I’m Mad As Hell, And I Won’t Take It Any More!

My apologies to the readers, but the title is the famous tag line from the prophetic movie, “Network” that thirty plus years ago foresaw the explosion of news-as-entertainment, 24-hour surveillance of everybody, and content-free “reality” television. Go back and look at it if you want to be really scared. But, the line also describes the way I’m feeling as the Congress bumbles through the current problems of the real estate sector.

LET ME COUNT THE VILLAINS

So, who am I mad at? Let me count the villains.

1.) Whiners and selfseeking opportunists.

The poster children here are home builders. They were a major cause of the housing downturn as they built subdivision after subdivision in response to demand that wasn’t there. The net result was that inventory piled up as new homes went unsold or speculators tossed their keys back to the builders. This depressed the price of all homes on the market.

Why did they do this? They did it to keep their stock prices up and thus safeguard the windfall they received from going public. And when the market collapsed around them, they had the nerve to ask Congress to allow them to carry current losses back against past profits for tax purposes (they almost got it, and still may—the Congress hasn’t finished fouling things up yet.) The builders are like the kid who shoots both his parents and then begs the court for mercy because he’s an orphan.

2.) The financial sector.

Like the guy with a hammer who thinks every problem is a nail, the financial sector, having had risk land on their heads, portray themselves as the center of the universe. Surely if some financial firms fail, then the planet will break free of the sun’s gravity and spin off into the void of space. Don’t believe it.

The financial sector is in the business of accepting large scale risk so that commerce can be done. It is paid handsomely for its efforts, as well it should be. But when deals don’t work out, or when the price placed on the risks is too low, losses will occur and this is part of the business. To whine (see number one above) to the Fed when things don’t work out is breaking the rules of the game.

3.) The Fed.

Yes, this is the institution charged with maintaining the stability of the financial system. But in this case, the Fed has gone overboard in its actions. For example, arranging for the sale of Bear Stearns to Morgan for $2 a share was entirely appropriate in defense of the system.

Responding to the complaints of Bear executives and raising the price to $10 stepped over the line.As you know from my last column, the actions of the Fed will result in the outbreak of inflation next year, unless those actions are reversed before the end of this year.

4.) The Congress and the Administration.

Here again, the “no pain” culture that seems to have gripped America is in full flower. No homeowner who has been foreclosed should suffer the loss of his home. Sorry, but failure to pay should have consequences. I’m not a hardhearted person, but the way in which Congress and the Administration are approaching the solution to the housing sector problems fails to distinguish between the sheep and the goats, rewarding the guilty as much as saving the innocent.

This is bad public policy. Both the Fed and the Congress have now created an expectation that no misjudgment will ever land on the head of its perpetrator. This is a precedent that will only encourage more reckless behavior in the future.

5.) Realtors® and mortgage bankers.

I don’t believe that the finger of blame can only be pointed outward. During the frenzy, point-of-sale professionals did all they could to get people into houses, since this is what generates revenue. Scant attention in many cases was paid to whether this was the right house or the right mortgage or whether the buyer could sustain the payments on the mortgage. To the extent that this happened, the industry bears part of the blame.

THE VILLAIN NOT COUNTED

Notice the villain I left out. Many in the real estate world have blamed the media for fomenting the crisis. To some extent this is true, but not to the degree most real estate professionals believe. I think the media got lucky.

They kept preaching about a housing bubble because this was the type of story that brought by-line credit. Meanwhile, there was an untenable market growing that eventually broke. Well, I guess even the blind chicken finds an occasional piece of corn.

SELL WITH SOUL - Book Review

In basic real estate licensing classes, one of the first topics covered is the real estate licensee’s duty to his clients and to his customers. The academic definition of client is the person whom you represent in an agency agreement while the customer is a represented or unrepresented third party in the transaction. The simplest example would be if you had a listing you would enter into an agency relationship with the seller, who would be your client.

A buyer, whether represented or not, would be a customer. While there’s a whole list of duties to your client, the most fundamental is that you put the client’s interests first. Most assuredly before your own. Your duty to the customer is to deal fairly and honestly. In most situations, real estate agents get paid when the transaction closes.

That could mean that there might be an occasional situation where it could be tempting to pursue a course of action that might not be in the best interests of the client. There are those who maintain that the reason real estate agents typically rate so low on the public respect surveys is that too often the client’s (and customer’s) interests become secondary.

The very basic message in this book by Jennifer Allan is that in every circumstance you should put your client’s interests first, and that agents should strive to be competent real estate advisors and not employ traditional sales techniques. One may wonder how an author could fill 233 pages simply addressing that issue, but since the book is aimed primarily at new agents, there is almost an endless variety of topics that can be addressed.

Her writing style is not only informative, it’s highly entertaining. Allan began her real estate career in 1996 in Denver and quickly became one of the top producers in the market area. In 2004 she founded her own New Precedent Real Estate company in Denver. She is also a trainer and speaker. You can check out her activities and more details about this book and others she has written at her web site: www.SellWith Soul.com.

You can check out her writing style and message by visiting Realty Times, where she is a columnist (http://realtytimes.com/rtpages/jennifer_allan.htm), this book would be a mandatory read for all my agents.

POWER TEAMS - Book Review

I like the title of this book, since it describes exactly the authors’ objective in writing it. It’s intended to be a complete guide to establishing and operating a successful real estate team. It accomplishes the mission extremely well. Co-author John Featherston is the founder of RISMedia, which is promoted as “the residential real estate industry’s premier source for news and information to the residential real estate, relocation, and home services industries.”

Visit the home page of the web site and you’ll get a good overview of services and products. I’m confident you’ll recognize the name of the other co-author of this book, Ralph Roberts, the President and CEO of Ralph Roberts Realty in Warren, Michigan. You can check out his brokerage web site at www.RalphRoberts .com. If you would like to sample his writing you can visit the web site of Realty Times (http://realtytimes. com/rtpages/ralphroberts.htm) where he has been a columnist since 1999.

You can access a long list of his articles. A feature of this book that makes it particularly credible is that the primary authors have secured input from 26 real estate professionals who are involved with teams. A brief biography of each contributor is included as an appendix to the book. I’ll site just a couple to give you an overview. Brandon Fairbanks (www.mymaderacountyrealestate.com)

Brandon is the President and CEO of Montecino & Associates Real Estate Company in Coarsegold, California. In the book he offers guidance on how to properly train and equip team members with the tools they need to succeed. Interestingly, Brandon’s mother Patty is a member of his team. Kandra Hamric (www.kandrahamric.com)

Kandra is a professional virtual assistant, and CEO of her own virtual assistant company. She also has practical experience in the real estate profession. In the book she offers her guidance on how to communicate effectively in the digital world.

REAL ESTATE SOUL MUSIC

Just as the real estate team concept has evolved over the years, so has the general sales philosophy in the profession. A couple of decades or so ago, when I embarked upon my real estate career after retiring from the Air Force, I attended just about every sales seminar within driving distance. The dominant theme of most focused on closing techniques.

The word “manipulative” frequently crossed my mind. Two of the most articulate sources of information on an evolving sales philosophy are the following extremely worthwhile books.

THE CHAMPION REAL ESTATE TEAM - Book Review

We’ve reviewed several of author Dirk Zeller’s previous real estate books in this section. Dirk is the President and CEO of Real Estate Champions, a prominent coaching company in the real estate industry based in Bend, Oregon. Here are the stated objectives of the book:

• Determine the ideal team structure and size for you;

• Select, train, position, coach, and manage to get the best performance out of each team member;

• Create a culture of consistent prospecting, learning and development;

• Work with buyer’s and listing specialists, field and marketing coordinators, Internet marketing specialists, and more.

For a complete description of the book, and other Zeller products and programs, visit www.RealEstateChampions.com. Click the Real Estate Training Books link. When you visit the web site, I believe you’ll agree with me that you’ve rarely encountered a more professional and impressive presentation.

TEAMWORK IN THE REAL ESTATE PROFESSION

Those of us who have been engaged in the real estate profession for a few (OK, quite a few) years have seen many changes in how business is conducted. One that is still evolving is the concept of real estate teams. If a person is engaged in “professional real estate activity” (which basically means you expect to get paid for your services) then a real estate license is required by the state.

The fact of the matter is that there are an incredible number of duties that must be completed in any real estate transaction which are essential, but do not require a license. Top performers began to bring on others to do those things, which freed them to accomplish the essential tasks. The team concept has now evolved considerably.

For example, I have several of my former students from my real estate license classes who now operate on teams as exclusive buyer’s agents, exclusive seller’s agents, and transaction managers. They are all licensed. In researching this topic I’ve come up with two excellent information resources. If you’re an agent considering forming a team, or an agent considering joining one, I highly recommend both of these books.

YOU ARE NOT A HOUSE - Book Review

If author Dr. Bill Fisher came up with his book title to grab the attention of potential readers, he succeeded with me. Try as I might I couldn’t figure out how the phrase “You Are Not A House” could possibly relate to the subtitle “How to Build Your Real Estate Career With Passion And Authenticity.”

Since I’m guessing you might be facing the same challenge, here’s how the book’s promotional literature explains it. “How does a real estate agent build a rich, satisfying career? For decades, real estate professionals have thought of the classified ad as the standard for all their advertising and marketing.

Use punchy words, leave out information that readers will call to find out about, tease the reader all the way to the phone. This may help sell a house, but it does very little to build your career and motivate people to call on you, not an advertised house, for help with real estate matters. You are not a house.”

The book is written around a series of “Service Oriented Marketing Principles.” Number one on the list sets the tone for the remainder: “Design all your marketing and prospecting with your clients’ needs in mind. Not your own needs.” The point is elaborated on with this: “The central error people commit is thinking from the vantage point of their own professional needs, rather than from the vantage point of their client’s and prospective client’s personal needs.”

Dr. Bill, as he refers to himself, is a former highly-successful real estate practitioner in California who now specializes in providing marketing information through a variety of personalized newsletters. Check out his blog at youarenotahouse.blogspot.com. His e-mail address is wedwrap@comcast.net. Just remember. You are not a house.

When teaching my real estate licensing classes I role play that I am the managing broker and the students are agents in my company. The company name: “Golden Rule Realty.” No theological implications, just good business. Both of these books would be prominently displayed in our office.

Some Helpful Tips For Achieving Logo Nirvana

A logo serves as the personality and opening statement made to the public by an organization. Logos can be seen on business cards, billboards, in print, online and everywhere in between. Many well-known organizations have memorable logos — think the bulls eye for Target, swoosh for Nike and the Apple for Apple computer. All are memorable as the symbol of the company they represent, and with just a symbol, we can associate a company and brand promise without ever seeing a written description or company name.

It is important to realize the power of a unique and effective logo and what it can accomplish for an organization’s identity. No matter the size of the organization, a logo is the symbol of an organization and an effective one is a visual icon that reinforces a company’s mission and identity.

YOUR LOGO DESIGN

The following tips will explain how to design a logo that will remain constant on the mind of its viewers.

Express Your Organization’s Personality

Your logo can not sing and dance but it can express the personality, purpose and promise of your organization. In fact, it is vital for a potential customer to learn something about your organization just by looking at its logo. It can also provide a clear and consistent image of the company. Believe it or not, the colors that make up your logo are an important component in helping to accomplish this goal. Consider implementing blue into your color scheme as blue communicates trust.

Pop Goes the Logo!

The most effective logos are ones that come alive and jump off the page or wherever they are displayed. Make sure your logo is bold, memorable and pops. Ensure that your logo design makes sense for your business and don’t be afraid to test it with existing and/or potential customers to see what their feedback is. What you think works might not resonate with your customers.

Keep it Simple

Don’t over-think your logo design and keep it simple and clean. Attempting to do too much with your logo will only confuse your target audience and blur your message. A confusing logo is forgettable and useless. Sometimes less is more.


Make Sure Your Logo is Flexible

A logo must work well across all channels as it can be displayed in numerous places online and in print. Legibility is key and your logo should be able to work in both black and white and color as it may be on documents that will be faxed or photocopied. A logo that cannot be viewed clearly is not effective. Keep in mind that your logo may be viewed on a small object like a business card or on a larger item such as a presentation folder.

Make a Statement

Many logos also include a tagline, which is a statement of the products or services you provide and separates your organization from others. Like the design of the logo, a tagline should be short and to the point but memorable — think of Subway’s “Eat Fresh,” John Deere’s “Nothing Runs Like a Deere” or Nike’s “Just Do It.” As you design your logo, incorporating a tagline can be an effective marketing tool and it is one best developed in conjunction with the logo.

Research Your Logo

While your logo might symbolize something positive in the United States, it might stand for something entirely different in other cultures. Research the meaning behind your logo before you finalize it as it may convey a negative message to those from other cultures. Many organizations do business with individuals and organizations from other countries/cultures which make it vital to create an internationallyfriendly logo. And, of course, make sure another organization is not using the same or a similar logo design, especially if they are a competitor.

Use it!

Now that you have a logo, it is time to use it everywhere both online and in print. Put it on all of your marketing materials including business cards, letterhead and even envelopes. Include it in your email signature, on your web site and use it in all correspondence to reinforce your company and encourage repeat customers and referrals. Once you have a solid logo that makes an impact, it should be synonymous with your company name.

Protect Your Logo

Give clear, specific guidelines to anyone who will be working with your logo and insist on approvals for any use of it. Be clear as to how the logo should be used, in what form and on what media. Let them know not to distort the mark and ensure they use enough clear space. If it is used incorrectly, fix it immediately. Your logo is the symbol of your company and it needs to be consistent.

Be Consistent

A logo is not something that should change regularly. It takes a lot of work to come up with a logo and it takes an even greater amount of time for customers and prospects to remember it and associate it with your brand. Changing a logo regularly will confuse your target market and cause more harm than good.

Spend the time to develop a stellar logo and associated tagline now to reap the benefits in the future. No matter your budget, design resources or the size of your business, these tips will enable you to create a logo that will represent your organization proudly and effectively.

Is Finding Balance In Your Life A Pipe Dream? It Need Not Be.

Balance has been such a popular subject in the last five years that it’s almost become passé. But that hasn’t stopped many of us from continuing to pursue it. The world has gotten smaller as it’s gone more global, and the pressure to do more, faster, with fewer resources hasn’t abated.

Most people are juggling the demands of two-income households while trying to keep current with all the chores, tasks, details, and information necessary to make informed and wise decisions, not to mention time for family, hobbies, volunteer activities, exercise, socializing, self-improvement ... the list seems endless! And overwhelming.

We seek balance because we’re stressed. We gravitate toward balance when our activities are not closely enough aligned with our values, or are too taxing to be healthy over the long haul.

WASTED EFFORT?

But trying to find perfect balance is a pipe dream and wasted effort. There seems to be more pressure to be successful — in the cultural sense — than ever before. While doing the job of two or three people at work, we’re expected to be exemplary parents, and also have a life in which we actively enjoy our avocations and hobbies, and take superb care of our bodies, spirits and minds.

If you think balance needs to be a daily practice, think again. While it’s a wonderful goal, it’s not realistic for most folks. Balance becomes another to-do on an ever-expanding and guilt-inducing list. What if the balance we’re looking for in our lives was more like the balance that nutritionists suggest as a diet? For instance, we don’t need to eat all the proper numbers of servings from the five food groups each and every day, but if we get a good balance over a month, that’s still quite healthy.

THE BIGGER PICTURE

Translating that to the bigger picture, that might mean that there are times when we need to work more than usual, and other times when we can take more time off; times when we focus more intently on our hobbies and passions, and other times when they go a bit neglected because there are other current important priorities.

There may be times when we take really good care of ourselves, and other times when that slips a bit; times where we devote a lot of attention to our family, and other times when there is less energy and daily time to focus on them. And that’s OK — it is as it needs to be. The aim of balance is to live a wellrounded life, and to renew and refresh your productive and creative energies on a regular basis so you can contribute to the best of your potential.

REALISTIC BALANCE

Here are some useful tips to help you achieve a realistic balance.

Get Mindless.

The other side of work isn’t only time or a simple hot bath, sports, meditation, fishing, taking a walk, sitting in your yard and watching the birds in the trees or the clouds in the sky. This “mindless” time is critical to restoring your mental prowess, as well as your physical stamina. It also creates space for spontaneous creativity and problem solving. Don’t force it, though. The aim is to relax and enjoy that relaxation fully.

Employ your calendar.

Remember to schedule those activities into your calendar for specific days and times. If you need to contact others to set things up, schedule that into your calendar, too. Seeing the activity in your calendar engenders more of an emotional commitment to it, and it sets aside time for it, automatically making it more of a priority.

Reduce family performance stress.

Quality time with your loved ones needn’t be complex or difficult to pull off. You don’t need to schedule special activities or spend a bunch of money to spend rewarding, memorable moments with your family and friends. Unstructured time and spontaneous activities are often more fun and are remembered longer. Some ideas include going for a bike ride, sharing an interesting craft project, baking or cooking a meal, going for a hike in a local park, or taking a car ride.

Be gentle with yourself.

If you start a new habit that soon gets pushed to the side in the onrush of regular life, understand that it’s completely normal. You haven’t failed, you’re just experiencing the same breakthrough bumps everyone else goes through, too. It’s unrealistic for you to decide to take up a positive new practice and always follow through on it forever more. We know this, we just forget to be more compassionate with ourselves. Ask yourself if the habit was worthwhile when you did it, and if it was, work it back into your schedule. If it wasn’t, pick something new to play with.

Make it sustainable.

If it’s not already part of your daily schedule, creating an expectation that you’ll practice silence, or meditation, or journaling, or some other activity every day just isn’t realistic. Once or twice a week, or even once or twice each month may be enough for some balance activities, at least to start with. After all, that’s 100-200 percent better than before you started, and that’s great progress.

Make it yours.

Don’t get caught up in trendy balance activities if they don’t fit your tastes or preferences. Since cultivating our best selves is one of the reasons we seek balance, spend time doing the things you really love to do, no matter what anyone else thinks of them. These are, after all, the pursuits that will truly reenergize and gratify you.

Look for balance between your values and your financial constraints versus a satisfying lifestyle, so that you’re living a life that doesn’t wear you out too quickly; one that satisfies and engages your potential over months and years rather than daily or weekly. It’s a much more forgiving intention, more reasonable and sustainable, allowing you to be productive and effective while not overloading you with expectations that just add unnecessary pressure.

If the pursuit of balance is putting you off balance, remember that while it’s a worthy pursuit in moderation, its purpose is to reduce your stress and overwhelm, not add to it. Have fun with it, enjoy it and let it be as “do nothing” as you’d like it, and need it, to be.

A Hidden Nightmare In Payment Options Loans

A past client calls you, totally in shock. She just received a letter from her mortgage company regarding changes to her payment option loan. It states that since her mortgage amount has increased due to negative amortization, she must now pay the fully-amortized payment.

In other words, the payment option loan is being stripped of its payment options! She took this loan out to have monthly payment flexibility; but now she’ll be saddled paying more than twice what she’s been paying. She tells you this new payment is financially impossible for her and ends the conversation with the question, “How can the mortgage company change rules midstream?”

THE RIGHTS OF THE LENDER TO CHANGE THE PAYMENT

The mortgage company can and does exercise changes to a mortgage payment during the life of the loan due to the language used in the mortgage papers your client signed at closing. This little-known payment change clause is currently affecting tens of thousands of homeowners nationwide and, unfortunately, is bound to breed a whole new rash of delinquent loans and foreclosures.

Here’s some background. The payment option mortgage is a type of mortgage (usually with an adjustable rate) that allows the borrower to choose one of four payments each month. For example, you can choose from a payment: 1) amortized for thirty-years (normal payment); 2) amortized for fifteen years (accelerated pay-off payment); 3) of interest only (no principal is paid); or 4) of less than interest- only (termed “minimum payment) where the shortfall/negative amortization is added back onto the principal balance.

Most payment option loans are for brief periods of three, five, or seven years in order to keep the principal balance from growing too large if only the minimum payment is made. While that sounded plausible in mortgage theory when these loans were birthed approximately five years ago, the application and subsequent outcome has morphed into a nightmare in the current mortgage environment.

LITTLE-KNOWN CLAUSE THAT BLINDSIDES CONSUMERS

A little-known clause in the documents for the payment option mortgage allows the lender to cease offering the monthly payment options for that loan once the principal balance reaches a certain high point, typically 110% of the original mortgage amount. Let’s say that your client’s original loan amount three years ago was $233,000 and she paid only the minimum payment each month since that time.

With the monthly payment shortfall/ negative amortization accruing over thirty-six months, she now owes $256,000, or 110% of the original loan. The lender’s position is that this extreme financial leverage could put her in a more likely position to lose her home to foreclosure. Moreover, the lender wants to protect their position against the borrower walking away from the loan due to low/ no equity.

The lender’s remedy is to require your client to stop the equity bleed and begin building equity in the property by paying the fully-amortizing, regular payment. In other words, the minimum payment of $871 on this loan now escalates to $1,797 per month…more than doubling her monthly principal and interest payment!

In a stance for self-protection, lenders across the country are mailing out payment increase letters by the thousands, giving little thought that a majority of borrowers choosing payment option mortgages did so because the fully-amortizing was financially out of reach. Unless a family takes on a second or third job or wins the lottery, this move will create additional insult to injury for homeowners in the already precarious market.

WAYS TO HELP YOUR CLIENT

There are several steps you can take to assist your client. First, recommend that she immediately call her mortgage servicer at the number listed on the notice she received. Ask what alternatives are available to her. For example, they might be willing to re-cast the loan at today’s current fixed-rate provided she qualified for that loan amount and provided full documentation (verification of income, debts,
and the like).

Since many payment option mortgages have fairly steep pre-payment penalties totaling thousands of dollars that would need to be paid as well. If re-casting the loan is not financially feasible, suggest that she negotiate with the loan servicer to at least reduce the full payment to interest-only. This is sometimes provided to a borrower who has a flawless mortgage payment record in an effort to at least keep the loan from growing in principal through negative amortization.

While it will save only a few hundred dollars a month in payments, that might make the critical difference of keeping the mortgage current or going into default. This latest coffin nail in the already precarious mortgage market is one more reason for consumers to understand each and every clause in the mortgage documents before they sign them and to request a viable worst-case scenario when any type of option or adjustment product is considered.

If your clients have a payment option mortgage, it may be in their best interest to get their financial house in order and move to a fixed-rate mortgage as quickly as possible.

Putting Video To Work For You On Your Website

Real estate professionals have long understood the power and effectiveness of video in selling property. Virtual walkthroughs and video tours immerse the buyer in the experience of the property, and result in shorter sales cycles, higher conversion rates, and better qualified prospects. Yet despite its effectiveness, the cost, complexity, and availability of video solutions has meant that very few properties ever benefit from the power of video.

In an era when many real estate professionals host their own websites to showcase properties, and where buyers and sellers alike are highly attuned to the online consumption of video, cost and technical complexity have been the major hurdles to the effective use of this emerging medium. But two important developments — video-enabled digital cameras and plug-and-play video service providers — are now putting cost-effective video solutions within the reach of all real estate professionals.

USING YOUR DIGITAL CAMERA

Whereas, even a year ago, capturing video meant engaging a professional production team to the tune of thousands or even tens of thousands of dollars, today any individual with a digital camera can capture highly-effective professional- looking video footage, provided they follow a few simple rules.

Shoot with lots of light - Video is much more sensitive to light than still images, and the more light you have when shooting, the clearer, smoother, and crisper your final video will be. Daylight is best, but if you have to shoot in artificial light, make sure to work in conditions that are as brightly lit as possible.


Don’t zoom or pan - Zooming in or panning (moving the camera from side to side) tend to be very hard on the eye. If a horizontal pan is important to your shot, move very slowly and keep the camera as still as possible.

Keep the camera steady - Whenever possible, use a tripod or set the camera on a desk or counter. If you must hold the camera, lean against a doorway or brace your elbows to keep movement to a minimum.

Fill the frame - Try to fill the entire frame with the subject. Online video tends to be shown at sizes that are much smaller than the average television, so for maximum impact, get as close as possible to the subject matter.

Keep it short - Videos with a duration of two minutes or less tend to have much higher viewership and completion rates and tend to be more impactful than videos with longer durations.

GETTING IT ON THE WEB

Once videos have been created, getting them onto a website is the next important step. Agents should avoid using consumer sites like YouTube that have poor quality and encourage visitors to leave a site by clicking away. Instead, take advantage of cost-effective professional solutions like Fliqz (www.fliqz.com) that allow site owners to easily upload, manage and integrate videos while providing a highquality user experience.

Uploading videos is as easy as uploading a photo. Simply browse to the video of choice, and click the ‘submit’ or ‘upload’ button. It will take a few moments for the video to upload, and then a delay of a few minutes while the video is encoded to Flash, a video standard that allows videos to be seen by all users, without downloading, regardless of platform (Mac or PC) or browser (Internet Explorer, Firefox, or Safari).

Once a video is available, including it in a site is simply a matter of cutting and pasting a short snippet of HTML, referred to as an embed code. Once pasted into a web page, this code will insert a video player which will, in turn, stream the video selected. Some solutions will also enable you to customize the look and feel of a video player, by selecting skins, adding watermarks, or uploading start or end screens to display before the video starts or after it has completed.

ATTRACTING TRAFFIC

Getting video onto a site is only the first part of a successful video strategy. Like any online marketing technique, there are three critical aspects to success: attracting traffic, maximizing engagement, and driving conversion. Following a few simple guidelines will help to ensure the maximum return on a video investment. The first goal sites should consider is traffic — attracting more buyers and sellers.

Video can be a powerful tool here, and offers two different possibilities for success: Search Engine Optimization (SEO) and viral propagation. SEO has historically meant tuning text and adding meta-data to improve the likelihood that a search engine’s crawler will create a high score for a given page, raising the site’s rank in natural search. Search engine results now also include thumbnails of videos that click through to the site hosting the video.

Since few videos have been indexed to date, a site with video which has been indexed by a search engine has a high likelihood of getting a prominent listing. Due to an inability to parse Flash tags, however, search engines are unsuccessful at indexing videos using their crawlers. As a result, the only videos that make it into the listings are videos that have been submitted via MRSS.

Therefore, any site including video in their mix should create an MRSS feed and submit it to Google, Yahoo!, and the other major search engines. Many video providers offer this as part of their services bundle. Another traffic strategy, viral propagation, provides the opportunity for sites to disseminate their message into other sites, blogs, wikis, and forums to which they would otherwise never gain access, thereby creating hundreds, and potentially thousands, of new marketing opportunities and new points of entry to their site.

To execute a viral strategy, your site gives visitors the ability to repost videos they like elsewhere on the web. This is accomplished by providing a snippet of HTML code to the visitor (called an embed code) which allows them to paste the snippet, and hence the video, into any other HTML page. Successful viral strategies can account for up to 15 percent of a site’s overall traffic and thus bear serious consideration as part of any web video strategy.

IMPORTANCE OF BRANDING

Keep in mind that branding is critical in any viral strategy. Getting your video onto other sites and blogs is only effective if it both promotes your brand and links back to your site or displays your playlist within the player. The best video solutions (again, Fliqz is a leading provider) give total control over the look and feel of your player, as well as its associated behavior, guaranteeing that the brand is front and center at all times.

Beyond creating increased traffic, the next goal should be to increase interactivity for more effective buyer experiences. A video on the home page will attract as much as 80 percent of the overall activity on that page. Buyers who experience a video walkthrough tend to be better qualified and more likely to act.

CHOOSING A VIDEO PROVIDER

There are number of things to consider when choosing a video provider. The primary consideration for many individuals will be cost. Consumer video sites offer free solutions, but these should be avoided unless there is no other alternative. The quality offered is often poor, your site won’t benefit from search engine traffic, and you’ll be driving traffic away from your destination and to the hosting site instead.

Compatibility is critical, so you’ll want to make sure your provider offers in-browser streaming, does not require the end user to download any software, and is compatible with all major browsers and operating systems. Typically, this means a Flash solution, although Microsoft’s Silverlight is emerging as a standard as well. You’ll also want a solution that allows you to centrally manage your video assets, and that tracks plays, shares, and other analytics so that you can see where you’re being effective in your video strategy.

Other features to consider include MRSS syndication, email sharing, and player branding and customization. Be sure to understand the number of uploads and streams included, and the amount of storage you’re allowed. Fliqz offers solutions for as little as $50 - $100 a month, and offers you a standard of quality and range of features that are well worth the spend.

FROM LOOKERS TO BUYERS

At the end of the day, the defining measurement is conversion, turning prospects into buyers. For real estate, this is where video really shines. Not only is video a more immersive and compelling form on content when selling the experience of a property, but it is far more effective in driving actual conversion. Real estate sites using video report that buyers exposed to video are up to four times more likely to act than those presented with words and images alone.

Online video tells a story far more compelling than words and photos. Given its low cost, ease of use, and widespread adoption, video is a powerful tool that is changing the way both buyers and agents are experiencing property. Decreasing cost and complexity, combined with widespread adoption by consumers means that this is a tool that should be in the arsenal of every real estate professional today.

From Lamb To Lion: Courageous Leadership For Tough Times

In this challenging market, I’ve been working with companies to turn their bottom lines from “in the red” back to six figure profits. Because of my work, I’ve seen some oft-repeated patterns that are not only disturbing, they’re actually directly causing that red bottom line!

I think these fatal mistakes are caused by the managers’ lack of courage. I call these managers “lambs.” They are unwittingly letting themselves be lead to….. You know what I mean. This “lamb” management style may have worked in markets that drove success, but this style isn’t working now.

THREE FATAL MISTAKES “LAMBS” MAKE

1.) Keeping non-producers.
2.) Hiring with “wimpy” expectations (or none).
3.) Allowing gaps in “agent development.”

Mistake #1: Keeping Non-Producers

A few years ago, I started managing an office that was literally known as the “office where agents went who didn’t want to work.” What a great recruiting slogan! The previous manager had hired just anybody and kept just anybody. Your hiring and retention strategies absolutely create your image, and you can’t escape it. Oh, I know. They’re “all nice people” and “they’re trying.”

Sure they are. How do you know they are trying? You don’t. You just want to think that. Why are you keeping those non-producers? What do they do for you? What would a producer do for you? If you don’t want to be known as the same “recruiting slogan” I inherited, then stop retaining those non-producers and get the courage to terminate them.

You’ll never recruit producers with more than 10% non-producers hanging on and determining your image. Lack of courage: The non-producers are running your office. Courage: You are setting the standards as a “lion” leader. Part of your standard is to terminate those who aren’t contributing sufficiently to your business.

Mistake #2: Hiring With “Wimpy” Expectations

We all think we do a “mutual expectations” talk during the interview. Unfortunately, it’s too “wimpy” a conversation. Recently, a manager said to me, “I hire with expectations. I expect them to come to meetings and educational opportunities, and to be a “team player.” All right. Pretend you’re sitting in the candidate’s chair.

What did you hear was most important to the manager? What did you hear you have to do to be a “part” of that company? What do you think assures success? If you do the “wimpy” or lamb’s version of the mutual expectations, stop it right now! Do you want them to produce? Do you expect them to start your start-up plan in the first week?

Do you have a start-up plan? If you expect productivity and you have a plan to get the agent to productivity fast, say that! Build excitement for your plan for success, and ask for a firm commitment directly. Future good-to-great producers will jump at the chance to work with you. Non-committed, future poor producers need not apply.

When I give this presentation to management teams or associations, I include three specific critical mutual expectations dialogues, to model the behavior I need to change the paradigm from “lamb” selection processes to “lion” leadership processes. Lack of courage: Expect little and get wimpy or no agreement. Courage:Get agreement on the critical components for success.

Mistake #3: Allowing Gaps in “Agent Development”

I’ve stopped thinking in terms of selecting, training, and coaching. Instead, I think in terms of “agent development.” What’s your plan for developing that agent from the time of that selection interview, through orientation, through implementing the startup plan, through training? Where are your “gaps”?

One of the most common gaps is that time between orientation and training. The agent sits around and gets bad habits—sometimes for months until training starts. By that time, the agent is de-motivated—out of steam. Don’t let that first week go by without an implemented plan to get the agent into the stream of business— lead generating.

Lack of courage: Not putting that agent to work in the first week so he/she can have success. Courage: Starting that start-up plan and holding that agent accountable to his/her success (they expect it in 30 days, you know!)

DEVELOPING THE LION MENTALITY

Have you been acting like a “lamb” or a “lion”? Stepping up to courageous lion leadership will solve any and all of your recruiting and retention challenges. To make the “switch”: Get the needed “how to” systems to guide you, and hire the best management coach you can find, so you get support for your desired “lion” strategies. Start now.

Environmental Due Diligence – For Your Buyers

Most everyone today knows that environmental problems pose health risks. That’s why issues found inside the home, like mold and lead-based paint, are routinely evaluated during home inspections. But did you know that pollution that originates elsewhere in the neighborhood, such as an oil spill from a leaking underground storage tank, can travel through the soil, groundwater or air and impact nearby homes as well?

Unsuspecting residents who live in close proximity to a polluter can feel the effects of residual contamination both in their well-being and in their wallet. Although high-profile cases regularly make headlines, homebuyers rarely screen potential neighborhoods for environmental risks. This is a mistake. Recent statistics show 551,368 identified leaking underground storage tanks nationwide, and more than 1,000,000 specific locations at which discharges of hazardous substances have been reported.

As a real estate agent competing in the current do-it-yourself Internet culture, you know that successful agents differentiate themselves by becoming a trusted resource on a variety of issues. Guiding buyers through a tailored due diligence process makes sense, and suggesting professional resources to help buyers screen for neighborhood environmental risks is one way you can help buyers make a sound investment.

HOW NEIGHBORHOOD POLLUTION AFFECTS HOMEOWNERS

Pollutants from current or former industrial activity, solvents from dry cleaning operations, oil from leaking underground storage tanks, and even chemicals from illegal drug manufacturing or “meth” houses can seep into soil and groundwater, where it can create unhealthy living conditions. Likewise, chemicals in the ground can travel through the soil as vapors and enter homes through foundation cracks and gaps around utility lines, negatively impacting indoor air quality.

Besides its negative impact on human health, contamination can drive down property values and stigmatize neighborhoods, especially if news of the pollution makes headlines. For obvious reasons, tainted properties are difficult, if not impossible, to sell. In extreme cases, homebuyers have even been held liable for cleanup costs, which can cost thousands of dollars.

LACK OF ROUTINE SCREENING

Commercial properties are routinely screened prior to purchase with a Phase I environmental site assessment. But there is no such provision in residential settings, and lender requirements for Phase I ESAs at home transactions don’t exist. “I sometimes see homes next to industrial properties and wonder who let that happen,” says Elizabeth Krol, an environmental professional with Shaw Environmental in Hopkinton, MA.

“And I once worked on an industrial property in New Jersey where a developer had built very expensive homes next to the site, just past the railroad tracks. The home owners later complained incessantly to the manufacturing facility regarding noise, odors and truck traffic. Didn’t they notice the train or the vent stacks
at the factory?” Understandably, the financial and emotional burden associated with residential contamination can be great.

Increasing pre-purchase environmental due diligence is a smart move, especially in a down market, when homes can become devalued. The effort pays off, because if a home is “clean,” the owner has peace of mind; and if it’s not, problems can be addressed up front. “Just looking at what’s in the neighborhood could save a lot of headaches down the road,” says Krol. “Buyers need to be aware of environmental issues at residential properties, and real estate agents can help drive that awareness.”

DUE DILIGENCE

In the case of potential environmental contamination, due diligence is key. A pre-purchase neighborhood environmental screen reduces the risk that an unsuspecting buyer will hold devalued property caused by previously unknown environmental concerns. While homeowners who discover pollution after the deal closes have little or no recourse, those who do so early in the deal have several options at their disposal.

For example, they can use the environmental issue as a bargaining tool to negotiate a lower price, evaluate available alternatives that would mitigate the impact of the pollution, such as connecting to a municipal water supply or installing a vapor intrusion mitigation system, or drop the home from consideration altogether. To protect themselves, potential homebuyers and their real estate agents should consider the potential for contamination when a home is located:

• On or near an existing or former industrial area;
• On or near a brownfield area;
• Near an existing gas station;
• Near an existing dry cleaner;
• On or near a well-developed, commercial main street, where there may have been former gas stations on the corners or former dry cleaners in nearby shopping centers;
• On a historic urban fill area — cities across the country, from New York and Boston to Los Angeles and Portland, have areas that were filled in with material containing naphthalene and polycyclic aromatic hydrocarbons, both known pollutants; and
• On or near a contaminated plume from a known release.

You can get a general feel for potential environmental problems by driving around the neighborhood looking for the presence of current or abandoned gas stations, dry cleaners, industries and the like, and noting their proximity to the home. Another way to determine whether environmental problems may impact the neighborhood is by calling the appropriate state agency, such as the Department of Environmental Protection, to ask about known problems in the area.

For example, if there is a sizable contaminant plume, that information is likely a matter of public record. Make the contact information for such local agencies available for your buyers, but let them do the investigating. Never assume responsibility for evaluating whether environmental conditions may be a problem.


Advise your buyers when you see warning signals, but let the decision as to whether
to test or how to test up to your buyers.You don’t need to take on that liability. For homes in newer developments, buyers can check with the developer, who should have performed environmental due diligence before acquiring and developing the property and will be able to provide relevant information.


PURCHASE AN ENVIRONMENTAL REPORT

Alternately, homebuyers can purchase a neighborhood environmental report — a quick and simple screen of reported environmental contamination within a specific radius around the home. These reports, which can be ordered through most home inspectors,
identify known environmental concerns such as leaking gas station tanks, landfills,
hazardous waste sites and other environmental problems that have been reported to federal, state, local or tribal agencies.

The reports are inexpensive (typically less than $100), can be prepared within a day or two, and are easily understandable by a layperson. Best ordered around the time of the home inspection to ensure that information is current and problems can be sufficiently addressed before purchase, the report should, at a minimum, contain a search of the following databases:

• Federal Superfund sites
• Proposed Superfund sites
• Leaking underground storage tanks
• Hazardous waste sites
• Landfills
• Illegal drug labs.

If the state Department of Environmental Protection (or its equivalent), the neighborhood environmental report or a drive-by investigation indicates that there might be contamination in the area, it’s a good idea to contact an environmental professional, who can help interpret the likelihood of an environmental condition at the home.

CONSUMERS WANT TO KNOW

Today’s homebuyer is more aware than ever of environmental issues and the problems they can pose to human health. Consumers pay more to eat organic foods, drive energy-efficient cars and otherwise live a “green” life, even in a slowing economy. It makes sense that they’ll want their home to be as safe as possible, too. As a real estate agent, you can offer added value by being able to offer some suggestions about available screening resources.

But be careful not to become part of the decision-making process. It is up to your buyer to have the testing done and to interpret the results. You need to stay out of the liability loop. Recommend testing. Provide lists of resources. But don’t get involved in deciding whether or not to have the property screened. That is totally up to the buyer.

If you suspect environmental problems and recommend testing and the buyer decides against it, it would be good to have your recommendations in writing and have the buyer sign a statement acknowledging them. That may cause the buyer to back away from the property. But that’s better than having the buyer push the sale through and then complain later that no one told them about the problem.

The Compassionate Edge

Empathy: “Direct identification with, understanding of, and vicarious experience of another person’s situation, feelings and motives.” Does empathy help you grow your business? Upon first glance, it would appear that being able to relate to another person’s experience is a key strategic advantage. For a broker, it would seem to be a useful component in the arsenal of tools for recruiting, training and coaching of potential and existing agents.

Empathy has been touted as the most powerful ingredient for successfully helping others, particularly in servicebased professions. Here is the truth. Empathy is a drain. Vicariously living another person’s pain and suffering does nothing but create pain and suffering. Taking on someone else’s negative feelings about anything in order to relate to them more effectively has us delving into the depths of their despair right along side them and does nothing good for them and certainly does nothing good for us.

EMPATHY/COMPASSION

So how can we feel and understand what our agents are experiencing without taking
their suffering upon our shoulders? We can accompany them on their journey, validate their experience, share our common stories and circumstances and travel past their misery allowing them to move forward. The only thing that empathy does is to allow them to remain stuck. If we are to step into our preferred role as their mentor, guide, confidante and leader, then we must eliminate the idea of empathy and replace it with compassion.

Compassion: “Acceptance of another person’s circumstances while accessing a vision of them in a better state.” By definition, the biggest and most important distinction between empathy and compassion is viewing “them in a better state” and holding that vision clearly in mind.

The last thing that agents need is our empathy; they need to know we understand and care and that we have an unfailing belief in their ability to succeed, regardless of current circumstances.They need us to lead them, guide them and direct their energy toward achieving their goals and dreams.

PUT TO THE TEST

I’d like to share an amazing story about Maggie Mouscardy, a real estate agent in California and one of our coaching clients. Her story exemplifies the distinction between empathy and compassion. When we act from a place of compassion rather than from a place of empathy great things come our way; her story is a lesson for us all. She took in a homeless woman, and together they have given each other the gift of living each day with gratitude, hope and joy.

It was this spring, a couple of weeks before the Armory in Santa Ana, California, closed its doors to its Homeless program for the summer hiatus, that Maggie Mouscardy heard about the work they were doing and was moved to go out and help serve dinner. When she arrived at the Armory that first night something changed forever inside of Maggie. She was drawn to a young woman who was sitting on her
mat eating dinner.

Her name was Raquel, and there was just some quality about her that drew Maggie towards her, a goodness and sense of gratitude that made her stand out from all the others. Once they had met, Maggie heard a voice from within her say, “You can’t leave her.” Responding to the calling, Maggie reached out to Raquel offering to give her shelter in her home, and helping her find a job and a place to live.

Maggie says that she “never felt so sure of what she was doing in her life, feeling incredibly compassionate, warm and glowing inside.” Raquel had come from an abusive marriage that resulted in social services taking away her 9 month old daughter, and placing Maggie in a Psychiatric Institution. She has lived on the streets for the 3 years since her release.

The metamorphosis of Raquel has been amazing. Within a few weeks of living with Maggie, Raquel secured a job at a flower shop which also provided her with a room. She left a “tremendously beautiful” bouquet in her room for Maggie when she left. The story, although still happy, did not have a fairy tale ending. Within two weeks it turned out that the flower shop owner wanted more than flower arranging in exchange for her room, and Raquel left, returning to live with Maggie and is already engaged in another job.

GIVE AND TAKE

Maggie and Raquel have learned much from each other. Maggie had been experiencing a very difficult time in her life, feeling financially stretched with the real estate market conditions and emotionally drained as well. Since Raquel has come into her life, business has been coming her way. She feels as if God is rewarding her for her kindness, although she didn’t do it for reward.

When Maggie saw what life was like at the Armoury she was, “filled with gratitude and felt privileged that she could help feed the homeless.” And as for Raquel, she prayed that someone would come and help her. Maggie has encouraged Raquel to keep
her daughter in her heart, write her letters, and birthday cards and keep them all. “Life” she says, “has a funny way of bringing back to us what is really ours.”

Maggie gave Raquel the most incredible gift. Through Maggie’s compassion, Raquel was able to see herself differently, to step into her own shoes and, with self confidence and an inner strength walk independently. Isn’t this what we want our agents to do? What does help us grow our business? As brokers, when our actions are motivated from a place of compassion, we are able help agents to reach their goals and dreams and when we do that we are giving ourselves the most wonderful gift as well. “Life has a funny way of bringing back to us what is really ours.”

Ten Common Characteristics Of Successful Real Estate Professionals

There is a TV show on CNBC called “The Big Idea” hosted by Donny Deutsch, a Madison Avenue marketing genius and a self-made millionaire. From time to time, Donny invites well known successful people from many walks of life to talk about how they achieved their lot in life. One night Donny Deutsch asked special guest Donald Trump about his views on the secrets to success in business.

To my surprise, Trump replied that not everyone can be successful in business, and some people just have to accept that. What? What do you mean not everyone can be successful? Trump was making a powerful statement and he had my attention. He went on to say that we (business leaders, managers, authors, speakers, coaches, and so forth) have done a disservice to the American businessperson. We have led people to believe that anyone can be successful in business. Anyone.

It’s simply not true, Trump explained. Not everyone can be successful. No matter how hard you work or how long you stick it out, some will simply be marginal, average at what they do, or won’t make it. Success in business takes more than attitude, passion and nose-to-the-grindstone work. The formula for success is more complex than that.

THERE IS A FORMULA

Trump is right. Success in business is reserved for a special group of individuals who are willing to do more and give more so that they can get more. It’s a fact of life, and it is a fact about real estate salespeople as well. So why do some real estate salespeople rise to the top while others sink to the bottom or bob somewhere inbetween? Success isn’t simple.

There is far more than one thing it takes to be highly successful in this business. Success is a formula, a recipe. It’s complex. If it were not, everyone would be successful and there would be no such thing as a “top performer.”

COMMON CHARACTERISTICS

Let me identify ten common characteristics of successful salespeople in the real estate business. Spend a day or a week with a top producer and you’ll see these traits and characteristics evident. Spend some time with an agent doing poorly or struggling, and you will see the same things lacking.

1.) Top performers are in it for the long run. Unlike other real estate salespeople who are trying the business on for size and waiting to see if it fits, or are using their current occupation as a job gap until they find something else, top performers are committed to their career in real estate until retirement. This longterm focus and obligation means they will invest more in their careers every day than others are willing to invest. That’s why they succeed at the level that they do. They are in it for life.

2.) Top performers take risks. They are willing to try new things, experiment, change habits and go after big targets. Although they may fail at these endeavors as much as anyone else, because they are continually taking risks and trying new things, they succeed more as well. This risk-taking mindset moves their business forward and creates listings and sales others will never have. That’s why you’ll see top performers run ads and sponsor events. That’s why you’ll see top performers working with the best clients and properties in town. They take the risk, they go after the big opportunities, and that’s how they get them.

3.) Top performers invest in their businesses. Top performers are okay with spending some of their own money to do things. They purchase gifts for their clients and partners. They buy books and training CDs to learn new things. They pay to attend seminars and subscribe to industry magazines and Internet services. They spend thousands of dollars each year to market to their lead sources and databases. This is their business, and they know that they must spend a little money to make a lot more.

4.) Top performers align with top clients. They know it is hard, if not impossible, to become a success in this business if you don’t work with successful people. That’s why they are picky about the clients and partners they align with. They want to be the best; and to be the best, you have to have the best vendors and customers. Many real estate agents are content to work with just about anybody that will talk to them. They saddle themselves with lesser caliber, low quality prospects and partners. In the business of selling, your clients and partners are your business. Top performers get that. It’s a people business, and to be the best you must work with the best people.

5.) Top performers have systems that work. How do top producers generate so much business? It’s because they have built ironclad systems, procedures and checkpoints that can run a high volume of sales and listings through the process with amazing accuracy. They have client management systems, follow up systems, status review systems, marketing systems and systems to measure and track their leads, loans and sources of referrals.

6.) Top performers are stingy with their time. They know that their time is worth money; a lot of money! Top performers are particular about what they do with their time every day and invest the bulk of their time in activities and clients that are likely to have the highest payoff. They delegate. They stay busy. They get stuff done. Many average performers who aspire to be top performers will never reach the level of success they want because of their inability or unwillingness to manage their time properly. They spend too much time with marginal opportunities, too much time doing administrative tasks, and too much time hanging around the office waiting for the phone to ring or for something good to just “happen.”

7.) Top performers are in control. Unlike some real estate salespeople that let others tell them what to do, where to be and how to behave, top performers are their own masters. They make the call. They decide their schedule and agenda for the day. They choose whom to work with and how. This level of focus and personal control not only makes them extremely productive, it also sends the signal to others that they are confident professionals in control of their businesses and their lives. Watch a top performer move through her day. No jumping around, no emergency fire-fighting, no flying off the handle. She’s in control. She has a plan for the day, it is written down, and it is followed. Period.

8.) Top performers know their profession. Because they are willing to invest time in learning new things, reading industry periodicals, reviewing market changes and sharing ideas with others, top performing real estate salespeople build a knowledge base that allows them to sell from a level of expertise few others have. They know their market, what’s happening in the industry and what economic changes are coming down the road. Clients see this advantage, and gravitate toward working with these people because they trust their knowledge and confidence to help them find the right solutions to their needs.

9.) Top performers like to sell. While many real estate salespeople shy away from various sales activities, top performers actually enjoy selling. They enjoy the client conversations, conducting home-buyer seminars, delivering listing presentations and meeting new prospects. They don’t like sitting in meetings or spending a lot of time on conference calls. They do not enjoy hanging around the office talking about sports, movies or somebody’s kid’s problems. Frankly, they’d rather be out meeting people, making contacts and writing contracts. That’s what they enjoy because that is what they do best. When you spend a lot of time doing what you like to be doing, and getting paid well for it, it ceases to become “work.”

10.) Top performers are “can-do” people. Some real estate salespeople are making excuses instead of making results. They have all sorts of reasons why something can’t be done. “I can’t sell that house because the price is too high,” they say. “I can’t get to work on time because of the traffic. I can’t make more sales calls because I have e-mails to read.” This is how can’t do people work. Top performers, by contrast, are can-do people. This is reflected in their initiative, their approach to problem solving and their openness to new ideas. They look for ways to make things happen, not excuses why things aren’t happening. This allows them to change, grow, adapt and out-perform the competition and their peers month after month and year after year.

IN SUMMARY

We need to dispel the myths about selling that exist today. We must realize that success is special — a special thing for special people willing to do more and give more in order to get more of what they want. Perhaps, as Donald Trump says, not everyone can be successful in business. But that means that some can be successful — incredibly successful. Maybe that includes you. Maybe you are at a place in your life and career where you are fed up with “average” performance. Perhaps you are ready to push past complacency and are prepared to step up to the opportunity to become a top performer.

Helping Parents Investigate Schools While Shopping For A New Home

As a real estate agent, you’re probably bombarded with questions about the performance of schools in the neighborhoods where you sell homes. Parents naturally want to make sure they are choosing the right school for their child. Fortunately, you can help potential homebuyers take the burden out of this daunting, pressure-filled task. Good resources are available online, and many are free.

SchoolMatters.com , an online database of public schools, is a website where real estate agents and parents can easily find pertinent school information. Below are the ABCs of school research. These helpful hints can help your clients make an informed decision.

A IS FOR ACHIEVEMENT

The first thing to research is how well students in a school perform. Every state has its own assessment, and scores can be found online. When looking at school performance, parents should look closely at the numbers. For example, are lowincome students performing as well as other students? Are minority students performing as well? What about those learning to speak English?

The best schools are able to provide all students a great education. Test data is often available in various formats. At SchoolMatters.com, scores are broken down into three categories.

1.) The first is key data. It gives parents a quick snapshot of scores by showing the percentage of students schoolwide who are meeting reading and math proficiency as determined by state assessments.

2.) The second category breaks down those scores by student groups: male versus female, ethnicities, and income levels.

3.) The third category shows test data by grade level and over time. This helps parents see growth or declines that may impact their decision of where to send their child to school.

B IS FOR BALANCE

Because school is about more than learning to read and write, it’s important to review elements of a school outside of the classroom. For instance, what extracurricular activities does the school offer? Does the child excel in chess, but the school doesn’t offer a club? What if the student is a star athlete and the school doesn’t offer sports, or requires parents to pay for participation?

A good way to find out about a school is by reading what other parents have to say about it. At SchoolMatters.com, parents can rate their child’s school as well as write in-depth reviews. This resource allows parents new to the community to learn from those who have actually experienced time in the school. And, it’s an opportunity for parents to share their own experiences with others.

For example, one Nashville parent of a 5th grade student reported, “Although we were concerned with our son attending a public school in such a large city, I think it has turned out to be a positive experience. The school administration seems to be positively influenced and sincere in their hopes and dreams for their student body. The school offers advanced classes even in the 5th grade, so I’m grateful for that.

Our son is very competitive (at everything) so being surrounded with advanced students certainly helps him.” This type of open and honest feedback is the best endorsement a parent can hope to find. The classroom environment is also one of the most important qualities in a good school, which means it’s always wise for parents to visit a school before making a final decision.

Most schools generally welcome prospective family visits. Parents should call the school, make an appointment with the principal and see first-hand how students, teachers and administrators interact. A better understanding of all activities and services a school has to offer will ensure the child receives a well balanced education that takes care of not only his or her mind, but also body and spirit.

C IS FOR COMPARISON

Another step in choosing the best school for children is to make schoolto- school comparisons. Here’s an example. Let’s say you wanted to review two local high schools. Using the compare function on SchoolMatters.com, you could see a side-by-side comparison. Make sure to probe top choices by clicking on school links to see parent reviews, extracurricular activities, district finances, and even direct links to the school website.

Parents can also take advantage of the district’s opportunities like open enrollment and school vouchers. By understanding the differences between schools, parents are able to pick the one that feels right for their child. And, they’ll appreciate the extra effort you made in helping them through their decision.

The Mortgage As A Wealth-Building Tool

While the media is focusing on the negative aspects of today’s real estate marketplace, and particularly the mounting problems with foreclosures, we as real estate professionals need to keep our focus on the positive side: the ability to create wealth through real estate. Despite what you may be hearing, home ownership is still the best vehicle that the average person has to create wealth.

IMPACT OF THE MORTGAGE

Most people know that the definition of the “American Dream” is homeownership. However, few stop to think about the impact their mortgage has on their ability to create wealth. The vast majority of homeowners have no clue how their goal for financial independence is directly affected by the type of mortgage they choose. Current market conditions bear testimony to this fact.

If more real estate professionals and borrowers had taken the time to understand financing and the impact it could have on the borrower’s financial goals we may not have as many foreclosures. Keep in mind that this is not to place the blame for foreclosures on real estate professionals and their buyers. Economic conditions and the huge job layoffs have also had a big impact on the current foreclosure situation.

However, a better understanding of how to use a mortgage to create wealth and to make sure you have access to your equity when you need it can be a great defense against foreclosure. Unfortunately, real estate agents have long been cautioned to “leave the financing to the lender.” We are told that financing is not our job, we are to simply list and sell real estate and keep our nose out of the financing.

Financing the homes we sell is none of our business and the client does not want us to know their financial information anyway. To top it all off we are told that it is a “conflict of interest” and “too much of a liability” for the real estate professional to understand financing. Hmmm, do you think this has anything to do with the fact that it is easier for the lender to overcharge and take advantage of a borrower if the real estate professional is not in a position to understand the process and protect their client?

The good news is that there is a trend for real estate and mortgage professionals to look beyond a quick closing and take the time to provide finance counseling to consumers. As a matter of fact, there is even a designation program, the Residential Finance Specialist (RFS), that’s focused on providing both real estate and mortgage professionals the knowledge and tools they need to provide finance counseling to consumers and to protect them from predatory business practices.

MORTGAGE PLANNING

Just as there is “retirement planning” and “estate planning,” many are now referring to finance counseling as “mortgage planning.” Rather than viewing a mortgage simply as a debt, mortgage planning offers a wealth-building perspective that positions the home and its mortgage into the borrower’s financial planso their equity is safe, accessible and productive. Mortgage planning focuses on using the mortgage as a leverage to create wealth, both on a short-term and a longterm basis.

The premise is to use the equity in the home wisely and invest it, preferably with the help of a professional money manager. Did you know, by the way, that 82 percent of the millionaires in the United States have built their fortune through real estate? Most people usually focus on the sales price, rates and fees and fail to consider the impact real estate and mortgages have on the bigger-picture issues like the borrower’s overall financial goals, asset-producing investments, retirement, planning for college and overall savings.

Real estate and mortgage professionals who will take the time to learn how to provide finance counseling that educates a consumer on the impact the mortgage has on their ability to create wealth will have a considerable edge over their competition.

IT TAKES TEAMWORK

The key to providing these services to consumers is to build a power team that will help educate you and your clients on all the aspects involved in buying and selling real estate. This includes the financial impact real estate and mortgages have on building wealth. Your role as the leader of the team is to hold the team accountable for working in the best interest of your clients.

That means you have to be knowledgeable about each role your team plays and be able to identify predatory business practices so that you and your clients do not become victims. We’ve all heard the slogan, “When banks compete, you win.” I’d like to suggest a bit of a twist on that, “When concerned professionals cooperate, everyone wins.” If everyone involved in the real estate transaction is committed to high standards of excellence, the American Dream will not turn into a nightmare.

Bridging The Gap Between The Builder And The Sales Agent

Although there are many different profiles of homebuilders, for the purpose of this article we will consider two major sub-categories or classifications: national/regional homebuilders and local “spec” builders. These two categories have been selected since these builders own the land and the home as opposed to custom builders or builders for hire who are selling a service, homes built on your lot.

1.) Large Homebuilders - The large national or even regional homebuilders tend to have in-house sales teams made up of paid employees whose only focus is selling the homes within that specific builder’s projects. Real estate agents tend to interact with these builders only on the buyer’s side (not including large land parcel specialists), and this interaction is usually limited to bringing potential buyers and registering them into the sales process. Many of these builders do not allow their own sales staff to sell anything but their own product so there is no real competition with the independent retail agent.

2.) Local Homebuilders - The next category of builder is the local builder who builds homes on their own lots (often referred to as spec building). This type of builder will often use a real estate agent on the listing side. The majority of the problems that crop up in dealing with this category come from competing interests and a lack of communication or understanding of each other’s business.

One common complaint of real estate agents is that builders expect a very low commission structure due to their perception that they are giving the agents listing volume. This presents a challenge for the agents, as their commission structure is already based on doing a volume of business. The simple fact of multiple listings with one party does not significantly reduce the broker’s or agent’s operating
costs and overhead.

This problem is compounded if the volume that the builder is providing is scattered across multiple sites. In that case, the actual economy of scale is suspect, at best. You need to help builders understand that.

TWO VIEWPOINTS

Communications between real estate agents and builders can be somewhat difficult, as each has a different perspective. Agents often have a hard time negotiating with builders on behalf of their own buyers as they become the voice that is suggesting a lower return on the builder’s investment. Experienced agents
can often lead the builder to see that an offer is simply what a particular buyer is offering to pay; it may be a negotiating ploy but not an indication of true value.

As builders, we often hear agents say “this is what it is worth.” But with the large sums of money we have invested, and the enormous risk involved, this can be hard to accept. It is important to understand that the causes of builders’ perception of the value of their homes are complicated and multiple. Basically builders tend to overvalue items that are not often seen by buyers (ie: better quality lumber or shingles) and they often surround themselves with “yes men.”

If they are not getting insightful and good guidance when they enter a project, and their pricing is not in tune with the marketplace, the real estate agent has to overcome these factors when presenting an offer. As a builder, I am most placated by low offers when the agent attempts to maintain impartiality and can present comps to support the offer.

That’s when we have the best chance to negotiate a successful outcome since there is a basis for discussion. Perhaps a comp that was considered is invalid, or perhaps I reached too high on price and now see the offer is closer to being reasonable. After all, if I push for a higher price it may not reach that point with the appraisal. No point in getting a contract at a high number if it can’t appraise out.

LEARN THE BUSINESS

One of the most effective ways for sales agents to convert builders into easier clients and cooperative partners is by learning about the particulars of the new home market—both the sales side and the actual construction basics. Many trade associations and community colleges offer basic introductory courses that will help real estate brokers and agents with these goals.

This knowledge will also help real estate professionals show potential buyers that they are well informed. Builders often discuss in private a perceived lack of knowledge about construction in many markets. This can create unrealistic expectations that the builder must overcome during walk-throughs and in the warranty period. Education will help the sales agent build a closer and stronger relationship with the builder community.

COMMON MISPERCEPTIONS

One of the most fundamental challenges that real estate brokers and agents must overcome to gain the cooperation of builders is the way that builders perceive them. One of the most common misperceptions by builders is that the agents have no risk. Because homebuilding is so capitalintensive, many builders do not recognize that other businesses are fraught with comparable risk. For example, even the newest agent knows the amount of work and money that goes into marketing and touring with potential buyers.

All of this is done without any guarantee of making a sale. Furthermore the listing could expire without a sale, in which case that advertising investment and open house time is totally lost. Builders don’t have to worry about that—they cannot lose the listing! Of course they have other concerns, but their perception of the real estate agent as having nothing at risk must be recognized and overcome. A direct attack on this perception may be difficult, but the best chance for success comes from a two pronged approach.

First professionalism is key. If your dress and knowledge is consistently top notch,
builders—and prospective buyers—will respect you as a person of authority. The proper attire for new home sales does not necessarily mean fancy clothes and expensive shoes but rather whatever is appropriate. Jeans should be avoided at
all cost, but always have some boots or sturdy shoes available.

Builders perceive agents who are not dressed for jobsites as unqualified for new home sales. The second strategy involves simply being aware of the builders’ misperceptions about agents. This awareness can be used to help establish better communications and avoid major pitfalls. If you are aware of the builder’s negative perceptions and preconceived notions you will be more likely to create a positive perception of yourself.

A young agent who had a listing for one of our homes had done a great job finding a buyer and helping us to get them into contract. The buyer asked me to meet them to allow their painter access to provide an estimate for work that would be done after closing. When I arrived at the home I found it unlocked! I knew that the sales agent had shown it to another party the night before. When I called her, I said I was quite upset that she had failed to lock the door.

She naively said, “Pete, relax! It’s not like there is anything of value there. The house is unoccupied.” As you can imagine, this did not create a positive impression upon me. It occurred to me that she was so used to resales what she was unable to perceive the amount of money we had spent nor the risk of losing the deal if the house was significantly vandalized.

While I understand what she was getting at — there are no personal valuables that can be easily removed — for a builder, a finished home ready to close with a buyer is a major value!

WHAT WE WANT TO HEAR

Now that you understand the misperceptions that builders hold and some of the common pitfalls in dealing with builders, let me tell you what is important to builders as a group. We don’t want to hear a long-winded pitch on your marketing plan. You should definitely have one, but boil it down to a succinct summary. Bullet points are often a good format. We want to be assured that you really understand the new home market and current local sales conditions.

Your years of experience is also important, as is your commitment to learning about the individual builder and their offerings. We also want to be assured that either you will be handling the showings yourself or that you will be assisted by someone you supervise and control, and that they are equally knowledgeable. Never forget that working in an environment that is filled with aggressive, assertive males, builders often respect people with concrete ideas and who can articulate those ideas clearly and succinctly. We are equally impressed with consistent follow-through.

What Went Around Then Has Stayed Around Today

My first by-lined article in this publication appeared exactly twenty years ago this month, at which point in time I had devoted twothirds of my then 62 years on the planet to a career in real estate. This odyssey was first as a salesman, then as a broker, trainer, writer, course designer, entrepreneur, corporate executive, globe-trotting professional speaker and, finally, an enthusiastic participant in the active retirement which continues to this very moment.

A couple of years prior to my debut in The REAL ESTATE PROFESSIONAL “Columny,” its then-and-now Editor/Publisher, Ed DesRoches, biographed my first four decades in the field, with emphasis on the progress of The Klock Company, Realtors®, from (as he aptly put it) “the brink to the bank.” I was, at the time, a battle-scarred survivor of rookie jitters, dumb decisions, bad breaks, inflations, deflations, stagflations, financing crises and the hardships of “kinetic solvency,” the scary science of staying barely beyond wolfbite when “things” got tough.

Ed’s profile, a generous five-page spread, had a happy ending, with the acquisition of the company by Coldwell Banker, then a subsidiary of Sears, and my gradual retreat from active management responsibilities. That trek has led me to my personal variation of existentialism (“I write, therefore I am”), which is where you find me today.


CRITERIA FOR SUCCESS

This column, however, is not about me or my past life. Rather, its focus is on a sidebar in that 1986 article, listing my “Criteria For Success,” which are presented here exactly as written then:

1.) Everything else must rank as a poor second in importance to the reputations of the company and the individuals in it.

2.) The company must never be a “body shop” or a repository for parttime dabblers.

3.) Education must begin on “day one” and never end, for both newcomers and veterans.

4.) There must always be room for personal growth and self-betterment.

5.) Full recognition must be given for individual and group accomplishments.

6.) Compensation must have built-in incentives to reward superior achievement.

7.) There must be no “special deals”; policies and pay scales must apply equally from the president to the newest trainee.

8.) Scrupulous fairness in dealings among all members of the staff must prevail, without exception.

9.) Extensive feedback from the field (ideally through some advisory council vehicle).

Elsewhere, the article recounted our company’s birth pains in 1974, which we euphemistically described as “just about the worst boom year on the record” in Florida. We quickly concluded and subsequently proved that it was (still is, incidentally) a lot less expensive and a lot more effective to train new people from the ground up than to hire away from the competition seasoned practitioners who had grown accustomed to easy pickings in earlier years.

Also, we learned, out of stark necessity, how to cut expenses to (and into, if need be) the bone and to prepare budgets for both the best and worst case scenarios — this last strategy enabling us to both survive a brutal downturn and capitalize on the rebound that eventually followed. As a matter of frightening fact, our “doomsday deficit” projections came within a pittance of reality before the financial tide turned in our favor and we began a welcome sprint, as aforementioned from the brink to the bank.

Ultimately, it proved to be a steady pathway from the gut-wrenching grip of an economic downturn to domination in a highly competitive market. The point to be made here is not that I am some sort of oracle or that I became, as one friendly wag once put it, “a legend in my own mind.”

CERTAIN ABIDING TRUTHS

It is to observe that, while there have been both evolutionary and revolutionary changes in our industry during my lifetime, there are certain abiding truths which stand the test of time and can be, as herein, restated verbatim a generation and more after they are first cited. Among them are the “Criteria For Success” noted above and the lessons we learned during, before and after that “disappointing boom” in the mid-seventies.

All of them, with some necessary massaging, can be applied to today’s conditions, tending to support the notion that what goes around comes around and what went around often comes back to stay. A suggestion from the sidelines: Reread this opusette and apply whatever you can to the situation in which you find yourself today— either as a leader or as a follower — then do what you can to make “things” break your way.

This final thought: You and your people can’t do better than they know how, so don’t skimp on training when you’re trimming the expense budget; it’s the goose that will lay the golden eggs of your future. As a familiar saying reminds us, “The more things change, the more they stay the same.”

The Perils Of Looking Toward The Future

I write for a hundred and some odd newspapers and as a result get a ton of questions from both consumers and brokers. Among the most popular inquiries are queries which go something like this: “So tell me, when will the market begin to go up, when will home prices stop falling and is now the time to buy.” I would dearly love to answer such questions with great specificity but there are two problems.

First, I have no idea where markets are headed. Second, neither does anyone else. The first point should be fairly obvious. Honest, I have no clue. I can’t tell you the future prices of homes on my block, much less the value of homes anywhere else. But the second point is not so clear.

Wall Street, for example, repeatedly tells us that past performance does not guarantee future results — and then proceeds to issue forecast after forecast explaining in great detail why one stock or another will reach a specific price by a specific date. Surely if there can be no guarantee of future results, then making financial decisions on the basis of forecasts from analysts hardly seems like a strategy to be encouraged. Just ask all those happy Enron investors.

NO GUARANTEES

Alas, crystal ball gazing is not confined to Wall Street. In real estate we also have our share of prognostications. In 2005, for example, when the real estate market was booming, the chief economists from Fannie Mae, Freddie Mac, the National Association of Realtors ®, the National Association of Home Builders and the Independent Community Bankers of America jointly wrote a study which said “home price appreciation should average around 5 percent per year from 2004- 2013, but could be above 6 percent if supply constraints continue to tighten.”

(See: “America’s Home Forecast: The Next Decade for Housing and Mortgage Finance”) How come? Our five economic insiders explained that “a stable relationship between income and house prices over time argues against any nationwide “housing bubble.” With the national unemployment rate below 6 percent (and falling), extremely low mortgage rates and economic growth accelerating, the likelihood of a decline in home prices at the national level is quite remote.

Even at a local level, demand-supply conditions today are such that there are few, if any, markets that exhibit bubble characteristics.”

THE THINKERS SPEAK

The 2005 paper follows a long tradition of eminent thinkers with an interest in housing trends. In 1988, for example, economists N. Gregory Mankiw and David N. Weil said “it appears that the real price of housing will fall about 3 percent a year.” (See: “The Baby Boom, The Baby Bust, and the Housing Market”) “The entry of the Baby Boom generation into its house-buying years,” said our two economists, “is found to be the major cause of the increase in real housing prices in the 1970s.

Since the Baby Bust generation is now entering its house-buying years, housing demand will grow more slowly in the l990s than in any time in the past forty years. If the historical relation between housing demand and housing prices continues into the future, real housing prices will fall substantially over the next two decades.” Dr. Mankiw, of course, went on to become chairman of the Council of Economic Advisers under President Bush in 2003.

PREDICTIONS ABOUND

When it comes to real estate predictions it would be difficult to beat 2007. A truly vintage year, we had the chairman of the Federal Reserve, Ben Bernanke, informing us in May that “given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system,”.

Not to be outdone, the then-chairman of the Mortgage Bankers Association, John Robbins, told the National Press Club that worries about the mortgage meltdown were plainly off base: “As we can clearly see, this is not a macroeconomic event. No seismic financial occurrence is about to overwhelm the U.S. economy.” Not all predictions, of course, have elicited much public attention.

In 2005 the Financial Accounting Standards Board (FASB) looked at the toxic mortgages then being popularized and modestly pointed out that the huge payment increases associated with option ARMs, negative amortizing, deferred interest and interest-only loans “could affect a borrower’s ability to repay the loan and lead to increased defaults and losses.” (See: FASB Staff Position Paper, SOP 94-6-1)

NO-ONE’S LISTENING

Alas, as my father — a CPA until almost age 90 — could have explained, no one listens to accountants when revenues are rising. So, if you really want to know where home values are headed and when the present market will turn, don’t ask me. I don’t have a clue — and I’m not alone.