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Here we grow again…

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This tag line is very appropriate for many different reasons.  First, let’s start with the Northrop Grumman’s move to Northern Virginia from California.  Northrop Grumman had been looking to relocate their company to this region because they have over 20,000 employees in Virginia, Maryland and DC and was looking for a different presence here in the area.  There will be approximately 300 high level executives moving to the area and there is no doubt, additional subcontractors and service providers of Northrop Grumman will move here as well.  Kudos to the leadership of Virginia in capturing such a valuable resource!

Additionally, in an economic report by George Mason’s Center for Regional Analysis, the Washington area’s economy will double over the next 20 years bringing in more than 1,000,000 new jobs and perhaps  upwards as many as 1.6 million to our region.  The jobs that will be created will be government – especially defense, domestic security, and financial regulatory agencies.  Along with these new jobs, a total number of new people in excess of 1.7 million will be moving to the area.  This is a good news, bad news scenario – good that the area will continue to grow and it should have a positive outlook on the housing market but a bad news scenario for roads, infrastructure and how to accommodate this growth.  The area planners have some work to do!

Next, let’s review New Home Sales.  Month over month sales of new homes jumped 26.9% in March – the largest increase in nearly 50 years!  New Home Sales had been in a four month slump coupled with a record low of housing starts in February; this segment of our market got a strong shot in the arm with this excellent news!  Let’s see how these numbers are affected by the home buyer tax credit ending this week and see if sustainable growth will occur.

Now on to existing sales…existing home sales rose as well.  The number increased by 6.8% in March – this is the ninth straight month of increase in sales over previous year ago levels each month.  This is a result of favorable market conditions – great rates, lower prices, and the homebuyer tax credit amongst other things.  Let’s keep this pace headed in a positive direction!

We must also speak about inventory levels.  They too have been increasing every week since the last week of December.  It is important to keep an eye on this number and how it affects pricing on a number of fronts.  In the Northern Virginia region – the inventory of existing homes for sale in week ending April 23 was 7,252…stay tuned.

And the last piece of good news – and it isn’t about an increase – it is about relative stabilization in mortgage interest rates.  Many expected rates to shoot up at the end of the government’s purchasing of mortgage backed securities but it hasn’t really happened.  Interest rates were just below 5% in March and have stayed in the 5.125 – 5.25% range over the last 3 to 4 weeks.  Let’s hope private investors continue to buy mortgage backed securities and the government keeps the funds rate low as well.

It is important for professional Realtors to keep up-to-date with the market and market conditions to keep their buyers and sellers completely informed on what is happening so they can make the right decisions when buying and selling homes – get in the game of learning more!  Get it?  Got it?  Good!

Negotiation tips and tactics

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There are three important areas for Realtors to be successful in to survive in any market.  First and foremost is lead generation.  Without lead generation, you can have all the skills, knowledge and ability to be a success but without clients, you won’t make a penny in the business.  The next one is being solution oriented and solving problems for your clients.  When you resolve issues, you become a valuable resource to your clients and will receive leads on an ongoing basis.  And the third key area is negotiation and that is what we are going to cover in this blog today.

Let’s review some of the important pieces of the puzzle to negotiating successfully.  To know where we are going we must know where we are coming from.  First, start by analyzing previous negotiations.  What went well, what didn’t & why.  What did you learn?  What did your clients learn?  Review this with your new clients to set expectations of success in their transaction.  By having the proper expectations, your road to a successful end is much more likely to happen.

Next, assess your client’s situation prior to entering the negotiations.  Do your research.  Ask lots of questions because information is critical to successful negotiations.  Who is involved?  What is your strategy?  Where will you give concessions?  What are your best alternatives?  Where do you want to end up?  Also, through your research determine, do we want to work with them?  What is the motivation of the other side?  When do they need to move and why?  Who is the other party involved in the transaction and what is their background?  Discuss what your options are with your client?  Determine the “what if’s”.  Then listen and take notes. 

Also, remember, it is just as important to know what your side wants as much as it is to know what the other side wants.  Do you know their position as well as your own?  What are their objectives?  How do you get the information?  Ask the agent or lender about the client and their situation.  Also, check them out on the internet, Google, social media outlets, DPOR and public records are just a few places to begin.

Who and how do you control the negotiations?  The person who asks the most questions and gathers the most information and can build the bridge to a successful end.  Plan your questions according to the situation so you can create win-win negotiations.  Let’s review how you create win-win negotiations.  Find common ground and build upon it to get the common goal of both parties.  Discuss all options available to both sides to get resolution.  If you come to a stall in the negotiations review how close you are to the final outcome, review how you got how you got where you are and why it is important complete the negotiations.  Use your notes and remind the other side it is better to negotiate than not negotiate to get resolution on the issue creating the stall.  Convey flexibility in one area over another.  Ask other side to restate their position, gain understanding and restate your position as well.  If the other side asks for a concession, say “yes if”.  Focus on the issues at hand and not positions and be tough on the issues but not the people involved – separate them.  Always seek to understand and be understood.  Remind the other side of the mutual benefits of resolving the issue.  Use we – not us and them.  Ask the other side, “What would you do?”  Never narrow it down to one issue – keep the discussions open and fluid.

What to avoid:  getting confrontational; giving up walk away power or getting to the point of no return;  giving up control; negotiating against yourself;  improper use of concessions;  assuming the other side wants the same thing as you; missing out on clues (good cop bad cop, flinching, stalling, red herrings, nibbling, higher authority, hot potato, any others, etc.); getting to bottom line too quickly; negotiating with the wrong party; negotiating price too soon and too quickly; not explaining your value – up front;

In addition to what we mentioned, we also need to strive for in negotiations are to keep an open mind – think outside the box.  Focus on what’s right not who’s right – it’s not personal.  If negotiations boil down to one issue – it’s a win lose…stay focused on give and take scenarios.  Answer questions with questions to determine what they really want.  Don’t pre-negotiate with yourself and don’t answer questions that weren’t asked.  Keep your ego in check.  You have more power than you think you have in the negotiations.  Put things in writing so the issues are clear.  No is just an objection that you need more clarification on – ask why they are saying no.  Start high or low depending upon the situation you are encountering.  List your assumptions on what will happen and the scenarios that will happen as a result of each option.  Build a relationship prior to beginning negotiations with the other side – by having a relationship, the transaction will go more smoothly.  Communication is the key – ask permission to ask questions.  Never say yes to the first offer and know the reason why.  Give in diminishing chunks.  Always give the impression you have other alternatives and this isn’t the only choice to gain leverage.  Keep your client’s information confidential.  Realize your strengths in your situation.  After making offer, remain silent.

Practice negotiations all the time and in different situations.  Also, it is also critical to rehearse with an accountability partner prior to presenting your offer to the other side as you need to be sharp with your presentation skills.

By exercising and utilizing these tips and tactics, you will have great success in real estate.  Get it?  Got it?  Good!

What have you done for you lately?

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Many real estate agents experience the roller coaster ride in their business and their bank accounts as a result.  Why does this occur?  They take their eye off the prospecting ball.  They get too wrapped up in their deals.  They talk to everyone about what is happening in each of their deals and why there are problems, issues or mention what the other agent is doing to them in the transaction.  In today’s market, virtually every transaction is tough because of the other agent, your client, their client, an appraiser, home inspector, pest inspection or whatever the case may be.  Guess what, get over it, put your nose to the grindstone and get busy working to resolve your issue then work on your prospecting.  Spend your time providing excellent customer service to your current clients by being solution oriented then get back to the basics and prospect for new clients to serve and the roller coaster ride will end.

Success is contagious and so is negativity.  Make a concerted effort to be positive and optimistic and resolve people’s issues and success will follow.  We get paid the big bucks to solve problems not talk about them.  Think about your conversations.  If they are repetitive and negative, stop!  Think about the issue and how to fix it.  What are the options?  What are the outcomes of each option?  What is the best solution for your clients?  Lay it on the table, discuss them, decide which is best for them and move on.  It is a good feeling to get results for others.  Also, hearing success stories about helping clients is a better one to tell and gets others motivated to do the same.  Again, success is contagious!

Once you realize that you need to change the way you approach deals gone bad, agents gone bad or clients gone bad and you have now made the decision to stop harping on negative issues and start working on your business, let’s discuss getting back to the basics of staying in front of your clients through notes, calls, pop-bys and other avenues and growing your database. 

As we all know, there are many ways to “touch” your sphere of influence but one of the best ways we have found to give back, grow our database and become involved is through our charitable efforts.  We combine our charitable events with client appreciation events.  As the saying goes, the more you give, the more you get.  Find a charity you have an interest in and see what it takes to get involved then host an event to support the cause.  As you involve yourself in the process, get creative with how you can attract people to attend your event, participate and give so you maximize the results for your charity of choice. 

We have two great events to facilitate our spirit of giving – the in office putt putt tournament, and Breakfast with Santa for Toys for Tots.  It is rewarding, gets you in front of your clients and you get satisfaction out of helping others.  It requires thought, energy, effort and planning but it is worth it in the end. 

Stay positive, focused on excellent service to your clients and get creative with contacting your database to get your business back on track by giving back and the results will follow.  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!

 

What are your opportunities?

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As I sat at home and watched the Capital’s game on Saturday night it reminded me of the fact that you can’t rest on your laurels.  The Caps won the President’s Cup for the best record in the NHL but they are down in the series to the Canadiens 1-0 and were losing, at that time, 2-1 in the game when I got inspired to write about the topic of staying on top of your game. 

The game reminds me of how in business, the skill set, knowledge, determination, perseverance and fortitude that brought you success today won’t keep you on top of the mountain tomorrow.  You need to stay sharp, look for new opportunities, continue to learn, make better contacts, improve your networking skills, ask better questions if you want to continue to be successful.  Your outlook on each day needs to be positive, upbeat and faced with an open mind.  Problems and challenges others put in front of you need to be looked at as an opportunity to shine and show you are the expert in your field.  You need to be focused, on task, have a plan of action for each day and attack it with enthusiasm, vim and vigor.  You can’t sit back and wait for things to happen.  You must be motivated, inspired and eager to attract others to want to be around you and do business with you.

Although the Capitals won the game in overtime, they appear to be going through the motions as so many others do in business on a daily basis.  If you find yourself in this situation, you need to find something that brings you passion and desire.  You need to get energized about your day by doing something that gets you pumped up to go to work.  Take time to analyze where you are and why and decide to change what you are doing to get the most out of life.  Determine what you want out of life, what brings you joy and what brings you the most success build your legacy – don’t just go through the motions.  Get it?  Got it?  Good!

Become better than yourself…

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In a recent Carpe Diem meeting I attended, I was reminded of the belief of how important it is to give back, to live life to the fullest, to take care of the really important things in life and to share our experiences.  It is important to take what we have learned in life and share it with others to help them and to give them guidance in their lives. 

It got me thinking about how important it is to challenge yourself, everyday.  Don’t sit back and wait for things to happen – make them happen.  In addition to this philosophy, challenge someone else to be better, to strive to achieve more, to get more out of life, to be a better person and hold them accountable. 

Ask what you did to improve today, what did you accomplish today, why is the world a better place because of what you did today and ask the person you challenged the same questions.  Ask yourself at the beginning of each day, how can I make a difference today and look for opportunities throughout the day to help you achieve the answer.

It is also imperative to think before you begin your day and determine what your priorities are for that day and why they are important and strive to do your best to get your list done.  What can you share with others to make someone else better today?  Are you utilizing your strengths to the fullest?  If not, why not?  What can you do to improve yourself today?   Keep yourself on track, don’t get distracted and if you do, correct your course quickly so you don’t drift too far away.

 Let me share with you what I tell my children every day.  Seek to improve just a little bit every day, build upon something good that happened to you the day before, learn something new and attack the day with enthusiasm!  Don’t just stick your toe in the water of life, dive head first into it and live life to the fullest. 

If you live your life in this way and have a positive, upbeat attitude you will become more effective, will have a bigger impact on others and will make a difference in life that will give you a legacy that goes beyond your years.  Get it?  Got it?  Good!

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!

Do we have sustainable growth in our market?

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It appears that based upon recent news about our market we can!  Sales of new condos rose to their highest first quarter levels in three years with 630 sales posted – last year there were just 316.  This allows the inventory levels to shrink which is good on all levels for real estate sales.  We have inventory levels of unsold condos that match inventory levels of 2003.  As new homes starts slow and as financing remains tough to obtain for builders and demand increases, look for conversions to become popular again if demand continues.

Additional good news is that the vacancy rates on apartments also have dropped locally and regionally and the month’s supply of rentals owned by individuals is also at recent lows of just 1.5 months.  As a result, lower concessions are being made to tenants as well – are increased rental rates next?  This should be attractive to investors who are savvy and want to take advantage of today’s lower house prices and see a great return on investment as long term real estate investors. 

There is also renewed interest in Harbor Station in Prince William County.  The board of supervisors is reporting that virtually every major developer is interested in the 2,000 acre parcel along the Potomac River which is anticipated to be a 20 year project.  A golf course, VRE stop as well as the right mix of retail and housing is planned for the mixed use development.  The last few years the project has been mired in financial disaster but it is now in control of the bank and Compass LLC and they are making quick decisions on moving the property forward for development.

We are also experiencing near historic lows in interest rates.  The Fed got out of the purchasing of mortgage backed securities and rates did not skyrocket as previously predicted they would by so many industry experts.  The Federal Reserve has vowed to keep the funds rate at 0 – .25% for the foreseeable future to keep mortgage rates low and keep the housing market moving forward.  This too will help allow us to maintain growth in the housing sector!

Unemployment rates continue to hover in the high 9% range nationally but we are well below that here locally and houses are where the jobs go at night.  As long as we continue to keep people employed – we will have strong housing numbers.  There is nothing that indicates we will lose jobs as we are insulated with DHS, the Federal Government, defense contractors, as well as the hospitality, technology, and communication industries coupled with their support services, we will be in good shape for some time.

The housing affordability index will reach 160 this year – the highest level since 1972!  This index measures what percent of households can afford to purchase a home based upon median income, median house prices and interest rates.  For more details visit: http://www.realtor.org/research/research/hameth

The HAFA program will also help facilitate more sales as it will streamline the short sale process which is approximately 25% of our market in most areas and even higher in suburbs further out from DC.  Additionally, foreclosures are higher in Maryland versus Virginia further suggesting we can sustain the growth we are experiencing.

These factors coupled with the fundamentals of our region – low unemployment, relatively affordable prices in relation to 2004-2007, excellent school systems, international and cultural attractions, and so much more will help us remain a viable housing market for many years.

It appears that the extension and expansion of the homebuyer tax credit has not had as much impact on the housing market as the original tax credit.  Builders are selling homes beyond the June settlement deadline and many sellers and buyers are unaware that the credit affects them despite our efforts and the efforts of media outlets and NAR.  The elimination of this program should have little effect on our market if everything else stays equal – consumer confidence remains high, jobless claims continue to decrease, and pending home sales continue to increase (up 8.2% – highest in 8 years) we will have sustainable growth in the housing sector.

Know the market, know the trends, and know how to communicate this to clients and you will succeed in any market.  Get it?  Got it?  Good! 

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!