The Simple Answer is amend the DUE ON SALE CLAUSE!

The shortest distance between two points is a straight line. Actually, it’s a line segment connecting point A to point B. It can get more complex but for the purposes of SOLVING THE MORTGAGE CRISIS, their is simple answer.

PLEASE explain to your elected representatives that a surgical assault  that may help in solving the mortgage crisis is to amend the mandatory, “DUE ON SALE CLAUSE” which currently forces home sellers to either come up with funds to close or be forced by banks to short-sell their homes or even worse FORECLOSE.

Sellers, especially those relocating to a new job and must sell, would rather take a low interest rate loan, say 1%, secured/underwritten by the US government (similar to student loans) than sell short and have their credit recked. This low interest loan with installments payments over 10, 15, 20, or even 30 years, for the difference between what the home sells for and what is owed should be issued in exchange for credit score retention. Doing so would  increase the numbers of ready, willing and able buyers in the pool and would position these folks well to repurchase once they’ve relocated.

Currently, sellers are being forced by banks and to sell short. Folks with otherwise perfect credit scores who are willing to take on debt in lieu of sellinmg short are not given an option to do so until after being foreced through the short-sale process by mortgage holders. Our government, of the people, for the people, by the people in lieu of helping consumers has opted to supply banks cheap money when they could just as easily make those dollars available for qualified transactions. As jobs shift and sellers move by necessity to find new employment, they are being forced to sell short by banks who are unwilling to provide low cost loans for the difference between what is owed and what the home sells for—a loan that any seller, who is current on their mortgage, could apply for and simply sign at the closing in conjunction with a sale. 

In order for banks and sellers to avoid short sales and foreclosures PLEASE demand that elected official vote to amend DUE ON SALE and provide low interest loans government secured loans to sellers NOW.

If this “AMENDED” due on sale clause provision existed, banks wouldn’t need to write down loans but would instead issue low cost long-term loans secured by the government in conjunction with a closing.

Sellers would then be motivated to sell their homes for the highest possible price to reduce the amount of loan they’d have to carry after the closing.  Banks and the government would make money through the issuance of loans to those who are current on their mortgages and Sellers’ credit score and history wouldn’t be damaged which in-turn would allow them to turn around and purchase a new home and thereby accelerating the absorption rate.

Simple answers to complex questions are not always easy to find but in this case, the shortest distance is the straight line.

It is mostly some of both and a bit more…

If you’ve been in the biz for anytime at all you’ve no-doubt heard folks say things that make you shutter. I have heard novice and so-called “veteran” agents alike, well-intended as they may be, shoot themselves in the foot in an ‘all out’ effort to protect their clients’ best interest. When, in most cases, the agent had no idea ( because they hadn’t bothered to ask) what the best interest of their client was, mostly because they hadn’t bothered to ask or more often than not, they hadn’t bothered to listen.

I once heard a guy say once that the reason God gave us one mouth and two ears was because He intended for us to listen more than we speak and I’ve found this to be true.

“When I listen, I learn and when I speak, I dispell all doubt that I’ve ever taken the time to listen,” a fellow once said.

I’ve learned over the years that if you learn to ask penetrating open-ended questions you will, more often than not, gain  insight into their ”why” and in no time at all you’ll be able to serve them in exactly the way they need or better yet desire to be served.

By asking penetrating questions and then listening with your whole being you’ll find that clients often share exactly what their needs are and this will assist you in serving them.

Take time to listen, then speak the truth, not just A truth,  honestly.

Doing so will go along way in growing your reputation in a good way.

On the Lead Response Management site is a whitepaper about the Jim Click Automotive Team.  The automotive industry, like the real estate industry, has been hammered by the economy.  Yet this automotive team increased their gross profit by 102.8% in eleven months!

They did this with an integrated system generating web leads.  Sounds like a truly neat system that would be fun to implement in real estate.  However, without dropping a bunch of money on a fancy integrated system, their results and findings, still point the way to increasing your own success with online generated leads.

THE INTERNET HAS CHANGED THE WAY CARS & HOMES ARE SOLD

The Internet has also conditioned people to demand an immediate response to information inquiries, and if not, they lose interest quickly.

This same study found that 92% of automotive consumers felt that the speed in which a dealer responded to their inquiry affected their perception of the dealer and whether they ended up purchasing a vehicle from them. 74.3% said it even affected their perception of the manufacturer who supplies cars to the dealership.

So, we know that response time is a factor…and a big one at that.  Now, due to the immediacy web users have come to expect, your brand and service/product are now being judged by your response time.  Unresponsive/slow to respond means the customers perception is dropping.  Respond quickly and you have least allowed yourself the ability to continue the conversation.

PROFESSIONALISM, COURTESY AND FORTHRIGHT ANSWERS

People are less inclined to subject themselves to the high pressure sales tactics of dealerships as they were in the past. They want real, courteous answers to questions. Or they just go elsewhere.

Information about real estate cars can be found everywhere on the internet.  Jim Click Automotive Team learned and profited from their ability to meet the needs of their customers shortly after responding to a web lead.  Dealerships struggle with the some of the same negative perceptions as real estate agents; namely, high pressure sales tactics.

They found that by contacting the web customers immediately, answering their questions and inviting them to the dealership, they were able to generate more sales.  Here are the three critical opportunities they discovered:

Critical Opportunity #1: A number of Salespeople may be talking to customers and qualifying them prior to capturing vital contact info and getting them to come in to the dealership.

Critical Opportunity #2: Not answering inbound calls and responding to Web leads immediately (as in 5 minutes.)

Critical Opportunity #3: Not proactively reaching out to leads, prospects, and past customers effectively, efficiently, and with a high volume of contacts.

Great points for anyone generating leads, let alone online leads, would do well to heed.

Here at theRockStarAgent.com, we strive to assist agents making the jump into Real Estate 2.0.  Part of the jump includes understanding the reason for the shift.  Real estate changes rapidly and if you’ve not noticed, the internet and technology of merely increased the rate of change.

This post will focus on the Buyer side behavior of the real estate transaction.  But really, who cares? Right?  After all, once you get in front of a buyer, you know instinctively what you need to do to help them meet their real estate goals.  These assembled words and charts simply attempt to show where the change is and where you as an agent should be moving your business and marketing efforts.

Overview:

The internet is not a fad.  It’s here and it’s changing how real estate is searched for, how housing information is accessed, and what’s important.  From the report we know that:

• the internet is as important as an agent in finding a home for buyers;
• members of Gen Y are using “off the beaten path” sites with real estate listings nearly 15% more than any other group;
• agents and the internet are seen as equally useful among home buyers;
• buyers want help in negotiating and finding the right home, but NEED help in determining price.

[after the jump, charts and stuff...you've been warned!]

Where Buyer Found the Home They Purchased

Ok, let’s start with the obvious, buyers use the internet to find information about their next home.

In 2008, 66% of surveyed home buyers found their home via the internet or their real estate agent.  The interesting part of the chart, is not the 2008 numbers, rather the trends.  While the internet has yet to replace the agent, it is interesting to see how “blurred” the line has become between ‘net and agent on the source of where the buyer found their home.

This blurring of distinction is an important one for agents to remember.  As you promote your listings, be mindful to be in as many places on the ‘net as possible.

The same is true for folks entering the real estate market to purchase.  If you haven’t noticed, many folks when they call for housing information, ask for information regarding foreclosures and these “short sales.”  I’ll tell you right now, that of the folks that I closed that originally told me they wanted a foreclosure or short sale, only 1 in the last year actually purchased a distressed property.

You know the drill, prospect says, “I want to only look at foreclosures and short sales,” thinking that these are the cheapest properties out there, and, therefore, the best value.  As a buyer’s agent, you likely know how the dance is going to go….

1. Send prospect list of homes that meet their criteria, distressed properties and non;
2. Immediate phone call from prospect, “Only want distressed properties!”
3. While showing the prospect homes one beautiful Saturday, they ask why they haven’t gotten 123 Main St sent to them
   1. 123 Main St is a non-distressed property
4. 123 Main St is priced appropriately, in great shape and already under contract

At this point, the prospect does one of two things:

1. Begins to listen to you; or
2. Decides to work with a different agent that “listens to me.”

Ok, so a bit of an over-simplification of the process, but you get the gist.

Need more reason to be wary of short-sales, specifically?  Check out this article from USA Today:

Just 23% of short-sale offers that homeowners receive from potential buyers actually close, according to a February study of 1,300 real estate agents by Campbell Communications. More than 90% of agents cited a slow response from the lender as the reason short sales were lost.

23% is an extremely LOW execution rate!  77% fail…over 3 out of every 4 short sales fail to close. Yikes, those are low odds for closing…

That’s a Grim Picture of Short Sales, but…

There is a silver lining, thin, but it does exist.

If you are the listing agent of a short sale listing, you need to stop trying to negotiate with the banks on behalf of your clients.  Your efforts are best utilized, on behalf of your clients, in marketing the property and negotiating the deals to be presented to the bank.  For your sanity, and the sanity of your clients, you should enlist the help of a short sale specialist or a real estate attorney.

Where Have all the Values Gone?

[apologies to Paula Cole and her song Where Have All the Cowboys Gone?]

Seemingly, the halcyon days of real estate are behind us when you could list a home, throw a dart to choose the price and the home would sell in a week. Sellers were ecstatic, agents elated and buyers were just happy they purchased before things got too expensive.

Then the house of cards collapsed…

Now, agents have to justify to sellers why their home is worth 20-50% less than when they purchased. Buyers are having a field day applying the boot to sellers that NEED to sell.

Agents, meanwhile, have adapted as they know best. Some, who saw the declining values as never-ending and too much work, bolted the industry. Other agents, comfortable with their communication skills and an eye for the long term, saw the drop as their time to shine. These agents KNOW in their hearts that by serving their clients well, during the period of a down market, they will reap the rewards when the market turns…

Transparency…there’s that word again

Systems/Technology + Real Estate = Happy Consumer and Real Estate Agent

Web 2.0 has pushed many industries to figure out how to connect with consumers in the online realm. Heck, even the “online realm” line is getting blurred…Smartphones keep us connected to our “friends behind the monitor” no matter where we go.

Twitter is indicative of just this level of blurring. Twitter has also made agents re-think how they do business…not just in closing transactions, but also in marketing and prospecting.

The real estate industry, agents in particular, have flocked into the new Social Media. And it makes good sense why we have too. Agents are a naturally social animal. We go to Chamber networking events, we flutter around social gatherings picking up area information, clients and referrals simply by being who we are.

Some agents are very good at being duplicitous in who they are at a networking event and who they “really” are. This is the disconnect for some when it comes to SocNets (Social Networks) online.

This increase in constant exposure that this new web gives us is a two-edged sword: those who are willing to put themselves out there in this manner will gain more business, but you MUST maintain who you are or your online presence will feel forced or somehow manipulated.

Ginny Cain McMurtrie over at the AgentGenius.com, writes a great post on transparency and aligning your online “image” with your overall professionalism.

Simply put:

This new space is about the natural flow of conversation and information. Not that you can’t sell, share your personal life, make editorial comment or show humor, it’s about doing all that as you.

If you are looking for a wider audience to talk with about real estate in your neck of the woods, by all means jump on the SocNet bandwagon! But remember, it’s a two-way street. You will need to engage others for them to continue to engage you.

photo: jurvetson

[Some thoughts from this past winter on customer service. Seems Customer Service is nearly a four-letter word...]

So on Wednesday, we got a fair bit of snow dumped on us in the Ann Arbor area. It fouled up the roads, was generally a pain to travel through and seriously messed up one of my windshield wipers.

You never realize how much you depend on those wipers until they don’t work correctly…

So, on my way home, I stopped into our local Advance Auto Parts for a single replacement wiper blade. I anticipated paying for the blade, opening the package, removing the old blade and installing the new blade.

You Know What Happens When You Assume…

Rob, the guy behind the counter, zeroed in on me as soon as I came through the door. Greeted me warmly and inquired why I had poked my head into the store. When I explained what I was looking for, he took one look at my car (he saw me pull up) and asked what year it was. He then asked which blade I was replacing, found it, cashed me out and then headed for the door with wiper blade in hand.

Shocked that he was heading to the door, I asked what he was doing, “I’ll replace it for you if that’s okay.”

Some of Life’s Neatest Moments are Small – An Aha! Moment

As I drove home, it dawned on me what had just happened. I had low expectations, anticipated that I would fumble around with an auto parts book, have to wait in line, and then spend a few moments in the freezing weather replacing a simple wiper blade.

Admittedly, my expectations weren’t high to begin with…
…and I was alright with that.

I thought of my clients, past and present, that have expressed their pleasure at some small expectation that my team and I have exceeded through the course of our transactions. It dawned on me that many folks entering the real estate market view the process as about as enjoyable as root canal…and that, potentially, as an industry, we have brought this upon ourselves.

A Few Questions…

What are your clients’ expectations?

• Can’t go any further without knowing their expectations!
  

Have you meet your clients’ expectations on a regular basis?

• If yes, how can you exceed their expectations?

Do your clients realize you’ve met their expectations?

• Without slapping yourself on the back too hard, have your clients seen the value you bring to table by simply meeting their expectations?

Application

First, KNOWING your clients’ expectations is the biggest issue to address. Within real estate, consumer expectations on agent performance are particularly low. Therefore, meeting client expectations are relatively easy for a professional real estate agent. What further things can you do to meet and exceed client expectations?

Second, under promise and over deliver. If you start with the end in mind, and know the objections and concerns that WILL arise during the course of a sale, you KNOW what your clients will ask, require, desire and talk about.

Plan in advance to manage expectations. If you can manage expectations throughout the process, under promising and over-delivering will come naturally. If you fail to plan, you’re planning to fail…

Third, have your clients ever expressed satisfaction or surprise at something you’ve done throughout the course of their transaction? Chances are that at some point a client was floored by your service, delivery, professionalism, etc. Your ability to differentiate yourself from others in your field helps IMMENSELY in managing expectations (in real estate expectations are already low) and then showing value above and beyond the average (just returning inquiries appears to be a great place to start.

What traits of awesome customer service have you experienced recently?

When Uncle Sam says, “Hey, first-time home buyers, I’ll reduce the cost of your first home by $8,000,” folks respond!

The NAR released its March Existing-Home Sales report this recently, and it paints a story that’s kinda grim, but still has some silver linings.

An NAR practitioner survey in March showed first-time buyers accounted for 53 percent of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available. “Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” Yun said. “By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.” [emphasis added]

So, even before the $8,000 sweetener, first-time home buyers were seeing value in jumping into the market.  With interest rates steady to falling, and inventory levels remaining relatively high, this is great news as the summer buying season gears up!

The problem facing many Realtors® is how to find those first time home buyers.  Simple deduction, and NAR reporting, tells us that an overwhelming majority of folks utilize the internet, at some point, to find information about their next, or first home, purchase.

After the Jump, 4 Facts You Need to Know About Today’s Buyers

From the 2008 NAR Home Seller and Buyer Profiles report:

• The typical first-time home buyer was 30 years old;
• Forty-one percent of recent home buyers were first-time buyers;
• For one-third of home buyers, the first step in the home-buying process
  was looking online for properties;
• Eighty-seven percent of all home buyers and 94 percent of buyers aged 25
  to 44 years used the Internet to search for homes.

So, on average, the first-time home buyer is 30 years old, and has a 94% chance of utilizing the internet to find information about their purchase.

At theRockStarAgent.com, we’ve created a system that will teach you how to generate leads from the internet giving the consumers exactly what they are asking for…information. Check out our Automatic Lead Generation course and see how over a weekend, you could learn, set up and be receiving leads within hours of turning your lead generation system on.

[pic source]

“Hi, my name is Todd and I’m a Realtor®.”

It almost sounds like the first step in a 12-step program!  And if you are a Realtor® in today’s ever shifting market, you know just how true that feels…

We feel as though we are being constantly hounded, beat on, beat up and generally abused for something that is well outside of any one real estate agent’s control.  The market is what it is, and that’s the rub.

Where’s MY Support Group?

Who could forget Stuart Smalley? That lovable, sophomoric Al Franken character on Saturday Night Live had some memorable lines and skits!

The one thing that always struck me watching these skits was how funny, yet nearly right on they were!  I mean, why else would we laugh so hard at someone’s struggle to ensure that their own self image was up to snuff?

Stuart Smalley is a caring nurturer, a member of several 12-step programs, but not a licensed therapist.

At times, being a Realtor® can prove challenging…Especially when seemingly NO ONE listens to our advice and professional opinion.

“I’m good enough, I’m smart enough, and doggone it, people like me.”

It was a catchy, cornball, goofy phrase when he said it, but “doggone it” he’s right!

When we wake up in the morning, we are often already out the door, in the car and with clients in our minds….and that’s the instant AFTER our feet hit the floor.  If we are that quick to assess what the day has in store for us, imagine the damage that stinkin’ thinkin’ has on our self-image?

I had a real estate trainer that routinely encouraged, nay demanded, that his students spend the first five minutes of the morning in front of a mirror, staring straight into our own eyes, repeating self-affirming phrases.  “I’m good enough, I’m smart enough…”

Admittedly, it was weird at first.  But over time, coupled with a constant reminder to smile, I could see my own self-confidence improve.  I now stare straight ahead when walking, and have a constant grin on my face.

My clients also responded to my shift in confidence.  I started to receive fewer questions about why I didn’t do open houses, or put flyers in outside boxes even though my explanations remained the same.

If we can simply change how we view ourselves, or at least affirm that we aren’t the complete idiots we tell ourselves, we will begin to exude the confidence that our clients so hope, look for and deserve.

It also helped the self-confidence knowing that on any given day I was going to have some leads to respond to with our real estate lead gen system.

Imagine real estate if no one asked for business.

Wait…

Instead of making it ‘personal’ and talk about real estate, let’s change the focus: what if Coca Cola didn’t market and ask for you to buy their effervescent beverages?

Kind of a no-brainer here, right?  Coke’s got a decent product.  If no one knows about their product, where’s their revenue going to come from?

Good intentions?  Nice thoughts?  Great vibes?

Business Pays the Bills

Brian Brady over at BloodHoundBlog makes a great point that I fear many real estate agents don’t even THINK about:

Asking lenders for business!

I know! Novel idea, eh?

Maybe you already have a great lender that you are working with in your marketplace.  Does your lender also know of folks coming into your marketplace before they arrive there?  What city or metro region routinely sends a bunch of folks into your marketplace?  Have you reached out to lenders in that marketplace?

As the Realtor(R) you should be able to put yourself in front of a few lenders across the country that will have past clients coming into your marketplace.  Need a few extra closings a year?  Include those national lenders on a regular contact follow up program.

Too easy, eh?

In addition to talking with national lenders about leads, have you tried theRockStarAgent.com’s Real Estate Lead Generation system?  Create your own system to automatically fill your inbox with leads daily.