A Wallpaper Redux?
July 20th, 2009 categories: Real Estate News, Relocating
Last week I ran across two articles that claimed Wallpaper is making a comeback. While I’ve certainly heard stranger things, I had to wonder what sources these writers used in making this claim.
In the real estate business, at least from a Realtor’s perspective, marketing homes whose walls are plastered with wallpaper, can sometimes be challenging at best. While, from time to time, wallpaper, tastefully done, may provide a unique look to a property, more frequently, its can be an eyesore and a hurdle to overcome to successfully market a home.
The Associated Press began last week’s story by saying that this spring, Oprah declared wallpaper was back in vogue. According to their report, if a homeowner is “looking for drama, texture warmth and personality, wallpaper is the way to go.” Well, yes, most of us might agree, if you want to be unique or loud, or dramatic, wallpaper fits the bill. According to Anne Goldsmith, a New York decorator, wallpaper makes “a bold statement” and “can just be really fun.”
I’m reminded of last week’s British Open. John Daly, a previous Open winner, and sometimes better known for his off-course exploits, was making his bold statement, attired each day in a pair of Loudmouth Pants. According to CEO Scott Woodworth, “If you’re uptight, self-conscious, and care more about your golf score than the experience, then Loudmouth golf pants are NOT for you. But if you treat a golf outing as a special occasion for fun and laughs…then wear some outrageous Loudmouth pants – they can’t hurt your score. They might irritate your opponent.”
If you’re considering selling your home, especially if you own in the Stafford or Fredericksburg, Virginia region, or for that matter, anywhere outside New York or California, pause before you decide to design your home with reams of wall paper. Take a minute to ask yourself, “Am I doing this for fun and laughs?”
Despite what you read in the newspaper, or hear on the Oprah show, the vast majority of home buyers are NOT looking for a “statement home” or someone else’s “experience” to call their own. Instead, they’re searching for peace and quiet and comfort. For that special occasion for fun and laughs, there’s always the local comedy club or King’s Dominion, just fifteen minutes South of Fredericksburg.
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His Needs, Her Needs
July 9th, 2009 categories: Real Estate News, Relocating
Have you ever heard the popular phrase, “Men are from Mars, Women are from Venus” when discussing the differnces between men and women? Of course, as many people know, that phrase comes from the title of the best selling book by John Gray, written in 1992. While the title is often remembered, the subtitle, which is the essence of Gray’s book, is rarely, if ever cited. That is, “A Practical Guide for Improving Communication and Getting What You Want in Your Relationships.”
The author’s focus is on the differences between behaviors and desires of men and women. From there, the book centers on recognizing these differences and learning to communicate effectively to meet the needs of each party. Understanding the expectations of one another, and communicating each others’ desires, are two keys to a successful relationship.
Yesterday, a fellow agent held me captive while recounting their latest adventure with a client of theirs, who had decided they wanted to “move on” and use another agent. In this case, the clients had informed the agent that they believed the agent wasn’t meeting their needs. So, now, it was time to find another agent, one that would do a “better” job of keeping them informed of “all of their options.” According to the agent, the clients talked to the husband’s brother who provided them with valuable information their agent neglected to tell them. From what my fellow agent said, the client’s brother provided a layman’s explanation of the need to make “back up” offers on properties they liked. Specifically, back up offers on Short Sale properties they liked.
Well, for those of us that have handled a few Short Sales – back up offers on short sales, while doable, probably aren’t the easiest road to success. By the way, did I mention, the client’s brother has never had any training in Real Estate? None, zero, zip! Also, these clients wanted to be in a house as soon as possible. So, as many of you know, ASAP and short sale are mutually exclusive. In other words, you can’t get there from here.
After listening to the agent’s tale, I had to ask if they began their relationship with their buyer by doing a “needs assessment.” Were expectations discussed before they began to look for homes? If not, why not? As happens in many real estate relationships, especially with buyers, the foundation that is necessary for a successful relationship is never established at the outset. In the rush to run out and look at homes, the clients, and the agent, sacrifice the most important step that’s vital in establishing a successful relationship – business or otherwise. And when things in the relationship begin to break down, it’s usually due to a lack of proper preparation.
So, what should that initial needs assessment, or discussion of expectations consist of?
1. Clear statement of clients and agents expectations.
2. Ground Rules. The What, Where, When and Why of the relationship. This simply means a review, or preview of what the normal operational parameters are. With expectations already discussed, this clarifies how you’ll look for homes, who will do what, when various parts of the transaction will take place, where things will take place, etc. It’s simply a way of providing a clear picture to the client of the transaction from the outset to the settlement table. No one likes surprises, an this should preclude that.
3. A discussion of a Realtors responsibilities and our of Code of Ethics. This isn’t an in-depth conversation, but simply a reminder to the client of the professional they’re relying on to make their transaction a smooth one.
Unmet client expectations are never helpful in business relationships. To avoid them, it’s essential to clarify, from the beginning, in a manner understood by all, what’s to be expected from all parties involved. While it may temporarily delay the buyer’s house hunting road trip, it’ll likely prevent misunderstandings or problems further down the line. And in a Realtor’s business, where you aren’t compensated until closing, getting there is worth the reward.
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Four Steps to Getting the Foreclosure You Want
June 29th, 2009 categories: Real Estate News, Relocating
For many of us, the current housing market feels alot like, as Yogi Berra might say, “deja-vu all over again.” Five years ago, in the midst of the runaway market, many homes were on the market for less a day before we witnessed multiple offers presented to the seller. In hindsight, one might conclude that the market was “out of control.”
Today’s market landscape looks very similar. As they say, the players have changed, but the “song remains the same.” Much like then, the multitude of today’s bargains comes in the form of foreclosures.
While there’s been much in the press about the the ugly side of foreclosures (owners destroying the property, evictions, mold, etc), many foreclosures on the market are in excellent condition. Very much like the condition they were in when purchased at the height of the market in 2004-2005. Yet, many of these properties are purchased for 35-50 percent lower than what the current owner paid for them. And, in a few cases, even cheaper. But, how do you find these properties before the competition? How do you level the playing field with the investors that have been in the business for years?
While there is no full proof method for success, there are three important steps that dramatically improve your opportunity to successfully purchase foreclosed properties.
The Steps to Success
1. Identify the property the first day it’s listed for sale on the Multiple Listing Service (MLS).
Better yet, locate the property before its actually foreclosed on. many of these properties have been on the market prior to foreclosure, as a resale of short sale. If this doesn’t result in a sale, they’ll be ripe for the pickin’ at the lower foreclosed price point. But, once they’re on the market as a foreclosure, it is, as they say, “the early bird that gets the worm.”
Seeing it on day one of its listing on the MLS probably depends on getting that information from your Realtor. So, hopefully, your Realtor has set you up with a direct feed of Foreclosures. Most MLS programs now offer the Foreclosure option. If that’s the case, have your Realtor provide you an automated feed of new Foreclosures on a daily basis. While this step a must do if you expect to catch the listing on day one, the second step to successfully getting the foreclosure you want is equally important.
2. Strike quickly.
Submitting a contract as soon as possible is vital to getting your contract accepted. As I discuss with my buying clients, during the contract process, we take things one step at a time. Our goal is to “get to the next step.” By that, I mean that we take things one step at a time. In the case of a foreclosure, we want to have the first contract submitted. The sooner we submit a contract, the less opportunity we give competitors to do the same. Multiple contracts are NEVER in the interest of the buyer. The preparation or due diligence necessary to protect my buyer should have been done ahead of time. Things like looking at comparable properties, neighborhood issues, history of the property, unpaid liens, should be done prior to the offer. But, many of these can be examined prior to the submission of the contract. Another key to securing the property is the terms the buyer is asking for.
3. Make it Easy For the Seller
If your goal is to buy a foreclosure, many pruchasers are looking for as little work as possible. For REO, or bank owned properties that are on the market as foreclosures, the banks are looking for the same thing; as little pain as possible. Since the onset of the current mortgage meltdown, lenders have been inundated with defaults. They aren’t in the property management business, and want to rid themselves of their properties as quickly as they can.
Avoid contract contingencies. Routinely, foreclosed properties are sold “As Is“, which means the buyer will take the property just as it is, at the time of the offer. Should you include a Home Inspection contingency in your offer? That is certainly an option, but not one I’d recommend. Remember, your goal is to get to the next step and provide the bank with few, if any, reasons to say no. However, asking for a home inspection for informational purposes can serve the same purpose, if, at some point, after ratification you decide to withdraw from the contract. Additionally, often, in bank owned (REO) foreclosures, the necessary bank Addendums to the contract will often allow you to alter terms before the contract is “fully” ratified by both parties. While the interaction with various banks are routine and standardized, there are some often differences from bank to bank, with specific procedures. Many banks negotiate one contract at a time. And, you want your contract to be the one they’re considering. So, banks are keying in on the “net” cost to them, make sure your terms aren’t providing the bank a reason to say no to your offer.
4. Go with Experience.
Real estate transactions can be easy, or they can be…not so easy. Make sure you’ve enlisted the services of a professional real estate agent. What does that mean?
It begins with experience and competence. While those traits don’t necessarily go hand in hand, they’re often found in pairs. First, it helps to have someone on your side with foreclosure experience. While the transaction process is fairly straight forward, having an agent that knows how the process works, and knows how best to “work the process” is invaluable. They’re familiar with the necessary timing, procedures, and strategies to accomplish the objective. Further, as the process unfolds, they’ve worked foreclosures with banks previously, and understand what it takes to get you to closing. They have the experience and the competence to close the deal.
Good deals abound in today’s housing market for home buyers. Many of those deals come in the form of foreclosed homes. Capitalizing on the foreclosure opportunities involves a few simple steps. By taking the time to become aware of what’s available, and acting decisively with the aid of an experienced professional, you can maximize your chances for success. Of course, you first have to find something you want to buy. So, how hard is that?
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Are You Looking for the Four E’s?
June 23rd, 2009 categories: Real Estate News, Relocating
Have you ever wondered what it takes to be successful? Of course, “successful” means different things to different people. But, for the sake of our argument, let’s use Webster’s definition, ” a favorable or desired outcome.”
Most of us would probably agree with that characterization. But, what does it take to get there, to achieve that end?
In the real estate business, many of us define personal success in terms of goal achievement, and numbers or monetary sales goals met. For others, it may be as simple as satisfied clients. But, whatever measure is used, what strategy do we use to acheive those goals? What about clients, home buyers or sellers? What methods do they use to maximize their chances of success?
For years, Fortune 500 companies have looked for certain qualities in their future employees. For many, they are looking specifically for the ”braniacs”. But at least one of those companies, has, for years, used a different approach.
Jack Welch, General Electric’s Chairman and CEO from 1981 – 2001, used a another approach. He looked, not necessarily for brains, but for what he called the Four E’s.
According to Jack Welch, it’s as easy as Four E’s.
This is the criteria he used to assess employees at GE.
1. Do they have the energy – postive energy? Do they start the day with enthusiasm, and end it that way too?
2. Do they energize others? According to Welch, “it doesn’t do you much good to be a whirling dervish if you don’t end up exciting other people.”
3. Do they have edge? Do they have the ability to say ‘yes’ or ‘no,’ and not ‘maybe’? Do they make the tough calls?
4. The fourth E is execute. Do they get the job done? In other words, do they deliver?
Said Welch, “Integrity is assumed. These four E’s—when you look at people and want to evaluate them, and when you look at yourself and evaluate yourself this way—give you a pretty good read on where you stand.”
According to Welch, this recipe for success will work in any environment.
If that’s the case, should we be looking for the Four E’s when we hire employees? Are those considerations we’ve used in selecting peers for leadership positions? If not, why not?
Are buyers and sellers looking for these qualites in the agents they hire to represent them? It would certainly make perfect sense. If they’re not, and, at the end of the day, leave the settlement table dissatisfied with their agent’s performance, they’ll have nobody to blame but themsleves. It’s called, “Due Diligence.”
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Mentoring Real Estate Professionals
June 1st, 2009 categories: Real Estate News, Relocating
“In every art beginners must start with models of those who have practiced the same art before them.”
Ruth Whitman
Mentoring programs designed to develop younger workers have long been a foundation of corporate training for Fortune 500 companies. These programs establish a relationship between the mentor and ”student” or “protege/mentee” that encourages individual as well as corporate development. The protoge relies on the mentor for, not only instuction on how to do the job, but also for professional guidance, and problem solving advice, through the establishment of a working relationship that benefits all participants; the mentor, the student, and the company.
According to Terri A. Scandura, a management professor and dean of the graduate school at the University of Miami, most Fortune 500 companies see mentoring as an important employee development tool, with 71% of them having mentoring programs.
If mentoring is a valuable teaching or developmental tool, why isn’t the real estate industry using it? While there may be isolated cases of individual brokerage firms using mentoring as a teaching tool, why doesn’t the industry encourage it more or adopt it as a necessary business practice? Perhaps, as the second stage of mandatory training necessary before a real estate licensee is certified to operate on their own?
I recently participated in a leadership development program hosted by three of the area real estate Associations. One of the tasks assigned was to examine the idea of a mentoring program for new agents, and to develop an outline of requirements for those licensed in the Commonwealth of Virginia. Our group put together the following outline:
MENTOR PROGRAM
VISION
To raise the standards of performance of Realtors by improving their education and career development through a mentor/internship program.
MISSION
To provide a comprehensive mentorship training program whereby all Realtors are provided with the educational tools, hands on instruction, and career counseling necessary to execute the responsibilities of a real estate professional.
PARTICIPANTS
Virginia Real Estate Board (VREB) – Establishes mentoring standards.
Virginia Association of Realtors – liaison between VREB and local Associations, overseeing standardization and coordination of Mentor Program.
Local Association – Advise and coordinate program with local Brokers, to include identifying mentors.
Brokers – In coordination with the local Association, responsible for establishing company Mentor Program. This includes:
1. Procuring curriculum. Ideally, a standardized curriculum, developed by the VREB, VAR and local Association will be used, and can be tailored by broker. However, minimum standards/ requirements must be adhered to.
2. Identifying mentors. This includes not only identifying mentor candidates, but ensuring they’ve been properly trained. Minimal standardized training requirements set by local Association in coordination with state agencies, resulting in Mentor Certification.
3. Identifying Students. While all new agents are required to complete program, those returning to an active role as a Realtor may also need the program.
4. Establish procedures and verify student’s progress.
Mentor– Responsible for instructing, encouraging and monitoring Protégé/Student progress in accordance with program standards.
Student – Realtor enrolled in Mentor program. Required to complete program in accordance with standard program criteria, and to the satisfaction of Broker.
MENTOR REQUIREMENTS
Individuals selected as Mentors should meet minimum standards to include:
· Minimum of 5 years Realtor experience
· Broker shall be qualified through a “mentor certification program” at the local board level
· Mentor will be qualified through a “mentor certification program” at the local board level
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Selected and endorsed by broker as an appropriate mentor. Clarification – Some agents are unwilling and others not qualified to mentor
· Brokerage shall compensate mentor at a minimum of 25% per mentor assisted transaction
· Mentors shall, at a minimum, provide agent with Mentorship Program Handbook that includes:
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NAR’s Professionalism in Real Estate Practice
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Contract documents
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Overview of mentor program
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Local Board’s Education Calendar
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Local Board’s suggested Tools of the Trade
STUDENT REQUIREMENTS
· Mentorship program minimum duration of 6 months, or as long it takes to accomplish minimum of 6 closed transactions, to include 3 listings and 3 sales
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To include listing presentation
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CMA
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Marketing plan per listing
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Buyer counseling session
· Competent understanding of Code of Ethics and Agency as well as having completed the post licensing continuing education requirements for each
· Build Business Plan to include Plan of Action
· Must demonstrate understanding of all contract documents
· Must demonstrate understanding of their market and product
· Must be acquainted with rental transaction
· Marketing & Technology orientation – the necessity to succeed
· Vendor Orientation – 30 min to 1 Hour per vendor
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Objective – understand role and responsibilities of industry partners, to include, but not limited to:
1. Home Inspector
2. Settlement Agent
3. Lender
4. Pest Inspector
5. County clerk/representative
6. Appraiser
PROGRAM EVALUATION
Identification of goals, standards of measurement and methods of feedback are necessary for the effectiveness of any developmental program. The following must be established, examined and reviewed throughout the course of the program:
During the course of the program
· Goals – established weekly, monthly, and transactional objectives.
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While some goals can be achieved by simply finishing a document or transaction, others can only be achieved with the subjective approval of the mentor/broker. It is important to discriminate between the two.
· Standards of measure – established by state agencies in coordination with the local Association and Broker to measure success of student and/or mentor.
· Feedback – establishment of a functional feedback mechanism for both student questions and inputs.
Post Program Review
· Establish feedback loop to evaluate program six months after program completion.
· Inputs from student, mentor, and Broker
While our outline is is not a perfect blueprint for an effective mentoring program, it is a starting point. Developing better competency and professionalism in the real estate industry is an ongoing process that all of us as individuals, and as a profession, should be encouraging. By establishing stricter pre-licensing requirements and developing a mandatory mentoring program for agents, each of us will be better equipped to practice our profession.
While these added requirements might improve our practice, how effectively are we using the current standards we, as agents, are obligated to follow? Is the Realtor Code of Ethics, established in 1913, outdated? If not, why it so poorly understood by agents, and rarely used to hold agents accountable for their actions?
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Aren’t Foreclosures Easy To Buy?
April 18th, 2009 categories: Military Installations, Real Estate News, Relocating
Have you ever heard the bar bell? The one that rings around closing time for last call, and as a reminder that it’s time to pay the tab. In the U.S., the bell is oftentimes used to signify a generous tip.
In the home foreclosure business, there aren’t any bells to ring, but there are an abundance of great deals to be had, if only ready, willing and able buyers have the necessary tools to avoid the pitfalls.
There are a number of roadblocks to purchasing a foreclosed home. They include:
- The Bank handling the property. As most Realtors can attest, this is THE most difficult hurdle in the transaction process. The bank is THE BIG DOG. They literally control the entire transaction. Unfortunately, when, what, and how they process a foreclosure is less than transparent. When they speak, we all listen attentively.
- Many agents haven’t been trained in the finer points of listing or buying REO (Real Estate Owned – by banks or lenders) properties. As a result, one side of the transaction never gets any traction, and unfortunately the clients are left holding….nothing.
- Buyer expectations aren’t realistic. As I’m reminded from time to time, “Disappointment is the result of expectation. If you have no expectation, you won’t be disappointed.” Foreclosed properties can be a great deal, but they are purchased, “As Is”. According to the Northern Virginia Contingencies/Clauses Addendum to the Sales Contract, that meaning is fairly clear:
“The seller makes no representation or warranty, express or implied, as to the condition of the Property, or any equipment or system contained herein.”
Pretty clear, don’t you think? Unfortunately, many purchasers don’t feel that way. Despite the “As Is” clause, they want guarantees. So, many resort to home inspections as a condition or contingency in the contract. While many of these begin as “for informational purposes only”, before it’s all over with, they’re used as leverage in the transaction. And, the good news is, as this chapter in the mortgage mess has evolved, so too has the attitude of many banks in attempting to get these transactions closed. What banks often refused to repair/replace two years ago when the mortgage dominoes began to tumble, are now often given a thumbs up when requested by the purchaser. So, as they say, you never know unless you ask.
4. Lastly, many will argue that today’s market is the polar opposite of what it was in 2003-2005. However, there is one striking similarity to those days that makes buying a foreclosure a challenge; multiple offers. Everybody wants a bargain, especially investors. So, not only do prospective home buyers have the normal ”other buyers” to compete with, they also have the bargain hunter experts, whose FULL-TIME job is to purchase distressed properties.
So, facing all those challenges, how does a buyer compete?
- The best way to buy a home is to use someone who has the expertise. Yes, a real estate agent is probably a good start. But, how about one that’s had some experience or training with foreclosures and short sales. Both of these types of transactions require more than a passing understanding of what those terms mean.
- Catch the properties AS SOON AS they hit the market. If you don’t, another buyer will.
- Trust your agent. If you’ve done your due diligence in selecting your agent, and discussing your needs, then leave it in their hands. It is what they are trained to do!
- Go in with your eyes wide open. It not only improves the odds of success, but minimizes any unnecessary worry and disappointment.
Are foreclosed properties easy to buy? If you’re fortunate, perhaps. But, more than likely, if it’s a bargain property you’ve got your eyes on, you’re not the only interested party. So, do your homework first. Have realistic expectations. Enlist the aid of a knowledgeable, experienced agent that’s worked some foreclosed property transactions. And lastly, you might want to get ready to rumble!
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