Archive for October, 2009
I don’t know where I am on the political spectrum. I don’t think it’s particularly important. But I know that if I took Robert Worthington’s approach to my business, I would be out of a job. People come to me with problems. I try to help them resolve their problems within the set of rules. They pay me. End of story.
What I think about those rules when I lay my head down at night is quite distinct from how I earn a living.
Whether you’re a lawyer or a real estate agent, a lender or a widget maker, you add value to the world by solving other people’s problems: keeping them out of jail, finding them a home, helping them finance a purchase, or selling them some widgets.
How you conduct your business – how you treat people and honor your commitments – matters.
What you think about whether they take a tax credit, or borrowed from 2003-2006 at Fed subsidized mortgage rates, or have benefited for decades from the mortgage interest rate deduction does not matter.
And if you’re so concerned about an $8,000 tax credit that you’d turn away customers, I think, quite frankly, your priorities are confused. There are some deep injustices in the world, and in this country. An $8,000 giveaway, however stupid or smart a policy that may be, is not one of them.
Robert Worthington is right. Do you want to know how right he is? According to Goldman Sachs, who ought to know about government intervention, the feds interventions into the housing have pushed home prices 5% higher on a national average than they would have been otherwise, Goldman Sachs estimates in a report released late Friday.
The government over the past year has slowed the pace of foreclosures through moratoria and the drive to modify mortgage terms to keep more borrowers in their homes. It also has pumped up demand for housing by giving tax credits to many first-time home buyers and by driving down mortgage interest rates. As a result, home prices in some areas have risen in recent months, particularly for homes that appeal to investors and first-time buyers. Bidding wars for the more attractive bank-owned homes have become common.
But these artificial props won’t last forever and may have created a false bottom in the market. “The risk of renewed home-price declines remains significant,” Goldman economist Alec Phillips writes in the report, “and our working assumption is a further 5% to 10% decline by mid-2010.” – WSJ
If they’re right, rather than a healthy market heading into 2011, what do you think we might actually have? We could be looking at falling home prices, rising interest rates and a government whose currency is faltering. Does it sound like a double dip? Will you be happy that the functions of the market were tampered with once you realize the misery has been extended, for years? Remember to say thanks to the NAR, thanks to the NAHB, thanks to the Feds and most of all, thanks to us realtors who supported the larceny. But, at least you may have universal access to a health care waiting list.16 comments
Really quickly. A lot of us have various opt in methods. Free books, blog comments, FB adds.
What are we doing with that noise? Hello. Call them.
Objection #1 “But I Can’t Find A Numba”
OKAY, fine. You can’t find a number. Sergey and Eric made this little website, it’s a good starting point. So is linkedIn. So is Twitter. Search your lists. Search everything you do, and yeah, you can “find a numba.”
It’s not hard.
Some hints: a lot of people are in the 90 and 9 in your fb list.
A lot of people are in linkedin.
A lot of people are attached to someone else.
Objection 2: But, Daddy, They’ll HAAAAAAAAAATE me.
Twice, maybe. Twice I’ve called people and gotten some sort of jerk face. Offense that I’d dare call them. I call about 15 people a day. 75 a week. I have had a bunch of people I got no interest in, that’s for sure. I have a bunch of people that I can’t stand…another given. And a bunch of people that want the free stuff. No sweat.
More often, I call people, decide that they are morons and don’t pursue anything. With them. I call, they’re not interesting….to me. See, calling about 75 people a week gives me options. I don’t need to chase every imbecile or get anxious about stuff.
…I don’t have any Boiler Room Jedi Mind Tricks. I don’t even currently have a script. I’m not that good…I step up to the plate and take my hacks. And that’s enough to make me a living that has been six figures 9 out of 10 years 2006, friends was the bad, bad year I know you all were laughing, but I was rocked hard by the IRS, my own ego, and a bunch of rental properties that were imbecilic.
Objection 3: I shouldn’t have to sell. I’m such a great blogger that they should come to me.
Okay fine. Look, they did. They came, saw and commented. They gave you love, they gave you some confidence. Now pick up the phone, and close the deal. They are BEGGING to give you their money. Go grab it. They voted yes, checked that box.
You need to call and CARE ABOUT THEM. Give ‘em some value, sell to help, do the best you can. Nobody’s perfect. Not one soul. The Nazarene gave us all some grace because nobody’s perfect. Look, I like people that I pick. I picked my wife, I picked most of my best clients. Hunting people down gives you options. Finding and serving the best people you know how to serve…is the surest path to riches.
Now, I’ve done some dumb stuff, I’ve had well intentioned process screw ups, and this year I was too slow to react and have a good customer service pattern. Fixed that now, mostly.
Objection #4: But I hate Cold Calling!
Dude, stop. This is not cold calling. You’ve served helped and added value. This is nothing like cold calling. At all. This is followup. You introduce yourself, politely, assume nothing, and call to connect and to help. Don’t be attached to the outcome. You’re following up.
Hell, they might have been to embarrassed to call about their question and you’ll be helping them…doing them a favor.
Just don’t be attached to an outcome, be there to help not to make a sale, and focus on them, not you. Amazin’ what happens if you do this.7 comments
If you are on the far left, there is no need to read any further, for what I am going to say, is from a capitalist “conservative” mindset (which only means to left wingers that…I must be a hate monger for not wanting to extend the first time home buyer tax credit to those poor innocent people who can’t afford a home in the first place).
To extend the tax credit is simply going to increase the national debt load beyond what taxpayers can already afford to pay, yet weakening the economy even deeper. Simply put I’m sick and tired of Realtor’s wanting the extension of the tax credit because it only benefits a few parties to a transaction instead of bettering the country. We need to look at the big picture. The fact is the tax credit must end at some point in time; that is a fact! Realtors need to put their own personal interest aside and do what is best for this country, not themselves! Extending the FREE money tax credit will only increase the pain of debt until the US dollar is worthless. So the FACT is…Americans must be willing the do the tough thing!
What is the tough thing you might ask? well, for me, I have refused to work with buyers looking for the tax credit!!! YES, you heard me correctly. I know that if I am against the tax credit, then I must ACT as I believe. I BELIEVE the government should not be handing out any of my money “tax payer money” to try and stimulate an economy that is FALSELY INFLATED in the first place.
How about this for a thought. How about Americans need to live their WAGE so no tax credit is needed! Here is my thought for the day. WHAT IF, your home cost 125k instead of 300k? what if you drove cars 10 years old with no car payments? Could YOUR WIFE be a stay at home mother for her CHILDREN if this were the case? Would the 10% unemployment rate drop to near zero if Americans lived their wage so mom could stay at home if she chose to with her babies!
Your thoughts?17 comments
…today is probably the day to make contact with your state’s U.S. Senators.
(Incidentally, if you want for your political communications to have maximum force, you have to do more than write a check. You’ll get double the impact is you make a photocopy of your check — and then mail the photocopy to your candidate’s opponent. This should be very effective over the next two years in “purple” districts.)6 comments
One of the things that I truly dig about Ryan is his utter willingness to try anything. Goofy? Serious? Whatever? It’s all in play for him. What keeps people on pages longer he’ll do.
I’m now free to do that. I was constrained by subordinating everything to someone else’s “best practices.” The Caples stuff, other people’s methods, best practices, and the Fortin stuff that you see working. I am Japan. Like Bawld Guy. Take ideas, appropriate…make ‘em mine, lather rinse repeat, and knock out another 5 of my 10,000 hours.
No more need simply copy. Enter A/B Testing. You can create a loop that corrects itself. By not having your ego involved, by subordinating EVERYTHING to effectiveness, you can try ANYTHING and see what’s what. Wanna see if pink hippos sell? Go.
Blog Consultant Michael Martine pointed this killer video out, and for those of us using WordPress and a Theme of some type that allows page level layout changes (for color scheme and suchlike) this is the cool.
Now, I can do 2 things: see if pink hippos sell , and see what sells better than what else.
Questions I am going to address:
- Does a highly produced video sell better or worse than a “Garage bandy” deal?
- Does 16×9 kill 4×3 like I think it does?
- Does asking for a sale work better than asking for an opt in?
- Does asking for a sale AND an opt in lower the chances of either one happening?
- Does leading or closing with testimonials work better?
- Do testimonials work at all?
- Should I have dense or sparse sidebars for the purpose of getting opts?
Heady stuff, and stuff that can let us run experiments to test it, and guard our marketing dollars. This is an utter blast, if testing is part of what you do on a regular basis, you can constantly improve your marketing.
When you learn what people respond to in marketing…
…you can improve your salesmanship.
That’s why we do what we do.2 comments
Time to take a look at the second installment in the 7 things series. If you recall, last time, we looked at the fact that, in a rapidly changing market like we are, 6 months ago is ancient history. What someone paid 6 months ago…… Well, just read about that at 7 Things – Part 1.
So what’s Part 2 about? Here’s what I wrote last time:
2. Don’t worry so much about what you paid for your house. Instead, look at the difference between what you can expect to sell your house for and what it’s going to cost you to buy the new one that you want. I expect you’ll find that those are much more important numbers (unless you end up without any equity, in which case you don’t sell).
There are a couple of things that I think still hold true and one big thing that I think doesn’t hold true any more. First the things that hold true:
- If you are selling one home to buy another, the most important number is not what you paid for the existing home, the most important number is the difference between the two homes. If the value of your home has fallen by $40,000 but you’re in a situation where you can buy a newer home with less maintenance and 1000 square foot bigger for a “net” difference of $20,000, then it might very well be a good deal.
- If your family situation has changed (i.e. – We got married and are expecting our second set of twins in the last 2 years! – Yikes!) then what you paid for your house doesn’t matter. I’ve got a client who is negotiating on a house where the seller has to sell within the next three weeks but they are “hung up” on what they paid for the house. If you need to do something, don’t worry about what you paid for your house, just focus on what the financial and logistical aspects and make the move. I’m working with a client who is relocating for a new job. His new position is a nice enough “step up” from his current position that they sold their home for approximately 20% less than they paid for it and still be able to buy a new house. He told me that while he didn’t want to sell his house for less, the overall picture of the move is “the right thing” for them at that point.
Now, the one big thing that has changed since last year. Let me lay it out this way:
- On March 4, 2009, Bloomberg reported that More than 8.3 Million Home Owners were underwater.
- On October 20, 2009, I was on a conference call where Dr. Nouriel Roubini said that if housing prices drop another 7 to 10% over the course of the next year, by the end of 2010, there will be 25 million home owners who are under water. Oh and he said that it’s almost guaranteed that they will drop because of the imbalance between supply and demand. There already is too much inventory, credit is still tightening, foreclosures are still climbing and jobs are still getting eliminated. That means the inventory problems aren’t going to go away any time soon.
Let me make that perfectly clear. There are approximately 51 million home owners in the United States who have mortgages on their homes. By the end of 2010, almost half of them will owe more on their homes than what they are worth.
If you’re sitting in a coffee shop reading this on your laptop, look at the guy at the table next to you. Now look at the guy on the other side. 1 out of the 2 of them owes more on his house than what it’s worth. Ouch.
That means a number of things that are different than last time:
- There will be sustained upward pressure on foreclosures.
- There will be marked lack of geographic mobility. A lot of people who would consider and/or actually relocate to get a job/a better job won’t be able to because they can’t sell their house. Or they’ll relocate, give the old house back to the bank (lots of credit ramifications – topic for some other time) and rent.
- Over the years, the “old rule of thumb” was that the average home owner would move every 7 years. Now with almost 50% of the homeowning population “trapped” in their homes, we’re going to see people staying in their homes a LOT longer and we’re going to see a lot less move up buyers, a lot less move “over” buyers and a lot less downsize buyers. That’s going to accentuate the inventory problems and keep downward pressure on house prices.
- That also means that there will be a lot less opportunities for builders, Realtors and lenders because of the decreasing mobility of the American population.
So, on the one hand, things are similar to what they were last year in that if you are going to make a move, what you paid for your house isn’t that important, it’s the difference that matters. But, for more and more people, the changes in the market since last year mean that if they want to move, they have no good options. They can stay put or they can do the short sale/foreclosure/rent for a long time option.
The market is different than it was in the summer of 2008.
P.S. Stay tuned for Part 3 – Is this the market for Do It Yourselfers?12 comments
I do not get around to as many blogs as I would like in the real estate space. (Seriously – I am busy with EricOnSearch and the brokerage), but it did not escape my notice that my friend and fellow dog, Galen Ward and Estately are running in the black.
EricOnSearch (my little teeny tiny enterprise) runs in the black. We celebrate others who do as well. Just like when I toasted Glenn Kelman and RedFin turning a profit, my hat is off to Estately. Good job guys!
In each of these cases, profitability has come from hard work, tough decisions and focused effort. That is how you stay out of a dot com bust or any other kind of bust for that matter.
The bad news: Tens of thousands of people, including IRS agents and including at least one four-year-old, fraudulently claimed the $8,000 first-time home-buyer’s tax credit. The good news? When these morons take over your health care, you’ll probably die before you suffer too terribly much…
From Politics Daily, the you-just-can’t-make-this-shit-up section:
Four-year-olds are adorable, trustworthy, and, having never owned a home before, fully eligible for the first-time homebuyer tax credit that Congress passed in 2008.
As a result of that loophole and numerous faulty reporting mechanisms, a House panel learned Thursday of tens of thousands of cases of fraud in the tax credit program, including more than 500 instances of people using their children — including a four-year-old — to apply for the credit to get around income caps and a requirement that the purchaser has never owned a home.
Together, fake or faulty claims for the $8,000 refundable tax credit may have cost the government up to half a billion dollars so far, investigators told the Ways and Means subcommittee.
Russell George, an inspector general with the Treasury Department, told the subcommittee about the most brazen instances of bogus claims that he had come across since the IRS created a filtering system last May to weed out suspicious applications.
George said he had found nearly 20,000 returns for people who may not have actually purchased homes; thousands for people who already owned homes; 3,200 taxpayers who could not prove they were in the country legally; and an unspecified number of IRS employees wrongly applying for the credit.
It is completely implausible to me that anyone could expect anything other than disaster from government-run anything. I like to say that governments are only good at one thing — killing people — but even that isn’t true of the U.S. government: The Army expends 20,000 rounds of ammunition for every confirmed kill. No worries, though:
This week Sens. Chris Dodd (D-Conn.) and Johnny Isakson (R-Ga.) began a push to expand the credit to all homebuyers and extend the deadline, now set for Nov. 30th, to July 2010.
Good plan…8 comments
“See, the thing is, Don Corleone, I just want you to steal my competitor’s assets and give them to me. I don’t want for you to tell me what to do with them after you steal them for me. Capisce?”
Google chief executive Eric Schmidt favors net neutrality, but only to a point: While the tech player wants to make sure that telecommunications giants don’t steer Internet traffic in a way that would favor some devices or services over others, he also believes that it would be a terrible idea for the government to involve itself as a regulator of the broader Internet.
The impulse is to say, “What a schmuck!” But once they’ve screwed up the internet, that will be one more once-free aspect of American life that will be enslaved forevermore.
Here’s a little rule of thumb to head off objections: If an allegedly-valuable social objective cannot be effected without force, it’s crime.7 comments
In effort to stem public outcry the government today announced that they were limiting the salaries of the top 175 executives for companies that have received federal bailout money.
Will this be the event that causes the best and brightest our country has to stop being exactly what we need in this time of economic strife? Will the best and brightest stay with the companies that so need their talents for a fraction of what they could earn on the free market OR will they do what capitalists have done previously? Will they leave for bigger paydays and more options to earn what the market will bear? I am betting that the majority will follow the opportunities that present themselves in the form of job offers from companies that are in better financial shape and can offer a better financial package. Perhaps one without government run healthcare too. The companies that are in trouble will be forced to struggle with 2nd tier talent to help guide them through the upcoming months. I also predict that we might see a company fail as a direct result of this short sighted action.
This to me seems like the first step towards the very thing that Ayn Rand described in Atlas Shrugged. The thought that this might actually become something other than a work of fiction scares me. What will be next? Will I have to share my commissions with agents who are not working because I am making too much money (A guy can dream now right?) Will our countries talent be wooed by other countries that need our intellectual capital to continue to grow?
While it is disheartening to see reports that the bailout money was used on executive pay and bonuses it is even more troubling to see that our government has decided to step in and force businesses to act and think like government agencies.
Today is a very sad day for the cornerstone of America our capitalistic system.22 comments
I had coffee yesterday with a long time friend of mine who works for a local title company. We were talking about a variety of things, including some of the new stuff I’m working on on the web.
The topic came around to the $8,000 First Time Home Buyer Tax Credit. He said to me that he’s had 3 different Realtors tell him that on December 1, the value of all of their listings is going to drop by $8,000 each.
Let me say that again, on December 1, each of the houses that they have listed is going to drop in value by $8,000. Why’s that? Because the first time buyer credit is going away.
Now let’s look at a couple of things (according to this story):
- It’s called a FIRST TIME HOME BUYER tax credit.
- According to these Realtors, it has inflated (or kept up) the prices of homes by $8,000. So does the buyer benefit or does the seller?
- Somewhere less than 50% (according to the last stats I’ve heard) of the buyers qualify for the tax credit.
- But 100% of the buyers are paying paying $8,000 more.
- And the government is paying $43,000 for every additional sale we’re getting.
Now, do you really think that it’s such a good idea any more?
Oh, and in reality, the prices of the homes aren’t going to wait until December 1 to drop. Realistically, if you haven’t signed a purchase agreement by Halloween, it’s going to be very difficult (but not impossible) to get the deal closed by the end of November.
All is not as simple as it seems.
For those Twitterites out there, yesterday was a very good day. Twitter announced two (count ‘em) deals, one with Microsoft to have Tweets appear on Bing’s results. The second one was roughly similar with Google.
What does it all mean?
To me it means the following…
If you think tweetspam was bad before, watch out now…it’s gonna get worse. Think tweeting listings was bad before? grin
The big winner is Twitter. Seriously. It is like if the iPhone cut deals simultaneously with AT&T and Verizon instead of just At&T.
From here I am interested in your thoughts. What do you think it means. Please comment and discuss.16 comments
For the real estate agents among us, well you guys are used to selling things. I think the act of selling is undervalued in our culture. When you sell something, you are convincing another person that, whether it’s your service or a house, that you have something of value, and that they should part with some of their hard earned cash to pay for it.
There’s something very honorable about the exchange. No one puts a gun to anyone’s head. No one takes by force. One human being is convinced or persuaded that, yes, that home, or that real estate agent’s services are worth the price asked. And a deal happens.
For all of my life, I’ve been a salaried employee. A guy who worked in an office and was paid for his work. And that’s fine too.
But let me tell you, that when I made my first “sale” this week – meaning, a human being hired me as a lawyer to represent him on a matter – there was something particularly exhilarating about it. Of course, it’s going to take a few more clients like this to hire me, but, with my private practice barely three weeks old, and a bunch of leads in the pipeline, it’s pretty nice to make a sale.
So let me say, to all you real estate agents who have been selling homes to live in for all these years, why didn’t you tell me earlier how fun it could be to sell something to someone, and to add value to their lives.