A few weeks ago we emailed several real estate associates in the Northern Kentucky area and asked what your biggest frustrations were in today's market. We were OVERWHELMED with the responses. We can't post them all here but we will give you a few of the most common frustrations.
We also took those problems to some of the TOP associates in the Northern Kentucky market today and asked them how they would (or have) overcome the problems.
Here are their responses as well!
1. I need more Deals!!!
Top Associate response:
"Who doesn't??? There is a great book by John Gordon titled "The Shark and the Goldfish". The message in essence is that it is GOOD to be a shark. Why? Because a shark seeks out its own food, while a goldfish is at the mercy of others for its survival. Which are you?
However, if you want to MAXIMIZE your opportunities for transactions, you should be doing the following: looking for business from at least 5 niche markets; using at least 3 technology based lead generation systems; working from a sound business plan; having personal and frequent meetings with someone (coach, broker, mentor, etc) who is helping to guide your business and is holding you accountable for your success.
Even in this market, our business is UP and continues to grow."
2. "I'm working more but because of falling prices, increasing company referral fees and changing company commission splits I am making less money than I ever have."
Top Associate response:
"You can fix this!! Falling prices is a market driven variable. We can't control this so it does mean we'll make less per transaction. So, you have to MAXIMIZE your opportunities in the other areas. If you are depending on your company for business (and we all do to some degree) you should be looking for an environment where there are no, or minimal referral fees to pay. Some companies claim that you'll lose all of your business if you change brokers. Don't believe it. You have to find the environment that allows you to make as much as possible for the time and effort you put in to your business. It never hurts to look around to see what the competition has to offer. Even the top players in the market do it more regularly than you might think. What they offer in splits and fees is important but also what they offer in lead generation systems. Can they document the business they have given associates? Can they show how much money the associates have made from company generated systems?
The other part of the answer is that you have to develop a business plan that increases your transaction count to help offset the lower prices. This is critical, and absolutely necessary, in this market. If you have never taken the suggestion of putting together a real business plan for this business, you better take it seriously now. You won't survive without one."
3. "I am feeling overwhelmed with technology. My company wants me using their systems but I don't know that I need all of it and if it will really help make me more productive. And of course they want me to pay them a sizeable monthly fee for it."
Top Associate Response:
"More than ever technology can make us incredibly productive or be our biggest nightmare in preventing us from being productive.
As we've analyzed our business here is what we think is critically important today... You have to be in an environment that endorses "cloud" computing. It simply means you have to be able to access your business from anywhere, at any time, from any computer. Which means web based applications. There are some caveats regarding client security and whether the company has access to my client database. Our company has tech people who will work on our equipment so we experience minimal down time. We also have an incredible web based educational environment that makes getting training a snap as it can be done on our schedule 24/7.
You're in the dark ages if you aren't accessing email, and listing information from your phone (smartphone). You have to be communicating in the same mode as your clients, and most of them are already there. You should also be looking at Google Apps (something like $50/year) which is a great way to integrate many business functions you use everyday.
Another item worth looking at that will save you and potentially your clients tons of running around time is some type of electronic signature program. Don't wait for your company to offer it if they don't have it already. A product like DocUSign is great. It removes the need for downloading, printing, signing, rescanning and resending. It is legal, very quick and convenient, and your clients will love it."
4. "I wish there was a way to get banks to respond more quickly to short sale offers. I've lost 3 deals in the last month because buyers walk away unwilling to wait any longer for the bank to respond."
Top Associate response:
"That is a typical complaint many associates are voicing today. To help reduce the amount of time the banks are taking to respond try the following: (This applies to banks who do NOT use a web based portal system like Equator.) If you don't have your CDPE (Certified Distressed Property Expert) certification, get it! I haven't experienced ANY educational program that is as thorough in educating agents in how to deal with banks and transactions. Beyond that once you have listed a property, make the call IMMEDIATELY to the bank to let them know you have listed the home and it will be a short sale situation (non-HAFA short sale route) and ask them what they need right now from you. Give them what they want. Ask them who your contact will be once an offer comes in. Try to establish the relationship up front. It may not work, but sometimes it will. Make sure YOU know what bank forms are necessary to be included. Fannie Mae and Freddie Mac have their own numbering sequence of forms to cover the same things. Once an offer is submitted, call within 24 hours to verify they have received it. Then begin calling every 48 hours to ask for updates until such time as you have a negotiator in place and they are responding to your offer. Try to get the bank to order the BPO immediately upon offer submission, rather than waiting until a neogtiator is assigned to the file. Push to work with email as much as possible instead of faxing documents as some banks prefer. These are all little steps but they can help remove days and sometimes a few weeks from the process."
5. "I can't believe the number of appraisals that are coming back so low. It is costing me and many agents I know sales."
Top Associate response:
"Today more than ever, to preserve the sales transaction we must be proactive. This means doing a very comprehensive CMA to justify the price on the purchase agreement. Then it is critical to personally MEET the appraiser at the home, and to deliver your material to him or her in a very respectful and professional manner. If you are not the listing agent, call to see if they plan on performing this step. If not, suggest you do it. This simple gesture goes a long way to helping keep deals together.
In a case where you are holding a low apprasial in your hand, you must ask for reconsideration. Again, you must supply very comprehensive material to support your position of the increased value. If you have a substantial difference between the sale price and the appraisal, providing the material to the apparaiser will provide the ammunition you need. But, even if you are fully justified, don't expect the appraised value to rise to the level you desire. The appraiser would look like he or she completely missed the mark with the first appraisal and the bank would question the abilities of the appraiser. This might result in less or no future business from the bank. The best you can hope for is to have the value rise in some substantial way and see if the rest can be negotiated. As hard as it is to say, even in this market, if you feel justified in your price for your client and you truly believe the apparaiser did miss the mark, cancelling the transaction and putting it back on the market can be the solution."
6. "I understand banks need to be more scrutinzing of buyers qualifications today, but many buyers with fairly decent credit are getting rejected. Underwriting standards seem to have gone overboard. So I'm sitting with buyers who want to buy but can't."
Top Associate response:
"As real estate professionals we have to recognize the opportunity that exists in the face of apparent market calamity. If the banks won't cooperate the way we and our cleints would like, we must find our own way to put transactions together. One solution is to be proactive in locating homeowners who wish to sell and own their homes free and clear. Using owner financing will allow some decent buyers the chance to purchase a home and allow the home owner a chance to sell and realize a rate of return on their money that they probably can't find in the marketplace today.
Many agents seem to be reluctant to offer this type of financing on their listings. Perhaps they feel such financing could put their seller at risk of selling to a buyer who may default and the seller gets the house back. While statistically it is a small risk, it is a risk. But, the ultimate outcome of this would be that the seller gets to resell the house again and make even more money. We're working this angle right now and having good success."
7. "Many of the Buyers I find myself working with have unrealistic expectations. They insist on making low ball / unrealistic offers."
Top Associate response:
"Take charge of your clients; be a leader. Educate your clients - Just because it is a Buyers market does not mean every Seller is desperate and is willing to take a low ball offer.
Advise them not to let this opportunity slip away: Interest rates and low prices combined make for great buying opportunities now.
If a buyer is paying cash and offering a low purchase price, encourage them to make the terms very agreeable.
Paint, floor coverings and yard work are not good reasons to pass on a house.
Remind clients that the Northern Kentucky market did not take the "hit" that some of the other metro areas of the country continue to suffer from, and, that appreciation is likely to return here before other parts of the country.
If you are unable to get your client signed around on a deal because their expectations are unreasonable, then decide whether or not you should be spending your valuable time working with them in the first place."
8. "Putting in a FULL PRICE (or over asking) CASH offer on a bank owned property and not receiving a reply for 1.5 weeks, only to find out, the offer has not been accepted."
Top Associate response:
"Most importantly, remember that dealing with an institutional seller is completely different than attempting to negotiate with a typical consumer who has a home to sell. Each owner of REO properties has a different process for handling the offer submittal process, and typically, are managing hundreds, if not thousands, of Assets at a time. Many are subject to corporate directives / guidelines that dramatically slow the process down.
Before submitting an offer to purchase on a REO property, you may want to contact the Listing Agent to review the process, and to get some advice on what the timeline involved may be. You can then educate your Buyer on the process, which in turn will help you to set / manage the Buyer's expectations.
Pay particular attention to any instructions provided by the Listing Agent, as what appears to us to be a simple, easy to fix, clerical error on the Offer To Purchase documentation, can create a major issue within the Lender's process and delay a response, or cause your offer to be set aside without any reply at all.
After submitting an REO offer you may want to check status by taking a daily look on the MLS for the subject property as your form of communication for your buyer. This may not be what you expect or what you are use to however it just might save you time and frustration
9. "Major lenders are not allowing Investors to purchase properties for 10 to 15 days, only owner occupants. For Agents that work with Investors, there is no real inventory."
Top Associate response:
"The lenders and services have pressure from the government to have more homeowners purchasing these properties. Remember that Fannie and Freddie are controlled by the government, and HUD specifically wants end users. This stabilizes the neighborhood values. If you are working with investors, perhaps you could try seeking bulk sales from the lenders, or you could look for properties that fall out of contract, anticipating that the seller maybe more flexible."
10. "Agents not returning calls or emails" Top Associate response: "This is an age old Real Estate issue. Agents need to show respect and courtesy for each other on a daily basis. Even if the property is sold, a return call is needed. Unfortunately, other than contacting the broker, the options are limited."
