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February 10, 2008
A series of serious questions to the real estate brokers (and agents) who read this blog
Now that the real estate market had slowed into a dramatic slump - some may say ‘bust’ - how do you cope?
Where is your current business coming from?
What do you do differently?
How do you deal with your lender's new policies?
Have you been actually closing foreclosures & short sales? - How many?
How do you find them?
Where do you see the market in the next 12 months… 24 months?
How will you survive?
Where do you find hope?
Please share -
A Huge Depository of Unusual Real Estate Stories Here 
February 10, 2008 in Real estate | Permalink
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Would love to answer, but I have nothing in common with the real estate business...
Posted by: g at Feb 10, 2008 8:00:51 AM
Your questions have some complex answers. I practice in a very rural area; 4 counties encompassing 5k square miles with under 200k population. Less than 1000 sales per year in the whole area. The rural south was economically distressed even before NAFTA, which hit us particularly hard, and we have moved beyond this into economically depressed. I've been in the biz for 10 years and opened my own company last year. This gives an idea of my background and why my perspective may not be the norm. Now to your questions.
1. This "bust" was brought about by greed, atrocious lending practices, flipping guru programs, artificially suppressed interest rates, lack of personal savings due to a consumerism attitude among the populace and the government, a huge influx (almost triple) of "newbie" realtors hoping to cash in on the growing bubble, and unsustainable/unrealistic and insanely fast pricing growth. There are loads of other things that have contributed but those are the high points. I have no idea how the industry as a whole will cope, I think there will be pockets that are not affected as badly as others, but I think overall it will be a rough ride for many if not most.
2. My current business comes from people looking to buy or sell, it always has.
3. I dont know what everyone else is doing. I do however take the Realtor Code of Ethics very seriously. I think it actually needs to be strengthened a bit. The financial gains of any transaction never outweigh the fiduciary responsibility I have to my client, be it buyer or seller. I do not recommend reverse, interest only, and mortgages of that ilk. I never have and never will. I do like working with first time homebuyers and helping them take advantage of some of the low down payment programs that helped more people achieve ownership at a time when you could buy cheaper than rent! I hope those are not a thing of the past due to this whole mess.
4. I dont originate mortgages. If clients ask for my help in this area, I give them a list of mortgage companies and brokers that I have positive experience with, and help them to whatever degree they need to understand different mortgage products and make a sound informed decision. Many buyers come in with their financing already in place.
5. My first listing 10 years ago was a foreclosure. I maintained 3-5 foreclosures in my listing portfolio for the first 5 years. Then it began to increase slightly every year. It is holding steady at 10 since Dec 07. I have done a few on the brink of foreclosure sales and saved the homeonwner, but never a short sale, although if the opportunity were presented I would favour it over default any day.
6. They find me through word of mouth, advertising, and online networking.
7. Biggee...too many factors at play to say exactly where we will be. Much will depend on the overall economy as we get there. I think pricing in bubble markets will adjust downward, and more foreclosures will hit the market. The jobs market, Fed monetary policy, government spending, banking system reform and recovery, globalism, and many other things have enormous influence on the housing market. I havent seen many positive indications in these sectors. In my experience, most foreclosures result from income loss, death, sickness or some other equally difficult experience in life. The devaluation of the dollar due to the whole mix of problems is threatening to undermine the whole economy. A crash is possible in this climate, and if positive strides are not made, even probable. I would hope some group or entity would intervene before half the population were homeless!That being said, there will always be a demand for real estate because it provides shelter...one of the basic human needs for survival. If people cannot buy they will rent. I think there will be an upswing in the rental market especially in areas hard hit by foreclosures.
8. The same way I always have. Providing excellent service and helping people. In the midst of this "bust" I average 5 sales per month and took on an assistant in January. The assistant lost her job when the local factory closed down 6 months ago and by that time was desperate for a job. I was swamped on my own and needed good help. She is awesome and helps me do a higher volume and quality of business. She says this is the best job she ever had! Tomorrow an appraisor will be joining us. He had a heart attack last year and lost his office. He approached me needing some help. He is a good guy and I have an empty office in the back, so what the heck. Help him get back on his feet...its not costing me anything and its helping him. I will not make a penny off any of his appraisals nor will he appraise properties I sell unless one party to the sale requests him to do so. To do otherwise would be a conflict of interest. I also encourage application to the USRDA for clients who meet the criteria for low income homeownership. I work closely with them and have even donated part of my commission to pay deposits and insurance that would have been a distress to their pocketbook. The one I'm closing Tuesday is an amazing example. It is a foreclosure that was rehabbed to qualify for the program, and the family was renting a dump for $75 more than what their house payment will be. This increases their saveable income and allows them to weather crises better. If thats not enough I will take on a second or third job if necessary to support my family. I have done it several times in the past, but I dont see it being necessary.
9. Hope springs eternal! The Great Spirit, my Heavenly Father, renews my hope with His mercy every morning. My sleeping children, beautiful and innocent give me hope for the future. The wonderful people I meet every day give me hope for humanity and peace. Mother Earth, the green environment outside our doors gives me hope in her very beauty, amazing me with the Creator's imagination, and shining in her reflected glory. Hope and inspiration abound if one will open the eyes of the heart and truly see.
Sorry for the long post, hope I didnt bore you to tears.
Posted by: CR at Feb 10, 2008 9:53:36 AM
I think we need to remember that real estate is local. Not all real estate markets are tanking despite what the national media want to tell you. My market appreciated 18% last year. The number of sales were down, but we did fine. I sell mostly second homes and luxury homes which are not as effected by the credit crunch. I think 2008 is going to be similar to 2007 and we should have another good year. I don't do foreclosures or shortsales very often and am happier that way. Most of my business comes from referrals or from webbased marketing though my blog, my website, or social networks like LinkedIn or ActiveRain.
Posted by: Geordie Romer at Feb 10, 2008 3:29:44 PM
This is just the kind of market an Exclusive Buyer's Agent like me wants to have: high inventory, low interest rates, falling prices (not too much) and buyers needing to move. Most of my business comes from the internet, some fom referrals from past clients and friends.
I find I'm dealing with many more first-time home buyers than I did a few years ago. They're still out there looking for their first home, and they're mostly young professionals -- a lot of single women -- who have recently completed their academics and are now into their real life careers. For instance, I've had a rocket scientist (can't remember what she does exactly, but she's a Ph.D. engineer), a pharmacist, a physician, an educator in the ranks of women; an attorney, lots of people who do computer stuff -- programmers, engineers, and the like; and some move-up married clients -- a retiring diplomat and family, a UPS shipping manager and her carpenter husband, a Ph.D. research educator and her husband, a computer guy; an interior designer and her husband, also a computer guy. I could go on and on. They come from all over the world, some from Denver where I practice.
Things are a little slow right now, so I'm taking the opportunity to beef up my website with new content and update some of the old content, always a good thing to do.
Over the last year I've been involved in several foreclosures and bank-owned transactions. The pre-foreclosure purchases have been a nightmare. I much prefer the bank-owned ones. Quicker answers and not so much drama. I don't work with investors. Ours isn't a market where investing pays off much unless the investor plans to hold on to it and rent it out. Fixing and flipping does work, but you do have to know what you're doing. I stopped working with investors when I encountered so many people who had been watching the infomercials promising the moon if they invest in real estate.
The number of rentals has increased enormously because of the foreclosures. I have a colleague who has invested in rental homes and is doing quite well. Vacancy rates are moderate right now, probably between 6-7%.
I do recommend, and strongly, that my clients work with a lender I've worked with for some years now. Never had a problem, and she still has great programs. Sometimes interest only, ARMs and other exotic products are right for particular clients, they're not all bad. Recommending a lender is more like choosing an expert witness. An attorney doesn't trot out three and then ask her client to choose one. An attorney has the same kind of fiduciary relationship with a client that a real estate agent does. I'm the expert, so I strongly urge my clients to check out the lender I use. Not all choose her, but most do, and we always have a smooth transaction from start to finish, unlike with lenders the clients choose.
Denver's market is a bit different from the rest of the country. Our years of double-digit price increases were in the 90s. We came to a halt in 2001, but didn't start having significant decreases in prices till this past month. We were the first state to have record foreclosures a couple of years ago. We still have a high foreclosure rate, but it's dropping, thank God. I see the market continuing to flatten for the next 18+ months and then begin to recover, probably not at the same rate we did from 1991 when things were still bad from the mid-80s recession locally, but certainly enough to claim a growing economy and healthy housing market.
I'm headed toward retirement in three or four years, so I'm hoping it will pick up significantly before then. I need to save up a lot of money for my "golden age" years. LOL
Judith
Posted by: Judith Clausen at Feb 10, 2008 3:52:17 PM
Hanan,
Here in Chicago business has slowed considerably and even backslid a little (Pricewise)since 2006 but the all out 'bust' that is occuring in other markets has escaped us---or we, it.
Current business for me personally is 50% internet, (ChicagoHomeEstates.com and my Blog, Chicago's Home Weblog) and 50% past clients and referrals. Our company goal is to stay on Page 1 of Google with the strongest Real Estate Search Terms, organic and Adwords campaign. Even though we are a boutique Chicago brokeraqe we are rarely any lower than the 2nd or 3rd position on Page 2. We do ZERO print advertising and ZERO direct mail. I only do residential realty.
I've had to expand my preferred Lender base to included those who are welcoming secondary paper for non-conforming loans, i.e., more brokers and less Bank of America.
I've written more than a few posts on my feeling on these tighter lending policies. It's my opinion the mortgage industry is a 'big hungry beast' and can only go so long without being feed. They need to find a more appealing and secure way to bundle mortgages for those investors who are still buying secondary paper.
Short Sales and Foreclosures are an area that I leave for those few attorneys in town here that control that market. Anything that is left over after those with the 'inside scoop' pick through the bargains is worhtless, in my opinion. Just more unnecessary risk for the amateur investor.
I see the residential market staying level in Chicago for the next year or two with only modest appreciation in only the most interesting neighborhoods. There are a couple hundred different 'hoods here in Chicago and I generally only work in a dozen or so of those 'most interesting.'
Again, the internet and past client base are my tools for survival. Oh yeah, I traded my S500 for a Mini-Cooper and I won't be vacationing in Europe for another year or two. Other than that everything sucks...I mean... is great!
Posted by: Geno Petro at Feb 10, 2008 4:10:44 PM
Hanan,
Thanks for making such a timely set of questions and putting them out there for us to all discuss; as someone who works with and for Realtors here are some observations on your questions:
1.)The market is not bust. The mortgage system is broken. It can be fixed, but I think a moratorium on foreclosures is likely.
2.)Obeo only sells its services to Realtors, not FSBOs. We are having a seasonal ( winter)
drop in sales that always seems to go up as March approaches. In my area, Wisconsin,
I am seeing the career, full-time Realtor push their marketing very hard. There has been a substantial number of Realtors leaving the profession, as we all know. Social networking, blogging and being in on line communities is creating business relationships that I would not have had a year ago.
3.) What I am doing differently is offering Realtors knowledge about blogging, social networking and on online communities as an integrated part of their on line marketing solution.
4.) We had a banner ad/tour sponsorship program for lenders that want to subsidize a portion of our on line maketing program for their Realtor partner.
5.)We are working with a large, national brokerage to help them market these types of properties/sales.
6.)We are lucky here - we get one million buyers a month coming to our website to view properties and they tell others about Obeo. And work the blogging and social media marketing like crazy, every day!
7.)In the next 12-24 months: moratorium on foreclosures; mortgages as long as 50-75 years, Realtors regroup and become a smaller, tighter, more experienced and nimble network nationally becoming more involved in social media marketing, inventory at a surplus but-is already reducing in some areas.
8.) Hard work, social networking, offering incentives when we can.
...I find hope in knowing this country is a place where we can all have dreams and we all have hands to reach out and across.
Bset to all, and thanks, Hanan!
Steve
Obeoman
Posted by: Steven Stearns at Feb 10, 2008 4:47:11 PM
1. The real estate market is in a very severe "slump" in some areas of the country, a mild "slump" in other areas, and it is business as usual in international markets of the U.S. Real estate is cyclical ... always has been ... always will be! The market goes up and the market goes down. Right now we are in a down period of the cycle.
2. I am a full-time media and training person now, and I continue to keep an active real estate license. I continue to receive referrals from past clients and other Realtors, and I pass most of this business on to other Realtors. I also continue to receive a healthy volume of online leads.
3. When I work with a listing, I use single-property sites, multiple virtual tour providers, and I use blogs and other social networking tools.
4. Underwriting criteria are always changing. I have a hunch that tighter underwriting standards will make FHA financing more appealing than ever in many market areas.
5. I have worked with foreclosures AND short sales for many years. Many lenders and asset management companies continue to be "truth challenged" and they continue to offer communication challenges. This business is not for the weak of heart. Clients facing these issues need a ferocious advocate to deal with genre of professionals staffing REO departments and asset management companies.
6. I think that real estate professionals who wish to track foreclosures and pre-foreclosures would be well advised to subscribe to http://RealtyTrac.com.
7. I see the market remaining in the same or deeper "slump" in 2008, with conditions improving sometime late in 2009. I think that there are some dramatic and creative intiatives on the horizon to deal with the foreclosure morass.
8. I have been in the real estate business for 23 years and I have weathered up and down cycles. A downturn in the business offers a savvy realty pro the chance to prove his/her mettle and demonstrate the true value of a real estae professional. The best in the business thrives more than ever when there is a market correction. A lot of people will leave the business. They never should have been there to begin with.
9. I find hope with each breath in the day. I count my blessings each morning, and each evening I give some thought to gratitude for my gifts. Hope is abundant and it is there for the taking.
Frances Flynn Thorsen, e-PRO, SRS, ACRE
Managing Editor
RealTown.com
Posted by: Frances Flynn Thorsen at Feb 10, 2008 6:51:56 PM
Wow Hanan! I'm going to be visiting L.A. at the end of March. Is it really that bad out there?
Hard for me to answer these questions from up here in the Seattle area. Volume is down in the County since September, but it was kind of off season anyway. There's still plenty of business and lots of newer agents are leaving the business.
Just closed a short sale, but we picked it because it was the best home for my clients. It just happened to be a short sale. I have as many or more clients right now than I've ever had. Inventory appears to be high, but it's like every other February. The best is yet to come...and many of my seller clients will be out in Spring, as will the houses for my buyer clients.
It's an interesting topic...but we're not at the "Where do you find hope" stage here in the Seattle area. The mortgage mess is clearly here, but being a Banker in my former life, I didn't make a business off crazy or bad lenders in the first place. So I'm not seeing any differences except longer days on market, so far.
The only thing I am doing differently is that I plan to sell my own house this season. Will I buy or rent? Time will tell :)
Posted by: ARDELL at Feb 10, 2008 8:14:51 PM
FSBO: 3bd, 2ba, new roof, huge back porch/spa, huge shop/garage, 2 lots, walk to the beach. Ocean Park, Washington state USA. Please email joetruck AT gmail.com
Posted by: Joe at Feb 10, 2008 8:48:34 PM
The Albuquerque Real Estate market has slowed but the market is still growing slowly and we have not seen price depreciation. I have heard that many Agents in New Mexico did not renew this year, as we did have many part-timers in the area. Our website ( www.WelcomeHomeABQ.com ) has been our main source of leads and has kept the pipeline full over the past 6 months. I am thankful that we invested the time and money into the site about a year ago, it has really paid off.
There is plenty of business in our market, we just have to work harder for it, and that's ok with me.
Posted by: Tego Venturi at Feb 10, 2008 8:50:44 PM
I am a developer in Sonoma County, California. I have a project being designed that includes a 70,000 sf neighborhood shopping center and 600 condos. During the last year local asking prices for condos have fallen from $420k to $320k and the median price of sales of existing sfd has fallen from $609k to $466k. The project is well funded and my intention has always been to hold the units as rentals for at least 10 years but the short-term market has had it's effect. I can borrow less per unit now ergo more equity per unit is required ergo I have decided to get rid of the underground parking garages which increased the number of units possible but at a high marginal cost ergo i'm dropping the unit count to 400 from 600. It just makes more sense for me to use the incremental capital to buy vacant development lots at fire sale prices than to 'manufacture' space for developable units by putting in underground parking.
I guess that means the 'crisis' has given me a financial incentive to promote more sprawl (buying empty lots on the fringes at fire sale prices) instead of density in the town center (where I'm opting against parking garages and more density).
Posted by: jeffrey at Feb 10, 2008 9:55:52 PM
RE business in Michigan has been slowing for a couple of years. We were ahead of the curve. We've maintained our business by innovative marketing, exposure gained from our blog (miOaklandCounty.com) and hard work. We have a large rental business that will someday again be buy/sell business, so that gives us a good future pipeline even if the paychechecks from rentals are smaller. We've also taken on quite a few luxury REO listings. REO listings are what is selling here.
I find hope all around me.
Posted by: Maureen Francis at Feb 10, 2008 10:45:14 PM
Our market here in Silicon Valley has split into two: The lower-end $500K to $800K market is not doing very well, with high inventories, low transaction volume, and dropping prices.
The higher-end market -- especially around $1.2M and above -- remains very active, with multiple offers commonplace. The in-between price points have started showing their seasonal Spring bounce.
Take what the media says with a grain of salt!
Posted by: Kevin Boer at Feb 10, 2008 10:46:09 PM
Thank you all for the thoughtful responses. Please keep them coming - I'll add a follow up post later.
Hanan
Posted by: Hanan - growabrain at Feb 10, 2008 10:49:51 PM
No problem at all !!
The Real Estate in Lima, Peru is booming.
There are lots of opportunities for building companies as well as for well established brokers like us. The phone doesn't stop ringing, sales are up and we are getting lots of business proposals from local and foreign investors and building companies.
Posted by: Alfredo at Feb 10, 2008 10:58:48 PM
The market here in Seattle has slowed, but it's not as bad as the media would have you think. Well-priced homes are still selling, and close in-city neighborhoods remain popular.
I've been in the business for many years, so am able to work on referral and my personal business is strong.
Everyone needs a place to live, no matter how bad the economy, and people will still get married, have babies, get divorced, relocate for a new job, move up or down the career ladder and generally find the need for a real estate agent.
Posted by: Marlow at Feb 10, 2008 11:19:32 PM
Interesting questions. I am very busy right now because some of the people I work with are relocating and that seems to be a steady business. My business mostly comes from the internet (my blog) I do close short sales and foreclosures. I don't find them, they find me they are just a normal part of the job these days. I can expect a percentage of my listings and sales to be short sales or foreclosures. I have closed 5 or 6 of them in the last six months.
My biggest challenge for coping is my listings. They are fairly easy to get but hard to sell and they won't all sell. Last year I mads some mistakes. I took some listings where the sellers could not lower the price because they owed too more money than the homes are worth. As a result they were taken off the market and have not sold.
many of us are finding that we show far more homes to each buyer than we ever did before and they end up not buying. In general I have enough clients, enough leads, listings and buyers but am not making as much money as I used to because I am having fewer transactions. I don't want to work as hard as I am working, at least not for free and am trying to figure out how to manage the situation.
Sales are down in my area by 25 ot 30 percent and we have more real estate agents than we need so it is as always very competitive.
Posted by: Teresa Boardman at Feb 11, 2008 3:09:18 AM
- I cope with humor, patience, persistence and dedication to my clients' best interests.
- Repeat business and my blog, primarily.
- I don't do very much differently - providing customer service and representation hasn't changed, counseling clients hasn't changed and analyzing the market hasn't either. This is my first "down" cycle, and I've been in for 6.5 years - so I'm coping the best I can, doing my very best every day and stealing as much knowledge from the older agents and real estate bloggers as I can. Certainly "This too shall pass," but it may not be for some time.
- I avoid the lender's new policies, and work only with lenders whom I trust to be honest with my clients. If they can't do a program, I am confident that "my" lenders will tell them. They keep me informed as to what guidelines change, what legislation is coming down the pike and what I need to be aware of; I also read an awful lot every day to ensure I'm as up to speed as possible.
- I have not yet done either a foreclosure or short sale - our market just doesn't have enough of them (yet) - but the buyers are asking for them.
- there is not yet a good method or tool by which to find foreclosures or short sales in our market - Realtytrac is not very good in the Charlottesville, Virginia area.
- I think we'll see a turnaround in either 4th quarter of 08 or 3rd quarter of 09.
How will you survive?
This is why God invented home equity lines. We deal with it - we spend less, and spend more wisely. Build business every day, and provide remarkable client representation. The strong will survive and I hope that we see a serious thinning of the herd - across the board - Realtors, lenders, home inspectors - everybody.
Where do you find hope?
Wherever I can. Sales are down 22% YoY, the number of active Realtors is down 2% - something's gotta give.
Posted by: Jim Duncan at Feb 11, 2008 4:03:01 AM
I'm in the same marketplace as Kevin Boer, generally, and I will second what he says.
Just this week I'm seeing an uptick in activity. Often that is exactly what happens just after the Superbowl. Seasonally it's right on time.
I'm not really running my business a lot differently. Saturday, though, I did show six homes to a buyer couple and every single one of them was a short sale situation and tonight am writing an offer with that couple on one of them. We weent' trying to find short sales, by the way, but virtually every home in their entry-level price range was a short sale.
Posted by: Mary Pope-Handy at Feb 11, 2008 6:34:55 AM
Ardell,
I tried emailing you regarding your Washington real estate and received no response. Please get back with me.
Posted by: Atlanta New Home at Feb 11, 2008 7:31:39 AM
Slump? What Slump? Not happening in San Francisco. Actually, it is...on a very small scale. Volume is down and median prices have plummeted anywhere from .2%-3% (depending on which gloomer you're reading that day). The SF market is still doing phenomenally well given the state of our media's binge on the matter. How long will it last? Who knows.
To answer the questions at hand for Mr. Levin:
how do you cope?
Lots of tequila and surfing. Actually, I write sfnewsletter and am helping agents keep in front of their sphere for this "slow" time.
Where is your current business coming from?
Referrals and sfnewsletter leads
What do you do differently?
Stress more
How do you deal with your lender's new policies?
Send in Vinny and Carlo
Have you been actually closing foreclosures & short sales? - How many?
None-Zero
How do you find them?
N/A
Where do you see the market in the next 12 months… 24 months?
If the media keeps at it, down. They let go, balanced and healthy with moderate 2-4% appreciation for the next 3-5 years.
How will you survive?
Send my wife back to work and sell more sfnewsletter subscriptions to local real estate professionals
Where do you find hope?
in the ocean
Posted by: theFrontSteps at Feb 11, 2008 8:10:59 AM
Hello,
Great Post! We live and work in the Toronto and GTA area of southern Ontario Canada and we are 'blessed' that our market has continued to grow and actually boom for the past while.
We've experienced unprecedented growth and continuous increases in prices since 1995. You can see a graph of prices at this page:
http://www.mississauga4sale.com/TREBavg1995date.htm
We watch the US meltdown from up here and feel very bad for your economic situation and real estate meltdown. We are hoping that once you have your fall election and elect a new government for "change" your economy will bounce back in the spring of 2009
I wish you all the best!
Mark Argentino
Posted by: Mark Argentino at Feb 11, 2008 8:13:42 AM
Fortunately I have built a solid client base over 25 years. A major foreign investor is also a great resource. I turn up my collar and turn my back to the wind and wait for the sun to shine again. It always does.
Posted by: Joseph Ferrara.sellsius at Feb 11, 2008 11:12:48 AM
Now that the real estate market had slowed into a dramatic slump - some may say ‘bust’ - how do you cope?
At the risk of sounding a little Pollyanna-ish, prices may be slumping, but our business is not. People still need to or want to buy and sell for a variety of reasons. While numbers of sales are down in our area, there are enough sales to continue to fill the dance cards of the better agents. We cope by finding opportunity in the changing landscape.
Where is your current business coming from?
The same place it has always come from: Past clients and new clients. We don't have a schtick, unless it is trying to constantly evolve. I see the changing world as more of an issue to the long-term viability of the average agent as is a changing market.
What do you do differently?
Nothing we wouldn't be doing differently anyway. We are naturally migrating more of our marketing efforts (marketing for both ourselves and our clients' homes) online.
How do you deal with your lender's new policies?
Have you been actually closing foreclosures & short sales? - How many?
Sure - So many of the homes we list and sell are in short positions. We don't seek them out, but we must deal with them. In terms of numbers, probably a half-dozen in the last half of last year.
How do you find them?
As Marlow said, I don't find them. They find me.
Where do you see the market in the next 12 months… 24 months?
Down, and down, but showing signs of turning a very slow, gradual corner.
How will you survive?
The same way we "survived" in a good market - By working our b-hineys off, being the best we can be, and distinguishing ourselves in our market.
Where do you find hope?
We don't have to find it; we have never been hopeless. Agents can sit around and mope about being victimized by a challenging, unfamiliar market, or they can wake up every day and find ways to improve and enhance their value to the consumer. I suspect the same agents that prospered in the early decade boom years are the same agents who are prospering now. Markets change, but the arguments do not.
Posted by: Kris Berg at Feb 11, 2008 12:51:18 PM
Oops - Looks like I skipped the lender question. I'll let you fill that one in for me. :)
Posted by: Kris Berg at Feb 11, 2008 12:54:43 PM
I'm a newer agent so never got to enjoy the boom times. Basically my agent job and regular job ratio has moved back towards a stronger weighing on the regular job.
The market is cyclical and eventually it will come around. I just have to stick it out and keep it ticking over.
Posted by: Athol Kay at Feb 11, 2008 1:31:58 PM
Posted by: Atlanta New Home
I tried emailing you regarding your Washington real estate and received no response. Please get back with me.
THANK YOU FOR YOUR INTEREST, and thank you to HANAN for not deleting my post altogether. I am unable to contact you because your website is evidently for ALL Prudential agents in the Atlanta area. Please try again to email me at
Thank you,
Joe
Posted by: Joe at Feb 11, 2008 4:15:51 PM
In San Diego County, the better areas, especially along the coast, (Coronado, Del Mar, La Jolla, beach towns), are doing OK, with prices slipping some. But the below average areas have had values drop drastically, in some cases down 50%, (honestly).
Posted by: Bill Fleffingham at Feb 11, 2008 7:39:52 PM
I cope because I have a naturally sunny disposition. It's in the genes and these days I'm very grateful!
Two main sources of business are referrals from past clients and my blog.
Reduced expenses dramatically. Assistant is long gone! Almost no direct mailing. I'd sworn off print advertising quite awhile ago. Watch every penny! I've also started, in a small way, doing some property management. I'm testing the waters at this point but believe it could be a way of balancing things out over the long haul. In a down cycle on the sales side, rental business would likely increase. Too late to make much impact in this cycle but I'm building for the long term.
I use only lenders that I'd be willing to give my own business to.
Yes, to short sales and foreclosures. They're probably half of my business right now. I've only done short sales on the listing side. It's a lot of work, but satisfying when you manage to pull it off. Almost every home I show these days is empty and well over half are either short sales or foreclosures. Again, it's harder work.
They find me.
Flat for now, possibly approaching a bottom depending on what's happening with the larger economy. 2008 likely to be marginally better in terms of sales, with prices continuing to decline.
Alternate streams of income such as property management and training. Bottom line is reduce expenses find new income sources. I'm finding new sources of free advertising and believe I'm well positioned to do well when market turns around. Until then, hang in there by whatever means possible!
I do not believe hope is based on current circumstances. Hope is about who I am and what I believe. I am blessed and if my real estate business crumbled around my feet tomorrow that would still be true. It's a career I love, but it's not foundation to my life. I've been a survivor all my life and I'll land on my feet again, one way or another!
Posted by: Julie Emery at Feb 12, 2008 8:22:59 AM
While we have seen a dropoff in the number of people doing 1031 exchanges, we are actually getting more high net-worth clients and exchanges facilitated. So, the number of transactions is down, but the investors that aren't as fazed by the mortgage issues are still churning out 1031 exchanges.
But, given that, we still are ramping up our performance as best we can in order to weather the overall national downturn.
We're coping mainly with focusing on going through our CRM and making sure we are tracking people properly in order to make sure we are doing everything necessary to not let leads fall through the cracks.
A wise man has said, "When performance is measured, performance improves. When performance is measured and reported back, the rate of improvement accelerates."
We are trying to hold each of ourselves more accountable to our several responsibilities in the office and then stay motivated that we will have the skills necessary to help the leads turn into actual clients.
CAVEAT: * 1031 Exchange Coordinators (www.1031ECI.com) facilitates 1031 Like-Kind Exchanges, so our experience with the downturn in the market may be diferent than others' based on the fact that we work throughout the country, and, generally, with investors (who always are in the market to buy and sell properties). *
We find hope in driving into work everyday in Bellevue, WA and seeing 10+ cranes running to build the newest skyscrapers. We find hope in working to fine tune our product and marketing abilities. We are reorganizing our website and blog in order to met the demand of the new generation of investors. Look for them to be done in a month or two.
Good luck to all and keep your eye on the prize!
Posted by: Chad Hallberg at Feb 13, 2008 10:04:19 AM
The real estate market has not slowed into a dramatic slump in Connecticut, so as we often say, real estate is local. The market is certainly softer but we have not seen any significant price reductions... yet. My biggest concern is "affordability". Even with low interest rates, buyers with average income can't afford the average sales price in most of Connecticut. I don't see that changing over the next year or so unless we see some significant price drops.
My current business comes about 40% from farming, 35% from past clients and 25% from the internet. I will survive like I did in the late 70's and the late 80's when the market really did slump in our area - by working harder and smarter than the competition who has had it pretty darn easy for the last 5 years. Many agents have never been through a down market. Knowing and studying the market trends is critical. My listings still sell while others languish at laughable prices.
I've closed several foreclosures this year as the listing agent. I work with one large lender and have the systems in place to make the process a little smoother for the buyer's agents who might have never worked with a bank foreclosure before.
I don't rely one method of prospecting - you know the corny expression "high tech/high touch" - that's me. I only work with sellers but at he end of the day, if all I've done is sit behind my computer that is not going to cut it. I need to get toe to toe and belly to belly with prospects.
Posted by: Linda Davis at Feb 17, 2008 10:37:55 AM
We are Primarily Buyers Agents so like others said this market has been great for buyers. We are finding the 2 ends of the market are moving here - the First Time Home buyers - been putting several people a month in FHA homes (in this market most are getting in with no money down with 3% seller gift and closing costs) the other extreme is our beachfront real estate - many of these people are cash buyers or buyers with 20%+ downpayments. We are heavy bloggers and we currently have @150 new people a day searching for homes and condos for sale - since we're a husband and wife team we're keeping plenty busy. lol
We have closed several short sales this past year - several taking 5+ months - most home buyers don't have the stomach for it - they emotionally want closure and start planning so many back out and buy another home before the banks come around.
Just this month I've notice lots of bank owned properties hitting our MLS priced to sell - it's going to be interesting to see the impact on their neighborhoods. Several were homes people paid $250,000 less than 18 months ago and now are on the market for @$170,000 - I feel for those relocating or having to move - values are taking a hit.
I do think if you don't have a proactive marketing strategy that's working you're in big trouble as an agent.
Thank goodness we got started blogging early :-)
P.S. I see mortgages taking longer and appraisals and underwriting being a sticky point. 45 days is becoming more normal
Posted by: Cyndee Haydon at Feb 22, 2008 9:32:24 PM
I have owned and sold several homes in my life and now sit on the sidfelines! I have "super prime" credit rating "money-in-the bank',totally debt free and I'm unfortunately somewhat amazed by what has been long over-due in the housing market.
Professional postions helds in the past are paying the same or less than when I held them 15-20 yrs ago...How can we be having such a great economy. Most of my friends say the same thing! I fled to Alaska to work where it can be rough but you bank your check and Rm & Board is ususally included (Free). I expect and would bet that the housing market down turm is going to be long, at least two yrs, and will hit many areas by as much as -50%. I will not pay the current prices - there is no such thing as "fair-market-value" in today's market! that's anyplace-anywhere in the US. Prices are headed down because the reality of real-income vs credit or imaginary income is HERE!
What new financial lending tool we now be created trying to avoid th inevitable "crash of the Housing market? BEWARE!
A crash is needed to make housing more affordable again. I'm just sorry that so many people will lose their "imaginary equity" and be way upside down in their homes. Housing prices have to be inline with median incomes! only a crash in prices will accomplish this. I will not purchase housing until I know I'm paying "fair" -not inflated housing prices.
Don't belive any of the pro-realestate adds or market gurus on the boob-tube - there will be more trying to prop up the market. Let it Crash!
Don't Buy Wait - there will be better housing purchase opportunities in the future. DON"T BUY WAIT! LET THE BANKS, LENDING INSTITUTIONS and GREEDY DEVELOPERS CHOKE ON THE BAND LOANS! YOU will SAVE THOUSANDS IF NOT HUNDREDS OF THOUSANDS BY WAITING AND SITTING IT OUT!
Sitting on-the sidelines with money in the bank!
Posted by: John Moylan at Feb 25, 2008 6:07:33 AM
Wow, I'd have to say all of the responses I've read have been good & enlightening. I's like mostly to reiterate what CR said, and that is that real estate is regional not national. While in most of Florida and California we have been severly affected, there are still many metropolitan area that are growing at a "normal rate". That big bubble that we experienced was just that...a bubble. It was not normal.
The majority of my answers coincide with g although we are not from the same locale.
I too believe that the Code of Ethics is important above and beyond any financial gains.
Posted by: Florida Real Estate Expert at Feb 27, 2008 12:14:10 PM
I stumbled upon your blog and have to say that it is top-notch! I can't get over the many thoughtful and heartfelt responses -- kudos to you!
While I'm still "in the trenches" working with buyers and sellers, my primary focus as of late has been my consulting business and I am finding that the brokerages that are doing the most business these days are the ones that have:
1. Taken on full responsibility for their outcomes -- they do not blame "the market", or "interest rates", etc., for their success (or lack thereof).
2. They have redoubled their efforts with respect to marketing and lead generation.
3. They are fully embracing the concept of "niching" and do not try to be all things to all clients.
It's a matter of getting back to basics and putting their clients first. There are actually many brokerages across the country that are having their best year ever, because much of their competition is confused and at a loss as to what to do.
It's relatively easy to shine in a down market (if you know what you're doing) when everyone else is scrambling to figure out what's going on.
Thanks again for a great blog.
Never forget your greatness!
John A. Michailidis, GRI, CRS, JD
Posted by: John A. Michailidis at Mar 1, 2008 1:13:10 PM
From a buyer/investor stand point I think that real estate agents need to put emphasis on the fact that this is a great time to buy. I have been looking at Chicago homes and am excited about the rates. This site (www.propertymaps.com) has a great tool to help you search in specific areas with the aid of a google maps mashup - and also allows you to look for foreclosures in the area. With a great tool like this, the knowledge of a good real estate agent, and the opportunity of the rates and house prices dropping out there- it's a good time to buy.
Posted by: Shell Smith at Jun 24, 2008 11:31:02 AM
The market is definitely starting to pickup in the last month or so. I work the Morristown thru Summit New Jersey areas and they are two very different markets, although not far from each other. Summit is a stronger market due to the closer proximity to New York. When you commute to the city, every little bit matters.
The press (and the Larry King show) has been much more positive. I think that buyers are feeling more confident about moving forward on purchases.
Posted by: Sue at Jun 30, 2008 5:53:26 PM
As a realtor myself in wetsern NY, we have seen things slow too. I wanted to comment on prospecting. I bought a DVD that has the first fresh approach I have seen in years. It talks about innovative ways to get people to call you, so you van have leads and sales without any prospecting. I tried it and I am doing very well. I recommend it. Go to http://www.salesandmanagementsolutions.com/lp_noprospect.htm
Posted by: Joe Murphy at Jul 19, 2008 12:37:13 PM