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Happy New Year!

Rich Levin

My recent blog about listings got a lot of positive comment, thank you.

Let’s be clear on another thing. If listings are the name of the game, Buyers are the rest of the game. You don’t make a commission with a Buyer. In fact, a qualified, motivated Buyer with an urgent need is as good as the average listing (particularly in today’s market) any day; in fact, the better the listing, the more of those valuable Buyers it will attract.

So, as I said in the previous blog, keep taking listings. At the same time, keep searching for qualified Buyers who are eager and ready to buy. The key is to be rigorous in asking the Buyer questions about their financial qualification, motivation and urgency as early as possible in the relationship (with complete respect for Agency and Agency laws).

Yes, I saw the statistics on how much more money is made by Agents who focus on listings. And I completely agree that consistent success is based on a listing focus. I coach Agents every day to extraordinary listing success. But the statistics are flawed. Here’s why.

Most, possibly all, Agents with a team focus on listings. On their team are Agents who focus on Buyers. In fact in many those ‘Buyer Specialists’ refer all of their listing leads to the Primary Agent. The team leader (I call them the Primary Agent, thank you Patrick Daily) gets a portion of all the Buyer sale commissions. This enormously skews the statistics. The more accurate measure would be individual Agents who focus on Listings versus the ones who focuses on Buyers. The problem with that is that the vast majority of individual Agents necessarily focus on both.

The point is that focusing on Buyers in a smart way is necessary for Agents with or without a team. For the teams it would be a waste to get all those listings and not benefit from the Buyers they would attract. For an individual Agent it is also most often a matter of survival.

Buyers or Listings there is opportunity in this market. It absolutely takes more talent and effort to find it and close it in this market. Those who tough it out and learn to succeed in this market will be the top Agents and the leaders as a healthy market re-emerges. And with a bit of blessing, it will.

I’ve been flooded with questions and comments about real estate logos and branding in the last 30 days.  We had such positive response to our recent “before and after” contest … and it made me realize that I need to talk about the power of branding more regularly.

I’m a proponent of branding because it works.  Branding your business will increase the success of your business.  That’s why my company offers branding and design services to our clients.

I want to be very clear on my next statement.  I don’t talk about branding because my company offers branding … I made the decision long ago to have branding as one of my company’s core services because branding works.

I’m going to be talking a lot about branding in the coming months so I can share my thoughts about why branding – coupled with ongoing training – could be the most important commitment you make to your business.

So just why am I so keen on branding?  Why do I encourage agents to invest in their business via branding?

Let’s start with this basic premise: a brand is a blueprint for, or a “promise” of, the experience your client will have when using your products and/or services.

If you think about nationally known brand you’ll know this is true.  Think about the following companies:

When you see these brands, you instantly have an expectation of your experience.

These companies have all developed a strong corporate identity through their brand – one which quickly communicates to past, present, and potential clients exactly what they can expect from the company.

Take a peek at the last two examples here – Budweiser, and Guinness.

Budweiser has incorporated several taglines over the decades (“The King of Beers”, “This Buds for You”, “When You Say Budweiser, You’ve Said it All”).  However, what hasn’t changed are the brand colors – a strongly American palette of red, white, and blue.  Budweiser positions itself as a beer for the patriotic masses.  It’s relatively inexpensive, and it’s American-made.  When you see the Budweiser brand, there’s absolutely no question it’s an American beer.  Like many successful companies, Budweiser directs its brand message at a relatively young market, hoping to build brand loyalty and develop long-term relationships.

Contrast this with Guinness – an Irish beer known for its stout (think of it as very dark beer).  Their brand reinforces this, with a dark, murky color palette.  Guinness has cleverly introduced an image associated with Ireland – a harp – into their brand, and they call attention to their country of origin by referencing “Dublin”.  They’ve also been very strategic in positioning the length of time their brewery has been in business – their date of establishment (1759) is clearly referenced in their brand.  Like Budweiser, Guinness has changed their taglines over time (“Good Things Come to Those Who Wait”, “Bring it to Life”, “My Goodness, My Guinness”, “Guinness is Good for You”, “Out of the Darkness Comes Light”, “The Most Natural Thing in the World”) but has kept their brand elements consistent.

Your brand should be the foundation of all your marketing efforts.  Not a piece of marketing – whether online or offline – should be seen by the public unless it showcases your branding.

Develop a brand, use your brand consistently in your marketing, and you’ll create an identity that resonates with clients.

Here are five easy ways to identify if branding is for you.  It’s time for you to brand if:

1. You need to differentiate yourself in your marketplace.  Do you appear just like every other agent to potential clients?  If so, how will they find you … or, if they find you, how will they know they would want to work with you?
2. You want to eliminate your competition. When you are the agent with a point of differentiation, there’s a reason for a client to work with you, not your competitor.
3. You want to gain focus on your core values. Nothing brings clarity more quickly to what is unique about you than the work of creating a brand.  Branding forces you to discover – then articulate – your value.
4. You want to shorten the time it takes to build trust with clients.  With a brand, you’ve differentiated yourself from competitors, and you’ve articulated your core values.  A brand allows you to deliver that message to your clients quickly, thus decreasing the time you must spend convincing clients that you are their agent of choice.
5. You want to start marketing yourself, not just the company you work with.  Too many agents rely on their company’s marketing materials.  This is a huge mistake.  Yes, if you work with a well-respected company you should leverage their name.  However, you must also brand yourself so clients have clarity around your value as an agent, and to provide a reason for a client to work with you … not your co-worker in the next cubicle over!

Do any of these five reasons resonate with you?  If even one of them does, it’s time to get to work on creating your business brand.

As I mentioned earlier, I’ll be talking about branding regularly in the coming months.  Can’t wait?  Download a copy of my free white paper on branding; Jump Start Your Business: Branding Ideas for Small Business and Entrepreneurs.

In order to get a Short Sale approved, it is imperative to know the guidelines for which closing costs the lender will and will not pay for on behalf of the Seller and Buyer.

Seller’s Closing Costs
As part of a Short Sale, the Seller’s lender will typically cover most of the closing costs on behalf of the Seller, as well as the broker commissions. Most lenders pay a total of 6% in Broker commissions, however, there are some lenders who are paying less. In Conventional and VA Short Sales, the lender will typically cover all closing costs that would typically be covered by the Seller, as well as current year property tax pro-rations and even delinquent property taxes, as long as the sales proceeds are sufficient to cover them.

In FHA Short Sales, there are a few closing costs that the lender will not cover on behalf of the Seller, such as the cost of a home warranty if requested by the Buyer, HOA transfer fees and certificates, and any delinquent HOA dues. However, in FHA Short Sales, HUD offers a “Seller Incentive” of up to $1000, which can be used to cover some of these costs. The full $1000 Seller Incentive is available only when the following two criteria are met:

• An acceptable Purchase Contract is submitted and closed within the 120-day Pre-Foreclosure Sale Period, as allotted by HUD, and

• The net sales proceeds are sufficient to cover this incentive.

On the HUD-1 Settlement Statement, any closing costs paid out of the Seller Incentive should include the notation “Paid from Seller Incentive”, so that the Loss Mitigation Rep can see and approve what exactly is being paid out of the Seller Incentive. If there is any balance left over from the Seller Incentive, that remaining balance will be paid in cash to the Seller at closing. Any remaining balance that is to be paid to the Seller is typically reflected either in the 500 section or the 1300 section of the HUD-1 Settlement Statement, with the notation “POC” indicating that the remaining balance is an item that will be “paid outside of closing”. If the transaction comes under contract and does not close until after the 120-day Pre-Foreclosure Sale Period allotted by HUD, the Seller Incentive is reduced to $750.

Buyer’s Closing Costs
Whether or not any Buyer’s closing costs can be covered depends on the type of loan the Seller has and the type of loan the Buyer is bringing.  In an FHA Short Sale, until December 24, 2008, HUD would not allow the lender or the Seller to cover any closing costs on behalf of the Buyer.
On December 24, 2008, HUD implemented a new guideline that allows the Seller to contribute, from the sales proceeds, up to 1% of the Buyer’s loan amount towards Buyer’s closing costs, but only if the Buyer is bringing FHA financing themselves. In Conventional and VA Short Sales, the lender will sometimes cover reasonable closing costs on behalf of the Buyer, but typically no more than 3% of the sales price, and the Buyer must be submitting a market value offer.

Stacy Spickes is the co-founder of America’s Home Rescue and the CDRS, CDRCS and CSSBR Short Sale Certification Programs.  To learn more, visit www.AmericasHomeRescue.com.

Stacey Harmon

I was recently honored to conduct a webinar for Diverse Solutions , the topic was Building a Brand & Business on Facebook: Three Realtors Who Are Doing It Right. Watch the video below to learn how your Realtor colleagues are using Facebook effectively to connect with potential clients, generate engagement with their audience, and use Facebook ads to drive traffic to their page.

Stacey Harmon: How to Build A Brand and Business on Facebook

Here are links to the three case studies highlighted in the presentation. “Like” these pages so you can observe the activity of these realtors and pick up the strategies they use to optimize visibility and interaction with their clients.

Raj Qsar, Realtor – Premier Orange County Real Estate

The Robin Milonakis Group

Didelot Real Estate Group

Feedback from agents who attended the webinar is that they got some great Facebook marketing ideas from their colleagues.  What is your top takeaway or tip from the video?  Let us know!

Rich Levin

Here’s why.

First, I know that in many markets listings are not selling very quickly.  The listings have to be priced right, in very good condition and still may not sell.  (Although by definition priced right means they will sell. ) But keep taking listings.

Kyle Killebrew has taken 88 listings so far this year.  That is about 30 more than previous years.  His listing sold percentage is way off from previous years.  He has sold just 68% of them.  Oh, that’s 60 of them isn’t it?  And from the leads generated from all those listings he and his team have sold another 52 houses to Buyers.  Even if less listings sell, having more of the listings means you sell more.

It is tougher to get listings sold in this market.  The Clients’ situations are often negative.  There are job losses, divorces, and involuntary moves.  We are always dealing with these types of situations but in this market and in this economy there are a higher percentage of those negative circumstances.

There are more Sellers who believe their house should sell for a higher price.  A higher percentage of Sellers who sell are disappointed with the price they get.

All of that is true and keep taking new listings, getting price reductions, and re-listing because there are flurries.  A flurry is when, suddenly, for no apparent reason a bunch of properties sell.  The Agents with the listings benefit from the flurries.  These listing Agents benefit in two ways.
First, their listings sell.  Second, they the Buyers contact them.

Kyle said, “Rich, you are right about the flurries.  We sold six properties the first week in September.  School started, right after Labor Day, I wouldn’t have expected that.  But I’m glad to have had the inventory.”
Keep taking listings.

DELIVER YOUR MESSAGE … the way they want to hear it!
Here’s a big question when it comes to generating leads: how do you get the message out most effectively?   Newspaper ads?  YouTube videos?  Social media,  print marketing,  a website, open houses?   Talk to different people, and they’ll all give you a different answer about what’s effective.

I can’t tell you how many agents tell me that newspaper advertising doesn’t work.  Or that their social media activities aren’t generating business.  The fact is that all types of outreach can generate results – but you have to be directing the right message to the right market … and deliver that message in the way the client wants to receive that message.
The bottom line: different social generations prefer information delivered differently.But before I talk more about delivering the message in a generationally-appropriate manner, I want to touch briefly on another important piece of the puzzle – and that’s making sure you identify your target market.If you haven’t identified your target, it’s like the old saying “Ready.  Fire.  Aim.”  You can’t expect to hit a bulls-eye if you haven’t aimed.  In this case, aiming involves determining who your target is, then crafting a message that will appeal to them, and finally delivering the message in a way that’s appropriate for your target market.

But let’s imagine that you have determined your target market, and have developed a strategic message that will captivate and engage your target market.

Now you need to determine the best way to distribute your message, and that needs to be done based on social generations.

As time has gone by, our society has become more and more technologically dialed-in.  Not surprisingly, this means that the older the potential client, the more “high touch” your message needs to be.  And obviously that means that younger potential clients are looking for “high tech” message delivery.

Let’s take a look at the different generations, the birth ranges of those generations, and how your brand message should be communicated to each.

The Silent Generation:  1925 -1945
Typically wants only via “high touch” — in person, snail mail, radio, and telephone.

Baby Boomers; 1946 -1964
Wants primarily via “touch”, but with a little “tech” — snail mail, telephone, email, and websites.

Generations X (“Baby Bust”): 1965 – 1981
Prefers a good mixture of “touch” and “tech” — snail mail, telephone, websites, email, text, and social media.

Generation Y (“Echo Boomers”): 1982 – 2000
Wants primarily via “high tech” — text, email, websites, and social media.

Generation M (“Mobile Generation) / Generation Z (“Digital Generation”):  2001+
This generation isn’t purchasing homes yet … but when they do the will be anticipating a “high tech” message — texts and social media.
Let’s pretend your target market is women who don’t currently own homes, between the ages of 23 and 29.

Since the target market is Gen Y women (or “echo boomers”, as they’re sometimes called), effective delivery of your brand message should occur primarily via technology – through text, email, websites, and social media.
Had your target market been someone in the “silent generation” – your brand message should be delivered primarily through “touch”, face to face and voice to voice interaction with very little technology.

So remember: for your lead generation efforts to be effective it’s critical that you deliver the message in a way that resonates with your target market based on the preferences of their “generation”.

Mike and Stacey Spickes

It is important to realize that the appraisal is the most critical piece of information that the lender will consider in determining that the market value of the home is indeed less than what is owed on the property. The Rep will use the appraised value to calculate the net amount that the lender will accept in the Short Sale. The net amount that the lender will have to receive in the Short Sale will be a discounted percentage of the appraised value as determined by that lender’s Short Sale guidelines, the type of loan that the homeowner has, and the condition of the property. It is important for you to know that the discount percentage used by lenders in accepting or rejecting a Short Sale changes according to federal guidelines, market conditions and individual bank policy. Currently,

• FHA loans are insured at 84-88% of the appraised value and, therefore, the lender can discount the pay-off amount down to 84-88% of the appraised value, depending on how long the homeowner has been approved into the HUD Pre-Foreclosure Sale Program.

• VA loans are guaranteed at 88% of the appraised value and, therefore, the bank can discount the pay-off amount down to 88% of the appraised value.

• Conventional loans currently tend to be discounted to 85% of the appraised value. Understand that, for Conventional loans, this % moves with market conditions and is typically based on the lender’s volume of foreclosure activity and inventory in a particular region.

Once you have submitted your Short Sale package and have been assigned to a Loss Mitigation Rep, the Rep will order an independent appraisal to be done on the property. It is important that you make yourself the main point of contact for both the lender and the Appraiser. Sometime after your first contact from the Loss Mitigation Rep, you should get a call from the Appraiser wanting to schedule the appraisal. We try to establish a good rapport with the Appraiser. We usually provide him/her with the comps for the area, a list of all the repairs that are needed to bring the property up-to-par, as well as pictures of any problem areas that should affect the value of the property, such as roof damage, wood rot, termite damage, mold, etc. Of course, you must keep in mind that this Appraiser has been hired by the lender and is working on the lender’s behalf, not yours. Also, understand that the information we give him/her is for informational purposes only. We are not trying to inappropriately persuade his/her professional opinion. What we do know is that the value he/she comes up with is somewhat subjective and there is a range within which the Appraiser can appraise the property. If the information we provide might help the Appraiser better understand the situation and come in with a lower appraised value, the lower we will be able to list the house, the faster it will sell and, therefore, the better chance we have of saving this homeowner from foreclosure.

If you have already placed a lockbox on the house, the Appraiser should be able to access the home with his/her key. If not, you will need to schedule a time to meet him/her at the property. If your clients are still living in the home, be sure to let them know the time and day of the appraisal. We usually recommend that our clients leave the property while the Appraiser is there, but if they choose to be present, that is their prerogative. Many homeowners ask if they should clean up or make any repairs to the property prior to the appraisal. We recommend that they leave the condition of property as-is. After the Appraiser does his/her appraisal, reviews the information you have given him/her to consider, he/she will come up with an appraised value for the home, formalize a report, and submit it to the bank. The appraisal is the final piece of information needed by the lender to approve or disapprove the homeowner for the Short Sale.

Note: On Conventional and VA Short Sales, lenders sometimes order a BPO, rather than a formal appraisal. A BPO is a Broker’s Price Opinion and entails the lender simply having one of their approved Brokers do a valuation of the property and provide a Comparative Market Analysis. The upside to this is that this Broker is using the same CMA data that you are in determining value and, if the Broker’s valuation comes in too high, in your opinion, the lender will many times allow you to contest the BPO value. The downside to a BPO, instead of a formal appraisal, is that the Broker does not need to contact you for access to the property; therefore you are unable to explain the situation to the Broker in hopes that they will value the property at the lower end of their valuation range.