Growth Leader: Innovative Tool Helps Prospects From Contact To Close

The real estate marketing and technology company Market Leader Inc. has introduced an innovative new tool for real estate brokers and agents that allows them to see at a glance what's going on with all of their online prospects and help them decide what
needs to be done next to tum those prospects into clients. While the technology is fascinating and pervasive, what's best about the system is that it's easy to understand and use.

Intuitively, the Growth Leader product can even offer insights into whether a prospect has changed his preferences about his future home. The product was introduced at the NAR Annual Conference and Trade Show in Orlando and already has proven to be a leap forward in what technology can do to help build an individual
broker's or agent's business.

While the typical agent Web site may convert only a few visitors into registered
users, Growth Leader is converting around 10 percent of its visitors - visitors
who are willing to register at the agent's site. Once that registration is received, the real estate professional is able to bring into play an array of helpful tools that will guide the prospect toward a home purchase and help that real estate professional get a competitive edge in earning their business.

HOW IT WORKS

According to John Gallagher. Market Leader's senior director of marketing, the company employs its national advertising buying power and years of expertise to help real estate agents generate a steady stream of prospects. The company also has business relationships with the major search engines, including Google. Yahoo and others, to make sure its customers come up high in consumer searches.

"We don't sell leads to real estate brokers and agents:' Gallagher said, "Instead we advertise them in a way that enables them to generate visitors to their own site. And we give them the tools they need to convert these prospects into clients. That's what Growth Leader is all about". From there, Growth Leader tracks the prospect every time they return to the site. "The system knows that the prospect has looked at 18 houses and has saved 6 as favorites."

Gallagher said: "The system identifies for the agent the average price of those homes and the amenities, all of which helps the broker or agent focus on what that potential buyer is looking at." The system knows when the prospect comes back to the agent's site - whether it's a few days later or a few months. It will note whether the prospect is starting to look at more properties and spending longer looking at each one - an indication that the buyer's search is intensifying.

The system even picks up on when the prospect's preferences change. "Let's say the buyer has been looking for condos in the city, but suddenly starts looking at houses in the suburbs. The system notes that change and tells the broker or agent so he or she can follow up with a phone call or email to the prospect," Gallagher said.

The system also maintains e-mails sent between agents and prospects and provides a space for agents to take personal notes on conversations - such as the prospect comments on specific listings. And because most agents are out and about working with clients, the system can be accessed via mobile phones as well.

ANALYSIS

The Growth Leader system can analyze the homes the prospect has looked at and identify other listings that the prospect hasn't seen but might be interested in. Those additional listings, however, are not pushed to the prospect - but are sent to the agent to filter before being forwarded to the consumer. The system is intuitive, much like Amazon.com's automated analysis of how book buyers use that site.

(A consumer looking for Harlen Coben's latest mystery thriller "Hold Tight" not only sees that book, but also gels a recommendation to take a look at David Balducci's " Whole Truth.") "The difference is that the alternative homes aren't sent to the prospect directly, they are shown to the agent," Gallagher said. "Then the agent decides which ones to forward to the prospect. That way the contact is personal and positions the agent as the neighborhood expert."

All of these features are designed to give Growth Leader customers a competitive edge in keeping prospects engaged. and in converting them into new clients.

PRICING

The Growth Leader system is priced at $175 per month on a month-to-month basis but can be as low a $99 per month when purchased with an annual subscription. When agents first sign up for the system, a Growth Leader associate will discuss the agent's objectives, figure out how many prospects they would like to generate each month, and then decide how much additional advertising they would like Market Leader to do on their behalf.

While the cost of driving prospects to a broker or agent's site varies area to area, Market Leader is able to help agents attract new clients at rates far lower than they could do on their own because of their volume relationships and decade of buying expertise. "We encourage brokers and agents to buy advertising - it can be really cost effective, we can pass savings on to agents," said Gallagher.

Gallagher freely admits that Growth Leader is geared to the broker and agent who is working with buyers. but says it also is a good listing tool. "The agent is able to show sellers the kind of technology that is available to him and the kind of interest that can be generated in a property. It's a powerful listing tool," he said.
For information on Growth Leader, go to www.MarketLeader.com or ca1l 877-732-9521.

How You Can Identify And Avoid Mortgage Fraud

On February 6. 2004. CNN reported that the FBI warned that mortgage fraud was becoming so rampant that the resulting " epidemic" of fraud could trigger a massive financial crisis. Mortgage fraud has now become so prevalent that the United States Department of Justice and the Federal Bureau of investigation have been forced to create an entirely new category for tracking these cases.

According to a CBS news report, the number of FBI agents assigned to mortgage related crimes increased by 50 percent from 2007 to 2008. Prosecutors and investigators on both the state and local levels are also feverishly organizing task forces and creating real estate fraud departments to counter this burgeoning wave of crime.

CRIME AND PUNISHMENT

The primary focus of these investigators appears to be on borrowers, investors, mortgage brokers, appraisers and real estate agents. Some of the charges levied against these perpetrators have included making false statements on loan applications, bank fraud, mail fraud, wire fraud, conspiracy to launder funds and a number of applicable state laws.

However, the primary legal vehicle implemented by federal prosecutors has been section 1014 of Title 18 of the United States Code which declares mortgage fraud as a federal crime encompassing anyone who willfully overvalues any land or property, or knowingly makes any false statement, for the purpose of influencing a financial institution upon a loan application, purchase agreement or other related documents.

A violation of the federal mortgage fraud law (18 U.S.C. §1014) alone is punishable by up to thirty years imprisonment and a one million dollar fine.

MORTGAGE FRAUD SCHEMES

The most effective way to avoid prosecution for mortgage fraud is to identify mortgage fraud schemes prior to any actual involvement. Most mortgage fraud offenses fall into one of two general categories: "fraud for housing" and "fraud for profit". Fraud for housing often involves fraudulent acts committed by a borrower, often coached by his or her mortgage broker or real estate agent, to obtain a loan for the ultimate goal of acquiring a home.

These fraudulent facts generally pertain to the falsification of facts and documents during the loan application process to enable the borrower to obtain financing that he or she would otherwise not be qualified to receive. Conversely, fraud for profit typically involves a more concerted plan to abuse the entire real estate transactional process for pecuniary gain.

FRAUD FOR HOUSING

Income Fraud - This occurs when a borrower inflates his or her amount of income to qualify for a loan or a larger loan amount. Although recent reductions in the use of "stated income" or "no-doc liar loans" has somewhat curbed income fraud, daring borrowers are increasingly generating more fraudulent documents to falsify income. Information technology and photocopy equipment have become so advanced that very convincing documentation, such as income Statements, savings accounts and tax returns, can be produced on demand.

Employment Fraud - In order to justify overstated income in a loan application, borrowers will claim self-employment in a non-existent company or represent having a higher position in a company than the borrower actually holds.

Failure to Disclose Liabilities - The debt-to-income ratio is an important part of the loan underwriting criteria used to determine a borrower's eligibility for mortgage loans. Consequently, borrowers will conceal financial obligations like newly acquired credit card debt, other mortgages, and private loans to artificially reduce their debt-to-income ratios.

Occupancy Fraud - This generally occurs when a borrower states on a loan application that he or she intends to occupy a property as a primary residence to secure a lower interest rate when the borrower actually intends to obtain the loan to acquire an investment properly.

FRAUD FOR PROFIT

Equity Skimming and Cash-Back Schemes - A straw buyer is typically implemented as the buyer of the property due to his or her credit worthiness and resulting ability to obtain favorable financing. Unknowing straw buyers can be manipulated by mortgage brokers and real estate agents to purchase a property as a primary residence with the broker or agent later serving as a property manager to collect anticipated rental income.

After the escrow closes and the mortgage and real estate brokers collect their commissions, they proceed to collect rental income and fail to make the mortgage payments. Complex schemes can involve a knowing straw buyer, an appraiser who intentionally overstates the property's value, a dishonest seller who intentionally inflates the selling price, and a dishonest settlement officer who makes undisclosed disbursements from the loan proceeds. All of these conspirators collaborate to collect portions of the proceeds of an inappropriately large loan before eventually letting it go into default.

Appraisal Fraud or Price Inflation - This fraud occurs when a dishonest appraiser intentionally overstates the value of a property or when an existing appraisal is altered to reflect a higher value. When a home is overvalued, more money can be obtained by the seller in a purchase transaction or by the borrower in a cash-out refinance.

The New Appraisal Fraud: Price Deflation - When done legitimately, a short sale occurs when a borrower who owes more than his or her property is worth sells the property below market value and the lender agrees to accept the lower repayment amount and forgive the difference.

A new hybrid of fraud has emerged where an appraiser or a real estate agent drastically devalues the property in an appraisal or broker' s price opinion (BPO) so that the home will sell with ease at a price well below market value. Of course the new buyer is in collaboration with the seller, agent and appraiser, so all of the conspirators proceed to sell the home at a higher price for a big profit.

Identity Theft Identity theft fraud occurs when a victim's identity is assumed by another to obtain a mortgage without ever intending to make any payments on the loan. The perpetrators often abscond with a portion of the loan proceeds and sometimes are daring enough to lease the property and collect some deposits and rental income before disappearing.

The Buy and Bail - This completely new scheme is perpetrated by a homeowner who cannot sell the home because more is owed on the property than it's worth. Because no lender will provide the owner a loan for a second primary residence, the owner tells the lender that he or she plans to rent out the current home despite having no intention of doing so. Sometimes a falsified rental agreement is used to further support the falsehood. Once the second home is purchased. the owner "bails" on the original home and fails to make any further mortgage payments.

AVOIDING AND PREVENTING FRAUD

Mortgage fraud frequently emanates from groups that complete an abnormal
amount of similar transactions or churn out many offers to purchase at once. These outfits may appear disorganized or unprofessional due to the large amount of transactions they are attempting to manage. It is also no coincidence that mortgage fraud has significantly increased as housing values have decreased since most fraud schemes involve a financially distressed or otherwise vulnerable seller.

It is equally important to remember that agents owe a very strict fiduciary
duty to act in their clients' best interests. So before reporting a client to your local authorities, you need to speak with legal counsel or your state real estate licensing department to ensure that your proposed actions don't constitute a breach of your fiduciary duty to your client.

Real estate agents are in a unique position that enables them to identify and even prevent the occurrence or fraud by recognizing the red flags, asking appropriate questions, and giving the principals in their transactions the full picture of what consequences are associated with participating in mortgage fraud. While a lot of damage has been done in the real estate market, we can prevent more of the same from occurring in the future.

How To Re-Energize Home Sales

Long ago I was a part owner of a company that produced dual-fuel vehicles -they could run on either gasoline or propane with the flip of a switch. We did a lot of fleet conversions and we even supplied fuel for a number of apartment buildings. I also used to write about energy and have been lucky enough to visit an underground uranium mine in New Mexico, live on an off-shore oil production platform south of Louisiana, see coal mining sites in Kansas and Colorado, visit a nuclear fuel fabrication plant in California, see shale oil in Colorado, look at experimental nuclear reactors (they're sort of like deep hot tubs), and so forth.

ENERGY PRODUCING PROPERTIES

I bring up this history for a simple reason: We need to re-start the American
economy. One step among many would be to make every house, apartment, building and office structure not just energy efficient, but energy producing. The technology is out there today to do just that. Instead of massive projects, think smaller and in terms of millions of installations.

We could employ a lot of people in every state and in every community. At the same time we could also increase the value of our housing stock, do a lot of good for the economy and also cut our dependence on foreign oil - a dependence which drains our bank accounts and demolishes our political independence.

WHAT CAN BE DONE

Newer homes - and retro-filled older ones-give some sense for what can be done. As one example, our 40-year-old furnace finally gave out. The new sytem will cut our healing and air conditioning bill by about a third. No less important, it's better. We now have a programmable thermostat. The temperature moves up and down during the day as our needs change.

When the temperature in the house needs to be adjusted the system doesn't just go full blast, it instead selects the most energy efficient approach to get the job done. Add in better insulation, modern windows and doors, fuel-efficient appliances and more efficient toilets and you not only cut energy bills and water usage, you reduce the need to build new power plants.

Saving energy ought t0 be encouraged but it's only half the equation. The other half is this: Every home, apartment building and office complex should be seen as a source of energy production. We already have a number of homes where owners have installed various devices which allow them to lower electric usage and in some cases to feed energy back to the power grid.

We need to go further and make these pioneering efforts commonplace. A smart example of what can be done comes from Brookfield Homes. It has properties available right now, today, that benefit from solar, geothermal and wind energy. (See: http://www.
brookfieldblue.com ). Heat from the sun can be used to heat water (a huge energy cost) and also to convert it into electricity. Geothermal power to heat and cool a property can be extracted from the ground.

A simple and small turbine can produce electricity from wind. No less important, the time has come to recognize that vast homes with more square footage than a polo field are out. Times change. No one is making cars with fins. TVs with tubes or telephones with dials.

With better designs and more efficiency, smaller homes, say 1,200 to 1,600 square feet, can make great sense, especially since they're most likely to comply with Miller's First Rule of Real Estate: Never buy a home you don't want to clean.

It costs money to install or retro-lit energy generation systems, but it also costs money if you don't. As our newly elected President says, we need new ways of doing business and that includes real estate.

BROKER SUPPORT

Brokers ought to support the move not just to green homes, but to energy generating homes. The reason? Better inventory to sell. A new reason to stoke demand.

• Homes which are objectively better for the country.
• Homes which will lower gas prices by reducing overall energy demand.
• Homes which sell because they're cool, sexy, in, green and politically correct.

Look toward the future and think about the new generation of cars being produced. Some experimental models are now getting 100 MPG. That's done by combining gasoline engines with electric generators and batteries. We'll be using gasoline for decades because the distribution infrastructure is already in place. But so is the distribution infrastructure for electricity. A car that gets 100 miles per gallon is great, a car that gets 100 miles per gallon and uses free fuel from home is a technology that's long overdue.

MONEY WELL SPENT

While few of us have the ability to dig an oil well in our backyard, it's a fairly simple matter to hook up a small wind turbine or to add a few solar cells. Given the benefits, it's money well spent.