Top 5 in Real Estate Network, February 2009– The market is tough. There is no reason to sugar coat it. Many agents are experiencing challenges for the first time in their real estate career. Clients with strong credit are being challenged by the lenders. Homeowners are not putting homes on the market. Buyers are submitting low-ball offers. Foreclosure and short sales are happening in record numbers. Buyers are negotiating harder. There are obstacles at all stages of the transaction. On top of all these issues people are frozen waiting to see what will happen with their jobs, the economic bail out, Wall Street…and the Madoff scandal just adds to the uncertainty.
An agent client and I looked at her numbers for the year and we realized that out of 43 deals she had had 11 deals die. In 2007, she had four out of 50 die; the year before that she had 49, with no dead deals. Unfortunately, this is not uncommon. Fortunately, it is not all gloom and doom.
The truth is that many agents will not survive this era. But those that know how to or learn how to get through it will not only survive, they will thrive in the healthy market that will follow. My clients and many agents are utilizing creative marketing and building their skills with their business practices to succeed.
Here are some examples.
1. Freddie Mac has recently loosened their policy for the amount of short sales they will accept and I am sure many other lenders will follow suit. This will open up a stream of homes on the market. Yes, they will be more difficult sales and yes, the agents that learn to sell them will be more successful.
2. Investment real estate is extremely hot right now. The sharpest investors know that this is the best time to buy and they are out there looking for desperate sellers. The sharpest agents are honing their skills in finding and working with these savvy investors. An agent client in Southern California recently had an investor buy a 4-plex rental property for $84,000. That’s right, I said $84,000 in southern California. The deals are out there. Real estate continues to be the most safe, stable investment with the highest returns over the medium and long term. Income property investors have not only been unhurt in the present financial debacle, most are thriving.
3. Literally, there has not been a better time for first time home buyers in 30 years. The $7,500 tax credit now available, low interest rates, low prices and lots of inventory to choose from is a shopper’s dream. Agent clients who have been fussy in the past about working in higher price ranges are exploiting the opportunity of first time buyers. One said to me, it’s the easiest work she has done. She is strong, confident and bold about their opportunity.
4. Get to know your lenders. Instead of sending your clients to the big lending houses, get to know your local banks. Create a relationship with the people there. They have portfolio money. They offer some of the best terms available and they are eager to lend.
5. Conventional 5% down mortgages with seller concessions are widely available. Ten or 15 years ago, it was unheard of for people to buy a home with no money down. You can easily thrive on what is available. Yes, there may be additional paperwork, glitches and delays. That’s why you get paid so much. The not-so-secret secret is simply to prepare your buyers for this extra paperwork and the glitches and delays. Then when it happens they are ready for it and grateful to you for the heads up. Loans are still being funded so search them out and take advantage.
6. In some markets, short sales and foreclosures make up the majority of the sales. The agents embracing the need to do what it takes to deal with these more difficult transactions are surviving, while those moaning, groaning and fighting over the more difficult transactions are going broke. Find Brokers that are dealing with these properties and align yourself with them.
7. Be an expert. Right now, people are afraid of real estate because of all the news reports. This is the time to effectively communicate to your spheres of influence and past clients what is really happening in the market. I suggest you send out a postcard this week with a headline that says “Find the Golden Opportunities in this Crisis.” Include in the mailing that this is a great time to buy. Describe some of the opportunities I have mentioned in this article. Inform your sphere that mortgage money is readily available. Be smart and find lenders to underwrite these postcards. When you are the voice of opportunity and optimism in this time of uncertainty you will both succeed through it and boom as the healthier market ensues.
8. Move-up buyers can buy property that was previously out of their reach. In every market there are modest price ranges that are pretty healthy and higher-end price ranges that are pretty soft. Buyers are getting top dollar for the modest price ranges and truly amazing buys on property that they couldn’t afford two years ago. Find those price ranges in your market. Look for the modest homeowners with stable investments and employment. You will make sales that will even surprise you.
9. Watch your numbers. Know what your goals are. Know how many appointments per week you need to reach your goals. Know your monthly open sales and listing goals. Compare your sales and listing results with previous years and against your goals. Smart, successful business people know to watch their numbers more carefully in a more challenging market.
10. Cut expenses. Yes I know this is self defeating as I am a real estate coach and coaching is an expense. More agents are hiring me than ever before because of proven results. That’s the key. Cut expenses that don’t show proven results. Cut personal and professional expenses to a minimum. Your family will understand this is a temporary situation.
Most importantly, now is the time to be positive, to be optimistic. You have a choice; you can dwell on the negative or search for the positive. You control your attitude at every moment. Learn to snap yourself into a peak state. Attitude is the only way you can survive this tough market with joy. The smart and resourceful real estate agent will make it through. Find the opportunities. You have my sincerest wish for a successful year.
Rich Levin is president of Rich Levin’s Success Corps Inc. He is a coach and speaker whose focus is teaching agents to understand and control their business. Register for a free 2009 Strategy Session or contact Rich at 585-244-2700 or firstname.lastname@example.org.
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