Go Pro Systems: June 2010

Do you ever take a few moments to read some of the articles that give advice to people buying and selling homes? There are so many of them on the internet and in the newspaper, you certainly cannot be expected to keep up with them. Although the advice is for your clients, if it is sound advice, you may find that some of it is uses. It will also help you become familiar with other real estate professionals who you may meet or want to consult with at some point.

Nancy Conner, author of "Buying a Home: The Missing Manual"wrote a book to help home buyers, but some of her advice may help you too.  Conner describes real estate agents and "professional negotiators"-have you ever thought of yourself in that way? In an interview she notes,

"...your agent doesn't have to be your best friend, but it does have to be somebody you can feel comfortable communicating with. Your agent is representing a whole bunch of prospective buyers and can't read your mind..."

What is the takeaway for an agent from such a statement? Well, it is a reminder that good communication is essential to your success. You will find that you relationship with certain clients is warmer and friendlier than with others. That is okay. You need to be someone your clients can have a conversation with, whether you feel friendly towards them or not.  And while we do not recommend that you remind a client of just how many buyers you represent, we think you can encourage them to be open with you and tell you what they want in a property.

Conner also tells a personal story of a time when, as a home buyer, she saw the need to rely on her own communication skills rather than her agent's: she and her husband sent a holiday card to the owner of a home she hoped to buy and that swayed him. She cautions buyers against meeting with a seller without their agent's knowledge, but does suggest that they ask the agent to accompany them at a meeting with the seller and the seller's agent. I'm not to sure how I personaly feel about this but It may work for some agents.

The final countdown has started on the June 30 deadline for the home buyer federal tax credit. New home buyers who fail to close on Wednesday stand to lose up to $8,000. For many new home buyers, particularly first-timers, loss of the federal income tax credit could spell financial disaster. Many buyers are counting on the credit to make their home purchase affordable and may be forced to back out of their contracts without it. Buyers and their real estate agents are hoping the U.S. House of Representatives follows the Senate's lead in extending the closing deadline to September 30. The deadline extension, which would also require presidential approval, is backed by the National Association of Realtors, the American Land Title Association and other realty trade groups.

In an interesting turn of events, buyers who missed the April 30 contract deadline to qualify for the income tax credit may actually come out ahead of those who filed promptly. With home buyers harder to find since the credit expired, realty efforts to goose the housing market coupled with declining interest rates may wind up benefiting procrastinators. Since the tax credit expired on April 30, three things have happened that could pay those who delayed:

• Many sellers have been forced to lower asking prices to attract buyers.
• Builders and real estate companies are offering promotions valued at more than the credit.
• Mortgage interest rates have declined from 5.125% in April to 4.75%, enough to save home buyers more than the value of the credit over the life of their loan.

Of course, whether home buyers benefit from buying in the post-credit market depends largely on market and price. As always, buyers will find better deals in stagnant housing markets. Buyers who appear to be benefiting the most in the post-credit market are those shopping for homes in the under $200,000 price range. Homes at this price point were snapped up fast this spring by first-time buyers anxious to take advantage of the tax credit. The lag in home sales since April 30 has forced many buyers to drop their asking price by as much as 30%. Coupled with the traditional June drop in housing prices as families scramble to move before the next school year starts in August, post-credit home buyers may be glad they waited.

Success in real estate today involves a combination of real-time, in-person effort while throwing some technology and automated tools in the mix. You may find that you need to do all of the things you used to such as attending networking events, making phone calls, sending out postcards and holiday greetings and taking out ads in addition to maintaining an online presence. Since this is the case, you will want to find ways to execute all of your marketing efforts in the most efficient manner possible.

We have already mentioned that Twitter is a very useful tool for real estate professionals. By creating and exchanging brief 140-character messages, you can spread the word about your business and gather useful information.

With the appearance of a micro-blogging tool like Twitter, there are, of course, tools to help you use this marketing tool better. There are even some that are geared specifically for real estate. One of these is Tweetlister. Tweetlister is a subscription-based tool that was created especially for real estate professionals. It is to be used exclusively for Real Estate and is monitored so that people who try to post spam or listings that are not real will find themselves blocked from the service. As far as legitimate listings go, you can post residential, commercial and vacation properties that you want to sell or lease.

Using this service, you can input listings yourself or have them automatically sent from your MLS listings. You can also schedule posts ahead of time and send these posts to more than one Twitter account. It also allows you to fill out a profile with a bio and photo

and have a landing page. Tweetlister gives you a breakdown of who has clicked on your listings. While you may not want to send the same listings every day, you can use Tweetlister to set up periodic posts of the same listings, removing that periodic update when the property has been sold.

Not only will a tool like Tweetlister help you reach your goal of getting properties sold, it will also assist with boosting the search engine ranking of your website or blog if you include links to your other online forums in your posts.

The Obama administration is inviting the redefinition of "required use" offers. If discussions lead to an expanded definition of real estate settlement law, they could level the playing field, giving more real estate players a chance at the action. "Required use" is the term applied to the lucrative practice popular with home builders in which home buyers are offered special discounts, paid closing costs, construction upgrades and other incentives if they use mortgage and real estate services affiliated with the builder. Real estate critics have long claimed that affiliated services give privileged providers an effective monopoly that limits competition in the industry. Affiliated service providers have also been charged with jacking up prices, eliciting numerous consumer complaints.

While the Real Estate Settlement Procedures Act prevents "required use" clauses from legally forcing home buyers to purchase mortgages, title insurance or other real estate services from a builder's affiliated service provider, some builders have found an equally lucrative run-around. The Department of Housing and Urban Development (HUD) has logged an increasing number of consumer complaints about builders who tie construction and upgrade discounts and rebates to the use of affiliated services. Consumers feel trapped in a Catch-22 scenario. Attracted by builder discounts, they agree to purchase a home only to find at closing that they must also purchase high-priced affiliated services or lose their discounts.

HUD tried once before to address such abuse by extending "required use" prohibitions to include economic duress. HUD's attempt to prevent economic penalties tied to required use of affiliated service providers raised the ire of the National Association of Home Builders which filed suit to block the move. Faced with a protracted and expensive legal battle, HUD withdrew the changes.

The issue didn't die, however, and the Obama administration is opening it up for another airing. This month, HUD invited consumers, mortgage lenders, real estate agents, builders and other interested parties to share their experiences and suggestions about the "required use" issue. Support for changes in current regulations and practices is expected to come from the National Association of Mortgage Brokers and National Association of Realtors, both of whom favor a more open market and an end to exclusive builder practices.

What are your thoughts and feelings?

A recent story in the New York Times (Manhattan Was the Dream; Jersey City Fit the Budget) illustrates the notion that some-times a client just isn't ready. The article details how one woman spent years searching for a home to buy, even when she actually was not quite ready to buy one. She enjoyed looking at open houses, frustrated her daughter and tried to tie up loose ends that would make it possible for her to buy a home. What she wanted was beyond her budget and she found "deal breakers" for the homes that were within her means. Seeing beyond her dismay at whatever drawbacks she found, the woman admits that she just was not ready to buy and that it takes her a long time to make a decision.

When she finally found a place she liked after having various family members visit and give their stamp of approval, a close cousin who describes himself as "impulsive," rented out his a place and bought in the same building. The cousin obviously did not need a lot of time to make his decision.

The story does not say a lot about what role a real estate professional played in all the years that the woman was house hunting. However, we know that dealing with clients who need to gather a lot of information before making a decision requires a good deal of patience. In the story above, keeping in touch with the woman who was on a constant house hunt might have also meant getting business from her cousin who bought in the same building. It pays to keep in touch.

At GoPro Systems we also know that a large part of a successful real estate business involves being in communication with friends, associates and former clients. If working with a certain client does not lead to a sale the first time, that does not mean that there is no hope for the future.

We can help assure that you can keep in touch with prospective clients while working with current clients. The automated campaign system from GoPro Systems will make lead conversion easier than ever. You and your business will constantly be in front of all your prospects.

A real estate agent's work isn't done when buyers ink their signatures on a real estate contract. The agent still has to help the buyer negotiate the financing maze. Partnering with a knowledgeable loan officer who can provide the buyer with astute financial advice can make the difference between a nice commission and a lost sale. Changes in mortgage practices that went into effect June 1 could impact a home buyer's ability to consummate a mortgage loan despite pre-approval. Savvy realtors and loan officers will make certain their clients are advised of new mortgage practices and how to protect themselves.

Beginning June 1, 2010, mortgage lenders started ordering a second credit check on home buyers immediately before scheduled closing dates. To protect their credit rating, home buyers have routinely been advised not to apply for new credit prior to purchasing a home. However, the moratorium on new credit was presumed to end once the buyer's mortgage loan was approved. Many buyers felt free to open new credit accounts and increase credit card purchases at home furnishing stores, appliance stores, flooring outlets and other retailers in anticipation of moving into their new home. Since June 1, however, new credit applications of any type, including new credit cards, expanded credit balances and home-equity credit lines, could potentially endanger a buyer's mortgage loan.

Mortgage approvals are based on viable debt-to-income ratios determined by lenders. To ensure that home buyers do not increase their debt-to-income ratio after mortgage approval, borrowers are now subject to a second full examination of their finances and recalculation of their loan risk. A substantial change in a buyer's debt-to-income ratio can raise warning flags and cause a lender to withdraw a loan offer.

Implemented by mortgage giant Fannie Mae, the new double credit check policy is an attempt to rectify the slipshod underwriting practices and borrower fraud that led to the mortgage meltdown. Fannie Mae's "loan quality initiative" requires mortgage lenders to obtain two credit reports on mortgage borrowers and verify numerous aspects of the home purchase, including borrower identification and occupancy plans. A second report pulled close to the closing date may not leave enough time to verify and rectify any new issues, halting the sale. Real estate agents and loan officers should advise home buyers to wait until after the sale is finalized before making credit changes.

It is important for real estate professionals to be knowledgeable about many different things. Knowing real estate law, tax laws, local laws about land usage and all manner of factual knowledge plays a big part in being able to get the job done and get the house sold. But what about what goes on in the minds of clients, customers and peers? Anyone who has been in real estate for a long time can tell you that a little psychology can go a long way. Thinking more about and learning more about your clients is never a bad thing.

What do you really know about the motivations of your clients? One thing real estate professionals are often advised to do is gauge a seller's motivation, to see what it would take to seal the deal. But how often do you take some time to factor in the buyer's motivation into the equation?

The publishing world is not exactly flourishing these days, which is why when a book gets a lot of press, it is worth noticing. A recently published book by Megan Daum called Life Would Be Perfect If I Lived In That House is a memoir in which one woman examines her life through the prism of real estate. While it really is just one woman's story, it does give some insight into what lead her and others towards, as she puts it, "buying real estate and melting it down to liquid form and injecting it into their veins." This is a startling metaphor, but one that fits since the country is now in a kind of recovery phase after real estate boom and bust.

The Wall Street Journal titled its review of Ms. Daum's book, "Addicted to Real Estate."  You may or may not agree with the notion that people are addicted to real estate; after all, people do need somewhere to live. The addiction maybe was not the desire to have home of one's own, but the prevalent desire for more home than one could afford.

No matter what motivates your clients, we know that you are motivated to help them and we want to provide you with tools for lead conversion and of lead communication.

A tantalizing new wireless technology innovation being introduced by Intel that allows you to transfer laptop displays to TV could have fascinating applications for the real estate industry. Just beginning to appear on upscale, heavy-duty laptops offered by Toshiba, Sony and Dell, Intel Wireless Display appears to be another coffin nail presaging the end of television as we know it today. But beyond the ability to revolutionize consumer television viewing habits, Wireless Display offers intriguing marketing opportunities for real estate agents and brokers.

The Intel Wireless Display allows users to transfer to a television screen whatever they display on their laptop. The system comes with a small wireless adapter about the size of a thin paperback. You place the adapter in your entertainment center and connect it directly to your television via a digital HDMI cable or you can connect it to a digital receiver that is already connected to the television. When you activate the Intel software on your PC, it connects to the wireless receiver and your TV will display whatever is on your laptop. You may need to make a minor manual resolution adjustment to your PC signal to produce a clear, crisp image. Intel's wireless signal has ample range to carry between rooms without line-of-sight and includes audio transmission so you both see and hear transmitted material.

This revolutionary technology is just out of the box and currently only runs on fairly powerful laptop. However, expect Intel Wireless Display to become standard fare on at least the highest end laptops within a few tech generations. The current incarnation exhibits a slight delay between typing something on your laptop and seeing the display on your television, but it shouldn't take Intel long to perfect that minor glitch.

The ease of including this PC-to-TV feature in wireless, take-anywhere technology offers exciting marketing opportunities for real estate professionals. Intel Wireless Display makes it a snap to create seminars, video how-to demonstrations, produce virtual home tours and a host of other possible marketing applications and give them big screen display at your office, open houses, meetings and seminars or community events.

There has been a lot of talk about how we may see an extension of the homebuyer tax credit. Because a lot of people waited until the tax credit was nearly over to buy, many of these loans are caught in a backlog. Those who managed to sign contracts by the last day of April will have to the last day of June to see to it that they close in order to receive the tax credit. However, as you well know, making sure the deals close in time does not depend only on the buyer.

As you are probably aware, a number of these sales that were made just as the deadline was looming were short sales. These kinds of sales are more complicated and require more time to complete.

Lenders have been working very hard to process documents for those who signed on before the tax credit deadline. As a realtor, you can encourage your clients to hand in any requested documentation as soon as possible in order to avoid any delays in processing. However, there is discussion of moving the deadline up to the send of September, allowing three more months for transaction to be finalized.

Some in the industry are concerned, however, that extending the tax credit will serve as an added incentive to the dishonest, since there have already been reports of people attempting to backdate documents to make it appear as if they had closed by April 30.

For those who think that the government is too big or too slow to notice, Uncle Sam
should not be underestimated. The IRS could easily ask for supporting documents and records that will be hard to fake.

Plus, since extending the tax credit to all who should receive it legitimately will not come cheap, you can be certain that the government it not going to look kindly on fraud in connection to the tax credit.

If you take a moment to calculate the total of direct and indirect costs associated with generating a single online real estate lead, you may be surprised at the extent of the resources you're devoting lead generation. Now calculate the percentage of those online leads that actually become sales. If you're not converting close to 10% of generated online real estate leads into profit-making closings, you need to rethink your approach to processing online leads.

Follow these tips to maximize your lead-to-sale conversion rate:

•1.      Immediate response. Respond immediately to online real estate leads. Smart phone technology allows real estate agents to respond to email, Facebook and Twitter queries immediately. Make an effort to respond to queries within 5 minutes. Responsiveness fosters positive client-realtor relationships. If the contact provides a phone number, telephone them. The sooner you begin a personal relationship with potential home buyers and home sellers, the more likely they are to choose you as their agent.

•2.      Be specific. Don't waste the client's time with bland generalities. When prospective home buyers and sellers contact a realtor, they're looking for specific information and they want it now! Respond to online contacts with detailed information about the property they're interested in or the subject they're asking about. Providing links to helpful articles and checklists on your website is a fast way to answer questions and cement your reputation as a knowledgeable expert.

•3.      Don't drop the ball. Be persistent. A single contact will not convert leads into real estate sales. Expert realtors say it takes 7 to 10 contacts to turn an online respondent into a client. For maximum effectiveness, use a combination of different online, phone and mail contacts to keep your name in front of potential clients. For example: tweet a website article link, text a listing link, start a Facebook conversation, email information, mail an open house invitation.

•4.      Get personal. Make use of social media to build personal relationships with clients. Twitter, LinkedIn and Facebook contacts humanize you, encouraging a friendlier relationship.

•5.      Think creatively. Think of ways to make yourself stand out from competing real estate agents. Email a video message or provide tips via Podcast.