By Scott Newman
So you’ve made it through the worst of the real estate bubble, you’ve developed a nice client base, and you’re taking over the entire industry – great! If that’s the case, then this blog isn’t for you.
Instead, this blog focuses on what we as veterans of the industry can share with the newbies to shorten the learning curve and help create another reputable professional who gives our industry a good name.
The following are my top three “I wish I knew that when I first started” tips to make your transition into a real estate career as painless as possible.
1. Simple Math
So many real estate agents come into this business thinking of the riches they’ll make selling homes for a living. Many even come up with lofty goals for themselves, “I’m going to make $200,000 my first year in the business.” Does that sound familiar?
Well, the problem is that most agents don’t stop and break down the math behind creating that kind of volume. They end up focusing on the big picture when it’s the attention to the little details that will create the success they desire.
For example, let’s say you’re new to the business and don’t know a lot of people, and that the average home price in your area is $200,000. Simple math tells us that you will make $3,500 per transaction at that price, assuming you have a 70/30 split. At $3,500 per deal, you’d need to complete 58 transactions a year to make your $200,000 – that’s more than one house a week, which is a large volume even for a veteran real estate pro. Continue reading »
By Lynn Minnick
I’ve just come back from an amazing summer in Europe with my young family. The time had come again to get off the continent for vacation, because we all know that if you’re somewhere reachable, it’s going to happen that clients and other agents will find you. In the past 10 years or so, doesn’t it seem like everyone feels they can still contact you when you’re clearly not at work? I blame technology.
For the first week I admit I didn’t think about work for even a nanosecond. By week two, a few stray thoughts crossed my mind (mostly about buying a little castle and staying forever), and I was drunk on British architecture. I had my business well-covered by partner agents, so there was little to worry about. I started taking photos of “estate offices” in Great Britain — “The Guild of Professional Estate Agents” struck me as particularly nice. We strolled through Notting Hill and Kensington in London and picked out several apartments that would suit our family.
In France I started to pick up my favorite glossy real estate magazines. French real estate ads read like poetry and their romantic descriptions made me fall in love with several properties sight unseen. I took more photos of charming houses. I sought out offices and delighted in finding those with specializations like in the Champagne region, where one exclusively handled vineyards (and I imagined how glamorous that must be!). I watched the French version of “House Hunters,” which I loved because it portrays a more honest reality, where sometimes the buyers don’t actually find a house or apartment they like, and their agents pout and shrug and admit it would take a miracle to find them something in their budgets. The French buyers bring their friends along for approval and offers are scribbled on a piece of paper or made verbally and the notaries handle the rest of the transaction. Everyone drinks champagne. Continue reading »
By Sammer Mudawar
Buying and selling residential real estate is one of the most emotional transactions consumers conduct. Understanding client psychology, managing expectations, and using effective communication are the three most valuable skills that a real estate professional needs to develop for a successful career with less stress.
Understand the psyche of your client and your chances of a smooth transaction increase dramatically.
Is the client a standard seller who has lived and raised their family in the home for the past 25 years, but has not done many upgrades? Perhaps prepping this client for the possibility of offensive offers from cash investors will be important to making sure they don’t take things personally, or worse, become unreasonable sellers.
Understanding client psychology is important, however, equally important is they understand your psychology. It is vital to the client relationship that they understand your goals are in-line with theirs, and as a fiduciary you will only represent their best interests. Breaking down the walls in the beginning is one of the best ways to get on the same page as your client.
Here are two examples of how to manage expectations with buyers and sellers. Continue reading »
By Scott Newman
Many agents forget that barriers to getting deals to the closing table exist in both good and bad markets. We are seeing a lot of appraisal issues in the Chicagoland area as over-regulation and timidness on the part of appraisers to push values — despite undeniable appreciation — has resulted in many deals dying at the financing stage.
How do you avoid becoming one of the statistics? Follow my 3 practical tips below…
Know Thy Appraiser
The biggest mistake an agent can make is not meeting the appraiser at the property.
To assume that your appraiser is a true expert on that particular neighborhood, city, property type, etc. is foolish. You know what they say about people who assume!!
You need to be there — both agents should be present, in fact, to show solidarity. Make sure you walk that entire property with the appraiser and give him or her the comparables you feel best reflect the true value of the home. Also, follow up with them afterwards to make sure things are going smoothly.
Remember, lenders are no longer allowed to speak to the appraiser on their file, so you are the first and last line of defense in making sure someone who’s under-qualified doesn’t blow up your deal .
Know Thy Lender Continue reading »
By Sammer Mudawar
Let’s face it, in the eyes of the consumer, especially the internet shopper, all real estate agents are the same. In fact, they don’t even know why you get paid since they find properties on the internet themselves. Does this sound familiar?
Regardless of experience level, 6 months in the business or 16 years, most agents are insecure when discussing income with clients, especially on the buying side. Why? We work nights, weekends, and holidays to earn their income, but if you cannot demonstrate value in yourself, the consumer will not see value in your service.
First, let’s separate seller representation from buyer representation.
Most agents have less difficulty discussing compensation when dealing with sellers. I’m sure many of you are thinking the opposite; the buyer side is easier because there is no discussion, you just accept MLS offered compensation and the subject is never brought up. So let me explain, this industry has trained sellers to understand two things: 1.) A listing agreement will be required; 2.) A percentage of the sale price will be paid as compensation. In a listing presentation, the expectation of payment is already there, half the battle is already won, now it’s a discussion of how much.
However in buyer agency, the consumer doesn’t expect to pay or they don’t even know how compensation works. Continue reading »
By Jason O’Neil
Sit tight. Last week mortgage interest rates jumped drastically. Some say without warning, but then again, most have been preaching for months, if not years, that rates can’t stay this low. Can they?
Why did they rise? Is Wall Street fed up? Was the Federal Reserve testing the market’s tolerance with some well thought out comments? “The downside risks to the outlook for the economy and the labor market have diminished,” said Federal Reserve Board Chairman Ben Bernanke on June 19. Will the Fed begin to unwind its efforts? Time will tell the answer to all of these questions. But I do assure you that the ride is not over. As we’ve seen in years past, there is always a secondary action to the immediate (usually over-reaction) reaction.
Rates will likely dip again and level off in a somewhat upward trajectory. We have likely seen the record low rates come and go.
This happens. It is the cycle. It is not doom and gloom. Rates are still low and people are still interested in buying houses. In fact, I typically see an uptick in home sales immediately after an interest rate rise as homebuyers fear further increases.
As real estate professionals, we don’t have all the answers when it comes to the future of interest rates, but we owe it to our clients to partner with mortgage professionals who are pro-active and knowledgeable about their industry. Rates will be what they will be, and while they have an impact, they certainly are not the largest reason that someone should or should not buy a home.
Jason O’Neil is an associate broker with Encore Sotheby’s International Realty in Indianapolis. Connect with him at jasononeilrealtor.com.
By Dave Robison
My brokerage had one crazy month a few months ago. We had five buyers who failed to perform on a contract and lost their earnest money. Now in Utah, getting the buyer’s earnest money is supposed to be as easy as the buyer’s broker writing a check in about 24-48 hours. But in all five cases it was a fight, with hours of discussions and arguments. In the end, our sellers received their checks — although, in some of the cases the buyers and their agents were very bitter about turning the money over to the seller.
In the midst of the stress, there was one agent in particular who shined through. I believe this person will always be more successful than others (and he is, actually). His attitude reminds me of the attitude held by one of the most successful people I have ever met: Bill Child.
Bill Child sold his furniture store called RC Willey to Warren Buffett. Bill met with me and several friends and told us his story. I also read the book written about him: How to Build a Business Warren Buffett Would Buy. The great thing about Bill is that his attitude toward working with others never changed from the time he took over RC Willey to when he sold it.
Bill took over the business when his father-in-law died. He didn’t realize it at the time, but the company was laden with customer service problems, debt, and tax burdens. Bill turned all that around. For example, the company had sold an appliance that later became known to have a defect. There wasn’t a manufacturer warranty or guarantee on the product, but Bill wasn’t about to let his customers down. He took on the responsibility himself to do the repairs on all the units, even though he knew it would make his company go in the red. Most companies would just blame the manufacturer and keep their money in their pockets, but Bill’s customers were his No. 1 priority and he took the responsibility himself when legally he didn’t have to. He cared more about his relationships and his customers than he cared about profits.
Now, I don’t know the details about all the conversations the agents had with their clients regarding deadlines and earnest money, Continue reading »
By Jay O’Brien
Now that I (maybe) caught your attention with such a money-hungry, eye-grabbing, cliché of a title, allow me to attempt to pave a thought process in your mind on how to achieve such an ambitious monetary goal without being too Robert Kiyosaki about it.
First, focus on connecting the dots more than selling houses. Learn how to spot opportunities.
Forget about the postcards, lose the expired listings scripts, and think. For example, is your neighbor having a garage sale? What’s their story? Maybe they’re gearing up for a move. What do you do? You have their address…now look up tax records, find out information, and send a personalized letter to help figure it out.
Here are two other ways to seize a business opportunity:
1. Have you ever received a phone call on one of your listings that was already in escrow? Think about EXACTLY how that conversation went. Most I have heard sound a little something like, “Nope, nope. Sorry. That property is pending and will be closing soon. Yep. Yeah. Thanks for calling,” in an annoyed and disturbed voice.
When a sign call comes in, prospective clients are calling your buyer’s hotline. It’s our job to capture this call, convert this lead, and represent this individual on a different transaction. I personally like to ask questions such as: Continue reading »
By Anand Patel
We can’t help it.
As real estate professionals we sometimes are trapped within an industry bubble. We attend conferences, meetings, seminars, mastermind groups all related to the real estate industry. We spend most of our time with fellow real estate professionals (our whole business is based on cooperating with our competition). The topic of many of our conversations inevitably revolves around buying and selling real property. It’s easy to get stuck doing and thinking the same…day in and day out.
Because of this, it’s no surprise that a majority of the disruption and innovation happening in the real estate industry today is coming from individuals and companies outside the field. Why? They provide a fresh perspective as an “outsider” peering into a profession that, in their eyes, appears broken. Many of those taking on the challenge personally went through a real estate transaction and realized a need that wasn’t being met.
There is no reason why more solutions can’t come from within the real estate industry.
Imagine the innovation that can take place if more professionals within the industry adapted a broad-minded perspective to challenge our everyday thinking. It doesn’t have to be a major disruption to change the whole industry – it can be something as small as going paperless in our offices, changing how we communicate MLS listings with our buyers, or perhaps considering unconventional marketing techniques.
Here are some ways to help start thinking “outside the house”: Continue reading »
By Paul Everett
The first indication from many home owners that they are seriously considering selling their home is often through a free listing on Zillow, Trulia, Craigslist, StreetEasy, or other regional and national For Sale By Owner sites.
With the expansion of FSBO advice companies as well as online listing tools—particularly Zillow and Trulia—an increasing number of home owners are feeling empowered to take a spin at selling their homes on their own, in order to cut out the potential fees associated with agent sales. As we all know, FSBOs most often learn after a few weeks that selling a home is hard work, and best left to professionals! Placing yourself and your real estate services in front of the home owner during this moment of realization is the key to securing listings from online FSBOs.
When the home owner starts feeling the frustration of selling on his or her own, this is the seed of your opportunity. Unfortunately, you won’t be the only one who knows the time is ripe. Rest assured that many like-minded and hardworking agents in your area will all be thinking the same thing at the exact same time. Therefore, timing and approach will mean everything if you want to be the one who gets the listing. Here are five tips for putting yourself ahead of the pack: Continue reading »