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.  

Home Values

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As a leader in real estate, I am repeatedly asked specific questions about today's market – especially in today's economy. In an effort to provide more information to my community, I am posting this Top 5 Real Estate Social Networking Systemsm "e-Article," in which to provide useful real estate information. 

 

Don't Wait – Increase Your Home's Value Now

 

In today's climate of dwindling home values, I am often asked, "How do I make my home worth more without spending a lot?"

 

To elevate the value of your home, a detailed and specific assessment of your home, and the homes against which it will compete in the market, is necessary. A professional home inspection-especially for those who are not planning to sell their home soon-can go a long way towards increasing the value and creating demand for your home, and can help you plan for expenses if there is work to be done.

 

As a Member of the Top 5 in Real Estate NetworkR, I am committed to maximizing the potential of my clients' homes. Having your home professionally inspected well before putting it on the market-or when you're not even planning to put it on the market-has a number of

advantages:

 

1. For a relatively minor investment, you will have the opportunity to review an objectively prepared assessment of the condition of your home'

s structure, systems and amenities.

 

2. Everything else being equal, your inspection report should be consistent with the report prepared by your buyer's inspector, virtually eliminating stressful surprises when your home is on the market one day.

3. You will have the opportunity to decide whether to do the work yourself or to have the work contracted while time is on your side.

 

4. The greatest value of proactive inspection is that the decision to repair vs. replace will be yours alone. A buyer may use the replacement of the air conditioner or the roof as a negotiating gambit when a proactive, high quality repair would have been completely satisfactory.

Armed with the facts, you have the alternative of making a completely professional and perfectly functional repair of the roof rather than deducting the expense of replacement from the price. This places you in a much stronger negotiating position.

 

5. Finally, you will be able to enjoy the new roof, live worry free with the new water heater or use your new air conditioner and enjoy its higher energy efficiency. When you and your family are ready to move up, relocate, downsize or retire, you can put your home on the market with peace of mind, and concentrate on moving forward rather than looking back upon the costly repairs that you should have made.

 

Not only will buyers associate a specific value based on your home's "move-in" condition, but by addressing major repair/replacement issues, you will diminish competition from newer and better maintained homes on the market. Also, you will not have to worry about inspection issues arising at the last minute that could stop your transaction cold.

especially when this stress could have been avoided. For more information about home inspection, visit www.ashi.org, the website of the American Society of Home Inspectors, or, in Canada, www.cahpi.ca, the Canadian Association of Home & Property Inspectors.

 

Breakfast with Janet Evans

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Janet Janet Evans, 5 time Olympic champion for swimming, came to our Business Networking group to speak to us on how to be a champion.  She mentioned that being a champion isn’t about winning. It’s about how you play the game and the vision you create for yourself to get you there. You set goals to get what you want, we all do. But once we reach the goals what do we do? Do we high five our friends and sit back on our laurels because we reached the goal we set out to reach? Or do we step back and reset that goal? Make it better, more challenging; make you reach higher than you thought you could?  That’s what Janet did when she made the Olympic team, she realized that it wasn’t just about making the   team, but about winning the gold and ultimately being proud of herself no matter how she performed.  A champion, she said, is someone who loves what they do, inspires others, does their best, doesn’t listen to what other say, believes in themselves, doesn’t always have to win and at the end of the day is satisfied with the end result.  Her speech defiantly gave you something to think about.

Economic Outlook

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I recently attended an Economic Summit at our local Realtor association. It was an informative session where we heard about the National economy and how it compares with our local economy. Dr. Fuller with George Mason University informed us that we would need to have nationally 100,000 new jobs per month for one year for the level of unemployment to stay where it is now. If not, the level is going to continue to rise until 2011 when job  loss should stabilize because by then our economy will have been able to absorb all of its losses.

One point I found interesting is that in the end, once the economy has stabilized, it will be more streamlined. When there is a downturn, it makes us change our ways to find better, more economical ways to do things, thus legislation is formed that in the long run, helps our economy. 

 The Washington DC Metro Area is quite unique.  The national outlook seems pretty bleak, but in our area, the GDP (Washington GDP) is higher than the National GDP, our unemployment level is substantially lower at 5.6 than the National unemployment rate which is 8.6. This is due in large part by the opportunities within the Federal Government and contractors/consults that move to the area and/or move their businesses to the area. We are very fortunate to live in the DC Metro area as opposed to other parts of the country that are suffering devastating blows to  their local economies, high levels of unemployment which in turn produces high levels of foreclosures and short sale situations.

All we can do is wait and see how it all pans out in the long run.

Our Crazy Market

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 It’s a crazy mixed up real estate world today and we are faced with an uphill battle for the next several months, if not for the next several years. We are looking at quick turnarounds on properties if they are priced right and staged properly.  We are inundated with buyers and rates continue to be at historically low levels, but we are fighting the untouchable appraiser and underwriters in terms of attaining values. It has always been my opinion in an arm’s length transaction that market value is what a buyers is willing to pay for a property and what a seller is willing to sell for.

In today’s environment, we are faced with a challenge of not being able to communicate to our lender with the appraiser an as a result properties are not appraising for the sale price.  As of May 1st appraisal management companies have been inserted into the real estate transaction.  This has resulted in the consumer not being able to get values on properties on their purchase. Appraisal Management Companies are taking a piece of the pie for doing nothing more than assigning an appraiser to appraise a property.

What’s the problem you ask?  The problem is top quality appraisers are not getting paid what they are worth and the appraisal opportunities are going for lower fees and to lower quality appraisers. Until this practice gets overturned, we will be faced with making the role of the realtor more critical in today’s real estate transaction.  We are here to help.

 

Our local market…is it any good?

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Yes, we continue to be the anomaly in the world of real estate. At the National Association of Realtors meetings in Washington, DC last week we heard the wows of the rest of the country and how houses aren’t selling – prices are reducing daily – foreclosures paint their real estate landscape and they don’t see any end in sight. Nationally, there is a 9 month supply of houses for sale – as you see below, we have a 1.6 month supply of houses. Foreclosures are a part of our business but vacancies rates only represent 25% of our market, down from 33% last year showing we are selling our foreclosures. Our area does have a huge supply of short sale properties on the market which may turn into foreclosures, but as the government and banks work together to systematize and shorten the process to approve short sales – this may not occur. In many areas, our prices are stabilizing as a result of high demand and low supply, but we are encountering a significant issue with appraisals. There are new rules and regulations that are changing our appraisal landscape that places appraisers on a pedestal with no contact until after the appraisal has been completed. This lack of contact with appraisers has resulted in low appraisals causing significant issues in our market. It has always been my assertion that the
market price is what the buyer is willing to pay and the seller is willing to sell any product for in any market.

As we analyze our business, we see that first time buyers are representing 60% of our market; investors representing 30% which leaves just 10% for move up buyers and relocation buyers. Couple this with higher rates on jumbo loans results in making our upper price ranges more susceptible to longer marketing times and perhaps, further reductions in prices as there is a smaller pool of buyers. We continue to believe that, although there will be challenges, we are in the best real estate market in the country and will continue to be for many more years.