Answering the ‘Not So Simple Questions’

November 3, 2009Scott MacDonald Leave a comment

I was recently asked by an old friend, an innocent question
in his mind I am sure but as you can see from my answer it is anything but a
simple question. He asked, “How will the
market be in the spring?”.

Here is the response:

You ask an interesting question which requires me to pull
out my crystal ball. Here goes my best
guess. There is a lot of uncertainty of
what can happen in the spring. There is
speculation that the extension
of the Tax Credit will pass and be offered to all buyers (with
restrictions) through April 30th, then reduce quarterly through the end of the
year until it is gone. This measure will
help sustain momentum that we currently have in the market – especially in the
under $400,000 market. In all likelihood
it should pass this week. This, as
previously mentioned will be good for our market.

At this time we have very low inventory – it's down 54% from
this time last year. It has been rumored
that foreclosures
will be released into the market by the banks – the question is, how many
are in NOVA and how will they be released?
Slowly or just dumped. If we have
a lot and they are released simultaneously, how far will prices fall? We have seen the phenomenon of prices falling
with low supply and high demand – it is a true economic anomaly in my
opinion. If they are released
strategically and are allowed to be absorbed by the market naturally, we will
continue to see a rebound price wise and have a healthier market. Tying into this question is how soon will
they be released? This supply and demand
aspect which is tied to pricing is also critical to the strength of new home
sales. With the cost of land, builders
can’t build product and make money in many areas, they are “shut out” of being
able to build. Until we see an increase
in prices, many builders will remain on the sidelines. This carrot of foreclosures has been dangling
in front of us for about a year now.
Stay tuned on this one as it may be a critical piece to our housing
recovery depending upon how it is handled.

Mortgage interest rates are low now but have slowly
increased upward the last few weeks.
The government has committed to buy Mortgage Backed Securities through
next spring – to the tune of $1.2 trillion.
Who will step up to buy these securities in the future? If no one does, how high will rates go and
how quickly? Additionally, it appears as
if we see the high loan limit of $729,750 stay at this level for our area, if
it doesn't, how drastically will it hurt the upper price points that are
already experiencing a slower market.

Right now, we have buyers looking for homes, we have low
inventory levels, low interest rates and loan programs to get buyers into
houses. It is a great time to be in the
market. Over the next few weeks, we will
see how things play out for the spring – beyond that will require a second
crystal ball. Hope this helps!

Here We Go Again

October 22, 2009Scott MacDonald Leave a comment

Platinum Club October

Asset managers are checking up on their listers to make sure
properties are being marketed properly.
If you are listing foreclosure properties – tighten up if you want to
keep your listings!

2^nd quarter is when the next “wave” of foreclosures
is to be released – here we go again!

3 month moratorium on foreclosures is more here say yet
properties are going to foreclosure in November. Apparently, the banks are going to do away
“stages” of appraisals.

Ekko works well with short sales, S5 is OK –nothing above
the others, and Advanced Title gets them done.

Banks have stacks of short sales to work through – Bryan had
4 approved in the last week – 1 in 70 days, 2 in 3 to 4 months and 1 in 6
months. It seems as if the Asset Manager
makes all of the difference not necessarily the bank.

Take short sale listings to generate buyer s leads and close
them because chances are your listing
won’t close. Short sales make the agents look incompetent.

Buyers are indecisive and becoming unrealistic – coming up
with excessive home inspection lists.

Upper bracket prices continue to fall and those buyers are
more cautious. People are backing out of
remodeling contracts as well – the economy is their excuse of why they aren’t
moving forward. National news and lack
of details about our market is making them uncomfortable in both scenarios.

Are there more listings coming on the market? The answer is yes – inventory is low put it
on now.

Builder activity is on the rise. One builder, Van Metre is up 40% and is
raising their prices – NVR posted a 50%
increase over last year’s sales.

We all believe Tax Credit for first time buyers will be
extended. As previously discussed each
real estate transaction “touches” 29 different industries and generates $62,000
in capital to the economy.

We also believe that the loan limit will go back to $625,500
and remain there as prices are lower – we all have had fewer sales above the
$700,000 price range. Also, the
government may want to diminish their exposure and not raise it back up.

Condo associations need to be proactive to get their
properties approved FHA after November 2, 2009 – no one has heard of any
associations taking the lead. Be sure to
make sure the project is in process of approval prior to finalizing
contacts. No more spot approvals with
FHA after this date. Here
are the outlines of the program – lots of questions are still
unanswered. Will this kill the condo
market?

What does all of this mean?
Professional Realtors are more valuable and more needed today more than
ever. Get it? Got it?
Good!

Now, go sell something!

How disappointing!

October 20, 2009Scott MacDonald Leave a comment

It is disappointing to be ranked so low in the consumer’s mind as to how we handle ourselves relative to others in sales. What I am referencing is most consumers rank Realtors very close to where they rank new and used car sales people. In the past month or so I have shopped for a car for myself, helped our company vice president and lastly, my mother. We have looked on used car lots as well as luxury new car lots. We explained our situations – my lease ends at the end of October, one car broke down, and one car was totaled – basically, we all had an immediate need. How many have followed up when we told them exactly what we were looking for in our next vehicle and what our situations were – um – zero. How many wanted to sell us something we didn’t want – um – all of them except 2 out of about 20. How many were obnoxious, overbearing, unprofessional, made us feel uncomfortable and made it difficult for us to leave the lot – um – again, all except 2 out of about 20. As a result of this experience, I asked myself, “why was this case”. How can Realtors be compared with sales people who exemplified this behavior? Do we truly have that many untrained, unprofessional agents in our industry?

Let’s examine what we had done with our shopping experience and how others in our industry can improve if they exemplify the used car sales approach. In our journey, we had tried to make their job as easy as possible as I don’t like to be sold. We had partially qualified ourselves for them by telling why we were there, what we were looking for in the next vehicle, how much we wanted to spend, how soon we needed our cars, and that we had our financing lined up. So, what was the problem? First, I don’t believe they have been trained in professional sales. The biggest problem was, they didn’t listen – they were too concerned about making a sale. Had we not prequalified ourselves, I don’t believe they could have done it for themselves because they weren’t focused on us – only the sale. They didn’t ask any follow questions like, what kind of cars we had – what we liked about them – what we were looking for in the next car and why – had we looked anywhere else – what did we find there and what did we like or not like. They were too busy talking and definitely didn’t ask us any questions to build rapport. The only way they knew what I did was because I gave them my card to follow up with me. Guess what? They still didn’t follow up with me – at all.

As professionals we know the basics of sales which are: people buy from those they know, like and trust. If they are so busy talking about what we don’t want to hear, how can this chain of events happen? The agendas we followed was not ours but theirs – they wanted the sale. They believe that they had to speak the whole time to be in control when the fact is, those who ask questions are the ones in control.

Their technique of closing was so far off it was laughable. We wouldn’t buy from anyone who subscribes to the ABC theory of sales…Always Be Closing. Don’t close until you know enough about your client so you can help them make the right decision. Closing is an evolution not a forced approach to sales.

In order to build trust, demonstrate your knowledge of your business. Listen, clarify, then respond to clients don’t oversell and force yourself on others. Dress the part, be polite, and communicate effectively. These skills will result in sales, I assure you.

So the moral of the story is – if you want to attain more sales as well as referrals you need to differentiate yourself from other sales people. Start by prequalifying effectively, ask lots of questions and then, listen to the answers – don’t tell. Don’t sell from an empty wallet you are looking to fill, put their needs/agenda ahead of yours, people can sense this immediately. Build rapport by learning about them and what their needs are. Have an effective follow up system in place to show your professionalism. Act, look, and communicate the role of a professional. Close at the appropriate time in the process – not continuously – it turns people off. If you follow these little techniques, you will attain the success you desire. Let’s elevate ourselves from the lower ranks of sales people! Get it? Got it? Good!

Now, go sell something!

Walter Bond, Kathy O’Neal…what a great day of speakers!

October 16, 2009Scott MacDonald 1 Comment

Today’s speaker at our exclusive business development group Accelerent was Walter Bond who amazed the crowd with his personality, flair and common business sense to help us “sell” our way out of the recession. Here are a few of his tips: strive to be the top in your business – whatever your chosen field may be; connect with people – don’t just communicate; execute the principals of the of your business – be fundamentally sound; differentiate yourself and most importantly be likable! As we know, people buy from people they know, like and trust. They know you by branding yourself, they like you because they you “connect”/build rapport with them and the trust you through your knowledge, skill and expertise you display in your business. Also, to be the best, carve out your niche!

Our Top Producer Panelist in today’s training was Kathy O’Neal

Team of 3 plus Kathy

Unlicensed assistant – visual tours, schedules appointments, client coordinator

Part time IT guy – does videos, website design, blogs

Husband – writes blog, works internet stuff, but they don’t do twitter or Facebook or Linkedin

Kathy – the face of the team

Videos are of testimonials, interview Kathy, buyer process – people know you before you meet them – think about

Incorporate video into your program – financing, seeing properties, writing contracts, settlement, foreclosures, short sales

Now send video emails introducing yourself

Keep up with past clients – know market area – newsletter – client party (cut down Christmas Trees nic– birthday cakes about

Podbeam – podcasts that are hosted by another

Blog a few times a week – interview clients, potential buyers

Thoughts on the market – under $400 is hot – people who would put house on the market don’t know they can sell their house in today’s market – not enough houses for sale – lots of buyers out there – not enough move up buyers – not too many appraisal problems – think prices are coming down, sell now – foreclosures are coming so not sure how this will affect values, we know where it is now – appreciate agents who answer phones

Keys to success – do the basics, good service, keep up with your client base, figure out what you do well and keep doing it, keep up with the market, connect with people, be a real person, look for new trends.

Here are the numbers!

Active inventory is down 56% from 2008 with onluy 5,850 active listings on the market. The vacancy rate is holding steady at 28% of the market leaving us with a 1.7 months supply of houses for sale.

The rental market has a 1.9 month supply of rentals on the market with 3,004 properties currently for rent.

Now, go sell something!

Another GREAT Real Estate Information Exchange last night!

October 8, 2009Scott MacDonald Leave a comment

It was a terrific turnout – we had 25 people attend. Thanks for all who came out to be educated! Here is a synopsis of what was discussed. Hope to see more of you next time!

Scott MacDonald:

Market Update…builders have said activity and contracts have been up. The summer lull is gone and activity is picking up. Great news for us! In talking to other agents, they are saying the same thing. It’s important to tell your sellers that the market is still price sensitive. There is still activity, but it’s important to get the house priced right to get it sold quickly. We are still seeing multiple contracts. BPO’s are picking up as well.

Leslie Wish – SunTrust:

Rates continue to be great. Phones are ringing off the hook with buyers wanting to close by the end of the November. It is better to close prior to Thanksgiving and not wait.

Lenders are skittish on condo loans because of litigation against the condo association – any litigation no matter who is suing whom, no conventional loans – FHA loans will allow “some” litigation. Lender questionnaire will bring to light lawsuits and delinquencies.

Scott Mayhew – NuStart Credit Restoration:

Pull credit report to see what issues are with the report. Typical problem takes 90-120 days. Process starts with letter writing – it is a must. The letter must state name, address, loan number, discrepancy, timeframe to correct and expectations of resolution. Only way to dispute discrepancy is to state the loan is not late or not mine – this is the only way to get it removed. The letter must be signed in blue ink. Lender has thirty days to respond with exact amount owed and details of delinquencies. Consumer must write letter – not company. Proof of accuracy letter must be returned by lender – if not, need to send another letter stating they have violated. Paying off credit cards end of month doesn’t give you a great credit score. Inaccurate data CAN be removed from credit report. If your mortgage is 30 days late, it will show up on your credit score is 100 point deduction, it used to be 40 points. Credit rating goes from M1 to M9. M5 is about a 40 point hit. Tell short sale clients to have bank say paid in full as agreed and not to rate short sale higher than an M3. Fee to correct is $395 one person $495 for two.

Keith Barrett – Champion Title

New HUD form is coming out January 1^st – you have to be prepared if you want to keep clients happy. Get caught up on all the changes at 4900 StoneCroft Blvd., Chantilly, VA 20151 on October 28 from 2pm to 4pm.

What in the world is going on in Northern VA real estate?

October 7, 2009Scott MacDonald Leave a comment

Well, we are starting to see more activity lately at our listings, more homes are selling than are going on the market reducing our inventory levels, builders are seeing increased activity and sales as well, rates continue to fall, prices are remaining stable, and now is a fantastic time to be in the Northern Virginia real estate market whether buying or selling. What else could contribute to our market? We continue to have low levels of unemployment locally compared to the rest of the country – which is a huge positive for us. As a matter of fact, Virginia was ranked number 1 for an example of how employment has affected their total real estate market.

What is on our forefront? There continues to be the threat of more foreclosures coming on the market but we haven’t seen it here in our area yet. We have the impending expiration of the First Time Buyer $8,000 Tax Credit or do we? In speaking with the Former Governor, now Senator, Mark Warner, he indicated he was voting to extend the credit. Many others in support of this initiative believe this will keep momentum moving in a positive direction with our recovery from the recession as the Housing Market has such a large impact on our national economy. Interest rates may creep up – but they are so low, they have to increase at some point. Basically, as stated above, we are fortunate we have the fundamentals to be one of the top real estate markets in the country.

An Enlightening Weekend

October 5, 2009Scott MacDonald Leave a comment

As a Realtor, you never know who you will run into to discuss our business. This weekend was no different for me. I was invited to attend a political function for an incumbent who is attempting to keep his seat as a delegate for our area. Of course, Chuck Caputo is the right candidate and the right person for the job and, for our area, we need him to be re-elected. His views on education, business and transportation for our area far exceed his competitor’s opinions on how to continue to run our region and for us to stay the number one state to do business in 4 years in a row.

But I digress, at this function I had the opportunity to meet Mark Warner and we discussed our local real estate market. Our conversation included inventory levels, supply and demand challenges, trends in housing prices, profiles of our purchasers, as well as HVCC and the First Time Buyer $8,000 Tax Credit. Over the last several years, we have discussed the need to know your numbers, and know the trends in our business and to have them ready to discuss at any time. As a result of staying abreast in these areas, I was able to accurately convey why we need to address the HVCC issue but more importantly, the need to extend the First Time Buyer Tax Credit. In our discussion, he told me he was going to vote to extend the credit! It is a wise decision to keep the housing sector of our economy moving forward and to help continue to bring our country out of the recession. When it comes to making the right decisions about our economy, we need to knock down political affiliations and work together for the common good. Get it? Got it? Good.

Now, go sell something!

New Legislation- H.E.R.A.

July 23, 2009Scott MacDonald Leave a comment

Just when you thought you knew the business and what is happening in the business, a new regulation gets implemented that very few agents are aware of and that will impact our business. The Housing and Economic Recovery Act (H.E.R.A.) requires that lenders provide the borrower with a Truth-in-Lending statement (nothing new) and that the borrower has 3 days to review it and no fees (other than credit report) can be collected from the borrower until the review period is over. Assuming the lender sends this out immediately, 3 days are allowed for mail and 3 days are allowed for review, then the lender can receive payment for the appraisal. Under the HVCC – appraisals can’t be ordered until payment for the appraisal is received – hooray! This is up to a 7 day delay in ordering appraisals up front. So be sure to make a special note of this scenario.

The next potential delay that can occur is closer to settlement. If the Truth-in-Lending form changes by more than an 1/8 tolerance of accuracy (used to be a ¼) a new Truth-in-Lending form needs to be reissued and, once again, the buyer needs 3 days to review after receiving it by mail, 3 days later for a potential additional 7 day delay. It is necessary to get your purchasers locked in early to avoid any delays or penalties for delays in closing. Also, you must do your due diligence to ensure the buyers of your listings are locked in well in advance of settlement. This scenario is very likely to happen on short sales and when we have delays in foreclosure settlements as a result of title problems.

If you have any additional questions about this OVER legislation of our industry, contact your lender.

Another area of concern is the sales price changes – increase price to cover closing costs – decrease price as a result of home inspection items – changing settlement dates – and even more…stay on top of your transactions so you don’t get crushed by them! Get it? Got it? Good!

The tyranny of the Status Quo

July 15, 2009Scott MacDonald Leave a comment

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.

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Current Affairs

Answering the ‘Not So Simple Questions’

Here We Go Again

How disappointing!

Walter Bond, Kathy O’Neal…what a great day of speakers!

Another GREAT Real Estate Information Exchange last night!

What in the world is going on in Northern VA real estate?

An Enlightening Weekend

New Legislation- H.E.R.A.

The tyranny of the Status Quo

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