Home sale figures for October provide a slight dose of optimism

By Jim Droz

It’s only a slight improvement, but existing-home sale numbers for October weren’t as scary as some people feared. The latest figures from the National Association of Realtors show that sales were up 1.4 percent from September last month and are a promising 13.5 percent above October 2010. The latter figure is cause for some good cheer as we head into the holiday season.

Three of four regions saw growth in October, with the West leading the way at 4.4 percent. The Midwest and South rose 2.8 and 2.1, respectively. The Northeast was the only region to see a decline in October, falling 5.1 percent.

NAR chief economist Lawrence Yun said the market has been steady and would likely improve if the country’s overall economic news started looking up.

“Many people who are attempting to buy homes are thwarted in the process,” he said in a statement that hinted at credit standards being too tight.

The NAR also reported that the national median home price for existing homes is $162,500, which is down another 4.7 percent from October 2010. Distressed properties are accounting for less of the market, which means prices are falling in response to other economic conditions.

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Working expired listings can breathe life back into your business

By Jim Droz

Maximizing your spot in the marketplace these days is an efficient and effective way to build a listing inventory and form relationships that ensure residual income and enduring success. However, building relationships is like building a home. It takes time to complete the process, with results often deferred for 12 to 18 months.

Most agents don’t have the financial ability to survive until the building of a loyal clientele starts paying dividends. Out of necessity, they must find a way to generate income during the building process.

One of the most effective tools for quickly creating a substantial listing inventory is an expired listing system. This is especially true during times when the real estate market is in a down cycle. It’s a given that the “expired” homeowner (who hasn’t expired but may feel like he has) has an interest in selling. The owner is also aware that an adjustment – in price and terms, etc. – must be made to get his home sold. And past experiences make the owner somewhat familiar with the process. In other words, expired listings present an agent with an educated homeowner who is willing to listen and learn.

The focal point of calls to expired listings shouldn’t be ego-centric or contain excessive promises or hype. Offering solutions to a homeowner’s problems is the best approach and will likely pique their curiosity and keep them on the line. Ask questions to discover what caused the home to not sell during the prior listing period and implement a strategy that eliminates the cause. Having a script to follow might help. Here’s an example:

    • Good morning, Mr. / Mrs. (Smith). My name is (your name) with (your company). The reason I’m calling is that the listing on your home is showing as having expired.

    • You’ve probably been contacted by several real estate agents. I hope it hasn’t been a problem for you.

    • Have you re-listed your home?

    • I’ll do all I can to help your agent get it sold. (If the previous answer was yes.)

    • Do you still want to sell?

    • Are you going to put your home back on the market in the future?

    • Do you know why your home didn’t sell? Usually it’s for one of six reasons: price, terms, location, condition, marketing and market conditions.

    • I have a system that can pinpoint the reason your home didn’t sell. Once the cause of the problem is recognized, I can help you make the corrections needed to place a sold sign in your front yard.

    • There’s no cost or obligation, and you have my word that there will be no high pressure sales tactics.

    • Is there a time when we can get together?

The goal, of course, is to make the conversation smooth and to schedule an appointment as soon as possible. A script should be for guidance, otherwise the conversation will sound stiff and uncaring. And once you get face to face with the homeowner, the rest of the process should come easily, especially if you’re the first agent to make an appointment.

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Home-selling clients can handle the truth if you’re honest

By Jim Droz

People are jittery about the economy and no amount of sugarcoating can make things right. In fact, that will do more harm than good most of the time, especially when dealing with a client listing a home.

If that person hasn’t checked out the market for a while, they’re likely in for a shock, no matter how many news stories they’ve seen. Being frank and honest with homeowners about pricing and marketing a home is important. They need to know upfront that what they think – or hope – their home is worth likely isn’t realistic these days.

Look at each appointment as an opportunity for a two-way dialogue. Ask a lot of questions before the appointment, and then when you meet them and have viewed the home in question, take notes and prepare a marketing strategy to sell the property. This is best accomplished by offering suggestions to the homeowners that could improve the chances of a sale and still allow them to obtain the highest possible selling price.

Frank and honest discussions lay the correct groundwork for realistic expectations for real estate clients. The market is what it is, and there’s no way to avoid that in business conversations. Relevant facts can’t be glossed over with small talk, so be polite and compassionate, but don’t paint an unrealistic picture. It cheats everyone involved and often leads to an unhappy ending.

Sellers also need to know the truth when a home needs a new roof or paint job, the landscaping has no curb appeal or the flooring needs to be replaced. But it’s not a one-way street. Homeowners planning on selling a home need to be asking you about recent home sales in the neighborhood, total days houses are spending on the market and what seller contributions were made on recent sales. That and additional information is vital these days and can easily be backed up by statistics. You can help by knowing the markets and engaging in discussions of local neighborhood real estate trends.

Informed clients with realistic expectations generally make for smoother home sales. It’s never easy to suggest a listing price to a homeowner, and no one likes to be the bearer of bad news. But if it’s handled professionally, things will be much better for everyone in the process. Here are some things to keep in mind to make that happen:

Research the listing opportunity thoroughly and have statistics ready.
Know the local market better than the property owner.
Ask lots of questions and pay attention to the responses.
Be prepared to offer solutions and not just worst-case scenarios.
Have a list of recommended tips for homeowners selling a home.
Offer sellers your vendor list of handymen and tradesmen if they list with you.
Don’t patronize them, and when asked for your professional opinion, don’t be afraid to answer honestly. If you get the listing, get it on your terms.

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Being a good agent these days requires some personality testing

By Jim Droz

It’s been said that opposites attract in romance. In selling real estate? Not so much.

People like to interact with others who are like them. Check it out the next time you’re out and about for business or pleasure. Having something in common is a good starting point for a business relationship that has the chance to develop into something stronger.

Real estate agents and buyers or sellers obviously have something in common, and having a good working partnership benefits both parties now and into the future.

Real estate trainer Jackie Leavenworth recently told a gathering in Southern California about a DISC system that can help business people understand behavior and personality. DISC identifies four major elements of personality: dominance, influence, steadiness and compliance. Dominance is the need for control and challenge; influence, the need to interact and persuade; steadiness, the need for security and stability; and compliance, the need to follow standards and be accurate and cautious.

Buyers and sellers often give indications of their personality type in the way they answer open-ended questions. For example, influencers might talk about how great their home is for entertaining, while a person high in the compliance aspect is likely just interested in the facts. Cues about personalities also can be picked up by voicemail messages, home decoration choices and how clean or untidy the house is.

Obviously, overhauling your personality to suit each client transaction is impossible. If it were, you likely would have gone into the acting profession. But shaping your tactics and approaches to match those of the clients you’re working with is possible. Here’s what Leavenworth suggests:

For sellers high in dominance, lay out the process and ask how they’d like to be involved.
For influencers, make the process fast and easy.
For steadies, provide frequent updates about how the process is going.
For compliers, be fact-based.

A failure to communicate is a surefire way to kill a business deal. Understanding your clients better will go a long toward making sure that doesn’t happen.

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There’s no place like home, even if the town’s name is a little odd

By Jaime Westman

Welcome to Hell. Sound inviting? Probably not, but imagine if you worked for the Chamber of Commerce or were a real estate agent there.

No, not down there. Up in Michigan. Yes, there is a town named Hell in the Wolverine State near Ann Arbor. Let the jokes begin. I’m sure residents have heard them all. But it’s Michigan. What if the town freezes over in the winter? All you know what breaks loose?

Fortunately for the people in Hell (population 265, give or take), their unincorporated town isn’t the only one in the country with an odd or unfortunate name. So put yourself in the shoes of real estate agents from these towns and think about how tough – or fun – it would be to entice people to move there and buy a house. Here are some of those towns and suggested slogans for offices in those locales:

Agreeable, Tennessee – Make us an offer; we’ll accept.

Tightwad, Missouri – Spend some time with us.

Zigzag, Oregon – We get straight to the point.

Neverfail, Tennessee – We always get clients into the right house.

Pray, Montana – Want a good deal? Amen to that!

Surprise, Arizona – It’s really no shock that we’re the best.

Hard Cash, Georgia – Give us some credit, we know what we’re doing.

Good Grief, Idaho – We work for Peanuts.

Santa Claus, Indiana – If you’re nice, we deliver.

Idle Hour, Kentucky – We can always squeeze you in.

Accident, Maryland – Smashing successes are our specialty.

Hurry, Maryland – What are you waiting for?

Weed, California – We smoke the competition!

Brilliant, New Mexico – It’s a no-brainer.

Last Chance, North Carolina – The good deals won’t last forever.

Bread Loaf, Vermont – Our town has the best spreads.

Scrabble, West Virginia – Must we spell it out for you?

Romance, Wisconsin – You’ll love it here!

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Foreclosures climb as lenders sift through large backlog of filings

By Jim Droz

The number of foreclosures climbed in October, as mortgage lenders started to work through the paperwork problems that had delayed new filings for much of the past year.

Foreclosure filings were reported on 230,678 properties nationwide in October, a 7 percent increase from September, according to RealtyTrac, an online tracker of foreclosed properties. Despite the increase, filings were still 31 percent below year-earlier levels.

RealtyTrac said one in every 563 U.S. homes had a default notice, a scheduled auction or a bank repossession filing during the month.

“The October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we’ve been in for the past year as lenders corrected foreclosure paperwork and processing problems,” RealtyTrac CEO James Saccacio said in a statement.

The states with highest foreclosure rates during the month were Nevada, California, Arizona, Florida and Michigan. Combined, these states accounted for 53 percent of the national total.

Las Vegas gave up its dubious title as the foreclosure champion, after leading all other metropolitan areas in the rate of new filings over the previous 22 months, as new foreclosure filings there plunged 36 percent compared to September. The retreat in foreclosures took it down to fifth place nationwide, and turned Stockton, Calif., into the new foreclosure epicenter.

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Report says quarterly housing prices down in most regions

By Jim Droz

In another sign that a housing-market recovery could be miles down the road, the National Association of Realtors reported this week that prices dropped in the third quarter of 2011 in almost three-quarters of the 150 markets it tracks.

The report follows on the heels of HouseHunt’s third-quarter report that said buying activity was up slightly in some areas of the country but pricing remains mostly flat, according to agents surveyed.

Overall, the national median price fell to $169,500, down 4 percent from the third quarter of 2010. The number of sales was down 0.1 of a percent from the second quarter, but up 17 percent from the third quarter last year, according to the NAR report.

“Home sales need to recover first; only then can prices stabilize,” NAR chief economist Lawrence Yun said. “The good news is inventory levels have been trending gradually down.”

Inventories might rise again, however. More homeowners were late on their mortgage payments in the third quarter, and the pace of foreclosures is picking up as lenders move past the paperwork problems of the robo-signing scandal.

Investors, all-cash sales and distressed properties continued to make up a significant part of the market in the third quarter. Investors accounted for 20 percent of sales, distressed properties accounted for 30 percent, and all-cash purchases were 29 percent, according to the NAR.

Cities reporting the greatest decrease in prices were Mobile, Ala.; Phoenix; Allentown, Pa.; Atlanta; Las Vegas; and Miami.

Cities reporting the greatest increase in prices were Grand Rapids, Mich.; South Bend, Ind.; Palm Bay, Fla.; and Youngstown, Ohio.

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Foreclosure backlog likely to take years to clear off the books

By Jim Droz

It will take more than eight years in half of the states in the country to clear out backlogs of foreclosures at the current pace, according to research from LPS Applied Analytics shows. And that doesn’t include foreclosures that must go through the court system.

In New York and New Jersey alone, it might take more than 50 years at the states’ current sales pace to clear the pipeline of seriously delinquent or homes already in the foreclosure process, the research said.

After many months of questioning their practices, lenders are now doing more checks when processing foreclosures, which have slowed the process of repossessing homes and created larger backlogs in many cities. States where courts aren’t usually involved in the foreclosure process are clearing out foreclosures at a much quicker pace — just under three years, experts say.

According to the survey, states with the largest backlog of foreclosures and the time it would take to clear the supply of seriously delinquent mortgages or homes in foreclosure at the current pace of sales are New York and Washington, D.C., 57 months; New Jersey, 52; Maryland, 21; and Connecticut, 20.

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Home-buying survey highlights frustrations of real estate market

By Jim Droz

Twenty-seven percent of Americans say they plan to purchase a home in the future, but only 2 percent say they plan to buy one in the next 12 months, according to a Move Inc. survey of 1,000 adults.

Talk about the ultimate good news/bad news situation, with the frustrating part for real estate agents being that buyers continue to wait on the sidelines when home affordability is high and interest rates are hovering near record lows.

About 23 percent of those surveyed say they’re delaying buying a home because they’re concerned about the real estate market in their area, particularly with concerns over the future of home values, the economy and jobs, as well as difficulty in saving for a down payment.

“Perceptions as much as the realities of home ownership are standing in the way of boosting demand for housing,” Errol Samuelson, chief revenue officer of Move Inc., said in a statement.

Nearly 35 percent of those surveyed say their inability to get credit or find affordable credit are the main reasons why they’re putting off purchasing a home.

The Move survey also found that younger adults tends to look at home ownership as a place to be happy, not an investment. That means that they tend to be extra picky and only want a home that defines who they are. The survey also found that younger adults, with about 40 percent saying they should or would spend 30 to 60 percent of their gross monthly income on housing.

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More single women buying homes is a trend worth watching

By Jim Droz

Talk of females and empowerment likely brings to mind songs, slogans and movements from decades ago. But society is constantly evolving, and preconceived notions continue to fall by the wayside.

According to a recent report from the National Association of Realtors, single female buyers accounted for nearly twice as large a share as single male buyers for first-time homebuyers – 24 and 12 percent, respectively – and repeat buyers, 17 and 9 percent.

Who knew? If you’re a diligent real estate agent on top of his or her game, you might have. But it’s a statistic that probably has many other agents scratching their heads.

But it’s worthy of taking note, because a recent study by the Joint Center for Housing Studies of Harvard University echoed the NAR report, saying that social changes during the last generation have led to higher female labor force participation rates, later age at first marriage, higher divorce rates and lower remarriage rates. The report also notes that these changes place “each generation on a different trajectory that persists well into middle age.”

In other words, it’s a pattern that is likely to increase rather than shrink. And that’s backed up by another NAR report that says 20 percent of recent home buyers were single females.

So what to do? Here are a few tips to consider when marketing this group:

Basically, guys, women are more likely to know what they want right away, so a good first impression is important. Find out her interests and needs, and then streamline the choices so there isn’t any wasted time or effort.

Most women like to live close to their extended family. So, be sure to find out what neighborhoods your single buyer is most interested in.

Don’t even bother showing homes with security issues. The question is likely to come up, so be prepared and research crime trends for neighborhoods, streets and buildings.

Women are also more traditional, so don’t suggest any of your ideas for what she can do to enhance certain rooms in the house. Show it as is; she’ll come up with her own plans.

Don’t assume money is going to be an issue, even in these tough lending times. Women still earn less than men, in many cases, but there are many women breaking into the executive suite who are looking to spend top dollar for the home of their dreams. Be sure to let the client show you what their ideal is before you make any assumptions.

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