrifts conducted by Bankrate.com put the 30-year FRM at 5.35% with an average 0.37 point. That’s an increase of 1 basis point from the previous week. One year ago, their estimated rate was 6.77%. Freddie Mac said the 15-year FRM rate was 4.46% with an average 0.6 point, up from 4.43% last week, and Bankrate.com said the 15-year FRM was 4.74%, up 2bps from last week. Anyway, to make a number filled story short, interest rates are up. Bankrate.com goes further and says that sales have increased, prices are down and supply is starting to decline. Susan Wachter, a real estate professor at the University of Pennsylvania’s Wharton School of Business, said in the Bankrate.com survey that the housing market is not at a false bott
om. “These are strong numbers, but not surprisingly strong numbers,” Wachter said. “The fundamentals are in place for a recovery — however, a slow recovery.”

White House claims jobs saved and created

According to a report released by the Obama administration, its stimulus program has created or saved 650,000 state and local jobs. Maybe this time things will be different, but last time the White House released a job creation report it turned out so full of overstatement and errors that among other things, it reported an award to a French vaccine maker as 100 times the actual amount. The numbers in this report, like last report, are drawn from tens of thousands of self- reportings from state and local recipients as well as private companies. The White House claims to have created or saved at least 650,000 state and local jobs, but says the actual number of jobs created so far is likely closer to 1 million, since its report on stimulus job creation only focused on $150 billion of the $339 billion in American Recovery and Reinvestment Act funds spent so far. "We're solidly on track to create or save 3.5 million jobs by the time this program winds down," administration eco
nomist Jared Bernstein told CNN on Friday. "There's a lot more ammunition in that Recovery Act. The stimulus package is absolutely working, both in GDP terms and in terms of saving or creating jobs." Yup. The White House maintains that the funding saved the country from slipping into a depression and fueled the 3.5% growth in the economy in the third quarter. Republicans point to the rising unemployment rate, now at a 26-year high of 9.8%, as a sign that the recovery act is a failure.

Consumer spending down

The Commerce Department says consumer spending plunged in September by the largest amount in nine months, and incomes, the fuel for future spending, were flat. Spending dropped 0.5 percent in September, and economists worry that the recovery could falter in coming months if households cut back on spending to cope with rising unemployment, heavy debt loads and tight credit conditions. Some economists believe that consumer spending will slow sharply in the current quarter, lowering GDP growth to perhaps 1.5 percent.

Analysts said the risk of a double-dip recession cannot be ruled out over the next year. The 0.5 percent drop in consumer spending in September followed a 1.4 percent surge in August which was propelled by the big jump in car sales that month as consumers rushed to take advantage of the clunkers' incentives. Last month's drop in spending resulted in a boost in the savings rate to 3.3 percent of after-tax incomes, up from 2.8 percent in August. Many analysts believe households will keep striving to increase savings in the months ahead, which would hold back spending in the months ahead, weakening the recovery.

31% of consumers say access to mortgages is harder

Financial services information provider Bank Administration Institute (BAI) measures consumer views across five areas: financial stress and the economy, access to credit, fees and disclosure, managing personal finances and consumer trust. The index’s findings indicate that one-third of consumers feel their financial situation has deteriorated in recent months, but few expect conditions to grow even worse.

Of those surveyed, 31% indicated that access to mortgages is worse now than six months ago, while only 5% said it improved. The projections indicate that 12% of respondents expected access to improve in another six months, while 15% expect access to worsen. “In today’s fast-changing scenario, consumer opinion counts more than ever before and technology has made the consumer highly empowered,” said Haragopal Mangipudi, global head at Finacle. “Presented with diverse and ever-dynamic consumer segments, banks need to anticipate changing requirements and fine-tune business strategy.”

Robert Schantz – Broker Associate of Keller Williams Realty San Diego Metro achieves designation of Pre-Foreclosure Specialist Certification (PSC)

2009-10-22T08:58:00.000-07:00

Robert Schantz – Broker Associate of Keller Williams Realty San Diego Metro achieves designation of Pre-Foreclosure Specialist Certification (PSC) from Partner First, a Nationwide Real Estate Network.

SAN DIEGO, CA October 20, 2009 — Robert Schantz, Broker Associate for Keller Williams Realty San Diego Metro, recently achieved his certification as a Pre-Foreclosure Specialist from PartnerFirst, www.partnerfirst.org. Keller Williams Realty San Diego Metro Market Center is located at 3965 5th Avenue, Suite 300 in the Hillcrest Village Colonnade.

Robert has an extensive background in the sales and marketing of San Diego Metro Residential Properties and has been in the real estate industry for over 8 years. Robert has consistently achieved Top Agent status and always ranks in the Top Tier of Agents in the Market Center.

“With the large number of homeowner’s in distress in the current real estate climate, I found it was necessary to get this designation so that I may effectively guide homeowners through this process. I also found that banks have a strong need to work with agents who can navigate the short sale process for their portfolio so that they mitigate the necessity for foreclosing on the homeowner.”

The Mission Statement for PartnerFirst is to be the industry leader in providing solution-based relationships and strategies to its members and clients. Through education, they have established a national network of top-notch short sale agents with the "Pre-Foreclosure Specialist Certification" (PSC) designation. Their Agents connect homeowners with mortgage servicers by providing viable pre-foreclosure solutions to all parties involved. Members of their network hold a high standard of excellence, compassion, integrity, and commitment to bringing stability back to the housing market one pre-foreclosure solution at a time.

“I am truly lucky to be affiliated with PartnerFirst as well as Keller Williams Realty. Keller Williams Realty offers its associates unparalleled career growth and lifelong learning opportunities in the real estate industry.

“I chose PartnerFirst over other certification programs because of its reputation and network of PSC Agents Nationwide. I want to continue to grow my real estate business as well as help distressed homeowners, and PartnerFirst provides the training and technology that will help me reach my goals.”

The Keller Williams San Diego Metro Market Center, recently relocated to its new 9,000 square foot state of the art facility at 3965 5th Avenue, San Diego, CA 92103, was established in 1998 and has 165 associates. In this challenging real estate market, Keller Williams San Diego Metro has consistently sold and listed over 300 more properties in 2008 over 2007.

To learn more about Keller Williams Realty, call Ashley Lunn at 619.233.5935 or visit www.sandiegometro.yourkwoffice.com.

2009-09-21T20:13:00.001-07:00

It's all about Glee. I can't get enough of it. http://ping.fm/C9B1i

2009-09-13T13:06:00.001-07:00

Save The Sarah Connor Chroniciles. savesarah

2009-09-11T14:45:00.001-07:00

RT @CourageCampaign Duvall screwed CA. Now we must fix Sacramento. Sign our petition for real lobbying reform: http://bit.ly/4DvHmP

2009-09-07T11:54:00.001-07:00

Day 8 of my P90X fitness challenge. Much better than last week. My blog says it all. http://ping.fm/uRecr

2009-09-06T07:26:00.001-07:00

Enjoying my Sunday morning watching CBS Sunday Morning mark 30 years. Wow........great memories and clips from their previous broadcasts.

2009-09-04T10:23:00.001-07:00

Seller Master begins September 8th, 2009 @ 2PM in the Keller Williams Realty Metro Training Room. Go to www.agentcareers.info for more info.

2009-09-03T09:53:00.001-07:00

When "bad" things happen to "good" people, it's often because they want to become even better teachers, guides, and helpers to those precious souls who will one day need them to be their rock.

Plus, today's bad is always tomorrow's boon, no matter who you are, no matter what has happened, and no matter how weak the coffee was.

2009-09-01T14:30:00.001-07:00

Beginner’s Mind
The Zen master says that in the expert’s mind there are few possibilities (because the expert thinks he knows everything) while in the beginner’s mind the possibilities are endless.
“Orville Wright did not have a pilot’s license.”

2009-08-27T06:15:00.001-07:00

At Mega camp listening to Gary Kellers opening remarks

2009-08-26T14:21:00.001-07:00

Day 1 at Mega Agent Camp/Masterminds in Austin. I'm so lucky to be with Keller Williams Realty. They Rock.

Home prices: There’s no quick recovery ahead

2009-08-20T15:33:00.000-07:00

There has been some muted—albeit exhausted—cheering from homeowners in recent weeks. But before
we break out the champagne, look out for further potential problems just down the road.
To read the full story, please click here

New law may cause delays for borrowers

2009-08-20T15:31:00.000-07:00

New law may cause delays for borrowers
Changes to the Truth in Lending Act took effect last month, requiring lenders to provide certain disclosures
about mortgages fees and helping borrowers make better-informed loan choices. However, some in the
industry believe the new regulations could create further delays in the lending process.
Previously, lenders could begin underwriting the loan the same day they received an application by charging
fees to borrowers, such as paying for property appraisers. The new regulations now mandate a three-day
review period for the loan documents before the loan process can begin. If the interest rate changes before
the settlement date, a new set of disclosure documents must be given to the borrowers, restarting the review
period.
Funding the typical mortgage on a new purchase takes approximately 45 days—at least two weeks longer
than last year, according to some lenders. Delays in loan funding also can be costly to borrowers, as time
on mortgage rate locks may run out.
Borrowers can lock in interest rates for as long as 60 days, and may extend the rate lock for up to three
weeks—down from four weeks a year ago. The cost of each further one-week rate-lock extension costs
one-quarter of a percentage point of the total loan amount.
Borrowers whose settlement dates are in jeopardy may apply for an emergency waiver of the three-day
waiting period, but it is not likely to be granted, according to one lender who issues loans in 20 states.
To read the full story, please click here

Start house-hunting now to qualify for tax credit for first-time home buyers

2009-08-20T15:29:00.000-07:00

Start house-hunting now to qualify for tax credit for first-time home buyers
First-time homebuyers—those who have not owned a home for at least three years—may be eligible for the
$8,000 federal tax credit, but the window of opportunity is closing rapidly. To qualify for the credit, the buyer
must close escrow by midnight on Nov. 30, when the tax credit expires. Buyers hoping to take advantage of
this benefit are advised to start house-hunting early, as the buying and lending processes takes time.
KEEP THIS IN MIND
• Finding the right house can take some time, so REALTORS® recommend home buyers start
looking for a home as soon as they are able and ready to purchase. Buyers also should build in
extra time to accommodate the lending process, which is taking approximately two weeks longer to
process this year compared with last year.
• The tax credit is equal to 10 percent of the purchase price, up to $8,000, subject to income limits.
Single taxpayers are eligible if their modified adjusted gross income is $75,000 or less, while
married taxpayers filing jointly must have a modified adjusted gross income of $150,000 or less.
• Only primary residences are eligible for the federal tax credit, including new or existing single-family
homes, townhouses, condominiums, manufactured homes, custom homes, and houseboats.
Vacation homes and investment properties do not qualify.
• Purchases must be arm’s-length transactions, meaning the seller cannot be the buyer’s parent,
grandparent, child, grandchild or spouse.
• Married people filing as such cannot claim the credit if either spouse has owned a primary
residence within the last three years. However, unmarried joint purchasers may allocate the credit
in any way they see fit, as long as it does not exceed the $8,000 maximum.
• The government will allow those who finance their purchases with a federally insured loan to apply
their anticipated credit immediately toward closing costs or as additional down payment, rather than
waiting until they file their 2009 taxes to receive the refund.
To read the full story, please click here

2009-08-18T16:07:00.001-07:00

"Obstacles are those frightful things you see when you take your eyes off your goal." Henry Ford

2009-08-10T16:32:00.001-07:00

"Energy flows where attention goes" Want good things to happen....think good thoughts.

2009-08-07T11:18:00.001-07:00

Analysts at Deutsche Bank say that the number of homeowners whose home value is less than what they owe on mortgage loans will double to 48% by 2011; currently 26% of homeowners have negative home equity.

2009-08-04T11:08:00.001-07:00

Arya M sez: Plan for the Future, Live in the Present and Learn from the Past.

2009-08-04T11:07:00.001-07:00

Don't let the past dictate your future, but let it be a part of who you will become.

2009-08-04T11:01:00.001-07:00

Planning the Sept Ed Calendar and looking forward to going to Yreka to see the family. Can hardly wait.

When will the Gov't Learn that their intervention is only prolonging things???

2009-07-28T14:48:00.001-07:00

Lenders prefer foreclosure to loan modification in certain cases

The government program for preventing foreclosures is not in the best interest of lenders in all cases. If a borrower is likely to default even after participating in mortgage modification program, the lender is better-off opting for foreclosure. Michael Fratantoni, vice president at the Mortgage Bankers Association, said: "There is going to be this narrow slice of borrowers for which modifications is the right answer." Fratantoni said it is tough to estimate the size of that slice and "the industry and policymakers have been grappling with that." According to a study conducted by the Federal Reserve Bank of Boston, about a third of the borrowers who miss 2 payments can get back on track without help from their lender.

"These are the people who will get a second job, borrow from their family to keep up," said Paul Willen, a senior economist at the Federal Reserve Bank of Boston. "From a cold-blooded profit-maximizing standpoint, these are the people the banks will help the least." Michael Barr, assistant Treasury secretary for financial institutions, while commenting on the mortgage modification program, said: "We will continue to refine the program as new data becomes available. We are committed to studying the effectiveness and efficiency of the program, and we welcome outside analysis."

Government mulls more housing sops for troubled homeowners

With foreclosures rising, the Obama administration officials are set to meet this week to discuss new initiatives to help homeowners. Rising unemployment is impacting the effectiveness of the administration's current foreclosure prevention program. "Unemployment is making the job of doing loan modifications more difficult," William Apgar, a Housing Department senior adviser, told a congressional committee last week. "We are exploring other options related to how to provide assistance to unemployed folks." According to RealtyTrac, over 1.5 million homes received at least one foreclosure filing in the first half of 2009.

Unemployment accounts for a large number of foreclosures. The loan modification program introduced by the administration has not been effective so far for a variety of reasons including operational problems. "Loan modifications will not reduce by any sizable amount the number of homes going into foreclosure," said Morris Davis, an assistant professor at the Wisconsin School of Business. Experts feel that a new foreclosure prevention program may not find favor with lawmakers given the low success rate of existing program. "Any measures taken to help people avoid foreclosure will only prolong the pain by using taxpayer money to prop up unsustainable mortgages," said Kurt Bardella, press secretary for California Rep. Darrell Issa. "The best thing we can do for the unemployed is adopt policies that will create jobs," Bardella said.

2009-07-28T14:46:00.001-07:00

"We make a living by what we get, we make a life by what we give!"- W.C.

"Don't pray life gets easier... Pray that you get stronger! ~ J.R. ... And
then hit the mental emotional and phys gym and do something about it!!"

2009-07-28T09:50:00.001-07:00

Check out my Tale of 3 Markets on my blog; www.coachingtipsforrealtors.com to see why the upper end is set to suffer.

California Real Estate Market Analysis

2009-07-28T09:41:00.000-07:00

California real estate market is divided in to three catagories. Under $500k, the market is smoking hot....some areas less than 2 months of inventory. Between $500k-$1,000k, the market is so so and above a Million it is a snails pace. The reason????? It's The Financing Virgina. Their ain't no Santa Claus when it comes to financing. The current dichotomy exists within the conforming loan amount being increased from $417k to $729,750 in many counties including San Diego. The interest rates are higher too which makes qualifying more difficult for these loans. The qualifing is even more strict for jumbo loans, loans above the $729k. Since Fannie and Freddi only buy conforming loans; therfore, less money is available for jumbo loans. It isn't clear why conforming loans pay higher rates and have tougher guidelines to qualify than the loans for less than $417k. Historically, all conforming loans had the same interest rates and qualifying guidelines. Unless Fannie and Freddie start treating all conforming loans equally, and the governement intervenes on the ol' jumbo's, as it has on conforming loans, we will continue to experience this nasty tale of 3 markets and soon the upper-end market will likely see prices depreciate even more before this market strenghtens. Anyone want to buy a home on the cheap in Mission Hills??? Let's wait and see.

2009-07-27T17:07:00.001-07:00

Do what others won't for FIVE years, so you can do what others can't for the REST OF YOUR LIFE!!!

This Month in Real Estate July 2009

2009-07-27T08:20:00.000-07:00

2009-07-26T07:22:00.001-07:00

I am over my Blackberry Storm...piece of $*&* Thinking of the Tour. Any input???

Existing home sales rise for the third straight month

2009-07-23T10:54:00.000-07:00

According to the National Association of Realtors (NAR), existing home sales in June rose by 3.6% to an annual rate of 4.89 million, the highest since last October. Lawrence Yun, NAR chief economist, said: "The increase in existing-home sales occurred in all major regions of the country." Analysts say that this signals moderation in housing slump.

"Market-clearing price levels are resulting from the foreclosure wave," said John Ryding, chief economist at RDQ Economics. "This will be a protracted bottom, rather than anything that will show a quick recovery." The national median existing-home price for all housing types was $181,800 in June, which is 15.4% below June 2008, according to the NAR. Analysts expect to see depressed home prices for many more months to come. Tax incentives and drop in interest rates have contributed to the rise in home resales. But concerns about unemployment are keeping many prospective homeowners in the sidelines.

Banks incur significant losses in commercial real estate loans
While banks, irrespective of their size are incurring losses in commercial estate loans, large banks typically have well-diversified revenue streams, protecting them from a downturn in a single sector. "For the smaller banks, the primary revenue generator is going to be the lending side of the business. That's still a real mess out there. Particularly relating to commercial real estate, it's getting worse, not better," said David Twibell, president of wealth management at Colorado Capital Bank.

Morgan Stanley lost $700 million in commercial real estate last quarter while Wells Fargo reported a 69% increase in delinquent loans. Regional banks such as Key Corp and HMN Financial have reported a significant rise in commercial real estate loan losses. "Banks are writing off commercial real estate loans now at a bigger rate than in the last 20 years," said Kathy Boyle, president of Chapin Hill Advisors. Analysts are not bullish about banks. "There are still significant problems in the commercial real estate market," Twibell said. "We're probably in the third or fourth inning of that, whereas in the residential side we're in the seventh or eighth inning. There are so many problems, it's tough for me to get excited about banks."

Initial jobless claims rise after 2 straight weeks of decline
According to the Labor Department, initial jobless claims rose by 30,000 to 554,000 in the week ended July 18. Claims had fallen by 93,000 over the previous two weeks on account of companies such as General Motors shutting down their plants and not laying off as many workers as expected. "The level of initial claims is still consistent with deep job losses but smaller than we saw in the first months of this year," said Zach Pandl, an economist at Nomura Securities.

Continuing claims decreased by 88,000 to 6.23 million in the week ended July 11, the week for which latest data is available. This is the lowest since April. Forty one states reported an increase in new claims while 12 reported a drop. Federal Reserve Chairman Ben Bernanke says unemployment is the "most pressing issue" for policymakers today. "Job insecurity, together with declines in home values and tight credit, is likely to limit gains in consumer spending," Bernanke said in a recent testimony before Congress. "The possibility that the recent stabilization in household spending will prove transient is an important downside risk to the outlook."

Bailing out Fannie and Freddie is proving to be expensive
Since Congress authorized the Treasury Department in provide capital to Fannie Mae and Freddie Mac last July, Fannie Mae has received $34.2 billion of direct government support while Freddie Mac has received $51.7 billion. While the amounts are lot lower than bailout funds offered to firms such as AIG and Citigroup, analysts say that Fannie Mae and Freddie Mac may require significant sums of money in future on account of their rising losses. "We're assuming they each will cross the $100 billion mark fairly soon. They could be hitting the $200 billion barrier by the end of next year," said Bose George, mortgage analyst at Keefe, Bruyette & Woods. From a financial perspective, investments in Fannie and Freddie may not yield much to the government.

Few expect that Fannie or Freddie will be able to pay the committed 10 to 12 % dividend on the government funds they have received, let alone return the principal. James Lockhart, director of the Federal Housing Finance Agency, says investment in Freddie and Fannie cannot be looked at just in terms of financial returns. "They really have been the backbone of the housing market throughout this period," said Lockhart. "The money spent, we can at least say has gone to a good cause -- keeping the housing market much more stable than it would have been [without the bailout]."

Debt collectors wait for loan quality to deteriorate further
Debt collectors buy troubled loans at fire-sale prices and collect whatever is possible from borrowers in order to make profit. "Once they decide to buy the portfolios and get a sizable amount, the portfolios could be lucrative for the companies over a number of years," says Sameer Gokhale, an analyst at Keefe, Bruyette & Woods. Given the current economic conditions, one would expect debt collectors to be busy. Not quite. It looks as though debt collectors are waiting for a further deterioration of the economy when they can buy loans cheaper. "Our strategy has been to reduce purchasing.
We are waiting for those advantageous prices," said Rion Needs, chief executive of Asset Acceptance Capital, a debt collection firm. This is a good strategy. Buying loans for pennies on the dollar would significantly limit the downside for debt collection firms while providing a significant upside even if they manage to collect on a small number of loans. Analysts caution that debt collectors will not be able to improve their results in the near-term on account of borrowers' poor repaying capability. "It will be unusual to see an acceleration in performance (near term) because the consumer is still so strapped," Mark Hughes of SunTrust Robinson Humphrey.

Bidding wars seen in markets for foreclosed homes

2009-07-21T09:03:00.000-07:00

"Prices of foreclosed homes have taken such a beating that investors are jumping in and bidding up prices. Investors who win bids are often cash buyers who do not need to go through the appraisal process to get a loan. Traditional buyers who are looking for a home to reside are at a disadvantage. Jerry Lou Davis, a real-estate agent in California, says the activity in the foreclosed housing market is similar to the housing bubble of yesteryears. Jay Butler, director of the Realty Studies program at Arizona State University, concurs with this view. "This market is about as abnormal as the hypermarket that we came out of a few years ago," said Butler. Experts say that the bidding wars will impede stabilization of the housing market.

In Phoenix, the median home price, which was $265,000 3 years ago, was $125,000 last month, from a low of $115,000 in April. Real estate agents across the country have been observing price wars in the last couple of months, according to Walter Molony, a spokesman for the National Association of Realtors. In states such as Nevada, Arizona, California, and Florida, where home prices are moving to levels well below their peak values, it is not uncommon for sellers to get multiple offers. Jonathan Abbinante, a real estate agent in Las Vegas, says some of his clients are making 3 offers a day on homes they have not seen. "I sell homes right over the Internet," said Abbinante. "That's what I did in 2004."

Is there still hope in the fight against foreclosure?

The Obama administration has been criticized for its $ 75 billion modification program not doing enough to the stem the rise in foreclosures. Some experts believe that the steep learning curve is inevitable given the magnitude of the problem. "Part of it has been understanding how big the problem is," says economist Dean Baker, co-director of the Center for Economic And Policy Analysis "They're also getting more experience about what's going to work and what isn't." Some say that there are far too many operational glitches for the program to succeed immediately.

"There seems to be a ramp up and that's good, but there are still execution issues," says Andrew Jakabovics a housing expert at the Center for American Progress. "We're starting to see an impact from the modification program. I don't think we're at a comfort point yet." The Obama administration seems to take criticisms and suggestions for improvement seriously. The administration has implemented an audit mechanism for applications that have been rejected. Government officials recently wrote to industry players asking them to do more for the success of the loan modification program. "I don't think the administration's plan has proven to be a magic bullet yet," says Edward Pinto, a former chief credit officer at Fannie Mae. "We have to work through this; it is a long process."
TARP official says rescue cost may eventually be $23.7 trillion
Neil Barofsky, special inspector general for the Treasury's Troubled Asset Relief Program, says the $700 billion bank-investment program introduced by the Treasury represents a fraction of the total federal funds required to revive the financial system."

Compliments of Chris McLaughlin of www.shortsaleriches.com

2009-07-20T08:22:00.001-07:00

I love it when Louie has such a profound quote: "Heal Your Life. You’re always alone, but you’re only lonely if you don’t like the person you’re alone with. - Dr. Wayne Dyer"

2009-07-17T12:34:00.001-07:00

http://ping.fm/VDwKJ Don't miss our upcoming Webinar on Loan Modification or Know Your Options if you Need to Short Sale. http://ping.fm/PN2gQ

2009-07-17T12:28:00.001-07:00

http://ping.fm/VDwKJ Don't miss our upcoming Webinar on Loan Modification or Know Your Options if you Need to Short Sale. http://ping.fm/PN2gQ

2009-07-16T14:42:00.001-07:00

I am loving every day of my life more and more.

Love it when one of my agents gets in the news

2009-03-20T12:19:00.000-07:00

Banks Tank As Concerns Over Housing Bailout Mount

2009-03-05T09:25:00.001-08:00

Don't miss tonight's Recession Proof Investing webinar! Jump on this link now to sign up, there are less than 8 spots left:

https://www2.gotomeeting.com/register/722876237
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Bank stocks continued to be under significant pressure today, with Citigroup dropping below $1 for the first time, plunging 14% to .98. But the company doesn't need to worry about being delisted (which happens if you can't maintain $1 per share), as the exchange modified its rules requiring the $1 minimum. Bank of America slid 10% to $3.21 and Wells Fargo dropped 17% to $8.
President Barack Obama announced more details of his mortgage bailout plan yesterday, which his administration tout may keep as many as 1 in 9 U.S. homeowners in their homes.

Obama's point man, Treasury Secretary Timothy Giethner, stated: "It is imperative that we continue to move with speed to help make housing more affordable and help arrest the damaging spiral in our housing markets, just as we work to stabilize our financial system, create jobs and help businesses thrive."

So let's review the plan, now that a few more details are available. Let's first talk about loan refinancing.
They are saying that the plan will enable "up to 4 to 5 million responsible homeowners to refinance." That's true ... and a great boom for loan officers and title companies, but let's look a little more at these claims that they will stop foreclosures. It helps folks who right now aren't the ones really struggling ... and ignores the folks under water on their mortgage beyond 5%.

Let's read directly from the White Houses' summary:

"Consider a family that took out a 30-year fixed rate mortgage of $207,000 with an interest rate of 6.50% on a house worth $260,000 at the time. Today, that family has about $200,000 remaining on their mortgage, but the value of that home has fallen 15 percent to $221,000 - making them ineligible for today's low interest rates that now generally require the borrower to have 20 percent home equity. Under this refinancing plan, that family could refinance to a rate near 5.16% - reducing their annual payments by over $2,300."

Yep, they sure can do that ... but guess what? Most of the folks who will take advantage of this are not the folks that are in foreclosure or currently facing foreclosure! If they have a conventional mortgage with Fannie and Freddie, they aren't the issue right now ... for the most part, the subprime garbage is.
But there's a magic number out there ... 105%. Yes, that's what we're talking about. If the loan is less than than 105% of its current market value, they might be eligible for refinance. But come on! Most of the people in foreclosure purchased with 100% financing ... you know, the 80/20 loan. Most homes lost at least 15% of value last year, and in California, Nevada, Arizona and Florida, just double that to at least 30%. This plan does nothing for these homeowners.

Now let's think about this further. In order to refinance with Fannie and Freddie, you have to not only have equity in your home (or in this case you can't be under water more than 5%), but you also have the meet the guidelines for a loan refinance. That means you have be employed. You must have a job. NINJA (no income, no job, no assets) loans aren't around anymore. So everyone who just lost their job doesn't qualify for this help.

Unfortunately, with 80% of distressed properties having a first and second mortgage, modifications for those who were over leveraged is going to be next to impossible unless they've been paying extra payments to bring down their loan balance.
What about the modification for those who are in foreclosure? What is that all about?

First, the lender reduces the interest rate on the mortgage to no more than 38% of the borrower's income. (Note: what if they don't have a job...kinda hard to do, huh?) Income is defined to include wages, salary, overtime, fees, commissions, tips, Social Security, and pensions.

Second, the government will match dollar for dollar the reduction from 38% to 31% debt to income ratio (government is buying down interest rates, not a bad idea, but the investor has to take the hit getting to 38% which many of them won't do).

Third, lenders must keep the modification in place for 5 years.

In order to incentivize lenders, the government will pay the $1,000 for the initial modification and then will give a $1,000 payment for the next three years if the loan is current.
Then the government will give a carrot to the homeowner of a $1,000 principal reduction for up to $1,000 each year for the next 5 years.

So does this do anything to really stem the foreclosure tide? Unfortunately not really ... because lenders know the nasty statistics that most folks don't want to talk about.
But the New York Times told us the real story a few weeks ago: "The nation's 14 largest banks reported that more than half of the loans they modified last year were delinquent again after just six months, according to the federal bank regulator, the comptroller of the currency."

Yes, after just six months over half of the modifications that were done went back into foreclosure. Why? First of all, a lot of people that never should have been homeowners became homeowners with 100% financing. They aren't ready for the responsibility of owning a home and aren't able to manage their finances accordingly. Second, the economy has a lot of folks wiped out and they've lost their job. And third, after paying for a property that they know is $75,000+ underwater, at some point they just walk from it because it frankly doesn't make economic sense to keep it, especially since their credit is shot already because they've missed so many payments. They can bail out now, rebuild their credit, and buy something again in a few more years (with a short sale they only have to wait 2 years).

Now on to our real estate investor education section...

"Only Buy Something You Would be Perfectly Happy to Hold if the Market Shut Down for 10 years" ---Warren Buffett

Although Buffett probably had financial instruments in mind when issuing this insightful quote, the wisdom behind the mindset remains just as pertinent today as when it was first uttered. During periods of prosperity there are those that rush in where even fools don't dare to tread. They believe the good times will last forever and buy as though there is no tomorrow. Unfortunately, the price must be paid for such rash behaviors with the resulting loss of confidence in stocks, bonds and every other piece of paper that supposedly represents wealth.

Former generations and those from other nations know that a piece of paper is only as good as the trust bestowed upon it by the general public. Once trust is gone each and every "asset" reverts back to its intrinsic value. For most of America, those pieces of paper and other financial instruments face the very real prospect of becoming worthless. Like the demise of the Confederate dollar, financial instruments of all types provide little in the form of shelter, food, clothing or other essentials once a crisis of confidence is underway.

After the end of the Civil War, Confederate dollars were reportedly more valuable as fire kindle than currency. While we hope this nation never again faces such dire prospects, it drives home the idea of buying something you would be perfectly happy to hold if the market shut down for ten years. Ask yourself if you would be willing to hold any of the following if the market was indeed depressed or shut down for the next three, five, ten or even twenty years:

Short sale real estate that provides shelter, recreation, food, raw materials, supplies, rental income or other necessities or amenities. Notice, it cannot be stolen and land still remains even if destroyed by fire.

Stocks and bonds at risk of dropping to zero

Gold, Silver or other precious metals that can be stolen or require expensive storage

Treasury bills or notes backed by the good faith of the indebted US government

Dollar bills or blips on a computer screen secured by failing or faltering banks

Antiques, paintings or collectibles that can be ruined in storms, fires, theft or vandalism

Foreign currencies from emerging markets or other nations that have internal strife, corruption, lack of clear regulations (even less than those of the USA) and other challenges.

Municipal or corporate bonds by bankrupt states, local government and over-extended corporations

Finally, ask yourself which is likely to restore wealth and help you regain financial independence once the markets and economy are restored? Buy what you would like to hold...chances are it is the same assets others will seek during tough economic times.

What should you do? Join us on our amazing webinar tonight at 8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/722876237

Register for Keller Williams Family Reunion 2009

2009-02-18T21:18:00.000-08:00

2009-02-13T11:49:00.001-08:00

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This Month In Real Estate (US): January 2009

2009-02-02T08:41:00.000-08:00

Keller Williams Realty Bucks National Business Trends During the Toughest Real Estate Market on Record

2009-02-02T08:39:00.000-08:00

News Release

FOR IMMEDIATE RELEASE

Keller Williams Realty Bucks National Business Trends During the Toughest Real Estate Market on Record

Company celebrates 25 years as it outpaces market through its financial model

AUSTIN, TEXAS (January 27, 2009) — Bailout. Credit crunch. Foreclosure. Despite these words permeating the headlines and airwaves, there are companies out there moving forward – even in real estate. Keller Williams® Realty Inc., the fourth largest real estate company in North America, announced today that it outpaced the market in 2008, while remaining free of debt, and gave back more than $30 million in profits to its agents.

“Our strategy is no secret. We faithfully follow the sound financial model of leading with revenue – the same model our market centers follow,” said Mark Willis, CEO of Keller Williams Realty Inc. “As we watch companies throughout the country take on billions of dollars of debt, we are proud to say that our company has not one dollar of financing debt and we remain strong and financially sound. It is our joy to be able to give back to our agents during these times.”

Despite pervasive downward trends in the real estate industry, Keller Williams Realty continues to outperform the industry. For the first 11 months of 2008, existing home sales for the United States fell 17 percent when compared to the same period the year before. By comparison, Keller Williams Realty is poised to outdo those numbers by 10 percentage points, and in addition, the company experienced a much smaller contraction in its agent base compared to the National Association of REALTORS®, who saw a 10 percent decline in membership.

“Keller Williams was founded 25 years ago during one of the toughest markets on record – when interest rates were higher than 18 percent. We continue to urge our agents to zero in on lead generation and reducing expenses so they can thrive during this market,” said Mary Tennant, president and COO of Keller Williams Realty Inc. “We admire our agents’ spirit, tenacity, and dedication to their businesses. They just keep powering forward.”

Throughout 2008 Keller Williams Realty launched new products and services specifically to boost its agents’ businesses, including two new books: Your First Home: The Proven Path to Home Ownership for first-time home buyers, and SHIFT: How Top Real Estate Agents Tackle Tough Times. Both books are written by Gary Keller, co-founder and chairman of the board of Keller Williams Realty, who also authored national best sellers The Millionaire Real Estate Agent and The Millionaire Real Estate Investor.

Additionally, Keller, co-author Dave Jenks and trainer and coach Tony DiCello hit the road to teach the 12 tactics laid out in SHIFT, drawing more than 20,000 attendees in 29 cities. The company also continued to provide agents support through Operation Heart to Heart 2, a training initiative designed to help agents and market centers deal with today’s market.

About Keller Williams Realty Inc.:

Founded in 1983, Keller Williams Realty Inc. is the fourth-largest real estate franchise operation in North America, with more than 690 offices and 70,000 associates in the United States and Canada. The company, which began franchising in 1990, has an agent-centric culture that emphasizes access to leading-edge education and promotes an economic model that rewards associates as stakeholders and partners. For more information, visit Keller Williams Realty online at (www.kw.com).

Frequently Asked Questions from Homeowners/Sellers

2009-01-30T13:24:00.000-08:00

Frequently Asked Questions from Homeowners/Sellers

What is a Short Sale?

Simply put, a short sale is used to describe the sale of a home in which the homeowner owes the bank more than the home is worth. The bank agrees to allow the home to be sold for less than what is owed (AKA “Short Sale”).

Would I qualify for a Short Sale?

There are 2 main qualifications for a good Short Sale candidate…

(1) A good Short Sale candidate is a homeowner who is behind on their mortgage payment and is unable to keep up with all of their monthly obligations. Some of the reasons for falling behind on their mortgage payment may include sudden change in monthly household income, loss of job, divorce, and more.

(2) A good Short Sale candidate also has no equity in their home. They are not able to sell their home and pay off all of the outstanding loans that are secured against their property.

How do I select the right team to successfully manage and negotiate my Short Sale?

Before hiring just any 'Agent' to assist you in a Short Sale, make sure they are qualified and understand all the work that is required to see you through to the end. A properly trained Short Sale Agent knows how to qualify you for a Short Sale transaction and therefore has a very high success rate. Most Realtors®, Investors and Real Estate Agents do not understand how to qualify you and your lender for a Short Sale Transaction. This is one of the reasons they often have such low success rates when it comes to closing a Short Sale. Investors have around a 10% success rate. Most other so called 'Real Estate Experts' don't do much better.

Be smart and make sure that you ask many questions before trusting your future, your credit and your financial situation with a self-proclaimed 'Expert' that may have just learned about Short Sales from a Title or Escrow Company, a Real Estate Seminar, or their Broker.

Do you work with all banks?

Yes, we are currently working with all banks.

How long does it take to do a Short Sale?

There are several stages that are involved with the Short Sale process...

(1) The first stage requires working with you as the homeowner to get all of the required documentation that your bank will require us to send them. This stage shouldn’t take longer than a couple of days.

(2) The second stage involves us preparing the listing paperwork and scheduling an appointment with you to see your home and prepare your home to be listed for sale. This stage only takes a few days as well.

(3) The third stage entails us aggressively marketing your home for sale and producing a willing, ready, and able buyer. This stage can take as little as a few days or as long as a few months. On average we receive offers on our listings within 3-6 weeks.

(4) The fourth stage is the actual presentation of the offer to your bank. This is where our expertise and experience in negotiating Short Sales takes place. The actual negotiation/approval process can take as little as 2 weeks or as much as 3 months. On average most Short Sales take between 30-60 days from the date the offer is presented to the lender to the date of the Short Sale approval. In most cases, 60-90 phone calls and faxes back and forth between the lender and our team are required. The process is usually not described as “fast” in most cases, but with the right team working on your behalf, you can be at rest knowing that everything is being handled diligently and with much care.

(5) The fifth and last stage to the Short Sale process is the period of time between Short Sale approval from the bank and the buyer closing on the home. We prepare all of the buyers that we work with to be ready to close in as quickly as 3 weeks from the time of Short Sale approval. Often buyer’s will even close in as little as 10-14 days.

What if I don’t have money to pay the Realtor commissions?

While there is a small up front fee for our out of pocket marketing and negotiation expenses, you as the seller do not have pay the Realtor commissions.

Are there any tax ramifications to a Short Sale?

You may have heard, "Don't do a short sale because you will get a 1099 and have to pay taxes on the difference between what you owed on your home and what you sold it for or the amount the bank wrote off." This is true, but this is not the whole story…

If you do a Short Sale you will receive a 1099 from your bank. This 1099 will be called a “1099-C.” The thing that most people don't know or don't tell you is that with a Foreclosure, you will also get a 1099. In the case of a Foreclosure the 1099 is called a “1099-A.”

So what's the difference between a 1099-C and a 1099-A? The 'C' stands for "Cancellation of Debt" and the 'A' stands for "Acquisition or Abandonment of Secured Property". The differences are much more than you get the 'C' with a Short Sale and the 'A' with a Foreclosure. It is important to know that while there are many differences, the tax consequences for the 'C' and the 'A' are the same. You may not even be required to pay taxes on the 'income' as shown on the 1099-C, but don't just assume that you won't have to pay. Before making your final decision, first consult your CPA or Tax Preparer. While we are very good at successfully closing Short Sales, we are not tax experts. Please, consult a professional CPA or Tax Preparer before beginning the Short Sale process.

One more thing you should know is that in approximately 99% of the cases, the amount of the loss at Foreclosure is greater than that of a Short Sale. If you are going to receive a 1099 in either case, it is in your best interest to do a short sale instead of allowing your property to be sold for less at Foreclosure or as an REO (Real Estate Owned or Bank Owned Property). Now that you know this, don't allow rumors and incorrect information to influence an important decision in your life. Losing your home to Foreclosure is always the last resort and you should seriously look at all of your options before letting your home go to Foreclosure.
Are there any credit consequences to a Short Sale?

This question is asked very frequently and has many different variables involved. The first thing to keep in mind is that the moment you go 30+ days behind on your mortgage payment, your bank has the right to report to all of the credit bureau’s that you are 30 days behind on your payments. When a late payment is reported to the three major credit bureaus, it does have a direct affect on your credit. After going through a Short Sale or a Foreclosure, most people have multiple 30, 60, and 90+ day late payments reporting on their credit report.

When the actual Short Sale is completed, most banks will report to your credit report that your account was “paid in full for less than the full amount.” Your credit report may also be marked as “settled.” It is important to keep in mind that each lender has a different way of reporting that a Short Sale was done, but this is the most common language that is seen. If your home were to go to Foreclosure you would most often see the bank report “Foreclosure” on your credit report.

It is difficult to guage how much of a credit scoring affect a Short Sale has vs. a Foreclosure. Credit experts will agree that neither a Short Sale nor a Foreclosure is favorable to your credit or credit score, however, the impact of a Foreclosure is much worse. We strongly advise you to work with a Credit and Credit Scoring Expert for more specifics on this topic, and ways in which to improve your credit after the Short Sale is complete.

Why exactly would a bank agree to a Short Sale?

It is much more cost effective for a bank to do a Short Sale rather than Foreclose on a home. Banks are not interested in owning real estate. Banks make their money from receiving monthly mortgage payments. While banks will take a loss doing a Short Sale, they can often minimize their loss by as much as 10-20% over a Foreclosure.
Can the bank sue me or place a judgment against me for the difference between what I owe and what the home sells for?

This is a good question that is best answered by a qualified Real Estate Attorney. What you should know is that Arizona is what most people refer to as a “Non-Judgment Deficiency” state. What this means is that generally speaking if the bank forecloses on your home, they cannot pursue you for a deficiency judgment. For more specifics on this topic, please refer to the California Revised Statutes and consult a qualified Real Estate Attorney.

It is also important to know that most Home Equity Lines of Credit (HELOC) are not just secured to your home, they are also personally “backed” by you. What this means is that even though your HELOC bank may agree to do a Short Sale or Foreclose on your home, they still may attempt to collect on your account – even after the Short Sale or Foreclosure is complete.

This Realtor I know said Short Sales rarely close and banks don’t approve very many of them. Is this true?

It is true that you may have heard this from one or more Realtors – we certainly have – however, it is not accurate. Most Realtors are not educated on how to successfully close a Short Sale. Reference back to How do I select the right team to successfully manage and negotiate my Short Sale? before believing others’ “negatively-tainted” opinions on Short Sales.

I’m behind on my payments, how long until the bank forecloses on my home?

Most notes (the “I Owe You” document that you signed with the bank when you first qualified for your loan) give the bank the right to file the “foreclosure notice” or the “notice of default” as soon as you are 30 days behind on your mortgage. While the bank has the right to file the “foreclosure notice” or set the trustee sale date (the date your home will be foreclosed on) as little as 30 days after you miss your mortgage payment, they often will not do so until you are 90 days or more behind on your payments. The bank has the sole discretion on when they want to file the sale date and all banks make this decision differently and within different time parameters.

When the official “foreclosure notice” is filed (whether it is filed after you miss 1 mortgage payment or 3 mortgage payments), there is a 91 day period of time between the filing and the actual “foreclosure sale” or “trustee sale.”

When should we begin working on the Short Sale together?

Ideally we would like to begin working on your Short Sale as soon as you recognize that you are unable to keep up with your payments and will be falling 30+ days behind. The important thing for you to know and keep in mind is that the sooner we begin working with you on the short sale process, the more you increase your chance of a successful closing. Don’t wait any longer to get the process started!

Law of Attraction in You Real Estate Business

2009-01-30T13:20:00.000-08:00

You’ve heard all the hoopla about the Law of Attraction, but how can it work it your real estate business? Can you really attract anything you want into your life? How do you make your specific intentions and requests so irresistible that the Universe will stop in its tracks and fulfill your every desire and help you achieve your real estate goals? It all starts with tapping in to your vibrant life force and redirect your energy to attract astounding abundance. Here’s one of my daily exercises to help welcome more prosperity, love, and business into your life. Why not start today?

Letting Go of Lack in your Life and Real Estate Career

Intention Today I am focusing on abundance and letting go of lack. Whenever I catch myself longing for something I don’t have, I smile and tell myself: That would be nice, but I don’t need it to be happy. I have the option and power to be happy now.

Reflection

So many people spend much of their time focusing on what they don’t have. It’s the process of devaluing—the opposite of appreciation—an attitude of desperation that’s absolute poison to your life force! If you’re one of those individuals, it’s time to notice what you have instead of what you lack.

A consciousness of lack is a chronic longing for something else. Your obsession with achieving what’s missing screams to the Universe that your life isn’t valuable or appreciated now. Such a severely negative assumption can only draw more lack, a process that’s compounded when you envy what others have. This expands your competitive neediness and makes you even more desperate and miserable.

You must let go of lack and use the energies of presence and appreciation to turn your longing around. Your life has value already and—whether you want to own it or not—you have the choice to create happiness and acknowledge your blessings right now. In fact, it’s the best energetic choice you can make!

Activities for Letting Go of Lack

When you catch yourself obsessing about something you don’t have, remember that your needy focus will make it even harder to achieve. Let go of the lack and release the obsession. Splash some water on your face and wake up to your conscious choices. Take a quick look around you and acknowledge all of the wonderful things you already possess.

Develop an awareness of your envy, greed, or longing habits. Notice when you’re engaging in the assumption that you “need that to be happy.” Let go of such false conclusions and take your power back. Engage in the activities of appreciation and presence (Days 21 and 24), and make them a genuine part of your daily life. Longing won’t bring you happiness, but your happiness will bring what you long for!

Affirmations for Letting Go of Lack

More and more, I experience joy in all that I have and let go of any concern about what may be missing in my real estate business.

I am letting go of lack and choosing to see only value from now on. The Universe is abundant, and all that I need is available to me in my real estate business.
Today and always, I am learning to walk the path of peaceful pursuit. I take peaceful action toward my goals while I create a full and happy life right now in my real estate business.

I acknowledge the value in my life and feel a sense of fulfillment in this moment. I am truly blessed with the level or production in my real estate business and in my life.

2008-11-26T11:38:00.001-08:00

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YOU MUST READ THIS. IT EXPLAINS WHY THE BAILOUT IS MESSED UP!!!

2008-11-13T12:55:00.002-08:00

Mid-Day Market News & Commentary by Chris McLaughlin, November 13, 2008
http://www.shortsalesriches.com/welcome.html
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We have a fr'ee webinar scheduled for tonight! "Government Morons Just Made the Foreclosure Crisis Worse. How you can Profit from Their Stupidity."
So go now to register for the webinar that's held on Thursday night at 9 PM EST, 6 PM PST, while there's still room:
http://www.thursdaynightwebinar.com
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This is a long one today, folks. And I'm going over most of this tonight on the webinar, but it is important! Feel free to forward this on to friends and colleagues so they understand what's really happening out there. I have an MBA from Georgetown University and I had to put it to use this week!

A funny thing happened this week...and this is absolutely the
truth. I was walking down the hallway and two Realtors came up and said "Chris, you'll never believe what happened ... the bank actually called me today and asked when we could close on my short sale."

Yes, two banks. In two separate transactions. Both called. And were nice. And were proactive. What the hell happened?

A lot.

This is important. You need to understand what's going on out there. The reason I write these market commentaries isn't because I have a passion for typing or a love for possible carpel tunnel syndrome, but rather because everything, and I mean everything, impacts housing. And today's news was simply a reiteration of what I've been saying for weeks.

Treasury Secretary Hank Paulson did a 180. No, even though the guy is bald and might in a former life have been a skater dude, his 180 was on his approach. He had a lot of money to play with, and he's wasted no time deploying it. The Troubled Asset Relief Program, or TARP, allocated Paulson $700 billion to invest in troubled assets.

He initially told Congress that he proposed buying up troubled assets, but that "would take time to implement...and would not be sufficient given the severity of our problem." So when Paul got half of the $700 billion, he injected $250 billion into many banks, shoring up their balance sheets and giving investors confidence that even though the bank had exposure to bad mortgages, it would be strong enough to survive.

So he kicked the idea of buying up all these troubled mortgages to the curb. It's gone. Outta here.

You see, as time went by, Paulson noticed a more severe threat coming, one that he needed to address more so than the illiquid securities. Paulson now has $60 billion left.

Consumer debt. Yeah, those pesky credit cards, car loans, and student loans are all frozen. As Paulson noted: "Approximately 40 percent of U.S. consumer credit is provided through securitization of credit card receivables, auto loans and student loans and similar products. This market, which is vital for lending and growth, has for all practical purposes ground to a halt."

So Paulson wants to allocate most of the remaining dollars on tackling this problem.

But why doesn't Paulson just throw the last $60 billion at the foreclosure problem?

He's not allowed to, and he really thinks it isn't a great idea anyhow.

You see the TARP only granted him authority to invest in troubled assets. He's not allowed to essentially give away money - he has to buy an asset. So a proposal whereby the government would help a lender by buying down their loan isn't feasible with this current reality. Unless they are buying the security, the TARP doesn't allow Paulson to just pay for principal reduction on someone's loan.

And Paulson is a smart guy. He thinks, rightly so, that the banks themselves will manage the modifications, short sales, and REOs rather than the government, as they are already setup to handle the problem (okay, that was my joke of the day, right!?!).

His concept is that the government needs to come to the rescue to provide liquidity, to give confidence to people that banks won't fail, and to invest the government's money rather than spend it.

Most believe it unlikely that Paulson will tap the TARP again, for his next $350 billion installment, as the Obama Administration will likely oversee the next deployment.

But he's done with buying bad loans, and it is highly unlikely that idea will come to the table again. He thinks the market conditions have changed, and his proposal to buy illiquid mortgage backed securities, or collateralized debt obligations, is history. Gone. Outta here. No more.

What the heck does this mean?

A lot.

You see, some of our clients who were short sale listings were calling us wondering what to do ... and loss mitigators seemed to be dragging their feet in the last month, all believing that Uncle Sam was coming to the rescue and would ultimately be off the hook. Instead, Treasury injected capital into the banks themselves, to shore them up, but it did an about-face and decided not to use the cash to buy up all the mortgage backed securities. As I noted before, even if they had, it didn't mean the government was actually buying the foreclosed house--they were just buying the underlying security.

So, again, what does all this mean? It means that we're back to business as usual, and the banks now understand it. You're going to hear more from the banks now about loan modifications, because frankly the banks need to do everything they can to keep people that want to keep their house in it. But these proposed loan modifications won't even really make a dent in the problem.

Why, you ask? Folks think about it. How much time does it take to negotiate a 2nd lien holder away, or to deal with a condo association that has back dues? The proposals by the government for "refinancing" are ridiculous because they are essentially short sales--but rather than selling, they are refinancing. But the same amount of work has to go into it! And guess what? The government is going to compensate the lender with a whopping $800 fee for doing so. After they take their cut the loan office gets $400.

Would you do a short sale for $400? We both know the answer to that.

So as I said yesterday, the only way out of this foreclosure mess is to stimulate demand. We need tax credits, and we need them NOW. We need downpayment assistance for qualified borrowers. We need the government to come in and either buy down the rate or give guarantees that will drive interest rates lower.

That's how we're going to stop foreclosures: they will end when demand is back, which means that housing prices will stabilize and people will understand that there might be equity yet in their home.

So what is my challenge to everyone? Get real about short sales. Get real about REOs. Get real about distressed properties. They are here to stay. This is when you will make your money! This is the moment. This is the time. Don't read the nasty headlines out there ... you can do this, and you can profit!

What should you do right now? Make sure you're on the webinar entitled: "Government Morons Just Made the Foreclosure Crisis Worse. How you can Profit from Their Stupidity." It is being held tonight at 9 PM EST, 6 PM PST, while there's still room:

http://www.thursdaynightwebinar.com

We're limiting the webinar to just 30 people for personal attention. Get on it quickly!

More tomorrow...

See you at the top!

Chris McLaughlin, J.D., M.B.A.
web: http://www.shortsalesriches.com/welcome.html

P.S.: If you got my e-mail about one of the top agents secrets that has nothing to do with foreclosure, make sure you check out the Probates by Preston Launch at NOON TODAY. There are only 300 available and he'll be sold out in an hour. Be one of the only Realtors or investors in your area to have this secret weapon:
http://www.1shoppingcart.com/app/?Clk=2672240
Loss Mitigation Training Institute LLC

218 E. Pine Street
Lakeland, FL
33801
US

How to find the right price for a home in an area you are searching in

2008-10-31T08:10:00.000-07:00

Mid-Day Market News & Commentary by Chris McLaughlin, October 30, 2008

http://www.shortsalesriches.com/welcome.html
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Get your career on the right track! If you haven't attended one of our fr'ee webinars, make sure you get on the one tonight. It is 100% fre'e and you shouldn't miss it! So block off some time and join us ... TONIGHT, October 30th (Thursday) at 9 PM EDT, 6 PM PST:
https://www2.gotomeeting.com/register/389540903
Spaced are limited ... log on now to claims yours!
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The stock market was higher today as global investors cheered the Federal Reserves' 50 basis point rate cut yesterday, sending the stock markets of many foreign countries higher in overnight trading.

Exxon Mobil posted the largest quarter profit ever on record: $14.83 billion. Net income climbed 58% to $2.86 per share. "Our integrated business portfolio, strong operational performance and financial discipline continued to allow us to capture the benefits of the commodity price environment," Exxon Mobil investor relations head David Rosenthal said during a call with analysts. "Despite recent volatility in the financial, commodity and credit markets, the fundamentals of Exxon Mobil's business remain strong," he said.

American Express announced today that it would lay off 7,000 employees, or approximately 10% of its work force, in order to save an approximate $1.8 billion in 2009. Kenneth I. Chenault, Chairman and CEO, said that "The re-engineering program we announced today will help us to manage through one of the most challenging economic environments we've seen in many decades."

Now on to our real estate investor section...

Affordable Housing Remains in High Demand

Here are a few facts from the US government... nearly 40 percent of homes were either 2nd homes, vacation homes or investment properties. That may not sound too bad until you realize over 65% of people already own their own home. Think about this a minute... if 2 out of every 3 people already own their own home, and then a LOT of those people own more than one home (and many own more than just one additional home) then it stands to reason there are a LOT of homes to choose from when it comes to finding short sale offers.

So, what about the so called housing shortage you hear the government talking about? Well, listen closely because it's always said very specifically...it's a lack of AFFORDABLE HOUSING! By now any short sale investor should be asking what qualifies as affordable housing? It's a good question that is likely to pave the road to riches for those that know how to ask the right questions and get the right answers.

First, let's discuss what affordable housing is NOT...

1. Affordable housing isn't the lowest selling price. Let's face it, a house in extremely poor condition can often cost more to repair and maintain than it saves in mortgage payments each month.

2. Affordable housing isn't the oldest home in the area. High heating, water and other costs associated with older homes can easily cost more in the long run.

3. Affordable housing isn't necessarily a mobile home. Rapid depreciation and lower appreciations combined with higher than average insurance premiums can erode long term profits and cost more.

So, now that we know what affordable housing is not, let's define what it is...

1. Affordable housing is safe, up to date, energy efficient housing that is easy to maintain and has low utility and insurance costs.

2. Affordable housing is located in a convenient area near shopping, schools and employment.

3. Affordable housing is in keeping with 25 to 35 percent of the average household income for working class laborers, renters and potential retirees.

Short sale investors don't need to search the oldest, most run down or high maintenance properties to find great - high demand properties. In fact, the most affordable housing options are often newer homes in convenient locations that allow an easy commute, future appreciation and low maintenance costs for buyers.

To find the right price for your area do the following:

1. Locate the average household income for the zip code.
2. Multiple by 3
3. Search for newer homes in convenient areas within 10 percent of the above amount.

More on Friday...

See you at the top!

How to attack a SHORT SALE and get the price you want

2008-10-22T12:01:00.000-07:00

The stock market was lower in early afternoon trading as investors feared more bad news would come out as corporations report their earnings. At 1:35 PM EDT, the Dow Jones Industrial Average was down 410.83 to 8662.82, the NASDAQ was down 52.25 to 1,644.42 and the S&P 500 was down 44.93 to 910.12.

Wachovia reported dismal earnings this morning - a huge loss of $24 billion. Yes, that's billion, not million! Part of that loss was an $18.7 billion "goodwill impairment charge," a fancy way of writing down the company's value to prepare for the upcoming sale to Wells Fargo.

Storm related losses negatively impacted the earnings of Travelers Cos., the St. Paul, Minn. based commercial and personal property insurance company. Earnings dropped to $214 million versus $1.2 billion in the year ago period. Hurricanes Ike, Gustav, and Dolly cost the insurance company around $682 million.

But in a positive sign, credit markets appeared to be stabilizing today. The interbank rates continued to drop, which means that banks are lending to other banks on better terms. The London Interbank Offered Rate, also known as Libor, fell to 3.54% from 3.83%, demonstrating the credit is in fact easing.

Now on to our real estate investing educational section...

Affordability Measures & Pricing Strategies

In the past we have discussed various valuation methods above and beyond the typical "comp value" so loved and over-used by bankers and brokers throughout the nation. Today we will spend a little time covering alternative affordability measures as a basis by which to make an offer on a short sale property.

Like its cousin the comp value, determinations of affordability have typically centered on a debt-to-income ratio that makes little sense in today's market. It goes something like this...
Person X wants to buy a home and makes $150,000 per year. Their current car payments, credit cards, student loans and other obligations qualify them for a mortgage payment of $3,000 per month based upon a typical ratio of 25-35 percent.

Unfortunately, few people remain in the same job for 30 years like their parents before them and decent jobs are hard to find. The company downsizes and unemployment tops out as a miniscule fraction of their monthly income. Before long, they are behind on their mortgage. Sound familiar? It should because as a short sale investor you have probably heard this story dozens if not hundreds of times.

A common sense alternative measure of affordability is to take the "average" income for a given geographic area and correlate it to the type of earning capacity. For example, if Person X is a white collar worker located in Los Angeles their earning capacity is higher than the average earning capacity of the same job located in Boise Idaho. That does not mean individuals cannot make more money -but rather what they can expect to earn should they experience a job loss and need to replace the income. Communities and the United States government use affordability as a measure for determining whether homes are priced too high for a given area and so should you. It's a strong argument to use when working with bankers and brokers who may feel your bid offer is too low. Simply use the following steps:

1. Determine the average household income for the zip code.

2. Determine the cost of a home that would equal 25-35 percent of the average household debt at the prevailing interest rate - don't forget taxes and insurance.

3. Deduct the cost of major repairs or other required work.

4. Drop the price by 10 percent (or more) to account for reduction of anticipated fees the bank would normally incur to hold the home.
Another affordability measure that can be used to support a low bid price is rental rates. Many areas have low rental rates below the actual cost of PITI should someone opt to buy the same home. The Federal government actually uses rental rates to calculate CPI so it should come as no surprise it tends to derive a lower value.

1. Determine the average rental rates for similar homes in the area- not asking rentals but actual rentals without a vacancy.

2. Compare against the PITI, vacancy rates, repairs, HOA fees and other costs. If rental rates are lower than the cost of ownership, use the rental rate as a basis to determine the selling price.

More on Thursday!

See you at the top!

Why homes are a great investment in this rocky economic times

2008-10-15T11:13:00.000-07:00

At midday investors continued to hold their breath, as the Dow Jones Industrial Average was down 317.24 to 8993.75. A government report released this morning showed that retail sales had dropped by 1.2 percent, which was twice as much as most analysts had been expecting. The report does not bode well for the upcoming holiday season, where many Americans are seen as tightening their belts.

JP Morgan Chase's profit dropped 84 percent to $527 million from the $3.4 billion in the year ago third quarter. "It's an unpleasant situation, and I don't want to underplay it. It's unpleasant for the country," said CEO Jamie Dimon. "I hope that the financial crisis, with the powerful moves made by governments around the world, will start to ease."

In other banking news, Wells Fargo fared much better than JP Morgan Chase. Its third quarter profit fell 25% to 1.64 billion from $2.17 billion in the year ago period. The company was successful in breaking up the proposed Citigroup-Wachovia merger and now Wells plans on merging with Wachovia. Citigroup has indicated that it will not stop the deal but does plan on extracting its pound of flesh in court for damages.

Now on to our real estate investing news arena...

Recession, Depression, Inflation, Deflation...What's it all About and How Does it Impact Real Estate?

Ronald Regan once stated "A recession is when a neighbor loses his job. A depression is when you lose yours." If we were to apply the same logic to the real estate market, then the nation has been in the midst of a recession for some time as people have been steadily losing (or walking away from) their homes. In fact, there is a great deal of recent debate on whether the nation is already in a recession and heading for a depression or whether the easy money economics of the Federal Reserve will prevent a depression at the risk of creating further inflation...or perhaps world-wide deleveraging will actually result in massive deflation instead. Let's take a few moments to examine real estate in each of the above scenarios'...

Recession. Unlike employment figures (or stocks), real estate doesn't act the same as jobs during a recession. When a worker loses a job the position may be completely eliminated (or the stock completely wiped out). When someone loses a house it reverts back to the prior owner, heirs, bank or local government. Short sale buyers realize the inherent value in the home or property and act like a middle man to obtain a percentage of that value for themselves in the form of resale, rentals or retained equity.

Depression. During a depression the entire economy may slow down so much that little to nothing is being produced. Job loss often runs rampant as prices drop below the cost of production. Unemployment drives labor costs down - creating a downward spiral as unemployed workers are unable to afford more than the basic necessities. Again, jobs and stocks alike may all but disappear during a depression but a house remains standing. Housing is a basic necessity and tends to take top priority even during the most critical economic crisis.

Inflation. Inflation tends to drive the price of all commodities and assets higher as the replacement cost rises; real estate is no exception. With the Federal Reserve practically printing money out of thin air, the ability to own or control physical assets with a fixed rate of interest is often the best way to preserve wealth during periods of escalating inflation. On the other hand, the increased cost of production and labor often leads to more work for less pay among employees.

Deflation. Falling assets prices and world-wide deleveraging tend to drive down the price of commodities and assets including real estate. However, short sale buyers are often purchasing property at or near the fully depreciated value. Even those who experience further price drops still have other options available to bridge the gap until the market recovers; rentals, owner financing and factoring may each help raise needed capital or reduce individual debt repayments until the property has regained full value.

More on Thursday...

See you at the top!

P.S.:
Join us for our fr'ee Webinar this coming Thursday at 9 PM EST/ 6 PM PST that will reveal the Top 12 Strategies on Getting Rich with Short Sales:
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P.P.S.: If you really want to get started building your wealth, now that recognize that your 401(k) isn't going to do it, what are you waiting for? Take action today! A journey of a thousand miles begins with a single step. Take that step right now by clicking here:

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We're back in 1999 now. Read why and why people are turning to hard assets.

2008-10-07T12:42:00.001-07:00

We're back to 1999. Remember that year? Bill Clinton was President. All the wealth in the Dow Jones Industrial Average has been wiped out since then. As of 1 PM ET, the Dow had dropped nearly 300 points to the 9600 level. What will happen next? My bet: investors will head back to hard assets like gold...and real estate! Just watch as money begins to flow again as investors bargain shop among the short sales, REOs, and distressed properties available for purchase. And what if lenders reduce rates even more? Read on...

Fed Chairman Ben Bernanke hinted that a rate cut might be in the cards now that oil and commodity prices have eased (because of fears of recession, which would reduce demand). "In light of these developments, the Federal Reserve will need to consider whether the current stance of policy remains appropriate," Bernanke said. The Fed Chief further stated that economic recovery is likely to be prolonged given the recent turmoil and that the Fed planned to use the "tools at its disposal to improve market functioning and liquidity."

In other real estate related news, Bank of America announced just plain awful earnings yesterday and also slashed its dividend in half to shareholders. Net income slid by 68% to $1.18 billion from the $3.7 billion a year ago. Kenneth Lewis, the CEO and a veteran of the banking industry, summed it up: "These are the most difficult times for financial institutions that I have experienced in my 39 years in banking." Investors believed him, with the stock down over 20% after lunchtime today.

So what bank will go belly up next? Some are wondering whether National City can make it as the stock has taken an absolute beating recently as many believe it could become the next Indy Mac and fell over 25% Monday. Fitch Ratings led the drumbeat against the bank, saying that the Cleveland-based bank "has been battling asset-quality issues in its mortgage and home-equity portfolios for over a year."

Of course one silver lining in this for Realtors and investors is that gas will be a little cheaper when you drive around and look at properties--nationwide gas is just under $3.50/gallon.

Financial and credit markets are in crisis. What to do???

2008-09-29T15:43:00.000-07:00

Market News & Commentary by Chris McLaughlin, September 29, 2008
http://www.shortsalesriches.com/welcome.html

Financial and credit markets are in crisis. Congress failed to pass the Administration's bailout today. Fear, panic, and calamity overcame investors as many threw in the towel after the US House of Representatives gave a stunning rebuke to the Bush Administration as well as Congressional leadership. The Dow Jones Industrial Average plunged 777.68, nearly 7%, and the S&P 500 dropped 8.79%.

Investors were wondering what bank was going to be next after Citigroup announced that it would scoop up Wachovia for just $1 a share (Wachovia shares plunged over 81% today). But Citigroup is not necessarily getting the bank for cheap--it must write down much of Wachovia's $312 billion loan portfolio.

So let's take a deep breath. All within a month Fannie Mae, Freddie Mac and AIG are owned by the government. Washington Mutual is gone, bought on the cheap by JP Morgan. Lehman Brothers is history. Bear Stearns was already history. Wachovia's shareholders have been wiped out and are now Citigroup shareholders for pennies on the dollar. Brand names that Americans recognize are gone. All within a month. Wow.

What's next? You can see that regional banks are under intense pressure. Banks like Fifth Third dropped '43% today, First Federal Financial dropped 25% and KeyCorp plunged 33%. "Who's next?" is now the topic of conversation across the nation.

If you're trying to get a sense about the level of anxiety about economic activity, just look at energy prices. Crude oil dropped $10 a barrel today as many believe that with the slowing economy so too will there be less gasoline and oil used. Crude oil has dropped over 20% in just the past two weeks.

Now, on to our Realtor and investor education section...

Now that the stock market is in utter chaos, typically investors look again to "hard assets" like gold and housing to invest in. Many of you reading this are either investors or realtors ... so let's take the approach of understanding how to best advise clients to get into real estate versus gold.

On September 17th, gold recorded the largest ever advance as it soared $120 within a 24-hour period. Just a few months ago, gold reached a record-breaking $1,000 plus per ounce for a short period of time. Considered by many to be "Gods Money," gold has enjoyed a long and illustrious career as a "hedge" during periods of rapidly escalating inflation or other economic uncertainty but does it deserve the reputation? Should you run to liquidate holdings and buy gold bullion? Most of all...how does it compare to real estate when the going gets tough?

To answer these - and maybe a few other burning questions - today we will spend a little time discussing real estate and gold as a hedge during uncertain economic times. Every portfolio has room for both but use these facts when deciding what percentages to allocate to each:

Fact #1: Real Estate as an Index. The Gold Standard is long gone. Whatever your opinion of removing the dollar from the gold standard, the fact is the dollar is a fiat currency without a gold backing. That has been - and remains - the current state of affairs. The fiat - or paper currency - has not been backed by gold for decades and despite the occasional lone voice crying in the wilderness, little serious attention has been given to restoring the currency to a gold-backed standard.

During a period of time when many doom-and-gloom types are calling for a complete collapse of the dollar, savvy real estate investors may well turn to the Weimar Republic as a working example of what happens after a currency collapses: Germany turned to real estate (rather than gold) holdings as the foundational index for the newly created currency!

Fact #2: Shelter is a Primal Need. As any student of psychology or human behavior knows, during times of uncertainty, people tend to seek out the most basic needs of food, clothing and shelter. Although gold is an item of intrinsic value, it does not compare to that of shelter. The worse the economy - the more people return to the values of home and hearth.

In fact, much of the value of gold is due to its ability to be used as a unit of exchange for food, clothing and shelter during times of need. On the other hand, if you own real estate - ie, shelter, land able to grow food, water and other essentials then you have the most sought after commodity of all.

Fact #3: Gold can - and has - dropped significantly in the past. Like all recent investments, gold has seen highs and lows. Real estate has experienced 20 percent drops in price but so has gold. Looking back at the late 70's and early 80's, gold momentarily reached a high of $845 per oz only to steadily decline for the next 20 years when it finally bottomed out at approximately $250 per oz...NOT adjusted for inflation!

On the other hand, while real estate also experienced a sharp price increase during the late 70's and early 80's it then remained stagnant for approximately a decade - barely keeping pace with inflation (but still managing to hang on). Those who held gold rather than real estate - lost.

Remember, those who don't learn from history are doomed to repeat it. Learn the lesson from Weimar Germany, the United States in the late 70's and early 80's and even man himself...men steal gold but go to war for land.

So let's get this straight. Mom and Pop don't have much money anymore, but what little money they do have is now losing money and now banks aren't safe. Credit has tightened beyond all recognition and the thought of getting a loan that isn't government backed is laughable.

But it is the single biggest gift many of us will ever be given in our lifetime! Wherever the public runs one way, I say run the other. And I have made a lot of money because of it. It is time to buy foreclosures and start understanding how short sales can build major wealth. It is time to get excited about being a Realtor or real estate investor again!

So we're going to do it again tomorrow night (Tuesday). We're hosting a Webinar (you need a computer and a phone to participate). Last week's webinar was nearly sold out, so if you're interested in learning how to make money in this market jump on this now and register while we still have openings:

https://www2.gotomeeting.com/register/759612505

The webinar will be both Nathan and I discussing how you can turn this crazy market into the biggest opportunity in a lifetime. It begins at 9 PM ET (6 PM PST) so that our friends on the West Coast can join us, too. Sorry if you're East Coast you might have to stay up a little late but the fr.ee content is well worth it!

So remember ... in this market, you can now buy low, and not only sell high, but sell fast. And that means less risk, less holding costs, and money in the bank. But you have to do more than read this and agree ... you need to take action, too.

See you at the top!

Bye Bye WaMu. It was nice knowing you.

2008-09-26T15:12:00.000-07:00

Bye bye, WaMu. It was nice knowing you.

Washington Mutual finally went bust - everyone was expecting it, and its stock had been in the tank for months. But it finally happened. Any who benefited? Certainly not WaMu shareholders...but it looks like JP Morgan Chase will be the winner here. JP Morgan Chase bought WaMu's $307 billion in assets and $188 billion in deposits for a mere $1.9 billion, which actually goes to the FDIC. The bank will also re-capitalize by selling some of its stock to raise $8 billion.

The combined entities will have 5,400 branches in 23 states. JP Morgan shares jumped 10% on the news, as investors believe the company continues to gobble up assets on the cheap that will ultimately provide a solid shareholder return.

But the fall of WaMu certainly could put more investors in a panic and tighten up liquidity. The good news is that the White House says that by Monday a deal should come together.

In the latest political twist, a group of conservative house Republicans, led by Representative Boehner, said that instead of buying the illiquid securities the government should just insure them. Other proposals have reduced the proposed $700 billion to $250 billion with another $100 billion provided at the President's discretion and a final $350 billion would be provided after the next President is elected (subject to Congressional approval). We'll know more Monday.

Wachovia also tanked today, as shares slid 31%. Investors are still nervous that Wachovia's 2006 purchase of Golden West Financial, which has $122 billion in exposure to subprime mortgages, could lead to the company's ruin. But in after-the-bell news the New York Times reported Wachovia is in early talks with Citigroup to be acquired. Looks like the only ones making money these days in New York are the mergers & acquisition attorneys.

In real estate news (although all this news is related to real estate!), KB Home reported a 56% decline in revenue. "These difficult conditions have now been exacerbated by the recent, unprecedented turmoil in financial and credit markets," said Chief Executive Jeffrey Mezger. The company lost $144.7 million for the three month period ending August 31st. But in typical Wall Street fashion, the results weren't as bad as some were expecting, so the stock closed up 1.89% today.

Now on to a real estate discussion...

I'm still hearing from people, Chris, how does this all affect my business? I'm a realtor...I'm a real estate investor. Or I'm thinking about getting into real estate investing. Is now the best time?

Folks, there's never been a better time! When equity markets are awful, and investors are looking for hard assets, where do you think they are going? Well, precious metals that's for sure. But don't forget about bricks and mortar. Some investor pulls out $500,000, does a self-directed IRA into real estate, and gets a 8% to 10% return on the cash just based on rent alone. Then they get the upside appreciation, too.

I'm telling you. Read me loud and clear: when financial markets plunge, the real estate market will be the beneficiary. Just watch. Only so much money can go to gold.

Or better yet, start taking action!

So who gets us out of this mess? You do. If you're reading this, you're probably a real estate agent or investor. Once you get going, and do your thing, and start telling people that the real estate market is A LOT more stable than the stock market, you'll begin to make sense.

And guess what else? Banks are tanking. They have to unload nonperforming assets. So short sales will become easier. REO's will become plentiful. And realtor bank accounts will start filling up, not depleting.

So hang in there. Sure it is painful for your 401(k), but you better be able to make it back in spades with the opportunity you've got in front of you.

See you at the top!

Market News & Commentary Compliments of My Friend Chris McLaughlin of ShortSalesRiches.Com

2008-09-25T14:46:00.000-07:00

Market News & Commentary by Chris McLaughlin, September 25, 2008

http://www.shortsalesriches.com/welcome.html

All eyes were on Washington, D.C., today as President Bush urged lawmakers to come together in a bipartisan manner to back the Administration's $700 billion Mortgage Bailout Plan. Bush met with lawmakers and invited both Presidential contenders Barrack Obama and John McCain to the White House for a full briefing.

Investors were pleased with the progress, sending the Dow Jones Industrial Average up 197, or 1.8%. But after the market closed, Senator Richard Shelby, a Republican from Alabama and Chairman of the Senate Banking Committee, emerged from the White House and said that there was no bailout agreement reached during the meeting. He then proceeded to strongly speak out against it. So hold on to your hats -- tomorrow's market may send a different signal if the plan is in trouble.

In real estate news, new home sales continued their downward slide. A government report shows that new homes sales were at their lowest point in 17 years, at a seasonally adjusted annual rate of 460,000, which was down from 520,000 in July. Only 39,000 new homes were sold in July, the lowest since December of 1991. The report also noted that median new home prices continued to slide, down 5.5% to $221,900, from $234,900 in July.

In a positive sign, inventory continued to shrink to 405,000, a level not seen since August of 2004. This drop in inventory is a positive sign for most Realtors and investors, as there will be fewer brand new homes selling at fire-sale prices from developers unable to make their interest payments.

Now on to our Realtor and investor tips, tricks, and traps for Realtors and investors...

Short Sales and Valuation Models

When it comes time to prepare a short sale offer, many novice investors or buyers are uncertain how to demonstrate a proper valuation model. Chances are your bank will prefer one method, the property tax office another and (of course) you will want to use the model which most benefits your position.

Take time to run various scenarios before making your final offer or when presenting your financial portfolio for review. Depending upon the situation, the numbers can present a dramatically different picture.

Here are a few alternative valuation models to consider:

Replacement Cost. This works very well when adding an older property or a major "fixer" to your portfolio. For example; an average price of a 1,000 square foot home in the late 70's or early 80's was often only $40 per square foot or $40,000. Today, the starting price to replace the same home would be at least $100 per square foot or $100,000. To calculate the replacement costs, you can use insurance industry averages or calculate the current cost to rebuild the property on the same lot including impact fees, labor, supplies, taxes etc...

Tax Assessed Values. This can work for or against you so be cautious. Properties that were recently sold at higher prices may have inflated tax assessed values which can make them appear more valuable than the current market price. On the other hand, when purchasing a short sale or foreclosure for resale, a high tax assessed value may make your asking price seem very competitive.

Comp Values. Most real estate agents use comparable sales data to determine home prices. Comp values are simply the average sales prices of similar sized homes within the same general area.

Income Potential. Another alternative valuation model is to determine the income potential of the property; essentially, what would the property rent for if placed on the market? If the rental rate plus anticipated vacancies, repairs, maintenance plus PITI would cover the mortgage then it is considered a strong "buy" opportunity.

Return on Investment or ROI. Another common method typically used by commercial investors is to calculate the return on investment or ROI. Using a simple example, if the total out of pocket cash expenditure was $20,000 and you made $2,000 then the ROI would be 10 percent - a rate considerably above the stock market this year!

Whatever valuation model you select, remember to maximize the numbers when showing banks or financial institutions your numbers and minimize when negotiating the purchase price of a property.

More tomorrow...

See you at the top!

Market News & Commentary Compliments of My Friend Chris McLaughlin of ShortSalesRiches.Com

2008-09-25T08:29:00.001-07:00

Market News & Commentary by Chris McLaughlin

The Presidential candidates both fell over each other today trying to see which one could be the most bipartisan. Democratic nominee Barrack Obama called Republican nominee John McCain offering to issue a joint statement on the proposed Bailout plan. McCain then beat Obama to the punch a few minutes after the phone conversation and announced to the media that he was all for a joint statement, while also suggesting that the debate this Friday be delayed so that they could work together on the economic problem the country faces. "It has become clear that no consensus has developed to support the administration's proposal," McCain stated. "I do not believe that the plan on the table will pass as it currently stands, and we are running out of time." McCain said he would return to Washington this Thursday to focus on putting a deal together. No word yet on Obama's plans.

In real estate news, the National Association of Realtors (NAR) announced that national home sales dropped 15% in August from the year ago period and the median price declined 9.5% to $203,100. There was a 2.2% decline for the August over July period. Lawrence Yun, NAR chief economist, noted that interest rates rose in August from July, but the recent bailout of Fannie and Freddie has led to a significant drop in interest rates, which should help housing affordability.

"However, home sales will be constrained without a freer flow of credit into the mortgage market. The faster that happens, the sooner we'll see a broad stabilization in home prices that in turn will help the economy recover," Yun said.

Now for our educational tidbit today ... we're going to focus on things that show up at the last minute when doing short sales...

When it comes to short sales, there are a few lions and tigers and bears for the buyers to be aware of but with a little planning and preparation you will have nothing to fear. In fact, use this quick checklist to stay alert to potential profits while walking away from common pitfalls that trip the unsuspecting.

1. Taxes. Taxes come in all shapes and sizes when it comes to short sales, bankruptcy and foreclosure; from property taxes to Federal Income tax liens, the property may be encumbered by a variety of taxes which could impact the deal. While property taxes are relatively easy to deal with, large Federal income tax liens may not be worth the hassle and headache required to clear the property, although we have done several where the US Treasury was willing to do a lien release (and partial lien release). Do your homework to determine the viability of the project and be sure to set aside funds to cover any taxes that become your responsibility with the transfer of the property.

2. Liens. Make no assumptions when it comes to liens; even brand new homes may have mechanics liens from builders or developers that failed to pay sub-contractors. Homeowners may have contracted improvements or work ranging from simple repairs to full blown upgrades. Other common liens include HOA fees, utility assessments, etc... Liens often become the responsibility of the buyer so take time to investigate potential liens when negotiating for the purchase price of the home. And I can tell you one thing about HOAs: they are a pain! Think about it: these typically are retirees with way too much time on their hands. They will spend $2,000 in legal fees putting a lien on a property for a $350 lien. I've seen it time and again. Recently we faced a situation where the HOA wanted to charge $200 for a payoff letter that would be given to our title company. I always advise my clients that if they are able, PLEASE STAY CURRENT on HOA fees, they are more trouble than they are wo
rth when it comes to eliminating them at closing.

3. Permits. Improper work permits, zoning violations and other irregularities have resulted in higher than anticipated expenses for more than one buyer; understand what work was done, by whom and in accordance to what standards before making an offer. Work performed without proper permits or out of accordance to modern building standards should be considered a liability rather than an asset in today's competitive market.

4. Easements & Restrictions. Know what you are buying before making an offer. Although it sounds simple enough, irregular parcels, easements and other restrictions can be tough to track down especially in rural areas or when property was transferred within a family. Homeowners associations frequently place restrictions on the use or transfer or property which may also impact your plans - take time to understand what is and isn't allowed before making an offer.

5. HELOC's, 2nd's and Other. Distressed homeowners may have Home Equity Lines of Credit, 2nd or even 3rd mortgages plus a host of other potential liabilities that could impact the deal. Make a point of understanding - and explaining - how each is likely to impact the outcome of the deal for you and the current owner. Not only is it the right thing to do but it also increases the likelihood of a successful closure. I know of one sad situation where a homeowner was unable to make their first payment but had enough to make their payment on the 2nd. Not understanding the priorities of lien, the homeowner stayed current on their 2nd mortgage but not on their first! It is important that you NEVER tell any client to not make their payments, but in a situation like the one described you can explain lien priority and the client can draw their own conclusions.

More tomorrow...

See you at the top!

Chris McLaughlin, J.D., M.B.A.
web: http://www.shortsalesriches.com/welcome.html
e-mail: info@shortsalesriches.com

P.S.: Did you hear about our amazing Webinar that we're doing tomorrow night at 9 PM ET (6PM PST)? It is f.ree of charge to you! Nathan Jurewicz and I will be live on the web explaining the Top 5 Traps to Short Sales Investing, and we'll have some new information that you won't want to miss out on. We only have room for 20 more seats, so if you're interested please go now to: https://www2.gotomeeting.com/register/798484502

P.P.S.: Have you thought about building an investor-focused short sales business? There's never been a better time. Go now to http://www.shortsalesriches.com/html and take action today! Call me on my cell at (863) 698-6592 if you have any questions. Call anytime.

In this edition of the President's Podcast, NAR President Dick Gaylord sits down with NAR Chief Economist Lawrence Yun to discuss what is happening in

2008-09-24T17:19:00.000-07:00

Real Estate vs Bonds and the Flight to Safety

2008-09-23T15:51:00.000-07:00

Wall Street continued to send its messages of anxiety to Capitol Hill today, with the Dow Jones Industrial Average dropping 161.52 to 10,853, or 1.47%. But in a positive sign for the Bush Administration, legendary investor Warren Buffett told CNBC's Becky Quick, when asked about the $700 billion bail-out: "It's what I would do if I were there."

In real estate news, the Office of Federal Housing Enterprise Oversight's House Price Index showed that home prices slipped 5.3% over the last 12 months ending in July and slipped .6% from June to July. This is the largest decline since another period that ended in April 2007 (the index began in January 207). All regions were affected, giving further proof that the decline in prices is a national rather than regional issue.

Now, on to today's real estate educational tip...

Real Estate versus Bonds and the Flight to Safety

The recent financial crisis has many investors seeking "safety" above returns as the emphasis shifts from creating above average returns to preserving capital. As millions of Americans watch their stocks, bonds, retirement accounts and general investment portfolio's drop by 10 or even 20 percent (or more) they are turning to the safety of Treasury Bonds. Is this the best an investor can hope for? Is it even wise? Let's take a critical look at short sales versus the "safety" of Treasury Bonds to see if the numbers really add up.

Treasury Bonds

The flight to government securities has taken on a new urgency as investors seek safety above returns. While it is true that the principle amount is guaranteed by the "full faith and credit of the United States government", not everyone would agree that government bonds are truly safe. In fact, some may argue they are some of the most risky investments possible.

Few people would argue the low yield of Treasury or Savings Bonds leave much to be desired especially when adjusted for inflation. Even if you agree with the governments estimated rate of inflation as recorded on the CPI, the real return on government securities is close to zero...in fact, last week it went negative for a short period! Since inflation is not calculated into the "profit" but rather the nominal rates only, taxes earned on the "profit" further reduce yield leading to an actual loss of purchasing power. Let's use a deliberately simplistic example to demonstrate.

Assume you had $100,000 to invest into treasury backed securities with a current rate of inflation at 5 percent and a yield of 4 percent. At the end of one year, the balance in the account would grow to $104,000 showing a "profit" of $4,000 which is then taxed at a minimum of 15 percent or $600 for a total of $103,400.

However, inflation of only 5 percent (the government estimate is higher and most analysts put it into double digits) means that $103,400 can now only purchase $98,230 worth of goods. In only 12 short months you have actually lost nearly $1,800 of purchasing power. Unfortunately, the actual numbers are much worse since inflation is rising rapidly. As the real rate of inflation approaches double digits, the actual loss of purchasing power can reduce your investment by half in as few as five to seven years!

Short-Sales & Real Estate

Now let's examine real estate. Let's assume you had the same $100,000 to spend and used it to put 20 percent down on five short sale properties (a nice hefty sum to be sure...and with the Short Sale System something you can likely avoid) with an average price of $200,000 each. Let's further assume that each of these properties was formerly priced at $250,000 and have each lost $50,000 prior to being indexed to the current rate of inflation. Since this is a short sale, we will assume the sales price is close to the actual value of the property today but notice, even if it continued to fall for a short period of time, you have other options available to offset the losses (tax incentives for example).

You now control $1 million of real estate. "Real" or physical assets tend to increase in value with inflation as it drives the cost of goods and services to higher and higher levels. Using the same 5 percent rate of inflation, the holdings would grow by 50k in just the first year alone...nearly ½ your total cash outlay!

This is a very simplistic example but it demonstrates the power of inflation to build or destroy wealth. Throughout history there have been two primary means to building wealth in this nation: building a corporation or building real estate holdings.

So where do you go with this information? What are you doing right now to help investors understand that it is time to move money away from equities and into real estate? Are you continuing on the sidelines of real estate hoping for a market rebound, or are you mastering the market of the moment and learning everything you can about short sales and REOs? I hope it is the latter.

See you at the top!

Republished with permission from the following:

http://www.shortsalesriches.com/welcome.html

King Henry & The Great Bailout: What's next for Short Sales???

2008-09-22T16:03:00.000-07:00

Dear Robert,

You gotta love John Stewart regardless of your politics. He kinda summed it up best:

"Funny story. You know all that money that we've been giving to the banks. They don't have it anymore." -- John Stewart, The Daily Show

Before we get started, I think it is important that we talk about real estate, Realtors, and investors. Frankly, we got into this business because of the freedom it gave us, the tremendous satisfaction of being our own bosses, and the fun of closing the deal. Most of us never really enjoyed doing HUDs and preliminary closing statements; we don't particularly like math, right? Hey, I have a MBA from Georgetown, but even I don't really like math that much.

So what I'm about to talk about doesn't involve a bunch of math, but it involves some concepts that every single real estate professional needs to understand. Why? Everyone is going to be talking about this, and you need to understand it! You need to understand why there is a crisis in confidence, why capital markets are frozen, and how this all impacts housing and Main Street, not just Wall Street. Arguably the most powerful man in the world is not George Bush today, but rather US Treasury Secretary Henry Paulson. You're going to start hearing him called "King Henry" and other terms indicating his power and the rise of big government ... but you need to know why. It is time to get educated as a real estate investor on topics that really matter to your bottom line. He's gone from relative obscurity to a name that will be as well known as Obama or McCain before this is all over.

Let me be very clear. This is the worst financial crisis our nation has ever faced since the Great Depression. We're talking about a lot of things in jeopardy. Home loans, retirement accounts, 401(k)s, pension funds, credit card debt, and job creation. So please forward this e-mail on to your colleagues at your real estate firm. As long as you provide attribution to www.shortsalesriches.com/blog you can post this anywhere and everywhere. My goal is real estate investor education ... and hey, if I sell a few more courses of our short sale system courses, all the better.

Now, let's get busy talking shop...

I received an interesting question from a reader over the weekend:

"Chris, you are a lawyer, so can you tell me what the difference between the RTC that helped bail out the S&L and with this proposed huge $700 billion bailout. How will it affect me as a real estate investor doing short sales? How will it affect the realtors that I use to help re-sell my properties? Will we have less inventory?"

First, let's make sure folks understand the difference between the RTC and the proposed bailout. When the RTC was formed, it actually took possession of the assets and sold them. They would hold auctions and if you can recall, they had some nice fire sale prices for them.

Have you ever done a short sale and the loss mitigator says "Well, I have to check with the investor and I'll get back with you..." You see, the mortgage that Countrywide might be negotiating isn't necessarily owned by Countrywide Home Loans. It could very well be Mortgage Backed Security #122433542 owned by a Singapore or Hong Kong investment bank for all we know.

In this case, the government isn't going to own real estate. It will own the actual derivatives or securities that own the real estate. They will then give this mortgage backed-security to another lender to run on their behalf. So perhaps the government will say, "Ok Goldman Sachs, you run this $60 billion dollars worth of mortgage back securities on our behalf." So who wins? A lot of people. The bank or investor that is saddled with securities that aren't liquid will now have a purchaser - the government. Then they can turn around and get hired by the government to sell these. They then continue to hire realtors to perform REOs and continue to hire loss mitigators to get the pre-foreclosures off the books, too.

But let's add up our spending related to bad home loans, ok?
$700 billion for mortgage assets
$85 billion for AIG
$300 billion for Fannie Mae & Freddie Mac
$300 billion for FHA insurance for loans
$29 billion for Bear Stearns
For a total of approximately $1.3 TRILLION dollars. Wow, that's a lot of cash huh?

But before you start thinking we're all spending this money, let's remember that King Henry used to be the CEO of Goldman Sachs, the venerable real estate investment firm. He doesn't like to leave money on the table or lose it. So the $700 billion for mortgage back securities isn't a total loss of $700 billion. The government will buy them cheap, then try to resell them at least for what they bought them for. The government is buying illiquid assets which are clogging up the financial system.

The taxpayer isn't necessarily on the hook for $700 billion. This is money purchasing illiquid assets. The assets will be held and resold. The ultimate cost will be well below $700 billion. The effort is to stabilize the market, not to solve the crisis right away.

How will this impact us as realtors and real estate investors?
Folks, we just received another gift of the market shift. Why? Now you're going to start seeing banks actually lend again. Within the year you'll see banks come out with loan products that compete against FHA. Why? Now that their balance sheets will be improved, and the financial system will get unclogged, the banks will begin to lend again and take some amount of risk. So that person with a 700 credit score, who can't obtain 100% financing but has a track record of making her payments, will get that loan again.

So financing is going to become more available ... but guess what else is going to happen? In my opinion, more and more Americans are going to fall victim to this economy. Oil just spiked with a record $25 to $130 increase today over all the anxiety surrounding this bailout. The Dow Jones Industrial Average tanked 372 points today (Monday). Consumers just don't feel "wealthy" anymore as the equity in their home ... as well as the equity in their 401(k) has vanished. So get ready for a lot more short sales ... and a lot more REOs. We're in this for the next few years at minimum. That's great news for Realtors who are focused on this market and great news for real estate investors. For others ... well, we won't go there.

More tomorrow ...

Happy Production!!!

P.S.: The best way to get ahead of the curve in this economy is to master the market of the moment. That market is short sales and REOs. If you've been sitting on the sidelines and want the competitive edge to get your business back up the speed and start making serious money, check out http://www.shortsalesriches.com/welcome.html

Short Sales in Real Estate vs. Short Sales on the Stock Market - An Explanation

2008-09-18T16:46:00.002-07:00

News & Commentary, September 19th, by Chris McLaughlin
http://www.shortsalesriches.com

What a week! Aren't we glad it is Friday? If you thought as a Realtor or real estate investor you had a tough week, imagine if you worked at Lehman Brothers, AIG, or any number of major financial institutions. It was truly a historic week. And many are glad it is over.

But today was a better day than most this week. Wall Street investors applauded US Treasury Secretary Henry "Bail 'Em Out" Paulson after he announced yet another massive bail out initiative. He's bailed out Bear Stearns, Fannie Mae, Freddie Mac, and AIG. And today Paulson announced that he would form a new entity similar to the Resolution Trust Corporation (during the S&L crisis in the late 80s) that would oversee the orderly liquidation of bad mortgage related debts. This was by far the biggest move to date, as Paulson suggested that it would be "hundreds of billions of dollars." But specifics weren't available, and Paulson plans to meet with members of Congress over the weekend to start shaping the plan.

What else happened? Well, it looks like Securities & Exchange Commissioner Christopher Cox didn't like hearing chuckles from all his friends that Presidential Candidate John McCain would fire him if elected President (I guess we know who Cox will vote for in November, huh?). So Cox made a dramatic move today to show that the SEC is doing something: banning short sales of 799 financial stock.

"This action, which would not be necessary in a well-functioning market, is temporary in nature and part of the comprehensive set of steps being taken by the Federal Reserve, the Treasury, and the Congress," Cox said. The ban went into effect immediately and expires at midnight on October 2, 2008.

NOTE: THIS HAS NOTHING TO DO WITH REALTOR AND INVESTORS NEGOTIATING A SHORT SALE, OR REDUCTION IN PRINCIPAL AMOUNT OWED ON A LOAN.

Let me make this very clear: this ban on short sales has nothing to do with real estate short sales that we're primarily focused on. PLEASE FORWARD THIS E-MAIL TO REALTORS AND INVESTORS YOU KNOW, AS THERE IS MASSIVE CONFUSION RIGHT NOW. A short sale when it comes to the stock market is generally considered this: short sellers borrow stock in a company that they don't actually own and then sell it, hoping that they can buy the stock back at a lower price and make a spread on the difference. This leads to wild swings in a stock price, and perhaps an exaggerated movement--and such was the case this week when financial stocks plunged.

And a final note... As I was walking down the hallway, one of our realtors here at Keller Williams, Alison Terry, grabbed me and said: "Hey Chris, doesn't this meltdown on Wall Street mean that more people are going to be interested in real estate again?" To which I responded that she needed to go to my blog, since I mentioned that earlier in the week. Folks there is only so much gold someone can buy. Americans aren't stupid, they are incredibly smart. They will begin moving more and more assets over to things they can touch and feel. They can't touch and feel stock in Morgan Stanley, but they can touch a foreclosure they bought on Morgan Street and Stanley Drive, right?

So, stay tune in for more commentary and announcements next week. It has been a truly exciting and memorable week. And real estate will be a huge beneficiary of all the events of late.

This posting compliments of www.shortsalesriches.com/blog.

I'm Loving This Market, More and More Each Day!!!

2008-09-18T16:46:00.001-07:00

Well you don't have to worry about AIG bringing down the Dow Jones Industrial Average anymore...the Ritz cracker just ate AIG. Yep, Kraft Foods will replace AIG in the Dow Jones next week. We've gone from insurance to mac and cheese. At least my 3 kids, all under the age of 4, will be happy.

And President Bush attempted to calm markets as well and indicated that the government bailouts of Fannie Mae, Freddie Mac, and AIG were essential to keep the economy sound. "These actions are necessary and important, and the markets are adjusting to them," the President noted.

Adjusting? Panicking seems more like it, huh?

Washington Mutual continued to find itself a suitor today, but The Wall Street Journal reported that Citigroup didn't want to get engaged just yet. Morgan Stanley is rumored to have been thinking about dating and possibly proposing to Wachovia Bank, but a few Asian banks--and perhaps that Chinese government itself, might come to the rescue of the firm.

Politics took center stage today as well. Republican Presidential candidate John McCain, seeking to put some distance between himself and President Bush, said he would fire Securities and Exchange Commissioner Christopher Cox. The chairman of the SEC serves at the appointment of the president and in my view has betrayed the public's trust," McCain stated. "If I were President today, I would fire him."

How does this affect Main Street? Well money markets are getting a little jittery these days. These funds invest in short-term corporate and government bonds, but they have taken a hit as of late due to significant redemptions. The Primary Fund RFIXX went below a benchmark of $1, which meant that if someone held money in these funds they would actually lost money, not make money. The Primary Fund had around $40 billion in withdrawals since last Friday. And Putnam Investments said it was now closing its $15 billion Prime

What good news was out there? In a move reminiscent of the Resolution Trust Corporation (remember the good ole' days of the S&L Crisis), US Treasury Secretary Henry Paulson is developing up a plan to take the bad debts from banks and investment houses and package them up for an orderly sale. That sent stocks higher today, with the Dow Jones finishing the day up over 400 points.

So let's get this straight. Mom and Pop don't have much money anymore, but what little money they do have is now losing money in what some folks thought was risk free, a money market fund, for the first time ever. Major financial institutions like Morgan Stanley and AIG are teetering. Credit has tightened beyond all recognition and the thought of getting a loan that isn't government backed is laughable.

But I still hear from some Realtors that foreclosures are just gonna be here for just 1 more year. Well, if you think they aren't here for the next 3 years, in this economy with this type of financial turmoil, you might as well grab some of those Ritz crackers and have a pity party now, because it isn't going to happen.

But it is the single biggest gift many of us will ever be given in our lifetime. Wherever the public runs one way, I say run the other.

So remember ... in this market, you can now buy low, and not sell high, but sell fast. And that means less risk, less holding costs, and money in the bank. But you have to do more than read this and agree ... you need to take action, too.

And as the headline says, I'm loving this market more and more each day. The real estate market, that is.

Some Important Words for These Troubling Few Days

2008-09-18T16:46:00.000-07:00

Alan Greenspan says that this is a once in a lifetime financial crisis. Then why is someone I know making more money in this crisis than ever before? Well, read on ...

And I know what you're thinking. "What's it going take to fix this mess?"

I have the answer ... and if you're reading this, you are probably part of the solution. Read on ...because the answer might surprise you!

But first, let's recap. The Dow Jones Industrial Average tanked again today. It wasn't pretty. It lost 449 points, or 4.09% of its value. And Uncle Sam came to the rescue again.

This time, however, it is serious. Helping Bear Stearns out was one thing. Giving investor confidence to Fannie and Freddie was another. But all of a sudden, the perfect storm developed and Merrill Lynch and Lehman Brothers were is trouble. The bull lost its horns and is now a cow, out to greener pasture somewhere...with plenty of foreclosures around the farm to boot.

Merrill was saved by Bank of America, but Lehman is done and sold some assets to Barclays today. Now the bloody streets get even worse...Morgan Stanley tanked 25% today. Goldman Sachs plunged 17% today. All my buddies from Georgetown are freaking out today.

Why? Well, the AIG mess is quite a mess. We're talking over $1 trillion in assets that almost went on the auction block for pennies on the dollar. That would spell financial ruin the likes we haven't seen in a century. It would make AIG's 74 million clients a little panicky, too, don't you think?

AIG still will be selling its assets, but in this case they'll be doing so to pay Uncle Sam back, rather that giving folks a free to all in a liquidation. So thanks, USA, for backing AIG with $85 billion.

What happened in real estate today (of course everything that's happening is related to real estate). Housing starts for August dropped to 17 ½ year low the U.S. Commerce Department reported today. The seasonally adjusted annual rate was 895,000, which is off from the estimated 950,000 and represents a 6.2% drop.

But, as long as you are not a homebuilder, we in the real estate world know that this is actually a good sign... meaning that in order to recover, this is the medicine we need. We need less new home inventory so that we can move more of the existing inventory we have, and to create an equilibrium of supply and demand. A new house just isn't going to compete against a bank-owned 2007 or 2006 house that is 30% less than the cost of construction. Starts on single family homes were 33% below August 2007 levels at 630,000.

Ok, but Robert ... you're the guy that's screaming that this is the biggest opportunity ever. So where's the silver lining you ask?

The Mortgage Banker's Association reported that loan applications jumped 33.4% to 661.7 just last week, its highest level since May 9, 2008. This shouldn't be too much of a surprise because the government bailout of Fannie and Freddie gave more confidence to the market for mortgage backed securities. So rates dropped. This is good news for Realtors, good news for lenders...and perhaps good news for new home builders going forward.

And guess what? When equity markets are awful, and investors are looking for hard assets, where do you think they are going? Well, precious metals that's for sure (gold had its best day ever today, up 11% to $80/ounce). But don't forget about bricks and mortar. Some investor pulls out $500,000, does a self-directed IRA into real estate, and gets a 8% to 10% return on the cash just based on rent alone. Then they get the upside appreciation, too.

I'm telling you. Read me loud and clear: when financial markets plunge, the real estate market will be the beneficiary. Just watch. Only so much money can go to gold. Or better yet, start taking action!

So who gets us out of this mess? You do. If you're reading this, you're probably a real estate agent or investor. Once you get going, and do your thing, and start telling people that the real estate market is A LOT more stable than the stock market, you'll begin to make sense.

And guess what else? Banks are tanking. They have to unload nonperforming assets. So short sales will become easier. REO's will become plentiful. And realtor bank accounts will start filling up, not depleting.

So hang in there. Sure it is painful for your 401(k), but you better be able to make it back in spades with the opportunity you've got in front of you.

Go for it!

Reverse Diabetes in 30 Days

2008-08-14T14:29:00.000-07:00

Click Here to See the Trailer for "Simply Raw: Reversing Diabetes in 30 Days"

2008-08-06T18:46:00.001-07:00

The Comeback Mindset in this Market

2008-07-09T11:45:00.000-07:00

Sooner or later we all have challenges in the real estate market. It happens to everyone. At some point we all wind up with our backs against the wall and need to make a comeback. This market has proven that all too often, even to some of my most successful agents that I coach. So what do we do when this happens? Here are some points to help out when you sit and wonder, “is this business for me”.

Following these plays will determine if you are really cut out for success!

Round 1: Your Plays
- The heart of resilience is optimism.
- When you are down, other people will write you off. Don't let them define you.
- Get mad at those people saying you can't do it. Let it motivate you.

Round 2: Your Plays
- Allow yourself to feel bad for a little while.
- Know exactly what you are trying to accomplish.
- Sometimes you can learn from failure... sometimes you have to just write it off.
- Think like a boxer... when folks think you're down and out, they'll leave you an opening for a counterpunch.

Round 3: Your Plays
- At the heart of every comeback is doing the right thing. Have the courage to make the ethical decision.
- Manage your darkest fears by doing something about it. Take action!
- Taking risks is a habit you can teach yourself by saying "What is one risk I can take today?"

Round 4: Your Plays
- Understand what got you to where you are. Stay true to your core.
- You have to stay focused and get past the denial of what got you in trouble.

I know this market “can” be challenging. I also know it can be the most “rewarding”. I know of agents who are actually thriving in this market and learning skills beyond what they thought possible.

Always remember, it is you and only you than can determine your success. How much you believe in yourself, will determine your ultimate outcome. And never look at failure as a failure, but as a learning experience. Remember, when you see someone that is successful, you probably see someone that has experienced a lot of failure.

Happy Production. And always say to yourself, ALL IS WELL.

SELLER FINANCING - A way around the mortgage frenzy

2008-06-17T07:49:00.000-07:00

I saw this posting and I had to share it with you. It was origionally posted by Emerging Markets Group. Happy Production

SELLER FINANCING - A way around the mortgage frenzy

Posted by Emerging Markets Group

In todays mortgage frenzy it is becoming more evident that qualifying for a mortgage loan can be complicated, and even quite stressful. This gives home buyers and real estate investors a reason to start looking for other ways to get financing on properties. There is still FHA financing, but what if you are an investor or you already have an FHA loan? In today’s market is extremely important to know and maximize the options of SELLER FINANCING.

The concept of seller financing is really quite simple. However, very few people really understand Seller Financing or how to structure a deal. Because of the demand for information, we have included a special post to meet the education demands of many. The material we have included is intended only an introduction to the possibilities of lay within the realm of seller financing. Please feel free to contact us with further questions or creative ways to structure a deal.

You may ask…WHAT IS SELLER FINANCING?

Seller Financing: A "creative financing" technique in which an owner sells property, usually real estate, to a buyer. This technique is often used if the market interest rates are too high for the buyer and the seller does not require principal from the sale. The title or deed transfers only at full payment of the loan and any foreclosure results in the property reverting to the seller. Seller financing was very popular during the 1980s when real estate values escalated. Buyers used seller financing to arrange "no money down" purchases of real estate.

Also, at some point, many people may tire of managing their own properties. They are tired of dealing with tenants and the necessary repairs. Perhaps health problems are forcing them to slow down. They want smart, safe investments that are less management intensive so they can relax, travel, and enjoy life.

You can turn your best investment into an even better one by thinking of creative Seller Financing strategies. This will allow you to turn real estate into a paper asset that is still secured by real property. If you can structure a seller financed deal properly, it can be one of the safest investments in the market today.

Here are some of the benefits of Seller Financing

You can defer capital gains

You typically get the house sold much quicker

You can allow your equity to continue working for you, often at interest rates higher than a bank would yield

Get a good cash down payment now

Create residual income without the hassle of being a landlord or property manager. Hassle free income for the term of the loan.

The note is secured by a property you personally understand and have owned.

You can often collect more on the interest than you would from renting out the unit

You no longer have to worry about maintaining the property or the tenants

Property taxes or insurance are now the responsibility of the new own

If the buyer stops paying, you keep everything and regain ownership of the property back

If you or your heirs ever need money, you can sell all or part of the note for cash

Any questions or for Seller Financing strategies please email info@investemg.com

Keller Williams Offices shine on Industry Surveys RISMedia Power Broker Report and Survey

2008-05-20T13:52:00.000-07:00

TOP STORY: Keller Williams Offices shine on Industry Surveys RISMedia Power Broker Report and Survey

Every year, RISMedia and REAL Trends release two of the real estate’s most comprehensive surveys: the RISMedia Power Broker Report and the REAL Trends 500. Both surveys rank the largest residential real estate brokerages in the U.S. based on both transaction sides and sales-dollar volume, and these reports are frequently used as referral tools and are referenced by thousands. This year, Keller Williams stormed onto the lists with a very strong showing.

KW offices dominated the Power Broker Report – with more offices listed in their top 700 list than any other franchise brand. The survey also named Keller Williams Realty as the industry leader in terms of number of agent teams. And, 102 KW offices were listed in the Companies to Watch section – making up 55% of the total list!

As for the Real Trends 500, which lists the top 500 brokerages in the nation, Keller Williams Realty had the second highest amount of offices listed both transaction sides and sales volume, among the top franchise brands.

Even further proof that it's always a great day at Keller Williams!

To find out more about these lists, visit RISMedia’s Website or REAL Trends’ site.

Dare to be Red

2008-05-14T16:23:00.000-07:00

How to overcome the misconceptions about the "credit crisis"

2008-05-06T12:22:00.000-07:00

Overcoming the misconceptions about the "credit crisis"

You’ve watched the news and read about it in the papers. You know, the “credit crisis” and how buyers need 20 percent down in order to buy a home? And even if you found a buyer with 20 percent down, lenders aren’t making loans anyway. So, why bother, right? Wrong!

We’re right smack in the middle of what just might be the biggest disservice ever perpetrated on potential home buyers. It seems the press just can’t get enough of all the gloom and doom in the housing industry. The fact is that mortgage money is as available today as it was a year ago and loans are being made this very moment with little or no money down. And, no, platinum credit isn’t required. You just need to know where to look. Who are these lenders? They’re right down the street.

Federal Housing Administration (FHA) loans are exploding onto the mortgage scene; recent estimates are that one out of five mortgages are FHA loans. FHA loans never went away, their reemergence is a result of the collapse of the sub-prime market. FHA doesn’t technically have a minimum credit score, although, in practice, lenders won’t approve an FHA loan with a credit score below 500. But that’s a far cry from the notion that an 800 score is the only thing lenders care about.

The best part? FHA only requires 3 percent down. 3 percent. And that 3 percent can come in the form of a gift or grant. FHA borrowers only need to have $500 in a transaction. All the while, FHA mortgage rates are as good or better than their conventional counterparts.

Low or no down payment, extremely competitive rates and easier qualifying. No wonder FHA is moving up the charts!

Why who you are in business with MATTERS!!

2008-04-30T12:05:00.000-07:00

Who you are in business with matters - how they treat you is critical to your success. Here are 20 important questions to ask about the real estate company or franchise system you are currently with, or considering joining:

Does the company allow you to build your own agent brand? Can you put your own logo, name, phone number and website on yard signs and in your ads? Can it be larger than or as prominent as the company's?
Does the company allow you to directly receive the sign calls or inquiries on your own listings without going through the up-desk or office switchboard?
When a person is seeking you on the company's local or national website, can they quickly (within to or three clicks) get directly to you, your own website and your own business phone number?
Can you do agent-to-agent referrals without going through the company's relocation division and paying them a portion of your referral fee?
If you decide to leave the company do they let you take your listings with you? Do they still pay you the same commissions you were owed on your pending transactions - without any penalties or reduction in splits?
Does the company seek your input and advice on important financial and policy decisions? Do you have a say in what goes on?
If you are a top producing agent, do you get to serve on a council that discusses and votes on company changes in policy and fees?
Does the company open its books and allow you to see and review monthly financial records - such as Profit & Loss Statements?
Does the company offer you an opportunity to share in its profits? Is the profit sharing amount greater than 30% of the company's net income?
Do you have the opportunity to earn residual income from the company that will contribute even after you leave the company or retire?
Does the company cap the money you pay it on an annual basis (Company Dollar), so that you do not have to keep paying them on all your production?
If you are affiliated with a National Franchise, do they cap your royalties (or service fees) annually, so that you don't have to keep paying them a portion of all your commissions?
Does the company allow you to earn 100% commissions without having to pay monthly fees even when you don't have closings?
Does the company provide a way for you to actually earn more than 100% - to be paid more by the company than it costs you to be with them?
Does the company provide all levels of sales and business training - from the fundamentals of real estate sales all the way up to hiring staff, building a team, managing your expenses and creating a business?
Does the company provide wealth-building information and training? Do they give you good advice and consulting on how to gain financial independence?
Do the leaders of the company take the time and make the effort to share with you research, strategies and systems that you can use to improve your business and your career?
Have the leaders of the company written best selling books that are used and respected in the real estate industry? Do they speak with knowledge and authority on the issues that matter to the agents?
Does the company have a set of written beliefs and values that it shares and sincerely seeks to live by? Does the company have a spirit and culture of teamwork and positive energy?
is the company clearly agent-oriented? Does it understand that the consumer selects the agent, not the company? Does that awareness show up in the way the company does business?

The answers to these questions may help you understand which company you want to be with - which one will provide the most support for achieving your own personal and professional goals.

The interesting thing is this: at Keller Williams Realty the answer to everyone of these questions is YES!!

For information on joining Keller Williams Realty, ask me. I'd love to share my story on how KW has changed my life and my career.

How a Mortgage Rate “Buydown” Can Help you Sell in a Slow Market

2008-04-16T15:51:00.000-07:00

I've discussed this before, but I wanted to mention this technique again. If you do not work with a lender who understands this, I suggest you find one ASAP. It can get those buyers looking for a deal to focus on the monthly payment rather than the loan amount.

A technique used in the 1980s during a slow housing market is emerging again by lenders who are trying to help move some of the unsold houses glutting local markets. This technique is called a mortgage rate “buydown.” Rather than lowering the asking price of a house, a seller offers a discount rate package that lowers the buyer’s effective interest costs and monthly payments during the first few years of the loan.

The most popular form of a buydown in the ’80s was a “3-2-1” on a fixed rate 20 year mortgage. In this instance, the seller agrees to pay 3 percentage points of the interest rate during the first year, then 2 percent during the second and 1 percent in year three. After that, the buyer pays the full rate.

If you had a house for sale at $210,000, for example, would save more money by offering the buydown rather than discounting the house price by $10,000. Over the course of 3 years, you would pay about $9000 and you would be getting the full asking price upfront. This is also a win for the real estate agent who will have a slightly higher commission. The buyer, who will not likely be enticed by a $10,000 discount on the asking price, would likely be more interested in saving on their monthly payments during the first few years.

In the current housing market, offering this type of mortgage rate buydown just might help you get your house sold at the price you want.

How Past Clients will be Grateful if you do this NOW!

2008-04-15T09:36:00.000-07:00

For most of us, calling our past clients can be a great way to drum up extra business. Calling them has been a tried and true way of increasing production. But if you sold them something in the past few years that may have come down in value, you are probably apprehensive for fear that they might be mad at you. Right???

But in realty, you don't control the market. But you can be there to help out if their property values have come down. In San Diego at least, property owners can petition the tax assessor to have their property reassessed thus having their property taxes lowered. This is one way to show them that you want to be "Their Agent For Life."

Here is a simple script to call them to show that you care and that you are there to help out no matter what.

"Hi, ____________it's___________________. How's it going? The reason for my phone call is that it is the time of year that I offer all my friends, family and clients an evaluation of there properties to find the value. Would you like me to do this for you?

Client: Why?

The reason I do this is you may be thinking of refinancing or selling your home in the next year. Are you looking to refinance or sell in the next year?

Client: No

The other reason is with the change in property values, you may be able to have your home reassessed and pay lower property taxes. How does that sound?

Client: Great

Who else do you know who could benefit from paying lower property taxes?

It's that simple. It shows you care, gives you a reason to call and helps in your prospecting for new clients.

If you make a commitment to do this once a year to all past clients, you will be guaranteed to client retention and commitment as well as the opportunity to be introduced to new prospects.

Check with your local Assessor for forms. In San Diego, our file date is by May 30th in which property owners must file for appeal. You will also need to provide them with comps to show if their values have been reduced.

Happy Production

Homebuyer Qualifying Questions that Work

2008-03-30T16:53:00.000-07:00

These are a list of questions you will need to ask every prospect that wants to buy. This list is not inclusive, so feel free to add or take away.

Homebuyer Qualifying Questions

What type of property are you looking for?
What areas are you looking in?
Ask personal questions? Kids, dog, do you work locally.
What are your must haves?
What is your wish list?
What price range will you be looking in?
What is your time frame?
How long have you been looking?
What’s been holding you back?
Where do you live now?
Are you renting? When is your lease up?
Do you own? Are you selling? Do you need to sell to buy?
Have you listed it yet? Don’t try to get the listing yet. Work the buy half first get them comfortable with you, before you go there.
Have you been pre-approved?
Do you have a copy of your letter?
Could you bring it with you for my files or fax me a copy, because a lot of seller require buyers be pre-approved before setting up showings.
Have you been working with another agent?
Is there anyone else that needs to view the property?
Are you a first time buyer?
Do you fully understand the buying process?
Is there anything that would keep you from writing an offer if we found the right property?

Open House Language that Works

2008-03-30T16:51:00.000-07:00

Open House Language

Agent: Welcome to our open house. My name is Robert Schantz what’s yours?

Prospect: My name is Bill.

Agent: Nice to meet you Bill. Could you take a moment to sign in our guest book. At the Seller’s request all visitors must sign in before viewing the home.

Prospect: Okay Sure.

Agent: (as prospect is finishing up signing in the register). Bill I would just like to point out a couple of important things about the home before you go on your tour. (Remember to keep smiling)

-There is a finished attic up the stairs in the back so you don’t want to miss that.

-The laundry is in a closet in the hallway so feel free to open the doors to see that

And

-The backyard has a dog run built on the side of the home so please take note of that.

I will be available to you if you have any questions while your viewing the home and afterwards as well. I would also like to get your opinion on the home when you have finished viewing it.

Also, please stop by the kitchen and grab an ice cold water if you’d like.

Prospect: Thanks. I appreciate that.

(Agent now follows the prospect to the back of the home but hangs back a little so Agent is not hovering)

Prospect(while walking through the home) makes comments. Agent turns those comments into questions. For instance comment is made and Agent responsds : Yes, I see that and is having a XX important to you? Why? Or That’s true and would having a smaller xx be better for you? Why? Or Yes I see that and what about a large xx is unattractive to you? Or that’s true and what is the challenge in that feature for you?

At the end of the preview Agent asks the client for the feedback by saying, “ I’m glad you’ve had a chance to view the home and I know a couple of the homes features were interesting or not so interesting to you. Can you tell me what you feel are the homes biggest disadvantages?”

Turn these disadvantages into a discussion with the prospect that will help you find his/her true needs in a home and then discuss the inventory that you might think would be a match for this client. It will make you as an agent sound like a neighborhood pro. Once you’ve peaked the propect’s interest, offer to send them some additional information related to these items and get them to fill in more information on the sign in sheet. As they are doing this, ask them if they would like to set up an appt. to discuss their needs even further or if they would like to see a few properties with you.

Happy Production

What is your BIG WHY

2008-03-30T16:28:00.000-07:00

My Broker Leona Kline, who I draw upon great strength and conviction, shared with me the below article from a Bradley Thomas Newsletter. You've heard me talk before about a Big Why so I thought it would be great to share it with you. If nothing else, I hope you remember to always focus on your BIG WHY. In other words, WHY it is that you are in this business of Real Estate. By doing so, it makes it so much easier when you pick up that phone to cold call, knock on doors or all the other lead generation activities that you do or should do on a daily basis.

THE REAL CAUSE OF MOST FAILURES

"Nothing leads to futility and failure like the lack of a chief, strong aim,goal or purpose in life. In my classes, clinic and correspondence course, Ihave analyzed more than 2000 people. Eighty-seven percent were accomplishingless than their highest potential because they had no goal or vision to drawand drive them forward.

You'll never even know what your real power and possibilities are until youfeel that irresistible pull from an overmastering purpose from within,drawing you forward. That vision or goal, that purpose or feeling will actlike a magnet, pulling you from in front, instead of requiring a push frombehind. Your powerful subconscious mind will take over and replace the crudewill power and DRIVE AND DRAW you forward.

This dominant goal will relieve you of the source of petty annoyances,fears, hates, peeves, excuses, inhibitions, and complexes that lick littlemen. Whenever an obstacle crops up, you'll automatically think, "How smallthis petty piffle will look five years from today."

Your vision will carry you over obstacles like a jet bomber. It will freeyou from the paralyzing complexes and the picayune peeves that flattenfloundering floaters.

You'll automatically think with Sir Thomas Buxton, "The longer I live, the stronger becomes my conviction that the truestdifference between the success and the failure, between the strong and theweak, between the big and the small man, that separates the boys from themen, is nothing but a powerful aim in life, a purpose once fixed and thendeath or victory. And no perfect speech or manners, no culture or education,no pull or influence, can make a two-legged creature a man without it."

Happy Production and all my best as you focus on your BIG WHY.

Good advice for Clients that want to sell Short on their homes

2008-03-26T12:37:00.001-07:00

Have you come across seller's who will probably be short on a property if the were to sell but can maintain the property if they rent it out even though they might have a negative cash flow?? Now you aren't a financial advisor, but you can make a recommendation to them. Be very clear that they should seek the advice of a financial consultant.

First, see if they got into this property with zero money down or even got one of those exotic loans where they also financed their closing costs and even took money out. If so, these people are what we classify as investors. Have a frank conversation with them that as an investor, they rolled the dice and gambled and now they are the ones getting stung. And that's the way the ball bounces in the investment world.

Then, let them know that their time has come to pay the down payment. So if they don't want to damage their credit and go short, they can just continue to make up the deficit each month until it cash flows or can sell to cover the loan. It's that simple. Time to pay the piper as they say. Good thing is they rent it out they can deduct every expense on the property and depreciate it as investment property.

This was a big AHA for me when I heard this as it makes sense. You can't invest all the time and come out ahead. But, you can invest and learn a lesson the hard way. The trick is, learn from that lesson and don't repeat it.

Happy Production.

How to make phone calls without freezing up

2008-03-19T09:24:00.000-07:00

Our wonderful MAPS leader, Diana Kokoszka, posted this on the MAPS email and I wanted to share it with you because I know how hard it is as an agent to pick up that phone and make calls. When you do, just remember the following and it will make it a whole lot easier. You will also need to focus on your big WHY.

Diana, I want to make calls; I just freeze every time I go to pick up the phone. What do you suggest I do?

Dianna: First, I want you to remember that “Life begins outside your comfort zone.” It seems like anything we want in life we must stretch to grow. When you go to the gym you lift weights to help your muscles grow, you workout to help your heart grow strong. It is the same in real estate, you must push to grow. Now, how do you do that? Remember, “The truth will set you free but first it will upset you.”

1. Think of all of the possibilities that you create by picking up the phone. Is your mindset one of contribution thinking, “how many people can I help today,” or do you think, “oh my they are going to reject me,” or, “I will be interrupting them”? The first response is contribution the other responses are ego based and therefore the call is about you. I have found that when you come from contribution, you help people and when you come from ego, you repel people. So the fact remains: Come from contribution and call to see if you can help, or come from ego and make the call about you. If you would feel badly because someone lost thousands of dollars because they worked with a terrible agent then you are someone who would pick up the phone to make certain that person would know about you and how you can help them. If you don’t care then you will be the one who will never pick up the phone.

2. Ability: Do you have the ability to make the call? Do you know what to say? If not, get into coaching, The Language of Sales or practice your Scripts and Dialogues

3. Worthy: Do you feel you deserve to make a lot of money? Do you think your family deserves for you to make a lot of money? If you don’t find you feel worthy then say affirmations daily and get your thinking in the right direction. Maybe you need a check up from the neck up. Think Big! Think Possibilities and then pick up the phone because you deserve the money you will get from the service you render.

Good luck and Happy Production

Script to help with FSBO's.

2008-03-19T09:20:00.000-07:00

I've said it before, and I'll say it again. Besides FSBO standing for For Sale By Owner, I also call it Fastest Source of Busines Opportunity.

Here is a little script you can use when calling them.

FSBO Questions

Mr. FSBO how many calls did you receive last week?

How many were real estate agents?

Do the math and then say

So you had ___ potential clients call. Out of ___ how many came to see your home?

(regardless of what they say)
Are you aware of the 4 types of buyers?

(some of this taken from Jerry Bresser)

The first are serious and in a hurry, they may be relocating where they only have 3 days to find a home. Others may have sold their house last night and have to find a new home in the next few days.

The second kind are serious yet not in a hurry, they may be a first time buyers proceeding cautiously. Or they may be someone looking for that perfect home either way they want a Realtor to help them.

The third kind sometimes work with Realtors yet they do love FSBO's. They are investors and want to buy a home for 10 cents on the dollar. Have you had anyone call to see if you would take less for the home?

The fourth kind can't qualify to buy a home but they love to look at homes. Realtors won't work with them so they love to look at FSBO's. Do you see if Realtors have the serious in a hurry and the serious not in a hurry what kind of buyers are left?

If I could show you a way to make more money by having me sell your home are you interested?

Good luck with this and Happy Production.

Great Scripts for Creating Urgency to Buy

2008-03-18T09:54:00.000-07:00

Scripts for Creating Urgency to Buy

Buyer’s market = Right time to buy

Today’s biggest challenge is on the buy side of the business. There are some key things we hear frequently:

1. The media has created misconceptions about buying homes.
2. Buyers fear paying too much
3. Many buyers don’t have any sense of urgency to buy.

However, the most challenging aspect of making it in real estate today may not be the buyer’s mindset. It might be your mindset. Many agents think this is not a good time to buy.

Truth is though; many people are buying and selling homes in this market.

The solution: Visualize how you can succeed with buyers.

1. Be an expert on your real estate market and the economy.
2. LISTEN to your buyers.
3. Find houses that are priced correctly and in good condition.
4. Show buyers houses that match their needs and wants.
5. Assuage fears about buying.
6. Find solid financial institutions offering good, reliable mortgage programs.

This is a time to provide leadership for your buyers so they feel comfortable and are willing to make a purchase. As Dwight Eisenhower, former US President said, “Leadership is the art of getting someone else to do something that you want done because he wants to do it.”

This is a BUYERS’ MARKET. By definition, it is a great time to buy!!!

SCRIPT:

Mr/Mrs. Buyer, in this market, every house that’s a good buy is in the lower part of the chart. Those homes are IN the market. Buying today would be a great idea. The problem is that if you don’t buy one of those, they’re all going to be gone, because they’re selling. Some are getting multiple offers. And if you aren’t IN the market, then you’re going to miss the market. So you have to be looking and ready to act. When a house fits your criteria, and it’s a best buy, that’s when you buy. You don’t wait for the price to come down because the only ones that are going to come down are the ones that are overpriced. The ones that are currently priced right aren’t going down any further. They’re being bought.

Tip!

To get buyers to buy, show them houses IN the market and explain to them that houses IN the market sell fast. The best homes sell fast in any market.

Buyer Fear:

Interest Rates will drop.

Script:

Interest rates may drop and they may also increase. We just don’t know where they will go. Comparing current rates to the past thirty-five years, what is available now is good, and history shows that rates have rarely been better. When rates have been lower, it’s not been by much. What we do know is that rates are about the best they’ve been in thirty-five years.

Buyer Fear:

Home prices will drop further.

Script:

The media tells us home prices will continue to drop. The media looks for dramatic stories because that is what sells news. Newscasters can’t predict the future. They can only report on what has happened. Eventually home prices will increase. They always do over time. No one can predict when prices will hit bottom. We only know prices hit bottom after they start to rise again, and it is too late to buy at the lowest point. We also know many homes are selling for less than comparable properties sold for in the recent past. Combined with sellers who are willing to make concessions and low interest rates, it is a great time to buy.
Properties that are priced right sell quickly. It is only overpriced homes that drop in cost.

OR:

If we’re at the low or near the low point of this shift in the market, and you’re buying a house to live in and stay in for a multiple number of years, then five years from now, you’re not going to be sitting around saying, “I should have waited another month to buy the house because I could have gotten a slightly better price.” You’re just going to be glad you bought in this general time frame because your home’s value will have gone up.”

OR:

“Do you want to risk missing a house that is perfect for you because you’re waiting for a sliver of savings that may or may not be there?”

Buyer Fear:

Something better may come on the market.

Script:

Inventory is high. Buyers have many more choices than they had in the recent past. In this market, like any other market, the best houses (priced right and in the best condition) sell fast. Skilled buyer agents find the best buys for their customers. Buyers who wait will get to select from the leftovers.

Create a BEST-BUY list. The homes that are IN the market and have no problem selling.
Once a buyer becomes your customer (a person who has signed a buyer representation agreement), prepare the customer to act fast when you show best buys.

SCRIPT:

“Mr. /Mrs. Buyer, not every home on the market is a good buy. But there is a set of homes that really are, based on their price, their condition, and the motivation of the seller. And those homes are the ones that are selling. I’ll take you to see those homes and you have to be ready to act. When a house fits your criteria and it’s a best buy, that’s when you buy. You can’t expect the price to come down in the future because only the overpriced homes will come down. The ones that are currently priced right are being bought.”
When you find out about a great buy, contact your customers right away and have them see the property as soon as possible. Let them know how quickly the best houses go under contract.

SCRIPT:

“Hi Mr. /Mrs. Buyer, this is YOUR NAME. I’m sorry to interrupt you at work, I know you’re busy, but here’s the thing. A home that fits your criteria just hit our best-buy list. This is probably THE ONE. Our experience tells us it could be gone within a day. We can’t get out there fast enough and I don’t want to delay. Can you and spouses’ name take a long lunch to see the property?”

“You should bring your checkbook and I’ll bring the paperwork. Be ready to act. It would be hard to find anything that is better than this. If we miss this opportunity, I’ll feel like I let you down.”

Buyer Consultation

Ask about Their Needs and Wants

The majority of time in a buyer consultation is devoted to asking about lifestyle and what the buyers need and want in a house. Don’t stop at the first level of questioning, such as “How may bedrooms? Go deeper with questions to get at their real needs, values and motivation.

Questions to dig deeper

Script:

“What exactly do you mean by _________________? (e.g., large kitchen)”
“What does having ___________________________ do for you?”
“What does that look like to you?”
“Can you explain that in more detail?”
“How does that make you feel?”
“Why do you suppose that is?”

Ask about Their Motivation and Urgency

People buy homes for a reason. You should ask about their motivation because it’s an indication of their urgency.

The most common reasons people buy homes are:

Ø Relocation – buyers must move due to work or other changes in their lives
Ø Dissatisfaction – the neighborhood has changed for the worse, they are living with other family members, or they are too far from school or work
Ø Positive Live Changes – marriage, the arrival of a baby, promotion, inheritance
Ø Negative Live Changes – death, disease, divorce, loss of income
Ø Second Home – for retirement or vacation
Ø Previous Home Sold
Ø Lease Ending
Ø Investment

SCRIPT:

“Mr. /Mrs. Buyer, out of curiosity, do you mind my asking, what’s prompting your move?”

“What does the next home need to accomplish for you?”

“When do you need to be in your new home?”

“On a scale from 1-10, with 10 meaning you must buy a home as quickly as possible and 1 meaning you’re not sure you’ll really buy anything, how would you rate yourself?”

“What would it take to for you to become a 10?”

Listen to What They Tell You

If you spend a lot of time with a relationship up front, you won’t have to invest so much time later.

Buyers Who Want a Deal

In a buyers’ market, many buyers are looking for a “deal.” What constitutes a deal may vary from one buyer to the next. In that case, figure out what they are willing to give up.

Agent: Do you want a home for you and your family or do you want a deal? You can’t have both.

Buyer: We want a deal more than anything else.

Agent: Tell me, what is a deal to you?

Buyer: Getting below market price.

Agent: How far below ---10 percent, 20 percent, 30 percent?

Buyer: Twenty Percent

Agent: Okay, 20 percent below market price. That’s reasonable. I can find it for you. Do you want to do some work?

Buyer: Yeah, we’ll do some work.

Agent: Okay, great! How much work? Are you willing to paint and change carpet or do you want to knock down walls?

Buyer: We don’t want to knock down walls.

Agent: You don’t want to knock down walls. Okay. I think we can probably find something around 20 percent below market that needs paint and cosmetic work.

Your knowledge of the market and list of BEST-BUYS will help you find the best opportunities for your buyers.

Creating Urgency to Buy

2008-02-29T14:42:00.000-08:00

With all the national spot light on the real estate market thanks to the negative press from the media, finding buyers in this market and getting them to buy can be a challenge. With this challenge, here is some sage advice in how to create urgency in this all to scared market segment.

First, some perspective on buyer urgency.

The Challenge

The media creates misconceptions about buying homes today
Buyers fear paying too much
Buyers don't have any sense of urgency
Many agents think it is not a good time to buy

The Solution

Find and work with motivated buyers
Be an expert on the economy
Be an expert on your local real estate market
Listen to your buyers
Find houses priced correctly and in good condition
Show buyers homes that match their needs and wants
Assuage fears about buying
Find solid financing

So how does one become and EXPERT in the market

Invest time in research
Know the inventory of your farm and surrounding area by previewing properties each and every week. This will save yourself time and gasoline when you take buyers out
Take customers directly to the best buys
Buyers will have more confidence in you when you only show houses that meet their needs and wants

Create a BEST-BUY LIST

Where do you find the BEST-BUYS

REO's
HUD Exchange
Foreclosure Lists
FSBO's
Price reductions in the MLS
New homes on the market
Builder's promotions

Do your homework and track your best buys

Time on the market
List Price
Condition
Selling Price

Use your list

Don't give the list out, offer access to best buys
Show houses on the list to your customers - these are the houses that will sell fast

During the buyer consultation, you need to remember the following:

Ask about their needs and wants
Ask about their motivation and urgency
Listen to what they tell you
Discuss advantages of home ownership

When preparing to show what they can buy, remember the following:

Know what they need and want
Match their needs and wants to best buys
Get their feedback on homes

To facilitate their decision making process, keep the following in mind:

What they need and want
How features will improve their lives
Their motivation
Cost of waiting

Remove their fears of buying by:

Providing a CMA on each property that they are prepared to make an offer on
An appraisal

To help eliminate their fear of commitment, offer the following:

An option period to back out
A buyback guarantee
An offer to sell it for free within 1 year if they are not satisfied

To help them in their offer, consider these terms to make the deal fly:

Improvement allowances (carpet, paint)
Pay early move-out on renter's lease in the offer
Pay mortgat on buyer's home for a period of time
Pay buyer closing costs
Lease-purchase options
Mortgage buydowns
Seller financing
Extras (electronics, car)

The bottom line

Be an expert
Educate your buyers
Articulate why this is a great time to buy
Assuage buyers' fears
Create a best-buy list
Show houses that meet your buyers' needs and wants
Facilitate a decision to buy

Happy Production

How to Stay Up in a Down Market

2008-02-28T15:56:00.000-08:00

It has been a while since my last posting. Mostly because I went to the annual Keller Williams Realty family reunion in Atlanta, GA. Not only did I come back with a whole host of ideas for postings that I will be putting up in the next few weeks, but I also came back with the flu bug that has hit this country hard. That said, waaaaaahhhh, I am behind so bear with me as I share some great information with you over the next few postings.

My topic today is "How to Stay Up in a Down Market". It is apparent that the real estate market has shifted across the entire country and all agents are feeling its effect. But there are certain things you can do to get you through this time that will help guarantee your long term success in this business.

Here is a list in no particular order of importance, but things you need to remember as you go through your day. I'd like to credit alot of what I have hear from my colleague Rosemary West of the Rosemary West Team in Joliet, IL.

Bottom line is that your potential clients and prospects are looking to you as a leader. They are looking for someone whom they can trust to get their home sold or find them a great deal. We are here to educate our buyers and sellers. So, instead of painting a picture of doom and gloom, paint a picture of how smart money is buying this time so if you are in the market to buy, this is the time. And if you are in the market to sell and buy, you might not get what you could have 3 years ago but you will make up for it on the buy side.
Have a pro-active marketing plan for your potential listings. Be the expert and be prepared to spend the money necessary to get your listings sold. You have to be a problem solver and you have to be educated about the market in order to get a home sold. Know your comps for all your listings so you can price them accordingly to attract buyers. Well priced homes in great condition do sell in this market.
Don't take a listing from someone who is unrealistic about their price range. Be prepared to walk away and tell them that you hope they keep your name and number should it not sell with their first agent. This is critical. Listings require a lot of effort and it makes no sense to put this effort in if you price it too high.
Be busy doing the right things. What I mean by this is do the activities that are revenue producing. You have heard me talk about the 80/20 rule. 20 percent of your activities produce 80 percent of your results. The other 80 percent is just stuff that doesn't make you money like paperwork, answering emails, developing flyer's, marketing plans, etc. Only concentrate on the 20% that produces REVENUE.
Be the agent that knows the market value of a property. Overpricing a home is the oldest trick in the book just to get a listing. Be prepared to share this with a home seller and be prepared to walk away and wish them the best.
Be prepared with your very own Unique Selling Proposition. In other words, what makes you different than all other agents out there. Selling a home is no longer placing a sign in a yard and listing it in the MLS. It takes your strengths and abilities. It takes a great marketing plan to get a home sold. Have this down pat in your listing presentation.
Align yourself with your Core Advocates like a good mortgage broker, title rep and escrow company. If you are not asking these people for referrals, you are missing a great opportunity for referral business. After all, if you are sending business their way, they should be sending business your way. It's a two way street.
To capture buyers, use a great hook in all your ads like, "Ask me how you can save 1% on your first years interest rate on your new home purchase". People always want a deal and if this can entice them to call you, you should be prepared to explain to them how a seller contribution can buy down their rate for the first year and how you can write this in to their offer.
Show how you are prospecting for buyer's by actively marketing your listings. Show them all that you do to pursue every opportunity out there. Your marketing program should be a pro-active marketing program, not a passive marketing plan. By pro-active, I mean things like knocking on the neighbors doors to introduce yourself and telling them about your listing you have for sale in their neighborhood.
You get what you pay for. You deserve 6% commission in this market. Be prepared to only accept 6% and be ready to explain why now more than ever it is important to offer that full 3% to the cooperating broker.
Know how to explain to a listing what their home is NOT WORTH. It is not what they have in it, what the appraised value is, what it is assessed at, what they need out of it, what they want for it, what their neighbors house sold for, what it's insured for, what memories and treasures are in it or what the prices of homes are for where they are moving.
The true value of a home is, what buyers are willing to pay based on today's market, the competition, financing, perception of condition, economic condition, location, normal marketing time and acceptability to the market.
Explain how they can control the showing conditions, the price and the offering terms.
Be prepared to explain how you do not control the market, value or the motivation of their competition. You don't determine the market, you only analyze it. To explain this you can use the used car scenario. On a car lot, the shiniest car at the best price will be the one that gets the most attention.
Counteract what the media is saying by coming out with your own message. Be prepared to discuss all the good as you see it like:

Foreclosures are great deals right now
Quality homes in top condition that are priced right are still selling.
Fixer uppers that can be stolen from investors who have too many mortgages on them.
Buyers get what they want in most cases.
Interest rates are still at historic lows.
Seller buy downs can reduce first year interest rates to 4.5%
Investors can tap in to their home equity to purchase properties at great steals.

16. Rosemary taught me this geat phrase and I'd love it if you listen and heed this advice. She says that you have to have skin in the game. Put your money where you mouth is and show your sellers how your are spending money to get homes sold. It shows you are in the business 100% and are stepping up to the plate and continue to market as you have in the past. When you go in to these houses, you can talk to them about this and say, just so you know, I have thousand of marketing dollars being spent in the game before I even get to the table to earn my commission. So I'm trusting in your that we can price your home competitively to make it shine and get the home sold.

17. Be willing to work the Expired Market. There is no greater time to call on Expired Listings as there are more now than ever.

18. Don't work short sales. They are a pain and you never know if they will close or what your end commission will be.

19. If you have a lead, then you better be on that lead like a banana on a split. Leads are so few and so precious these days that it requires you to be quick and responsive to every lead that comes your way.

20. Finally, you have to have a positive mental attitude. Whatever it takes, you have to get yourself in to the mindset that good things are happening. Clients and prospects will feel this in your voice and actions. They want you to know you are projecting a confident situation in these bad times.

Happy Production. More to follow in a few days.

Sellers wanting to wait for the market to come back???

2008-02-06T16:45:00.000-08:00

Yes, how many times have you heard a potential seller or Expired Listing say they want to wait until the "market comes back." Great excuse but here is a way to overcome that objection.

Basically, you can talk about how every market cycles for about 7 years. In San Diego, this last cycle starting coming up in 1995. But in 2002, our wonderful banking system found a way to make it last longer, which I call the wonderful SUB PRIME discovery. Yes, believe it or not, I feel the banks are due what is happening to them. But that's another story. So, this cycle here as in probably most of the country topped out in 2005. Which means, if you do the math, 2012 is when it will start to rise again topping out again in 2019 provided the banks don't find another way or we forget about 2/28 hybrid-subprime financing.

You can also talk to them about unit volume. Annual home sales for a long time have been about 4.5 million annualy. Then all of a sudden in 2005 there were 7.1 millon in sales followed by 2006 with 6.48 million in sales. You can share this data with a client and ask them, "exactly which market are you waiting for to come back?" It will become obvious to them that they hey day years are an anomoly and that they might not happen again. It may be a long, long wait for the "market to come back."

Happy Production

Words to get a buyer off the fence and BUY in this Market.

2008-02-01T05:32:00.000-08:00

I got this from my Mortgage Broker Heidi Odish and I had to share it with you as it really brings up the points about why people should buy. In all markets, we want to buy at the bottom. But as I have said in the past, the smart money knows when to buy and it is doing so. I see it all day long with investors back in the market buying up foreclosures and market funds out there scooping up big blocks of stock even though the stock market is having a rough ride. These are the times that SMART INVESTORS want you to think it is a bad time to buy while they go around and scoop up things at great savings.

A Good Time to Buy

With all the negative news about the housing and mortgage industry, many people are waiting to see what happens before they make a decision to purchase real estate. However, the time is right to purchase property NOW. There are three reasons why the time is right.

Interest Rates

Interest rates on mortgages have fallen substantially over the past 30 days. Rates on conforming 30 year fixed loans ($417,000 and below) have been ranging from 5.25% - 5.50%. Rates on Jumbo loans (amounts above $417,000) are also very good. For example, the rate on a 7/1 Jumbo Adjustable Rate Mortgage is currently at 5.50% with a 20% down payment. That means the 5.50% is fixed for 7 years before the loan converts into an adjustable rate mortgage.

Rates usually get better when the housing market and economy slow down. The interest rate markets typically anticipate what will happen in the future, so if the markets feel we are heading towards a recession, rates decrease. Many times they decrease before we actually get into a full recession. The same is true as we come out of a recession. The markets anticipate that we are going into a recovery and rates start to increase. In a lot of cases, when the Fed aggressively cuts interest rates, (as they are doing now) this actually causes mortgage rates to start increasing, because the markets believe that the aggressive cuts by the Fed will begin to spark the economy. Generally, by the time the public hears that the economy is starting to recover, rates are already moving up in anticipation of a recovery and they miss the bottom of the interest rate market.

Rates are now at levels that we have not seen since 2003, when rates hit all time lows. In 2003 and other periods when rates hit all time lows, these rates only lasted for a couple of weeks. Therefore, the “bottom” of the interest rate market is generally short lived.

It is important to understand that saving 1.00% to 1.50% on your interest rate today will save you thousands of dollars the first 5 to 7 years of your loan. These savings can be much greater than what you save by waiting for prices to drop further on real estate. Therefore, waiting for prices to decrease could actually cost you more in the long run if rates are higher when you find that “great deal”.

Mortgage Programs

During the last 8 months, we have lost many mortgage programs and it appears that underwriting guidelines for certain mortgages will continue to tighten. This means it will get harder for people to qualify for mortgage programs in the future. Therefore, if you wait to see what happens with real estate prices, a loan program that would be perfect for your situation today may not exist tomorrow. This is something that I always discuss with the agents that I work with to remind their clients. When the clients ask me what I think and if it is wise for them to wait another 6 months, I always advise that ultimately it is their choice, but they may be risking the possibility of completely being out of the market with special programs that they are pre-approved with today that may be eliminated in the near future. Programs that otherwise would enable them to get into the market at the current time. This is especially the case with a declining market and the fact of the matter is that San Diego is currently determined to be a declining market.

Market Timing

The third reason the time is right to purchase real estate has to do with market timing. Everyone would love to “buy at the right time”, meaning when prices are at the bottom. Whether it is stocks, bonds or real estate, we all want to buy low. However, it is very hard to know when prices have hit bottom.

Let’s look at the current real estate slow down as an example. By the time news of the real estate melt down was being broadcast by the media, the melt down was already in full swing. Many mortgage companies were already out of business, houses were not selling and prices were falling. These things were all happening for several months before the general public became aware there was an issue.

The same is true when the real estate market begins to recover. By the time the media begins to talk about real estate recovery and the general public learns that things are improving; prices are already on the rise. As a result, it is very difficult to “time the market” and buy at the bottom.

How to get an Expired to meet with you

2008-01-31T14:32:00.000-08:00

I have spoken in the past on how working with Expired's in this market can be a very lucrative source of business. Getting them to meet with you can be challenging since they have been through the ringer in the selling process with no results.

That said, you must keep certain things in mind when targeting this market and if you do, I know you will see immediate results in your appointment calender.

First, when calling an Expired you know they will be argumentative and combative. To get them to open up to you, do the following:

Don't put them on the offensive. Agree to whatever they are saying and empathize with them. Even though you know reality might be different than their point of view.

Show them that you care about what they are saying. Validate their frustration on the market being slow or that perhaps their agent did a terrible job by saying, you to deal with unprofessional agents all the time and that you definitley know how they feel.

Repeat back or paraphrase what you heard so that you are both on the same page.

Ask another question. Remember, the person who asks the questions, controls the coversation. Whereas the person who talks, dominates the conversation and gives away their hot buttons.

When working with this market, you must keep this in mind:

Know the market better than anyone.

Know pricing better than anyone.

Know what's happening in the market better than anyone.

Then combine that with the knowledge of scripts and dialogues and you will be guaranteed a surefire appointment. Focusing on scripts and dialogues means you will be able to listen to what they are saying and not focusing on what you are going to be saying next.

Also, focus on CONTRIBUTION. What can you do for them to help them get back to what their original motivation was in selling their property.

The two most important rules in selling are:

Ask important questions

Listen the the answers of what they say so you can better help their needs.

Now, with all this in mind, what little trick can you use to get them to agree to meet with you. An Expired listing will have 4 basic objections. Here is how you should deal with each one.

We've already found another agent. AGENT: Have you already signed the paperwork? If YES, wish them luck and thank them for time and offer your help if it doesn't work out. If NO, That's great and what I'm hearing is you feel obligated to your last agent since they have invested a lot of time and money in your home right? We Mr/Mrs Seller, you don't owe me anything and you don't really owe them anything but you do owe yourself the very best. It certainly wouldn't hurt to hear what I do to get homes sol, would it?

We are going to stay with the same agent. AGENT. See above.

I'm going to sell it myself (break in to your FSBO Script) I can appreciate that and what I sense is you want to make sure you get the best possible agent for the job of selling your home. What are you lookin for in an agent? Then let them speak.

I'm taking it off the market and decided not to move. I love this one as they are probably doing this because they can't get the price they want. If they are selling to re-purchase, speak to how they how they will make it up on the buy side. They might not get what they want for their home, but they will acheive thier goal of saving money when they repurcchase. If they are investors who want to sit tight, ask them if they know what their return on EQUITY is. If they don't know, discuss how you would be more than happy to figure that out for them and discuss with them the benefits of selling anyway and putting in to an Industrial TIC. This way they can have all the beneifits of owining invesment property, without the headaches of being a landlord. For more informatinon on industrial TICS, call me. I will hook you up with a good one.

One last note. Most of the time with an Expired, they will ask why you did not show the house when it was listed. Your simple response to that should be, "I appreicate that and I did not show your house. I am a very hard working agent for my clients and I was keeping my commitment to other sellers that hired me. So, when would be a good time for me to show you that commitment that I make to those sellers. Would today at 3 or tomorrow at 4 work best for you?" Close, close, close for the appointment and don't give up.

Happy Production

Why now is the time to go after FSBO's and Expireds

2008-01-29T14:44:00.000-08:00

2007 brought on a ton of Expired's as seller's were chasing too few of buyer's and not realizing that they needed to price their property to sell. And FSBO's now more than ever needed agents again as the hey day of putting a sign in your front yard was over and it required marketing muscle now more than ever to get a property sold. With that said however, agents who attempted to work these segments of the market found grief and aggravation in either trying to get a listing sold or a seller to realize how to price their property right.

This year NAR estimates that their will be 500,000 less agents working in the industry than last year. How does that work for you??? Less competition. So, if you want the "FASTEST SOURCE OF BUSINESS" opportunity, working FSBO's and Expireds can be a very lucrative market to go in to but also you need a game plan.

In all of my coaching, I always ask my agents, "what actions can I do now that would make the most difference in my business?" And what is my answer???? Prospecting, Prospecting, Prospecting.

While I believe you can build a business with people you know, you also need to add to that database of people by contacting the one's who have already raised their hands by letting the world know that they want to sell their house. That said, I will always tell agents that they need to find a way of looking outside their met database and to go after a market of FSBO's and Expireds.

The issue you can have with this market is that they "might" not be realistic with their price. If you sharpen you skills and are ready to show them where their home is positioned in the market, you will ultimately be the agent of choice in getting their home sold.

As a reminder though, I want you to keep this in mind before you work this segment of the market.

It is a numbers game. You should realistically expect to only get in touch with 15-18% of the Expired or FSBO seller to even get an appointment. Keep that in mind and don't get down when you hear more No's than Yes from these people.
Know when to say NO. If they are not realistic on price, be prepared to walk away. Be polite and hand them your card and say, "Please contact me if your property does not sell" Set your standards and keep them.
Have Empathy if they are an Expired. Most Expireds have been through the ringer. After all, the home selling process is no fun. They have probably had showings with no offers, they have had endless open houses with them out of the house and they have had the pain of making sure their home is in show condition daily even though no one showed up.
Be the agent there first. Usually the early bird gets the worms. And in this case, being the first agent on the scene will usually get their attention to see that you are serious about selling their home and that you can get the job done.
Set yourself apart! Set yourself apart from all the other agents. Drop off your marketing package in a bright colored envelope if you don't catch them at home. Then follow up with a phone call asking, "Did you get my package in the purple envelope?" Be prepared to have a marketing package like no other in what you are going to do to get there home sold.
Be persistent. Most agents give up after the first week. Here are the stats: 50% give up after week 1, 70% after week 2, 90% after week 3 and nearly 100% after week 4. Don't give up, never surrender until they sign or say GO AWAY.
Be prepared to discuss with them the four reasons why properties don't sell. They are:

Price
Promotion
Presentation
Location

Finally, have a plan and work it. Make it easy on yourself and make it reachable. Make a daily called the 5,5,5 plan. Call 5 Expireds, 5 FSBO's and 5 Drop bys. If you do this, you will see your business grow steady and even.

Happy Production!

Is your client loosing out on a HOT FORECLOSURE PROPERTY? Try an Escalator Clause

2008-01-28T17:01:00.000-08:00

In any market, a really well priced property will have multiple offers. Currently, with the wave of foreclosures that we have seen hit the market, aggressive buyers are taking advantage of this and know that this is the right time to buy. But just as you can lose a property in a seller's market by being outbid, you can also in a buyer's market with the same thing happening. How can you be sure that you be the winning bid? Try what is called an Acceleration Clause. First you must determine how high of the property in question is worth and attach this clause to your offer. You can attach a seperate sheet, but if you are in California, I suggest put it on an Addendum to the Purchase Contract.

Below is how you can craft the Escelator Clause:

Escalator Clause Addendum

The following is part of the Residential Purchase Agreement and Joint Escrow
Instructions dated ___________.

Between ________________________________ (“Seller”)
and _______________________(“Buyer”)
concerning _______________(“Property”)

IT IS AGREED BETWEEN THE SELLER AND THE BUYER AS FOLLOWS:

In the event another written offer is presented to Seller on or before acceptance of this offer, Buyer agrees to increase his/her/their offer to the amount of that offer plus ___$X_______ with the total amount* not to exceed $_____$X_________ on the condition Seller provides Buyer with a copy of signed offer from the other party. This offer is contingent on buyer excepting seller’s final acceptance.

*(After Seller concessions/credits to buyer are subtracted, Seller proceeds will be higher with this offer by the amount Specified above.)

Initials: Buyer _______________ Buyer ___________________ Date ___________
Seller ________________ Seller ___________________ Date ___________

Remember, the key is to determine if the property is worth doing this and if you are competing against multiple offers.

Pricing Listings to Sell and Handling Price Objections From Sellers

2008-01-24T16:23:00.000-08:00

Real estate agents don't sell homes, a home priced right does. We are just the facilitator in the process. That's why in this shifting market, it is very important that if you take a listing, that you price it to SELL. Let me repeat that. If you take a listing in this market, you price it to SELL. Otherwise, why have it? Just think of all the work and effort you put in to listings just to have it sit there and languish on the market. Not to mention the money you spend promoting it. That's not to say though you can't capture great buyer leads to help close more sales. But consider if you promote yourself as a great Listing Agent in your farm, how do you think it will look if you have a listing sit and sit and sit for 6 months or more? To me it would show that you can't get a home sold. So my advice is to make sure that you only work with MOTIVATED sellers that have to sell, and price it to SELL.

Now you all say that's great Robert, but what do I do when they fight me on price. Here are some comebacks:

Specifically....what makes you feel your home is worth $X? Provided you show them the comps and what the market will bear, this should be easy. Remember, you do not control the market. You only interpret it.
Did you add those features for your own benefit and enjoyment or did you add them to sell your house thinking the new buyer would pay more? If they say pay more, then go over the comps again and go over what they can expect to recoup for their investment based upon national statistics.

Price Reductions - If you happen to get a listing that you agree to let the owner's "TEST THE MARKET", then for God's sake, keep these thoughts in mind:

Use the price reduction time to prepare the seller for a lower offer.
With every price reduction, get an extension of the listing agreement.
Ask for price changes every 14-21 days or ten showings, whichever comes first. (Be honest about price)
Use the Law of Supply and Demand when presenting for price changes based on the MLS statistics for their area.
Always go back to the seller's motivation.
Don't chase the market down - tell the seller where the market could be in 4-6 months and price it as if it was 4-6 months out. You will stand out among the competition and get that home in to escrow as it will be a great deal.
Don't take too small of a reduction. When you see a sale at a Department Store, don't you typically see at least 10% OFF. Keep that as a goal for you price reductions. I hate to see a measly $5,000. What good is that?
Offer extreme customer service.
Follow up on all showings for feedback. If you aren't doing this, you are missing out on why that buyer has not made an offer so that your seller will know why their home is not selling.

Other things to consider with all your listing inventory is set a weekly price reduction goal so all listings are reduced every 14-21 days.

Also, rate your listings. Put your listings in monthly order of sales with our without price reductions and sell enough each month to reach your yearly goals.

Finally, don't be afraid to walk away from a Listing. If the seller is not reasonable about their selling price in relation to the market, why have it? You will spend a lot of time, energy, money and effort in trying to sell something that the market will not take. DON'T WASTE YOUR TIME.

Good luck and healthy production.

Know the Language of Sales to guide you to SUCCESS!

2008-01-23T08:16:00.000-08:00

To be a successful realtor - agent, it is critical to learn the Language of Sales. To master selling such that your words can cause instantaneous action in others, to build rapport or to have a positive frame of mind at all times will guarantee your long term survival as a great salesman.

NLP otherwise known as Neuro-Linguistic Programming is just that. NLP is the study of how words affect the brain to get an outcome. It provides strategies which will cause your customers to be more inclined to work with you and allow you to build rapport more quickly. NLP is a study of collection of "people skills" based on a deep understanding of how the mind works and how humans create an understanding of reality in their brains. It is the study of how words affect the brain to get an outcome. It is how the brain analyzes what's going on around you, looks for a time you have experienced similar items, searches for repetitious patterns which in turn creates an "I've been there.....done that feeling."

In NLP there are three pivotal skills. They are:

Influencing Skills - Which is used for teaching, leading, negotiating, mediating and persuading.
Self Management Skills - Used to move from motivation to learning to decision-making to self-fulfillment
Healing Skills - Used for resolving conflict to healing trauma

The Language of Sales really only uses influencing skills.

When using NLP to its optimal use on a prospect/client, one must consider how the other learns. There are basically 3 ways that people learn:

Visually - by seeing it
Auditory - by hearing it
Kinesthetic - by feeling or doing it

To determine how your prospects learns, you must ask them questions and listen to their responses, or simply just listen to what they are saying.

For example, if a prospect says something like, "I hear the market is picking up." They are an Auditory person. If they say, "I see the market is starting to move." They are a Visual person. Finally, if they say, "I feel the market is getting better." They are obviously a Kinesthetic person.

Knowing what type of ways people learn, will make a tremendous difference in say for example, how you deliver your Listing Presentation. If they are an Auditory Person, a Listing Packet is of no use to them. They want to hear you speak and find out that way what you are going to do for them. If they are a Visual Person, they will then want to see a Listing Packet with how you are going to sell their home. And if they are a Kinesthetic person, they will want to be made to feel good about what you are going to be able to do for them in order to sell their home and they will want to be interactive with the process.

Here are some important things to remember with each profile type:

Visual

They have difficulty with verbal instructions
Their mind might tend to wander
They want to see it to learn it

Auditory

They learn by hearing
They are distracted by noise
They talk to themselves
They repeat back easily
They like to be told what to do
They like praise, music and talking on the phone

Kinesthetic

The move/talk slowly
They stand close to you with eyes down
They memorize by doing or walking through it
They are less distracted by nose
They must experience it
They must be given directions as they do it
They like physical rewards

There is no right or now wrong way to be. We are all HARDWIRED differently which is why we as humans are all unique. Remember this if you are an auditory person with a HIGH D behavior and you come across a person who is Kinesthetic with a HIGH C behavior. The latter will probably not be that quick to absorb what you are telling them. They would prefer you slow down and let them absorb it so they can focus on the people element and situations.

For more information, please feel free to contact me.

Understanding your behavior as well as your clients is crucial for success

2008-01-22T10:54:00.000-08:00

What is behavior?

Behavior is the manner of conducting oneself. It is anything a person does that involves ones physical action and it is the way someone acts.

Behavior is not a person's intelligence, values or beliefs, skills and experience, education and training or motivation or ethics.

Every person has a "preferred behavioral style." This is the basic behavior a person will exhibit naturally (unconsciously) unless they willfully (consciously) alter it. So, the basic, non-altered, effortless, natural behavior is called a person's "preferred behavioral style.

The bottom line for preferred behavior affects is:

How people think.
How people act.
How people feel.
How people react.
How people behave.
How people speak.

Most people work naturally best with like behavior people. What people do or won't do depends on their behavior.

To understand their behavior, you need to understand the four types of behavior. They are as follows:

D - Dominant
I - Influencer
S - Steadiness/Systems
C - Compliant/Controller

This is referred to as the DISC Profile. Following is a break down of each profile:

D - Dominant

On the DISC, the D correlates to how a person responds to problems and challenges. Individuals with a High-D profiles exhibit behavioral characteristics such as:

Dominant, driving, direct, decisive
Strong ego
Active and aggressive problem solver vs. analytical researcher
Bottom line thinker
Leader because they want to lead
Task oriented

A High-D individuals primary emotion is anger - meaning that they have a short fuse and are quick to respond with aggression. These individuals fear that others will take advantage of them and/or waste their time.

I-Influencer

On the DISC, the I correlates to how a person influences others to their point of view. Individuals with High-I profiles exhibit the following behavioral characteristics:

Outgoing, charismatic
Verbal, gregarious
Highly optimistic, trusting
Persuasive
Impulsive, emotional
People oriented

A High-I individuals primary emotion is optimism. These individuals fear rejection and lack of approval or social acceptance.

S-Steadiness/Systems

On the DISC, the S correlates to how a person responds to the pace of the high environment, activities and responsibilities. Individuals with a HIGH-S profiles exhibit the following behavioral characteristics:

Steady, stable, predictable
Good listener, understanding
Possessive
Friendly
People oriented

High-S individuals typically hide their emotions and their greatest fear is loss of security or stability.

C-Compliant/Controller

On the DISC, the C correlates to how a person responds to rules and procedures set by others. Individuals with HIGH-C profiles exhibit the following behavioral characteristics:

Compliant, correct, precise, exacting
Analytical, fact-finding
High standards, systematic
Conscientious
Task oriented

A HIGH-C individuals primary emotions are fear and worry. These individuals fear criticism and imperfection.

Communicating with each behavior profile is important in achieving success in dealing with them. This is how you should work with each behavior:

D- The HIGH D is looking for Results/Efficiency When working and communicating with individuals who exhibit a high D behavior, remember that they are direct, self-reliant and competitive. They are high risk takers and they aer task-oriented. They have a desire to change the environment around them and they have a great sense of urgency. These individuals will need to lighten up when dealing with I profiles and slow down their pace when interacting with S profiles.

I - This HIGH I is looking for experience. High I's are people-oriented and tend to be very verbal and persuasive. They may have creative high-risk ideas, but some may not carry out the ideas. High I's enjoy people and fun. They ask lots of questions. These individuals need to be careful not to appear too pushy or enthusiastic to S profiles and untrustworthy to C profiles.

S - The HIGH S is looking for security. High S individuals are people-oriented, warm and stable. These individuals are the peace-makers or peace-keepers. They are systematic and methodical and do not take high risks. S and D profiles may have difficulty communicating because one prefers a slow pace and the other a fast pace. S and I profiles generally interact well because of their people-orientation, but the I profile will want the S to loosen up and have some fun.

C - The HIGH C is looking for information. High C individuals are task-oriented and seek detail analysis. C profile individuals have a critical eye and a critical nature. They are methodical and careful. C and D profiles may have difficulty communicating because of their influence in speed and risk orientation. I profiles will want the C individual to focus more on the people element in relationships and situations.

Follow these simple guidelines when dealing with each behavior:

Don't ignore the wisdom in behavior profiling. The sooner your learn each profile, the better you will be in working with all personality types.
Put behavioral profiling in perspective. Everyone is cut from a different cloth. And that is OKAY.
Let the ideals guide you - not limit you. Don't let the a person's profile limit you from working with them.
Respect differences. There are not right or wrong, better or worse profiles.
Use the DISC language appropriately. In other words, don't belittle someone if you are a D and they are a C and need more time to sort things out.

Good Luck.

How Powerful is Your Mind and MINDSET???

2008-01-22T09:03:00.000-08:00

Earl Nightengale said, "We become what we think about most of the time." This is very important in creating the MINDSET of being a success in this business. After all, 90% of this business of real estate is mental and 10% is skill.

In this market we are currently in, which is a buyer's market, that 10% is more important now than ever as a buyer's market is a skill based market. However, if all you do is sharpen your skills, it does no good if you don't put them to work. With that said, here are a few things I would like you to consider to keep you in the right MINDSET:

Keep your goals foremost in your mind. Read them weekly at a minimum and you'll be setting yourself up for positive results.
The issue of thinking big is a major issue in growing. Learn to close your eyes and visualize yourself achieving your goals.
You must develop an unwavering desire to achieve your goals in spite of the daily ups and downs that we you are going to encounter through hearing your clients' ups and downs.
Remove any drama from your life. The last thing you need to worry about is any outside influences ruining your day. It costs you time and money and it can ruin your life.
We become like the people we associate with. Are the people around you contributing to or taking away from your power to succeed at what you want in your life.
Thinking BIG is a learned process. It is no different that learning to ride a bike. Anybody can do it if they will take the time to work on the process.

How do you create a powerful MINDSET?

One way is to spend less time comparing yourself to others and more time working on yourself, your skills and your mindset.
Remember to do affirmations. There are both positive and negative affirmations.
To change the fruit, you have to change the roots.
Your income will grow to the extent that you do.
Set your financial thermostat
Look at your 5 closest friends. Are they helping you to set the bar higher? If not, consider who you are closely associating with.
Always show gratitude. Take each day to be GRATEFUL for all things no matter how small or how big they are. It can be as simple as an easy and safe drive to work or the ability to hear and listen to the joy of music.
Finally, don't take things personally.

Do you have the MINDSET to be a MEGA AGENT?

2008-01-13T08:53:00.000-08:00

Mindset will make or break a real estate agent
Do you have the personality to be a MEGA-PRODUCER?

Almost all agents would love to be a top producer. The question is what differentiates the top performers from all the rest?

The 80-20 rule says 20 percent of the agents will conduct 80 percent of the business. NAR statistics indicate the statistics are closer to 10 percent of the agents are conducting 90 percent of the business. Mega-producers are different in numerous ways, the most important of which is their mindset. To see how your mindset compares to the mega-producer, take the assessment below:

Determine how many of the following statements accurately reflect your "business personality":

1. I have no problem connecting with strangers. People find it easy to talk to me.
2. I have excellent listening skills and can easily spot what is blocking a client from taking action.
3. Normally I only have to show most buyers five or six homes before they purchase.
4. When I go on a listing appointment, I have no problem walking away from the listing if the seller wants an unrealistic asking price.
5. When I promise a client something, it gets done on time.
6. I spend at least four days per week, three hours per day, conducting proactive lead generation activities, such as door knocking, calling on expired listings and FSBOs, and/or telemarketing.
7. I may not always have the answer to a problem, but I know who to ask to solve it.
8. I know the inventory like the back of my hand and can accurately price properties without consulting the comparable sales.
9. Closing is a snap for me. I know what, when, and how to ask for the close with both buyers and sellers.
10. When someone makes an unreasonable demand, I have no problem telling them "no."
11. When others lose their cool, I'm the calm in the middle of the storm.
12. Rejection—what's that? If they don't want to work with me, it's their loss.
13. Objections? Not a problem! Objections are buying signs!
14. The first thing I do everyday is to complete my lead generation. I don't do anything else until I have made the minimum number of contacts I have committed to each day.
15. When there is a problem in a transaction, I'm a master problem solver. My motto is "Never give up!"

Scoring:

Give yourself one point for each item you said accurately describes your business personality.

• 13-15: You have the mindset of a top producer. If you aren't one already, you will probably be one in the near future.
• 10-12: You could be a top producer, but may need to make some minor alterations in terms of how you approach the business.
• 7-10: Top production may be challenging for you because you may have to alter your core behavior to fit the "top producer" profile. It's possible, but it's much more difficult when your core behavioral style is different from the top producer profile.
• 6 or less: Real estate will be a challenge for you. Take time to carefully examine whether you are willing to put up with the rejections and challenges you must face daily to succeed.

Coaching tips:

1. Mega-agents always make lead generation their top priority. No matter how many hang-ups or "no's" they hear, they keep prospecting until they hit their daily goals. It's smart to set aside specific prospecting time each day and hold that time as the most important appointment of your day. Without lead generation, you will have no business.
2. Mega-agents are excellent listeners who understand the importance of asking clarifying questions rather than talking all the time. They are generally "people's people." Excellent listening skills translate into showing buyers fewer homes because the agent hears what the buyer really wants. It also means the agent can spot when the buyer/seller is ready to be closed. Instead of talking, ask questions and write down what your clients tell you.
3. Mega-agents are not afraid to say "no" to unrealistic sellers or to individuals who ask them to "bend the rules."
4. Mega-agents are persistent. When someone tells them "no," they keep trying. When clients object, they recognize objections are normally buying signs. When things go wrong, they remain calm and focus on finding the solution.
5. Mega-agents know the inventory and they know their scripts. This results in confidence. See as many houses as possible and practice your scripts until you can remember them effortlessly.

If you would like to improve your production, consider working with a coach or a mentor who can help you take the necessary steps to reach the "mega-agent" mindset.

7 needed steps for every Realtor when PROSPECTING

2008-01-13T08:40:00.000-08:00

For many salespeople, prospecting is the most difficult activity they do. They dread the thought of picking up the phone to make a living. Long-term success in sales is built through solid prospecting. In order to be successful and profitable, sales people need to apply these seven secrets of prospecting daily.

1. IT GETS EASIER AFTER THE FIRST CALL. The first call is always the most difficult. I prospected solidly for over eight years in real estate. I never got over the difficulty of making the first call. Getting yourself to make the first call is the highest hurdle. The only solution is to just do it. After you make the first call, you realize it was not as difficult as you imagined. The person on the other end of the line was not as difficult as your mind had created. In many cases calling begins to get fun after a few calls. The problem is most people just never break through the initial barrier.

2. ESTABLISH A ROUTINE. To be successful, you should have a scheduled time for prospecting daily when that is the only activity that is being done. Treat prospecting as an appointment. Do not allow anything to interfere with your prospecting. We often allow distractions to creep into our prospecting time. The salesperson that has a set routine daily of making prospecting calls at a specific time and adheres to his schedule without distraction is guaranteed to succeed. This person will not only succeed but he will be a "top gun" Agent, the best of the best.

3. BIG "MO." At first prospecting will be very difficult. Your skills will not be developed to the level of an expert. Once you start the process, do not stop. Momentum is critical to prospecting. Once you get the process going, your skills will improve to generate more leads and to set more appointments. Do not break your momentum.

Another Agent in the real estate office where I worked once issued me a challenge. The challenge was who could list more homes in a month. I knew that I would win, since I had momentum and he did not. He had not been consistently prospecting, so he had no momentum. I must say that he did have the best month he had ever had. But that was because he was consistently prospecting and had been following up on the leads he was generating. At then end of the month, my team had taken eighteen listings and he took six. Do not bet against Big "Mo."

4. EXPLODING THE BEST TIME TO PROSPECT MYTH. The best time to make prospecting calls is when you have the most energy and when you actually will call. There have been tremendous arguments over this point by Agents and trainers. Set a time to prospect and call at that time. Do not worry about things you cannot control, such as someone being home or not. Focus on your skill level, avoiding distractions, and prospect. These factors you can control. I always prospected early in the morning because that was when I had the most energy. It also got my day off to a great start, which would carry me through the rest of the day. I always thought if I had a good disciplined day of prospecting that I had a good day regardless of the number of leads, number of appointments set, or anything else that happened that day.

5. FOCUS ON THE GOAL OR OBJECTIVE. Set a specific goal of what you want to happen on each call. Know what you want that prospect to do. It is hard to achieve success in prospecting without a clearly defined objective.

The true objective is to set a qualified appointment with the prospect. If you are unable to accomplish that objective, then the next best objective is to get an agreed upon action by the prospect within a specific time frame. For example, the prospect is going to be interviewing Agents next week. You and the prospect agree to speak on Thursday about getting the appointment scheduled for next week. The last objective is to generate a lead that will buy or sell in the future. This objective depends on your definition of what a lead is for a buyer or seller.

6. THE POWER OF SCRIPTS. Highly successful sales people use scripts. To effectively prospect, it is crucial to know what to say before you start to prospect. Scripts provide a guide and logical sequence of questions to follow. They allow you to focus on the response of the prospect rather than fumbling around to find the words.

The only way to move to the highest form of communication is to know what you are going to say to the prospect. The words you say only account for 7% of the communication. If you know the words, you can begin to focus on your tonality and body language. Tonality accounts for 38% of all communication and body language accounts for 55% of all communication. If you are focusing and stumbling through 7% of the words you will be ineffective in prospecting. We have all heard an unskilled telemarketer stumble through their scripts and dialogues. Develop, learn, and practice your scripts so you can effectively communicate and reach your prospect through your tonality and body.

7. IT IS A NUMBERS GAME. Prospecting is truly a numbers game, for two valid reasons. The first is the more prospecting you do the less rejection bothers you. The best way to deal with rejection is to get as much as you can as soon as you can to reduce its effect on you. Most people you call are very nice and pleasant. They may not need your services at this time, which is fine. Rejection is rarely as bad as you imagine. The only way to find this fact out is to make more calls.

The second reason is you can replicate your business via numbers. Prospecting will allow you to plan your income and results. If you track your prospecting efforts, you will find you have ratios in your business. I would make 25 expired listing contacts and get a listing signed. If I wanted to list a property a day, I needed to make 25 expired contacts daily, which would then create the desired income for my family. Contacts are defined as a prospecting call that results in talking to one of the decision makers in the household.

What is your desired income? How many prospecting contacts do you need to make to achieve it? As you get more skilled, the number of contacts needed will decrease. When I first began prospecting, I needed to contact over 100 people to get a listing. Start tracking your numbers so you can play the game. To play the game well is to know and understand the game.

Michael Jordan was the best player of all time because of his abilities, but also because cerebrally he knows the game better than any other player. His physical skills were not at his highest levels late in his career, but his mental skills were beyond compare. Develop your verbal and mental skills.

Prospecting is truly an integral part of success in any sales profession. Do not be fooled by the prospecting-free system to success. Develop and apply the seven secrets of prospecting success. Develop the habit of daily prospecting, and you will become one of the "top gun" Agents in the world.

How to accomplish more in less time as an Agent

2008-01-13T08:38:00.000-08:00

TIME COMPRESSION

One of the skills that top achievers have is the ability to compress time. Compressing time is the ability to accomplish more in less time. If you analyze the highest producers in business, you will observe they have the skill of time compression.

One skill of great time compression is the ability to plan your work tomorrow before you leave today. If you spend a few minutes planning your day on paper the day before, your subconscious mind will kick in. The plan, or list, triggers your subconscious to work on your challenges of the next day all while you sleep. Your mind will be working like a rotisserie, turning the challenges and your time for tomorrow, all night while you rest. When you get up you will be ready to attack the day.

Before you start your workday make sure to ask these key questions:

1. What is my highest payoff activity I can do?
2. What, if done with excellence, can make the biggest difference?
3. What can I do well that no one else can do?
4. Why am I on the payroll?

These questions must be asked each day before you begin. The most successful people are not the jack-of-all-trades. They are the people who specialize in something and who perform activities that no one else can do. And they perform these actions with excellence to a higher standard. If you do that you will be highly sought after.

Successful people understand the trap of urgent versus important. As REALTORS(r) we are faced with that challenge daily. We get interrupted constantly by phone calls that are urgent not important. We have to make quick judgments on unexpected phone calls from other Agents, sellers, buyers, title companies and escrow people. The consequences of selecting the urgent, not important, can easily cause us to lose productivity. Often urgent things are not important over the long haul. Here is a good rule to use when evaluating urgent versus important. Important things are usually self-directed or self-generated. They are the things that you can do to move your business and life forward. These important things will have the greatest impact on you and your family. We often select the urgent over the important because of someone else's emotional state that influences us. When you feel yourself being swayed by someone's emotional state, take a few steps back to analyze the situation.

Others generate urgent activities. They take place because of inbound calls by others or emails or problems. Often people want their urgent problems to be assumed by you. Someone else causes urgent activities. By setting boundaries as to when you will be dealing with urgent activities you will be able to accomplish much more in your allotted time.

To compact your time we must recognize the limiting steps. For every achievement or accomplishment there is a limiting step along the way. The sooner you cross over the limiting steps the more you can accomplish. The limiting steps can create a bottleneck to you achieving what you set out to do. Successful people identify the limiting step quickly. Then they focus with laser intensity on removing the limiting step. Until it is completed, they work on that one activity.

Lastly, successful people have clarity of purpose and clarity of values. They know the direction to travel and what they stand for. They have decided what is important to them. They have determined their priorities and they implement based on that order of priorities. They have also clearly defined their values. The values of what they stand for in business and life. They work to insure their values don't conflict with work.

By applying these simple steps of action and clarity you can compress your work time. You will also be able to double your effectiveness when you are at work. Take the time to review this article daily for the next 30 days. It will enable you to establish some new habits of time compression.

Script for Converting Sign Calls or Buyer Calls on Ads when they call you

2008-01-11T16:31:00.000-08:00

Script for Converting Sign Calls or Buyer Calls on Ads.

Goals for a sign call or ad call is to:

1. GET AN APPOINTMENT
2. To get a solid name and phone number to build your pipeline

The goal of the prospect is to:

1. Get information so they can eliminate the property.
2. Eliminate you as a realtor.
3. Invest their time wisely.

So, when a caller calls in on an ad or listing remember that the person who asks the questions controls the conversations, whereas the person talking through the conversation dominates the conversation.

So, key is to ask questions.

Caller: Yes, I’m calling on the property you have listed on Craig’s list/LOCATION. Can you tell me how much that property is?

Agent: That’s a great property. Everyone is calling in on that property. So I assume you are in the market to buy?

CALLER: Yes.

Agent: Hold on just one second. I need to grab that file. While I do that, do you mind if I ask you what attracted you to that home?
OR Let me look that up. While I’m looking that up do you mind if I ask you another question? What price range do you feel comfortable with?

If the home is out of their price range, then it’s time to switch to a switcher property. Begin conversation by saying: You know that property is a bit above what price range you are looking in. I’m logging in to the MLS right now. Tell me, is that neighborhood the area you are looking in or would you consider x or y neighborhood.

OR: Oh, that’s priced at _____________. Is that the price range you are looking for or is there another range that suits your better? Then go to following questions:

1. Tell me, how many bedrooms do you need?
2. How many bathrooms do you need?
3. What style are you looking for?
4. Two car or three cars?

OTHER TRUST BUILDING QUESTIONS:

• So, how long have you been searching for a home?
• How have you been going about your home search?
• Are you working with a realtor you’re committed to? Who would that be?
Perhaps I know them?
• I would be happy to call and give them the MLS# or I can give it to you…
Which would you prefer?
• Do you own your own home or are you renting?
• Are you tied to a lease or are you renting month to month?
• OWN: Do you need to sell before you buy another home? Would you be
interested in a FREE CMA to see what your present home is worth?
• What is the property address? Then go in to listing questions?
• How long have you been looking?
• Have you seen anything that you’ve liked so far?
• What prevented you from buying?
• Have you been prequalified by a lender?
• What price range do you have in mind?
• How soon do you want to be in a new home?
• If we find the right home, are you prepared to make a decision at this time?
• On a scale of 1 to 10, with 1 meaning you are not interested at all in
purchasing a home and 10 meaning you want to be in a home as soon as
possible, how would you rate yourself?
• Anything less than a 10 – What would it take for you to move to a 10?
• What features do you have to have in a home?

AGENT: Well, given that criteria, I have 17 listings that match those criteria. I’d like to schedule a time to show you these properties. I can have you come in to my office; I can pull them up on the computer with the virtual tours if they have any and print out any interior pictures in color if you need them. Which is the best time to do that? Weekdays or weekends? Fantastic. What is your schedule like this afternoon? Would 3 or 4 work? We’ll schedule it for 4. Here is my address.

If they say, CAN YOU SEND THEM TO ME?

AGENT: I can be more than happy to do that. But let me explain why I’d like you to come in to my office. I’m a buyer’s specialist. I only work with buyers. I know the market better than anyone since I preview over 200 properties each month. My goal is to save you time by taking the time to sit down with you and go over exactly what you are looking for. I know the market better than anyone and my goal is to save you time by narrowing down your search options eliminating the need to drive around from property to property wasting your time. Does saving time sound important to you?

If NO: Oh, are you a neighbor? That’s a great neighborhood isn’t it? Tell me, do you know anyone that would be intersted in buying in this neighborhood.

CALLER: Yes.

AGENT: Great. Would you mind if I gave them a call and invited them to come and see this property?

Terminator - the Sarah Connor Chronicles

2008-01-11T16:28:00.001-08:00

7 Tips to Real Estate Agents' Success

2008-01-11T10:07:00.000-08:00

The strong housing market within the U.S. coupled with the explosion of the Internet has lured thousands of individuals into real estate sales. Unfortunately, entry level real estate agents face incredible obstacles from experienced agents to an initial 6 month sales cycle time. Read how these 7 tips may help you achieve success in real estate sales.

7 Tips to Real Estate Agents' Success
By Leanne Hoagland-Smith

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's. During the last 10 years, what I have learned as a performance improvement consultant or coach is that 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 training (continuing education units) 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 a 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 or an executive coach who specializes in small business help and sales.

Being an incredible sales person and entering the real estate market does not guarantee similar sales success. However, these 7 tips may help you avoid many of the pitfalls by not being one of the four real estate agents who quit within one year or one of the nine who give up after 3 years.

Do you want more sold homes? Then register for FREE downloadable Mega Real Estate Agents Sales Profile assessment http://www.processspecialist.com/real-estate-coach.htm

Do you want more loyal customers? Then visit http://www.processspecialist.com/customer-loyalty.htm for the FREEE downloadable Customer Loyalty Assessment.

Please feel free to contact me, Leanne Hoagland-Smith, Your Chief People Officer and Business Coach for individuals and organizations that are TIRED of not being where they want to be and truly want success. 219.759.5601

Article Source: http://EzineArticles.com/?expert=Leanne_Hoagland-Smith
http://EzineArticles.com/?7-Tips-to-Real-Estate-Agents-Success&id=198978

Two Ways to Market your Listing Online for Free or Low Cost

2008-01-11T08:10:00.000-08:00

With so many web based applications out there, it seems like a day doesn't go buy that I don't get an email in my inbox asking me to buy this, use this, promote here, go here or there. It seems like there are endless resources out there that would love to have your money to promote your services or listings. The TWO services that I recommend are www.postlets.com and www.classifiedflyerads.com. The latter is FREE while the former charges a nominal fee. I recommend both as you should realize that you have to spend a little money for that $10,000 commission you are about to receive for Listing your neighbors home. :)

Don't have a listing? Why not borrow an office Listing from an agent and promote it to troll for buyers? In fact, borrow several Listings. In our office at least, all of our Listing Agents let the newbie agents "borrow" their listings. After all, they want that Listing sold and the more exposure the better. So, the more Listings you borrow, the more exposure you get.

These services post for free to most of the major search engines as well as real estate related directories. And, these services make a very nice flyer in HTML code for you to use. Click here to see a sample of what you can get if you use these services.

Happy Posting.

Script to Explain Why Buying a Home in Today's Market Makes Sense for your Buyer's Sitting on the Fence

2008-01-10T11:47:00.000-08:00

No one can put a price on the intrinsic value of homeownership, and there are many factors at play in today's market that can help make the dream of owning your piece of California a realty.

The pace of home-appreciation may be slowing, but owning a home is a solid, long-term financial investment. Interest rates on long-term, fixed and adjustable rate mortgages are at historically low levels which make it easier to qualify for a loan and monthly payments more affordable. The length of time a home remains on the market today before it is sold has increased significantly since 2004, while the multiple-offer syndrome that dominated the industry just a few short years ago has subsided considerably. Both of these factors mean you have more choices and time to shop when it comes to selecting a home today.

Things for agents to consider in order to survive in the 2008 Real Estate Market

2008-01-10T07:50:00.000-08:00

Our market is still in the process of declining. The forecast for California at least is for a further decline in sales by at least 4 percent. However, the most affected areas will be the inland affordable areas where they had the biggest increase in new construction. The moderate and lower-end homes had the majority of subprime or no-money-down mortgages. If they bought at the peak of the market and have no equity, they are in danger.

So, BUYERS are VERY IMPORTANT in this market. Where in the past year you might have had Listings not sell and you were scared to get more, now the goal should be to have as many Listings as you can possibly carry. However, you want Listings that are PRICED RIGHT. DO NOT take an overpiced Listing. In our market, we are starting to see lots of activity with foreclosures and REO listings so we should see a depletion in this area. However, more are on the horizon as rates adjust and homeowners are unable to handle their new payments. Also look towards auctions and short sales and more emphasis on builders who are looking to move existing inventory.

BACK TO THE BASICS is what I tell you. Now is the time to work harder than you have, join network groups, hold open houses, develope a program for FSBO's and Expired Listings and pick a farm and build on that farm as your base and get your technology up to speed. You make your market every day, regardless of the market. Remember, not all markets are the same. In any given time there are more than enough sales going on to have a great year, so go for it.

Post on your office work station and home office this phrase, "I'M A SURVIVOR". Live that mantra every day and you will make it through this market and come out the other side on top.

Remember these things:

Get your sphere and past clients in order and develop a consistent campaign to stay in touch with them.
Prospect a minimum of 3 hours per day
Develop and maintain a web presence as this business is becoming a web based platform. If you do not have this you will be left in the dust.
Set up a BLOG. Blog and blog often.
Brand yourself and your business.
Find a FARM and make sure you work the pockets of growth.
Systemize your business to grow.
Have a 1, 3, and 5 year plan.
Work on a referral source.

Helpful trick to get an Expired Listing to talk to you

2008-01-09T17:12:00.000-08:00

Many of us are experiencing more expired listings in our market place then we've seen in years.

With the excess inventory, there are simply too many listings out there for the number of buyers available. With that in mind, let me share a strategy I utilized during my career in pursuing Expired listings.

Whether you mail, have couriered or have hand delivered, this flyer frequently opened the door for conversation:

5 Reasons a Home Sells

1. Location
2. Price
3. Terms
4. Condition
5. The Agent You Select

You Control FOUR of these!

Which is the reason YOUR HOME DIDN'T SELL?

This allows the seller to vent their frustration with their listing agent (if they have any). It also opens the door for conversation about how you are unique and what you're going to do to sell their home.

That's it. It's as simple as that. For those of you who are not calling on Expired Listings, you are missing an excellent source of business out there as these people have already raised their hands and said, "I want to sell my house." Good luck and stay productive.

Planning For a Successful 2008!!!

When knocking on doors works

2008-01-08T17:18:00.000-08:00

Knocking on doors in your farm is the surest way of adding mets in to your database. Some of the most successful agents that I know of in our market, consistently get out and pound the pavement to meet people and drum up business. When knocking on doors, there are some simple rules that you need to follow:

When knocking on doors works
1. Walk around the block - a. Nosey Neighbors
2. Walk enthusiastically - a. 5 steps as oppose to 4
3. Knock enthusiastically - a. No doorbell
4. Stand back - a. Three or four paces
5. Face up the street - a. Less threatening
6. If you’re a man, whistle - a. Happy and harmless
7. Wait until they acknowledge you - a. Wait for them to speak then turn your head
8. Face them and smile - a. You can ease the shock by smiling
9. Bring their defense barriers down - a. Company name tag b. Company logo shirt
c. Ease their fears

Door Knocking Script Prior to Open Houses

Good morning/good afternoon, my name is ____________________ with Keller Williams Real Estate. My company has listed the home at ______________________________ and has asked me to hold it open and invite all of their neighbors to attend our open house on ____________(day) from _________(time). We’ll be serving refreshments, and I’ll also have some great information about what’s happening in the real estate market in the neighborhood. Will you be able to attend? (Listen to their response)
If “YES”. Great! I look forward to seeing you. By the way, do you know anyone who would like to move in to your area?
If “NO” That’s too bad. Do you know of anyone who would like to move into your area? (Listen to their response.)

Why picking a farm is important

2008-01-04T09:17:00.000-08:00

If you look at them most successful agents, you will see that they usually are dominant in a certain geographic location. What this tells us is that they have been very successful in targeting a specific group of people to make their business thrive. Farming is much like advertising. You will hear over and over that consistent touching to your target market will yield results as people will eventually buy your product.

I remember when I first got in the business, I did not pick a farm. Instead, I had a hard time choosing and always felt scared to pick a farm for fear that certain agents were too dominate in the areas that I wanted to farm and that they got all the business anyway. Boy was I wrong.

Now I know that it only appeared that they had all the market share and there is plenty of business for all. After all, not all people like vanilla ice cream right?? Some might like rocky road. :)

When picking a farm, you need to ask yourself 3 questions:

Where do they live?
Who are they?
What do they like?

There are also 3 types of farms you can have in your real estate business. They are:

Geographic - this answers the where do they live question.
Demographic - this answers the who are they question.
Psychographic - this answers the what do they like.

Smart agents have discovered that farming can give them a tremendous help in building their real estate business. Although it may take time, you will find the momentum to build upon itself over time and you will yield results in your real estate either in or out of the farm just because you are targeting a specific group of people. The key is "consistent" touching of that farm in order to yield results.

If picking a geographic farm in today's market, be sure and see that there is a 10-15% turnover of homes in that area each year. After all, you want to make sure you are in an area that will be selling.

Also, you don't need to spend a lot of money farming. Taking the time to walk the farm, knocking on doors and meeting the people can be very fruitful and yield great results.

Develop a plan to touch all of the people in your farm that you meet at least 36 times a year either face to face, telephone, email, snail mail or local events that you host like community yard sales, neighborhood block parties or social gatherings.

Always remember, consistency in advertising pays off. So will farming. Good luck.

How to CONVERT Sign Calls or Buyer Calls from Ads you place

2008-01-03T12:17:00.000-08:00

Here are some simple things to remember when a "potential" prospect calls you on your listing or a listing you advertise on the web or in print. Following these steps will insure greater success in converting these prospects to actual buyers. Practice them daily until you feel comfortable with them.

Goals for a sign call or ad call is to:
1. GET AN APPOINTMENT
2. To get a solid name and phone number to build your pipeline

The goal of the prospect is to:
1. Get information for so they can eliminate the property.
2. Eliminate you as a realtor.
3. Invest their time wisely.

So, when a caller calls in on an ad or listing remember that the person who asks the questions controls the conversations, whereas the person talking through the conversation dominates the conversation.
So, the key is to ask questions.

Caller: Yes, I’m calling on the property you have listed on Craig’s list/LOCATION. Can you tell me how much that property is?
Agent: That’s a great property. Everyone is calling in on that property. So I assume you are in the market to buy?
Caller: Yes.
Agent: Hold on just one second. I need to grab that file. While I do that, do you mind if I ask you what attracted you to that home?
OR Let me look that up. While I’m looking that up do you mind if I ask you another question? What price range do you feel comfortable with? If the home is out of their price range, then it’s time to switch to a switcher property. Begin conversation by saying: You know that property is a bit above what price range you are looking in. I’m logging in to the MLS right now. Tell me, is that neighborhood the area you are looking in or would you consider x or y neighborhood.
OR: Oh, that’s priced at _____________. Is that the price range you are looking for or is there another range that suits your better? Then go to following questions:
1. Tell me, how many bedrooms do you need?
2. How many bathrooms do you need?
3. What style are you looking for?
4. Two car or three cars?

OTHER TRUST BUILDING QUESTIONS:
1. So, how long have you been searching for a home?
2. How have you been going about your home search?
3. Are you working with a realtor you’re committed to? Who would that be? Perhaps I know
them?
4. I would be happy to call and give them the MLS# or I can give it to you…which would you
prefer?

OTHER TRUST BUILDING QUESTIONS:
1. Do you own your own home or are you renting?
2. Are you tied to a lease or are you renting month to month?
3. OWN Do you need to sell before you buy another home? Would you be interested in a
FREE CMA to see what your present home is worth?
4. What is the property address? Then go in to listing questions?

or

1. How long have you been looking?
2. Have you seen anything that you’ve liked so far?
3. What prevented you from buying?
4. Have you been prequalified by a lender?
5. What price range do you have in mind?

or

1. How soon do you want to be in a new home?
2. If we find the right home, are you prepared to make a decision at this time?
3. On a scale of 1 to 10, with 1 meaning you are not interested at all in purchasing a home and
10 meaning you want to be in a home as soon as possible, how would you rate yourself?
4. Anything less than a 10 – What would it take for you to move to a 10?
5. What features do you have to have in a home?

AGENT: Well, given that criteria, I have 17 listings that match those criteria. I’d like to schedule a time to show you these properties. I can have you come in to my office; I can pull them up on the computer with the virtual tours if they have any and print out any interior pictures in color if you need them. Which is the best time to do that? Weekdays or weekends? Fantastic. What is your schedule like this afternoon? Would 3 or 4 work? We’ll schedule it for 4. Here is my address..........

If they say, CAN YOU SEND THEM TO ME?

AGENT: I can be more than happy to do that. But let me explain why I’d like you to come in to my office. I’m a buyer’s specialist. I only work with buyers. I know the market better than anyone since I preview over 200 properties each month. My goal is to save you time by taking the time to sit down with you and go over exactly what you are looking for. I know the market better than anyone and my goal is to save you time by narrowing down your search options eliminating the need to drive around from property to property wasting your time. Does saving time sound important to you?

If NO: Oh, are you a neighbor? That’s a great neighborhood isn’t it? Tell me, are you intersted in selling your home? If NO, then do you happen to know someone who would make a great neighbor and might want to buy this property.

Remember, scripting is the key to success in real estate. You can be brand new as long as you know what to say in a conversation, will ensure your success.

For my daily FREE scripting call, email me for more information.

10 Reasons to be Optimistic in Today's Real Estate Market

2008-01-02T11:15:00.000-08:00

FSBO's (Fastest Source of Business Opportunities), Expired's, Cancelled and Withdrawns need realtors now more than ever.
Less competition amongst agents as NAR estimates there will be 500,000 LESS agents in 2008.
Builders and developers don't treat us as step children now. They need us now more than ever as well and they are making great deals to buyers. So take your buyers to new home developments if possible. It is a very easy escrow.
Sellers don't try and negotiate on your commissions as much as they did in the past so you can ask and get that 6% on listings. What they heck, try for 7% and 8%.
Investing opportunities are aplenty. Try and find something to buy if you can afford it. Why buy when it is too late and you are competing against other buyers.
Tumbling prices means more opportunites for FIRST-TIME homeowner's to enter the market. In San Diego, it is 40% of the market.
New niche opportunities in foreclosures and short sales. Know how to do these markets the smart way. Ask me and I will tell you for FREE.
Your opporunity is here to show yourself as a Real Estate Professional and offer advice to all who ask. They see you as the one with all the knowledge as you have your pulse on the market.
Increased inventory means excellent choices for your buyers.
This market will also force you to SHARPEN your skills and if you do that, you will be ahead of your competition.