Chris Farkas Bellingham Blog: January 2009

It's a new year! New business plans...new budgets (shoestring, though they may be...). New attitude attributed to a new year.  But, none of that will mean a thing if you continue down the same destructive path.

It amazes me on a daily basis how many agents that I deal with actually set themselves up for failure by making simple, yet deadly, mistakes in their business.  Some of these mistakes seem to be so simple to overcome.  Yet, time and time again, they repeat the same thing expecting a different result.  That is the definition of insanity. 

So, in the hopes that I can in some small way help YOU avoid making these mistakes, I wanted to summarize an article I found in BrokerAgentPro that lists 5 of the things agents do that hinder their own efforts...and ways to avoid getting caught in these commission killing traps.

Getting ‘Busy Work' confused with actual ‘Work' - Many agents across the country suffer from not having a consistent game plan for their daily activities.  There are several things that you should do daily.  These include: Lead generation; Contacting prospects that are potential clients; Work and sort out the motivations of existing clients; Negotiate contracts on pending deals; Present findings to your clients.  All 5 of those things MUST be done on a daily basis to maintain a consistent level of effort on all aspects of your business.  If you are not getting any one of these done, you are attempting to build a business on a weak foundation and you will fail. 

Not working a set schedule - Lack of motivation is the biggest cause of not working a set schedule.  "I don't feel like it today."  Guess what...no one *feels* like it.  But, they do it.  Successful agents work a set schedule every day whether they ‘feel like it' or not.  What do you do on days you don't feel like working?  See #1 above.

"It's a numbers game" - Well, sort of.  But, no, not really.  Yes, you need to track your numbers.  Yes, those numbers are important.  But, in no way will those numbers lead you to making any money!  This is a PEOPLE game!  If you are not out helping people with or talking to people about real estate, you are doomed to fail.  Focus on what you have to offer - your talents and abilities to assist people in buying or selling a house. 

Lacking multiple lead streams - That's right.  If you do not have multiple streams of leads, you will fail.  If your only source of leads is making cold calls, asking for referrals from clients, calling expired listings, etc...You are limiting your ability to get new clients.  If you take a day off, you don't make ANY progress.  None.  What if you lose your phone for a day?  What if you lose your voice for a day?  No progress.  So, having several good lead generation sources is a must in order to keep bringing in new potential clients.  Just remember, not every lead will close.  But, every lead needs worked.  That's what you do!

"Its all about the Benjamins, baby!" - This philosophy will ultimately be your demise in real estate.  You should never put earning a commission above your ability to be of service to your client.  If you are not out there to help your clients, you will fail.  If you don't know how to help your clients, LEARN!  The ‘rules' have changed.  Make an effort to adapt to those changes and *help* your clients.  The money will follow. 

 

If you would like more information on increasing your inbound referrals, please contact Clint Miller of www.recr.com.  You can call at 800-977-7058 or follow me on Twitter at www.twitter.com/recr.

A client who has wandered the world once told us, after a particularly good travel story, "The most uncomfortable experiences always make the most interesting stories."  As we look back on the current economic times, I'm sure that will be the case.  What makes it uncomfortable today is that we don't know the story's ending.  In the case of the real estate market, we want to know, "Will prices drop?  Will sales fall?  When should I buy or sell?" 

             None of the experts have those answers.   Most of them admit that they didn't see the current situation coming and that we have no good historical examples to show us what to expect.  But as humans, we want answers for the future, so the experts give us their best guesses, which range from a pickup in the 1st quarter 2009 due to excellent interest rates to softness through 2010 due to job losses and lack of consumer confidence.

            The reality is that nothing in life is guaranteed and that each of us needs to make our own financial decisions based on our individual circumstances.  Some people have to move regardless of the market, but more move by choice, and in today's market it still makes sense for some people to move up or downsize.  The current actual value of your property really doesn't matter - what matters is whether that value will allow you to make the change you want to make in your lifestyle.

           Statistics can show us what has happened in the past, don't help a lot in predicting the future, but give us some indication as to where we are currently, so let's look at some of the numbers:

• Single family home sales in Whatcom County peaked in 2003 at 3052 units sold
• Single family home average sale price in Whatcom County peaked in 2007 at $334,698
• Condo sales in Whatcom County peaked in 2007 at 685 units sold
• Condo average sale price in Whatcom County peaked in 2007 at $225,146        

2007 to 2008 comparisons of single family homes in Whatcom County show the following:

• 26.4% fewer sold (2693 to 1981)
• 4.4% drop in average sale price ($334,698 to $317,740)
• 4.5% drop in median sale price ($290,000 to $276,900)

 2007 to 2008 comparisons of single family homes in Bellingham show the following:

• 28% fewer sold (1219 to 881)
• 4% drop in average sale price ($375,161 to $359,151)
• 5% drop in median sale price ($315,000 to $299,000)

            To summarize the numbers, the odds of a house selling at this time are lower than they were a year ago and the price may be a bit lower than it was, but there has been no dramatic drop.  List prices are being negotiated down about ½ % further than they were a year ago.

            To summarize the reality behind the numbers, the basics of buying and selling have not changed.  There are people looking for property.  When something comes up that fits their needs and is good value, they buy quickly and  pay the listed price.  Some areas and price ranges are more desirable and in shorter supply than others so pricing is stronger and sell times are shorter.  With less new construction available, newer homes and nicely renovated homes have an advantage. To view this post in it's entirety access the Bellingham Real Estate Blog

           For ongoing real estate numbers, go to www.JohnsonTeamRealEstate.com. We update the site weekly with everything from interest rates to market conditions to information from Fannie Mae, the FED and the FDIC. Also, feel free to call us at (360) 527-8766 or e-mail Info@JohnsonTeamRealEstate.com if you want to know more about a specific portion of the market - we track a lot more than we have space to report.

           The Johnson Team also includes a constantly updated list of newly listed properties and a list of properties being offered as short sales, as well as the entire listing database of the Northwest Multiple Listing Service, fully searchable to your specifications.

A client who has wandered the world once told us, after a particularly good travel story, "The most uncomfortable experiences always make the most interesting stories."  As we look back on the current economic times, I'm sure that will be the case.  What makes it uncomfortable today is that we don't know the story's ending.  In the case of the real estate market, we want to know, "Will prices drop?  Will sales fall?  When should I buy or sell?" 

             None of the experts have those answers.   Most of them admit that they didn't see the current situation coming and that we have no good historical examples to show us what to expect.  But as humans, we want answers for the future, so the experts give us their best guesses, which range from a pickup in the 1st quarter 2009 due to excellent interest rates to softness through 2010 due to job losses and lack of consumer confidence.

            The reality is that nothing in life is guaranteed and that each of us needs to make our own financial decisions based on our individual circumstances.  Some people have to move regardless of the market, but more move by choice, and in today's market it still makes sense for some people to move up or downsize.  The current actual value of your property really doesn't matter - what matters is whether that value will allow you to make the change you want to make in your lifestyle.

           Statistics can show us what has happened in the past, don't help a lot in predicting the future, but give us some indication as to where we are currently, so let's look at some of the numbers:

• Single family home sales in Whatcom County peaked in 2003 at 3052 units sold
• Single family home average sale price in Whatcom County peaked in 2007 at $334,698
• Condo sales in Whatcom County peaked in 2007 at 685 units sold
• Condo average sale price in Whatcom County peaked in 2007 at $225,146        

2007 to 2008 comparisons of single family homes in Whatcom County show the following:

• 26.4% fewer sold (2693 to 1981)
• 4.4% drop in average sale price ($334,698 to $317,740)
• 4.5% drop in median sale price ($290,000 to $276,900)

 2007 to 2008 comparisons of single family homes in Bellingham show the following:

• 28% fewer sold (1219 to 881)
• 4% drop in average sale price ($375,161 to $359,151)
• 5% drop in median sale price ($315,000 to $299,000)

            To summarize the numbers, the odds of a house selling at this time are lower than they were a year ago and the price may be a bit lower than it was, but there has been no dramatic drop.  List prices are being negotiated down about ½ % further than they were a year ago.

            To summarize the reality behind the numbers, the basics of buying and selling have not changed.  There are people looking for property.  When something comes up that fits their needs and is good value, they buy quickly and  pay the listed price.  Some areas and price ranges are more desirable and in shorter supply than others so pricing is stronger and sell times are shorter.  With less new construction available, newer homes and nicely renovated homes have an advantage. To view this post in it's entirety access the Bellingham Real Estate Blog

           For ongoing real estate numbers, go to www.JohnsonTeamRealEstate.com. We update the site weekly with everything from interest rates to market conditions to information from Fannie Mae, the FED and the FDIC. Also, feel free to call us at (360) 527-8766 or e-mail Info@JohnsonTeamRealEstate.com if you want to know more about a specific portion of the market - we track a lot more than we have space to report.

           The Johnson Team also includes a constantly updated list of newly listed properties and a list of properties being offered as short sales, as well as the entire listing database of the Northwest Multiple Listing Service, fully searchable to your specifications.

How many Brokers and Agents get miffed with lack of listing from agents !!!!

I did a 2.5 hour class with 9 agents (i limit my class to 9 first come first serve) and after i prove howwwwwwwwwwwwwwwwwwwwwwwwwwwww easy it is to get FSBO'S (for sale by secret)

in our area FSBO's are drying up as the market is changing fast going to firm and not going down as we have been the last 18 months in some area's up to 40% DOWN from 2005 ....

We had our class but i do it different then most i ask questions that put agents on edge ,,,ya that's right i put them in the spotlight by teaching the 6 minute contract class then i stop and point to a agent and say im the seller and Mary why should list with you and not the Balloon company who will list my home for only 5%......the caught in the head-light look is better then HBO any day ,i teach the agents to think like a thief or chess player ,,,,that is to say think any permutation of any question and answerthat a client will ask will be dealt with and answered with no hesitation or shifty eye non contact.

 Example ::: when reading the contract up side down and showing the client a point on it i stop and say Mary why you at 5% ...she says right of the bat ,without blinking or hesitation ..Sir when a buying Real Estate agent has 6 homes on his desk to show and he spread them out going from 2% to 4% the 2% home the buyer will never see it will be dumped in the garbage bin (its greedy nature of more money from more commission equates to

$200,000 home 2% COMMISSION TO YOU IS $4000 BEFORE BROKER SPLIT

$200,000 home 4% COMMISSION TO YOU IS $8000 BEFORE BROKER SPLIT .....SO YOU REALLY THINK MR AND MRS BUYER WILL EVER SEE THE 2% HOME .............................

Mary was the best person with the quickest reply saying seeing the buying agent with all the homes spreed out which one would you show the buyers......

So we went out and first FSBO's i went down any road America and found two homes for sale a Coldwell Banker home next to a FSBO's i called the Coldwell Banker agent and showed the 9 agents every thing about a Florida home :

1...how to tell a CBS home from frame stucco

2...to tell if a/c unit is as old as home and what a 12 seer means

3...How to walk into a room and instantly measure the room in 3 seconds .Coz most people don't know the difference between a standard 7' by 3' door and tiles which are 12 " or 18" or what there out stretched arms measure ...

4...Take them out side and show brass nail in street which is the lot boundary mark (all 9 agents were blown away when showed how to tell where the lot starts and ends

5...some of the agents couldn't tell the difference between A/C unit and pool heater ,propane buried tank which shows only green 24" lid with a small GRAB hole i said BILL lift the lid to show all whats under it ,then i told him to stop as under neath a lot of the time a Snake will be hiding under it !!!!!!

6...tell if stove is old or cleaned up old or new never used (Its amazing how many have the pregnant pause moments if you cant be always pointing out things in the home and when your driving between homes ,always be pointing and showing off your neighborhood

7...and where to look for old damage etc

Then i called on speaker phone the FSBO's next door and said My name is Wayne Furlong from Exit realty i am next door showing your neighbors home and two of our 9 agents want to know more about your home ,how many square feet is the home and when was it built(i asked 20 questions and never asked the price seller will always give )i asked is it possible to show. she said shes at work, then she went on to say she has a real estate license and 4 other home shes trying to sell

so we have a possible 4 homes and a new recruit and it took only less then 1 hour  ,,my Agents are stoked and ready to go ..... i got back and said who wants to go back and see if we can get the homes all wanted to go as the seller has her License with a small independent brokerage and has a full time job ,,

We will know how successful we are next week!!!

ALLS IM SAYING IS GET LISTINGS NOW OR JUST BE A "SHOULDNT OF DONE IT AGENT"

 

The news may talk about the housing market being soooo bad but just in Dec. alone 303 homes sold in the PAR MLS.  If you put that along with all the other MLS in the National Associations it gives you a brighter side of things.. which never hurts your eyes to look at..

I believe you make your own reality and I have a strong positive outlook for the new year, you have to stay informed of course but I don't  think anyone in this business should sit back and dwell on what the media says....

I believe that is what alot of real estate agents did this past 2 years and as a result gave up.....Never, Never , Never give up, because wheather you think you can or you think you can't you always right.

 

Statistics Summaries Report

Category - Residential / PropType: RD, RA, CD, MF, MH, BS / Area: 01, 02, 03, 04, 05, 06, 07, 08, 09, 10, 11, 12, 13, 14, 15, 16, 17
Statistics for Entire MLS from 12/01/2008 to 12/31/2008

---

	Total	Total List / Sold $	Avg List $	Avg Sold $	Avg DOM	Median Price $	%SP/LP
Sold	303	$55,236,368 / $51,181,334	$182,298	$168,915	152	$149,900	92.66%
Currently Active (as of today)	5196	$1,533,770,018 / n/a	$295,183	n/a	235	$189,000	n/a

---

December 1 Front Page Article from local Bellingham Herald.

This true story demonstrates how a young couple did not fall for the 'qualifying loan' they were offered that felt way beyond their means. Instead they used their own budget and reason!http://www.bellinghamherald.com/102/story/696686.html   

Credit is due to Realtors, Anne Inman and Maryann Angus for helping realize this couple's home purchase within their reach. And we can't forget our unsung lenders, appraisers, processors, escrow and title agents working overtime to help fund deserving folks like this.  

Good News! Many great properties are available for smart buyers who have been biding their time at today's amazing interest rates! We can still lock 97% for FHA purchases (until January 2009--after that, 96.5%) and 100% VA purchases for qualified borrowers. 95% is the max for Conventional Purchases.

 Click this Credit Link to order your actual tri merge lender report on our secure site. Our agency report is about $30 compared to $50 on MyFico.com and it offers a credit analyzer tool.

Thanks for keeping the faith! Susan Templeton  www.loannetter.com  360.220.2997

Does your bank offer you a copy of your credit report when you apply for a loan? Most don't! So what if they deny your application based on information in your report? Sure you can write for a copy and find out later. By contrast, let's say you come to my office for prequalfication. I pull your report, I give you a copy and we discuss the report in detail. What happens if you find some surprising news that is not very flattering on your report? It could be old news you had forgotten about or inaccurate information. Together we assess what measures may be required to get you in better shape. While your FICO score is very telling --most folks don't realize how they got there.

It's All About Risk: Today a 540 FICO score is not acceptable risk for a mortgage lender. 800 is the new gold standard (850 is the highest score possible and I've yet to see one). Even FHA lenders want 580 minimum and many lenders set higher standards of 600 or even 620 for their FHA Loans. What this means is if your score falls below 620, you will pay a higher interest rate or you simply might not qualify for a loan. 680 is the starting point for 'good credit' these days. 700 or better will work for higher risk projects like construction projects. What a lender is looking for is how well you handle your obligations. So what if the negative impacts on your credit report are the result of just plain bad luck or life events you could not control?

All is not lost! If you can successfully and succinctly explain the nature of events that impacted your ability to meet your financial obligations, and show you have corrected the situation for a decent time-frame, you may still get your loan.  Outline those events for your mortgage lender and support with documents. For example, if you had a home fire that caused financial stress, include a copy of the police and insurance reports. Temporary medical emergencies, loss of work (if it has been replaced) and family emergencies that are 'not likely to be repeated' can be excused by an underwriter if your loan decision comes to an impasse.

Cut to the Chase: Our goal is to quickly give the underwriter a picture of what went wrong and how you took steps to correct the situation. The dates on a credit report when things 'went wrong' clearly indicate when the stresses occurred and when they ended. I seldom submit an application these days without a cover letter outlining how we arrived at our own findings, address the areas of concern, and back up with supporting documents relating to factors that we know are major concerns. Better to be up front than force an underwriter to wade through 30 pages hoping they won't find the onerous information...because they will resent the time spent finding your issue and your chances of negotiation will end right there! The one area that gets little sympathy is divorce, unfortunately. However, if your divorce caused undue financial stress and this has been corrected for 12 months or more, you may find these issues carry less weight. It's all about taking responsibility for your situation and moving on. Bankruptcies are becoming more common so we present the entire stack of filings discharge papers signed, sealed and delivered. The more complex your situation, the more requests for back up we can expect.

Hire a Pro: If you do have issues that require explanation, get thee to a licensed mortgage professional who can help you assess the situation and advise you of your options. If that person suggests you undergo credit couneling, dispute inaccuracies or pay down certain debts to improve your credit by all means do so. We have your best interest at heart!

Practice credit wellness: check out my info blog: www.netcredit.blogspot.com

 Click this Credit Link to order your tri merge lender report on our secure site. Our agency report is about $30 compared to $50 on MyFico.com for a retail version. I'll be happy to discuss your report in person or over the phone at your convenience, no strings attached.

susan templeton  www.loannetter.com  360.220.2997

washington loan officer license 510-LO-31434 branch license: 510-MB-24707-50145

Perhaps the most important fact to understand is that in today's economy short sales are a must to sell properties. Since property values have declined nationwide at such a rapid pace, The National Association of Realtors predicted that in 2008 and 2009 over 50% of all properties sold will be short sales or REO properties. It is unavoidable.  If a house is to be sold in today's market, then a short sale will be needed to make that happen.  Short sales require hours upon hours of work, and organization is imperative in order to get them done.  Also be aware that short sales will typically take approximately 3-4 months to complete depending on which state you are in (see below for typical lender timelines), and that is simply because the majority of lenders are overwhelmed at the moment, some receiving as many as 500 or more short sale packages a day!  And in some cases 2 or 3 weeks may go by without any change in the status a file.

Typical Lender Timelines (for each step in the short sale process)
Get authorization on file with lender	2 days
Compile short sale documents	7-14 days
Get short sale package on file with lender	3-7 days
Short sale package assigned to negotiator	10-14 days
Get BPO/Appraisal ordered	14-21 days
Schedule BPO/Appraisal with agent	5-10 days
Time for BPO/Appraisal to get to negotiator	21-28 days
Negotiate/obtain approval from negotiator	15-20 days
Total:	77-104 days

 

Please note that these timelines can vary by lender and that the above timeframes are meant to provide a general timeline, again taking into account that nearly all lenders are overwhelmed with short sales.  

 Brought to you by!

Laura and Rod Watson
THE WATSON GROUP
Re/Max Galleria Associates
4703 Richmond Ave Ste. B2
Houston, TX 77027
Laura's Cell: 281-797-3941
Rod's Cell: 281-797-3841
Fax: 281-817-5488
thewatsongroup.remax@gmail.com
www.thewatsongrouprealty.com

 

 

I have been kind of isolated from all of the flooding going on in Whatcom County. I live in a high enough area that it is not a problem. However, flooding yesterday was so bad that schools were closed and people -- trying to drive through high water -- were abandoning their cars. Several of the main routes to the north county were heavily impacted by this flooding. My inspection was in Blaine and the route up there was okay. However, the freeway coming home was nuts in the other direction. It had traffic like a big city. The local newspaper, the Bellingham Herald, has a gallery of dramatic photos. You can see those here.

Steven L. Smith

Bellingham WA Home Inspections

 

 

Bellingham Real Estate Investor Network

Mission: "To educate and inspire real estate investors to ethically achieve success"

Last night was another great meeting for the Bellingham Real Estate Investor Network (BREIN).  Al Schweitzer taught us about collecting on judgements, screening potential business partners, and locating distressed property.  It was another good turnout with lots of great networking, and several new members joining the group.

BREIN now has well over one hundred members and holds monthly meetings, featuring national and local speakers on various topics.  Members include investors, brokers, lawyers, contractors, appraisers etc.  Everyone is welcome.

Timely real estate investing information as well as local Bellingham and Whatcom County information is offered, and members can learn from one another and even buy and sell property at the meetings.   

The next meeting is Wednesday, September 24th at 6pm, all are welcome.  Details are on the website.

 

July 2008 Meeting

 

Dan O'Donnell, 360-220-7157

www.HelpInWhatcom.com

RE/MAX Whatcom County, Inc.

  

 

The majority of my clients come by referral. This means I can spend my time providing excellent personalized service for my clients. As a result, my valued clients refer their friends, family and coworkers to me for real estate advice. I am committed to building strong, lasting relationships, one person at a time. Who is the next person you know who is considering purchasing or selling real estate?