By Melissa Krchnak
We often get asked, “What’s the return on investment on this or that?” And most times, we can quantify our answer. Although if it’s about Facebook, we might respond the way Gary Vaynerchuk would: “What’s the ROI of your mother?”
But do you know the difference between something being an expense versus asking about its ROI? As REALTORS®, we all probably have those inevitable monthly expenses: sign storage, database management software, and digital signature services. Have you ever taken the time to really think about these things and what they mean—and cost—for your business?
I was having this conversation with a colleague and here is how he described the difference: An expense is something in which we’ve yet to find the value. That was a big BOOM moment for me! I see the value in those “expenses” just listed and yet I’ve never questioned their ROI.
Go check your bank statement and see if there’s something on there you’re not finding valuable. That, my friend, is an expense. My advice is to pull out your income statement and clear your books of these “expenses” so you can better invest in items with an “ROI”. Don’t have an income statement handy? Here’s a sample chart to peruse.
Melissa Krchnak is the team leader for Keller Williams in Pikesville, MD. Connect with her on Twitter @mkrchnak.
By Lynn Minnick
Although I’ve been in real estate for 10 years now, I just closed on my first HUD foreclosure. We haven’t had that many in my market (yet!) and so far I’ve somehow managed to avoid them. I almost fell out of my chair at the closing when the HUD attorney handed me a survey to complete regarding my experience selling the property! Really? I had a lot to say about not getting answers from the transaction management company when I asked, but mostly my beef was with the additional expenses incurred by the buyer.
1. When the information lists a repair escrow, it’s not the same as you’d think. In this case, it meant the buyer has to mortgage the amount listed ($2,000 in our example) which is held in escrow by their lender, and paid out to the contractor upon completion after the closing. This was unclear to me, the buyer, the lender and the attorney involved. There really should be some type of disclosure/explanation attached regarding this on the offer documents or somewhere in the paperwork.
2. In the case of a condo, as mine was, HUD does not provide resale packages. At $100 a pop, this was another surprise expense to the buyer, and there is no clause for condo document review. There was no ability to add such a clause either.
3. Not only are there no keys to the property, which of course I expected, but there was no remote garage door opener, and no mailbox key. (Looking back, I suppose none of that should have come as a surprise – we imagined we’d be able to get an extra mailbox key from the association – that wasn’t the case – the buyer has to install a new lock there as well. That’s more of an annoyance than an expense.) Continue reading »
By Jeremy Williams
After receiving a multitude of sales calls this week from various vendors across the nation, I came up with the new phrase “hocus pocus focus.”
Normally I would hang up the phone with one of these sales representatives after politely saying that I am not interested at this time. But this week I listened to their pitches.
I define “hocus pocus focus” as the ability to conjure and disguise a service, with or without deception, that focuses on our desire as real estate pros to do more business. Who does not want more business? So our human nature to fulfill this desire can lead to making bad financial decisions in our businesses, when we already know in our gut that we are submitting to an illusion. The focus on meeting our needs to do more business is the hook these sales representatives focus on because they know it is hard to reject.
“Hocus Pocus Focus” is dangerous to real estate practitioners, so beware. Here are some things you should listen to very carefully when you are contacted by a sales representative wanting to sell you a service that will “grow your business.”
1. Name dropping: “So and so is using this product in your office and having amazing results.” A lot of these sales representatives work off lists so it is easy to drop a name. Ask the sales representative if you could get their name and number to get back to them after you have followed up with those that are “getting amazing results” from their product. Continue reading »