Best business practices

Life is crazy…

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It is amazing how things happen in life and why they happen the way they do.  As I watched my kids play softball and baseball this weekend, the analogy of life throwing us curveballs came to mind.  We are in a current state of change and adjustment in life.  We can stay on the bench and watch it pass us by complaining about our circumstances or we can get in the batter’s box and play the game of life.  In the analogy of between baseball and life – getting off the bench and playing doesn’t ensure you success.  You can stand in the batter’s box and watch the pitcher throw the ball right past you.  You could step out of the batter’s box as you swing and miss the ball completely or you can change what you do and get a hit – maybe even a home run.

Business, much like softball and baseball, is a game of focus, determination, dedication and seizing opportunities.  Are you doing all that you can to be a success?  Are you putting in the time necessary to get results?  Are practicing your presentations to get them right?  Are you making adjustments according to the situation you are faced with to ensure your success?  Are you educating yourself on changes in the industry, trends in the market, and the numbers?  Do you have the passion for the “game” of real estate?  If not, why not?

In baseball there are different levels of success – Single A, Double A, Triple A, Majors and lastly World Champions.  Are you putting yourself in position to be a World Champion of Real Estate?  Do you have the right attitude and approach to the business.  Right now is the time to get into the game and work on becoming all that you can be as a Realtor.  If you need help, find a coach or mentor and grow your business today.  Get it?  Got it?  Good!

Conversations with Platinum Members

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Our group met today for our regularly scheduled meeting and the conversations were lively as usual.  Any time you get together with a group of movers and shakers in the industry with a history of production, sharing, and enthusiasm, how can you not get excited?

Here is what we covered: 

What is happening in the market?  Many of us are seeing a heightened level of activity – properties are selling but also inventory levels are increasing plus many of the agents are getting ready to put houses up for sale over the next few weeks.  Overall in the Northern Virginia market our inventory level of active resales has gone from 4,421 houses for sale the last week in December to 6,666 for sale today – it is over a 50% increase in just over 3 months.  In addition, this was the same level as what was available in July of last year.

We are seeing a lot of showings, but no contracts on some properties – a little slower, no urgency in the $500,000-$600,000, but the properties under $400,000 is still smoking hot.

Appraisals seem to be working out right now – agents were worried about achieving value but they still worked.  It is important to educate sellers and have them be prepared their properties might not get the value and be ready to make adjustments.

Interest rates have increased slightly and will continue to rise through the end of year.  Inflation is one reason they will increase along with the timing of the spring market and the fact that the government has gotten out of buying mortgage backed securities.  More short sales will be affected by rising interest rates – won’t qualify for HAMP and will go into HAFA.  This is a good thing as many people will avoid foreclosure and the inevitable debacle that we have seen where yards deteriorate, appliances are taken, and values are decreased.

More healthy sales are on the market versus distressed sales which is good for the buyers.  It appears as if that may change – stay tuned.  Right now in the Northern Virginia area, only 21% of the market is distressed sales.

In a recent study of first time home buyers by SunTrust mortgage, only 10% bought because of the tax credit.  April 30th is impending date we have been speaking about but it doesn’t appear as if it will have that much of a negative impact on the market because many people aren’t aware of the credit, don’t know if it impacts them so many haven’t utilized it as they should or could have the second time around.

What’s next?  Concentrate on short sales – they are here to stay.  Open house traffic is high so hold opens to increase your database and get more buyers.  Advertise your open houses on Trulia, Postlets, Craigslist, MRIS and e-properties to get the most exposure.  One agent has also had success with Washingtonpost.com and it is only $42 per month to advertise opens on for your sellers.

What are your activities scheduled to get more business this year?  Working on real deals.  Do more networking to build relationships.  Continue to grow database.  Be sure to reach out to agents with a history of working with in the past to become aware of potential new listings for your buyers.  It is all about relationship building.  Agents are utilizing Listingbook.com to educate sellers.

Other additional information was shared:

Please, please, please order HOA/condo docs for our buyers if seller or listing agent won’t provide them when we are working with short sales – you have to protect our buyers.  We have seen many instances where a high percentage of owners are in default on the association fees.  Also, get condo questionnaire filled out prior to listing a condo to see that the new owners can get financing on the property.

Equator says to switch contracts and start from scratch on short sales that kick out – you can no longer substitute new buyer contract at the last minute.

Stay on top of the market, what is happening so you can give your clients the right advice whether they are buying or selling a house.  Get it?  Got it?  Good!

Now, go sell something!

Are you determined?

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I was recently at a Wizard’s game and during the warm-ups I was looking around the stadium and noticed there were hardly any fans at the game.  Yes it was a beautiful day outside yet people had paid hundreds of dollars on their tickets and still didn’t go to the game (courtside seats and center 3 sections on each side are sold out for every game).  Earlier in the day I had conversations with a few other season ticket holders who asked why I would go to a game when they were so bad and the team they were playing – the New Jersey Nets – were even worse.   After giving it some thought, the answer came to mind and it was dedication. 

It made me realize it is hard to have dedication when things aren’t going well.  When you have to give it your all when the chips are down or when you have to make a commitment and there are other choices that appear to be more appealing like the weather, the time obligation required and in a lot of cases – short term sacrifice for long term gain.  Truly, it can be difficult to go all in day after day when faced with adversity. 

In business, so many people give up when they are so close to success and it made me realize that they don’t have the dedication required to succeed.  They try one thing then stop, then try the latest fad and don’t get results and move on to something else always looking for the easy way to success and it is never the case – you need dedication for success.

What does it mean to have dedication?  Perseverance, commitment and devotion are characteristics of dedication and are essential elements of success.  The thought process of it is easier to do nothing than to put forth the time, energy and effort to get the results is relevant in today’s market more than ever.  Dedication to your education is critical.  Dedication to the development of your sphere of influence and its growth is necessary.   Dedication to market research to know trends is an essential element for success.  Dedication to your clients is a key area of focus.  Dedication to showing up and putting in the effort is essential. 

Think about this, the winners in life persevere when things look the bleakest and come out on the “other side” stronger, smarter and better equipped to handle the next challenge.  They have made the commitment to grow and learn from their experiences and become better in their chosen field.  As previously mentioned – you see it all the time in sports – many athletes “just mail it in” and many professionals do the same thing when faced with misfortune.  Be devoted to your career.  Be willing to sacrifice the time and resist the temptations of outside elements to get ahead in the business.  Decide if you have the loyalty for the business required to go to work every day and perform at the highest levels and attain success.  If not, you should find something that gives you this type of drive.  If the dedication, commitment, and devotion aren’t there for you in real estate – get out of the business and get into something else where you have the drive to succeed.  Get it?  Got it?  Good!

Do you have pride in all you do?

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The longer you do something, the longer you realize how important having pride in what you do is so important to your growth as a business person and how it plays into how you get more referrals or stay employed longer.  The question to ask yourself is – do you have it in you?  Do you have or take pride in what you do?  Do you feel confident that you are doing the best you can do and are performing to the best of your abilities?  Do you feel remorse when something slips through the cracks or if you feel you are not doing your best or giving it your all?  Are you doing the minimum to just collect a paycheck or are you pumped up to go to work and improve upon what you did the day before, every day?  Are you doing the little things when no one else is looking because you know it is the right thing to do?  Are you doing the right stuff to do the job better than someone else?  If so, you are taking pride in what you do.  We have made the decision to take pride in what we do for you.  Our goal is to provide you with the best training, education, support and so much more.

As we have done in the past, let’s break down the word pride and discuss the elements of each letter:

Professionalism – embracing professionalism in the way you dress, the way you speak with others, the way you approach each day shows you have pride in what you do for a living.

Responsibility – the idea is to not only take on the job you were hired to do but to take on even more.  The more you do, the more you will get.  Also, do the right stuff – all the time.  You know what to do so do it!  Don’t take extra advantage of your lunch hour, being on the internet to surf the web during work hours, etc.  Be responsible and be the ultimate agent or employee.

Initiative – take the initiative to take on more projects and suggest new ideas.   Be proactive, creative, take the lead on projects – don’t wait to be assigned a task or responsibility.  What do you think about while you are at work?

Dedication – you must be dedicated to what you are doing.  It is the drive within you that makes all the difference in your success.  Be dedicated and get more satisfaction and better results out of what you are doing.

Excellence – this should be your minimum standard in the level at which you should be performing.  If you provide excellent service, perform at an excellent level, you can always expect to be given referrals and get promoted more quickly than others in your field.

Are you interested in taking more pride in what you do?  Ask the experts, be engaged, be active, read, learn, attend trainings to understand your field, be positive, make your job your priority and improve everyday and you will shine.  Get it?  Got it?  Good!

Now, go sell something!

Growing your business with foreign investors

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This week we learned yet another way to help agents today grow their business with developing new relationships through foreign investors.  Our featured speaker was NVAR’s Chairman of the Board, Vinh Nguyen.  He provided us with valuable information on how and where to establish these relationships as well as why we are a viable place for foreign investors to invest their resources.  Here are a few highlights from our training:

 

Working with Foreign Investors

 

It provides you with an additional source of income by working with foreign investors – it is another spoke in your wheel of building relationships.

 

It helps to diversify your business and grow your database.

 

Work with immigrant population, it is a hedge against the main stream market.

 

Work with embassies, schools where a high number of foreign nationals attend and participate in local and national conventions.

 

Attend NAR conventions and attend global forums, learn their market and offer to speak at their conventions, build relationships through your knowledge and expertise of our market.

 

Many foreign developers are interested in our real estate market.  They are looking to purchase bulk REOs, commercial, as well as buy houses for children studying here or abroad as they say in their country.

 

Many of these entrepreneurs have upwards of $50,000,000.00 to spend here in the US.

 

Develop referral channels for yourself to obtain business from different parts of the world.

 

Reasons they want to invest in the United States of America

    Stability of our government

    Price appreciation

    The value of the dollar is low coupled w/depreciation

 

The benefit to you is they do not know who to use, build trust through developing contacts.

 

80 countries have agreements with NAR to accept referrals and pay referrals to US agents.

 

There are great resources available to you through NAR.  Go to Realtor.org, resource, international buyers to learn more.

 

48 % of international buyers pay cash for their properties.

 

New loan program through HSBC

    30 % down, 5.25 % no points

    Foreign investors, paper trail on 30%  down payment is the only qualification that requires verification.

 

Finding channels to bring in money quickly and legally is a challenge to learn to overcome.  Get to know the process through your banker.

 

Your goal is to sell Washington area.  Make them aware of the Nevada, California and Florida foreclosure issues and why we are different.  We have:

    Stability of market

    # 1 in the world now for foreign institutional investors

    Low risk vs. overseas risk

    Diversify their investments

 

Other places to obtain more information on how to work with foreign investors:  Association of Foreign Investors in Real Estate – AFIRE.org –  has a lot of research information.

 

Also, it is important to learn immigration, visa, and green card processes to be able to speak with clients about these issues.

 

Were you aware that you can obtain a green card if you invest $1,000,000.00 in a business?  If you buy a business or establish a new one and maintain it or if you hire 10 Americans, you will have green card within 3 months and you can apply for permanent status in 2 years.

 

Another option is to invest $500,000.00 in a designated, depressed area and you can get green cards – regional EBS’s program.

 

A few final thoughts:  One thing to keep in mind is to not worry about communicating with your new contacts.  Most wealthy investors have translators or speak English.  Look into attending conventions and other associations, such as: AERAA.org and NAHREP.org and lastly obtain a designation – CIPS – develop relations with those agents and work referrals with them.

 

You have heard it before and will hear it again, the more you learn the more you earn – go get educated and learn how to build your database through alternative means.  Get it?  Got it?  Good!

 

Now, go sell something!

Tips for a smoother settlement!

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We had our regularly scheduled training on Friday to discuss the Northern Virginia Real  Estate market and have Champion Title discuss worst case scenarios for closing and even a few other disasters to be aware of in today’s sales environment.  As is the case in any sales situation, it is your job as a professional to manage your client’s expectations of what is going to happen at the walk-through and closing.  Here are a few tips!

Tips for a Smoother Settlement

  1. Try not to Close on last day of the month
  2. Know the difference between a home inspection item and a walk-through, and know what it means to be in normal working order?  This is extremely important when discussing age appropriate items.
  3. Disclose fees/additional costs upfront (e.g., admin fees, FHA/VA fees),Initial  all changes to the original sales contract (“meeting of the minds “), initials/signatures on all pages on the contract – do your damn job!
  4. Work with service providers you know and trust, its all about the team being in place with all the changes going on with RESPA and the mortgage market.
  5. Confirm closing cost credits with the lender prior to ratification of your contract so there are no last minute surprises.
  6. Make sure termite inspection has been ordered and conducted. If treatment was necessary, make sure all parties are aware of treatment prior to closing
  7. Keep utilities on through the settlement date
  8. Contact the settlement company if you know you have any walk-through issues and conduct your walk-through the day BEFORE closing – not minutes before.
  9. Avoid escrowing funds  if possible, lenders are tougher on this issue of allowing escrows
  10. Bring certified funds to the table or wire money prior to closing
  11. Know your client (e.g. reader, needs a POA, etc.) and what they will expect to happen at closing.
  12. Read the REO contract and know its details.
  13. Read the short sale approval letter, know and understand its terms
  14. Have sellers keep hazard insurance in place until a few days after closing

 

 

Now, you can’t prepare for every situation and we haven’t experienced everything we are going to experience but here are some recent situations that arose at settlements:

Dealing with the Unknowns

  1. Unexpected liens – IRS, HOA, etc. – are filed against the property.
  2. Bankruptcy – will not kill the deal but will take time because trustee must release the property and this can and will take time.  Find out the seller’s situation in advance.
  3. More than 1 ratified contract – be smart, know your listings and only ratify one contract.
  4. Improper foreclosure – people added to title after settlement with no knowledge of bank, then property forecloses, proper notification or no notification  was not given to person added to title – bank must re-foreclose and this is a lengthy process.
  5. Unilateral default – not closing because…

 

As always we discussed what our agents are finding out in the marketplace today when working with both buyers and sellers.  Here are some comments on the conditions of our current market:

There is no inventory out there and houses are selling fast.

There are multiple contracts on a lot of listings throughout the area.  Price points that are in the low $200’s are where we are seeing the most activity…

Some buyers are not aggressive enough on their first few offers and therefore are losing contracts.

Pricing is critical for listing prices – do not price a little high as there continue to be appraisal issues.

Agents are writing backup contracts on under contract properties – even foreclosure and regular sales.

An agent recently read that 70% of first offer short sale contracts fall out as buyers lose patience waiting on the process.  It is a good idea to write back up contracts on short sales today.

We continue to have appraisal problems as there are not enough comparable sales for appraisers to utilize in their appraisal therefore they are claiming market is declining.  One agent had an appraisal come in $100,000 low – they made buyers change lenders and verify qualifications of the new appraisal with the second appraiser.  It is imperative to do your homework, know the market and present this to the appraisers.

Ethics are slipping with agents – keeping listings off market (coming soon) then selling them before they go on the market.  The lack of returned phone calls, promptly responding to offers, etc. are the issues we continue to experience.  And what is really scary is contracts and earnest money checks are being deposit after VREB regulations and even closing!  Agents need to stay on top of their game or get out!

Rates continue to be great – we expected them to increase and they did for a short time but they have come back down – we are still below 5%.

You have heard it before – the more you learn, the more you earn so come to training!  Get it?  Got it?  Good!

Now, go sell something!

 

 

 

 

 

 

How do we determine the price?

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I recently posted a blog on Tips for Securing an Accurate Appraisal.  It brought to mind the different aspects of pricing in real estate.  It is one of the most important aspects when buying or selling a home in any market.  Keep in mind, in Northern Virginia, there are always people willing to buy and sell in any environment.  It is critical to analyze various aspects that determine the true market value but ultimate determination is what a buyer is willing to pay and at a price the seller is willing to sell.  Listed below are a few points variations of value.

 

-Appraised value:  this is the most subjective piece of the puzzle today with the implementation of the Home Valuation Code of Conduct.  It has taken what was once and almost a given to a tougher process to achieve “market value”.  As a “value add” part of listing process to our listing clients to help them achieve our sales price, we always meet the appraisers at the property to help support the value or sales price.  We include floor plans, surveys, comparable sales, market data and trends as well as statistics on the area that will help in the process of determining the property’s value. 

 

-Market Value – the truest form of value – what the buyer is willing to pay and the seller is willing to sell the property for under current market conditions.  Market value is determined by a particular purchaser’s and seller’s research of the market, market trends and data available at the time of the offering.  This is the value we hope to attain through the appraisal process once a contract is ratified.

 

-Tax Value – what the local governmental agency sets as their valuation for tax generation purposes.  These values are determined by market conditions and perceived value based upon an assessor’s opinion of what is happening in the marketplace and to raise funds in the appropriate jurisdiction.  These valuation occur on a regular basis from once a year to once every 5 years depending on the area.

 

-Perceived Value – This is the value a seller has in mind for selling their property for – it may be low, but often times it is high.  This value can come from past sales, perceived values of improvements made to the property or lack of improvements made that are necessary to achieve the value they perceive.  Additionally, this opinion can come from family, friends or neighbors and what they believe the seller could obtain in a sale.  On the flip side, it can be a purchase’s perceived value and their attempt to “steal” a house.  This value typically holds the least weight.  This value is also the hardest to overcome for a Realtor in many cases.

 

-Agent/Realtor Value – this value comes from market knowledge, market trends, analysis of demand in the price point, and in depth analysis of square footage prices, tax assessed value to net sales price ratios, and sales prices of comparable properties that have settled within the previous 90 days.  An experienced Realtor can be your most valuable asset in determining the right value for the house being considered.  If you have the right Realtor on your team – they are an invaluable asset. 

 

Hire a Realtor today!  Get it?  Got it?  Good!  Now, call us today 703-652-5777.

How committed are you?

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Commitment – what is it and why do people have it and others don’t?  Is it motivation to achieve more than others that drives us to follow through on what we know is the right thing to do?  Is it respect for our self and others to do what we say we are going to do?  Do we have more desire to succeed and put for the effort to achieve what we say we are going to do?  Is it our belief that we need to live up to what we say we are going to do?  Do we have more discipline?  Is it better time management?  Is it because we have goals and the desire to achieve them?  Is it a matter of just being more responsible?  Is it loyalty?  Is the belief we need to stand up to our obligations?

What I have been experiencing a lot lately is a lack of commitment from others.  Is it fear of commitment and as a result lack of vision and focus?   Is there something missing in their belief system that allows them to drift or become complacent and not take responsibility for their actions?  Is it just easier to be lazy than do it right?  Is it lack of effort or the belief that they don’t need to follow through on what is the right thing to do? 

It is my belief is that people generally know what is expected of them and what they know they need to do succeed in our business.  Professional and ethics are at the top of the list.  People need to follow through on their professionalism and simple tasks that are required to take care of their business.  Is it laziness that prevents them from turning in paperwork, turn in escrow checks, returning phone calls, respond to emails, or simply just show up for appointments?  Is it lack of desire, not loving what they do, no goals, lack of respect for themselves, the business or their company?

It is my opinion that you need to have discipline, effort and desire to be successful and you must commit to these beliefs and live by them or get out of the business.  Get it?  Got it?  Good!

Now, go sell something!

Top 5 Tips for Securing an Accurate Appraisal

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When it comes to buying or selling property, a successful outcome often hinges
upon an accurate appraisal. Unfortunately, due to unrest in the appraisal
industry sparked by government guidelines imposed by the Home Valuation Code of
Conduct (HVCC), securing an accurate appraisal can be hard to come by these
days. Colleagues have shared many a horror story about an appraisal gone wrong
and a client that’s left to pay the price.

As a member of the Top 5 in Real Estate Network®, however, I have learned that
there are steps you can take to help ensure an appraisal accurately reflects
the home’s value. Consider the following advice:

1. Keep it local. Inaccurate
appraisals are often the result of the current practice of using an appraiser
who is unfamiliar with your community…sometimes, they’re even coming from
another state! Talk to your agent and/or lender and insist that the appraiser
involved is local and, therefore, understands home values in your neighborhood.

2. Utilize comps.
Make sure your lender and appraiser are accurately leveraging comps (comparable
market sales) of local properties sold within the last six months to help
appraise your home. Your real estate agent can help in this area.

3. Put your best foot
forward. If you are selling your home, make sure it’s in the
best possible shape before the appraiser visit. Invest in any necessary repairs
and effective cosmetic changes. Consider how your home stacks up against other
homes in your neighborhood and let that be your guide.

4. Review carefully. Review
the appraisal thoroughly to make sure all the basic facts are correct: square
footage, features of the home, number of rooms, etc. If you find mistakes, call
the appraiser and ask to have them corrected. If the appraiser refuses to make
the corrections, file a complaint with your state’s real estate appraisal
board.

5. Don’t settle. You
are not bound to accept the appraisal results. Both buyers and sellers can
request a new appraisal. There is no guarantee that the bank will accept the
new appraisal, but it can be used to challenge the first appraisal.

An honest, accurate appraisal can make all the difference in your real estate
transaction. Follow the above steps and please e-mail
me for more details. I encourage you to forward this important information
to your social network, as well.

Looking to Buy a ‘Fixer-Upper’? The 203k Program Can Help Make It Happen

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Today’s real estate market presents a lot of opportunity for interested home
buyers—with the growing supply of foreclosure properties and short sales, there
are certainly some great deals to be had.

The problem in buying a “distressed” property, however, is that these homes are
often damaged due to lack of maintenance or prolonged vacancy. So while the
price tag might be right, the investment necessary to make the home livable
might just push buyers well beyond their budgets.

As a member of the Top 5 in Real Estate Network®, however, I have access to the
latest information on mortgage and financing options. One particular option
that is providing hope for many of today’s home buyers is HUD’s FHA 203k
program, a loan that enables buyers to not only secure a mortgage, but receive
the funds necessary to improve the home as well.

Here
are five facts about the 203k program to help you determine if it might be the
right fit for you:

1. The
FHA Section 203k program was originally introduced by HUD
in 1978 as a program to rehabilitate and repair single-family homes. The 203k
is a single mortgage loan that provides funds to purchase a home and make
repairs and improvements. A simpler version, the Streamline 203k, was
introduced in 2005. This version offers less documentation and lower loan fees
for renovations that don’t exceed $35,000.

2. In
today’s market, conventional financing, which often requires
20% – 25% down on a home and a perfect credit score, is often hard to come by.
However, with less-than-perfect credit and as little as 3.5% down, you can get
an FHA loan, such as the 203k.

3. The
203k approval process is a little more complicated than a
conventional loan. For example, you’re required to secure renovation costs from
an established, licensed contractor and deliver a package of the proper
paperwork to the lender to secure FHA approval. Make sure you work with an
agent—like a member of Top 5—who is well-versed in the 203k program, or who can
connect you with a lender that is.

4. The
203k loan is not just for foreclosure or distressed properties.
More than 80% of the homes in America were built before 1990—that’s over 100
million homes that are 20 years old or older—and almost every one is in need of
some amount of repair and updating. The 203k loan, therefore, offers advantages
for almost any home purchase.

5. The
203k loan is not just for home purchases but can be used to
finance a home improvement, as well!

For complete details on the HUD 203k program, you can visit www.fhainfo.com/fha203k.htm.
Please feel free to leave a comment or e-mail
me, since this information can be hard to digest and confusing.