Successfully reported this slideshow.

The Shiftv5

580 views

Published on

Published in: Business, Real Estate
  • Be the first to comment

  • Be the first to like this

The Shiftv5

  1. 1. The Shift Twelve Tactics for Tough Times
  2. 2. <ul><li>First, the Market Shifts </li></ul><ul><li>then </li></ul><ul><li>YOU SHIFT! </li></ul>
  3. 3. <ul><li>Part One </li></ul><ul><li>The Market Shifts </li></ul>
  4. 4. Shifts Happen <ul><li>Real estate is a cyclical business. </li></ul><ul><ul><li>What goes up must come down. </li></ul></ul><ul><ul><li>What is down won’t stay there. </li></ul></ul><ul><li>Shifts are never unexpected but rarely predictable. </li></ul><ul><ul><li>You know one is coming. </li></ul></ul><ul><ul><li>You don’t know when. </li></ul></ul><ul><ul><li>They are inevitable. </li></ul></ul>
  5. 5. Shifts Happen (continued) NOV JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT DEC Seasonal Sales Cycle More Sales Fewer Sales
  6. 6. Shifts Happen (continued) NOV JAN MAR APR MAY JUNE JULY AUG SEPT OCT DEC Seasonal Income Cycle FEB More Income Less Income
  7. 7. Shifts Happen (continued) <ul><li>The Anatomy of a Shift </li></ul><ul><ul><li>Supply and demand out of balance </li></ul></ul><ul><ul><li>Seller supply exceeds buyer demand—buyers’ market </li></ul></ul><ul><ul><li>Buyer demand exceed seller supply—sellers’ market </li></ul></ul><ul><ul><li>More listings selling—moving to sellers’ market </li></ul></ul><ul><ul><li>Fewer listings selling—moving to buyers’ market </li></ul></ul>
  8. 8. Shifts Happen (continued) <ul><li>Balanced markets occur during the transition between markets and rarely last for long. </li></ul>The Three Types of Real Estate Markets <ul><li>Buyers’ Market: More than 7 Months of Inventory </li></ul><ul><li>Balanced Market: From 5 to 7 Months of Inventory </li></ul><ul><li>Sellers’ Market: Less than 5 Months of Inventory </li></ul>
  9. 9. Source: NAR Months Million Housing Inventory (left axis) Existing Home Sales – Single Family Homes (right axis) Buyers’ Market Sellers’ Market National Shifts Happen Gradually
  10. 10. <ul><li>Composite Annual Sales in 5 Major Metro Areas </li></ul><ul><li>(Sacramento, San Diego, Las Vegas, Orlando & New York City) </li></ul>Local Shifts Happen Fast!
  11. 11. Local Market Shifts—Happen Fast! Buyer Transitional Seller SLOW FAST FASTER
  12. 12. <ul><li>Factors That Cause a Shift </li></ul><ul><ul><li>Nationally—interest rates and inflation </li></ul></ul><ul><ul><li>City level—population, jobs, and household income </li></ul></ul><ul><ul><li>Local level—neighborhood dynamics and housing prices </li></ul></ul><ul><li>This simply boils down to </li></ul><ul><li>Buyer Demand = Affordability + Perception </li></ul>Local Market Shifts—Happen Fast!
  13. 13. The Law of Equilibrium <ul><li>“ The available income in a market determines the number of agents in that market.” </li></ul><ul><li>Attracted by the perceived income opportunity </li></ul><ul><li>Driven out by the reality of the competition for it </li></ul>
  14. 14. The Law of Equilibrium (continued) Available Income Time Survive Thrive Peak Per Agent Income Lowest Per Agent Income The Lag Number of Agents
  15. 15. The Resilience Factor <ul><li>You must carry the lessons of the past into the present. </li></ul><ul><li>“ This too shall pass.” </li></ul><ul><li>Success comes to the resilient. </li></ul>
  16. 16. The Resilience Factor (continued) The Market The Market The Market Your Market Share 20% 35% 50% Build a fortress around what you have! As the market falls, hold your numbers steady and your share of the market will grow. Time Sales Activity
  17. 17. The Resilience Factor (continued) The Market The Market The Market Your Market Share 50% 50% 50% When the next up shift happens, your market share will hold steady but your numbers will explode! Time Sales Activity
  18. 18. <ul><li>Part Two </li></ul><ul><li>You Shift! </li></ul>
  19. 19. The 12 Things Agents Must Do, NOW! <ul><li>Get Real, Get Right – Get Clear About Your Role </li></ul><ul><li>Re-Margin Your Business – Get Lean and Mean About Your Expenses </li></ul><ul><li>Do More with Less – Leverage Admin and Sales Support Staff </li></ul><ul><li>Find the Motivated – Lead Generate and MOFIR </li></ul>
  20. 20. The 12 Things Agents Must Do, NOW! <ul><li>Get to the Table that Matters – Lead Capture and Conversion </li></ul><ul><li>Catch People in Your Web – Internet Lead Capture and Conversion </li></ul><ul><li>Price Ahead of the Market – Seller Pricing Strategies </li></ul><ul><li>Stand Out from the Competition – Seller Staging Strategies </li></ul>
  21. 21. The 12 Things Agents Must Do, NOW! <ul><li>Create Urgency in Buyers </li></ul><ul><li>Expand the Options – Master Creative Financing </li></ul><ul><li>Master the Market of the Moment – Short Sales, Foreclosures, and REOs </li></ul><ul><li>Bulletproof the Transaction – Transaction Issues and Solutions </li></ul>
  22. 22. Tactic #1: Get Real, Get Right <ul><li>Get Real About Your Situation </li></ul><ul><li>Get Right About What You’re Doing </li></ul>
  23. 23. Tactic #1: Get Real, Get Right <ul><li>When a Shift Occurs, Confusion Follows </li></ul><ul><li>Don’t Panic </li></ul><ul><li>Don’t Let Fear Creep In </li></ul><ul><li>Market Shifts  You Shift </li></ul><ul><li>A Mental Shift and an Action Shift </li></ul>
  24. 24. <ul><li>“ Your life will either be about your problems or your opportunities.” </li></ul><ul><li>Run toward what you most want. </li></ul><ul><li>Avoid running away from what you most fear. </li></ul><ul><li>You can’t control the market—you can control your outlook and your response. </li></ul>The Mental Shift
  25. 25. <ul><li>Get Right—Right into Action and Into the Right Action </li></ul><ul><li>Look at the Necessary Actions by Roles—Yours and Others </li></ul><ul><li>“ The seeds of failure are usually sown during times of success.” </li></ul>The Action Shift
  26. 26. Tactic #2: Re-Margin Your Business “ The most successful people are those who are good at plan B.” James Yourke University of Maryland
  27. 27. Re-Margin Your Business (continued) <ul><li>The number one determinant of “thriving” is lead generation. </li></ul><ul><li>The number one determinant of “surviving” is expense management. </li></ul><ul><li>When markets shift, the first change a business must make is “re-expense” itself. </li></ul>
  28. 28. Re-Margin Your Business (continued) <ul><li>“ We had to keep expenses to a minimum. That is where it started. Our money was made by controlling expenses.” </li></ul><ul><li>Sam Walton </li></ul><ul><li>This is true for all businesses. </li></ul>
  29. 29. Re-Margin Your Business (continued) <ul><li>Peter Drucker was famous for teaching these very straightforward points. </li></ul><ul><ul><li>You can’t build a business by cutting back. </li></ul></ul><ul><ul><li>But you can find your profit and save it. </li></ul></ul><ul><ul><li>Every business must make a profit. </li></ul></ul>
  30. 30. Re-Margin Your Business (continued) “ Name a business that has been ruined by downsizing. I can’t name one. Name a company that has been ruined by bloat. I can name dozens.” Charlie Munger Warren Buffet Speaks
  31. 31. Re-Margin Your Business (continued) <ul><li>In up markets we acquire habits and patterns of doing things that </li></ul><ul><ul><li>Don’t stop us in good times </li></ul></ul><ul><ul><li>But grind us to a halt in bad </li></ul></ul><ul><li>We do so much right that the market covers up the wrong. </li></ul>
  32. 32. Re-Margin Your Business (continued) <ul><li>Every dollar spent should return its original amount plus a reasonable profit. </li></ul><ul><li>Use the “cost plus” principle. </li></ul><ul><li>Lead with revenue. </li></ul>
  33. 33. <ul><li>There is no expense that is untouchable. </li></ul><ul><li>There is no cut too small. </li></ul><ul><li>You must reduce expenses to match your income plus an acceptable profit margin. </li></ul>Protect Your Margin
  34. 34. <ul><li>Your money was once smart. </li></ul><ul><li>When the market shifts your money instantly becomes dumb. </li></ul><ul><li>“ The first step to financial recovery is to stop doing the wrong things. It’s an old principle. You don’t have to make it back the way you lost it.” </li></ul><ul><li>Warren Buffett </li></ul>Get Your Money Smart Again
  35. 35. <ul><li>Don’t try to just spend your way out of a shift—results your way out. </li></ul><ul><li>The key to re-margining and changing your budget is changing the way you think. </li></ul><ul><li>To be an effective money manager you must be a “budget bully.” </li></ul>Get Your Money Smart Again (continued)
  36. 36. Tactic #3: Do More with Less <ul><li>Cutting expenses doesn’t necessarily mean slashing quality or delivering less. </li></ul><ul><li>When the market shifts, your organization must shift too. </li></ul>
  37. 37. Do More with Less (continued) <ul><li>This challenge can also be a gift. </li></ul><ul><li>It is the opportunity to evaluate, upgrade, and top grade your business. </li></ul><ul><li>It is the gift of the shift. </li></ul>
  38. 38. <ul><li>What are my business priorities? </li></ul><ul><li>When do they need to get done? </li></ul><ul><li>Who is the best person to do them? </li></ul><ul><li>How should they be done? </li></ul>Back To Basics
  39. 39. <ul><li>The Fundamental Six Priorities </li></ul><ul><li>Lead Generate, Capture, and Convert to Appointments </li></ul><ul><li>Present to Buyers and Sellers and Get Agreements </li></ul><ul><li>Show Buyers and Market Sellers </li></ul><ul><li>Write and Negotiate Contracts </li></ul><ul><li>Coordinate the Sale to Closing </li></ul><ul><li>Manage the Money </li></ul>Back To Basics (continued)
  40. 40. <ul><li>People begins with you. </li></ul><ul><li>Are you doing what you get paid most to do? </li></ul><ul><li>The role you play in your business is critical. </li></ul>People
  41. 41. <ul><li>Two Types of People </li></ul><ul><ul><li>1. Those directly employed by you </li></ul></ul><ul><ul><li>2. Those indirectly employed by you </li></ul></ul><ul><li>One Critical Issue with People </li></ul><ul><ul><li>You either have the right ones or the wrong ones. </li></ul></ul><ul><li>Do the Math: </li></ul><ul><ul><li>What you can afford </li></ul></ul><ul><ul><li>Who you can’t afford to lose </li></ul></ul>People (continued)
  42. 42. <ul><li>Sit Down with Your People—Share Your Vision </li></ul><ul><li>Visit with Each Person—Are They with You Willing to Do Whatever it Takes? </li></ul><ul><li>Realign Job Descriptions—Six Core Competencies; Build Task Descriptions </li></ul><ul><li>Set Easy to Measure Goals, Standards, and Activities for each Person— Expect Action or Resignations </li></ul>Seven Steps to Talent Shift
  43. 43. <ul><li>Establish Training Schedule—What to Do, How to Do It, and What is Expected </li></ul><ul><li>Meet Weekly with Each Individual—Evaluate Success and Agree on Corrective Action </li></ul><ul><ul><li>Inspect What You Expect </li></ul></ul><ul><li>Celebrate the Small Victories as Well as the Big Ones—Individual and Team’s </li></ul>Seven Steps to Talent Shift (continued)
  44. 44. <ul><li>If you must fire people, follow a process. </li></ul><ul><li>The respect you show those who are no longer with you, builds respect with those who are. </li></ul>People (continued)
  45. 45. <ul><li>When you need to hire, follow a process. </li></ul><ul><ul><li>References </li></ul></ul><ul><ul><li>Behavioral profile </li></ul></ul><ul><ul><li>In-depth interview </li></ul></ul><ul><ul><li>Test to prove their knowledge and skills </li></ul></ul>People (continued)
  46. 46. <ul><li>Having the right people applies to your vendors. </li></ul><ul><li>Get more and better support from your vendor team. </li></ul><ul><li>Think “preferred partner.” </li></ul>People (continued)
  47. 47. <ul><li>You top grade people and you upgrade systems. </li></ul><ul><li>Good times usually plant seeds of system inefficiencies. </li></ul><ul><li>You tend to add people rather than improve systems. </li></ul>Systems
  48. 48. <ul><li>Do More with Less </li></ul><ul><li>Make Things Simpler </li></ul><ul><li>Think Efficient  Effective </li></ul><ul><li>Be Lean and Mean </li></ul><ul><li>Remember, Complexity Kills </li></ul>Systems (continued)
  49. 49. Tactic #4: Find the Motivated <ul><li>Know the Numbers—Your Numbers and the Market Numbers </li></ul><ul><li>The Minute Key Signs Show Up </li></ul><ul><ul><li>1. Ramp up your lead generation. </li></ul></ul><ul><ul><li>2. Change your messaging. </li></ul></ul>
  50. 50. Find the Motivated (continued) <ul><li>As leads become fewer you must </li></ul><ul><ul><li>Attract more </li></ul></ul><ul><ul><li>Get to them first </li></ul></ul><ul><ul><li>Convert them faster </li></ul></ul><ul><li>Your messages must be appropriate to the conditions. </li></ul><ul><li>Make more direct offers that will attract responses. </li></ul>
  51. 51. Find the Motivated (continued) <ul><li>Do the sellers you are talking to really need to sell? </li></ul><ul><ul><li>Will they price their home to sell? </li></ul></ul><ul><ul><li>Will they get it in the proper condition? </li></ul></ul><ul><li>Do the buyers really need and want to buy? </li></ul><ul><ul><li>Are they going to listen to you? </li></ul></ul><ul><ul><li>Do they understand that there are good buys in every market? </li></ul></ul>
  52. 52. <ul><li>You can never be sure what it will take to find enough motivated clients to achieve your numbers. </li></ul><ul><li>Be willing to do whatever it takes. </li></ul><ul><li>The easy business will have disappeared. </li></ul><ul><li>Start with no spending. </li></ul><ul><li>Play “red light, green light.” </li></ul><ul><li>Hold lead generation expenses accountable. </li></ul>Own the Outcome
  53. 53. <ul><li>Lead generation does not have to cost you money. </li></ul><ul><li>Offer-response messaging will get the best results in the shortest time. </li></ul>Two Truths
  54. 54. <ul><li>Get Proactive with Direct Prospecting </li></ul><ul><ul><li>First to those you know </li></ul></ul><ul><ul><li>Second to those who have indicated a need </li></ul></ul><ul><ul><li>Third to those who have contacted you </li></ul></ul>Two Truths (continued)
  55. 55. <ul><li>Give this effort at least three hours a day!!! </li></ul>Two Truths (continued)
  56. 56. <ul><li>People respond if there is some direct benefit to them. </li></ul><ul><li>Give them a reason to call. </li></ul><ul><li>This is offer-response lead generation . </li></ul><ul><li>Make an offer—response can either be direct or indirect. </li></ul><ul><li>Make offers for immediate response—MOFIR. </li></ul><ul><li>It is a numbers game. </li></ul>Your Message Matters
  57. 57. <ul><li>Don’t cocoon. </li></ul><ul><li>Don’t stay in the office. </li></ul><ul><li>Get out of the house. </li></ul><ul><li>Take it to the streets. </li></ul><ul><li>Ask, seek, and knock. </li></ul>Get in the Path of Business
  58. 58. Tactic #5: Getting to the Table That Matters—Lead Capture and Conversion <ul><li>The bigger truth about lead generation is that it is actually “lead conversion.” </li></ul><ul><li>Leads are scarce—so conversion becomes critical. </li></ul><ul><li>It is a 3 step process: </li></ul><ul><li>Capture – Connect – Cultivate </li></ul>
  59. 59. <ul><ul><li>The Battle to Get to the Listing Table </li></ul></ul><ul><ul><li>The Battle at the Table to Get the Listing </li></ul></ul><ul><li>Lead conversion requires more than just winging it. </li></ul>The Two Battles
  60. 60. <ul><li>Your capture system will … </li></ul><ul><li>Insure that you get enough information from the lead that you can contact them. </li></ul>Capture
  61. 61. <ul><li>Your connection system will … </li></ul><ul><li>Generate a timely, scripted response, which will naturally lead to a conversation, which then allows you to assess their needs and establish a relationship. </li></ul>Connect
  62. 62. <ul><li>Your cultivation system will … </li></ul><ul><li>Record your follow-up contacts, assure the building of relationships, and keep you on the path to appointments. </li></ul>Cultivate
  63. 63. <ul><li>The three C’s of conversion—Capture, Connect and Cultivate—deploy both scripts and systems. </li></ul><ul><li>The only question will be which comes first. </li></ul>The Conversion Process
  64. 64. <ul><li>If people visit your websites and you never know who they are, what has it gained you? </li></ul><ul><li>Many agents get caught up in the internet excitement and don’t really think clearly about their strategy. </li></ul><ul><li>They become frustrated at what it is costing them and how little business they are converting from it. </li></ul>Tactic #6: Catch People in Your Web – Internet Lead Conversion
  65. 65. <ul><li>If they don’t leave any trail you can follow, they’re just a ship passing in the night. </li></ul><ul><li>Be sure your site has a way for the consumer to register and a reason to do so. </li></ul>Catch People in Your Web—Internet Lead Conversion (continued)
  66. 66. <ul><li>You have to give them a reason to register. </li></ul><ul><li>Your site must have “thin bait” that attracts people to your site and keeps them there for a while. </li></ul><ul><li>Then you must offer something more, the “fat bait , ” for them to want to register. </li></ul>Baiting the Hook
  67. 67. <ul><li>Once they have registered, fast response is critical. </li></ul><ul><li>You can use email and text messaging. </li></ul>Baiting the Hook
  68. 68. <ul><li>Today’s buyers begin their research early. </li></ul><ul><li>Your systems will need to be able to retain and grow these relationships with a sustained effort. </li></ul><ul><li>But, don’t assume that it will always take a long time or many contacts. </li></ul><ul><li>Check their pulse and get them started on the active search process. </li></ul>Long Term Cultivation
  69. 69. <ul><li>Truths: </li></ul><ul><li>The cost-per-lead converted is not very different from most of the fundamental lead generation approaches. </li></ul><ul><li>Internet lead generation does not cost less. </li></ul><ul><li>Technology and the internet are no longer a choice. </li></ul><ul><li>Their relative importance, position, and cost in your lead generation program is a choice. </li></ul>Return on Your Lead Generation Investment
  70. 70. Tactic #7: Price Ahead of the Market <ul><li>Pricing effectively can amount to 80% of your successful marketing of listings. </li></ul><ul><li>Until you get it right, you won’t have showings or offers, and little else you do can change that. </li></ul>
  71. 71. <ul><li>Whether the market is going up or down, price your listings ahead of the market. </li></ul><ul><li>Ahead of it on the way up and ahead of it on the way down. </li></ul>Don’t Chase the Market, Let the Market Chase You
  72. 72. AVERAGE HOME PRICE TIME ON MARKET Price Correction Price Correction
  73. 73. <ul><li>Sellers and buyers can be out of sync with the realities of the market. </li></ul><ul><li>Sellers tend to trail market reality by six to eight months. </li></ul><ul><li>Buyers tend to project forward six to eight months. </li></ul><ul><li>“ People will become reasonable when they are faced with the numbers. They really will.” </li></ul><ul><li>Martin Bouma </li></ul><ul><li>Ann Arbor </li></ul>The Challenge
  74. 74. <ul><li>“ Our market is really a tale of two markets. 80% of the homes are overpriced and 20% are well-priced.  The well-priced properties are getting multiple offers. The overpriced properties are getting none.” </li></ul><ul><li> Brian Hickox </li></ul><ul><li> Wrentham, MA </li></ul>The Tale of Two Markets
  75. 75. The Tale of Two Markets In the Market Out of the Market Great Poor Condition vs. Comps Above Below Price vs. Comps
  76. 76. Sellers’ Market In the Market Out of the Market Above Below Price vs. Comps Great Poor Condition vs. Comps
  77. 77. Buyers’ Market Out of the Market In the Market Above Below Price vs. Comps Great Poor Condition vs. Comps
  78. 78. A Final Look
  79. 79. <ul><li>Be a student of your market—know your numbers. </li></ul><ul><li>In hard-shifting markets, focus your comps on actives—pendings and solds may already be out of date. </li></ul><ul><li>Preview properties—understand what’s behind the numbers. </li></ul><ul><li>Keep your presentations as current as possible—let your ongoing research speak for you. </li></ul>Seven Maxims for Pricing in a Shifted Market
  80. 80. <ul><li>Prequalify for motivation—sellers who most need to sell, sell most often. </li></ul><ul><li>Secure price reductions in advance—avoiding falling behind the market. </li></ul><ul><li>And always price ahead of the market! </li></ul>Seven Maxims for Pricing in a Shifted Market
  81. 81. <ul><li>Proper staging is one of the best ways to entice buyers to take a look and make a property stand out. </li></ul><ul><li>Preparing a house to put it on the market—directly impacts whether or not a home will sell, how quickly it will sell and for how much. </li></ul>Tactic #8: Stand Out From the Competition
  82. 82. <ul><li>A review of over 2,800 properties in eight cities found that </li></ul><ul><li>“ Staged homes, on average, sold in half the time that non-staged homes did. The sellers with staged homes ended up with 6.3% more than their asking price, on average.” </li></ul>Stand Out From the Competition (continued)
  83. 83. <ul><li>Remind sellers that </li></ul><ul><li>Buyers are looking for value. </li></ul><ul><li>You won’t get a second chance to make a first impression. </li></ul><ul><li>You’re in competition with all of the homes in the vicinity. </li></ul>Stand Out From the Competition (continued)
  84. 84. Promotional Flyers & Cards Internet Listing Page Curb Appeal Entryway Kitchen Master Bedroom & Bath Living Areas Other Bedrooms Backyard 1 2 3 4 5 6 7 The Buyer Experience Determines Staging Priorities
  85. 85. Buyer Experience Determines Staging Priorities <ul><li>“ Pricing and staging are the issues of the day. It’s like a price war and a beauty pageant.” </li></ul><ul><li>Terry Moeller Westlake Village, CA </li></ul>
  86. 86. Tactic #9: Creating Buyer Urgency—It is Called a Buyers’ Market <ul><li>The biggest challenge you have in a buyers’ market is getting buyers to buy. </li></ul><ul><ul><li>They are fearful, reluctant and are sure it’s going to go lower. </li></ul></ul><ul><li>The first work you will do is on our own thinking. </li></ul><ul><li>All of this has happened before and it has been even worse. </li></ul><ul><li>Every market has its good buys—even great buys. </li></ul>
  87. 87. <ul><li>Once you are clear in your own thinking, you can begin to have a positive impact on others—buyers and your local community. </li></ul><ul><li>Overcome the media enhanced real estate malaise. </li></ul><ul><li>Be the one with the facts. </li></ul><ul><li>Focus your lead generation on finding and attracting motivated buyers. </li></ul>Be The Local Economist of Choice
  88. 88. <ul><li>A list you have compiled of the current best buys in the market. </li></ul><ul><li>Based on your consistent tracking of new listings, price reductions, and pre-foreclosure or foreclosed properties. </li></ul>The Best Buy List
  89. 89. <ul><li>You can’t create urgency if there isn’t a good reason for it. </li></ul><ul><li>Buyers can see through false optimism and manipulative selling. </li></ul><ul><li>You must find real, honest, and compelling ways to help them feel the truth. </li></ul><ul><li>If they wait, they are going to miss their best opportunity. </li></ul>The Best Buy List (continued)
  90. 90. <ul><li>You are being the highest level of fiduciary when you don’t let them cave-in to their doubts and fears. </li></ul><ul><li>They will thank you for having helped them make a smart decision. </li></ul>Overcoming Doubt and Fear
  91. 91. <ul><li>When the market turns back toward a sellers’ market, all the best buys and even the good buys will be gone. </li></ul><ul><li>Building buyer urgency is a matter of </li></ul><ul><ul><li>Knowledge of the market, </li></ul></ul><ul><ul><li>Skill at communicating the realities, and </li></ul></ul><ul><ul><li>Assertiveness in challenging their thinking. </li></ul></ul>Overcoming Doubt and Fear (continued)
  92. 92. Tactic #10: Expand the Options <ul><li>In a shifted market you will need all the legal, proven financing solutions at your disposal to get your transactions closed. </li></ul><ul><li>Look at alternative financing and expand the options. </li></ul>
  93. 93. <ul><li>Creative Things Sellers Can Do to Sell Their House </li></ul><ul><li>Creative Things Buyers Can Do to Buy a Home </li></ul><ul><li>Creative Things Lenders Can Do to Finance a Transaction </li></ul>Three Areas of Creative Financing
  94. 94. <ul><li>“ Sellers need to remember that buyers have to overcome three essential barriers to buy a house: they have to have the income, the assets, and the credit to qualify for a mortgage in a lending environment with increased standards and scrutiny. Sellers can assist will all three.” </li></ul><ul><li> David Reed Author </li></ul>Three Areas of Creative Financing
  95. 95. <ul><li>Seller Contributions Or Concessions </li></ul><ul><li>Seller Buy Downs </li></ul><ul><li>Owner Financing </li></ul>What Sellers Can Do
  96. 96. <ul><li>Family Members </li></ul><ul><li>Options Lenders </li></ul><ul><li>IRA and 401K Funds </li></ul><ul><li>Co-borrowing </li></ul>Creative Things Buyers Can Do to Buy a Home
  97. 97. <ul><li>Government Funded or Bonded Programs </li></ul><ul><li>Municipal or Regional Grants </li></ul><ul><li>Resubmit loan applications through automated programs until they figure out just what a buyer needs to do in order to qualify for a loan. </li></ul>Creative Things Lenders Can Do to Finance a Transaction
  98. 98. <ul><li>Sales agents only need to have a firm understanding of the playing field, the players, and the options. </li></ul><ul><li>Build a team of financing experts and sources. </li></ul><ul><li>Have them keep you informed and up to date. </li></ul><ul><li>Position them to serve your clients. </li></ul>Your Financing Team
  99. 99. Tactic #11: Master the Market of the Moment <ul><li>Short sales, foreclosures, and REOs quickly become the market of the moment. </li></ul><ul><li>Dealing with homes in default is hard work and requires organization and persistence. </li></ul>
  100. 100. The Three Stages of the Market of the Moment <ul><li>Stage One: Default </li></ul><ul><li>Stage Two: Foreclosure </li></ul><ul><li>Stage Three: REO </li></ul>
  101. 101. The Three Stages of the Market of the Moment (continued) <ul><li>Stage One: Default </li></ul><ul><li>An insolvent homeowner in default seeks relief from the lender. </li></ul><ul><li>Options: </li></ul><ul><ul><li>Lender temporarily suspends or reduces payments (forbearance) </li></ul></ul><ul><ul><li>Lender agrees to modify the loan </li></ul></ul><ul><ul><li>Lender agrees to a short sale </li></ul></ul>
  102. 102. The Three Stages of the Market of the Moment (continued) <ul><li>Stage Two: Foreclosure </li></ul><ul><li>Homeowner is unable to cure loan and home is foreclosed. </li></ul><ul><li>Options: </li></ul><ul><ul><li>Homeowner repurchases home at auction or during redemption period </li></ul></ul><ul><ul><li>Investor purchases home </li></ul></ul>
  103. 103. The Three Stages of the Market of the Moment (continued) <ul><li>Stage Three: REO </li></ul><ul><li>Home goes unsold at auction and becomes “real estate owned” on the lenders books (a liability). </li></ul><ul><li>Options: </li></ul><ul><ul><li>Agent works with lender to market REOs for resale </li></ul></ul><ul><ul><li>Agent works with REO agent to handle their buyers </li></ul></ul>
  104. 104. <ul><li>The Two Opportunities of REOs </li></ul><ul><li>REO Seller Representative—listing agents who market their services to financial institutions </li></ul><ul><li>REO Buyer Representative—buyer agents who market their services to REO seller representatives </li></ul>Master the Market of the Moment (continued)
  105. 105. Master the Market of the Moment (continued) <ul><li>Karen and Ralph Chiodo networked their way into the REO business. </li></ul><ul><li>“ This business runs on reputation and relationships. We keep our name out there and grow our network of productive relationships at conferences.” </li></ul>
  106. 106. Tactic #12: Bulletproof The Transaction <ul><li>Forewarned is forearmed. </li></ul><ul><li>You must get the transaction to and through closing. </li></ul><ul><li>Do that as a fiduciary service to their clients. </li></ul><ul><li>Do that in order to get paid. </li></ul>
  107. 107. Bulletproof The Transaction (continued) <ul><li>You will have to deal with “buyer remorse,” “seller anger,” loan processing delays, tight appraisals, tough inspections and anxiety all around you. </li></ul><ul><li>You must be the calmest person in the transaction. </li></ul>
  108. 108. <ul><li>Remind people about the consequences of their decisions and actions. </li></ul><ul><li>In times of fear, doubt or emotional reaction, bring them back to serenity and reason. </li></ul>Outcome Framing
  109. 109. <ul><li>Nail down the decision. </li></ul><ul><li>Make a list of all the ways in which this new home meets their needs. </li></ul><ul><li>Write down all the work they have done in finding this “best possible home.” </li></ul><ul><li>Have them date and sign this paper with the lists on it, and you sign it with them. </li></ul><ul><li>Congratulate them on their diligence and success. </li></ul>Deal with Buyer’s Remorse
  110. 110. <ul><li>S election </li></ul><ul><li>S upervision </li></ul><ul><li>S ystems </li></ul>The Three S ’s of Bulletproofing
  111. 111. <ul><li>S election </li></ul><ul><li>Do everything possible to select the service providers and have confidence that they are reliable, stable and acting on behalf of you and your clients. </li></ul>The Three S ’s of Bulletproofing
  112. 112. <ul><li>Supervision </li></ul><ul><li>Check on progress. Be ready to handle mistakes and delays before they become serious. </li></ul>The Three S ’s of Bulletproofing
  113. 113. <ul><li>S ystems </li></ul><ul><li>You must have systems in place to </li></ul><ul><li>Track the closing process. </li></ul><ul><li>Alert you at critical checkpoints. </li></ul><ul><li>Communicate the progress to your clients. </li></ul>The Three S ’s of Bulletproofing
  114. 114. <ul><li>You also want to have a say in the selection of inspectors, landscapers, repair people, insurance agents and other service providers. </li></ul><ul><li>Not only is your advice desired and expected by both buyers and sellers, but it insures that things will go as smoothly as possible. </li></ul>The Three S ’s of Bulletproofing
  115. 115. <ul><li>You can have a direct impact on the outcome of the inspection. </li></ul><ul><li>Your impact on the appraisal is much more indirect. </li></ul>Inspections and Appraisals
  116. 116. <ul><li>Be assertive in protecting your client’s welfare and your transactions. </li></ul><ul><li>Catch things early, before </li></ul><ul><ul><li>the problems happen </li></ul></ul><ul><ul><li>they put the closing at risk </li></ul></ul><ul><li>This will serve you in every market. </li></ul>Play Defense
  117. 117. Putting It All Together <ul><li>Down shifts are more difficult on the front-end. </li></ul><ul><li>Up-shifts become more difficult on the back end. </li></ul><ul><li>The drop off is steep in the buyer market. </li></ul><ul><li>The build-up is slower and more sustained in the seller market. </li></ul><ul><li>A buyers’ market requires us to be doing the things we should have been doing all the time. </li></ul>
  118. 118. Thanks for Being Here! Don’t Forget to Complete Your Evaluation of Mega Agent Camp!

×