Alive In Baltimore

B-I-N-G-O, And Bingo Was His Name-0.

I have 5 kids.  The first 3 are naturally born to my wife and me and the last two, are a set of twin girls that we adopted last year.  They are now, 14 months old. 

When you adopt there are always these idiosyncrasies that are unique to your new kids… “qualities” (if I can say it in a nice way) which didn’t show up in the other kids.  These twins?  They have always hated to get their diapers changed – they cry, they flip over, they cry more - get my point?

The only thing I have ever found that works to distract them is to break into a rousing rendition of B-I-N-G-O.  You know how it goes – with every verse, you drop one of the letters until the last verse only says, “…and Bingo was his name-o.”  We’ve used the song for when they are hungry and we don’t have a cracker to suffice.  We’ve used the song when they bump their head and need a little distraction.  Sometimes, the entire family is singing that silly song just to get those cute little screamers quiet.  But now, with them getting older, the song just doesn’t work like it once did.  That’s right.  BINGO’s days are numbered. 

We all have things that we use as distractions – Some of us eat too much.  Some of us drink too much.  AND, some of us choose to do business the same way we’ve always done it.  We sing the same song but no one is listening.

So, here’s my latest life lesson: I’ve got to be careful that my professional habits have not become my professional distractions.  My clients may not be eating what I’m feeding them.  If I’ve sent them postcards maybe they’re throwing out all their junk mail.  If I’ve been sending emails, maybe they’re ending up in their spam folder.  If I’ve been trying to connect on Facebook, Linked-In or Twitter, maybe they only use their cell phone to connect with the world.

BUT, our constant chasing after the hottest technology to reach our clients can be the biggest distraction of all.  Because, one thing is sure – Whoever has the better relationship with my client at the particular time they are making a decision to buy or sell a house, …WINS.  If a neighbor of their’s is a Realtor and maybe doesn’t even have a “web presence” but yet takes the time to walk down the street to introduce herself to my past client and establishes that relationship over time - well, her handshake is the only technology she needs when it comes time for my past clients to sell their home.

In the end, after I’ve tweeted and twittered my thumbs away, who loses?  BINGO!  Me.

From Bubble to Suds – 5 years later

It was July, 2005, the headline of the Baltimore Sun read “AREA HOME PRICES HIT RECORD”.  And, there I was in the photo heading down the front stairs of a beautiful home in Roland Park in Baltimore which I had just shown to my clients.

The article quoted 3 agents.  I was one of them.  The whole point of the article was so that the media could ask the question: When is the Real Estate Bubble going to Burst?  One of the other agents was quoted in the story as saying, “Its a phenomenal increase and there really seems to be no end in sight”.  Well, I guess he was wrong.  For my part of the article, I said that there seemed to be something happening with buyers that Summer of 2005 and that they were no longer willing to jump on any available listing but were being a lot more hesitant in their buying decisions.  I could tell something was changing.

Ok, 5 years later – What’s going on now?  What’s the BIG question everyone is or should be asking now?  Its this: HAVE WE HIT BOTTOM?  Well, Real Estate markets can only be discussed on a local level, right?  Here’s my take on the current state of the Real Estate Market in the Baltimore area: We have not hit bottom and until we get the close to 16% of consumers back to work, we will continue to see the erosion of our home values.  Are we waiting for another shoe to drop?  Probably.  There are still thousands of foreclosures waiting to hit the market and, again until we see the end of these, don’t expect our local market to stabilize substantially.  That’s it. 

What does this mean to you?  If you own a home and want to move – You probably don’t want to wait until your home increases in value.  Why?  First, because you may be waiting until the late 20teens before your home appreciates.  “Well,” you ask, “Won’t the homes that I might want to purchase also be worth less if I wait?  Sure, but it is the equity position that you have in your current home which is eroding and that is the money you need for that next purchase.  Remember, your lender gets paid off first at settlement and then you get what’s left. 

The media is no longer chasing the Big Bubble with a pin.  They are, however, searching for any suds left in the glass after the party is over.

Beyond the tax credit

Is a distressed property the right deal for you?

With the first-time homebuyer tax credit deadline having come and gone, you may be asking yourself, “What now?” Fortunately, the door is now open to a new wave of savings: distressed properties.

For many buyers, the term foreclosure brings up images of run-down homes with no heat and rotting wood. While this is still the case for some homes, it’s no longer the standard. In fact, first time buyers are snatching up distressed deals in decent condition for great prices. 

According to a November 2009 Keller Williams Research Buying Distressed Properties Survey, 40 percent of all buyers for bank-owned foreclosures (REOs) were first-time buyers in 2009. 50 percent of all short sale buyers were first-time buyers.

By definition, a distressed property is one that was purchased with a loan and the homeowner is no longer able to make their mortgage payment resulting in foreclosure – or if they’re lucky a short sale – meaning they owe more on the home than it’s currently worth. With a 20 percent increase in foreclosures from 2009, distressed properties still remain a large portion of home sales and are going to continue well into 2010 as homeowners continue to feel the effects of an economy on the mend.

If you’re in the market for a home and are prepared for a unique transaction, a distressed property can be a great option. Here’s why:

Prices are low – Buying a foreclosed property is an excellent way to get a home for less. Research shows you can save 10-40 percent over the price of similar properties in a traditional sale.

Mortgage costs are low – With rates hovering near historic lows, financing costs to are favorable. Keep in mind, rates are always changing. It’s important to begin the pre-approval process so that you know how much you can realistically afford.

You have options – The number of homes in some stage of the foreclosure process still remains high. RealtyTrac, a site dedicated to tracking foreclosures across the country, estimates that there are approximately 2.1 million homes in some stage of foreclosure in the United States.

Sellers and lenders are motivated – According to data from RealtyTrac, in April, one in every 387 households in the country has received a foreclosure filing. The bottom line is that many sellers are still feeling the pain of a down economy and are anxious to out get from under a home that is putting stress on their current financial frustrations. While it is still an emotional transaction, these sellers are willing to come down on price or even consider concessions such as helping out on closing costs. Banks holding on to large portfolios of Real Estate Owned (REO) properties want to unload quickly – and price these home to sell.

Post from Keller Williams Realty

5 Things you can do to ruin the curb appeal of your home

1) Let your shrubs grow larger than your car
2) Don’t give your shutters a fresh coat of paint every 3 years
3) Don’t hire a lawn service to properly nourish your grass and terminate the weeds.
4) Paint your trim the same color as the rest of your house.
5) Make sure you’ve got curtains covering every window.

Homeowner Tip – When there is snow on your roof…

Those of us in Baltimore were deluged with the heaviest snowfall in recent history this past winter.  So many homeowners experienced aggrevating leaks inside our homes because the snow, never had the chance to melt into our gutters.  Instead, the snow would melt, freeze and then the plywood under layment would act as a wick and allow water to sneak into the interior of our homes.

Here’s a tip – If you ever get another heavy snowfall, while you don’t need to worry about  most of the snow on your roof, if you have a typical pitched roof – but, you do need to try and clear off 3 feet above the bottom edge of your roof, ie, above your horizontal gutters.  And this way, when the snow does melt, the water will make its way into the gutter rather than into your living room ceiling.

Which came first? The Chicken or the Ipad?

Last night on Charlie Rose one of the guests said something like “Steve Jobs is not so much concerned about finding out what consumers want and then finding a cool device to meet the demand.  Rather, his genius is in thinking up things that consumers don’t yet know they need and then convincing them of those things”.  The round-table discussion centered around the new Ipad and its prospects for succeeding in the marketplace.

Well, of course, my next question was, “How do I approach my consumer?  Do I figure out what my clients want and then market to what I think their needs are or do I design my marketing to make them aware of a need they have no way of knowing unless I tell them?”

As an example, in the past three weeks, I have probably had 10 folks call me who need to sell their home.  They have been referred to me from past clients who were kind enough to pass my name to their friends.  However, and this has been a total shocker to me, 80% of the time, the first question they ask me is “What commission do you charge?” 

Now, realise, I totally understand their need for them asking me the question.  I mean, hey, we’re all consumers who want the best deal.  But, part of me (albeit, the “You don’t know how good I am at what I do” proud and probably arrogant part of me) wants to say to them, “Really?  This is how you want to hire the Realtor to handle the sale of one of the biggest investments in your life?”  I understand, “Choosy Mothers Choose Jiff”" (that reference might date me) but come on, there is not a ton of difference in peanut butters.  Do you really want the cheapest Financial Planner, the cheapest Accountant, the cheapest Brain Surgeon (no, being a Realtor is definitely NOT brain surgery)?

Here’s what I decided: Isn’t it more important for my consumer to know that I sell my homes in 1/3 the time as the ”average” Realtor in my market; that I have the proof to show that my list-price-to-sales-price ratio is 2-3 % higher than the “average” Realtor?; that my 16 years of experience have taught me how to position a home on the market so that it sells for top dollar?

Before another marketing piece is sent to your customer or, before you ask for your next raise – you have got to figure out just what unique thing you are bringing to the party.  Jay Abrams says, we need to have a clear understanding of our own USP (Unique Selling Proposition), ie, those things which our consumers don’t yet know are the most important factors for choosing our product or service over another.

Otherwise, you might as well settle for a sign around your neck that says, ”I’m the cheapest jar of Peanut Butter on the shelf”.

Minding your Mind

Flipping through the cable channels last night I heard someone from a public television documentary say “If you change the way you think, you can change the way you feel”. 

In my business, generating leads on a daily basis is the core of what drives my productivity.  It is imperative that I keep in touch with past clients as well as to always be fostering relationships with those with whom I would like to do business in the future.  Two weeks ago, I was “in the zone” – I felt charged up and was emotionally energized to pick up that phone and make sincere connections with people.   It was the perfect time to make my regular phone calls.

After an hour of great conversations with folks, I made the mistake of taking a phone call from someone who was not only not feeling good about themselves, but decided that I needed to take on their mood as well.  I did and could not make one more single lead generating phone call that day.  I grabbed my coat, locked my office door and headed into the cold in utter defeat.  What had changed?  I allowed someone else’s mood to get into my head and am ashamed to admit just how easily I allowed it to happen.

Why do the things we think have such an impact on the way we feel?  Psalm 139:23 says, ”Search me, O God, and know my heart: try me, and know my thoughts:”   Romans 12:2 tells us that we are to be “…transformed by the renewing of our minds”.  Our emotions and our thoughts are inextricably linked.  I know, this is nothing new.  Zig Ziglar and Tony Robbins have been saying the same thing for years.  I guess I just needed a good reminder of  why its so important to guard my thoughts.  

Now, knowing what I know, what should I have done differently that day?  Well, for one thing, I should have allowed that incoming phone call to go into my voicemail until I was able to address it at a later time.  

But also, I should have had the mindset that those phone calls I was making to others were not as important to ME as they were for the folks I was calling – I had the opportunity to encourage someone else who maybe needed a word of encouragement.  Just as powerful as a discouraging word can be, so even more powerful are words be that build up.  I lost that opportunity that day.  BUT, there’s always tomorrow.   Isn’t that what Scarlet says at the end of Gone With The Wind?

Be careful what you allow to get into your head today but also, don’t miss out on opportunities to put good stuff into someone else’s.

Changes in lending since the collapse of Lehman Brothers

• 3rd QTR mortgage delinquency rate was 9.24% which is very close to the current unemployment rate but more interesting is that  1/3rd of them are considered “Prime Borrowers” or folks who had not previously been considered risky. 
• 32% of homeowners are “under water” in that their homes are not worth what they paid.
• Mortgage brokers, at the high point of their activity were credited to originating nearly 60% of home loans and now they are around 15% of the loan originations. 
• FHA loans – 3 years ago it was only 3% of the business.  Now, it is approaching 30% of loans originated.
• Small lenders will soon not be able to originate FHA loans unless they increase their net worth to $1M up from $250k.
• In the 90’s, no mortgage company had more than 5% of the market share.  In 2007, the top 3 – Wells Fargo, Bank of America and JP Morgan had 37% of the market share.  This year, they have 52% of the market share.  Smaller lenders will have an increasingly difficult time competing.

Source: Paul Wylie founder of Metrocities Mortgage.

This Month (well, last month) in Real Estate

This Month in Real Estate

What is going on this month?  Have we seen an upswing in prices, volume of sales in the country?

Nick Vujicic (pronounced “voyachich”)

Nick spoke at our recent Keller Williams Mega Camp in Austin, TX.   His story is inspiring.  Check him out. http://attitudeisaltitude.com

Nick Vujicic