TNR - May 2012 Real Estate Edition

TheNicheReport.com

Real estate agent & broker Edition

For the serious real estate professional

Issue 005/May 2012

An interview with Real Estate Titan and judge on ABC's Shark Tank, Barbara Corcoran Page 16

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Four Things a Real Estate Agent Should Never Say And a few things a client does not want to hear

22

Your Dirty Dozen Connecting through adding value

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Six Steps to Make Seven Figures Selling Real Estate

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What Have You Done For Your Tenants Today?

Tenant retention is everything about property management

“A career is nothing more than a series of comebacks,” says Steve Morris, Founder & CEO of EXIT Realty Corp.

International. “Your life, both in and out of business, is a culmination of cycles that rhythm up and down, positive and negative, joyful and tearful.”

The real estate industry has cycled from alarming highs to alarming lows in many marketplaces. In an industry that normally experiences ebbs and flows across time, even veteran practitioners comment that they’ve never seen such lows. But the tide is turning.

“The remarkable thing about recessions is that more entrepreneurs are created than at any other time,” says Tami Bonnell, President of EXIT’s US Organization. “People don’t like change but when it comes about, whether from internal or external forces, they often have the opportunity to create something they’ve always dreamed of and from that, develop a new normal.”

The Las Vegas market was one of the hardest hit and Trish Nash, Associate Broker with EXIT Realty Unlimited in Henderson, found herself almost losing her own home. “In 2008 I was dealing primarily with listings.

Prices were falling and it was harder to get properties sold. I had to dig deep within myself to do something or make the decision to walk away from my home. It was a very scary time.”

Nash decided to focus on short sales and to network diligently. This opened doors for her to become affiliated with Fannie Mae and HUD to the point now where her home is secure and she has 200+ signs dotted on listings throughout the area. In fact, she is so busy that she is able to share the wealth. Thanks to EXIT Realty’s unique compensation package called the “EXIT Formula,” she is able to refer her short sale business to other

agents in her office and create a win/ win.

“I had a lot of support through the past few years and I wanted to do something special for those closest to me. Thanks to the EXIT Formula, I was able to pay for my mother and three friends to join my boyfriend and me in Puerto Vallarta, Mexico last year.

“People say I’m fortunate. Yes, I’ve been lucky but how do you spell luck?

W O R K.” Southern Californians have lived with a distressed sales market too. Susan Ebert and Shawn Sorensen, owners of EXIT Twin Advantage Realty in Murrieta pivoted their business to work with investors and fostered a family atmosphere in their office.

“As the market changed we followed Tami Bonnell’s lead,” said Ebert.

“She kept us at the forefront of market changes so we could stay ahead of the game when everyone else was just catching up. As the tide turned to a buyer’s market, we had tools and technology in place, like EXIT Promo Shop, to generate leads. Now that the market is shifting again, we have EXIT’s Digital Marketing Strategy and all we have to do is teach and mentor our agents to make the most of it.”

“We took what Steve Morris and Tami Bonnell gave us and emulated it in our office,” she continues. “We shared our vision with our agents and they coupled it with their own to create a wonderful family atmosphere.

It’s not lip service, it’s reality.”

“One of the main things we’ve learned through all this is to believe in EXIT and believe in ourselves,” says Sorensen. “I could sell real estate anywhere but I couldn’t build a future anywhere else.”

“We’ve remained committed,” concluded Ebert. “We’ve persevered because you don’t give up on family.”

FOR MORE INFO Call, TAMI BONNELL, President - U.S. 1.877.253.3948

www. exi tr ea l t y .c o m

CONTENTS

Issue 05

May 2012

Publishers Robert Pegg robert@thenichereport.com David Pegg david@thenichereport.com

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MANAGING EDITOR Rick Roque Rick@thenichereport.com

You Dont Have to Be a Shark to Swim with Them

Associate Editor Cathy Johnson info@thenichereport.com

An interview with Barbara Corcoran Rick Roque

8 22 24 27

Four Things a Real Estate Agent Should Never Say

ACCOUNTING MANAGER Shawna Ingram shawna@thenichereport.com

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Emily Williams And a few things a client does not want to hear.

Karen Deis

Your Dirty Dozen tami bonnell Connecting through adding value.

DEPARTMENTS

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karen deis First-time home buyer statistics.

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The Perks Of Being A Leasing Agent

32

30

Six Steps to Make Seven Figures Selling Real Estate Pat Hiban

Jessica@thenichereport.com

Production Manager Henry Suchman henry@thenichereport.com

Production Assistant

National Association of Realtors速 2011 Home Buyer Survey Results

JENNIFER CHAN

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How the Mortgage Acts & Practices Rules Affect Real Estate Agents & Builders, Part III

Advertising Director Jessica Grizzle

35 40

note from the Editor Market conditions and analysis straight up with j predovich online lead generation service provider classifieds

What Have You Done for Your Tenants Today?

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Advertiser DIRECTORY

Linda Day Harrison Tenant retention is everything about property management.

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BRINGING UP THE REAR

Dawn Exner dawn@thenichereport.com

Cartoonist Martin Bradford

COLUMNISTS & Contributing Authors Martin Andelman Tami Bonnell Jennifer Chan Karen Deis Linda Day Harrison Pat Hiban Jocelyn Predovich Chaibia Sarhrou Emily Williams TheNicheReport.com

5

note from the Editor

Real estate agent & broker Edition Let the Hunger Games Begin. Yes, I’ve seen the movie. I was drawn into this Darwinian setting, which drew in themes from Lord of the Flies and Apocalypse Now. While leaving the theatre, what kept coming to mind was the life of a realtor® in a world of very few loyalties. Essentially you eat what you kill, and like many cut-throat sales professions, there are few support systems in place to help new agents to succeed or high-performing agents to stay on top. This is why people have to work so hard and efficiently; everyone establishes a system that works for them.

The idea of having a repeatable process and boilerplate sales methodology that will take mediocre real estate agents and turn them into high-performing stars is a myth without the deep-seated customized perspective of the agents you are dealing with. Well, this is the life of a realtor® - and why we both love and hate the profession. We love it when our pipelines are full, and hate it when we can’t seem to get a deal to close.

May. Summer. Real Estate Season. The warm weather across the United States gave the industry a bit of a jump in March, and the low rates, excess inventory and a number of public policy efforts to keep this inventory moving will keep the American housing market moving through 2012 – and, as I write about in the Market Update, for the next 40-45 months. Believe it or not, it is a GREAT time to be in real estate. If you can communicate the reason why, you will do very well and you will build a new generation of loyal clients. But what are those factors that every agent should know?

How can these be put into practice and what industry partners exist to help you along the way? Keep reading each and every month, and you’ll discover the answers to these questions, and many more for your business.

2012 Northwest Housing Summit, Seattle, Washington. In April, I had the opportunity to speak at the Northwest Housing Summit in Auburn, Washington just outside of Seattle. With several national and regional housing experts, regulators and public officials, the event reminded me of what can go very well when housing professionals from real estate, mortgage and support services come together. It was a fantastic event, and The Niche Report actively supports state, regional and national conferences just like this one. So if you are interested in having us speak at your conference, feel free to contact me and we’ll help support you in any way we can as a speaker, moderator or master of ceremonies.

Barbara Corcoran, Real Estate Shark. This is an exciting issue as we conclude yet another solid interview with a highprofile real estate professional, the Today Show’s Barbara Corcoran, who is quickly becoming known for her investment prowess on the hit show, Shark Tank. Her strategies for success are the focus for our feature interview.

I am excited about the feedback we keep getting from our readers. Please keep sending us your feedback on how to improve this publication. What we are doing is unique, and readers are noticing! By combining the best of mortgage, real estate and housing-related topics into a single publication, we are the only magazine that understands the industry for what it truly is: an incestuous professional family who depend upon one another in such dramatic and yet unique ways as compared to other industries. So, thank you readers and keep the feedback coming our way.

My goal for The Niche Report, Real Estate Edition, is to provide useful insights into the real estate economy and how real estate professionals can grow their business in today’s challenging environment. Remember, if you want to learn more about what we are doing, email or call me (408.914.5895) and I’ll jump on a plane and come visit with your real estate team!

Thank you – I look forward to hearing from you!

Rick Roque Managing Editor, rick@thenichereport.com

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May 2012

Official

MEMBER

Published monthly by BODA Publishing, LLC PO Box 494, Bentonville, AR 72712 Phone: 866.964.2695 Fax: 703.991.2362 Email: info@thenichereport.com www.TheNicheReport.com

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Four Things a Real Estate Agent Should Never Say And a few things a client does not want to hear

By Emily Williams

W

hen you’re meeting a potential client for the first time, or conducting one of your first meetings after landing their business, they’ll be hanging on your every word. No pressure, right? Thinking that you have to say “all the right things” can be pretty intimidating. So, instead, I’m going to give you an alternative: focus on what NOT to say. Here are a few things that a current or potential client does not want to hear and may send them running for the door.

1) “I don’t buy into all that technology nonsense.”

Wrong answer! Chances are, your clients are going to be relatively tech savvy themselves – and even if they’re not, they expect you to be. When you tell them that you don’t use technology in your business, what they’re hearing is “I’m out of touch, behind the times, and don’t have what it takes to help you in today’s marketplace.”

Need proof that your tech skills matter? The California Association of REALTORS® annual consumer research indicates that more than 70% of consumers believe 8

May 2012

that being “tech savvy” is a “very important” trait in a REALTOR®.

What to say instead: “Let me tell you about the many tried-and-true, as well as technologically advanced ways I can help you achieve your goal.” This tells them that you’re not wasting time on ineffective newfangled gadgets while ignoring the time-tested keys to success (i.e., open houses, which we’ll talk about next). However, you are still keeping pace with current market conditions and can function in today’s Internet-centric atmosphere.

Need help with technology? Your broker, MLS, and Association are great resources! You can also count on RE Technology to provide a complete product directory as well as educational articles. If you have any specific questions, please contact us and we’ll be happy to help.

2) “I don’t do open houses.”

What your client could very well hear is, “I’m lazy, pessimistic, and not terribly excited about this project.”

They’ve spent their entire adult life hearing that an open house is a key component of selling a property. And, to a certain extent, they’re correct. Now, it’s true that most sales don’t happen at an open house and that there are other, more important pieces of the puzzle. So, the best thing you

can do is to demonstrate your value by honouring their wishes and, at the same time, informing them about the complex realities of the art of real estate sales.

What to say instead: “The timing of an open house is crucial. While it’s an important tool – one that I will use to full advantage – it’s only one tool in my toolbox. Let me explain . . .”

Open Houses are also excellent ways to meet people you can put into your farm for future transactions. You will often meet every neighbour during an open house. They are a rich source of area information.

3) “Don’t send me text messages – and I certainly won’t send them to you.”

True, text messages are not a one-size-fits-all method of communication. There’s a time and a place for their proper use; to get a feel for that, you can read our article, “The Do’s and Don’ts of Text Messaging for Real Estate.” But to completely rule them out is to ignore one of the primary ways your clients get in touch when they have a quick comment or question.

What to say instead: “I’m here for you, no matter how you want to reach me. Please let me know your preferred methods of communication – if and when you’d like me to use home phone, office phone, cell, email, social media and text message.”

4) “I check my messages/respond to email once a day.”

Ever heard this voicemail greeting on a REALTOR’s® cell phone? C’mon, people – this is a fast-paced business and you’re dealing with clients who have strong emotions (and big bucks) on the line. They want an agent who is responsive, not someone they can only reach once in 24 hours!

What to say instead: “I’m here for you, no matter when you want to reach me. If it’s urgent, the best thing to do is to _______________. If I can’t pick up at that moment, I promise I will get back to you as soon as I possibly can.”

Emily Williams is former paralegal who traded-in stodgy legalese and transitioned to marketing writing to explore her creative side. Prior to joining the RET staff, she worked as a copywriter at a web design and marketing company. Then she joined the RE Technology team for some hardcore reporting and fun, educational writing. She crafts articles, reports, press releases, web pages and other online and offline collateral.

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Market Conditions and Analysis

Market Conditions and Analysis By rick roque

The Real Estate season is upon us. Due to the warm weather, there were over 15,000 temperature records broken in the month of March in the United States. Real estate, recreation and landscaping companies have experienced increased sales or customer demand thanks to the warm weather. From an economic standpoint there could be some adverse effects on commodity prices, since farmers and agriculture businesses are concerned about how the temperature spikes will impact their crops later in the growing season.

In every economic condition there are give-and-take variables. The housing and real estate markets got into full swing this year about 45 days earlier than normal – which doesn’t necessarily mean it will increase overall unit volume, but it may distribute this demand more evenly over the summer and fall months. The backdrop to 10

May 2012

any housing market is the economy, employment figures, consumer confidence, savings rates, inventory and the overall affordability ratings of the homes in the marketplace. Here are several indicators that will make this housing season the strongest market since 2007.

It Still Is a Political Economy As we launched this publication in January, we noted that it was, indeed, an election year economy, and the current administration can’t afford to have the housing and/or employment figures get any worse.

In fact, every economic indicator supports some signs of economic strength, but with some clear vulnerabilities. Having said this, the political economy is going to direct the attention both toward and away from the frustrations of the economy.

This is a result of the political mood as every electable candidate focuses on a vision that reflects hope, optimism and a brighter future. These political sentiments tend to mask some of the more troubling signs that

actually exist, or that people feel are underlying our economy. But the political economy has already steered public policy in a more economically favorable direction – toward banks, housing, real estate and taxation. Let me explain.

Tax Cuts and Pro-Banking Politicians Going into an election year, we see President Obama proposing to cut corporate tax rates from 35% to 28%, something that otherwise would be ideologically difficult but, in a political economy, such economic measures are popular and will support the expansion of small businesses.

Secondly, influenced by the administration, the European Union is slowly testing a proposal that was otherwise called the Robin Hood Tax, which would tax various transactions from some banks and distribute them to the worlds poor. Taxing transactions would not deal with the heart of the financial crisis and the institutional weaknesses that exist; it would drive business away and

Market Conditions and Analysis

Miami Dade County Single Family Price Per Living Area and Regular Sales Turnover Rate 250

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Dollars Per Square Foot

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Los Angeles County Single Family Sold Price Per Living Area and Regular Sales Turnover Rate 450

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therefore depress the European markets even further – once again, we can thank the political economy for this as well.

Despite high oil prices, the Euro crises and political obstruction in Congress, the private sector continued its 25-month job growth streak in March. In March, 120,000 jobs were added across 29 states (while another 20 states lost jobs); overall this presents both promising and challenging signs as in the month of February, 42 states added jobs. Nationwide, the unemployment figures fell to 8.2%, once again a promising sign; however this figure does not include many who have been out of work or who are ‘underemployed’ which, according to many economists, puts the real unemployment rate to around 15% or more. There are nearly 6 million people out of work (for longer than six months, not including those who have stopped looking for work), and the negligible increase in hourly wages further depresses the forward momentum of the economy and the ability for consumers to qualify for a home or have the confidence in our future to consider purchasing.

As a result, the tax cuts and a politicized personal

tax increase on individuals making more than $1 million annually are sure to keep the political economy hotly debated, but with this, very little by way of substantive changes will be put into effect and the momentum will continue. This is good news for the U.S. housing and real estate markets and will only improve consumer confidence in our economy. This trend will continue through 2013 depending upon how decisive the 2012 elections are and whether or not there are any political or economic events that impair consumer confidence.

There are a few more national indicators to continue to watch, with their sources listed below – these forecasts also provide an insight into 2013 and 2014.

It is widely accepted that property values bottomed out in most markets in 2009. A good illustration of this trend is viewing the price per square foot in hard-hit Miami-Dade County and Los Angeles County (in the Sand States). You can see the low point around 2009, and the overall drop of 35-40% in overall valuation.

Year

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Market Conditions and Analysis Pro Teck Valuation Services, based in Waltham, Massachusetts, also presented the top 10 worst and best metropolitan areas in the United States. “The Miami and Los Angeles markets are highly representative of what we foresee for most of the important coastal U.S. real estate markets,” Pro Teck Chief Executive Tom O’Grady said. “In particular, we see stabilizing and then gradually increasing prices over the next few years.” The purchase market has been driven by bargains with a tremendous opportunity for appreciation; in many markets, there are plenty of deals to be had. Approximately 25-30% of the market are REO and Short Sales, which have driven approximately 30% of all real estate transactions to be all-cash transactions.

This is unprecedented, and it demonstrates a number of strong indicators that the housing market has indeed hit its ‘theoretical’ bottom in most markets. The “demand” for homes that are being sold at depreciated prices and/or short sales has established a new ‘bottom’; supply-and-demand principles affect this category as well and will create a longer-term “bottom hovering” of pricing as we are seeing today.

Buy a Home Today; If You Can Afford to, Buy Two or More - DO IT! This is really the message for the next four years. If you have the money and you can qualify for a mortgage (that is the big “if ”), it is the best time in a generation to buy a home. Sadly, this reality is happening at the expense of the politicized ‘middle class’, who can’t seem to catch a break.

Not only did the housing market and the many subprime options disproportionately adversely affect them, but even in the downturn it was the higher-end borrowers with equity in their homes and cash in the bank (baby boomers) that have been the primary buyers of homes today. With nearly 30% of all mortgages closed in 2005 as subprime, there is plenty of inventory to bleed through the system.

There are so many good deals in just about every market that we should expect another 36-45 months in order to bleed out the inventory. These trends tend to balance out local employment rates, foreclosure sales, new sales listings, average list price, number of sales and average time on the market to highlight various markets around the country as being strong and weak-performing markets. When ranking the above variables, the strongest and weakest markets are as follows:

Best Markets

Midland, Texas

Tulsa, Oklahoma

Billings, Montana

Provo, Utah

Salt Lake City, Utah

Dallas Metro, Texas Oklahoma City, Oklahoma

Weakest Markets Hartford Metro, CT New Haven, CT Eugene, Oregon Harrisburg, Pennsylvania Cleveland, Ohio Ashville, North Carolina Detroit, Michigan

The Subprime and Alt-A product recipients between the years of 2004-2006 are the most delinquent on their

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Market Conditions and Analysis could partner with financial planners and advisors who help borrowers make smart investment decisions. We are at the bottom of the market and in most areas, the opportunity to purchase a home and benefit from true, bonafide appreciation is now.

payments which, as we all know, has driven much of the foreclosure crisis, or rather the shadow inventory that is working through markets. There is no question, the housing market is working its way through its own cleansing process, and various federal programs such as HARP1 and HARP 2.0 and various principal reduction proposals have targeted this inventory in order to accelerate this 45-month process.

In an otherwise challenging forecast, light can be seen at the end of the tunnel. There is no better time to buy an investment property, a rental or vacation home, and given the lack of confidence in the stock market, the best 10-25 year investment for any qualified buyer just may be the late 30’s to mid-50-year-old buyers looking for investment properties to later unload to subsidize retirement living.

This is the main point that many realtors and agents are simply ignoring or do not understand. If they did, they would market this difference. Given these trends, it is an exciting time to be in real estate and you can provide a life retirement or investment plan for your borrowers. You

Rick Roque, Mortgage Professionals & Managing Editor of TNR making opening remarks to the conference.

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May 2012

Connect. Get Involved. Get Informed.

If you are a housing professional, it is important to get involved in your respective professional association. Whether it is your local chapter of the National Association of Realtors, National Association of Independent Housing Professionals or your state Mortgage association (broker or banker), the important thing is to get involved. To combat nearly three years of constantly negative press, the only remedy for this is to educate ourselves on the issues and then to be that source of information for the consumer. The mainstream media can say what they want, but the reality is, if we housing professionals aren’t competent and knowledgeable about their respective markets, there will be no reliable source of information other than part-time reporters or news commentators who simply aren’t qualified to adequately explain to the public the problem, the solution and the process to tie these two realities together.

Because of my background in mortgage and real estate, I was an invited guest and speaker at the Pacific Northwest Housing Summit (http:// nwhousingsummit2012.com/). While there was a number of organizers, the head of the Washington Association of Mortgage Professionals and principal at Cascade Pacific Home Loans, Marty Lough, organized one of the most impressive series of industry speakers I’ve attended in a couple of years. A few of the nationally notable speakers

Featured Speakers at the 2012 Northwest Housing Summit.

Market Conditions and Analysis at the conference were: • Edwin Chow, Regional Director of the Consumer Financial Protection Bureau (CFPB) • Attorney General of the state of Washington and Gubernatorial candidate, Rob McKenna • Director of Consumer Services for the Washington Department of Financial Institutions, Deborah Bortner • Jerry McDonald, who oversees licensees in Real Estate Sales, Appraisals and Home Inspection within the industry • Assistant Attorney General with the Washington Consumer Protection Division, David Huey • Pauline Craven, rising real estate producer for William Raveis, the third-largest family-owned real estate firm in the United States and the largest in the Northeast.

• Marc Savitt, industry advocate, mortgage broker/ professional and founder of the National Association of Independent Housing Professionals (http://www.naihp. org/) And not to be outdone, Frank and Brian from Think Big Work Small were present to help facilitate the flow of the overall conference. There was a significant number of topics reviewed to appeal to the diversity of professional needs across the attendees of several hundred people. With topics that delved into unimplemented requirements and provisions as set forth by Dodd-Frank, the CFPB’s mandate to implement such rulings and to modify them for clarity in implementation, HVCC, Appraisal considerations, Escrow concerns related to the new GFE/TILA forms, Title and the broader implications on housing & real estate transactions.

Approximately a third of the conference attendees were realtors®-agents/brokers, another third were mortgage professionals and the remaining third were service providers seeking to understand how better to serve their housing-related customers. It was an ideal blend to better understand the broader concerns confronting every aspect of the supply-chain of real estate and mortgage origination/funding.

In forums like these, it becomes very difficult for realtors® to always blame the mortgage lender for details they generally do not understand, and likewise, it provides

a forum for mortgage loan officers to better understand the housing dynamics, pressures and process flow of what it is to be on the front line of the transaction with the borrower from beginning to end. One of many challenges in housing/real estate is communication across several industries and disparate parties. Amidst the confusion, the consumer easily is the most affected by any breakdown in communication, and conferences such as these bring together housing professionals from across the process and seek to address these potential gaps.

The best way to take advantage of the opportunities in the marketplace is to stay current on the trends, study the opportunities and learn to integrate these into your day-to-day business, so you can translate all of this into an overall net benefit to your company. This is the goal of these conferences and, naturally, the broader goal of this publication.

Any questions or feedback on this article, email Rick Roque, Managing Editor of The NicheReport Real Estate Edition at rroque@thenichereport.com or call him at 408.914.5895.

2012 Interview Series

You don’t have to be a “Shark” to swim with them …

An interview with Real Estate Titan and judge on ABC’s Shark Tank, Barbara Corcoran By rick roque

H

ousing professionals are a stubborn group.

Whether you are a real estate professional, appraiser or loan officer, there are very similar characteristics in each sales occupation that define and even predict success. There is no occupation quite like the aggressive and hustle nature of being in real estate. It is difficult to find jobs that represent so much upside per transaction – yet so much financial risk – while you build your book of business. Adding to the difficulty, there are few loyalties in real estate, especially when you are a new agent trying to make your mark on your local market.

Fueling this competitive dynamic are a few facts from the National Association of Realtors: • Over 80% are independent contractors • Just 30% of all agents have a bachelor’s degree • There are 1.3M licensed real estate professionals • Average earnings for agents is just over $40K annually To close 2011, NAR revised its previous forecasts: With just over 4.2M single family homes sold in 2011, every deal is extremely competitive. Local market demographics naturally will reflect just how competitive, but, on a normative basis, there are a lot of realtors® fighting for each and every deal. Agents know this intuitively, but it is

interesting that there is still frequent resistance to learning or embracing what would be considered important sales fundamentals.

Fundamentals are annoying because they are “fundamental.” The “fundamentals” become the very things we know but don’t do, yet they are vital to our success. This is the interesting thing that comes from all interviews with highly successful people. The “best practices” become the very ingredients that make the larger opportunities work well. So if those ‘little things’ are ignored, don’t be surprised if consistent, repeatable success evades you. And yet, when we attend conferences or read interviews, we get annoyed easily as we look for the magic bullet or the secret recipe for success. While we do this, we skip over all the necessary details that in the end ARE the secrets to genuine success.

Knowing this, I step into my interview with Barbara Corcoran: investor, real estate mogul, TV personality and residential real estate “Shark.” Barbara epitomizes what it means to be in the real estate industry. Her quick wit, stark ability to analyze, forthright ability to interrupt, redirect and take control are qualities that were pervasive while I was in the “shark tank” – pun intended. Interestingly, this was accomplished while maintaining a likeable personality: intriguing, substantive, competent, helpful, instructive and – dare I say – maternal. She has a way of lecturing, educating, embarrassing and yet mentoring you, all in a single conversation. Perhaps it was the Catholic nuns who taught her this at the convent she attended for college, or maybe it is the male-dominated culture in New York that enabled a disciplined woman to succeed.

Whatever the reasons, and we explore several in this interview, it is not surprising when you learn that she sold her real estate company, The Corcoran Group, in 2001 for an estimated $70 million and was the face of residential real estate across the United States on NBC’s The Today Show. Her new venture is investing in companies she equally tears down on ABC’s hit show, Shark Tank, which, among other investments, has increased her total net worth to over $1.2 billion – astounding for a woman who was broke 30 years ago, working job to job simply to keep her fledgling real estate business from closing.

Barbara’s story is a perfect one that reflects how close any one of us could be to success. It is always one decision away, and it frequently revolves around innocuous factors; it is rarely a one-hit home run. That is the subtlety of success.

Frequently, we are so close – and yet we do not know it. We

are blindfolded in our business lives, often in the dark as to what the future may (or may not) hold. But those like Barbara, who have succeeded through the passion of their own convictions, nonetheless continue forward. *** In today’s residential real estate market, what is the number one threat that real estate agents should be aware of?

Barbara Corcoran: Believing that it isn’t a good time to grow your business. Don’t wait it out!

It is always a good time to pull ahead of my competitors – in good times, I was always outspent; in down times, larger companies tend to cut back and circle the wagons. It is a golden opportunity – and they wait it out. When I built my business, when the market was great, I worked my ass off and couldn’t pull ahead of my competitors; when the market was down, I ripped ahead of them.

The key is to manage the market cycles – the best agents make the most money.

The worst thing you can do as an agent in the market is to believe in not growing your business. The very opposite feeling or action is what you should do; waiting it out is the biggest mistake you could make. I am not saying it is the smartest advice, but when I worked my hardest when the market was bad, I truly went past my competitive cycles. Through each cycle I increased my market share. My best agents made the most money in the down cycles; the agents on the fringes generally did worse.

I sold my business in the year prior to 9/11.

However, I am actively investing in businesses. Real estate is no longer part of that – been there, done that.

How should residential real estate agents today respond to this threat and still remain competitive?

BC: It is a great time from the broker owner’s perspective – a great time to renegotiate your leases with your landlords. Even if they said ‘no,’ after three months I’d go back until they said yes. I was always persistent in reducing costs and growing revenue.

Secondly, I’d get rid of the bottom 25% of my staff.

In every downturn, the bottom 25% produces only 3% of your business – but they occupy a large percentage of resources. You have to move quickly and decisively. Other things such as bookkeeping, listing fees, phone costs – TheNicheReport.com

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every single part of your costs goes up. If you can save 25% of your costs and overhead, you will be far ahead of the game.

Most broker owners don’t do this until two years into a bad cycle because they are waiting for the market to turn around, but often their optimism can put them out of business because they aren’t moving fast enough.

I would recruit as well – the wonderful advantage is that most of the top agents tend to be most unhappy in tighter markets because of the cutbacks in sales and marketing expenses. Broker owners struggle in making clear priorities and they tend to be loyal to people they shouldn’t. As a result, those you should be loyal to end up leaving. It is very difficult to recruit when times are good; agents are doing well and they are well fed. I would always spend 50% of my week recruiting the better agents in the industry. If you wait until the market is coming back, it will be too late!

“I would always spend 50% of my week recruiting the better agents in the industry. If you wait until the market is coming back, it will be too late!”

These principles are very consistent with sales-focused, service-level businesses. It appears they are equally applicable to many of the mortgage companies I work with as well.

BC: Yes, this is very true – sales is sales. Real estate agencies have a much better image and reputation than the mortgage industry.

Is this a good time to get into the housing real estate market? And how long do you anticipate the residential real estate market to be as volatile as it is today?

BC: I saw your top agent of the month, Pauline Craven from William Raveis. She is relatively new to the industry within the last three to five years – and yes, top producers get lazy. She probably has a much better opportunity in today’s market than the more experienced agents.

Let’s face it – top producers get lazy. I had 1,000 agents – all of my agents started in the worst of times.

There is strength in naiveté, and people probably thought she was crazy. When you have experience and many years of selling, the poisons of the mind always hope for a different reality. Newcomers don’t have a reality different from the one they are in. Besides, they have newer approaches to marketing, sales, etc. than the old guys in the field. The old allegiances often break down as a result of a downturn in the marketplace. This is license to kill for new agents like Pauline. New agents don’t operate by the same set of rules. There are actual facts working on your behalf – you create your own reality, the market comes back and you have to break into that market.

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May 2012

As far as the market is concerned, I do believe we’ve turned the corner. Of the approximately 300 markets NAR looks at, 25% (NAR Charts) across the U.S. have turned around; there are double-digit improvements in many markets around the country – you can’t ignore this. You have to appreciate the fact that the inventory is 25% less than it was a year ago.

Sadly, what grabs the headlines is the black cloud that comes into a buyer’s mind – the foreclosure market. The foreclosure mess we have to work out through the system.

All of the efforts by the government have fallen short. How much longer do we have? I am not certain, but things are clearly on the mend.

What was behind your success in the 1970’s? As a woman, working in what was largely a man’s industry in such an aggressive city as New York – how did a woman from St. Thomas Aquinas College standout, be competitive and grow a real estate business?

BC: St. Thomas Aquinas – this was a convent, and lucky for me they brought in 30 lay women because they didn’t

recruit enough that year, and they accepted me into their undergraduate program. It was a stroke of luck. I would have been barefoot and pregnant by the age of 19 like everyone else I grew up with from my home town. It was a stroke of luck that I ended up being introduced to that college. It is a funny story.

I had a friend who was visiting the college who was a year older than I was. She had told me about this school.

I thought she was crazy because I was a terrible student – I figured I would never get in, but I decided to accompany my friend during her visit to the campus. She was a good student and I wasn’t. I filled out the application on a whim when I was there, and not only did they accept me – they gave me a bill for tuition in equal installments for 12 months. I was able to pay my own tuition. That was a lucky bus ride. It was a 30-minute ride north of my town and she simply wanted company. I was not a smart student and was never successful in business or a trade; I had 22 jobs before I started my real estate firm.

This decision literally helped me for the rest of my career. No one has ever focused on my education and how it impacted me, but quite literally, I made hay of that college decision on that fateful day – and I will tell you why and how. There was one bad market in the early 1980’s. I had 18 agents or so at the time, and we were starving to death, which wasn’t all that uncommon. I was thinking of closing my doors.

Two Italian developers come in one day and asked my opinion on some condominiums across from the United Nations. They mentioned they would need to hire a marketing and salesperson to run their project, and I asked them for the job. They were surprised and yet skeptical because I was running this real estate company. They didn’t trust me because my story didn’t make sense – and of course I wasn’t about to tell them that my company was on the brink of closing down.

I said to them, “You know, I was almost a nun, as I went to college at a convent – you can trust me.” That alone closed the deal and I got the job. It wasn’t technically correct but it wasn’t a lie, because I attended the convent and it was indeed a nunnery. These Italians needed someone they trusted and I needed the money to keep my business’s doors open. I worked there for seven or eight months, the market turned around, and I went back to my business full time. The Catholic culture was something that I benefited from, there is no doubt. That “Catholic Card” was pretty effective when I needed it – and it was true.

Did you fill a niche market? Do you recommend that other real estate businesses focus on niche markets? I have always been fascinated with niche markets such as the Chinese, Vietnamese or other specific market focal points. As the market shrinks, this large pond, which was a $3T market, is now a $1T series of puddles across the United States. Do you recommend focusing on a niche or taking the business as it comes?

BC: I could argue either side – in life, if you know a niche market better than anyone else, it is powerful and a good place to start. The NYC version of this story is the building where you live – it is great for someone to focus on this. You have local market knowledge. Therefore, to become a strong agent for the immediate 30 blocks can be the target goal.

You can specialize in a listing fashion – I focus on single-family homes – or raised ranch or one-level homes.

You have to learn other markets; customers are less loyal and they know what they want. This can be really difficult because customers tend to be very picky and less loyal.

In the early 1970’s, people didn’t look expansively; they focused on some neighborhoods to the exclusion of other neighborhoods. Customers will be more loyal if you can tailor what is available to their needs. So the agents who can swing with the changing tides of the market are the ones who come out ahead. This is always better than simply sticking to a specific niche market.

If you had $5,000 today (this is your $1,000 investment in your business in today’s dollars), where would you spend this money and what would be your approach to the business?

BC: I would invest in real estate; it is one of the few businesses that has a proven model. You can make money across the United States. You can work it – it is a low-risk, wildly profitable opportunity. It works in every town across the country. All the questions are known variables; the only question resides in yourself – can you work it? It doesn’t take much to get into the business.

Would you ever invest in tier two or three real estate markets such as St. Louis (MO), Tulsa (OK), Boise (ID), Lexington (KY), Indianapolis (IN), etc., given the stability in certain ‘slow to moderate’ growth regions of the U.S.? Are there strong longer-term real estate growth opportunities in these unsuspecting markets?

BC: It depends on the economy – in shaky times, yes.

In down times these markets tend to be more stable TheNicheReport.com

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because the population isn’t as mobile; there aren’t as many transients. Real estate brokers need mobile markets. Highly mobile markets are great because this is when people need real estate.

What setbacks did you experience with your business, perhaps when you were getting off the ground, and what can other real estate entrepreneurs learn from that experience?

BC: Well – these are the mistakes that almost sank my business and honestly, I see these affecting all businesses that eventually end up failing.

1. Cash flow; stretching every dollar you have.

2. Over-extending – and having the bottom fall out.

3. Lack of confidence – questioning your own judgment – vacillating. Be decisive in how you make decisions.

Making the right ones isn’t necessarily as important as making decisions in a timely manner.

4. Don’t be intimidated by the competition.

Each of these are killers, I mean real killers. Cash flow is always taken for granted. It is always important to be liberal with your attitudes and approaches to the market, but conservative in how you spend money. Don’t just expect that once you spend money, the business will definitely will be there. This often is NOT the case; naiveté always overestimates what the sales response will be. This is a danger for people who are new to the market, and 9 times out of 10, they are too stupid or prideful to know any different.

When people criticize you personally or pick at your business, more than likely you are making waves and getting things done. Those are good signs that you are doing the right things in your marketplace. People ultimately will find creative ways to take you down – most of the time they will try to undercut any idea you have before it can be successful. If you believe in it, just move forward passionately and demonstrate the success you believe in.

Reflecting back, what were the most important business decisions that later led to your success? Are these principles applicable to independent Agents who own their own local firms but desire to grow?

BC: Some other pivotal moments that led to the success of my business: I borrowed $1,000 from my boyfriend, and not long after, he fell in love with my secretary and left me – that was greatest gift and event that happened because then I could focus on my business! Lastly, I was publishing 20

May 2012

a market statistical report – the Corcoran Report – on my marketplace; this was based on only 11 sales. This information was posted in the New York Times because no one was doing something that was LOCAL. It is all about local knowledge – the information that is most helpful for agents. Therefore, publishing every 6 months for the next 30 years grew my business more than I could have ever dreamed. This expanded my image and market presence, and enabled me to crush the competition. Once you control the media platform, you are much bigger in perception. NAR, local market report with your name on it, these become entry points into newspapers, TV, radio, etc. If you become the go-to person in your marketplace, you will own it.

How do you recommend a real estate agent balance philanthropic or volunteer activities in a community with their business objectives? Should you leverage one for the benefit of the other?

BC: Personally, I have 10 siblings – I’m the second oldest.

Being a middle child – great position – you can easily hide. I wouldn’t want that today. I am closer with some family members than others; this changes depending upon the phase of life. Two siblings are on the West Coast, my sister is in PA, brothers are in Brooklyn and NJ. My relationship with each of them has certainly grown around a commonality of interest. To grow in a relationship you need new experiences – three of them wanted to go into business with me when I started my business, and quite honestly, I said no to all three ... it sounds cold, but I know a lot of people who have gone into business with family, and spend more time talking about those problems than making things happen in their marketplace.

In the community, I love to teach. I can lecture and make a huge difference in people’s lives; I like empowering people to get over failure. I can be influential and I know I can make a difference in people’s lives. So, I work in areas that I believe in – you can’t fake passion, and people in business know this. People are drawn toward conviction. Making money and success is a function of your passion and not an end in itself.

Was doing TV part of your growth strategy for your business? Social media today is the new ‘media’; how do you think this can be used in such a competitive market?

BC: I was on TV a lot in the NY market because of my

I said to them, “You know, I was almost a nun, as I went to college at a convent – you can trust me.” That alone closed the deal and I got the job.

With so many Americans struggling to qualify for a mortgage, is real estate still a good investment today for the average American family? Or are we entering a new nonhome-ownership phase in American culture where more and more will be renting?

BC: Renting is a band-aid solution to recent injury, so people can lick their wounds; people will always want to buy a house or a place of their own. This is America – we don’t rent, we own. And with that, I have my next appointment. ***

published books. TV was definitely part of my growth after I sold the Corcoran Group. Social media – the battle for people today is online – social media, Facebook, Tweeting, Blogging etc., it is the super highway to create an image of your company. If you create a following, you need some middle place to send people to – if you are on TV, radio or are frequently in print, you should send them to some website or some dynamic place where they can always get more of you. The internet is rather simple; you can take advantage of it for your business. The internet is a series of country roads. Via the internet, there are many more options.

You are known as a “Shark” on the venture capital startup hit television show Shark Tank. What do you look for in making investments in new companies?

BC: I am a shark on an angel investment show – it is American Idol for business ideas. I felt right at home. This is nothing different than hiring great salespeople. Who do I put my money on? Who will come in? I don’t want to piss my money away, and I want to spot talent. With all of my investments, they are flying – they are great salespeople.

It isn’t about the product. You need a salesman to build a business.

Barbara was remarkably friendly, professional, matter of fact and yet very personable. She touched upon a number of points that many already know but few put into practice.

This is at the heart of The Niche Report Interview Series – to uncover, articulate and clearly present the specific things agents and brokers need to take advantage of in order to be successful in today’s market. Will you invest, take calculated risks and listen to new ideas? Are you willing to focus on the little things that will build your business and make the tough decisions? These are the key points that have created success in the lives of people. There is nothing special about Barbara Corcoran, but what is special was her willingness to remain committed to her brand, taking advantage of new media and focusing on her market niche, and it was through these few principles that she was able to build one of the largest real estate firms in the United States.

Mr. Rick Roque, Managing Editor. For comments email me at: rick@thenichereport.com or call me at 408.914.5895.

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Your Dirty Dozen Connecting through adding value

By tami bonnell

W

hether you’re recruiting an agent into your company or selling property, real estate has everything to do with making connections, and through those connections, building relationships.

In this rapid-fire world of hypertechnology, we no longer connect the same way we used to. People broadcast instead of connecting. They add names to long lists and generate drip email campaigns or tweet 20 times a day, often pushing their message out with little regard to the actual person receiving it. We may have 1,000 touches on Facebook, Twitter or LinkedIn, but that number of contacts doesn’t translate into a strong foundation for your business.

Ask yourself this: if you were looking for an investment (whether an investment in where you’re going to work or a house you want to buy or sell), would you place your trust in someone who pushes their own agenda? Would you entrust your long-term future, your nest egg, the home where you’ve bathed your children, to someone you haven’t connected with? Probably not.

Studies prove time and again that people want to feel like they’re a part of something better. They want to matter. Even infants who are clothed, fed and sheltered fail to thrive in the absence of human connection. As humans we are inherently connectors. As good as video and other technologies may be, if we don’t connect in a real and genuine way, we don’t grow.

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So how do we build these connections in the real estate business (and in life)? We do it by adding value. When you add value to someone’s life – genuinely and unselfishly – they feel like they are a part of a larger community. They know that they matter. They feel appreciated.

For now, forget about the hundreds or thousands of friends, followers and contacts in your database and start with what I like to call your Dirty Dozen. Carefully review your sphere of influence and choose twelve people who work on the business of real estate but not in it; people like appraisers, home inspectors, mortgage brokers, bank presidents, state or city elected officials, etc. This group can fill in the gaps of your own knowledge and provide you with a wider perspective. Together you can better serve the public.

The big difference between the way you’ve been connecting up until now and the way you’re going to connect with your Dirty Dozen is this: they can’t (or won’t) help you unless you’re genuinely interested in them, their business and what they’re trying to accomplish.

Start your new connection strategy by reaching out to this group. Ask what their plans are for the coming year, and ask how you can help them to achieve their goals. Is there someone with whom you can connect them?

Daunting? Not at all. Here’s where technology can aid in the relationship-building process – the whole thing can be systemized. Here’s how it works for me.

Many years ago I started with a Dirty Dozen, and over time I’ve built strong relationships to the point now where I have a Dirty Twenty-Five. I’ve Googled and set up Google

Alerts for every one of them and their companies. I’ve friended them on Facebook and connected with them on LinkedIn. These technology connections help me to know what’s going on in their professional lives, and I keep track of it all on a spreadsheet – yes, a simple spreadsheet, because that’s what works for me. You might use Outlook, an app or index cards – the key is finding what works for you. I use the spreadsheet, not to dehumanize the process but to make sure I don’t drop the ball. I’m genuinely concerned about these people, and what happens to them is important to me. I don’t want to forget anything.

Annually, I write each of my Dirty Twenty-Five a letter sharing with them what I want to accomplish in the coming year and asking about their plans and goals. I tell them what I appreciate about them and that I value their opinion. I ask if they have any suggestions of people in their spheres to whom I should reach out, and if they can recommend any courses I should attend. I make a point of adding value to them by offering suggestions of a couple of things I think they could be doing in their own business to work smarter. I offer to connect them with others in my network who will benefit them.

After I send the letter, I connect with them after reviewing my spreadsheet. Most people on my list reply with their goals, both personal and professional. It’s important to note that each person has his or her own preferred method of communication – some prefer phone, others email, and others still, Facebook. I make a note of each person’s preference on my spreadsheet. If ever you have the opportunity to meet in person, do so. Live is always best. Watch for those opportunities through trade shows, REALTOR® association meetings, business networking groups, chamber of commerce meetings, etc. If you can’t get together live, then utilize video conferencing such as Skype or Oovoo.

Then schedule a monthly phone call with this agenda: How’s it going? Is there anyone I can connect you with? How can I help you? Always look for common ground and keep your eye out for connections and resources that will be of benefit to them.

I have followed this method for years, and over time the people on my list feel truly connected to me. They start to volunteer their plans and dreams and they become part of the solution. They feel cared for and valued because they are.

They start offering valuable ways I can work smarter. I update my spreadsheet after every encounter, making note of what is important to them and what they’ve accomplished. These are people I want on my team rooting for me – but I have to root for them first. It’s like Zig Ziglar said, “You can get everything in life you want if you will just help enough other people get what they want.”

When you stay connected with key people over a span of time, your relationship is elevated. You’ll find that when you

ask “how’s the market?” you’ll value and act on their insights.

They’ll act on your suggestions when you recommend a book to read or offer to introduce them to a contact. Over time, some of the people on my list have made hundreds of thousands of dollars as a result of my helping hand. Other times, our relationship has been that of trusted advisor or a shoulder to cry on. Whether I’m providing the right words at the right time or sending them a funny card or an interesting book to read, it’s all about adding value.

After you’ve established your first Dirty Dozen, build a list of a dozen peers with whom you can connect every four to six weeks and from whom you can learn best practices. This will become your own Master Mind Group. Share with them what you want to accomplish and, more importantly, find out what it is they want to accomplish on a professional and personal level. Always follow the principle of providing value first.

Soon you’ll be building lists outside of your direct real estate business; after all, it takes a village to make someone successful. I’m on 150 planes a year, which takes a lot of organization and planning. On more than one occasion, my dry cleaner has met me on the side of the highway to give me my clothes. Another time she met me at the terminal at Logan Airport. She goes out of her way for me because I make a point of showing her how much I value her. I write her a thank you note at least once a year and occasionally send her a funny card or a bouquet of flowers.

You can also extend the idea of a core group of connections to your client list. Review your database and choose the 25 people who are most likely to give you referral and repeat business. Find out what’s important to them. Sales activity in the area? Community development?

Charitable causes? School reports? Set up Google Alerts for their interests and reach out to them (by their preferred method) with relevant updates.

When you start to view your database in terms of core connections like your Dirty Dozen, your peer group and your key 25 clients, you can effectively deepen those relationships by adding value. Because you add value to them, they start adding value to you, which helps everyone become better.

The bar on the real estate industry is raised, and thereby the consumer is served by a better-educated, empathy-oriented group of professionals. And that’s the real value.

Tami Bonnell, President, US Organization, EXIT Realty Corp. International. Bonnell's real estate career spans more than 25 years during which she was instrumental in building three major brands. Ms Bonnell has been featured several times in major industry publications across the country. Since becoming President of the US Organization for EXIT Realty Corp. International, her focus is on growth and profitability for Regions, Brokers and Agents.

TheNicheReport.com

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National Association of Realtors® 2011 Home Buyer Survey Results First-Time Home Buyer Statistics

By karen deis

T

he 2011 NAR report called “Profile of Home Buyers and Sellers 2011” has just been released, with a huge amount of information that will help you plan where you should be spending your time and your marketing dollars!

While this info is from 2011, what it does is identify trends.

In 2010, 51% of all home purchases were made by FTHB. In 2011, it was 37%. The 2010 numbers are skewed because of the First-Time Home Buyer Credit offering.

Overall, the numbers have significantly changed AGAIN. Since the report provides stats on first-time buyers, repeat buyers, FSBO, and investors, this article is strictly about the first-time home buying segment, how the stats compared from 2010 to 2011, and a little commentary from me on why the information is critical in your business planning efforts.

First-time home buyers made up 37% of all homes purchased…

2011 FTHB by Area 2010 46% Northeast 56% 24

May 2012

35% Midwest 51% 34% South 46% 42% West 52% Tip: Still, over one-third of all homebuyers are buying for the first time. In this article, you’ll also learn that 92% of FTHB researched the Internet (websites, social media, blogs) before deciding which home to buy and which real estate agent to use. I suggest that you align your marketing with the way FTHB find information – but more on that later.

Living arrangements prior to buying their first home…

77% of FTHB rented (i.e., an apartment or a home) prior to buying their first home. This is up 2% from 2010.

19% lived in a home—a decrease of 2%. Broken down by marital status: 2011 Living Arrangement 2010 49% Single Female 52% 47% Single Male 55% 37% Unmarried 67% 58% Married 45% Tip: Over three-quarters of first-time home buyers are living in apartment complexes, and it is still the number one way to market to them even before they start the home search process. Free tips on how to market to apartment

complexes and to order mailing lists can be found at www. apartmenttoolkit.com .

Marital Status of FTHB… The big change is the increase of married couples buying their first home.

2011 Marital Status 2010 54% Married 48% 12% Unmarried 12% 21% Single Female 23% 12% Single Male 15% Tip: If you are holding home-buying seminars, consider segmenting them into “Couples Only” or “SinglesOnly” First-Time Home Buying seminars. You may want to segment the “singles-only” further to “divorced FTHB’s.”

Invite a loan originator to help you. Each segment has its own set of home- buying and loan approval issues.

Median age of FTHB… This is about the same as last year.

2011 Median Age 2010 9% Age 18-24 11% 52% Age 25-34 56%

20%

Age 35-44

19%

Average Income of FTHB… Big change here. A single male’s income significantly decreased while a single female’s income increased slightly.

2011 Income 2010 73,200 Married 71,200 69,800 Unmarried 62,600 46,300 Single Female 46,100 47,900 Single Male 52,800 Purchase Price Range No big changes here over last year, however the lowerpriced homes have had a slight increase. This is probably due to the fact that the home values have been decreasing.

2011 Price Range 2010 10% < 75K 6% 12% 75K > 100K 11% 12% 100K > 125K 15% 14% 125K > 150K 15% 10% 150K > 175K 12% TIP: While some areas are more affordable than others, 48% of FTHB purchased a home at $150,000

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or less. When choosing apartment complexes to market to, make sure that you have an inventory of homes in the “starter home” price range for your area. Review all their listings and see if you can negotiate seller incentives or special financing options like FHA and USDA (if the property qualifies).

Moving distance from current residence The distance from where a FTHB is living now to their new home is 12 miles. That has not changed over the last 3 years. It’s the same if they are living in an apartment or with parents/family.

TIP: If you are marketing to apartment complexes, consider the location of the complex in relation to the housing price ranges for FTHB. Check to see if the subdivisions within a 12-mile radius have housing prices at $150K or below (or your area’s starter-price range). If not, you may not want to market to those complexes.

Information source prior to buying a home…

The typical buyer who used the Internet is 42 years old (up from 37 yrs. In 2010) with an average income of $83,700. The typical buyer who did NOT use the Internet is 60 years old (Up from 57 yrs. in 2010) with an average income of $60,300. Those using the internet took twice the amount of time to find a home versus those that did not use the web. Interesting?????

2011 Info Resource 92% Searched for home on web prior to buying 88% Searched for Real Estate Agent online 53% Yard signs 40% Open houses 28% Newspaper ads 17% Homes magazines 5% TV/radio TIP: If you are spending money advertising in your local homes’ magazines or the newspaper, you may want to reallocate your money to online marketing instead.

Financing the home purchase…

It’s the same as last year—95% of home purchases were FIXED RATE Mortgages.

2011 Types of Financing 2010 30% Conventional 27% 54% FHA 56% 6% VA 7% 5% Other 5% 26

May 2012

TIP: Ask sellers to include closing-cost assistance and include the option on your listing comments.

Source of down payment…

The percentages have increased over the last 3 years, indicating that people are buckling down and saving more money.

2009 – 61% from own savings – 22% Gift Funds 2010 – 74% from own savings – 26% Gift Funds 2011 – 79% from own savings – 26% Gift Funds TIP: Fannie, Freddie, FHA and VA have their own “gift fund rules.” For example, there are five different ways funds can be gifted for FHA loans. They are complicated, and just one little error will hold up your closing. If you learn that your clients are going to get part of their down payment or closing costs from a “gift,” contact your loan officer and find out exactly what is needed BEFORE any money changes hands.

FTHB Tenure in Resale of Home 2011 Resale Tenure 2010 2% Sell home 2-3 yrs.

3% 12% Sell home 4-5 yrs.

16% 3% Sell home 6-7 yrs.

4% 15% Sell home 8-10 yrs.

14% TIP: It used to be that the average time people plan to sell their home and buy another one was 7 years. It looks like the two new timeframes are from 4 to 5 years and from 8 to 10 years. Plan to stay in touch with past clients for the long haul. That’s where a database, along with a killer email marketing system, will be a key component of your business.

FINAL MARKETING TIP: Consider partnering with your loan originators. I’d bet you that they have never seen this report, let alone broken it down by the first-time homebuyer category.

Use these stats to help you create a game plan between the two of you—based on the tips I’ve provided after each statistic.

Karen Deis, President, ApartmentTookKit.com, providing apartment address mailing lists and marketing systems for attracting leads from apartment complexes. Why market to apartment complexes? Because the address never change, but the people who live there do, so you are constantly marketing to new people.

The Perks of Being a Leasing Agent

By Jennifer Chan

B

eing a leasing agent in this economy can be challenging – the work is just as hard as ever, demand for rentals is cutthroat, and the weak housing market isn’t helping with commissions. Whether you’re a pro at the top of your game or a beginner learning the ropes of real estate, it’s important to remember why you’re in the field and the perks that you just can’t get anywhere else.

next client will be – a pro poker player, comic artist, or sous chef? Getting to know the newcomers to the community and helping them get settled also builds your professional network.

You’re always learning. With each client comes a different set of personalities, wants, and needs to work with. Pair this with a constantly changing real estate market, and no two days are ever the same.

All that stress leads to excitement – of signing a lease, that is. After marketing all those listings, scheduling showings, and drawing up paperwork, the victory of closing a lease comes with an adrenaline rush – how’s that for motivation?

You have a flexible schedule. Being an agent gives you the freedom to set your own schedule and make time for family and personal life. Of course, how much you earn depends on how much you work, but that’s another perk of being your own boss.

Meet interesting people. You never know who your

You’re not attached to your desk. Okay, so maybe you have an unhealthy relationship with your smartphone. But on the flipside, you’re not chained to an office chair for 8 hours day staring at a computer screen. Instead, you could be at a showing or community event, or getting to know a client over coffee.

Jennifer Chan is the Marketing Coordinator at RentJuice and manager of the RentJuice blog, The Rental Standard. RentJuice makes easy-to-use software that allows rental professionals to manage the entire leasing process, from getting listings to closing deals, in one place.

TheNicheReport.com

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six Steps to Make seven Figures Selling Real Estate By pat hiban

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ad habits are like the termites of business. We rarely recognize our own bad habits, so we ignore them as they eat away at our businesses from the inside.

However, over the course of being a realtor for more than 25 years, I’ve developed six simple steps to fight your own bad habits – no matter what they are – so you can stay focused on tactics that have a high percentage of success.

My six steps are: 1. Affirm – You have to set goals and affirm them. Have you ever heard the statistic that the average two-year-old boy hears forty negative statements for every one positive statement? It’s no wonder we don’t believe in ourselves.

Affirmations to ourselves – that remind us we can and will achieve our goals – are absolutely mission-critical if we intend to succeed.

2. Track – Why does Weight Watchers work so well? In my mind, it’s not so much about the food or the encouraging coaches. It’s about the point system. You track points and you track weight. Tracking your diet makes it real and keeps you on task. All successful agents I know track everything

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from expenses to lead sources. Most agents that struggle don’t track anything.

3. Find Mentors – The smartest people I know are absolutely assured that they don’t know everything. Those who are even smarter than that take the initiative to find people to help them fill in what they don’t know. For the past 25 years, I have accumulated more than 50 mentors to help me learn more about every aspect of my professional and personal life. These mentors have improved my life in immeasurable ways, and they will do the same for you.

They’ve taught me that the guy who thinks he’s the smartest guy in the room is actually the idiot.

4. Work – Yes, it sounds silly to mention this as a step, but you’d be surprised how many people do everything they can to NOT work during the business day. One of my mentors told me that if I wanted to succeed in the REO business, all I had to do were three things: fill out applications with the mortgage companies, call the mortgage companies, and repeat those first two things every week. No one wants to admit that it’s that simple, but it is. In 2008 I had no REO

clients; I now have 42 different asset management and mortgage companies giving me foreclosures to list, and all I had to do was work for it.

5. Build – It is much easier to get a new listing in a neighborhood where you already have one for sale, than it is in a neighborhood where you have never sold anything.

Look at all your successes, no matter the size, and ask yourself, “How can I build on this success? How can I use this success to make another success?” For instance, if you sell a house to a fireman, ask yourself, “What can I do to sell 10 more houses to firemen?” Then create a plan to advertise in the fireman’s trade magazine or go to the fireman’s BBQ as the guest of your first client. It’s not difficult to simply ask for referrals of more firemen from the client you just serviced. Build from a success up, not from the ground up.

6. Invest – In every class I teach I ask the realtors in the audience one question: “Are you a millionaire or a fillionaire?” Inevitably they ask, “What in the world is a fillionaire?” A fillionaire is a fake millionaire. A fillionaire wears a $10,000 watch but doesn’t have $10,000 in the bank. A fillionaire has an incredible palace-like home,

but owes more than it’s worth and is barely making the payments on time. In the realtor community, being a fillionaire is alive and strong. The only way to truly build wealth is to live below your means, save as much money as you can and invest your savings in real estate. I like to tell my students to set savings goals rather than material goals. Set a goal to save $30,000 instead of buying a new car or some new jewelry. Once you have enough to get you through a few slow months, start buying real estate. That’s what I did and I have more than 15 passive income vehicles paying my bills for me now.

In my 25 years in real estate sales I’ve used these same 6 tips over and over, and they have paid off handsomely for me. I hope you find the same occurs with you.

Pat Hiban is one of only a few agents who can claim to be a Billion Dollar Agent, selling over 4,000 homes worth a billion dollars in volume, one house at a time. Pat’s book, 6 Steps To 7 Figures – A Real Estate Professional’s Guide to Building Wealth and Creating Your Own Destiny, is available on his website www.pathiban.com or through www.amazon. com.

How we see it

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What Have You Done For Your Tenants Today?

Tenant retention is everything about Property Management.

By linda day harrison

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f you think being a Property Manager is about maintenance, utilities, contracting, technology advances or troubleshooting, you are sadly mistaken. Property Management is about "Customer Service" first. The entire purpose and being of a Property Manager is about tenant satisfaction and tenant retention. There is nothing else it is about.

With each maintenance item, utility bill, new technology and contract signed, it is about the end result: Customer Satisfaction and Service. It is probably the last thing you hear folks talk about or plan for or think of, and it should be the first! Each day you are on the job you need to start your day with: What have I done for the tenants today? If you ask that question and honestly address it, you will be an excellent Property Manager.

Remember, if the tenants are happy, the building owner should be happy.

Now, I know there are some building owners who are never happy and will never care if the tenants are happy.

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There are always a few bad apples in every batch, but for the most part, savvy building owners who really care about the bottom line do get it. It is really the naive building owner who does not get it. Quite simply, tenant retention is everything about Property Management.

With times being so tough it forces many to realize that their treatment of their tenants will surely rear its ugly head if the tenants have not been considered first. When you think about it, this just makes good business sense.

Why would any business operate against the customer?

Why would any business plan its operations around annoying customers? It makes you wonder sometimes when tenants are treated badly or ignored. That is absolutely insane. Why would you not answer the phone with each ring or respond like a lightning bolt with each work order request? I say it is pure training and education. Most folks who are trained or mentored are not always taught the importance of being nice and the simple rule that the customers come first.

Today it is paramount. It is not optional. The tenants must be considered and respected or they will move. It is that simple. When you look at the massive effort it takes

to find a NEW tenant! OMG, you are lame if you do not treasure the tenants you have. If a tenant moves, that should be like a knife in your heart and it should hurt really bad.

Nobody wants to lose a tenant today.

Now I realize that there are tenants who go out of business; but I am talking about a tenant who moves to another location. You must avoid that at all costs! You should never let a tenant leave your building. All of the staff must have that drilled into their heads. It must be the #1 thing they eat, drink and sleep, literally. It should be like propaganda on everything they use or work with. Make it your tag line and make it stick. Put it at the bottom of every timesheet, email or on every work order ticket. No matter what you do, every single member of the operations, housekeeping, security, contracting, suppliers and so on, must know this is your entire reason for being.

Once you are sure each member of your team is committed, the next thing is to create your program each year. Literally walk through each month of the year and create a theme or program or whatever you can do. It must involve everyone. That means, contracting services, staff members, and any other groups who touch your tenants must be on board with the plan. Include your contracting service vendors in the events and in sponsoring the events.

The motto must be - We are in business because of the tenants and we appreciate the business very much!! That can be said in a ton of different ways, but you get the drift.

Create a code word that equals your message.

If you come to the building every day with that message in your head, it will make a difference. Just think about being in the tenants' shoes. How do they see the building, the staff, the contract service vendors? Do they see a group of folks they are proud to work with or do they see sloppy and messy or rude folks? All of that makes a difference and can make a tenant move as a result.

There is no room for error here. The Property Manager is the leader of the team and the leader must think of the tenants in every project, every thought, every maintenance plan, etc. How you ask? Well first of all communication is the #1 thing. Today there is so much technology you can use for free, especially email. Be sure all of the occupants of your property know what is going on. That is the most effortless and basic thing you can do. For instance, if you are doing anything to improve the building, tell them about it. Also let the tenants know what to expect. That is the most basic rule of customer service. Hang signs, hand out flyers, whatever you can do. Plaster it in the restrooms,

whatever works for your configuration or building traffic flow. Nobody wants to walk in to the office and ask, what is going on. They should already know. Give all tenants advance notice!! Do not wait until the last minute.

Why? Because that tenant may be planning a big event themselves, or they may have VIP visitors coming to town.

Encourage them to tell you about their significant visitors or meetings. Why? Because you can help to welcome those visitors as well. You can spread the word to the staff to be on the lookout or to help people get into the building with boxes or whatever. It is jumping through hoops and making them feel special.

There are so many ideas on tenant retention and most of them are truly common sense and not rocket scientist level stuff. They are old fashioned and traditional courtesies or ideas that show people you care. Your goal is to have the nicest and friendliest staff in the world! If you can create a powerful team, you have it cinched. If you have cranky or ornery folks among you, they will have to go if they fail to follow your leadership. I am sorry to say, but you will have to hire nice people who can deliver the best customer service possible. Do not compromise that point. You can always give folks a chance to change, but if they do not change, they must be asked to leave.

Just remember to ask yourself - What have I done for the tenants today? - and if you do that simple thing each day, you will be on the road to excellent Property Management and superior Customer Service which all lead to high levels of tenant retention that you can count on at your property.

Linda Day Harrison, CPM, CCIM: Linda Day Harrison is a seasoned property management veteran, a CPM (Certified Property Manager), CCIM (Certified Commercial Investment Member) and BOMI International online Instructor. She is also a State of Illinois licensed real estate broker and founder of the commercial real estate professional site, theBrokerList.com. Linda is the founder of Manager Labs, where she provides consulting services in various facets of business, with an emphasis on technology and innovation to create streamlined operations for the commercial real estate, property, and facility management industries. She is also the founder of theBrokerList, an online database for the commercial real estate industry to share B2B information about the people, companies and deals happening in commercial real estate.

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straight up

How to leverage people without hiring employees

W

hy does it seem like the most successful people are the ones who have the most time on their hands?

How is it that the top earners and producers have the time to be going on vacations that you couldn’t afford, even if you could get away for a week or two (which you can’t). At the risk of sounding even more like the cheesy infomercial, it’s because super successful people have figured out a way to leverage other peoples time, money, knowledge and experience.

You know those people who seem to do more than humanly possible in a day? I’ll let you in on a secret...they aren’t doing it all themselves. So quit beating yourself up about not doing as much as that superstar who came to mind a second ago. Now the best part… you don’t need to hire employees to leverage other people. I actually have the perfect people who will be more than happy to work with you, take work off your plate, so you can achieve more than you thought.

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Who am I referring to?? Well here’s a hint. You have a current love-hate relationship with them now. Mortgage Professionals! It is a natural alliance. You are selling the “what” but your mortgage partners are selling “the how to buy the what.” Match made in heaven.

You Kind Of HAVE To Do This If You Want To Stand Out The marriage of real estate and lending options separates the non-producers from the top producers. For example: Hey Mister Buyer I have this perfect house for sell, it’s only $200,000. What I quickly realized is there are three types of buyers: Type 1 Unrealistically Positive – this group would expect a monthly payment of about $500/month for everything with no down payment.

Type 2 Unrealistically Negative – this group expects this $200,000 house to have a down payment of 1 million dollars with a monthly payment of $3,000/month And last but not least the smallest group of all Type 3 Realistic – this group has a pretty good idea of the cost of houses they are currently shopping for.

straight up My point? You are losing money. You’re either driving Type 1’s around who should be renting or Type 2’s around to houses below their price range. Yikes. Make sure, make sure that buyers know, what costs what. The other key to this, make sure they understand how minimal of an increase to their monthly payment when increasing the purchase price by $5,000, $10,000 or even $15,000. They are always amazed “that’s it!?” Lucky for us, getting into a house is still super easy BUT the public just doesn’t know this. Never again sell the “what” without the “how much”.

Street Smarts > Book Smarts...Let’s Get Real If there is any part of those chemistry classes most of us struggled thru that you can remember, it’s the topic of synergy. It’s real and it works - two or more people or things working together will produce an effect that’s greater than the sum of the parts working alone. I get it; you get it - no big news there. No big news here either; you are going to benefit more financially from this alliance than anyone else involved.

Shared Cost + Shared Time Commitment + Shared Creativity = Everyone Wins

Your Next Steps Make a list of the best three mortgage people you can think of. Keep in mind that not every one of them has access to every program, so having two or three is not only okay, it’s necessary. Think about your clientele - you probably need one who’s excellent at FHA, or at Jumbos and one at VA loans. They work with multiple agents for the same reason. Be smart about what you need.

You have your crew and everyone is on board, now what?

Meet with your mortgage people one on one and find out about the latest hottest programs. Take advantage of video marketing with your mortgage person. Interview each other and find creative ways to spread the word about these programs to your clients.

Other ideas?

• Have them write articles/guest posts on your website, blog and other social media outlets.

• Make sure they are ready to send you and your clients “what if ” scenarios on different properties.

• As a part of your listings service, offer a mortgage person to prequalify all buyers.

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straight up • The key to landing an internet lead?? Have your mortgage person call the leads with you. Much better to cross sell you than you sell yourself.

• Split the cost of marketing campaigns or sponsorships • And remember you can rinse and repeat these steps across all your non-competing business partners e.g. inspectors, appraisers, title representatives, etc WARNING! WARNING! While I’m not necessarily advocating an “official” partnership, we all know how these kind of things can go.... either really well, or horribly wrong. Here are a few things I’ve learned along the way to prevent misunderstandings and all of the garbage that falls into the “miserably wrong/ what the h@*l was Jocelyn talking about” category: Real Estate Agents - Stay away from quoting rates.

There is just too many parts that play into the interest rate an individual will receive. It depends on how much the client is putting down, credit, loan program, debt to income ratios. You will never guess right so don’t setup your mortgage partners for failure. This is why you partnered with the people you trust.

We Want YOU! Write for The Niche Report magazine or blog.

Let your voice and knowledge be heard by writing for us. Tap into our huge audience of Real Estate agents & Brokers around the country.

Learn more by going to www.TheNicheReport.com/write-niche-report or call us at 866-964-2695

Also - don’t throw them under the bus. You selected this person and now you need to be a team. You may think it creates some distance from fault in your client’s minds.

It doesn’t. They will just go away thinking both of you dropped the ball somewhere along the line anyway, but they will also leave thinking you’re kind of a jerk too. The mortgage person may be a flake, but you are a jerky flake.

Mortgage People – Real Estate Agents are working their as@#s off driving people around and trying to get a commitment. When you say someone is good for the money, THEY BETTER BE GOOD FOR THE MONEY. You make sure you are assuming nothing when you provide a preapproval letter to your realtor® partners and clients.

Remember they are out on nights and weekends selling houses on your word, while you are getting to spend time with your family or at the very least, eating ice cream and watching Modern Family. You also need to stick to your dates and deadlines you commit to. Now I know borrowers can be devilish in their ways of not getting things turned in on time. If that happens, let your realtor® know “hey, Suzie won’t get her stuff to me. If I don’t get this by next Tuesday, I will not be able to meet deadlines.”

Take Home Message: Don’t set each other up for failure.

This Isn’t a New Concept - It’s more about Getting Organized Chances are, you are already somewhat “aligned” with certain mortgage people. If you are smart enough to have gotten thru this much of the article, you’re probably smart enough to try and do business with the mortgage people who you know will follow thru, work hard and who you can trust. So put together a meeting over coffee and start brainstorming.

Jocelyn is a progressive entrepreneur who has established herself as a leader in the real estate, mortgage & technology realms. As founder & CEO of Limetree Lending Group she has created a lending company that is consistently named #1 out of all of the 100+ mortgage bankers under the Universal Lending Corporation umbrella in Colorado. If you would like more information on this program, join our weekly webinar. Contact me at jocelyn@limetreelending.com for registration details.

online lead generation

The only real asset in any business is the list

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n previous articles, we’ve been discussing the use of social media sites (like LinkedIn, YouTube, and Facebook) to get exposure, connect with your target audience and ultimately generate leads. After consulting with dozens of Real Estate Agents and Loan Officers, what I’ve found was that they were all so busy using the techniques to get new traffic and positioning themselves as the expert, that they forgot the main reason why we do any of this. What is the true value in any business? Well, it’s my goal to make sure that by the time you finish this article, you will have a new appreciation for what I’m talking about, which is….List building. The only real asset in any business is the list – lists of prospects, lists of clients, lists of JV Partners, etc.

Let’s get this straight out in the open right now, because I know that some of you are thinking it. I’m not talking about buying a list of prospect buyers (cold leads), calling it your list, and spamming them with your emails.

I’m talking about building your own list of people who have raised their hands and given you permission to email, contact and market to them. There is a huge difference between a cold list of leads and a warm list of people that already know, like and trust you!

A few days ago, I received an email newsletter from a Loan Officer with all kinds of mortgage rates, statistics and graphs. It was very boring and had no personality whatsoever, but that’s another issue. The problem now is that I don’t remember giving this person permission to put me on his mailing list. I’m not even interested in buying a house anytime soon. I was wondering how he got my information. Then I remembered I was giving a presentation at his company a few months ago so he must have picked up my card at that event.

Do you think I’m the only one receiving these emails from him? Am I the only one with this same reaction?

Absolutely not! More importantly, are you guilty of doing TheNicheReport.com

35

online lead generation something similar to this? It’s ok…. After today, you will be armed with some very cool techniques and ways of building your list the right way.

The first thing you should do is define your market.

Who do you want to attract to your list? Do you want to attract home buyers? Referral Partners? You can attract both; it’s just a matter of having them on different lists and different follow-up sequences. Obviously, you’re not going to talk to them the same way. Let’s take this one step further. Exactly which type of “home buyer” will you be targeting? Your conversations, tone and relevant content will be extremely different depending on if you are targeting first-time home buyers, investors, affluent buyers, etc. Do you see why having a targeted niche is a very important step in this process?

So, with that in mind, who is your ideal client? What types of loans do you specialize in? This is critical to know before you start building your list. If you have a broad target, your message will be general and will not resonate with ANY of your prospects – simply because they will sense that you’re not talking directly to them. When your message is broad, it loses a lot of power. You actually give the illusion that you don’t know enough about your audience and their particular needs.

Think of it like this. If you have an eye problem, would you go to your family doctor, or to an optometrist because you believe that he specializes in your particular needs? Do you see my point? Now that we know whom we are targeting, we need to get them onto our list so that we can follow up with them until they buy. Once that happens you can move them onto a different list, where you will be communicating with them differently in order to get them to send you a referral or become a repeat customer.

In order for you to build your list, you need four critical elements: 1) Traffic 2) Landing Page (also called Squeeze Page) 3) Offer 4) Auto-Responder Let’s break these down piece by piece and go over them in more detail.

TRAFFIC – This is NOT an easy subject to discuss in one article. There are entire home study courses devoted 36

May 2012

to traffic generation. If you could choose one subject to become a master at, choose traffic. Because once you master it, you are set up for success! Here are a few things you can start doing immediately to generate more traffic to your list-building page: • You can write articles and embed a link to your opt-in page where people will give you their info to learn more about that subject.

• If you have a Wordpress blog, there is a great plugin that allows people to get onto your list when they want to leave a comment. This plug-in is called www. optincomments.com and it will integrate with most auto-responders.

• You can also enable Facebook Comments on your blog, which will help your blog go viral. If a visitor is logged into Facebook (most people are always logged into Facebook when they’re online), all of his connections will see the interaction.

• A great way to build your list is through webinars. Hold a webinar educating your prospects about the homebuying process and what to look out for. Guess what the webinar registration page is? It’s basically a page with an opt-in form, to capture the registrant’s info. Later you can export that list and import it into your autoresponder.

• Here’s a cool tip: Get a referral partner to do an expert interview on your webinar. Let’s say that you want to educate people on how to boost their credit score to qualify for a house with better rates. Find a credit repair expert who has a list and ask him to send an email blast to his list, directing them to the webinar registration page. Once they register, you own that list. So, not only are you bringing value to your existing list, you are growing your list and also giving exposure to the credit repair guy and positioning him as an expert in both lists (yours and his).

• YouTube – In a previous article, we’ve talked about how you can include a call to action in your videos and how you can add a live link that will direct your viewers to your webinar, blog or landing page. Make sure to review that article for more ideas.

• Twitter – You can create a greeting message that will be sent automatically to your new followers. Make sure to put a link to your landing page with a brief description

online lead generation of your offer. If your followers are interested, they will click on the link. From time to time tweet about your free offer and include a link to it.

• LinkedIn – A few months ago, we talked about how you can use LinkedIn to grow your business. I will not be able to talk about all of the ways you can use LinkedIn to drive traffic to your landing page, but a very easy one is to just list the URL of your landing page as your website on your LinkedIn profile and call it something like “7 Mistakes Home Buyers Make.” Please review the LinkedIn article for more cool strategies!

• Facebook – The last two months I’ve been writing about Facebook Ads and how to use them to get your perfect, targeted leads. Please review both of the last two articles for more tips.

LANDING PAGE – The one and only job of this landing page is to get the visitor to give you their name and email address, or sometimes just their email address (the less you ask of them, the more likely you will get it).

We will have time later to extract all kinds of information that we will need from them as we go, but for now we just need the minimum that will allow us to initiate the conversation.

This landing page must have several important elements: • Opt-in form – This is the box where the visitors will put their names and email addresses.

• Powerful headline. This should be a compelling headline and should match your ad. Let’s say you are using Facebook Ads to drive traffic to this page; whatever title or headline you had in the Facebook Ad should be present in the landing page. The same with the image of the ad. A lot of people complain about low opt-in rates, once the visitors get to their landing page. A big part of that is due to the landing page not matching with the ad.

• Privacy policy and terms of service – You also want your landing page to be Google friendly. If you’re gathering people’s information, you have to have a ‘privacy policy’, especially If you’re driving traffic to that page from Google Ads – otherwise you will be violating their terms of service.

OFFER – What are you going to give your visitors in exchange for their name and email address? This should be something of value that they really need or want.

Going back to your market, if you really know who they are, you will know what to present to them that will be a ‘no brainer’ for them to opt-in.

• Include an image of what you’re giving away. People are visual, and showing them a nice picture of your offer will give it more perceived value. You can offer them a downloable PDF, MP3, CD or video. Again, the offer has to be of value to your target prospects.

AUTORESPONDER – You have several companies to choose from such as iContact, Infusionsoft, AWeber, Mail Chimp, and many others. I personally use AWeber, they are perfect for what my company needs.

I know this is a lot to cover in this short space. Please spend some time growing, segregating and nurturing your lists!

Please send me any questions or comments to chaibia@ cssocialmedia.com . I will answer every one that I receive!

Chaibia Sarhrou is the Founder of CS Social Media, an Online & Social Media Marketing company specializing in online lead generation. Chaibia consults with Top Producing Real Estate & Mortgage Professionals to help them set up and monetize their online & social media presence. Also, she regularly speaks at Mortgage & Real Estate Companies to educate them on using the internet to grow their business.

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How the Mortgage Acts & Practices Rules Affect Real Estate Agents & Builders - Part 3 By karen dies

T

his is the last of the threepart article regarding the Mortgage Acts & Practices Rules. The first article was an overview of the rules. The second article explained what “commercial communications” means and the record keeping involved.

While the Feds list 19 prohibited practices, only 13 of them affect real estate agents and builders.

3. Misrepresenting Existence, nature or amount of fees a. In addition to “no fees” charged

1. Misrepresenting the dollar amount of interest charged a. The amount of interest owed each month b. The difference between the interest owed and interest paid

6. Misrepresenting Prepayment penalty a. Existence, nature, amount and terms of penalty

2. Misrepresenting Annual Percentage Rate including a. Simple interest b. Periodic rates c. Any other rates 38

May 2012

4. Misrepresenting Products sold in conjunction with loan a. Credit life or disability insurance 5. Misrepresenting Taxes and insurance a. How taxes & insurance are to be paid b. Escrow account c. Included or not included in monthly payment

7. Misrepresenting Terms of variable rate mortgage credit a. If using the term “fixed” for certain period of time 8. Misrepresenting Rate Comparisons a. Rate or payment available for less than term of loan

b. Comparing actual or hypothetical rate or payment 9. Misrepresenting the Type of mortgage 10. Misrepresenting Payments a. When due b. How many c. “No Payments” (Includes Reverse Mortgages) 11. Misrepresenting associations or loan or provider a. That provider is affiliated with federal government b. Endorsed, sponsored by, affiliated with government agencies c. Using government formats, symbols, logos that resemble government agencies.

12. Misrepresenting that consumer has been preapproved or guaranteed a mortgage product 13. Misrepresenting counseling services/expert advice

So the bottom line is that the Federal Trade Commission and the Consumer Finance Protection Bureau are out to prohibit unfair and deceptive practices during the life cycle of buying a home and obtaining a mortgage – that means the initial advertising & marketing if loan terms are mentioned verbally or in writing; during the loan application, in the appraisal process and during the servicing of the loan.

Read more about it and pass this information on to your ad agencies. You’ll find it in the Federal Register, FTC 16 CRF Part 321 (pages 43845 and 43846.

Written and contributed by Karen Deis, President of Foundation Marketing, Inc., which specializes in training real estate agents and loan originators on consumer-direct marketing strategies. You may email Karen with comments or questions on this column at karen@karendeis.com.

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43

BRINGING UP THE REAR - continued from page 46

It’s truly crackerjack work, no question about it, and assuming you’re working with a fully developed adult human brain, it should make you want to chew on glass or lay down in traffic. That President Obama is helpless and DeMarco’s power reigns supreme, well… don’t get me started.

The point is… it’s not the least bit humorous. In Oceanside, California, just during the last four weeks, there were 14 foreclosure-related suicides and murder-suicides, and six of the dead were children. Are you laughing? Me either.

So, this month I’ve chosen the Director of the CBO, Douglas W. Elmendorf as the REAR, and if you don’t already know what’s driving my choice then you may want to stop reading now, and go do something else… because what you’re about to discover is flat-out repulsive… no, worse than that - treasonous? I don’t want to come off as being too extreme, but...

You see, Lan T. Pham, PhD, who was a “senior staffer financial economist” at the CBO, and who was fired after less than three months on the job, went public with some of the details of her experience working for Mr. Elmendorf after her dismissal by writing a letter to Senator Grassley, the Ranking Member of the Senate Judiciary Committee.

In that letter, Lan explained that during the fall of 2010,

How we see it

while working at the CBO, she was told not to publish or incorporate any data about the U.S. housing and mortgage markets… nothing about the foreclosure crisis, nothing that might spoil the CBO’s “forecasts,” and I use that term extremely loosely.

Here’s what Pham said that she was told in no uncertain terms by CBO leadership, among many other equally damning things…

• Statements could not be made attributing the decline in property tax revenues to foreclosures and the decline in home prices.

• Foreclosures had no impact on U.S. home prices.

• The decline in home prices had no impact on U.S. household wealth.

• The emerging foreclosure fraud problems in September 2010 were due to “media sensationalism,” and “the kind of event of the moment where we should be adding skepticism,” and “not just repeating the hype in the press,” and discussing it “lacks judgment about what is important.”

• “Alternative viewpoints are suppressed or questioned as ‘pessimistic’ by CBO Director Doug Elmendorf.

Economic facts inconvenient to the CBO's forecasts of economic growth, recovery and other estimates are omitted or suppressed so the desired message may be delivered.”

• And finally, the implications have profound financial and economic consequences that would be of compelling interest to Congress, and the public, but the CBO sought to silence a discussion of such risks that in reality have been materializing.

Okay, so this doesn’t need any further qualification… you did it… in your role as Director of the Congressional Budget Office, you deliberately withheld and even masked and knowingly distorted information vital to the current and future wellbeing of the United States of America during the most severe and damaging national economic emergency since the 1930s.

You lied to Congress, if only by omission. You withheld critical information from the President of the United States, or at least I’m going to pray you did, because if you didn’t… if your conspiracy to see this country’s economy so substantively disrupted as to become utterly destroyed, with trillions of dollars in middle-class wealth eviscerated to such a degree that there is no hope for it to return in my lifetime, actually involved the White House, well then… Dear God, sir… what have you done?

What have you done to lives of hundreds of millions of Americans citizens… to the elderly, the destitute, to those

44

May 2012

BRINGING UP THE REAR too young to be able to speak out or defend themselves - to say nothing of what your suppression of information has done to untold numbers of people around the globe?

Do you not realize how many lives you’ve destroyed by your actions… how many have taken their own lives because of what you’ve done in your capacity as director of the CBO? How many are today being forced to grow up without mothers and fathers because of what you engineered and accomplished?

As someone who, during this exact period of time in this country’s history, has devoted almost all of my time… seven days a week, and more often than not 16 hours a day… to writing about these facts as you worked to keep them concealed, you have robbed me and my family personally of hundreds of thousands of dollars. When I think of how many times I was asked why our government wasn’t saying what I was saying in countless articles… “they had to know,” people asked almost daily… “why is it that they do not say a word?”...

I am physically sickened by what you have done, by what you have allowed to happen. You, a graduate of Princeton with an undergraduate degree in economics, a Masters in Economics and then a Doctorate in Economics, the last two degrees from Harvard? You cannot claim

ignorance or feign indifference.

I suppose I’ll never know who else was involved in what you’ve done to this nation by manipulating and withholding such information from Congress, from the president, from the American people and from the world. You are a traitor to my country. You should be incarcerated for the remainder of your life at a minimum… were it up to me, you would be tried and held accountable.

And even as you saw the impact of your decision to withhold information grow and continue to do harm to the Obama presidency… even as you saw the economic conditions worsening so dramatically, you just turned your back on tens of millions who today live on food stamps and with no hope of employment for years to come? Beg this country’s forgiveness, and pray for your soul.

Martin Andelman is a staff writer for The Niche Report.

He also writes an almost daily column on ML-Implode called Mandelman Matters. He also publishes a Monthly Museletter and you can follow “Mandelman” on Twitter. Send your responses to Martin@TheNicheReport.com.

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BRINGING UP THE REAR

Bringing Up the rear Douglas W. Elmendorf, PhD, Director of the Congressional Budget Office

BY MARTIN ANDELMAN

I “

’ve been writing this column every month for… I don’t know… it has to be three years now, or darn close. And as those that read it know, I select an individual each month and basically call him or her out for being a “rear end,” or a miscreant, if you prefer. It’s not a particularly difficult task; unfortunately, it seems that unsavory characters are ubiquitous these days.

But, usually I manage to chastise my victim using humor… and if that’s not possible, I can always fall back on prose laced with a heavy dose of sarcasm. In point of fact, I’ve become fairly well known for my use of sarcasm in such columns. Just today, for example, I was on the phone with a fairly senior member of the Obama Administration… someone who works in a senior policy position at Treasury but shall remain nameless… and during that conversation I was told that my article one month last year “really pissed off my son.”

I apologized… said that it wasn’t meant to be personal, and that I had no plans to do anything like it again. “Don’t worry, you’re only a ‘REAR’ once,” I explained.

46

May 2012

A few months back was a real challenge, however, when my chosen REAR was Edward DeMarco, acting director at the FHFA, the conservator for the spectacular failures that are Fannie and Freddie… the GOEs, I call them - “Government Owned Entities.” It wasn’t hard to choose him, he’s a mammoth REAR END, to be sure. But, it was impossible to be funny, and my best shot at sarcasm was to suggest that “the DeMarco problem,” could be easily handled by simply shooting the man at dawn. That came across as being sarcastic, right? I’m pretty sure it was intended that way….

I mean, DeMarco’s well-publicized obstinacy related to Fannie and Freddie doing more to mitigate the carnage being caused by the foreclosure crisis is nothing short of maddening. For one man to be the proximate cause of so much human suffering, well… he should have to be a despotic monarch. And when you consider the fact that Fannie and Freddie are zombies, as companies go - bankrupt… insolvent… ruined beyond all hope - it’s not like holding out is accomplishing anything positive. It’s simply a case of taxpayers foreclosing on taxpayers, and therefore decimating the accumulated wealth of American taxpayers.

- continued on page 44

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