TIPS FOR NEW AGENTS AND WHAT TO DO NEXT
A monumental key to success in almost any profession is communication. One aspect of communication is gaining knowledge and sharing knowledge. That sounds simple. But it is far from simple since there is a multitude of components and nuances lying within the communication. For example, using the art of communication to make you stand out from the crowd and be heard for some can be a monumental effort, others not so much. It is put to its ultimate test as it becomes essential for brand recognition, and the brand is you. (we will go back and continue the communication discussion further in this guide)
You passed your real estate test and joined the NAR. After dropping around $2000, give or take, on real estate school and joining up with the NAR. You get a fancy-looking certificate with a seal and a pretty little pin square pin with NAR printed on it in raised letters. You have earned the skull and crossbones of the real estate world. It is your membership to an exclusive club where nobody tells all. Nothing short of extortion, fraud, late dues, or an egregious ethics violation will stop you from wearing it.
Yesterday you were nobody. Today it’s a whole different story. They say realtors can make a lot of money. Stories, books, and reality shows abound about those who have made millions buying and selling real estate. If you are focused and ambitious enough there’s no reason why you can’t be one of them. The key to becoming successful is putting all of the components together like some giant puzzle. Education, appearance, the way you speak, and your overall demeanor are some of the more integral parts. We will address these things and others in more depth as we move through this tutorial.
WHAT ARE YOUR IMMEDIATE NEEDS TO GET STARTED? Most brokerages have printers, computers, and desks you can use. When you start working at home you’re going to need a decent laptop and a multitask printer.
Before you spend a dime on anything your first purchase should be business cards. Purchase the best cards you can afford. They are an important part of your branding and you don’t want to pull any punches when you go to purchase them. Buy heavy stock cards, gloss or matte, whatever your style. There are metallic cards available as well, but they are expensive so I would hold off on them until you rack up a couple of sales.
Bigger is better and I recommend buying 3.5 x 3.5 cards instead of the standard 3.5 x 2.5 business cards. Although they might not fit in the average wallet, they will fit in the inside pocket of a suit jacket or a woman’s purse. Making them bigger may stop someone from tossing them into the first wastebasket they come across or lying them down and forgetting about them. Make them nice and colorful with tasteful graphics and customers may hold onto them for a while. When you can afford to do it, it’s good to hand out personalized calendars and pens. Buy little gold or silver sticky notes with your information on them and stick them everywhere that it’s legal. Put them in places like elevators, escalators, office doors, and on any open bulletin board, you find in supermarkets and other types of stores. Paste them on any flat wall you can find where there’s foot traffic. I notice them so others must too. Maybe someone will notice yours.
Because you are new at this and haven’t found an area to specialize in, which will take some time, say something about your integrity or a promise to get back to someone immediately should you miss a call. In the beginning brand yourself off as always being there when you’re needed; Just a phone call away. Make others they are in control and you are at their beck and call.
Remember, all the steps that are illustrated in this tutorial are part of an overall strategy to brand yourself. Branding is key for standing out and getting ahead of other realtors vying for the same leads and connections that you are. Just follow the steps and don’t cut corners. When some of the steps seem like a ridiculous exercise try and remember if nothing comes of it that’s okay. Taking the proper steps is like taking courses in accounting and calculus. You probably will never use them, and soon after the course is over you’ll forget the material. It doesn’t matter. What matters is how learning expands and formats the mind. Education opens the door to critical thinking, giving one the ability to reason on a higher level.
YOU COULD GET LUCKY At the beginning of your real estate career when you’re still green and a client falls in your lap, or someone hands you a lead that you were able to convert, at least know or find out at a minimum, the comps for houses sold right in the same area that holds the property of interest. Quickly learn how much the yearly taxes are, the date when the home was built, the last time it was sold, and how much it sold for previously. Most of this information you can grab on your laptop or phone while the buyers are busy checking out the home. Use all resources at your disposal at the time and when you get back to the office do more. Learn as many aspects of the house as you can. You never know when a client is going to make an offer, so you need to be prepared.
If the client is at all interested they’re going to start asking questions; they’re going to want to know all about the house that you showed them. If you made a good first impression chances are you will be getting contacted with lots of questions.
Be prepared to answer questions, because if you made any type of positive impression on the clients you spoke with at the open house, they will be calling you a few hours later, armed with questions. Questions like, is the neighborhood safe enough to let my kids play outside without worry? Can I leave my garage door open? Where are the tennis, basketball, and baseball courts? There will be more calls about the area. Things like where are the closest Whole Foods, Trader Joe’s, Garden Centers, Doctors, Hospitals, Parks, Community Centers, Churches, Synagogues, Gyms... It won’t stop. They’ll ask you about the traffic, where the nearest highways are, whether there’s an HOA in the development and if so how much are the dues.
The questions will keep coming. If you don’t know just say you don’t know. After the open house contacts the buyers to clarify as many of their answers as well as you can, as soon as you can. Gather all the relevant information to be found on the listing and go over to your contacts. You’re a newbie, and this is the time for learning. Learn about the inside, outside surroundings, and neighborhood of the home. If it has a history, know about it, and talk about it. If it’s a nice house in a good neighborhood think about doing an open house again before it sells. Grab as many names and emails as you can from buyers. If you find yourself with 15 or twenty points of contact that’s your jumpstart for the following week.
There are several resources available for finding information, like the Bureau of Land Management, the General Land Office, The County Recorder, the Local Assessor’s Office, Sticker Search, Census Records, the Library, and The MLS.
Make sure to bring your laptop so you can pull up Google Maps and show an aerial or street view of the house and the rest of the area. It makes a difference when arospective buyers can see what is around them in real time.
Now that you have your basic tools in place the next thing on your agenda will be finding leads. Here is a short definition of leads: (Real estate lead generation is a marketing and advertising process that stimulates interest in either a house for sale or a realtor to work with. This interest should, over time, form a pipeline of leads for you. Part of your goal should be constantly building your sales pitch and knowledge while filling up the pipeline to turn leads into clients by closing deals on behalf of the seller and buyer.
Before you grow your business your initial leads will most likely come from referrals, relatives, friends, old bosses, ex-wives flames, and long-lost acquaintances. Get that word of mouth going. As you grow your resource for leads will grow, but it takes time. It’s always good to have lots of friends and family when you start your career in real estate.
Most brokerages preach finding leads from the get-go. Your new mantra will be leads, leads, leads, so you might as well chant it, sing and dance around with it because finding leads will be the centerpiece of your occupation for some time to come. Welcome to the beginning of your real estate career.
Try to stay level-headed and calm in all of your business and personal endeavors. If you’re going to stress then find a way of turning that stress into energy. Take a deep breath and focus on finding leads because they are the lifeblood of your business. It can be frustrating at the beginning, but be patient. If you do the right things, good things will follow.
Unless you’ve spent your life in sales you most likely aren’t used to the sales term, LEADS, but don’t worry, that’s a word that will start burning in your head rather quickly. In the beginning, you’ll find yourself searching for things that seem elusive, dim, and unattainable. It can make you feel like an idiot panning for nuggets after the gold rush has gone.
Try not to let stress consume you, just remember there are several ways to get leads. It all boils down to a numbers game, and the numbers will fall in your favor as long as you are willing to work hard and put the time in.
Some ways are old school, others more technologically sophisticated. In the beginning, I would develop a marketing mix that covers all bases so that down the road you're not thinking what if I tried this or what if I tried that. Remember the term (MARKETING MIX.) It comprises the heart of your lead generation strategy. Marketing Mix simply means you are using all sorts of marketing, strategies, and tactics in your efforts to accomplish your mission of generating leads.
Let’s talk about one of the first things that were probably driven into your head while going through real estate school and sitting through seminars at the brokerage you chose.
Sphere of Influence. Oh, that magical Sphere of Influence. What is it? It consists of all the people you have come in contact with through your life who you still believe are breathing and sustaining a pulse on their own or are on life-support. It doesn't matter, as long as they are above ground. Those are the ones you want to talk to first. You think about aunts, uncles, and cousins, along with old flames and affiliations. Your coach or instructor, whatever you call them, will most likely have you start with the contacts on your phone.
The first step is to strip all the unused contacts. It doesn’t sound hard until you do it. When I stripped my phone of contacts I didn’t realize there were a couple of thousand names I put in my contacts. If 25% of those contacts were still live that would an overstatement. There were all these crazy names I invented, like Johnnie the Roofer, The Best Pool Cleaner, Master Plumber, Bicycle Sally, Used Tire Hank, Electric Joe, Computer Dan, and the list went on. For kicks, I called some of those numbers and most of them were disconnected. Hey, that’s Vegas.
There were so many people I didn’t remember at all or hadn’t spoken to for years it made the exercise seem like a waste of time. Remember that it’s not because you are formatting your mind.
Many of my family and friends had spread out and were now living in different cities and states than they lived in when I was still near them. When I started calling them I began finding out some have been in the same home for a minimum of 4 to 5 decades, others were renters, and a few were buying a different house along a cycle of every 8 to 10 years which is average. The problem with averages is they often reveal themselves over long periods. Regardless, the logistics and time frames shouldn’t matter or impede your efforts while working in the sphere of influence.
Approach the sphere of influence like a shot in the dark. If it works it works. If not you have nothing to lose but your sanity. It really is a shot in the dark because you have no way to know how to separate those who are sitting tight in the same house for maybe ever, from those who are in flux. All people are different. Some think of their home as a holy pyramid and wish to be buried there along with their wives, children, and favorite dog. Others see it as a whistle-stop or just another commodity. You won’t know until you call them up. Like me, you’ll be wondering why should I take the time to call these people. When I got over thinking it was nothing but a waste of time I had a paradigm shift and reached the conclusion that at the core of those hundreds of names lies a mystery. It’s like throwing a fishing line into a dark pool of water, sooner or later something is going to come up. It might be a spare tire or a license plate, but you never know when you’ll strike that legendary big fish in the lake.
Look at it this way, what better time to get in touch with those you haven’t spoken to within 15 to 20 years? Don’t you want to know what they are doing now? Maybe not. Look at it another way. If it all fails at least you took the opportunity to shorten the contact list on your phone, and if you have a massive contact list like I did chances are more than half of those numbers have changed or have been disconnected. It’s a good idea to get rid of clutter for the sake of organization. You may also find that your phone is moving faster.
There’s no guarantee that your efforts in any exercise will be rewarded or turn into a big waste of time, but there’s no harm in trying. If anything it will get your game up for doing cold calls and other types of solicitations where there’s no prior knowledge of the customer or client.
On the sunny side, it might yield you something. It did for me. A few months after calling everyone on the list, I was able to get a couple of deals closed from working the sphere. It was one of the great surprises of my early real estate career and kept me in the game working at real estate full time. What I learned from that experience was worth much more than the commissions I garnered. It helped center the mind and taught an impulsive guy like myself that in real estate, like most sales endeavors, you have to go about gathering leads and making connections one step at a time.
Although there is no hard fast rule on what steps to take to garner leads, I took the next step and began with old-school lead-generation methods. This was back before the advent of social media, and the Internet was just starting to make its debut in the business world. There weren’t that many people who knew how to make money on the Internet market yet, and one of them was me. Here are some of the main staples for old-school marketing or for what they have recoined gorilla marketing.
Door Knocking (Or my next step into the misery of mining leads) Before 9/11 you could still get away with knocking on people’s doors to try and sell them something. It certainly wasn’t the best approach but if you are willing to put in the time it could pay off. In today’s world, people, especially those who live in metropolitan cities have cameras all over their houses and they start getting nervous when they see someone they don’t know come knocking at the door. They’re figuring it has to be a murderer or a Jehovah’s Witness.
You can still go into a decent neighborhood and do it. Even if you don’t manage to make a sale you can gather important information, like what does the place look and smell like when the sun goes down? Go walk the neighborhood and talk to people. Tell them who you are. You’re that realtor guy selling the house on the next could-sac Ask the little kids on bikes and scooters if cars come ripping around the corner looking for trophies.
People who like to talk may tell you things like a neighbor is thinking of moving, or someone is getting divorced and they’re selling the house. Or, that house across the street is going into foreclosure. If you ever do door-knocking take notes because you’ll probably forget most of what people said. When door knocking stays aware and keep your eyes open for loaded weapons and attack dogs.
Cold Calling ( Or tell whoever it is that I’m in the shower and to call back later.) For me, it’s one of the hardest, most humiliating miserable ways to search for leads. But, some people are very good at it and have no problem sitting at a desk with a phone and headset calling strangers for ten hours. Many recipients can be hostile and don’t want to hear from you ever again. They threaten you with everything, from lawsuits to calling the Realtors Board and filing an ethics complaint. (they may have a case if you didn’t check the no-call list.)
The best way to look at is another right of passage and again, a good way to format the mind toward selling. Don’t discount it when you’re first starting. Be persistent. As I said, it's a numbers game, and if you keep at it sooner or later you’re going to bust through to someone who needs to sell their home and is open to your pitch.
The success ratio for cold calling is around 2%. Put one or two days aside and plan on calling around 200 people. At a 2% success rate, you could conceivably find 4 people who show interest in doing business. If one of those 4 people lands you one deal your time was well spent.
Let’s say you grab a listing for $400,000 and you get 3% from the sales commission after the sale. That’s $12,000. Not bad for working the phones for a day or two. Only a select group of people working 9 to 5 jobs can come close to making that amount of money in a couple of days. It certainly won’t happen every day, but if you keep at it eventually you’ll score.
Direct Mail Out of all of the old school bag of tricks direct mail is one of the least stressful options. The problem when first starting out is cost. The postal service becomes your partner. The good news is some direct mail campaigns are cheaper than others. Here are the three best direct mailing strategies that I found.
The Handwritten Letter Handwritten letters were once passe but now they’re back in vogue. Some services offer handwritten letters that are produced on a high-tech machine. Pick whatever font you want, they’ll have it. If your cursive is up to snuff I would recommend doing them yourself or paying someone else to do it, because a handwritten letter that is not produced by a machine will always look more authentic. A handwritten letter is a powerful tool as readers find it more personal and engaging than a form letter. They give off that warm and fuzzy feeling and are often responded to differently than a computer-generated flier that looks like everyone else's computer-generated flier.
Postcards These are cheaper to mail in bulk than letters and brochures, and you don’t have to spend much time with them. No envelopes, no folding. Find a company that prints them cheaply and sends them to a particular zip code or area of town where you are farming. If you want to save money you can send them yourself. Most title companies give out sheets of peel-off address stickers, according to zip code and area. You can find plenty of places to send them if you do a little research.
Food Sending out packages of food can be expensive. You will have to pick and choose what you are going to send to clients you have done business with. For example, a client that you have closed two or three deals with may deserve an Omaha Steak or turkey during the holidays. Most people love getting food. It’s a great way to show you are being thoughtful, and it’s something most clients won’t easily forget. For people who crave it, a good box of candy a Bundt Cake, or chocolate may go a long way in maintaining a business relationship. Keep in mind that receiving is food ultimately more gratifying than getting a calendar or a pen and pencil set.
The Open House Maybe I should have started with this one because when you begin at a brokerage as a new agent they’re going to pound the importance of doing an open house into your head like you were going on a quest to find the Holy Chalice or Philosopher’s Stone. At first, I was reluctant to do them until one of the managers in the office told me if I don’t do open houses you are dead. She meant it and I’ll never forget the way she said it in that deep Dracula Romanian accent of hers. “If you don’t do open houses then you are dead in this business. Dead, do you understand me?” I believe that was close enough to her exact words. Because of what she said and how emphatically she said it, I reluctantly but earnestly started doing open houses on Saturday and Sunday.
There was a girl who became disenchanted with real estate at the same brokerage where the Romanian woman warned me. She gifted me all of her open house signs. I had already purchased some and now I have over 20. Some agents say 6 open house signs are enough, but there is evidence to the contrary. 20 signs are good. If I had room for 30 signs I’d put up 30. A bulk of points of contact by using open houses will gain more exposure. The more signs the better. Spread them all over the neighborhood so e. Another of the more is the better theory is when people see them spread out all over a neighborhood they might very well be thinking, hey this must be a pretty well-known realtor with all so many open house signs. Other realtors might mark you down as being successful when they see an agent who’s going at it seriously with that amount of signs.
20 signs should be enough to cover most houses, even the ones that reside down twist and turns through a neighborhood riddled with streets that land at dead ends. The hard reality is you have to do them at the beginning of your career unless you have a lot of money for things like digital marketing on a big scale.
Pick a nice house in a good neighborhood and depending on the foot traffic keep the door open between 4 to 6 hours. Keep in mind the purpose of doing open houses is not only to sell the house. One of the main purposes of doing an open house is to gather leads and prospects because you will be speaking with buyers face-to-face. Always have a sign-in sheet, and use whatever means you have at your disposal to get a person's email address and phone number. Gathering information can be more important than selling the house you're doing the open house in.
The trick to an open house is finding the needs and criteria people are looking for. Make sure to write down everything, because you will forget. If you develop good skills in presenting you should yield a sale of one open house out of the 6 to 8 open houses that you show. That doesn’t mean that every 6 open houses you show will automatically offer you an opportunity to sell a house. It could take 12-16 open houses to make a sale. Again, the law of averages only reveals itself over the long term, so don’t set your sights high enough for disappointment when playing the numbers game. Just follow the rules and keep on grinding until you break through.
Expired Listings The nice thing about an open house is it can be obtained for free. You can also purchase them as well, but use a reliable source. There are a number of reasons that cause listings to expire. Many times it happens when the property is priced above market value. If the price isn’t corrected right away and the house stays on the market too long the listing becomes stale. Most realtors shy away from stale. (Too many questions arise about a house that has been on the market too long?) It could be several things. Someone had a job transfer fall through, a divorce, the house could have been rented out and the tenants left, and the owner who doesn't have the money to carry the loan on the property figures on selling it, but before that happens he gets lucky and new tenants show up. Or, the house could have been in disrepair, and the cost of fixing it up to reach market price lay way beyond the owners' means. Suddenly interest rates fell and the property owners were able to take out a second mortgage that fits their budget. There was enough to fix the house up and put it in a pool so they decided to stay. Neighbors got into a fight and have been feuding for years. One of the neighbors has had enough and put the house on the market. Before they get a sales sign on the lawn the other neighbor dies and his kids, who are easy to get along with move in, and the seller retracts the listing. It’s a red flag, too many questions to feed the client, who is nervous enough to make one of the largest purchases of his life. There are so many questions to answer, and so many rivers to be crossed until you get to that closing table, why would you want to clutter things up so badly that you have to make unnecessary overtures to the client?
We could sit here all day speculating. Let’s just say there are hundreds of reasons listing expires. You can find expired listings through the MLS, from other realtors, or on sites like Referral Exchange or Agent’s Referral Network. You can also find them on Public Search records in your county or just about any county in the country that isn’t living in the stone age. There are so many things that can happen to cause a listing to expire besides being overpriced. Maybe the Mentors can clue you in some more.
MENTORS
What I learned in real estate school were the basics. I didn't start my career in real estate until my late forties. I thought it would be easy, but I was wrong. Realizing how little I knew about my newly chosen profession was sorely humiliating, and it gave me pause. I seriously considered putting my tail between my legs and going back from whence I came from, the furniture business. But thinking about cutting and running was not in my nature. My pride wouldn’t allow it. It was time to get a handle on my career.
The answer to my particular dilemma was not that complicated. If I was going to succeed I would have to learn the business of real estate from the bottom up. Fortunately, there were some good things in my favor. I don’t know how it is now because I have been away from it, but when I began, most agents and brokers would happily share their knowledge with you.
Once I was inside a brokerage I began looking for a mentor. It was time to hit the ground running and seek out people who had become successful in selling real estate long before I came along, and make an all-out effort to learn from them. A seasoned agent with higher perspectives and takes on the real estate business are the ones you can learn from. Why not seek them out since the majority of them are willing to teach you?
A mentor can help you build up your network by helping you find new contacts, customers, and community support. They have the experience you don’t have and may help you sidestep mistakes that you would likely make trying to wing a deal on your own.
A good mentor can help guide you through tough situations that you might not have been able to handle without their help. They can teach you how to handle yourself in multiple types of situations. They can provide you with a sense of real estate beyond your local brokerage mindset, rising your sensibility and imagination towards a larger and more global scale. A good mentor can help you understand and imagine things that you might never be able to imagine on your own. A good mentor will support you, coach you, and tell you when you’re going astray.
The real estate industry by its nature has mentorship built into the culture. If you are working at a well-known brokerage with top sellers who are busy seeing clients and working the phones through the day, your might find that they will also take the time to help educate you. Take advantage of it and find the right people who severalet pleasure in teaching you how to become successful.
There are times in our lives when we all need someone watching our backs. Finding mentors and making friends within your brokerage will make you want to get out of bed and go to work. It’s rare to find a business that will put you into that type of mindset. Learn how to live to work, not how to work to live. Life is way too short to spend it punching in and out of the clock after the whistle blows.
THE FSBOS Going after FSBOs can feel like doing Door Knocking, Cold Calling, and Open Houses all at once, but it doesn’t have to be like that. In a seminar, I learned that 9 out of 10 homeowners who try to sell their homes on their own eventually turn to hire a realtor. There are several reasons for failure. Here are some of the things that eventually drive them to hire a realtor:
The inability to screen or qualify buyers
Not available for a showing
A tendency to hand over a buyer’s shoulder and pressure them
Failure to be able to negotiate things like price and contingencies
Unable to address problems found in a home inspection
Not enough market exposure
Misunderstanding of comps and pricing
(As I said, there are several reasons. This just gives us a general idea.)
TAKING A RUN AT THE FSBO MARKET
After running through the gauntlet of old-school lead generation methods for about a year, I was getting growing tired of grinding it out trying to keep my head above water, so I’ll jump ahead in the discussion for a moment. After hearing that statistic I thought the FSBO market might be a good niche that could provide me with a steady income. After a few successes turning a couple around I hooked up with a few agents who saw the FSBO market the same way I did. Yes, some agents and teams were going after them as a dog goes after a bone, but there wasn’t any particular individual or group that had yet to brand itself as an agency that primarily deals with FSBO. I didn’t see anyone completely focused on it. There was a lot of talk about it, but no one was stepping up at my brokerage and others brokerages that I was familiar with. There was no way to know if it was a good idea, the only thing one could do is try.
My instincts were telling me there was something there, a bridge that you could transport connections and leads across. It was a way to build toward something. We set up a small office in the back of the brokerage. If I remember they charged us $250.00 a month. The rental split between the four of us came to $62.50 a month.
Besides my real estate dues, my car, my house, and some other basic expenses, my business and lifestyle overhead was reasonably low which enabled me to go after the FSBO market full-time.
The personal computer was just starting to make its debut on the horizon, so to stay on the cutting edge we had one of those and one matrix dot printer. Landlines were much cheaper than using cell phones in the early to late nineties so we had landlines that the brokerage charged us for—just another little piece of overhead in the price of doing business.
We wrote up a contract between us to solidify things like what role each of us would play, the commission split, and how we would negotiate listing between us. We came up with what I thought was a fairly good plan and went to work.
There were days when my teammates and I sat on the phones for 10 to 12 hours straight, only stopping for a short lunch break. Depending on your personality phone work can be painful at the beginning as it was for me. But I forced myself until it became second-hand, and for some it became addictive. Once you get into a zone and find your rhythm it can come close to an art form.
Deals started coming, and like a pool full of sharks we began smelling blood in the water. Once you get a taste of that first bite all you want is more. We all got pumped up and focused, working long hours. We were turning into insomniacs getting 4 hours of sleep at the most. It was heavy lifting from the start but it paid off. We were building a business. It wasn’t long before we were so busy marketing, showing, and selling houses we couldn’t put in as much phone work. We laid off some of the sales calls to a telemarketing company owned by a guy I went to school with. I trusted him to do the right thing, and it turned out he did by digging up warm leads for us. I was never in the FSBO business, and neither were any of the people on the team, so we needed lots of practice. At night we would be in the back of a bar or over at someone’s house sitting in a circle writing and rehearsing the scripts we would use to hook the FSBO. We found some prewritten scripts as well and used them to practice. If a pitch seemed weak we made sure to improve on it. It became an all-out effort to come up with lines that would hold up to most rigorous objections and negativity, and to keep people from slamming their phones down.
To be honest, at the start I was still green and I don’t think any of us knew what the hell we were doing. We looked for help, but no one seemed to have any hard-fast answers. We winged our way through it as we started to build a client base. One team member found a study put out by a professor at UNLV that claimed only 5 percent of real estate practitioners work exclusively with FSBOs.
For once I was right and had found a niche. At that time and probably still, this is an overlooked market, I had found that spot from which you could launch a business, which gave me my first break on the road to success. My partners and I rode that FSBO market like we were in Buffalo Bill’s Circus until someone drew the curtain down in 2008. (it was a nice ride while it lasted.)
BRANDING
In this part of this tutorial, I would like to focus on what I believe is one of the most important aspects of what salespeople should do to remain on the radar of their clients, customers, coworkers, and peers. In any sales endeavor communication is key.
The brokerage I started in held free seminars during the week that covered every imaginable aspect of the business. The resources were there, all I had to do was decide to learn. So, I spoke to everyone that was approachable, and I attended those seminars like I was going to church. And suddenly a switch turned on. It was like a click - and just like that things started to become clear and I began to gain insight. I took that insight and began reading and writing just about every day. Before the end of my first year, I must have plowed through more than a hundred books. I’m still an avid reader and writer on the subject of real estate and other businesses.
The time came to write my bio and build a website. This, I assure you was no easy task. It was one of the hardest things I ever had to do, even with the gracious help of my lovely daughter who has a fantastic talent for setting up and manipulating graphics. So, with her help, I plowed through and got it completed. That task created a proper forum for me to blog from. The bio and the resume I wrote during the time I was writing the website content lent some insight. It helped me to better understand what I wanted and how I was going to get there. Far ahead in the distance, I began to envision a path to becoming an effective agent. Now it was time to refine my approach.
The trick is to look for all possible ways to get a conversation started. Get several conversations started. Any conversation will do. It could be one on one, Internet forums, Internet Seminars, questions and answers on a chat line, on your website or another person or company's website, or on blogs. You could write a blog, share a blog, or comment on someone’s blog. Always keep in mind the world of real estate, or any business where you are providing a product or service is never just one or two conversations.
You are looking for as many as you can get. The goal is to get a community established. The quickest path to creating a community is by placing a question-and-answer section on your website. If you’re not getting questions to answer throughout the day you are doing something wrong. To help build that community, put in a blog section. Blog as much as you can about what you know. Make it interesting. Make it fun. Share your articles on all the major social media platforms. It’s just a matter of clicking on the icon for Facebook, Twitter, and Instagram. If you continue to hammer at social media with meaningful content you will be successful. It’s all a matter of consistency. You may already be involved in your local community. If you are, be sure to share your interests and affiliations on your website. You never know what could spark a conversation or make a prospective buyer pick up the phone and call you.
If you’re not already participating in community activities get involved. Are you interested in local recreation and sports? Have you considered volunteering with Habitat for Humanity or your local Humane Society? Perhaps you’ve always wanted to join the church choir or become a mentor at the local Big Brothers or the Girl Scouts. It’s a good thing to be performing good deeds at the same time you’re spreading your name out to the community. Nothing better than a win, win situation.
Like most things worth undertaking, the beginnings are hard. What makes the beginning especially difficult with writing is the first thing you will need to do is write about yourself which for the majority is no easy measure. If you're an old hand at writing you already know what it takes, and you can skip this part of the guide. But let’s assume you are a beginner, which you probably are. There’s a high likelihood you’ll take some sharp cracks to your ego and pride going through these exercises.
No matter how humiliating and painful it may be, it’s a necessary effort, because writing about oneself is the most integral part of the beginning. This is where your branding begins. Try and keep this in mind: (You are the brand. It’s not the properties you are trying to sell, nor the brokerage that you will work for, it’s you.)
Most all successful sales transactions revolve around an open and honest relationship developed between you and your client, or a group of individuals trying to see a sale go through to closing. Knowledge and trust are the things that bind those relationships together. People are looking up to you for guidance. The last thing you want to do is let them down. If you lose the trust you lose to the client.
You should not begin your discourse with some corny unbalanced sales pitch. Leave that to the guys on the used parking lots, they’ve got it covered. If your goal is to make individuals become clients for life you have to dive in with a narrative that should already be in your blogs. When engaged face to face use proper body language that is not only peculiar to you but is also the driving force behind what you say and do.
You meet and shake hands. Before the dialogue even starts, remember, to act professionally. They called you because of what you supposedly know. Now it’s time to step up to the game and show them they called the right person.
Maybe it was the bad fiction I wrote when I was younger that inflated my writer’s ego because it was a rude awakening when I first began to blog. I knew very well that I wasn’t going to be the next Hemingway of the real estate world. My writing needed work. Beyond improving my basic skills, which can be done fairly quickly with practice, the biggest hurdle I was facing was not knowing nearly enough about the real estate industry.
For my words and thoughts to matter, I needed to start thinking and acting like a real estate agent. In most industries there lies an internal language, a lexicon, that you must learn to communicate with your superiors and peers. It may not matter to your average client, but overall using shop language when appropriate will help step up your game and help show some polish.
This is not a business for wallflowers, You have to stay noticed and remain relevant. You need to walk the walk and talk the talk. There is a long line of agents who pass through the profession and in a matter of months drop off the face of the earth unnoticed. This was not part of my master plan.
LEARNING HOW TO BE YOU My goal was to develop my tyle, one that fits my personality and the core of who I am. One step in achieving this goal was to master the gift of gab, which didn’t come easy, but by the time I got it. These skills lead you right back to branding, and I don’t think I could have been any clearer about how important branding can be.
(The gift of gab) according to the Cambridge Dictionary: the idiom UK informal (US the gift of gab) is the ability to speak easily and confidently in a way that makes people want to listen to you and believe you: She's got the gift of the gab - she should work in sales and marketing. Synonyms: eloquence, fluency, expressiveness, way with words.
These skills lend themselves back to branding, and I don’t think I could be any clearer on how important that is. Once you learn how to control a conversation (not manipulate one, but control it) your communications skills will rise and the interaction between you and those you come in contact with will change. You will no longer be the guy who doesn’t know where or how to position himself. Nor will you remain the self-conscience schmuck seen fiddling with his phone somewhere off in the background. You will be too busy controlling the room.
The gift of gab, for the lack of a better term, will not arrive overnight. For some, it comes quicker than others, but it takes time and practice to find that balance, that fine line between acting like somebody who is well-versed in his business or coming off like a know-it-all. No one likes a know-it.
During part of my development stage, I pretended to be learning how to play the starring role in a big motion picture. I read some books on method acting. I even took some acting courses on the side which helped.
One of the major components of success in any business is not only playing the part but making it your own. And you don’t wait until you believe you understand everything there is to know to make your first move toward the stage. If you’re unsure wing it. Wing it until you become sure of yourself, and along the way never let them see you sweat. The true art of any profession is never to allow anyone to see you as playing a role. Be the role, just playing it isn’t good enough. A great star never allows himself to get caught staring at the camera.
Every self-help book preaches the same idea in one form or another. What are the major goals you have to achieve to master success? Who do you want to be now and five years down the road? Can you envision it?
The upshot always comes down to believing in yourself and more importantly in your dream. If you believe in your dream with all of your body and soul, that something great will happen, then it will happen. Dreams are not fairy tales, they can become quite real. Dreams are meant to happen, but not for everyone. Only to those who chose to believe unequivocally.
Big dreams come to those chosen few who dare to grab them with the hands of fate. Always carry your faith and determination with you, and protect it as you would protect all important aspects of your being.
It took me much longer than I imagined to get close to becoming the upbeat dude I envisioned for myself to be. I was beating the bushes in real estate for a year before I grabbed onto the FSBO business. Then suddenly all things changed. The housing market took off like a rocket In Las Vegas and many other states around 2001. After passing those ultra-liberal lending laws in Washington I spoke about earlier, suddenly everyone who could show they had a beating pulse could qualify for a mortgage. A gardener making $35,000 a year could buy his dream house with the adjustable teaser rates they were serving to the public like pancakes. All you had to do was learn how to lift your hand and somebody would ask you to show them a house.
SPEAKING (I did not write this essay, it came from an anonymous source. There was no way to improve it but I did take the liberty of editing it slightly to fit the format of this tutorial. I hope you find it as useful as I did.) Everyone has a different voice. Some people may sound like you, but no one sounds exactly like you. To punctuate the point: Pick up a phone and call someone you know well but haven’t spoken to for years. They’ll know who you are before you can get past your name.
The sound of your voice and how you use it is one of the most unique things about you. Some people can blurt things out without an audition while others can’t. If you are not a good speaker it wouldn’t be a bad idea to put some effort into improving your speech by taking classes in public speaking. Hire a coach or tutor. Practice in front of the mirror. Do whatever it takes to find your voice
Speaking is an art, from public speaking up to acting, I would take the time to sit down and listen to some great public speakers. Listen to some great actors and listen to how they weave their words together while using their body language to make a scene convincing. There are more than enough on YouTube. and the movies.
You want to be paying attention and targeting certain main components when listening to professional speakers. Pay attention to phrasing, and listen to the way they weave their words together, their timing, and their cadence. Pay attention to the volume, strength, and tone of voice. Are people engaged with the speaker, or do they have their cell phones out?
Try to determine if people take notice and listen to what you have to say or begin to ignore you or chose to listen to what you have to say. Take notice of how you engage people about you. Are you unique and drawing the attention of Your Audience
There are several things you can try to draw other people's attention to you Speak Confidently The goal here is the audience should not feel that you are incompetent on the topic you are speaking about. Maintain an even rate while speaking Maintaining an equivalent rate of speaking will show your merit over the matter. Make the information digestible for the audience. The speech should neither be too hard nor too primary for the general audience to understand. Speak with proper enunciation and pronunciation Proper enunciation and pronunciation will bring lucidity to your speech, and it will be more reachable to other people. Last and most prominent, Customize the speech according to the audience. The audience is both the judge and the jury; if they like you, they will stay with you for the whole speech. So, to achieve that, try to customize the speech according to the audience.
Paint a Picture. Think that you are Bob Ross (A person who paints the way he uses to talk about his paintings, immerse the audience into his paintings. To give a similar impression on your speech, try to follow these methods: Use Iconic imagery Using images relative to the topic can bring a lot of good towards painting the picture of your speech over the minds of your audience.
Comprehensible Diagrams. The use of good and comprehensive diagrams can create patterns in the brains of the people which will help the audience to understand the speech well. It will also make your speech more interesting. Creative Slides A good presentation along the speech will keep the audience engaged and attentive towards the topic.
Make your unique quirk stand out. If you have any ability that you find unique, try to show it to your audience. This will increase their curiosity among them and, they will try to connect to you.
Use Humor. Humor is a delicate skill and a double-edged sword. With just a delicate stream-lined mistake you can destroy your speech. So, learning what to use as humor should be paid attention to. Laugh at yourself. You can learn to laugh at yourself, you will never be short of humorous material. 1. Self-deprecating humor lowers the walls between yourself and others and can be disarming. Tell funny, self-deprecating stories about yourself.
DRESS
The first impression you make is the most important. No matter how one comes off down the line it’s nearly impossible to wash it away, as it will stay in a person's mind forever and you will always be judged by it. All those cliches like ‘Clothes Make the Man’ and ‘Dress for Success’ are true. The way you look, act, stand, and posture yourself sends off a rippling tone that transmits subtle messages as to who you are and where you stand in life and the midst of a transaction. Your goal is not to dominate a client, but you should always be seeking higher ground withto maintain and control your role from the beginning to and end of a business engagement.
The cues and messages you transmit come off as a direct reflection of your personality. Most judgments clients make of you are not consciously determining assessments. Instead, they are cues picked up by the unconscious mind, leading them to automatically form images and ideas in their head to figure out who they are. (In layman's terms, they are thinking who am I dealing with here, and should I continue doing business with this person?)
Humans sniff each other out just like the rest of the animal kingdom. We are all looking for clues to gain understanding.
What happens if you don’t shower and wash your hair one day because you were being rushed or were just too lazy to do it? If you are working from home that’s okay, but what happens if you need to rush to the office or meet with a client at a moment's notice?
Because you are in a business where people are relying on your expertise and professionalism you have to make every effort to focus on your appearance. Letting your guard down even for a moment will cost you. You may retain all the knowledge in the world, but if you come off looking like a schlep you could easily lose all that time and effort you put into cultivating a client, putting you in the position where you’ll have to retrace acres of ground to gain back the trust and respect you worked so hard to instill. So, be mindful.
No one is perfect and we all make mistakes. One way to avoid these types of mistakes is by keeping a calendar that reminds you where you have to be and who you have to meet on any given day. If you want to work casually in your bathrobe and pajamas at home that’s fine. To avoid disaster, if you get an unscheduled call from a client that needs your immediate attention, take a shower the night before, or in the morning. Have an outfit ready to slip on quickly so you can get out of the house and off to meet the client without looking like you slept on a park bench the night before. Keep a hairbrush and cosmetics in your car to fix yourself up before the client has a chance to lay eyes on you.
I can’t express it enough. The clothing you select and your overall appearance is a key indicators of how much you respect a client's interest. The better you dress and appear the more seriously you will be taken and
considered. Not dressing professionally could be taken as an insult or offense.
You don’t have to show up for a meeting wearing a black tie and tuxedo. Dress nicely in clothing that fits the occasion. In most cases, a guy can rock it with a nice sports jacket and a good pair of jeans. Stay away from flashy accessories like blinged-out chains and medallions. Stay conservative. Make sure your clothes are cleaned and pressed. Stay away from piercings, tattoos, low-dangling earrings that clang when you walk, or shoes that are clunky or loudly colored. Stay relevant but subtle. If you want to accessorize a nice dress watch or conservative necklace will do the job.
Before you leave for the street, check yourself out in the mirror. Ask your wife, husband, mentor, or partner if your outfit looks okay. Surf the Internet to see what’s trendy and shop for deals. It doesn’t cost a lot of money to have a class. Above make sure the clothes you are wearing complement your body shape and make you feel confident and comfortable.
PROPERTY DESCRIPTIONS
Writing illustrative property descriptions is one area where some agents struggle. Some agents skip it altogether, thinking it’s just another house, and when clients take a look at it they’ll get the whole picture then. There is good reason to be putting in time writing property descriptions. We are in a time where over 90% of homebuyers begin shopping online before stepping into a physical house. If your description of the property, along with your photographs, videos, drone overview, or whatever tool you use for marketing a property isn’t properly honed and targeted, then a prospective buyer will move on to the next listing in about five seconds. Because you are competing with other listings on sites like Zillow, Trulia, and Realtor.com, your property description has to come off as more relevant and concise than it had to be in the past when buyers didn’t have access to unlimited data. You are going to need a great listing description that satisfies both your client and prospective buyer, who is flipping through listings on the Internet with sharpened pencils and steely eyes. Record basic details.
Here are some other things you may want to add to your property description:
Give as many positive details about the property as you can think of. Start from the outside. If it has mature landscaping with large trees, lush shrubbery, a manicured lawn, flower beds, and sprinkler systems. Talk about the size of the lot and the position and setback of the property. Talk about access and parking. Is the driveway cement or cobblestone? Even if the outside is in disrepair stay with the positive and give hints on what could be done to easily improve the outside with a landscaper pruning back areas that are overgrown, or if the lot is sparse make suggestions for planting and placing things like fountains and fish ponds that will immediately enhance the look. If the outside of the property is in utter disrepair you might want to talk to the owner about hiring a landscaper to clean things up to make it look more attractive. The outside of the property plants the first impression in the buyer's mind. Do whatever you can to turn your description of it into a positive.
Talk about the overall condition of the property. Has it been freshly painted? What are the floors like, are they carpeted or tiled or a combination of both? Are the appliances up to date? What about the countertops, are they marble or Corian, or old faded and faded Formica that will eventually need replacement? How old is the HVAC system, and has it been maintained? What are the windows like? Are the windows single or double pained? Is the washer and dryer in good condition and is the laundry room placed in a spot for easy access? When you enter your listing on the MLS you will be checking boxes for most of these items that I am mentioning, but go further in your description of it. Buyers have expectations, and if you’re an honest but brief description of the interior of the home will go a long way in avoiding a letdown of those expectations. Tell the truth about everything inside the home, just do your best to keep your descriptions on the sunnyside. Buyers with imagination and willingness to improve the property will take on the burden of renovation if the home is priced right. Others won’t. Some want a turnkey home and have no plans to do any work on a property no matter the price. This is why questions and answers are so important via your blog and website. Get to know your client and figure out what he wants. It will keep all parties happy and save time and gasoline.
Recommend the buyer hire a home inspector. If they ask you for a referral give than at least three home inspectors to pick and choose from. If the inspection report comes back negative speak with the seller about fixing the problems the home inspector found. If the seller is willing to throw some money into repair great. If they don’t want to do repairs you’ll need to use other tactics. In the case when you are the listing agent, at some point you may have to sit down with the seller and talk about other options, like adjusting the price. Avoid getting into a squabble with a seller at any cost. Ask them the best way to fix the problem, they may surprise you. Remember the seller is always in control so never dictate terms. Use your negotiating skills and find an even balance. The price will most always be the number one factor in getting a listing sold, and there is a buyer out there for practically every home. Use your skills to earn that commission.
If the house is dirty each time you show it talk to the seller about cleaning it. Make sure to give them plenty of notice to do so before you bring a client through for a showing. The seller may have reasons for not being able to do house cleanings, like poor health, or the inability to pay for a cleaning service. Find a way to work around it. If you have to hire a cleaning service write up an addendum that you will get your money back at closing for the money you spent. There are no hardest rules about going about transacting a sale. Always be thinking and using your imagination to get to the closing.
THE IMPORTANCE AND POWER OF SOCIAL MEDIA
Kipp Bodnar
Published: September 13, 2021
SOCIAL MEDIA(KEEP THIS FIRMLY IN YOUR MIND -There are more than 3.78 billion social media users globally, and the average person spends close to 2 ½ hours using social media every single day. So, statistically speaking, your audience is already on social media — why not meet them where they already are?
ALSO, REMEMBER THIS - In 2020, 44% of real estate agents generated the most clients via social media, only topped by referrals.
82% of agents plan to improve their social media presence to grow their business in 2021.
The National Association of Realtors 2021 Realtor Technology survey found that 53% of respondents say that social media is one of the most valuable technology tools they use.
74% of realtors use Facebook for professional purposes.
Clubhouse, a social media app that prioritizes audio, has real estate conversation clubs with over 50k followers.
81% of older millennials, 80% of younger millennials, and 78% of Gen X found their home on a mobile device.
Social media expands on the lead process in the digital and virtual world. Instead of knocking on one door, you are knocking on millions of doors all at once. Instead of getting one person on the line when doing cold calling, you are reaching clients from everywhere with relevant content and a click of a button. It’s the best tool available for marketing and branding
If you properly approach social media platforms you are going to see results. Social Media allows you to display your knowledge and instill confidence in clients on a much larger scale than anything else lying within your marketing mix.
Throughout the tutorial, I spoke about communications and getting a dialogue going - here’s your big stick in the closet.
Social Media Marketing
You will be applying the same principles you have been using with your Blog and Website. But it’s going to grow incrementally once you figure out how to use social media to its full advantage:
Communication goes in high gear as dialogues begin to transpire giving you the opportunity to scale your business, and your brand, too much larger markets. Once you’ve got it down pat your experience inside the industry will change. Follow the rules, and take things to step by step and you will find success and happiness.
Through proper use on platforms like Facebook, Twitter, and Instagram you will be able to share narratives and images that will expose your knowledge and educate the buyer or seller, as well as other stakeholders in the real estate industry. These platforms allow you to stream videos, images, and virtual tours. Once you can learn how to shoot quality videos of the interior and exterior of a home it won’t be long until you’ll no longer have to be hosting open houses every weekend. Instead of opening a single door, many doors will be opening many doors at once to a multitude of lookers searching the web for their next home.
Social Media will allow you to narrow in and promote your expertise in local markets where you have become an expert. You want to show them your stuff, this is the shortest path to achieving that task. Be genuine. If a neighborhood is good say it’s good, if it’s marginal talk about it. The worst thing you can do is bury the truth. Use Twitter to grab attention with blurbs of narrative. If you want to float some images use Instagram, a video presentation, YouTube, and Tik Tok. Keep the persistence up the same way you did with the more old-school marketing methods. The trick is to work on social media as much as you can. If you have time to do it every day then do it. There is nothing more powerful than finding listing and buyer leads.
Get your blogs on there. Put out good content that reflects who you are. If you need help writing content make sure that you are part of the process making every effort to make those blogs sound authentic. These platforms will enable you to make personal connections with hundreds, of clients through well-written content that shows authenticity. Make sure and answer back on all comments, even if they are negative make an effort to answer them back in a positive light. You want people coming back for more advice and more information and as that communication flows between you and the client, your community will grow. Provide valuable content and you'll keep people coming back.
In 2020, 44% of real estate agents generated the most clients via social media, only topped by referrals.
82% of agents plan to improve their social media presence to grow their business in 2021.
The National Association of Realtors 2021 Realtor Technology survey found that 53% of respondents say that social media is one of the most valuable technology tools they use.
74% of realtors use Facebook for professional purposes.
Clubhouse, a social media app that prioritizes audio, has real estate conversation clubs with over 50k followers.
81% of older millennials, 80% of younger millennials, and 78% of Gen X found their home on a mobile device.
A SHORT HISTORY OF THE RISE AND FALL OF THE REAL ESTATE MARKET
When I first moved here in the early ’90s the town was small and everything seemed quietly knit together. The population was less than 700,000, and the ratio of available land to people made it seem like a small town.
They hadn’t built any of the big box stores like Walmart and Home Depot, yet. The closest supermarket was 15 minutes from my home, now there”s one on every corner in every major shopping center.
One of the first things I learned when I moved here was Summerlin is on the west side, and Green Valley and other portions of Henderson are on the east side. Outside of some expensive custom homes, the average customer had three main choices when choosing a home. Buy a new house on the west or east side, or buy an existing home on either side. The overall difference in price between a new home and an existing home was so slight most people were opting for the new.
Customers from out of town would jump right in an agent's car and go home shopping. Times were different. After 9/11 we stepped into more turbulent times, leaving a bitter sentiment in our collective consciousness. Those who would hop in the back of an agent’s car have changed. Now they tend to follow you. But, in the 90s agents would be out riding around for hours with customers who were primarily interested in looking at the model homes in the new developments. It could take hours just to cover Green Valley. If they didn’t find their dream house in Green Valley an offer was made to cruise Summerlin. Many times it was an all-day excursion.
At the new developments, you would arrive in front of a gate that blocked off the main entrance to the model homes. All independent agents were required to sign a registry along with their customers. This was to give the developer notice you brought someone in, and if there was a sale the agent was entitled to a commission. Many of the onsite agents seemed to forget the term procuring cause. So many outside realtors were getting backdoored by the onsite realtor who was ruthlessly and illegally contacting your customer behind your back. Their company culture encouraged amnesia.
If a customer was willing to forget how they found the house in the first place there could be all kinds of perks and advantages like tile and carpet upgrades, and better window treatments - how about a swing set for the kids? (We’ll do anything to sell you this house. Just don’t bring that agent back, we want all the commission.)
Those were the good old days, long passed now. Homes were affordable, and Vegas was exciting as it was springing to life and becoming a major city. Builders kept throwing up houses as fast as you could throw up a tent, and the beat went on for years. People were cashing out their houses in states like California and buying here at half the price they would have to pay in a city like LA.
Suddenly all things changed. The housing market took off like a rocket In Las Vegas and many other states around 2001. After passing those ultra-liberal lending laws in Washington I spoke about earlier, suddenly everyone who could show they had a beating pulse could qualify for a mortgage. A gardener making $35,000 a year could buy his dream house with the adjustable teaser rates they were serving to the public like pancakes. All you had to do was learn how to lift your hand and somebody would ask you to show them a house.
Then the recession reared its ugly head home values dropped down thirty to forty percent below their post value. Overall lenders stopped lending and most sales were being transacted for cash.
bubble that began in the early 2000s, burst overnight in 2008. It started to slide in 2007, but nobody seemed to notice or care. The party kept right on swinging until that morning of September 19th, 2008. The DOW plunged dramatically. During the following month on October 10, 2008, it plunged again, but this time there was no adjustment, this was a Tsunami.
By 2009 my real estate career was put on hold. The housing crisis had turned Las Vegas into a ghost town
Builders could no longer obtain construction loans, so nothing was being built. Foreclosure notices were everywhere. Thousands of houses were sitting vacant. Banks were buying their own houses back up at sheriff sales. Hedge funds moved into play and there was a feeding fest. Nobody could come up with an exact number of homes that were being purchased, held, and rented out by these institutions. As we began to slowly bail out of the recession the bank had run through what is referred to as its shadow inventory. The hedge funds saw it was time to sell and began liquidating.
There has been a shortage of homes in Las Vegas since the 2008 recession. Builders have been resistant to putting up big blocks of homes to create new developments. They were afraid If things went sideways again they would be caught in excess inventory that couldn’t be sold. So they build a little here and a little there. That is why we have seen a housing shortage in this town for so long. (reference:Kipp Bodnar Published: September 13, 2021)
A THUMBNAIL VIEW OF WHAT CAUSED THE CRASH? (greed, stupidity, and government intervention- just to name a few)
Several factors caused the crash in 2008. Deregulation in the financial industry was the main cause of the 2008 bubble burst and the market crash. It opened the door for speculation on derivatives backed by cheap, unwarranted issued mortgages. Mortgages were being handed out on stated income, meaning a total of three bank statements and proof of employment. People who didn’t have the funds to qualify could find a family member or friend to deposit money into their account for three months which was enough to show creditworthiness. Many of these loans were tendered through teaser rates or what they call (Libor Loans.) They could start as low as 2% for a period of one to two years and then adjust up to 6% or 7%.
Property values were rising so quickly before the crash that lenders were able to talk buyers into taking these types of loans with the assurance that their home would continue to appreciate and they could always refinance if times got rough. This, in part, caused the crash. The Fed began ramping up interest rates in 2003-2004. The uptick in rates increased mortgage payments leaving many borrowers’ with the inability to make their monthly payments. It was only a matter of time before the bubble burst as defaults continued to increase.
The loans were tied to hedge funds, derivatives, and credit default swaps, and when people started to default en masse the bubble burst and the entire industry crashed, driving the U.S. financial industry to its knees. It went global, and if the U.S. government hadn’t stepped in to plug the gap financial systems worldwide could have crashed. The U.S. government was forced to implement enormous bail-out programs for financial institutions previously billed as “too big to fail.”
For a time I became a foreclosure specialist, negotiating to keep families in their homes through a program that was enacted by the state called AB149. The program allowed a homeowner to negotiate with their lender face to face with either an attorney or covered service provider; that was the category I was licensed under. I rented office space and studied foreclosure law for over a year until I became licensed in 2009. I carried on in that program for about four years until foreclosures slowed down, and I went off to other ventures.
STATISTICS
(One way to figure out who you're marketing to is to look at the numbers. Real Estate is a local market there will always be variances in the national statistics. However,it will give you a guideline
For most home buyers, the purchase of real estate is one of the largest financial transactions they will make. Buyers purchase a home not only for the desire to own a home of their own, but also because of changes in jobs, family situations, and the need for a smaller or larger living area. This annual survey was conducted by the NATIONAL ASSOCIATION OF REALTORS® of recent home buyers.
This report examines:
Characteristics of Home Buyers
Characteristics of Homes Purchased
The Home Search Process
Home Buying and Real Estate Professionals
Financing the Home Purchase
Home Sellers and Their Selling Experience
Home Selling and Real Estate Professionals
For Sale by Owner (FSBO) Sellers
Characteristics of Home Buyers
First-time buyers made up 26%, down from last year's 34%. This is the lowest share of first-time buyers since the data collection began.
The typical first-time buyer was 36 years old this year, rising from 33 last year, while the typical repeat buyer age climbed to 59 years. Both are all-time highs.
61% of recent buyers were married couples, 17% were single females, 9% were single males, and 10% were unmarried couples. This is the highest share of unmarried couples recorded.
Among first-time buyers, 18% of buyers were unmarried couples, and 5% were other household compositions. Both are the highest shares recorded.
14% of home buyers purchased a multigenerational home, to take care of aging parents, because of children or relatives over the age of 18 moving back home, and for cost-savings.
88% of buyers were White/Caucasian, 8% were Hispanic/Latino, 3% were Black/African-American, 2% were Asian/Pacific Islander, and 3% identified as other. The share of White/Caucasian buyers and Hispanic/Latino buyers both grew this year, while the share of other racial and ethnic groups declined.
91% of recent home buyers identified as heterosexual, 2% as gay or lesbian, 2% as bisexual, and 5% preferred not to answer. 22% of recent home buyers were veterans and 1% were active-duty service members.
At 22%, the primary reason for purchasing a home was the desire to own a home of their own. For first-time buyers, this number jumps to 62%.
Characteristics of Homes Purchased
12% of buyers purchased a new home, and 88% of buyers purchased a previously-owned home.
Most recent buyers who purchased new homes were looking to avoid renovations and problems with plumbing or electricity at 41%. Buyers who purchased previously-owned homes were most often considering a better price at 31%.
Detached single-family homes continued to be the most common home type for recent buyers at 79%, followed by mobile or manufactured houses at 8%.
Senior-related housing held steady this year at 7% (for buyers over the age of 60), with 17% of buyers typically purchasing condos and 8% purchasing a townhouse or row house.
The median distance between the home that recent buyers purchased and the home they moved from was 50 miles. This is a significant increase in distance moved, as the distance between 2018 and 2021 was a median of 15 miles.
For buyers, 49% cited the quality of the neighborhood as the most important factor determining the location. Convenience to friends and family and overall affordability of homes were both cited at 37%.
Buyers typically purchased their homes for 100% of the asking price, with 28% purchasing for more than the asking price.
The typical home that was recently purchased was 1,800 square feet, had three bedrooms and two bathrooms, and was built in 1986.
Overall, buyers expected to live in their homes for a median of 15 years, while 28% said that they were never moving.
For 47% of recent buyers, the first step that they took in the home-buying process was to look online at properties for sale, while 18% of buyers first contacted a real estate agent.
86% of recent buyers found their real estate agent to be a very or somewhat useful information source.
Buyers typically searched for 10 weeks and looked at a median of five homes, and viewed four homes only online. The number of weeks searching for a home grew from eight weeks seen in the 2020 and 2021 reports.
Nearly all buyers used online tools in the search process at 96%
.
When asked where their internet searches were conducted, they typically conducted 60% of their search on a mobile device(s) and 34% on a desktop/laptop.
91% of recent buyers were at least somewhat satisfied with their recent home-buying process.
Home Buying and Real Estate Professionals
86% of buyers recently purchased their home through a real estate agent or broker, and 10% purchased directly through the previous owner.
Having an agent to help them find the right home was what buyers wanted most when choosing an agent at 49%. 38% of buyers used an agent that was referred to them by a friend, neighbor, or relative, 12% used an agent that they had worked with in the past to buy or sell a home and 10%found their agent when inquiring about a specific property found online.
67% of buyers interviewed only one real estate agent during their home search.
89% of buyers would use their agent again or recommend their agent to others.
Financing the Home Purchase
78% of recent buyers financed their home purchase, down from 87% in the 2021 report.
The typical downpayment for first-time buyers was 6%, while the typical downpayment for repeat buyers was 17%.
For 47% of buyers, the source of the downpayment came from their savings. 38% of repeat buyers cited using the proceeds from the sale of a primary residence, while 22% of first-time buyers used a gift or loan from friends or family for the downpayment.
For first-time home buyers, 26% said saving for a downpayment was the most difficult step in the process.
The majority of first-time buyers did make financial sacrifices to purchase a home. For those who did, the most common sacrifices buyers reported were cutting spending on luxury goods, entertainment, and clothes.
Buyers continue to see purchasing a home as a good financial investment. 88% reported they view a home purchase as a good investment.
Home Sellers and Their Selling Experience
The typical home seller was 60 years old, an increase from 56 last year.
For all sellers, the most commonly cited reason for selling their home was the desire to move closer to friends and family (21%), moving due to retirement (11%), or the neighborhood has become less desirable (11%).
Sellers typically lived in their home for 10 years before selling. This is an increase from eight years in last year’s report but reverts to the same tenure seen in 2019 and 2020.
41% of sellers traded up to a larger home and 32% purchased the same size home.
86% of home sellers worked with a real estate agent to sell their home, 10% sold via FSBO, and less than 1% sold via Buyer.
For recently sold homes, the final sales price was a median of 100% of the final listing price, the highest recorded since 2002.
Recently sold homes were on the market for a median of two weeks, an increase from one week last year.
Only 20% of sellers offered incentives to attract buyers, a drop from 26% of all sellers last year.
91% of sellers were at least somewhat satisfied with the selling process.
Home Selling and Real Estate Professionals
63% of sellers found their agent through a referral from a friend, neighbor, or relative or used an agent they had worked with before to buy or sell a home.
80% of recent sellers contacted only one agent before finding the right agent they worked with to sell their homes.
39% of sellers used the same agent to purchase a home, as sell their home. A share which rises to 85% for sellers who purchased a new home within 10 miles.
86% of sellers listed their homes on the Multiple Listing Service (MLS), which is the number one source for sellers to list their homes.
74% of sellers reported that they provided the agent’s compensation.
The typical seller has recommended their agent once since selling their home. 27% of sellers recommended their agent four or more times since selling their home.
85% said that they would definitely (73%) or probably (12%) recommend their agent for future services.
For-Sale-by-Owner (FSBO) Sellers
10% of recent home sales were FSBO sales this year. This is up from seven% last year.
The majority of FSBO sellers, 50%, knew the buyer of the home.
Within rural areas 13% sold via FSBO compared to 6% of sellers in suburban areas.
FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $225,000 last year, significantly lower than the median of agent-assisted homes at $345,000.
NAR provides housing statistics and real estate market trends on the national, regional, and metro-market levels where data is available
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