I have recently moved and I for the first time used a moving company. Prior to this move I have moved 14 times as an adult ... not including the 9 different moves while my father was in the Air Force. So I know about moving. I researched and got quotes from several movers, I did not go with the cheapest nor most expensive.
Let's start with the beginning:
Salesperson makes promises that I have in writing about the cost ... I received a Binding Quote which means they could not charge me any more.
I packed all my lose items and the movers were to use pads for the furniture and load it on the truck. This is the first place that the nickle and diming started ... although the pads were included in the price the "foreman" told me I had to pay for all the tape used to secure the pads ... here was the first call to the salesperson to get this cleared up. They used 19 rolls of tape and wanted to charge me $4 per roll.
I do not have enough to fill an entire truck so I was to be put onto another truck and then shipped out, you would think that this would be arranged days in advance ... no the moving company will not give you a timeframe until all your items are on the truck and then they will tell you that someone will call in the next few days with a delivery range. Seems that it would be pre-arranged through the scheduling department.
When all my items were on the truck my agreed upon price had a clause that said if I was under weight and volumn that I would be refunded up to $250 ... once they had my items that clause was "not valid" any more. The "foreman" of the loading crew speaks poor English and makes it difficult to ask questions. When I asked to supervisor I was told that if I didn't like the price he would unload my items on the dock and I could come and get them myself and find another way to move.
Upon delivery the driver said that the stairs were to many and that he would charge another fee for the stairs, this is not what the salesperson says. All the items that I packed came through just fine ... the items the movers packed had several broken items ... know let's see how long it takes to get reimbursed from the moving company.
Why do moving companies have ... and deserve such a bad reputation:
1) BECAUSE THEY WILL PROMISE ANYTHING TO GET YOU TO SIGN A CONTRACT
2) BECAUSE ONCE THEY HAVE YOUR ITEMS YOU ARE AT THEIR MERCY
3) BECAUSE IF YOU DON'T GIVE IN TO THEM YOU WILL HAVE NO FURNITURE UNTIL THE ISSUE IS RESOLVED
Call me directly and I will tell you the name of the company I used.
On June 11th the Wall Street Journal published an article titled "Some Buy a New Home to Bail on the Old", the article discusses the fact that some homeowners are buying a new home claiming that their existing home is being rented and then simply letting the first home go into Foreclosure. The article even states that some are being "coached" through the process by real estate agents and brokers.
Can you think of more unethical and fraudulent behavior?
I understand the need for lenders to consider a person renting out what would be their primary home in order for the borrower to purchase another primary home ... but if the first home goes into foreclosure right after the second home is secured than their should be some recourse. Fannie Mae is adjusting their guidelines to accommodate this situation which is not widespread, but their should be some serious laws against this type of fraud; think about the fact that you the taxpayer are going to be covering this cost.
Agents and mortgage brokers that participate in this process should have their licenses revoked.
Sometimes having been in this industry so long that I have become jaded to some of the fades that have come and gone, remember the recipe cards sent every month?
Staging is the latest in (I won't call it a fad) classes that I have to question. As an agent I always spoke with my clients, and taught my agents to do the same, about pre-packing and removing clutter and de-personalizing the property before selling. I have seen some really bad properties and always ask a very HARD question to the seller ... "If you walked into your house like it currently is would you pay TOP dollar?" If the answer to the question was "yes" than I told them to find another agent.
This technique has worked for me for years and I have never lost a listing because someone answered "yes" ... they always changed their mind when they realized I was willing to walk away from the chance to sell their home. Honesty has always been a great tool.
I have always staged homes and have never taken a class. Sure they don't look like model homes but they look good and they sell. Do you need a course to tell you to; clean the house ... and keep it clean, to de-personalize, to remove clutter, to make sure everything works, to pack away things that are not necessary?
What are your thought about paying up to $3,000 to learn to stage? ... Yes I almost gagged when I saw the price of one two-day course.
Let's just be frank and straight forward. For those of you that think Business Planning is a process of listing out your goals and showing them to your manager I will give you a one-word summation "BROKE" ... which is probably what you will be if that is your plan. In a down market your business plan is the tool that you should be using to take corrective action and cut expenses where possible.
How? Simple, with your Business Plan and your dedicated use of your plan you should see which Activities you are doing that generates you the most number of Appointments and Transactions. All the marketing that you are tracking that is not performing should be eliminated. All those websites that you used in the boom to draw buyers ... if they are not working get rid of them or reduce your cost with them, still sending Just Listed or Just Sold Cards ... if they are not performing than get rid of them.
There is no panacea in real estate. What works for one agent may not work for another agent for a variety of reasons; Size of Sphere, Time in Business, Use of Automation, Upkeep with Past Clients, etc. What does work for any agent is treating this business like a real actual business. You should know where every dollar is being spent and what that money returns for you. If you send out 300 cards per listing for each of your listings and you do 12 listings in a year that is 3,600 cards or approximately $3,600. Does not sound like much, but to the average agent it is a good chunk of money.
The problem stems from the inability of agents to let go of past habits. "Well it worked back then!" There is an old saying in the stock brokerage business ... "Don't Confuse Brain with a Bull Market" ... meaning that sometimes and in some markets all you have to do is be breathing and you will get business. So many agents that were breathing got business and thought they were great business people ... then reality sets in and because these individuals had no business plan or sense of what worked and what didn't they kept doing what they have always done and assumed that it would generate business like the past. May I remind all readers what the first three letters of assume spell.
So get out of the past and stop assuming that what worked then will work again. Get a business plan put together and stay on top of it.
Recently read an article about short sales and a comment on the article was from a client of a NATIONALLY known coach who said (Paraphrase) 'Don't do short sales because they take too much time and are too emotionally draining and you don't get full commission'
That is a bunch of *&^%$#
Here was my response.
1) ... If agents took more responsibility for the buyer instead of the "It is not my job" attitude than there would be less people in this position. You know that many mortgage lenders are not licensed and are only looking after their own paycheck ... it is our DUTY to try and assist in a short sale "So what if you don't get full commission and have to spend more time doing it ... it balances out all the quick and easy deals that were done in the boom time!"
2) Get trained on how to properly analyze a potential short-sale to see if it will qualify and if it will work ... consider earning the CSP (Certified Short-Sale Professional) designation from RealtyU.
To ActiveRain members ... It is my strong opinion that we a the focal point in a real estate transaction and that our clients should look to us to be the SANE and COMPETENT anchor in determining the right property and whether the loan is legitimate and well suited today and into the future ... if you are unable or unwilling to perform this fiduicary duty than leave real estate to those that are.
Tax Ramifications of a short sale ... prior to taking the Certified Short-Sale Professional course from RealtyU I was under the impression that you you would be given a 1099 for the amount that was forgiven by the lender.
YES and NO - If you are INSOLVENT (read previous blog http://activerain.com/blogsview/470140/Short-Sale-Myths-Part) than you can use IRS code 108(a)(1)(b) also known as 1401 which states that a borrower who is INSOLVENT at the time of the taxable event is exempt.
Additionally, President Bush signed the Mortgage Debt Relief Act of 2007 last December which allows those that experience a short sale be exempt from the first $2 million dollars of debt forgiveness if married filing jointly.
The types of indebtedness will be discussed in another blog.
I just finished a short-sale course that was very impressive, Certified Short-Sale Professional Course from RealtyU. I have been in real estate many many years and was floored by some of the myths I had about short-sales.
Myth #1 - Your Total Liabilities must be more than your Total Debt - essentially bankrupt. WRONG ... A short-sale deals with cash-flow and the bank will make you prove that your INCOME is less than your EXPENSES. The bank is not checking to see how much savings you have or your 401(k) balance.
The term that the bank uses is INSOLVENT - as an accountant I can see how this would make one think assets and liabilities - a better term to use is ILLIQUID.
The course from RealtyU is very enlightening and a great value too. www.RealtyU.com
Roommate.com LLC, a company that operates a Web site that matches people with rooms to rent with tenants, may have violated fair housing laws by requiring users to disclose their sex, sexual orientation and whether they had children who would live them, an appeals court has ruled.
In a ruling that sends a lawsuit against the company back down to a district court, the U.S. Court of Appeals for the Ninth Circuit overturned the lower court's ruling that Roommate.com was protected by the Communications Decency Act if users of the company's Web site used it in ways that violated fair housing laws.
In a precedent-setting decision, the appeals court said that although Roommate.com was not responsible for answers provided by users in open-ended questions, it became more than a passive participant in the process when it created online forms that asked users for information that could be used to discriminate against them -- namely, their sex, family status and sexual orientation.
"By requiring subscribers to provide the information as a condition of accessing its service, and by providing a limited set of pre-populated answers, Roommate becomes much more than a passive transmitter of information provided by others; it becomes the developer, at least in part, of that information," the appeals court ruled.
This is a terrible ruling against Roommate.com. As a renter of a room you are inviting someone into your home to live as a roommate, not renting the entire property to the person. To screen for matches it is appropriate to screen for sex, sexual orientation and presence of children.
What is the 9th Circuit going to rule next ... that dating sites cannot ask those questions either.
However, I think one of the challenges that was not listed is a lack of understanding by most agents of the mortgage and credit crisis and how that market effects buyers today. Consumers rely on the advise of professionals and often times it is the agent that is looked above as the professional that has the consumers best interest in mind.
This is a play on words to some extent. The Fed has raised the Jumbo amount to over $700k in some areas. The Fed also believes that by raising the Jumbo loan limits that there will be much more refinancing over the next several months making late spring and into the summer a better economic picture.
The play on would is from the phrase "Trickle Down Economics" the theory that if those with means do not spend than those with no means do not work. How much will the ability of $700k plus loans being refinanced weigh on the economy ... here is some simple math.
If one loan is refinanced and saves the owner of that home 1% that is an extra $7,000 spendable income into the economy per year. In the state of California alone that could mean a huge impact since the average home price in many areas is outside the previous conforming loan limits. Having a higher limit allow "Average" home owners to be able to refinance.
This is a simple question that I proposed to my "Little" from Big Brothers Big Sisters program. I have volunteered for several years and find the program rewarding and a direct way to impact a child's life. My little is 13 years old and is smart and reads a ton. During a conversation I had caught him in a situation that I knew was not the truth. I use the word situation because nothing was actually said.
So we asked the question when is it a lie?
Does a lie have to be spoken?
Can a lie be ignoring the truth?
Can a lie be letting someone believe something to be factual when you now it isn't?
So for those of you out their with kids ask them these questions. All of us can probably ask these question in our everyday lives as well.
If you live in Texas you probably know a lot of Aggie jokes. And there are a lot of them. However, I am amazed at some of the stories I hear and how vast the Aggie network is.
I am in the process of getting my MBA, round two ... first time I started this process I ended up creating CreateAPlan and never finished the MBA process. I am interviewing individuals about their experience. I have had one initial conversation with a gentleman from Texas A&M and from that conversation has come 6 more contacts and lengthy conversations. This is really what networking is about.
During each of the conversations with Aggies each told me that their class ring has started more conversations, outside the state Texas and even abroad. That got me to thinking about the REALTOR pin some of us wear with pride and some that have never taken it out of the bag.
Are you wearing your REALTOR pin and do you know what that pin is to represent?
As an educator and speaker I am in full favor of community groups. The benefit of colaboration is finding its way to the Ivory Tower. Educators should be fully exposed to the community groups that blog and post on their particular subject. As a creator of designations for the real estate community we have found that our members are participating more and more in groups discussions and webinars about their particular subject of interest be it Staging -AHS or Seller - ASR or Neighborhoods - CNS or Short Sales - CSP
Short Sales in particular are a very popular forum. For those agents that are new to a down market and have never done a short-sale these forums are a great way to learn about the process and avoid the many mistakes that are made by the uneducated.
News Flash Fannie Mae says appraisers are not to be induced or threatened to inflate appraisals by banks or lenders. Shocker! Never thought that Fannie Mae had to come out and actually tell banks and lenders that "You really shouldn't threaten appraisers with pulling business if they give you a low appraisal."
I must be the stupidest person alive to think that the job of an appraiser is to give a realistic view of what the house is worth to "Protect" the bank from potential losses. This is called sarcasm.
We are in trouble because of the simple fact that our entire industry from Lenders to Real Estate Agents to Appraisers are paid on commission and are not paid on the long term benefit/profitability of the work performed. ENRON was a textbook example of paycheck first profitability second ... and look were they have wound up.
If you did not read the latest article on the mortgage industry and how lenders are working with those in trouble here is some good and bad news. According to the article over one million homeowners have had there loans re-worked to stay-off foreclosure. This by itself is a very impressive number. 72% of the loans had lates and missed payments tacked onto the back on the mortgage and interest rates fixed for a period of time. 27% of the loans were completely re-worked from terms to interest rates etc.
Interestingly enough 42% of all loans that received some type of assistance were PRIME loans. Those that had good credit and just got over their heads.
It would be a very interesting study to find out how many of these re-worked or appended loans were the result of the borrower contacting the lender of vice-versa.
I am venting. Not to long ago I was attending an Expo for a large nationally recognized company. I was speaking and had also setup a booth at the trade-show (not something I normally do but this group was an exception).
The first night of the Expo I had to leave early to meet a vendor who worked about 90 minutes away. Packed up the booth so that the table top had only order forms on it for the book I was selling at the Expo ($150 each). My inventory I placed under the table in SEALED boxes. The next day at the Expo one of the boxes had been opened and 12 books had been taken. 12 times $150 is $1,800.
No note was left no one called later ... nothing.
As I stayed late on night #2 at the Expo I overheard an agent walking by a booth that had left all their books and CD's out on the table ... understand that the Expo Hall is CLOSED and these agents were not to be there. As this woman walked by she told her counterpart ... "This looks really great I am going to take some." To which her counterpart said, "I think you have to pay for that!" ... to which she replied, "But there just sitting here".
Every wonder why real estate agents have such a bad wrap? This is just one of many examples.
Anyone can set a goal, but goals offer no means to accomplish themselves.
Goal-setting is as arbitrary as making the statement; "I want to earn a million dollars!"
If you want to earn a "million dollars" a business plan will define what you will need to do to realize your ambition. A goal is just a desire with no statement of action to achieve that desire. Before examining the components of a business plan let's define more clearly the differences between goal settings and a business plan.
To accomplish the task of differentiating between goal setting and a business plan let's move out of the business realm and into everyday life. Let's say you have a goal to lose 40 pounds. If all you do is set that goal you are in essence "Wishing". If you write down that goal and tape it to your bathroom mirror you are still "Wishing". Although you should be commended for at least putting your "Wish" in writing.
A basic plan for losing the weight would involve looking at your diet and calculating how much less you need to consume to lose the weight. Very basic but it would eventually get the job done. A more in-depth plan would also examine how much time do you have to lose the weight and your exercise routine and make various recommendations to optimize change your diet, exercise and maybe your timeframe.
Better yet planning would involve a change in diet, with a daily list of consumption, an exercise routine allocated to meet your desired results and finally a way to track your progress and make appropriate changes. Now you have something worthy enough to put on your bathroom mirror, a plan to achieve your desire to lose 40 pounds.
Goals are a part of business planning, but a goal, in itself, is not a plan.
You need to have the ability to check your progress.
What good is creating a business plan, if all you plan on doing with it is throwing it in your desk draw never to be seen again?
Your business plan in-and-of-itself is just a tool
A tool to guide you to your desired goal
A tool to help you make changes if you are not meeting your desired goal
A tool to help you make better business decisions
If your business plan just sits in a draw how can you tell if you are meeting your goals for activities, revenue and expenses?
Check your progress by meeting with those who hold you accountable mainly yourself, but this could be your coach or managing broker.
Examine those things you have control over:
1) Activities - Each week you should be examining the marketing activities you performed and the appointments you went on that week. Start writing this down
2) Expenses - At least once a month you should list all the money you spent and ask WHY? Why did you spend the money and what did you get from it?
Do you know the BEST thing about the real estate sales business?
Everything works!
By this I mean there are countless ways to develop business and market your services in this industry.
From Open Houses to Floor Duty to Farming to Canvassing to Cold Calling to the Internet and beyond.
Personally, I know agents that never seem to get business from Open Houses. Yet I know several agents in the same market that host 2 and 3 Open Houses every weekend and get close to half their business from Open Houses
Why is it that some activities work for some agents and not for others?
This leads to the next statement
The WORST thing about the real estate sales business?
Everything works!!!!!!!!!!!
Determining what activities work best for you is half the battle. Once you know what works for you you can start focusing on those activities. To do this you must plan and have a mechanism for tracking your activites and the resulting appoitments that come from these activities.
Timetables are a part of everyday life. In Planning your Business you need to set timetables.
If you made the statement "I want to make a million dollars!" how long do you have to do that
A Week?
A Month?
A Quarter?
A Year?
A Lifetime?
Your timetable will help you in defining your business plan. Within your plan you should have annual goals as well as weekly, monthly and quarterly goals. Your weekly and monthly goals should be more Activity Oriented, I need to do this many Activities this week or month.
Revenue and Expense goals should be addressed in Quarterly and Annual terms this will accommodate for the fact that homes typically close in clusters verses being neatly spread-out over the entire year.
When you make your business plan also allow for Seasonality which is natural swings of your market. Some markets have months that are just busier do to weather of other functions. Examples would be winter resorts typically have little if any volume during April because it is mud-season, the time of year when the snow melts and everything is just muddy and nobody wants to have their homes listed or tracked through.
Reason seasonality is important if for your psychological momentum. If you were slated to close 20 deals this year, 5 per quarter. And if the first quarter you only closed 2, you might feel poorly about your business. However, if you had seasonally adjusted your business plan to represent that only 10% of your business comes in the 1st quarter than you would be right-on-track.
Deciding what you want is the first step in developing your business plan you want consider not only monetary but other goals such as personal development and family time.
Although your business plan will focus on the fiscal aspects of your business, having a clear understanding of your other goals is helpful.
Do you plan on being a sole standing agent or create a team?
Write It Down
A Clearly Defined and Written Plan
Is Powerful
Every week you know what needs to be done to meet your desired income
Is Motivational
Today I must do these activities towards meeting my desired goal
And Adds Accountability
I know what I must do and the consequences of not doing it
Is not meeting my desired goal
Daily we create plans ... not nearly as detailed as a business plan, but none-the-less still a plan
It's called the To-Do list
Now instead of your To-Do list just being those items that need to be done to get a deal to close, consider your To-Do List for all the marketing items you should do such as call past clients and sphere, send personal notes, send a new CMA after a buyer has been in the home a few years. The list is endless, but most of us fail to plan for these ongoing marketing activities.
For those that do not know me I try to make a difference ... I do not rely on the government to help people (because it is not their job ... they have other things to worry about) ... So I take it upon myself, and I encourage you to do the same, to find a group that you can volunteer for and change someones life.
I volunteer for Big Brothers which is a great program. They have a variety of programs for volunteers. I chose Community Mentoring, which means 2-3 times a month I meet with my little for about 3 hours. This can revolve around activities such as biking or hiking or whatever. Together we have volunteered our time to walk dogs for a local animal shelter.
These kids (called Littles) are here voluntarily, not sent by a court system mandating that the time, and this makes all the difference. Best feeling you will ever have is when the parent of your "Little" says something to the effect of how much better they have done in school or how they have come out of their social shell.
So get involved and do something that makes a difference ... and I don't want to hear lame excuses like "I don't have time." This kids already hear that enough.
Be careful. Revenue is not income. Revenue is the gross earnings before expenses and taxes. Income is what you keep after all is said and done. Do not confuse the two. If you do not set yourself an income goal for the year, chances are very likely that you will not achieve it.
2. Know All Your Expenses.
There are two types of expenses, fixed and variable. In real estate that translates into Overhead and Transactional Expenses. Overhead would be defined as those expenses, such as license fees, E&O insurance, signs, MLS access, etc., expenses you would incur just to function in the industry. Overhead is the silent killer as most agents do not take this into consideration when calculating all their expenses. Transactional expenses are those that incur with each Listing or Buyer such as Just listed/Sold Cards, Virtual Tours, Closing Gifts, etc.
3. What's The Size of Your Market?
You must have your hands around the market. Pinpoint your market, whether type, geographical boundaries, price range, etc. Obtain the specific details of your market: the size, number of annual sales, home price ranges, change in the market over previous years, future growth projections, etc.
4. Who is Your Competition?
It's always wise to know your competitors. Are they national brands or well-established independents? Is it a single top producer that has been well established or is it a group of agents? Is their market share growing, constant, or declining? How aggressive or progressive are they? What unique elements do you see in their business plan and marketing?
5. Key Factors You Must Understand
Good Business Plans address many key drivers that directly influence and impact a real estate business plan and you must know and understand how these activities work. Ask yourself questions such as: What are my costs per transaction? Where does my business come from? What activities must I do to generate this level of income? How do I check my progress on a weekly, monthly or quarterly basis?
6. Map out the Action Steps
While putting down your goals in written form is critical, equally important is laying down the action steps that will get you there. This is where the rubber meets the road. Only now can you determine whether the goals and targets you have will be achieved. If achieving your goals now seems impossible, go back to the beginning and revisit your research and earlier decisions.
7. Make it Measurable
Lastly, you must hold yourself accountable. You wrote the plan and set the goals with the intent of achieving them. Now measure your activities and results every week to ensure that you stay on track.
Tools That Can Do Everything
Thanks to technology, business planning has left the stone-ages of paper, pen and pencils and a previously daunting task is now as simple as email. CreateAPlan (http://www.createaplan.com/) has created a web-based application, specifically designed to create business plans for real estate agents and brokers. A wizard walks agents through the entire process and in less than 30 minutes you will have a well constructed business plan providing the number of required transaction needed to close, a weekly To-Do list for what must be accomplished in order to meet the user's income goal, a five-year projection on revenue and expenses, and a calculation of the overhead per transaction. The system can even send you reminders about what needs to be accomplished each week.
Here is an interesting twist that has 2 sides to this long-winded story of over-extended credit. Many home-equity lenders are NOT foreclosing on loans that have become default. Instead they are writing off the loan on their books and waiting.
Waiting? Yes, according to the article the lenders are waiting for the home to sell so they may collect at that time ... during which they are not going after the consumer for the payments. Why? The banks that are in second position do not see any advantage of starting foreclosure proceedings because to foreclose the first lien-holder must agree.
Analyst estimate that losses in home-equity loans may hit $58 Billion ... compared to the $278 Billion estimated loss in the first-lien position.
