For me, the experience was one of confirmation of what I believe to be the future of the real estate industry—Internet-based real estate. The business model, like ours, is a national Internet-based Real Estate Brokerage, where the Realtors work out of their home offices, and as a result, the broker has no brick and mortar expense. In return, the Realtor keeps 100% of his or her commission and just pays the broker a small association fee each month, thereby creating a profit for the broker, rather than an expense.

Two years ago, when we first rolled out our business model in Washington D.C. at the Midyear NAR Convention, the word “virtual” was absolute poison. Brokers and Realtors would come to our booth and literally run when they heard the word virtual. What a change just two years has made.

This year at the NAR National Convention in San Diego, the word virtual was the most exciting idea being discussed. Brokers wanted to learn how to create a virtual environment for the Realtors and brokers successfully. I suspect in the coming year we will see hundreds of brokerages recreating themselves under a virtual banner.

Even the Realtors this year jumped all over the virtual business model. We encountered thousands of Realtors who realized that they can now command 100% of their commissions, and that is now the accepted standard.

Furthermore, what we heard from every Realtor is the reason they don’t go to an office, and the reason they don’t care about an office environment is boiled down to one word: distraction.

The top producers think that when they go into an office environment, they become distracted from being productive. We heard this comment universally from almost every Realtor. Realtors’ insight into their most fruitful working conditions has been an unanticipated end result of this business model.

So, after this year’s convention, I feel that Internet-based real estate was not only accepted by both the brokers and Realtors, but that brokers, such as myself, were no longer the strange broker that lived out there in some mysterious virtual never-land.

The virtual culture is not only the future of the industry, but a huge favor to all the brokers who are struggling to keep their doors open, now that even brand new Realtors expect to keep 100% of their commissions.

This new business model has legs, and it will continue to expand and grow. It will, in the process, make the brokers of our industry financially healthy once again. It will also allow the Realtors to truly be independent contractors who are allowed to keep all of what they have earned.

The virtual culture is a win-win-win for the broker, the Realtor and the consumer.

James A. Crumbaugh III is CEO of Allison James Estates and Homes and may be reached at jcrumbaugh@allisonjames.net.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Don’t miss these headlines on RISMedia.com:
Take Charge: Is Your Credit and Debt Profile Optimized?
Target Builders and Boost Your Business

Worse, some of the old ways don’t seem to work anymore. Advertising in glossy magazines, yellow pages ads, mailing out calendars and pens or notepads, working desk duty at the office—all just don’t seem to cut it like they used to. You know your own difficulty finding new clients; imagine that you are transported to a place like Wolf Creek, Colorado—a place so remote most people couldn’t find it on a map. Visitors must drive 6-12 hours to get there, so walk-ins are not a reliable way to find new clients.

It was this fear of not having enough real prospects that Poppy Borland faced when she decided to go it alone and moved into her own one-person office In May of 2008. She knew that in order to prosper, she had to be capable of prospecting most of her business because there was not enough foot traffic to her market to assure that she would always have customers.

Where Is Poppy Borland?
Borland owns Two Rivers Realty in South Fork, Colorado; a small mountain town in Southern Colorado of about 1,000 year-round residents. (The town of South Fork has been known as being in the Wolf Creek area literally forever, and people will call this area either name). The town grows to 6,000 to 7,000 in summer and 2-3,000 at Christmas or Spring Break. The 300+ sunny days per year and the sunny and cool summer weather make outdoor activities just wonderful: golfing, river activities, hunting, and riding ATVs in the summer are very popular just as snowmobiling and skiing in the winter keep the visitors coming.

“This is a mostly unknown paradise because it is far off the beaten path,” Borland told me recently. “Our visitors come from Texas, Oklahoma, New Mexico and Arizona in the main and almost all of them drive to get here. That averages a 6-12 hour drive, so we don’t think of South Fork as a weekend kind of destination.” Combine that with the fact that the area is surrounded on three sides by the Rio Grande National Forest and you’ll begin to get the picture that Poppy Borland operates her business in a wild and remote location. This may be remote, but its remoteness makes its properties very valuable, and homes and land sell from under $100,000 to just under $2 million.

A Strategy Born of Common Sense
“I had read many articles about how the majority of home sales began online,” Borland continued, “and I wondered if that would hold true in a remote area like ours. I realized I would never know unless I got a website and tried to make it work. I figured I could get a lot more people to visit this wonderful place online than would ever drive here, and I hoped a few might be so overwhelmed by our beauty and peacefulness that they might consider buying land or a home here.”

Lacking a big advertising budget and having very little technical expertise, Borland started researching how she could supplement traffic to her site in order to always have buyers working. She decided that the Internet would be her main producer of prospects.

Then, reality set in; how could she make that happen? “I didn’t even have a website. I didn’t know anything about how to make one effective or how to make it so that buyers could find it (and me). The more I read about it, the more I became concerned that succeeding online was beyond my knowledge level and budget. I read about another agent in a town slightly larger than mine who had succeeded with the strategy I was trying to employ in an online newsletter. It turned out that she had the very same worries I had and she had decided to hire professionals to help her achieve her goals.

“It’s just too complicated for me to do it on my own,” she said in the article I read. “I’m a real estate agent, not a technical person and for me to try to achieve Internet success is just like a FSBO trying to sell a prime property: it might work, but it probably won’t.” That resonated with me and I decided to follow her lead.

I contacted the company that had made it work for her. They connected me with a really great Web designer who did fine work at a reasonable price so I could personalize my site to be what I wanted. When my site went live, I was really excited (www.wolfcreekareaproperties.com). The company that I contacted initially, CompassSearch, made that site be found by people looking at South Fork and Wolf Creek, CO real estate. Believe it or not, I sold my first Internet buyer in only two months and my commissions paid for my site, my subscription and I had plenty left over. So far in 2009 (September) I have had nine closings—six from my website. I get 700-800 unique visitors monthly, exactly double what it was even one year ago—and I am usually working with six solid buyers all the time. Five of those six buyers come from the website on average. My idea of selling this area online worked and without it, I don’t think I would have most of the clients I have today.

“Not all people who contact me close quickly,” Borland continued. “I closed on a $1 million+ property this week where the buyer contacted me on my website on August 8, 2008, a little more than two months after I contracted with my online marketing services company. It took a year, but he got a tremendous piece of property. Although that contact was made over a year ago, my online presence gets stronger and better all the time and keeps me busy with Internet buyers.”

One Benefit She Didn’t Anticipate: Her Internet Strength Gets Her More Listings, Too
One thing many agents don’t anticipate when making an Internet marketing plan is the huge benefit it brings to a listing presentation and the physical confirmation that presence gives that seller that you are the right party to list with. Here’s how Borland uses her strength online to list more: “It’s really great that Internet buyers from anywhere can find me online, and that reality has enabled me to list far more properties, as well. When doing a listing presentation, I will act like a prospective buyer and search for real estate in the area. Maybe I’ll enter “Wolf Creek CO Real Estate” or one of the hundreds of other phrases I have been found on. When my website appears at the top of the page—number one on Google [from the aforementioned search phrase]—the sellers are impressed. I then go into the back end of my website and show the sellers my website statistics, which convince them that I can bring buyers here from anywhere. Then, when they see how my website is simple and easy to use, they usually list with me.”

It Seems So Simple
Borland is so modest and unassuming that we had to convince her to share her story here: “I wonder if my experience will really be interesting to anyone,” she told me when I contacted her. “This is just a story from ‘County Life.’

Borland might not be so self-effacing about her success if she knew that 95% of all agents fail at online marketing, according to NAR. There are so many good agents out there who just can’t seem to crack the code of how to sell homes online that many have just flat given up at online marketing. “I just can’t catch any luck with that Internet thing,” so many say.

It doesn’t take luck; it takes a good plan, well executed. Make it happen for yourself and never worry about where your income is coming from again.

About the author
Mike Parker advises thousands of agents and brokers on the subject of online marketing services for Realtors. If you want to plan to succeed like Poppy Borland did or if you’d like to request a free review of your website to determine if it can be found by Internet buyers and if it is set up to be effective for you, click here and we’ll review it for you at no cost or obligation.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Don’t miss these top headlines on RISMedia.com:
Wall Street vs. Main Street: Courts Beginning to Side in Favor of Foreclosed Property Owners
Latinos Still Passionate about Homeownership

Lawrence Yun, NAR chief economist, said the projections are enhanced by a tax credit expansion to more home buyers through the middle of 2010. “Given the success of the first-time buyer tax credit to date, and the need for qualified buyers to continue to absorb inventory that will include additional foreclosures over the coming year, we are hopeful about the impact of the expanded tax credit because it will stabilize home prices,” he said. “In fact, the credit is working better than first projected – it now looks like we’ll have 2.3 to 2.4 million first-time buyers this year.”

The 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows first-time buyers accounted for a record 47% share of home sales over the past year, up from 41% in the 2008 survey. The share has risen steadily since a cyclical low of 36% in 2006.

Existing-home sales are expected to total 5.01 million in 2009, a gain of 2.0% over last year, and then are forecast to rise 13.6% to 5.69 million in 2010. “A steady draw down of inventory will help home values to turn positive in 2010, but risks such as unemployment remain in the economy,” Yun said.

New-home sales are projected at 397,000 this year, recovering to 549,000 in 2010. Housing starts, including multifamily units, should total 564,000 units this year but grow to 752,000 in 2010.

The 30-year fixed-rate mortgage will probably average 5.3% in the fourth quarter, rising gradually to 5.8% by the end of next year. NAR’s housing affordability index will set a record in 2009, averaging 30 percentage points higher than 2008. Affordability will decline from record highs next year but will remain at historically attractive levels for home buyers.

“We’ve seen a steady downtrend in housing inventory for well over a year and home prices appear to be in the early stages of stabilizing. With the expansion of the tax credit to additional buyers through the middle of next year, and no major unforeseen events impacting the economy, home prices should rise between 3 and 5% in 2010, but with wide geographic differences,” Yun said. He expects growth in the U.S. gross domestic product to be at a pace of 2.5% in the current quarter, with GDP up 2.8% in 2010.

The unemployment rate is close to peaking and is projected to ease to 9.5% by the end of next year.

“The size of the U.S. budget deficit is a concern going forward, and carries the risk of higher inflation. At this point, that risk appears to be restrained,” Yun said. Inflation, as measured by the Consumer Price Index, is seen contracting 0.4% this year, then rising 1.6% in 2010. Inflation-adjusted disposable personal income is estimated to grow 0.4% this year and 1.2% next year.

For more information, visit www.realtor.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Don’t miss these top headlines on RISMedia.com:
Regional Spotlight: Home Prices Held up Better This Year in Towns Served by Metra
Checklist for Natural Search Engine Rankings, Part II

Moderator:
Virginia Cook, Special Liaison for Large Firm Relations, NAR

Participants:
Vicki Cox Golder, Realtor, Vicki L. Cox & Associates; President, THE NATIONAL ASSOCIATION OF REALTORS®

The Power Broker Roundtable is brought to you by the National Association of REALTORS® and Virginia Cook, NAR’s Special Liaison for Large Firm Relations. Watch for this column each month, where we address broker issues, concerns and milestones.

Virginia Cook: As 2009 draws to a close, we are happy to report that the real estate market is, indeed, demonstrating some important signs of recovery. Thanks to the first-time home buyer’s tax credit, price stabilization in key areas and REALTORS® who have rolled up their sleeves to help move short sale and foreclosure properties off the market, we can once again approach our business with a much-needed sense of optimism. But there is still a tremendous amount of work to be done in 2010.

As the incoming NAR president for 2010 Vicki Cox Golder prepares to take office, new challenges arise in the journey toward real estate and economic recovery. Who better, however, than a 35-year real estate veteran with years of experience in local and national associations to lead the charge? Vicki, I know that your theme for the year ahead is ‘On the Rise’ as the real estate industry makes a comeback. What’s your mindset toward assuming the NAR presidency during a difficult time for real estate?

Vicki Cox Golder: I am extremely positive. The work that NAR has done—both on Capitol Hill and with our members—during the last couple of years has really helped stabilize the real estate market. The momentum has definitely shifted in our favor—we just need to keep it going.

Virginia: What are some of your goals in terms of broker participation in NAR during 2010?

Vicki: I want to increase member participation in our advocacy efforts. One of the best ways to do that is through NAR’s Broker Involvement Program. When NAR sent a call for action in 2007, we typically got about 5% of our members to send a letter to their members of Congress. However, with the advent of the Broker Involvement Program and better messaging, we elevated that number to over 9% in 2008. Our brokers in the Broker Involvement Program consistently respond at rates of 20% or higher. Currently, we have about 2,000 brokers participating in the program. By the end of 2010, I would like to have 6,000 brokers participating in the program, reaching more than 300,000 agents.

Virginia: How do you plan on continuing to enlist this type of support from leading brokers?

Vicki: The NAR Leadership Team will continue to meet regularly with large brokers to discuss key issues and opportunities to work more closely together. I have personally met with NAR’s Real Estate Services Advisory Board, which includes the leading brokers in the country. Those meetings are tremendously helpful on both sides.

Virginia: What are Realtors looking for in terms of leadership at this juncture?

Vicki: That’s a tough question to answer. I think Realtors have always looked for leadership that understands their business needs. Currently, our members are looking to us to guide them on all of the legislative and regulatory changes that are impacting business, and I think they need leadership who inspires them to get out there and help consumers in their communities.

Virginia: How will NAR continue to help its members survive and prosper in today’s market?

Vicki: By continuing to advocate for laws and policies that promote private property ownership, and by giving our members the tools they need to out-perform the competition.

For an expanded version of this article and other NAR Power Broker Roundtable topics, visit www.rismedia.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Don’t miss these top headlines on RISMedia.com:
Finding Your Dream Foreclosure: What to Know When You’re Buying an REO Property
15 Billion in Credit Card Fees Charged! …and the New “Credit Card Act”

Lawrence Yun, NAR chief economist, said the tax credit is a significant factor. “We can’t underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector,” he said. “It’s given buyers the confidence they needed to get off the fence and take advantage of extremely affordable housing conditions. The buying conditions this year are the most favorable on record dating back to 1970, but the tax credit is allowing buyers to set aside any reservations about waiting for a better deal.”

During the third quarter, 123 out of 153 metropolitan statistical areas reported lower median existing single-family home prices in comparison with the third quarter of 2008, while 30 areas had price gains.

The national median existing single-family price was $177,900, which is 11.2% below the third quarter of 2008; the median is where half sold for more and half sold for less. Distressed sales- foreclosures and short sales- accounted for 30% of transactions in the third quarter, which continued to weigh down median home prices because they sell at a discount relative to traditional homes.

“The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas, but we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market,” Yun said. “Foreclosures will continue to come on the market, but rising sales from the expanded tax credit should stabilize home prices by next spring and help to stem future foreclosures.”

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage rose to 5.16% in the third quarter from a record low 5.03% in the second quarter, but was dramatically lower than the 6.32% average rate in the third quarter of 2008.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said he is encouraged by recent actions in Congress. “Extending and expanding the tax credit to more buyers through the middle of next year is the right medicine,” he said. “Congress understands the impact of housing on the economy, so consumers who aren’t able to complete a transaction before the end of this month now have a second chance but must have a contract in place by April 30, 2010.”

The biggest sales gain between the second and third quarters was in North Dakota, up 42.3%; followed by Rhode Island which rose 26.5%; and Pennsylvania, up 25.6%. The largest single-family home price increase in the third quarter was in the Cumberland area of Maryland and West Virginia at $122,100, up 19.2% from the third quarter of 2008. Next was the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price increased 14.3% to $115,600, followed by Oklahoma City, at $144,100, up 9.1% from a year ago.

“The wide range of market performance and reversals around the country, ranging from double-digit gains to double-digit losses in both sales and prices, underscores just how local real estate truly is,” Yun said. “The wide changes and mix of numbers also indicates a market in transition, hopefully to one that is becoming more balanced and stable.”

Median third-quarter metro area single-family home prices ranged from a very affordable $61,400 in the Saginaw-Saginaw Township North area of Michigan to $566,000 in the San Jose-Sunnyvale-Santa Clara area of California. The second most expensive area in the third quarter was San Francisco-Oakland-Fremont at $538,100; followed by the Anaheim-Santa Ana-Irvine area of California at $498,800.

Other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $70,700, and Lansing-East Lansing, Mich., at $86,600.

In the condo sector, metro area condominium and cooperative prices- covering changes in 55 metro areas- showed the national median existing-condo price was $178,000 in the third quarter, down 15.4% from the third quarter of 2008. Four metros showed annual increases in the median condo price and 51 areas had declines.

The metros experiencing condo price gains were San Diego-Carlsbad-San Marcos, at $215,100, up 13.3%; followed by the Cincinnati-Middletown area, up 2.0% to $119,700; the Toledo, Ohio, area, where the median price of $130,400 rose 1.7% from the third quarter of 2008; and the Indianapolis area at $114,400, up 0.8%.

Metro area median existing-condo prices in the third quarter ranged from $67,600 in Las Vegas-Paradise, Nev., to $432,800 in San Francisco-Oakland-Fremont. The second most expensive reported condo market was New York-Wayne-White Plains at $297,500, followed by Boston-Cambridge-Quincy at $293,700. Other affordable condo markets include Reno-Sparks, Nev., at $81,300 in the third quarter, and Jacksonville, Fla., at $91,600.

Northeast

Regionally, existing-home sales in the Northeast surged 16.7% in the third quarter to a pace of 930,000 units and are 6.9% higher than a year ago. The median existing single-family home price in the Northeast declined 9.4% to $244,500 in the third quarter from the same quarter in 2008. The best price gain in the region was in Buffalo-Niagara Falls, N.Y., where the median price of $119,700 rose 4.8% from the third quarter of 2008; followed by Manchester-Nashua, N.H., at $237,600, up 2.6%; and the Pittsburgh area, where the median price rose 1.5 percent to $124,600.

Midwest

In the Midwest, existing-home sales jumped 13.2% in the third quarter to a pace of 1.20 million and are 5.2% above a year ago. The median existing single-family home price in the Midwest was down 5.5% to $150,200 in the third quarter from the same period in 2008. After Davenport-Moline-Rock Island, the next strongest metro price increase in the region was in Cedar Rapids, Iowa, where the median price of $145,700 was 7.6% higher than a year ago; followed by Bismarck, N.D., at $157,200, up 7.5%; and Ft. Wayne, Ind., where the median price rose 6.9 percent to $102,500.

South

In the South, existing-home sales rose 11.3% in the third quarter to an annual rate of 1.97 million and are 5.9% higher than the third quarter of 2008. The median existing single-family home price in the South was $160,000 in the third quarter, down 7.9% from a year earlier. After Cumberland and Oklahoma City, the next strongest price increase in the region was in Shreveport-Bossier City, La., at $152,300, up 8.6% from the third quarter of 2008; Jackson, Miss., at $141,200, up 4.6%; and Durham, N.C., where the median price rose 3.6% to $184,300.

West

Existing-home sales in the West increased 5.6% in the third quarter to an annual rate of 1.19 million and are 4.6% above a year ago. The median existing single-family home price in the West was $224,000 in the third quarter, which is 16.4% below the third quarter of 2008. The best metro price performance in the West was in Yakima, Wash., where the median price of $158,400 rose 2.7% from a year earlier; the Denver-Aurora area at $229,100, up 1.8%; and the Kennewick-Richland-Pasco area of Washington, where the median price rose 0.7% to $172,200.

For more information, visit www.realtor.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

For more top headlines on RISMedia.com:

• Home Sellers: Top 5 Home Improvement Projects Based on Cost and Return on Investment
• Avoiding the 5 Detours on the Road to Success

Top Tips to Improve your Credit

1. Review your current credit report for accuracy. Everyone is entitled to one free credit report per year from each of the three credit bureaus—Experian, Equifax, and TransUnion. Get a copy of your credit report and look at it for accuracy. First, make sure that the information in your file is about you and only you, not someone who has a similar name or a similar Social Security number. It is very common for your credit reports to have mistakes or incorrect information. At a minimum, make sure that the information you are being evaluated on is current and correct.

2. Repair credit report mistakes. If you find something on your credit report that is incorrect or missing, you should dispute the mistake by contacting the credit bureaus directly. All credit bureaus have their dispute procedures on their website. They are also required by law to investigate any disputed items and these investigations will usually be done within 30 days of your request.

3. Pay your bills on time. Sounds like a no-brainer, right? Payment history accounts for roughly 35% of your credit score. Paying bills on time is the most important thing to do. If you’re struggling to catch up, contact your creditors to work out a payment schedule.

4. Increase the length of your credit history. This accounts for about 15% of your score. Don’t cancel your old card or get a lot of new ones in a short time span because this can hurt your score.

5. Keep credit card balances low. It’s a good idea to keep the balances below 25% of your available credit. Even if you pay off your credit cards every month, a high average balance will impact your score. This accounts for about 30% of your credit score.

6. Keep new credit requests to a minimum. This accounts for 10% of your score. Every time a lender runs your credit, an inquiry is recorded. If you are trying to get a loan, don’t apply for new credit cards first.

7. Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.

8. Pay off debt rather than moving it around. The most effective way to improve your credit score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.

9. Beware credit-repair scams. By all means, don’t pay someone to wipe away the negative items in your file. If they don’t follow through, the damaging items will reappear in two or three months.

Please keep in mind that Christine Van Tuyl and Margaret La Grange are real estate agents, not mortgage lenders. For more information on how your credit score will impact your loan and interest rate, please contact your mortgage lender.

About Christine Van Tuyl and Margaret La Grange

Christine Van Tuyl and Margaret La Grange are award-winning agents with Prudential California Realty in the Coronado Village office. A mother-daughter team with San Diego family roots going back 75 years, Christine and Margaret pride themselves on delivering impeccable service for home buyers and sellers alike.

For more information, visit www.sandiegosurfandsand.com.

Communication Needs

A group that largely can’t remember a time without cell phones, computers and the Internet expects instant access to information and consultation. Millennials initiate and conduct a range of official and personal business via e-mail, text messaging and social networking. They’re unlikely to prefer phone calls. Consider updating your business card and promotional materials to reflect all the ways customers can reach and get to know you, including your blog, Twitter account and Facebook profile.

Financial Situation

Although recent Gen Y college graduates tend to have more debt than their parents did at the same age, they’re not discouraged by the current challenges in the economy and aren’t too proud to wait it out under Mom and Dad’s roof. But they do show signs of interest in homeownership and real estate investment a few years earlier than Gen Xers. Some may even want your help understanding the various first-time home buyer incentives and programs, as well as alternatives to traditional single-family home purchases, such as distressed properties and condos.

Lifestyle Goals

Millennials have grown up busy balancing school, sports, hobbies and more, and they’re keeping the same pace through college and into the workforce. They want to do it all and have a talent for maintaining a balance. But they need proximity on their side. They’re drawn to communities that are close to work, home, the gym and their favorite hangouts and activities. Keep track of real estate in urban centers and planned communities so that you can guide this group to the most affordable and convenient options for their circumstances.

Reach out to the confident, social and technologically savvy Millennials on their terms, and your referral network—along with your annual sales volume—could grow exponentially over the next decade or more.

Margaret Kelly, CRB, is chief executive officer of RE/MAX International, Inc.

For more information, visit www.remax.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Don’t miss these headlines on RISMedia.com:

• Credit Woes to Threaten Housing Recovery?
• Work Your Sphere of Influence to Your Advantage

Did you see the article in another e-newsletter last week in which two “successful” social media real estate agents were profiled: one who had never sold a home from her four hours a day efforts and another who had sold one from his two hours a day efforts (oh, but they both have thousands of people following them?).

You are being told that in order to succeed online you must continue to employ esoteric and obscure social networking sites, in addition to Twitter, Facebook, etc. After all, who can ignore the Twitter nation of 250 million members? You must participate. (Pay no attention to that man behind the curtain reporting that the vast majority of Twitterers make one tweet and never come back).

Well, as I have been telling you for three years now, that is hogwash. Social media is a sinkhole that absorbs time, effort and money that could better be spent on finding listings and selling houses. Social media is the new blogging. It too will peak, then decline with one very large exception: affinity group business communication.

Affinity group business communication is where groups of like-minded business professionals in an industry utilize a resource to stay in touch with each other. Unfortunately, it is my belief that such social networking won’t last or really take off between sellers of real estate and people looking to purchase it.

Why social media won’t be a long-term selling tool for real estate
In February 2008, I tried to explain why advertising and social networking don’t complement each other. My friend, Michael Krisa (“That Interview Guy”) explained it to me like this: “Advertising in social network sites is like this: You and I are in my newly renovated kitchen having a coffee. You ask me who did the work and I gladly refer the contractor because I am pleased with the job he did. As I’m writing down his name and number, there is a flash of light and the sickening sound of breaking glass as Home Depot throws a brick through my window promoting their own renovation team…ads on social network sites are just as welcome as that brick…and equally as annoying.”

I have seen nothing—either in theory or in results—that has changed my mind. The two concepts are not compatible for what real estate professionals are selling. While those with huge sums of money to spend on mass advertising may disagree, my position comes from the frame of reference of the professional agent: someone whose time is money, and whose time cannot be wasted without deleteriously affecting their livelihood.

It is the function of techies to push new technology upon us
I’m no slouch when it comes to IT. I’m no programmer, but I’m relatively in the know about all phases of the Internet and personal computing. When it comes to marketing, I understand it as well as anyone. My efforts in these columns are to advance marketing.

Techies, on the other hand, love to wax rhapsodic about “the next big thing.” They write about things outside the experience of agents, regular folks and non-techies because that is their life. By telling us all we must utilize a particular technology, they make themselves more valuable and more influential. By offering new courses on the latest thing, they extract yet more money out of an already reeling agent base.

Trust me, folks, a course on how to social network isn’t going to sell that next property for you. Neither is a tweet or a placement on your Facebook page. Sure, “everybody’s doing it” but don’t you toss that lame reasoning out when your high school kid told you the same thing trying to justify (insert unjustifiable thing, here)?

Lemmings rarely are top salespeople, and those who do not understand the one great truth about selling houses in the digital age will never succeed at doing so.

The one great truth about selling houses in the digital age
You must put the Internet to work for you. An estimated 880 million people search Google for a real estate related thing each month. They search Google—not Twitter, not Facebook or whatever the newest and hippest social site is these days.

The home-buying audience may be hip, but most are concerned. They want access, value and service from their agent. No matter how “hip” they are, they want a professional who knows more than they do about real estate; to guide them and to help them. They play on Twitter, they social network on Facebook, they buy homes from the Internet.

Want to sell houses online?
An advanced degree in techie is not required. Three things are required:
Internet buyers must be able to find you when they search for homes online;
You must attract between 5 and 15% of these buyers to sign in and ask you for more information; you must follow up properly (not with auto-responders) and promptly; NAR says 50% of agents call an internet lead within 54 hours and the other 50% never call them. That may be in part due to the poor quality of many of these purported “leads” but regardless: 54 hours doesn’t cut it. Under one hour cuts it.

Don’t be stampeded into feeling like you are disconnected
One of the oldest techniques in the world to promote a cure is to create a sickness. Lacking an interest or skills in social networking will not affect your selling real estate. Lacking an Internet presence will greatly affect that ability and having one will bring you success you can’t now imagine.

If you could talk with agents who sell 10, 20, 50 or more homes from their websites annually, they’d tell you this: response time is far more important than any other factor in responding to a lead. They’d also tell you that the quality of leads is the single biggest factor in selling homes to Internet buyers. If you aren’t getting leads from your website, or you are getting the old “corporate junk leads” and are so frustrated with them that you have mentally kissed them off, re-read the paragraph above this one. Do that and you will succeed.

The rest of this social networking stuff is fine for becoming and making friends. I don’t know about you, but most agents don’t go into real estate to make friends, they do it to sell homes and make a good living. Put your efforts where the results are, not into what today’s techie says you need to do to stay au courant. Techies don’t sell houses. You do.

Mike Parker advises thousands of agents and brokers on the subject of online marketing services for realtors. If you want to learn more about how to succeed at selling homes to Internet buyers or to request a free review of your website to determine if it can be found by internet buyers and if it is set up to be effective for you, click here and we’ll review it for you at no cost or obligation.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Don’t miss these top headlines on RISMedia.com:
How Real Estate Agents Can Use Bonuses and Incentives to Get More Clients and Sell More Homes
U.S. Homebuyers Pay Closer to Listing Price in August, but Are Still Negotiating Thousands in Discounts

All NAR full-conference and day-conference attendees are encouraged to attend. 

This session—held as part of the NAR Conference program, will be led by Top 5 in Real Estate Co-founder & President Allan Dalton—will help Realtors clearly identify and explain short sales, expireds and price reductions to their clients, while also explaining their own understanding of the subject matter and how they will assist those clients. 

Realtors will also learn how they can use various marketing techniques to acquire more listings and how to implement a marketing strategy that benefits their own business, while also educating consumers on the nuances of today’s market. 

This session’s panelists include: 

• Becky Boomsma, Realtor, Coldwell Banker Residential Brokerage
• Valerie Fitzgerald, Previews Director, The Valerie Fitzgerald Group, Coldwell Banker Beverly Hills
• Julie Vanderblue, President, The Higgins Group
• Rosemary West, Team Leader, The Rosemary West Team, RE/MAX of Joliet 

For more top headlines on RISMedia.com, don’t miss:
‘Teal Is the New Green’: How One Company’s Focus on the Environment Is Creating New Marketing Strategy for Agents
How Real Estate Agents Can Use Bonuses and Incentives to Get More Clients and Sell More Homes

HomeGain’s recent survey shows the top do-it-yourself home improvements that Realtors recommend to home sellers. HomeGain received responses from nearly 1,000 Realtors nationwide and configured a list of the top 12 do-it-yourself (DIY) home improvements that cost under $5,000 and benefit sellers most when they sell their homes. 

According to the HomeGain survey, the top five home improvements that Realtors recommend to home sellers based on cost and return on investment (from highest to lowest ROI) are: 

1. Cleaning and de-cluttering ($200 cost / $1,700 price increase / 872% ROI)
2. Home staging ($300 cost / $1,780 price increase / 586% ROI)
3. Lightening and brightening ($230 cost / $1,300 price increase / 572% ROI)
4. Landscaping ($320 cost / $1,500 price increase / 473% ROI)
5. Repairing plumbing ($385 cost / $1,250 price increase / 327% ROI) 

Cleaning and de-cluttering continues to rank as the top suggested home improvement (since the survey was originally conducted in 2000), recommended by 98% of Realtors, costing less than $200 and returning a value of nearly $1,700 to the home’s sale price, or an 872% return on investment. 

“Many Realtors agree, especially in a buyer’s market, that sellers who make these recommended home improvements often get their homes sold faster and at higher prices,” stated Louis Cammarosano, General Manager at HomeGain. “We have customized our Home Sale Maximizer online home improvement tool to help identify and prioritize the projects that can increase the salability and selling price of a home.” 

Rounding out the top 12, the list of low cost, do-it-yourself home improvements includes: updating electrical, replacing or shampooing carpets, painting interior walls, repairing damaged floors, updating kitchen, painting outside of home, and updating bathroom/s.

The home improvement projects with the highest price increases to a home’s resale value are updating the kitchen ($1,200 cost / $2,850 price increase), followed by painting the outside of the home ($900 cost / $1,815 price increase) and home staging ($300 cost / $1,780 price increase). 

“Inexpensive cosmetic home improvements and basic improvements greatly enhance the value of the home,” stated Carol Wilson of Carpenter Real Estate in Indianapolis, IN, HomeGain AgentEvaluator member since 1999. 

For more information, visit www.homegain.com. 

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. 

Don’t miss these top headlines on RISMedia.com:
Home Buyers Want to Save Energy – but Only at Right Price
Taking Advantage of Negotiation – U.S. Homebuyers Paid $7,039 Less Than Listing Price in July

The extension is part of a $24 billion economic stimulus bill that will extend the $8,000 tax credit for homebuyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate. 

The following details apply to the homebuyer tax credit expansion: 

Who is Eligible
-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
-All U.S. citizens who file taxes are eligible to participate in the program. 

Income Limits
Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
-For married couples filing a joint return, the combined income limit is $225,000.
-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000. 

Effective Dates
-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010. 

Types of Homes that Qualify
-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify. 

Tax Credit is Refundable
-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

-For example:
-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).
-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return. 

Payback Provisions
The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase. 

The www.federalhousingtaxcredit.com site is being updated. Check the site next week for more detailed information on the new tax credit. 

For more information, visit www.nahb.org. 

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. 

Don’t miss these top headlines on RISMedia.com:
Where Are All the REOs?
15 Billion in Credit Card Fees Charged! …and the New “Credit Card Act”

Flexibility may be the buzzword of the millennia. Flexible schedules, flexible work hours, flexible space—Americans are regaining control by rearranging the flow of their day-to-day lives. Very few of us lead cookie-cutter lives, so cookie-cutter home solutions don’t always work. If every family has a unique configuration and life pattern—consider single moms, empty nesters with visiting kids and grandkids, families with young children, multigenerational families—shouldn’t the architecture that surrounds them be flexible enough to accommodate their needs? The opportunity is to identify houses that offer “adaptable possibilities” and develop talking points aligned with your client’s situational needs. 

Buying a home today is an emotional, economic and deeply considered purchase. That home will be a base station for family, friends, neighbors, school, work and play and its layout and traffic pattern will need to accommodate the “busy-ness” of life. As buyers imagine themselves in a potential home, adaptable space may be a selling point over and above simple staging. Here are a few spaces to consider: 

-Kitchen: We cook, we do homework, we entertain, we do crafts there. Open or co-located areas for simultaneous activities and multiple people usually top the wish list. If space is limited, suggest a corner of the kitchen or an adjoining dining room as a homework/conversation area.

-Open, accessible plans: If your client is single, an open plan delivers a great space for entertaining. An older or multi-generational family may view it in terms of accessibility. Either will have visiting family members, so having a “visitable” home offers the opportunity to welcome anyone regardless of age or ability. One zero-threshold entry, wide doorways and a main floor bathroom offer ease of use and accessibility whether you’re unloading groceries or have a temporary or permanent physical impairment.

-Home office/library/reading space: Part of a dining room, den, extra bedroom or even an extra closet can be furnished to create a small space for quiet activities. Bookcases lining a wall speak volumes regarding functionality far beyond the original intention of the room.

-Basement: This extra square footage offers many options so even if the space is un- or partially-finished, paint the vision for tomorrow’s media room, game room, exercise or craft area.

-Outdoor living spaces: Whether it’s a tiny lot or large open space, suggesting ideas that go “beyond the deck” with landscaping, pathways and sitting areas brings even the mundane to life. 

Seeing a home through a different lens may help your clients imagine the space as they would actually use it and gain a new perspective on possibilities. Going beyond the basics of BR/BA-speak to engage your clients in lifestyle discussions will not only help you find solutions that are right for each family; it will help them find the perfect fit for the architecture of their lives. 

Melissa Birdsong is vice president for Trend, Design & Brand, Lowe’s Companies, Inc. 

For more information, visit www.lowes.com. 

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. 

Don’t miss these top headlines on RISMedia.com:
Housing Tax Credit Working, NAR Says to Keep Momentum Going
A Fix-Up Strategy Works in Long Run: If You Have Time on Your Side, Improve and Enjoy Your Home

The homebuyer tax credit, due to expire at the end of November would be extended through April 30 of next year. First-time buyers who are in the process of making a purchase would not need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline. 

For the first time, the legislation that was recently cleared makes move-up buyers as well as first-time buyers eligible for a credit. The $8,000 maximum first-timer credit will continue and will now be available to couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. A new $6,500 maximum credit would also be available to move-up homeowners who have lived in their current residence for five of the prior eight years. 

For homebuyers across the country, the expanded tax credit would allow more people to qualify for the credit. While two-thirds of American families own their own home, and most earn less than the income limits that have been established within the extension, more buyers may be eligible. Move-up buyers don’t have to sell their current home to qualify for the new credit, but the money cannot be used to buy a vacation home. “It’s only for a primary residence,” said Regan Lachapelle, a spokeswoman for Sen. Harry Redi (D-Nev.), who helped engineer the deal. “In expanding the tax credit, we are helping first-time home buyers, as well as homeowners looking to move up to a new home, but we would exclude from the credit speculators who may have recently purchased a home intending to flip it for a fast profit,” said Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee. 

The tax credit has fired-up the housing market, driving existing home sales to the highest level in over two years. The National Association Realtors reported sales jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September and are 9.2% higher than the 5.10 million-unit pace in September 2008. 

The legislation included provisions added to address complaints of fraud as well. The Internal Revenue Service is given greater authority to oversee the process to root out fraud, and provisions are added in response to past abuses of false sales or underage buyers. An investigation by the Treasury Department’s Inspector General for Tax Administration found that more than 580 children, some as young as four years old, had received $627,000 in first-time homebuyer credits. The IRS has identified 167 suspected criminal schemes and opened nearly 107,000 examinations of potential civil violations of the first-time homebuyer tax credit.

For more information, visit www.realestateeconomywatch.com and www.wsj.com. 

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. 

For more information about the tax credit on RISMedia.com, don’t miss:
What Impact Will Homebuyer Tax Credit Extension Have on Housing Industry?
Breaking News: Senate Plans to Extend and Expand Tax Credit

In a recent interview, Fox-Pitt Kelton analyst Robert Stevenson said the Senate’s proposal for extending the $8,000 tax credit for new homebuyers will have a “limited impact” on home sales.

A Senate committee reached a deal last week to extend the $8,000 tax credit and offer a smaller $6,500 credit for some existing homeowners. The main pitfall of the proposal is that it only pushes back the expiration of the tax credit to the end of April, Stevenson said. It is currently set to go away on Dec. 1. Stevenson said he’s skeptical the tax credit will drive activity during the slower winter months. The prime selling season for the housing market kicks off in the spring and tends to run through the warmer months. “Of course, Congress could come back and extend it again,” the analyst said. “When the next selling season starts, the housing market will depend on the state of the economy and mortgage rates, rather than tax credits.” 

The $6,500 credit for some repeat homebuyers would let more buyers participate albeit at a lower level, “but a lot of those people are effectively trapped in their current homes,” Stevenson said. 

From their peak in 2006, U.S. home prices have fallen about 30% through the end of August 2009 during the housing downturn, according to the S&P/Case-Shiller home price index. More Americans are falling behind on their mortgage payments or losing their homes in the recession as job losses pile up. Rising foreclosures are another key worry. Yet hopes that a recovery is in place were fueled by a report showing the fourth straight month of rising home prices. Some attributed the tentative rebound to buyers rushing to cash in on the expiring $8,000 tax credit. The push to extend and expand the credit has been led by home builders, Realtors and other groups connected to the housing market. 

“Failure to act now could derail the fragile housing recovery even before it has time to take root,” said Jerry Howard, president of the National Association of Home Builders, in a statement urging Congress to stretch the tax credit. “The consequences would be devastating for both housing and the economy.” Howard said the tax credit has already helped create nearly 200,000 jobs, drive home sales, stem foreclosures and stabilize prices. Homebuilder stocks were up sharply in the wake of the news on the Senate compromise. Still, some economists say the incentive’s impact is overblown. 

“I am not applying the recent home-price rebound to the tax credit,” said Cameron Findlay, chief economist at LendingTree, in a recent interview. “I don’t think the tax credit makes as big an impact as people make it out to be, although it certainly motivates first-time buyers,” he said. “If it expires, I don’t think it would shake the housing market as much as some have predicted.” 

The compromise on extending the tax credit doesn’t mean it’s a sure thing, and the proposal still face votes in Congress. One potential snag is a recent government report that uncovered fraud and abuse associated with the tax credit. Thousands of ineligible taxpayers have received millions of dollars under the program, according to the report. 

Stephen East, an analyst at Pali Research, said the proposed new $6,500 credit would likely have some impact on the lower-end of the move-up market. “In essence, this could slowly start to prime the pump,” East forecast. “That said, we remain wary that any measurable impact will be seen until after the holidays and investors need to reconcile their expectations to that.” 

(c) 2009, MarketWatch.com Inc.

Distributed by McClatchy-Tribune Information Services. 

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. 

Don’t miss these top headlines on RISMedia.com:
U.S. Homebuyers Pay Closer to Listing Price in August, but Are Still Negotiating Thousands in Discounts
Homebuyer Tax Credit Best Tool for Sustaining Housing Recovery

Maria Patterson: Please begin by explaining what the 203k program is.
Dennis Walsh: The FHA Section 203k program was originally introduced by HUD in 1978 as a program to rehabilitate and repair single-family homes. HUD considers this an important tool for revitalizing neighborhoods and increasing homeownership. What’s unique about the 203k is that it’s a single mortgage loan that provides funds to purchase a home and make repairs and improvements. It’s intended for owner-occupants to purchase and renovate one- to four-unit residential and mixed-use properties. A simpler version, the Streamline 203k, was introduced in 2005. This version offers less documentation and lower loan fees for renovations that don’t exceed $35,000. 

MP: Why does today’s market present the ‘perfect storm’ conditions for the 203k program?
DW: The reality is, the market has changed and, as always, change brings new opportunities. First, look at all the distressed properties out there that need repair and renovation. So many of these homes haven’t been properly maintained and others have been damaged somewhere along the line—the furnace is missing, the kitchen is gone, or the carpeting rolled up and carried away. 

Secondly, conventional financing is simply out of reach for the majority of people. Without 20% or 25% to put down on a home and a perfect credit score, most Americans can’t get a conventional loan. However, with less-than-perfect credit and as little as 3.5% down, you can get an FHA loan, including the 203k. FHA financing opens up home-buying opportunities for many more people. 

Teresa Walsh: Keep in mind that with FHA financing, it’s critical that the house meet certain code standards—if it doesn’t, you can’t get an FHA loan. There are lots of homes out there that could be sold if the needed work was done. And most people recognize that homes needing repair and updating are some of the best deals available—great homes in great neighborhoods that need a little love.

So the question is, how does a buyer take advantage of a great deal on a home that needs work done? Where does the money come from to make the improvements? Some might run up charge cards at higher interest rates, or tap into savings or even retirement funds, but that’s usually not the best financial decision. The 203k loan offers an ideal solution. 

MP: Given these advantages, why haven’t 203k loans been more prevalent?
DW: There was no need to go through the process of FHA loan approval a few years back. We went through a long period of time where mortgage money was easily available to almost anyone who could fog a mirror—so use of FHA financing all but disappeared. It’s a whole new world now and, as a result, the use of FHA financing has grown to record levels. 

It’s also about awareness. You may have noticed that the U.S. government has not won many marketing awards! The FHA has had no mandate or funds allocated for marketing the 203k loan or providing training and support to real estate professionals. 

There’s also the fact that the 203k approval process is also a little more complicated than a conventional loan. For example, you’re required to secure renovation costs from an established, licensed contractor and deliver a package of the proper paperwork to the lender to secure FHA approval. This can be challenging for the average buyer, as well as agents without the training and resources. 

MP: Is an FHA loan a government loan? Will an increase in FHA lending add to the country’s deficit and overall economic problems?
DW: The great news for taxpayers is that this is not a program that requires the federal government to allocate billions of dollars of support. The FHA does not actually provide mortgage funds, but instead provides lenders with insurance that protects them against losses in the event of homeowner mortgage default. This reduces the lenders’ risk, allowing them to offer loans to buyers with less-than-perfect credit and with lower down payments. Lenders must follow specific guidelines established by FHA to qualify for this insurance. 

The FHA is funded entirely by proceeds from mortgage insurance included in the mortgage payments. As a result, the FHA is the only government agency that is entirely self-funded—operating at no cost to the American taxpayers! Additionally, the home construction and community development driven by FHA programs stimulate the economy through job creation, tax revenues and more. 

MP: What’s the concept behind RE-buildUSA?
DW: RE-buildUSA is designed to simplify the 203k loan process for everyone involved—to drive greater awareness, provide training and a support platform to allow real estate professionals to work most successfully with buyers, lenders, contractors and inspectors. 

Realtors involved in the program receive training to earn a 203k Specialist designation, a membership program for ongoing support and a technology program to facilitate 203k projects. We will work with Lowe’s to provide premier service to RE-buildUSA members and their customers. 

MP: Mark, why was it important for Lowe’s to get involved with RE-buildUSA?
Mark Malone: We, at Lowe’s, fully understand and empathize with each agent out there trying to keep and grow their business in today’s economy. We are here to support their business any way we can, and 203k presents new opportunities for Realtors to build business. We want Lowe’s to be the back-pocket resource for all things home improvement, so it’s a natural for us to be involved in RE-buildUSA. 

MP: Has RE-buildUSA officially launched?
DW: The first phase of our website, re-buildusa.com, is now live, with additional development under way. We’re scheduled to be launching the password-protected membership area some time in December. 

To become a 203k Specialist, an agent must complete approximately five hours of interactive self-paced coursework online. They then gain membership in the RE-buildUSA program, which helps them reach consumers interested in the 203k program, plus continued training and support. 

MP: What does an agent receive for becoming a member of RE-buildUSA?
TW: Agents will be featured in an online membership directory so that home buyers interested in working with a 203k Specialist can go to RE-buildUSA.com and find them. Members will also be able to identify themselves as a 203k Specialist on their websites and in their marketing. Members can access the RE-buildUSA membership site to download forms, checklists and sample marketing materials, as well as forums and a blog, highlighting up-to-date news, trends and best practices. RE-buildUSA is a one-stop shop for members, providing them with access to marketing materials, inspectors, lenders and a direct connection to Lowe’s to help their customers coordinate the bidding and renovation activities. 

MP: If I’m a real estate professional, why do I want to become a 203k Specialist?
DW: We’re showing real estate professionals how the 203k program works because it will help them sell more homes and help more Americans move into homeownership. We’re also excited that we can work together as an industry to reduce the inventory of foreclosed homes and get our housing industry back to greater stability. 

TW: When the market started to turn, a lot of agents steered away from listing foreclosures because it’s difficult business. There are a lot of out-of-pocket expenses, loads of paperwork, security issues and other challenges. Many other agents steered away from short sales because they didn’t want to deal with those headaches. Those, however, who recognized the opportunity and jumped in with both feet, are reaping the benefits today. So, I advise agents not to sit back and pass up the opportunity that now presents itself with the 203k program. Right now, the door is wide open all across America. 
DW: I think it’s also important to recognize that while this is a here-and-now opportunity, it’s also a long-term opportunity as well. Many people are not aware that more than 80% of the homes in America were built before 1990—that’s over 100 million homes that are 20 years old or older. Almost every one of these homes need some amount of repair and updating. It’s our belief that almost every single real estate professional is going to need the education we provide through RE-buildUSA to offer expertise in the 203k as well as other similar loan programs that come along in the future. 

MP: How is Lowe’s helping Realtors in today’s difficult market?
MM: Lowe’s has three main ways in which we help Realtors close more business. First, our free marketing tool, available to all Realtors, allows agents to send 10%-off coupons to their clients before they buy to help them envision how they can turn that house into a home. Second, we know what an effect foreclosures and distressed properties have had on housing and we want to empower agents to get those homes fixed up as quickly and cost effectively as possible. Realtors can download a 10%-off coupon to pass along to a trusted contractor or use it themselves to get these distressed properties to a presentable and, hopefully, sellable state. Third, and probably the most exciting, RE-buildUSA will help deliver a turnkey solution for agents who have buyers utilizing the 203k loan. 

MP: If I’m a consumer, why do I want to work with a 203k Specialist?
TW: First off, most consumers don’t really understand the program, what improvements can be made, how to find a lender, steps in the process…there are an awful lot of questions that need to be asked and answered. A RE-buildUSA 203k Specialist will help them understand 203k details and options, evaluate available properties, compare neighborhoods and introduce them to an FHA-approved 203k lender. They’ll also coordinate the appropriate home inspection and help them evaluate the renovation work and the potential impact on the value of the home.

Just as in short sales and foreclosures, home buyers find it very difficult to wade into these waters without the help of an expert. 

MP: How will a buyer benefit by choosing to work through Lowe’s for their 203k improvements?
MM: Safety, satisfaction and savings. All of Lowe’s installers are licensed*, bonded and insured so you can trust our team with the safety and the security of your buyer’s new home. We also stand behind the quality of our work with a 100% satisfaction guarantee. Don’t forget, the everyday low prices of the product in our stores insure home buyers will get the most value for their hard-earned dollars. 

MP: How will working with a 203k Specialist benefit the lender?
DW: Lenders tell us all the time that it’s very difficult to work with a consumer or agent who doesn’t understand the program. They also agree that working with real estate agents supported by RE-buildUSA training and resources will make life much easier for them—leading to smoother loan approvals and closings. Because of this, a number of lenders are already gearing up to work more closely as partners with RE-buildUSA members. 

MP: Why is the 203k program a critical program for today’s particular market conditions?
MM: We know that this is a different real estate landscape than we have ever dealt with before. Consumers are not in the same mindset as three or four years ago. More first-time home buyers are entering the market than ever before and we all need to be ready to help them learn how to make a house a home. Realtors are repositioning themselves to be even more of a trusted resource for home buyers, many of whom are gun-shy as they re-enter the market. Lowe’s is committed to the partnership we have with the National Association of Realtors and now with RE-buildUSA. We want to support Realtors in any way we can. 
DW: I hear a number of agents telling buyers and sellers that we’re in a “correcting market” and waiting for things to return to “normal.” So what does the typical buyer or seller do? They’ll most likely sit back and wait until the market’s corrected! 

We’re in a different market—a new market with new realities and new opportunities. Agents who are the first on the block to become 203k Specialists can take advantage of these opportunities right here, right now—and position themselves for the future as well. RE-buildUSA is about all of us working together to solve today’s problems and making a long-term investment in the stability of America’s housing industry and economy. 

Don’t miss these top headlines on RISMedia.com:
Where Hollywood Boulevard Meets Main Street and Dreams Meet Reality
Foreclosure Fortune-telling – Adjust for Your Success

For finding out how much your mortgage is going to cost you, a loan mortgage calculator often works as a user-friendly tool. Nevertheless, this tool can’t save you all the time. Similar to other forms of investment, real estate mortgage loans are also subject to scams. Mortgage frauds and scams can make you lose thousands of dollars on interest as a minimum because of excessive fees and other hidden costs. The worst that can happen is that you can lose your home to foreclosure. 

According to industry professionals, there are three principal or familiar types of real estate fraud: 

1. Identity theft via mortgage request
2. Bait and switch
3. Loan flipping 

For preventing scams, it has been witnessed that offense is the best defense. Understand the truth and don’t hesitate to make queries. 

Bait and switch is a fraudulent sales technique where a loan product is publicized at a lucrative rate (bait). However, the product or rate is subsequently changed for the gain of the lender (switch). This is an utterly illegitimate and deceitful practice. For instance, one interest rate is assured at the time of selling a loan, but a bigger rate is provided at the time of closing. 

When you’re obtaining a pre-approval or mortgage quote, you believe that your question with the lender is secret, right? You’re wrong. On many occasions, important financial details about you and your mortgage requirements are hacked by vying lenders. This can happen within 24 hours of your credit bureau inquiry. Your loan officer is even unaware of this. Many firms provide countrywide accessibility to your financial details to the lenders and everybody in your city who requested for a mortgage within the last 24 hours. Any other lender can talk to these individuals the following day and give them a pre-approval for an improved mortgage loan. 

One more dilemma is mortgage solicitation through telephone, the Internet or door to door. These scams involve filling in an application through fax, the Internet or over the telephone and often the rates are phony. However, it is not the largest issue to be bothered about–it is nothing but identity theft. Even though the rates are legitimate, the company would get all your important details such as your social security number that can result in mortgage scam or identity theft. 

Another type of mortgage scam that is prevalent in the real estate industry is loan flipping. Loan flipping denotes frequent refinancing of a mortgage within a small time frame with very small gains to the borrower. It takes place when a borrower can’t keep up with the planned payments or constantly combines other unsecured loans into a new secured loan at the request of a lender. Lenders flipping loans ask for too much origination fee with every consecutive refinancing. They might ask for these fees on the basis of the whole loan amount, not only on the increased amount summed up with the loan principal through refinancing. In addition, every refinancing might attract prepayment penalties that can be funded as a portion of the overall loan amount, accumulating the debt of the borrower. 

If you’re buying a home, looking for a home equity loan or considering a mortgage refinance, it is better to work with a trustworthy lender. You must shop around and do some homework to get the best offers. Try to stay away from furnishing any details until you’re confident that the company or individual you’re talking to is right for you. 

For more information, visit www.mortgagefit.com. 

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. 

For more top stories on RISMedia.com, be sure to see:
First-Time Homebuyers Have Unique Advantage in Mortgage Market
Lose Your Job, Keep Your Home – Ask for Help Before it’s Too Late

While its passage remains uncertain, the agreement would extend the existing credit for first-time homebuyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners, Senate aides said. The reduced credit would be available to all homebuyers who have been in their current residence for a consecutive five-year period in the past eight years. Lawmakers in Washington also raised the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000, housing-industry sources said. Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, said the sources. The measure still faces votes in the full Senate and the House. 

Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan are in full support of the Senate’s proposal to both extend and expand the first-time homebuyer tax credit and called on Congress to approve key housing measures that include the tax credit. “We welcome efforts taken by Congress to extend the First-Time Homebuyer Tax Credit for a limited period. This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide,” said Secretaries Geithner and Donovan. “In extending the credit, we urge Congress to include strict measures to combat tax fraud and protect responsible homeowners.” 

The current tax credit did little for the new-home market in September, the Commerce Department recently reported—news that took many industry analysts by surprise. Sales fell 3.6% from August and 7.8% from September 2008. Industry observers had expected a fifth consecutive monthly increase in new-home sales, believing that the tax incentive for qualified first-time buyers—credited with 357,000 sales of previously owned homes so far this year—would do the trick. Instead, sales of typically more expensive newly built houses slipped. “The decline in new-home sales seems to us to be more a function of the attractive pricing available on resales in the current environment than a reflection of weakening demand,” said Michael Feder, president of Radar Logic in New York, which tracks the market. 

“Since hitting rock bottom in March, demand is up 20 percent,” said Joel L. Naroff of Naroff Economic Advisers in Holland, Pa. For Naroff, the robust rise in existing-home purchases—9.2% year over year in September—indicated that the housing market was not faltering. “Maybe the issue is supply, which fell to its lowest level in 27 years,” he said. “Builders, at least those left standing, have been making sure they don’t have any houses sitting around, and they have been very successful in controlling inventories.” 

IHS Global Insight economist Patrick Newport echoed that, noting new-home inventories “sank for the 29th straight month to their lowest level since November 1982.” Naroff maintained housing has recovered enough to stand without the tax credit, but Newport said that if the credit were not extended and expanded, housing demand would take a hit, and home sales would drop. 

The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real estate market a bigger boost while preventing real estate investors from benefitting. While Senate lawmakers appear to have reached a deal on the substance of the tax credit, they are still at odds over how it would be brought to the Senate floor. 

(c) 2009, The Philadelphia Inquirer.

Distributed by McClatchy-Tribune Information Services. 

For more information, visit www.wsj.com. 

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. 

For more top headlines on RISMedia.com, be sure to check out:
Credit Card Reform Offers Good News and Bad
Seniors Increasingly Realizing Nest Egg in Life Insurance Policies

In the course of my adult life, I’ve lived in 14 different residences, six of which have been single-family homes that I bought. Like most people, each time I had my list of must-haves in terms of living space, floor plan flow, structure, amenities, etc. But as I was also new to the area for half of those decisions, I was also interested in knowing more about the neighborhood and surrounding environment and would always envision myself coming home after dark. Even the most charming tree-lined street takes on a different character when the sun goes down. 

Home as a sanctuary has moved from cultural trend to the essence of what makes a house a home. The term “sanctuary” covers everything from the basic need of shelter, a place of refuge, security, as well as a home that fits the lifestyle of the family living there. Gone are the days when showing a house with a home security system or solid deadbolts might signal the buyer to think the neighborhood was unsafe. Today, a home properly equipped to address general security issues is expected and has become the norm. Making a home more secure doesn’t have to be expensive or time consuming. 

Here are some options for sellers to consider: 

1. Hedging your bet-Trimming the bushes at the front entry and near the windows of the home adds curb appeal and opens sight lines around entrances.
2. Security with style- Choose attractive storm doors and entry doors with more secure locking options.
3. Light it up- Motion-activated lighting, timer controls and dusk-to-dawn options paired with path lighting and landscape lighting means the curb appeal of the home doesn’t go down with the sun.
4. High-tech peace of mind-Easy-to-install, whole-home wireless security systems and monitoring means you can control locks, lights and cameras from a computer or cell phone. 

A buyer in the market for a new home today has more options than ever, and each has his or her own list of must-haves. Leverage the opportunity to show a home’s strength by marrying curb appeal and charm with a few upgrades that deliver on peace of mind.

Melissa Birdsong is vice president for Trend, Design & Brand, Lowe’s Companies, Inc. 

For more information, please visit www.lowes.com. 

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. 

For more top headlines on RISMedia.com, be sure to check out:
Credit Card Reform Offers Good News and Bad
Seniors Increasingly Realizing Nest Egg in Life Insurance Policies

“Broadly speaking, the rate of annual decline in home price values continues to improve,” says David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. “The two Composites and 19 of the 20 metro areas showed an improvement in the annual rates of return, as seen through a moderation in their annual declines. Looking at the monthly data, 17 of the MSAs and both Composites saw price increases in August over July. While many of the markets remain down versus this time last year, the relative rate of decline has shown some real improvement. California, in particular, has seen some real positive prints in recent months. We see this general trend whether you look at the as-reported data or the seasonally adjusted figures. Once again, however, we do want to remind people of the upcoming expiration of the Federal First-Time Buyer’s Tax Credit in November and anticipated higher unemployment rates through year-end. Both may have a dampening effect on home prices.”

The index levels for the 10-City and 20-City Composite Indices show that as of August 2009, average home prices across the United States are at similar levels to where they were in the autumn of 2003. From the peak in the second quarter of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. With the relative improvement of the past few months, the peak-to-date figures through August 2009 are -30.2% and -29.3%, respectively.

In terms of annual declines, all metro areas and the two composites remain in negative territory, albeit most showing an improvement over the previous month’s figures. Dallas and Denver are continuing their trend from the past month, edging closer into positive territory with August figures of -1.2% and -1.9%, respectively. In addition, both New York and San Diego have emerged out of double-digit declines. New York was down 9.6% in August and San Diego was down 8.9%.

In the monthly data, only Charlotte, Cleveland and Las Vegas reported monthly declines in August over July. Minneapolis and San Francisco reported positive returns greater than +2.0%, and nine of the MSAs plus the two Composites reported monthly returns greater than +1.0%.

For more information, visit www.standardandpoors.com.

For more top stories on RISMedia.com, be sure to check out:

• Taking Advantage of Negotiation – U.S. Homebuyers Paid $7,039 Less Than Listing Price in July
• First-Time Buyers Race to Beat the Clock, Qualify for $8,000 Federal Tax Credit

A personal pattern of Innovation

Beckman has always been known as an innovator and an aggressive marketer of his client’s properties. For example, he combined direct mail and Internet presence to positively dominate an affluent section of suburban Seattle for many years—home to many prominent Seattle families—listing about 80% of all homes sold there. Today, on what many would call a truly basic website, prospects can sign up for his daily “Just listed” e-mail, for foreclosure listings bulletins, for first-time home buyers classes and much more. His website produces 75% of his leads for his team and, in September, originated 7 of the 11 closes his team had.

He has diversified into Property Management in order to have a core business immune from real estate slowdowns and he uses his base of renters to supply his first-time homebuyer classes with folks eager to learn the “8,000 reasons you should buy your first home now.” Beckman has practically owned the first pages of the search engines for years for his specialties and was one of the first agents to realize the tremendous benefits associated with being found on the first pages of every search engine. In sum, he is not a “rest on your laurels” kind of agent—he’s always looking to stay ahead of what is moving the market.

His innovation in 2006 helped save him in 2008

“When I realized I needed to increase my property management business (in early 2008) we had about 20 properties under management. Today, we have over 80 properties under management. It was a great help that when one enters Mason County Property Management on Google, our company comes up number one—even though I never subscribed nor optimized my site for that phrase. My CompassSearch subscription made it possible for Google to bring me people looking for property management. Lots of companies can manage properties, but we can fill them with renters because we attract renters from all over the United States online. That same subscription has me on page one of Google for Mason County Rental Properties, too, so I have plenty of renters looking for a home contact me, too. Of course, I am also on page one of every major search engine for Mason County Real Estate, one of my key phrases I chose back in 2006. The people at Compass tell me that this is what is meant by “long tail search;” evidently, a properly optimized website is found under many different searches relating to the geographic target an agent chooses. Whatever it is, I am grateful that my Internet power enabled me to expand a facet of my business I hadn’t even really thought about in 2006, but that helped save me in 2008. Without a doubt, if I had not made the $3,400 investment in 2006 to be found in organic search placement through Compass, I could not have expanded my business online in these new areas in time to avert potential catastrophe. I am extremely glad that I made the decision to move to the Internet then and that I am so dominant there, now.”

Would you like to have a whole new source of business?

Beckman mentioned being on page one of Google for the above phrases; fact is, he is found on the first pages of the search engines on over 1,000 different search phrases. Since he subscribed to CompassSearch, over 62,000 people have come to his website because of his subscription. About 20,000 Web visitors annually go to Beckman’s website, a solid base of traffic that enabled him to branch into property management and rental properties without missing a beat. Chances are, if Beckman wanted to start selling boats, cars, airplanes or widgets, he would dominate the search engines for those, too. Once you dominate your geographic identifier—your hometown marketplace or any marketplace you choose—you are found under so many different iterations that it almost defies belief. Being found will not sell homes all by itself, however. There are two other major steps to be taken, but if you cannot be found on page one of Google, Yahoo and bing! for your marketplace, you don’t need to worry about those other steps because no one will contact you. If you are waiting for the big time corporate site to bail you out, it’s been nice knowing you. You must take your Internet destiny into your own hands. Take control of your marketplace and take control of your own income and success, for good.

His sure fire method of closing all listing presentations

“I always ask them if their home could be found on the first page of Google when a homebuyer types in Mason County Real Estate, do they think their home would sell faster? They always answer ‘Yes.’ I then pop open my position report from Compass, show them my search engine positions and guarantee them that they will be on the first page of Google when they list with me, because I am on the first page of Google, Yahoo, MSN and all the rest, too. If there are any doubters at this stage, I turn my laptop around and say “go ahead. Go to Google and enter Mason County Real Estate (or any of the other terms I dominate). When I pop up, they are amazed and impressed. Every consumer today recognizes the selling power of the Internet and the advantage of being on the first page of the search engines. They get it. Once I prove to them that they can have that tremendous advantage, they are sold on listing with me and with West Realty Shelton.”

Richard’s lesson is just as vital today as it was then

There will be lots of closings in November, due to the First-time Homebuyer program (odds are it will be continued in some form) deadline. Many agents will make lots of commissions. There won’t ever be a better time to do now what Beckman did then: Establish yourself online. Maybe it won’t “save you” if another monster comes to our doors, but it certainly will broaden your client base, bring new prospects to you and enable you to earn a good living, regardless of what the markets are doing. Take a few of those commission dollars that flow now and get established where people can find you- online.

“2008 was a tough year,” Beckman told me. “Ninety percent of my property management marketing and expansion was done online. Had I not shown up on the first page of Google under Mason County property management I don’t believe I would be here today. Now that we made it through the bad times, it feels really good to get back to our real business—helping people buy and sell real estate. Also, I must say that I can’t speak highly enough about the CompassSearch service. Not only are they responsible for the internet buyers we’ve picked up, but they are also responsible for the listings, property management, and rentals. That’s a pretty remarkable return on a $3,400 investment and that’s one reason that I love the service.

Mike Parker has written more than 200 published articles about online marketing services for realtors. For help in making your Internet marketing as successful as Richard Beckman’s or to you or to request a free review of your website to determine if it can be found by internet buyers and if it is set up to be effective for you, click here and we’ll review it for you at no cost or obligation.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Don’t miss these top headlines on RISMedia.com:

• Single-Family Starts Ease as Credit Deadline Looms
• Return to Housing Peak is 10 Years Away, Analysts Say