Current Affairs

Do you over promise and under deliver?

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To over promise and under deliver is one of the worst mistakes a sales person can make in business.  You take both your time and the client’s time to a build a relationship through finding out each other’s wants and needs, as well as learn what their expectations are for you and for them.   Agreements and commitments are made based upon satisfying these needs.  Then, the salesperson doesn’t deliver based upon promises that were made.  In the end, when you can’t deliver upon the promise, and you didn’t set the expectation up front, you broke the bond of trust and in turn, hurt your business situation which can take years to recover from financially.

The question I have is why?  Why do people say and commit to delivering results that they cannot produce?  It brings ill will, harms friendships and causes more harm than good.  Your reputation is one of the most valuable assets you have in business – it takes years to develop – why put yourself in the position of having to defend yourself to others or rebuilding your reputation.

My advice is know what you and your business can deliver and by when.  Don’t say yes or we can do that to just get the business.  Return phone calls, emails, and text messages promptly.  If your company changes policy which results in you not being able to perform, notify the client immediately.  If you delegate to others, stay on top of them to make sure nothing slips through the cracks.  Remember, it is your reputation, not theirs at stake.  After the sale, service is critical and will get you more referrals in the end.  Follow up and follow through is what matters most.

Expectations are set through relationship building, proper delegation and being held accountable to get the job done.  This is what you get paid to do, so DO IT.  Live up to your word, do your job and make someone satisfied, not disgruntled and upset that they made the decision to go with you.  Get it?  Got it?  Good!

Now, go sell something and deliver on your promise!

Don’t believe everything you hear!

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Be careful to pay attention to what you read.  It was recently reported that Fannie Mae foreclosures were up 12% in the second quarter – loan modifications that are 30 – 59 days late are up 2.19% – deeds in lieu of foreclosure and short sales are up 27% – there is “frailty” in the housing market and on and on. 

Well, as the cops say in the movie Hangover – not up in here, that’s right, not up in here!  In Prince William County, the average sales prices of properties are up to $255,000 from $229,000 in August of 2010 versus 2009 numbers – this reflects an increase of 12.46%.  And the average days on the market are down to 44 from 63 – a decrease of 30%.  This is great news but wait, there’s more.  In Loudoun County property prices are up to $378,000 from $344,000 from August 2009 to August 2010 – an increase of 8% and the average days on market are down from 65 to 52 – a decrease of 20%.  The story of good news continues for Fairfax County as well – average sales prices are up to $417,000 from $381,500 – an increase of 8.6% and the average days on market are down to 52 from 61 – a decrease of 15%.  The City of Alexandria and other localities here in the Washington area are experiencing similar results. 

The government has release nearly $1,000,000,000 to states for their Neighborhood Stabilization Program.  This program was introduced to bring stabilization to neighborhoods that have been affected by foreclosures and abandonment.  As a result of this program, Virginia received $6,254,000 (mainly for the Hampton Roads area and Richmond) a relatively low number compared to Florida who received over $208,000,000 and California who received over $149,000,000.  Again, this is good news for the Northern Virginia real estate market.

The bottom line is that we will be having more foreclosures coming on the market and short sales will continue to be present in our market place as well.  But, the good news is we are seeing that the distressed market is having less of an impact on our market than the rest of the country.  Our market is strong compared with the rest of the country – people are still moving here and houses are selling with price increases over last year’s numbers.  Know the facts and make it happen!  Get it?  Got it?  Good!

Now, go sell something!

Extra, Extra…there is some Good News in Real Estate!

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Good news is that the Case-Schiller Home Pricing Index reflects that housing prices are up in the Washington area for July, the 4th straight month of gains – good news…there is talk about prices not making a comeback to 2006 price levels until 2014 – bad news…nationally, home sales were down 27.2% from June- bad news…but our numbers were only 18.4%, nearly 9% better than the rest of the country – good news.  Days on market is down – good news.  Inventory levels continue to maintain and even slightly decrease…not really bad or good news either way, just an FYI.

Well, enough of that silly little exercise.  However, I did that to illustrate a point – the market is what you make it and you can spin it the way you want so why not be positive.  The other point is, if you head is spinning, so are consumers.  It is our responsibility to get in front of people and explain to them that our market is different.  In our area, people are always buying or selling – we have a 2.6 month supply of houses – your job is to find them.  We can talk about the negative sales numbers or the positive sales prices – choose to move people forward and not keep them down!

More good news, Virginia was once again ranked extremely high as a business friendly state, #2 over all nationally, as ranked by CNBC.  To illustrate this point, Northrop Grumman selected Fairfax County for its headquarters, MeadWestvaco is relocating to Richmond, Pfizer has agreed to stay in Richmond, Southern University is relocating jobs to VA, and Thermo Fisher Scientific is expanding as is Evatran.  Northern Virginia boasts the lowest unemployment rates in the country and Northern Virginia has seen a drop off in foreclosures where the rest of the state has seen an increase.  In addition, Gables Residential is building 120 apartments near Fair Oaks after sitting on the property since 2007 as they see a need now for more housing.  STG has also inked a deal for 100,000 square feet in Reston and plans to grow from a $220,000,000 company today to a $1 Billion company by 2016 – keep an eye on them!

Now for the numbers!  Inventory levels are down to just under 7,600 – contracts continue to come in at about the same pace weekly – mid 600’s and month’s supply remains in the mid 2’s with rentals still posting strong numbers at a 1 month supply.  Interest rates continue to be phenomenal as well.  So, as we have said for several months now and was reconfirmed at the broker owner meetings in Denver…it is an investors market!  Find’em, sell’em, rent’em, manage’em and then sell’em again…what a theory and business model for the next few years!  Get in the game or get out.  Get it?  Got it?  Good!

Now, go sell something!

What’s your mindset?

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One of the most important things you can do at the beginning of each morning is to check your mindset.  What are your thoughts at the start of everyday?  Are you positive or negative?  Are you eager or are you apprehensive?  Are you excited or worried about what the day will bring to you?  What is the first thing you think about when you get out of bed or when you face any situation during your day.  Whatever it is will dictate your behavior the rest of the day so it is so important to feed your mind with the right thoughts.  Also, your thoughts help develop your character, your personality and how others perceive you which determines if they will want to be with you or associate with you.  So start the day right – with the right mindset – the mindset for success!

The people you interact with on a daily basis are the ones who will set your baseline attitude.  Are they forward thinking, positive, can do people or are they lazy, see what we can get away with today type of people.  If the latter, you need to move on and find new friends.  It has been said that your income is the average of the 7 people you hang around with most…income and attitude go hand in hand – think about that for a minute!

Do you have a mindset that says you need to get up, work hard and accomplish something worthwhile today?  Do you have a true work ethic that drives you to make the most of everyday or do you have an air of entitlement where you expect people to give you business, buy you lunch, and give you what you want?  If the latter, you need to really analyze your thinking and thought processes.

Is your mindset and attitude one of inspiration to others?  Do you lift up others or do you put them down?  Are you destructive in how you treat, speak, or act towards others?  If you are in the second set, why, it does you and them no good to be this way?  Think about this, you get further faster by helping, encouraging and motivating others rather than by putting them down.  Change your mindset and success will follow.

Do you have a servant mentality ready and willing to help others by referring them, educating them or by just being there for them in their time of need or are you always needy asking for more from others and not giving back?  The saying is, the more give the more you get so get busy giving!

Is your attitude one of positivity, creativity and innovation that motivates others to achieve more or are you angry, close minded and negative ready to snap at anyone you encounter?  Take the time to think before you act, what are the consequences of your actions and words.  Strive to be more open minded and unlock the creativity within you!  There is also medication for this…ask Kate.

Are you constantly looking to improve upon how you act or treat others?  Are you continuously upgrading your systems and processes to serve others better? Or are you stuck in a rut, doing the same thing over and over like a robot because that’s the way it has always been and will always be?  It all starts with your mindset.  Write down new things that come to mind and share them with others.  Take the first step to continuous improvement and never look back!

Be bold in your statements and make things happen because your thoughts control your destiny.  Sit back and analyze how and what you think at the beginning of each day and get your head right each and every morning.  You will be surprised at what will happen!  Get it?  Got it?  Good!

Now, go sell something!

 

 

What’s going on in our crazy market?

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What a great event – the broker owner conference in Denver – turned out to be for all of those who attended.  The networking was excellent as always but it was the content of all of the sessions that had the most impact on us.  Michael Abrashoff delivered the key note address on leading your company.  Many of us are coming out of the survival mode and into the “new normal” economy so his message on leadership was very timely.  Each of the breakout sessions covered aspects that are relative to our industry today.  Topics included:  how to take advantage of the market we are experiencing, how to increase your exposure on the internet as well as marketing ideas to help you generate more business.

It is important to attend events such as these to get an understanding of what other agents and brokers are experiencing today, to hear what industry experts are forecasting for our market going forward and to get tips on making you a better agent to become a more professional business person.

Here are a few ideas that were discussed:

· Banks have only released 30% of their inventory up to this point

· Short sales on average are sold at 15% discount – foreclosures are sold at a 35% discount so banks are going to adapt and begin to accept more short sales and are even considering principal reductions on loans of 10% because they will save money in the end

· Interest rates are going remain at this level for several more months

· The job market is stabilizing

· The US Dollar is stabilizing

· The bulk of the Stimulus money is being released in 2010-2011

· There should be 5.5 million home sales in 2010 – 5.2 to 5.3 million in 2011

· 14.75 million houses are underwater – 9.1 million have negative equity of 20% and 4.1 million are have negative equity of 50%

· Foreclosures will continue through 2012 and will begin to slow in 2013

· 70% of all loans are being handled by 4 banks

· 1.7 million GSE loans are 60+ days past due

· Government agencies hold almost half of all REO inventory

· Strategic defaults may have peaked

· Chase is no longer doing short sales so be sure to let your clients know!

· Foreclosures accounted for 31% of Q1 sales – distressed properties accounted for over 50% of all sales

· Investors make up 20% of the market today and will represent 50% over the next 3 years, so it’s time to get educated on working with them to capture this piece of our market

So what do you think the moral of the convention was for most of us?  Get busy understanding distressed properties, how to handle short sales, and the options sellers have going forward.  Get it?  Got it?  Good!

Be prepared for what might happen…

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We all know that there was a push to get houses under contract by April 30th and settled by June 30th so guess what could happen?  Settlements may get delayed as stress has been put on the system to get these transactions closing on time.  Is your lender on top of your buyer’s loan application?  Have your purchaser’s submitted all of their paperwork to the lender?  Is your appraisal completed?  Has the appraisal been underwritten?  Have you received your commitment yet?  Today is the time to push everyone in the process to move forward and get your sale ready for closing early – be the squeaky wheel. 

Why do you ask are you urged to take action today?  Well, if your settlement is delayed, your buyer may not receive their tax credit they are entitled to receive.  If the settlement gets delayed, who is responsible for making up the difference?  If you are proactive, on top of your transactions and put pressure on the lender to perform…it won’t be you!  If you wait until the last minute to check on your loan and where your loan is in process…the buyers may look at you for a contribution to their lost opportunity.  Begin to have questions today to discuss the potential of the loan not closing and what your lender is going to do to make it right if it doesn’t happen as scheduled.  If you lay it on the line early, you will get the results your clients are looking to receive – an on time settlement!

Potential solutions could be reducing your buyer’s principal amount.  Buying down the interest rate is another possibility.  Paying closing costs for the buyer is another possibility.  When the responsibility is put on the lender early to perform or pay – they will perform more often than not. 

On the flip side of the transaction – a buyer may decide not to close if they don’t receive the credit and potentially walk away from the transaction.  As a listing agent, track your closings closely – you don’t want to get caught off guard!

Be the professional, be on top of the process and avoid problems that may arise and you will be the trusted advisor that gets referrals for taking care of your client.  Get it?  Got it?  Good!

How do you approach failure?

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Failure and how you approach it can lead to more failure or tremendous success.  Are you afraid of failure and as such, rarely risk attempting anything new?  Are you a remedial failure – you fail a few times before you learn something from your experience?  Are you a habitual failure that fails every time you attempt to do something new?  Or do you embrace failure and look for the learning experience each time you do not succeed?

Analyze the last time you failed.  How did it make you feel?  Did you feel upset and distraught?  Did the experience leave you feeling puzzled and curious?  Did the experience make you analyze why you failed and how you could have improved to prevent the same result again? Or did you have an ah ha moment resulting in you knowing exactly what happened and why?  It is critically important to know what happened that lead to your failure and why.  If you tweaked your presentation, asked more questions, spoke with the decision maker, or reworked your numbers would you have won?  Ask for feedback from the client, your peers or mentors to determine how you could improve to gain more achievement.

People who have experienced tremendous failures understand and recognize the importance of what happened so they can grow from the experience and build toward success.  Keep an open mind when you fail – be optimistic that you will find a better way to accomplish your task – learn from you mistake and move on to finding an alternative solution.  Also, build upon the experience of other successful people to learn how they adapted to failure:

Henry Ford Failure Quote:

"Failure is only the opportunity to begin again, only this time more wisely."

~ Henry Ford

 

Thomas Alva Edison Failure Quotation:

"I have not failed. I've just found 10,000 ways that won't work."

~ Thomas Alva Edison

 

Benjamin Disraeli Failure/Success Quote:

"All my successes have been built on my failures."

~ Benjamin Disraeli

 

Sir Winston Churchill Quote on Failures:

"Success is the ability to go from failure to failure without losing your enthusiasm."

~ Sir Winston Churchill

 

Thomas H. Palmer Quote on Failure:

"IF AT FIRST YOU DON'T SUCCEED, TRY, TRY AGAIN. Don't give up too easily; persistence pays off in the end.”      ~Thomas H. Palmer

In addition to this, you must try.  Don’t sit back and wait for something to happen.  Take action, massive action towards your goals and then remember it is imperative that you keep positive, be persistent, move on and concentrate on your next task and don’t lose your enthusiasm to get the results you are looking for out of your efforts.  Get it?  Got it?  Good!

Now, go sell something!

Slow & steady we move along…

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The real estate market is moving steadily along today but with reservation.  As corporations continue to move into our area and the state attracts businesses all over the Commonwealth, we were ranked #7 in the most transient states in the country – pretty impressive for those of us selling houses!  In order to be successful, you have to find the buyers and sellers so get out there and get busy looking – they won’t come to you, you have to go to them!

In addition to this, existing home sales increased 7.6% in April.  This was expected as the home buyer tax credit was set to expire but let’s keep a close eye on this in the coming months and see if the sales momentum continues.  We should be in good shape and should continue to outpace the rest of the country as we continue to create jobs, have affordable housing prices, and interest rates remain low.

Not only did existing home sales increase but so did new home sales!  New home sales rose 14.8% in April – the highest performance in two years!  Be wary however as the pace of new home permits dropped 10.7% in April as well.  We can expect this number to drop next month as a result of fewer permits being issued couple with low builder inventory.

Mortgage interest rates also continue to be a driving force in continued sales.  This week it was reported interest rates are at their lowest level since December as the instability in financial markets overseas have lowered borrowing costs.  If rates continue to stay low, buyers will understand the fundamentals for ownership are strong and will continue buy homes.

Another key to the market continuing to blossom this spring is consumer confidence.  As the economy continues to improve and we ease out of the recession, consumers believe their personal situation is improving and as a result, they are spending again.  As we know, consumers drive the recovery in their “perception” of their situation and not necessarily, reality.

Now, let’s talk about the reservation part of the blog.  Although refinance applications remain strong – they have increased 3 consecutive weeks – purchase applications have continued to decrease and have done so four consecutive weeks.  As a result, purchase applications have dropped to their lowest levels since 1997.  Keep a close eye on this number as it indicates future settlements on home purchases.

Next, is the double dip in home prices that Dave Stevens mentioned at our year end meeting in December.  Two price indices – the dreaded S&P Case-Shiller and the Federal Housing Finance Agency reported housing price decreases in the first quarter.  As we have mentioned, the under $400,000 market and the $800,000 – $1,000,000 market continue to be strong but the inventory priced between $400,000 – $800,000 are still trying to find the bottom and that is where a majority of our houses are priced today.  Couple this with the fact that mortgage delinquency rates have hit 10% – a record.  If these homes go into foreclosure and don’t end up as a HAP sale or a short sale, prices could continue to slide.

Lastly, another monkey wrench that could be thrown into the equation that could affect getting home loans is if Fannie Mae implements the right to pull credit up until the day of closing.  It can have a significant impact on a purchaser’s ability to close on their loan if their credit score goes down by just one point.  As we know, it is monkey see monkey do in the lending arena so others may implement this same strategy to limit the number of defaults in the future.  Stay tuned for further details.

So, what do you do?  Work!  As previously mentioned – people are buying and selling houses here in Northern Virginia – get out there and network.  Create urgency – rates won’t stay this low forever, prices will increase and if you can afford the home today, buy it.  Be a professional Realtor and set yourself apart from others in the industry and you will survive in any market.  Get it?  Got it?  Good!

Life after the government support for real estate

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Well, all the hype over the government’s propping up of the real estate market is over and where do we stand?  It may be too early to tell as it has only been one week but in speaking with lenders, title companies, home inspectors and  – oh yeah – Realtors too, the market continues to hum along.  Contracts are being written and accepted.  What appears to remain hot are the lower price ranges (those below $400,000) and the upper price ranges ($800,000-$1,000,000 in some areas) so it appears to be business as usual – so far – for these sellers. 

The sellers we are concerned about are the ones priced between $400,000 and $800,000 as it seems in many areas these housing prices haven’t found their bottom of the market yet.  Going forward it will be critically important to pay particular attention to this segment of the market as we are starting to see the beginning stages of the foreclosures being released into the market.   More BPO’s (Broker Price Opinions) are being requested, Bank of America has hired a third party vendor to help with their release of foreclosures and Notice of Trustee sales are flooding the papers.  And from what we notice, they are going to fall into the $400,000-$800,000 price ranges – not the lower end as we saw in 2008.  From all indications, we are looking at an alarming number of foreclosures hitting our market prior to the third quarter of this year – not as many as we saw in 2008 but close to those levels.  This will have a definite impact on prices.

As far as rates are concerned, mortgage interest rates hit a 6 week low this week suggesting that private investors have filled in for the government in their purchasing of mortgage backed securities.  In addition, there have been several reports stating that the government will continue to keep the Federal Funds rate at or near 0-.25% which should continue to encourage investors to buy these securities and keep rates low for home owners through the end of the year which is good news for housing.

How will the end of the home buyer tax credit impact the market?  In a recent survey of first time buyers conducted by SunTrust, they found that only 10% of these buyers purchased their homes because of the home buyer tax credit.  Low interest rates, affordable house prices, desire to own versus rent were the main reasons why decided to purchase over any other.  A good deal is a good deal.  If the market shows signs of slowing, let’s keep an eye on seller and builder incentives to lure buyers into their properties – right now, we don’t see any but only time will tell.  For now, we don’t believe our market will be severely impacted by this incentive ending.

Another bright spot in our market that will help us continue to sell houses is the “new and improved” short sale process through HAMP to HAFA.  These programs will help qualified sellers have the ability to get approval on short sales much more quickly than in previous years.  This streamlined process will not only help sellers avoid foreclosure but also help buyers get into homes and protect neighborhood values.  We are anticipating this to be a tremendous asset in selling houses going forward.

All things being considered, now is a great time to be a buyer or seller in the Northern Virginia Market.  It is important to stay on top of the trends that affect real estate, watch inventory levels and the type of inventory coming on the market, and lastly, track the number of buyers in the market place to help buyers and sellers make the right decisions when considering real estate.  Get it?  Got it?  Good!

How will you make it happen?

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In today’s business world we all have similar challenges – we want more sales, more clients, a larger database, more profit and the question is, “how do we make it happen?”  In my opinion, it all starts with relationships.  How you treat others, how you speak with others, how do you interact with others are all actions that you take every day that require continuous analysis.  Once analyzed, take the time to enhance and improve on these important skills to be successful. 

The analogy of – people do business with people they know, like and trust is an adage that goes back several decades.  What must you do to have this happen to you? 

First, be an excellent listener.  Be engaged, my eye contact, lean forward, and take notes – be interested, not interesting and people will respond in kind.  Remember their name – it is music to their ears. 

Next, avoid the “me” monster – ask questions, pause before responding, find common ground and build upon that common ground.  Take extra time with people, don’t rush people, ignore people or treat them poorly – this will have a long lasting negative impression upon them.  Remember, it is all about them – not you.  You want them to feel good about the interaction with you and want more.

Also, remember to be observant – recognize their style of dress, artwork in the office or home, memorabilia, pictures of places, friends or family, the car they drive, etc. that will give you clues about how they are as individuals.  These clues about who they are and what they enjoy will help you build upon your relationship with them.

Compliment them when appropriate.  People love to receive accolades for a job well done or on their personal appearance or style.  Be careful not to overdo it or it will come across as insincere.

Be positive and keep an open mind to learn something new every day.  By learning something new, you get the opportunity to teach or help someone else with their situation.

If you take these skills, couple them with dressing the part and build upon them with what my friend Hilary Fordwich calls the 5 C’s you will gain more business, get more referrals, have more profits and in the end, enjoy more success.  

Her 5 C’s are:

Communication.  Buy in your language, sell to them in theirs.  Never start emails with I.  Use their name often.  Be visual versus internal.

Candor.  Be open and honest.  If you make a mistake, admit it.  If you don’t know something, tell your client you don’t know but you will find out.  Be a straight shooter.  Do not use the following terms  – to be honest with you, let me be frank with you or to tell you the truth.  Being honest builds credibility and trust.

Concern.  Empathize with your clients.  It is about your clients and their needs not yours.  Show you truly care by going above and beyond the call of duty.  Understand their situation and where they stand.

Competence.  Know how to tailor your service to meet their needs.  Know your business, its trends, and the numbers and know how to communicate it with your clients.

Connection.  Find common ground to neutralize differences.  Ask the right questions both personal and professional ones to learn more about them.

The more you rehearse these skills, the more you incorporate them into your daily routines, the more you and your business will grow.  Get it?  Got it?  Good!