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Encouraging Buyers to ‘Move up in a Down Market’

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By Lesley Geary

TOP 5 IN REAL ESTATE NETWORK, June, 2009-Principals: Husband and wife Jim and Julie Spampinato work with their son, Michael, as “Team Spampinato.” Jim Spampinato serves as team spokesman.
Real Estate Company: Coach Realtors
Years in real estate: 5
Region Served: Northwestern Suffolk County Long Island, New York
Average sales price in your market: $800,000
Average listing time: 6 months

jim_spampinatoWhat strategies are you utilizing to promote the fact that there are many opportunities in today’s market? We are basically high-end Realtors, but we do, of course, sell anything and everything. This is the best market ever to move up. I get this from potential buyers all the time: people come to me and say, “I should have sold my house in 2005.” And I say, “What would you have done? Where would you have lived?” I also tell them that they did the smartest thing in the world and didn’t even know it. If they intended to move up and had sold a $500,000 house in 2005, while that house would likely only sell for $450,000 today, if you were trading up back then to a $1 million house, it would have only been worth $850,000 today, therefore, you would have lost a lot of money. However, if you sell your house today to trade up, you are getting a lot more house for the money; therefore, this is the perfect time to trade up. Aside from the price differentials on housing costs themselves, I also tell buyers that interest rates have never been lower, therefore, the price of buying is lower.

Today’s buyer can also grieve taxes if the house he or she is buying is selling for less than its 2005 value. All in all, these three things make this market a tremendous opportunity to buy at deflated prices. We have 800 e-mail addresses in our database, and we send out e-mails every week. One popular e-mail that I use is, “So you thought this was a terrible market. Well, it’s not. Call me and I will tell you why this is the best time in the world to buy.” You must be proactive.

julie-spampinatoHow do you encourage buyers to buy now as opposed to waiting on the sidelines?
If you are buying a $1 million-dollar house and the market changes and raises the interest rates, then if they go up 1%, that’s going to cost you a lot more each month. Interest rates are the main reason to buy now. We figure you get 10% of the purchase price of the home you are buying in purchasing power for each 1% of interest.

How do you encourage buyers to move up to a larger home, purchase a second or vacation home, etc.?
In our market, the homes are expensive, so they are usually first homes. We do not really have any speculative buyers here. This opportunity is to buy a larger home. We get 1,000 visits a month on our website. We are very specific in where we want to work. You can’t be everything to everybody, but be the best at what you are. I use Google ad words to drive people to our website. We have developed an e-mail base. We want to be the source of knowledge for everything about real estate. Every week we send out more information: prices, what’s sold, what’s out there on the market. So we have a dialogue. We are also setting up a blog. We do not cut costs-we spend about $25,000 per year on self-promotion marketing.

mike-spampinatoWhy did you become a member of the Top 5 in Real Estate Network®?
When we do anything like this we look at the incremental value. For instance, it costs $2,000 to join Top 5. If I can sell one house because of Top 5 and earn, for example, a $15,000 commission, then Top 5 pays for itself for the next five years. If it pays for itself and then it makes one more sale, then I am ahead of the game. There also is a secondary benefit because it is difficult to measure how the house was sold. When I go to listings with Top 5 materials and all of the other marketing I do, I show that I can provide the most exposure. We have a newsletter and we advertise, but basically, nobody can give you more exposure than we can in our market.

What is the greatest benefit of Top 5 so far?
Perception. If people perceive that we are with the top Realtors around, then you become that person in their minds; they will know we are among the best in the area.

What is the key to a successful life in real estate?
You have to love it. This has been the most fun that I have had in the last 20 years. Also, you have to spend money to make money. In a down market we spend more money, not less. We are buying market share. When the market comes back, we will still have the higher market share we obtained while the market was down; we will still have 40 percent of it. Most agents are cutting back. Last but not least, you need to be a good business person.

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