Author: Scott MacDonald

Scott MacDonald http://scottymacsblog.com Scott MacDonald is a real estate investor, real estate broker and owner of RE/MAX Gateway with five office locations to serve Northern Virginia and the DC Metro areas, headquartered in Chantilly, Virginia, with additional full-service offices strategically located in Fairfax, Alexandria, Haymarket and Warrenton. Scott specializes in residential real estate. Scott began his career in 1988 with Shannon and Luchs, a regional company, which at the time was the third oldest real estate firm in the country. He left there to work with Prime Properties based out of Fair Lakes in Fairfax, Virginia. It was a company tied to one of the most renowned developers in the area, The Peterson Companies. There, he learned about land development and new home sales and developed his skills as a Broker. In 2001, he embarked on a new course and joined the RE/MAX network as an owner of RE/MAX Gateway. He has built his business on providing excellent customer service, enabling clients to achieve their goals, and thus feel confident in referring others to RE/MAX Gateway. This same level of commitment to his clients has carried over to how he treats his agents and helps them to succeed in today’s ever-changing market. Through Scott’s extensive knowledge and experience, RE/MAX Gateway is able to provide the tools, systems, and training to make the agents thrive under any market conditions. RE/MAX Gateway is an award-winning organization that has grown to four offices and is highly regarded in the industry as a leader in the Northern Virginia real estate market. We are the premier agent and business development real estate company in Northern Virginia. Bringing balance to your Real Estate business to take your life to the next level. Throughout his career, Scott has received numerous accolades, including a nomination for REALTOR of the Year and induction into the RE/MAX Hall of Fame. With over 30 years of experience, Scott is highly regarded for his real estate expertise, as the RE/MAX International Convention Speaker in both 2002 and 2007, a panelist for a National Association of Realtors focus group on RPAC, has served on the Northern Virginia Association of Realtors’ Board of Directors and has been selected as a RE/MAX R4 2014 convention panelist on the how-to of “Maximizing Office Profits.” Most recently, Scott was recognized as one of the 2019 Top Real Estate Newsmakers by RIS Media, and he received the Outstanding Leadership Award from NOVA Real Producers Magazine.

The tyranny of the Status Quo

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What is the status quo?  As Webster’s dictionary defines it, it is – the existing state of affairs (at a particular time).  What is wrong with the status quo in real estate?  The market is in a constant state of flux.  Interest rates change, inventory levels change, the market shifts between a buyer’s market to seller’s market regularly, housing prices fluxuate between areas & neighborhoods, attitudes of buyers, sellers and agents  alter within the market,  and as we know now, the appraisal portion of our transaction has also adjusted.  The internet has brought more information to more people more quickly so it is imperative that we as agents adapt to change. 

Let’s analyze where we need to make adjustments in our business to maintain a competitive edge.  First, our conversations with clients, other agents, lenders and appraisers must change.  We have seen inventory levels steadily decline, demand steadily increase, we see multiple contracts throughout our area and across different price points and we are definitely in a seller’s market.  Let people know how the market really is and not what the media says it is.  As an example, The Washington Post wrote about Short Sales and strategic defaults on mortgages this past weekend.  We have been dealing with these issues for several months now.

Our marketing efforts must be a reflection of how to attract what is “working” in our marketplace.  Today we are seeing investor and first time buyer purchasers buying a majority of houses in Northern Virginia.  Prices are down, interest rates remain low, the rental market is hot, and the $8,000 tax credit are making it ideal for buyers in both categories to enter the market.  Hold home buying seminars geared towards first time buyers and investors.  Now is also a fantastic time for move up buyers to take advantage of the market and “switch” equity positions.  Call past clients and tell them how the market really is, build inventory and sales will follow. 

Our education – as previously mentioned in the internet comment in the first paragraph – CDPE, winning multiple contract situations, Green Designation are what we need to direct our attention to in today’s market.  Determine the next trend and pursue your education in that arena.  The more you know, the more you will grow and your bank account will follow.

Our networking efforts need to be increased.  You need to get in front of people to get your message out.  Now is not the time to sit on the sidelines.  Make the effort and see the results.  Networking opportunities are everywhere – informal places like the gas station, grocery store, schools, games, swim meets, swimming pools, etc to formal ones like chamber events, BNI’s, etc.  Also, network with lenders, builders, title companies and other Realtors to gather information on our market for you to share with others you meet to show your expertise.

Our prospecting efforts need to be more intentional.  Be direct in regards to past clients, sphere of influence, and adding new people to our databases.  Your prospecting efforts need to be continuous, consistent, as well as meaningful to the recipient.  Send the right message and get sent referrals.  Your prospecting must be done on a daily basis – not on occasion.

What should stay the status quo – diligence in which you pursue your personal and business growth – persistence in your prospecting efforts to expand your database and your business as well as consistency in your communication with your sphere in regards to the number, type and message delivered to the people in your database.  Your pursuit for success is reflected in all of your endeavors you undertake in your daily routine.

Get busy getting busy.  Get it?  Got it?  Good.  Now, go sell something.

Expert Opinions on Our Market

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Each month for over 4 years, we have gathered top real estate agents to discuss the market, trends and future of our business.  Here is what we discussed this week:

Unprofessional agents are controlling a lot of the business out their today.  Lack of returned phone calls, delays in presentations, incorrect information listed in MLS, and general lack of respect for fellow Realtors.

The short sale process is taking even longer as banks appear to be more disorganized than the previous several months.  Paperwork isn’t being logged, lost or is being asked to be resent for verification.  In some instances, short sales have been lost to foreclosure as there is no communication within the bank.  In one scenario, the seller’s suffix wasn’t at the end of their name on some paperwork so the lender closed the file without notifying any of the parties in the transaction – just reported no updates at this time for 3 weeks before realizing they had actually closed the case.  There is no end in sight as more short sales continue to come on the market.  A uniform process should be implemented by banks to streamline the process and allow more short sales to go through.

Appraisals are still a leading concern.  The HVCC process is extremely disorganized and has many flaws.  Here are some examples:  An appraiser was assigned to do an appraisal in Alexandria VA and the appraiser was from Aberdeen MD – nearly 100 miles away.  An appraiser was assigned an appraisal in Oakton VA and they were from Waldorf MD – over 75 miles away.  Two appraisals were done on a property in Piedmont – one was $550,000 the other $635,000 on a sales price of $600,000 – the underwriter said both were flawed and said the house was only worth $590,000 – they were in OKLAHOMA!  How can they say what a property is worth when they aren’t familiar with our market and more importantly – never saw the house and based their opinion on 2 flawed appraisals?  Many of the appraisers aren’t following through on their commitments and add to delays in approvals by taking 10 to 14 days to get their appraisals in to the lender.  Values are being surpressed by unprofessional, uneducated, and inexperienced appraisers who are the low bidders for appraisals through Appraisal Management Companies.

Average sales prices are down for everyone in the group – more first time buyers, fewer move up buyers, and investor purchasing low priced homes for investment opportunities.

We continue to have pent up demand for housing.  The market is on fire below $450,000 with multiple contracts on virtually every home that is in good condition, shows well and is priced right.  With many properties experiencing multiple contract situations, agents are starting to look at new homes as an option.  There are tons of calls coming in from buyers – many have a huge back log of buyers but no inventory to sell them.

We still are not seeing foreclosures flood the market as has been discussed for nearly 9 months.  Our inventory levels are down to May 2005 levels and if they were to come on the market, we could absorb the inventory with the pent up demand we have in our marketplace.

The agents were encouraged to remain optimistic, to be proactive in reaching out to move up buyers, educate the public on the opportunities available and to go sell something!

 

Care

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Care A question posed to me recently is, “Do you care more about
your people’s success than they care about their own success”?   After some deliberation, my answer was yes –
at times I believe that we need to provide more to our agents to help them get
over the hump or get them on their way to a successful career in real estate
and that they should seek more counsel from us to become more successful.  In understanding that everyone defines
success differently, it is still imperative to understand what success means to
each of our agents.

So, what was learned from this exercise?  I need to ease up – let the agents take
advantage of what we have to offer – stay current, but don’t add more to our
plate or theirs by offering more programs – and encourage them to apply what
they have been taught to their business to facilitate their success as well as
take advantage of what programs we currently have in place.  Will we still care?  Yes, of course, and here is how we plan on
accomplishing our goal – the acronym CARE:

C – Commitment-
we are committed to ensuring our agents are the most educated, professional,
top producing agents in our marketplace by providing them with training
opportunities, real estate exchanges, mastermind groups, blogs, and up to date
information for them to share with the clients, sphere of influence and those
they encounter on a daily basis.

A – Attitude – We
will be a positive, upbeat and energetic force in their environment that will
provide constructive feedback to enhance their business.

R – Responsibility
– We will encourage our agents to be responsible for their careers by providing
an encouraging environment, the right tools for success, a supportive staff
eager to assist our agents, and the time to assist them with their efforts.  We will also be responsible to them to by
providing constructive feedback and by helping them in their endeavors to be
successful in real estate.

E – Education –
We will continue to keep our agents educated through our current training
schedule, one on ones, quarterly meetings and our business specific summits so
they can help buyers and sellers make the right decisions when buying and
selling properties, grow their teams and build their business so they can
achieve the success they want out of their business.

We will always care and we will continue to inspire our
agents to greatness and will only seek to control what we can control and not
care more than they do about their success. 
You control your destiny, take advantage of what is available to you,
learn, earn, grow and succeed.  We are
here for you.  Get it?  Got it? 
Good!  Now, go sell something!

Should you sell FSBO?

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In a conversation I had today with one of my agents, I was asked why would someone list their home FSBO (For Sale By Owner)?

This was my response…

Nationally, the average FSBO gets 29% less for their comparable property than a home listed by a Realtor and make up for only 7% of all recorded sales nationally. In a report published by the National Association of Realtors in February of 2009, the median selling price of an open market FSBO home was $150,100, while the median price for agent-assisted sales was $211,000, as most home owners are unaware of how to properly price the property based upon current market conditions.

FSBO’s tend to have a longer time frame on the market due to…

·         less exposure due to no MLS publicity

·         limited website distribution

·         limited market research to advertise to potential buyers

·         no word of mouth advertising  between Realtors

·         owners miss out on the vast exposure through media outlets Realtors have access to through social media marketing, blogs, etc.

·         limited availability of showings and feedback due to no lockbox

·         limited or no access to forms

·         purchasers  want to negotiate more because of no Realtor involvement

·         owners are not aware of the showing, prequalification and settlement process

 

Pitfalls to avoid…

·         HOA guidelines, rules and regulations

·         Pre-qualifying or approving potential buyers

·         Reputation of other parties involved – other Realtor (if applicable), lender or loan broker, title company

·         Price or points – what’s better?

·         Appraisal (meeting, providing comps, discussing market trends, etc.)

·         Home inspection rules and regulations

·         Time frames and hurdles to jump over to get to closing and what happens if they are missed

·         Who orders what?  When?

 

In the long run, it pays to hire a professional, full-time Realtor to help guide you to a successful sale and settlement.  Call us today – Results Realty Group – (703) 652-5777.

Pieces of the Puzzle

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Puzzle Pieces of the puzzle that lead you to success – what are they?  In today’s market, one of the most important pieces is knowledge.  You need to know the numbers.  How many houses are available for sale?  How many months supply do we have today?  What are prices doing – going up, down or remaining stable?  What are the average days on market?  What are interest rates? With these numbers and others you need to know how they compare to where they were last week.  Last month?  Last year?  Additionally, you need to know what markets are “hot”.  What price ranges are selling and which are not and why.  You need to know what is happening in the industry – underwriting guidelines, appraisal rules and regulations, loan programs and guidelines, and what is going to change that will affect our industry.  You have to know the contract and all addendums and be able to communicate what they say and mean to your clients.

Prospecting is also a very large piece of the puzzle.  All of the knowledge in the world is useless without someone to share it with.  Your efforts need to be intentional, focused and proactive.  When speaking with people, tell them what you are going to tell them, tell them and then let them know what you told them.  If you are looking to help people in distress, let them know.  If you are looking for buyers, let them know.  If you want to work with clients not in distress, let them know.  Be specific, be direct and be positive in your approach and you will reap the rewards.

Another puzzle piece is time management.  Setting a schedule, following it and incorporating the following areas of into will help lead you to success.  Find time to work on your business, schedule working in your business – showings, listing appointments, writing contracts and closings, make time for your family commitments and friends.  Also make sure to include community involvement, to get involved in your association, and work time for charities into your schedule.  As you have heard, the more you help others, the more help you will receive.

You must also work on sharpening your skills regularly.  Rehearse your presentations, attend trainings, read sales books, take courses on selling.  Learn to network better by having your elevator speech prepared and be able to communicate it at any time.  In real estate, we are always “on” so practice to be prepared.

Your attitude also needs to fill in one of the holes in your puzzle.  A positive, upbeat and optimistic attitude will give you energy, focus and determination when times get challenging.  Remember, helping people and being solution oriented will produce huge rewards for you in life and in business.

Work on you delegation.  Only work what adds to your bottom line.  By only doing what creates revenue and delegating the rest makes you an asset to your team.  Give up control of paperwork, mailings, brochure creation, feedback calls, MLS input, etc – review it but don’t do it.  Get busy getting in front of people and your bank account will grow!

Tools are another piece of the puzzle.  You need to know what works and why and how it can help you and your business.  Know how to work on social media sites effectively and efficiently and don’t let them be a distraction.  Use them to enhance your marketing and to develop and grow your sphere.  Also, know which devices are most effective for your business and invest in your business.   In today’s market, you need at a minimum a lap top with wireless capabilities, portable printer & scanner, PDA/IPhone/Blackberry, video capabilities through a flip video or camera, and a digital camera.  Also, you need to know what software programs will help make you more productive, efficient and effective.

Put your puzzle together today and your success will follow.  Get it?  Got it?  Good!  Now, go sell something!

Work on your Business

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Vijay At the AT&T National golf tournament yesterday, we watched Vijay Singh hit balls at the driving range.  He had obviously been there prior to our arrival as he had already worked up a sweat.  We watched him hit balls with precision for close to a half an hour and he was still on the range when we went in to watch others play in the tournament.  He was doing all of this prior to his 18 hole round in the tournament.  Then, as we were leaving, he was back at the range hitting balls.  As many of you know, Vijay is at the top of his profession. 

So, you ask, what does this mean?  In my opinion, if you want to be at the top of your game like Vijay is at the top of the golf game, you need to be work on your business as much as if not more as you do in your business.  To stay on top of the real estate game – learn all you can about the business as often as you can.  Start a mastermind group and discuss trends in the market, read blogs and subscribe through RSS feeds of writers you like, speak with industry leaders – not just locally but nationally as well and ask what they are experiencing in the market, read books on real estate, attend conventions, seminars, and trainings.  The more you know, the more you can communicate your value to others, the more referrals you will get and the more your business will grow.

In addition, have a business plan with a course of action to help you attain your goals.  Start with short term goals, set mid range goals then lastly have strategic long term goals.  Everyone at the top of their game has goals – on paper.  Learn and mimic top professionals in other industries to grow your business.  Get a mentor, coach or entrust a successful person to share your ideas with, to hold you accountable and to provide you with the right feedback to help you succeed.

It is easy to get caught up in your business – showing houses, breaking your schedule to meet with a new client, putting out “fires” that pop up, not delegating enough lower revenue generating tasks, etc.  instead of working on your business.  Working on your business takes time, diligence and discipline but it is critical to your success.  Differentiate yourself from others in the industry and start working on your business today.

Get it?  Got it?  Good!  Now, go sell something!

Stress

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Recently the key word in real estate has been stress.  Stress because of the other agent’s lack of professionalism, stress of short sales and the process, stress because of appraisers, stress over underwriters, stress because of unrealistic buyers and stubborn sellers –it is mind boggling.  Experienced agents and managers who have been in the business over 15 years haven’t seen or been through anything like it in their careers.  It has brought some to the point of taking a hiatus, others are thinking about changing careers, and others are looking for ways to beat it.  The bigger question is when will it change and how.

No one has a crystal ball so we can’t answer when others will change but you can change yourself.  As we know, it is how you respond versus react to a situation that determines your outlook on the business.  If everything is construed as a problem, a hassle, or an inconvenience – it will be.  If you look at each situation as an opportunity to help others solve a problem, help them make the right decisions, or give them an opportunity to learn about the business, the contract or the process, your stress level will go down as you see yourself as a solution oriented –not as every situation is a problem.

Next, consider taking a vacation from the business.  In the movie What about Bob, Dr Leo Marvin (Richard Dreyfus) told Bob Wiley (Bill Murray) to take a vacation from his problems.  So, if your business is your problem, enjoy a mental health day or two or even more if you can with no phones, emails or ties to the business.  You should come back refreshed and ready to tackle your daily real estate challenges.

Also, try listening to motivational tapes or watch inspirational videos.  We have all seen them before but revisiting them can only help – not hurt!  As Zig Ziglar says, “Motivation speeches don’t last and either does a bath so take one every day”.  Again, have an open mind and just try it!

Reach out to your peers and ask their advice about how they handle their stress levels when they reach their tipping point.  What are their sources for relieving stress?  Sometimes just talking about it helps relieve it.

Many others exercise, garden or read to release their stress levels and some even write about it.  Start a journal to let it out on paper.  Blog about it and how you relieve your stress to help others – it can help – I assure you.  The thing to recognize is what works best for you and do it!

Get it?  Got it?  Good!  Now, go sell something!

 

Real Estate Information Exchange

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Our Monthly Real Estate Information Exchange at the Market Street Grill was once again filled with lively conversation, outstanding & relevant real estate information and great networking opportunities.  We covered topics such as short sales and recent bank changes.  We are hearing more about banks asking for mortgagees to hold a reduced note, interest free for up to 7 years to offset the mortgagors losses and the impact it is having on getting short sales through.   The conversation also went on to discuss reporting MRIS violations on listing agents who do not properly change the status on listings with contracts in our multiple listing service.  We also discussed which areas are “emerging” as hot markets and where we are seeing more multiple contract situations occur.  More frustration was discussed about how we are having increasing difficulty with cooperating agents and getting responses from them in a timely fashion and how to handle them through Professional Standards to “police” our own.   We also covered our recent involvement in Top 5 in Real Estate and how it will help us differentiate us from others in the industry as well as help us promote ourselves more professionally to the public.  On the mortgage side we reviewed how ARMs are a great alternative to fixed rates as fixed rates continue to rise.  FHA 5/1 ARMS are currently at 3.5% with caps of 1 and 5 – a very viable option for many buyers in our market today!  Conventional 5/1 ARMs are at just 3.625% – very attractive as well!  We also heard that NVR had acquired WCI’s land holdings in Northern Virginia out of bankruptcy court on Tuesday by outbidding several other National Builders.

How to win in multiple short sale/reo contract situations

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Art Grace’s ways to win multiple contracts:

  • Write a perfect contract – it reflects your professionalism.  Put in all details for listing agent on page 10 of contract, dot the i’s and cross the T’s.

  • Be aware of appraisal train wreck ahead

  • Don’t write in “As-is” contract – home inspection for informational purposes only.

  • Read the bank addendum and see if the addendum says you have the right to inspect, or does it allow you to have a home inspection opportunity?

  • Reasonable price is paramount to the bank – don’t make ridiculously high offers – especially with FHA loans or a price you know won’t appraise

  • Submit comparables that will help your offer and appraisal through when you come in high

  • Ask for a repair credit and any balance will be returned to the seller prior to closing – not all banks will approve

  • Fannie Mae will not allow any repairs prior to closing and you cannot obtainFHA financing unless it’s a 203K loan program

  • Have a licensed contractor or home inspector preview property prior to submitting offer – relieves obligation of home inspection contingency

  • Human element of buyers does not impact the sale as much as it does with arms length transactions

  • Don’t make multiple contacts to listing agent – don’t be threatening or confrontational or overbearing.  Listing agent doesn’t hound their asset manager so don’t hassle them.

  • Email is typically the best way to communicate with listing agents

  • Scratch through paragraph 13 on contract removing the right to change financing.

  • Highest and best is still critical – Competence of agent, title, mortgage company in addition to big deposit, quick closing, waving inspections, etc.

  • Write on bank addendums or refer to your client’s addendum on their addendum unless it’s Fannie Mae – they don’t allow you to alter their addendum

  • Watch out for anti-flipping rules in Freddie/Fannie addendum

Short sales

  • Problem #1 – there are too many processes – virtually a process for every agent

  • Ask the listing agent how they are going to handle the process

  • Don’t avoid them – they are everywhere and you can make a lot of money doing them

  • Write into the contract that the seller will only ratify and send one offer to the bank for approval

  • Get written evidence of rejection if seller is truly denied

  • It is not possible for the seller to provide a release of recordable lien in recordable from at the time of settlement-lender always has 90 days – not a “real” clause so strike the sentence in the addendum

Seller side:

  • Get seller in touch with attorney to discuss short sale versus foreclosure and ramifications of bankruptcy

  • Avoid tax consequences by utilizing tax relief act that is in effect until 2012 if it is your principal residence – insolvency exemption as well to relieve tax obligation due to debt relief.  Always have seller consult with tax advisor and attorney first – insolvency exemption can allow investors to sell under a short sale situation

  • Most success in short sales comes when sellers deals with lender directly – agents second – short sale negotiator 3rd (fees can be too high)

All in all, maintain your professionalism and communication with all parties involved in order to ensure a fair shot for your clients.