(This is Part 1 of a two-part series. Read Part 2, “How to thrive in 2008.“)
Could a group of real estate agents write and publish a real estate book in just a week? The answer is “Absolutely!”
The Saturday before the National Association of Realtors convention last month, Frances Flynn Thorsen, Steve Kantor and I spoke on a panel for a coaching event hosted by Patti Kouri. Kantor, who is the author of “Billion Dollar Agent–Lessons Learned,” came up with the idea of asking Patti’s group of agents to help him create a national effort to write a real estate book within one week and have the book in print by the last day of NAR.
The book, “Transforming the Market in 2008,” was in print the following Friday. Kantor owns www.BestAgentBusiness.com, which specializes in providing agents with virtual assistants. His success at completing this task in just six days is a tribute to the effectiveness of the virtual assistant model. It’s also a tribute to all the agents who willingly shared their ideas about what’s working in today’s market.
The book is a compilation of hundreds of comments about the challenges agents face today. Below is a list of the most frequently reported challenges as well as how to meet them.
1. Negative media: Previous columns have outlined strategies for taking negative housing news and showing what is positive. Use this information when you work with sellers and buyers as well as in your print and Web marketing.
2. Reluctant buyers lack urgency: To cope with reluctant buyers, educate them on the cost of waiting to purchase. Rates are at historic lows and may dip at least once more. By waiting, interest rates will eventually creep up again. Here are two examples that illustrate how expensive a one point interest rate increase can be:
On a $200,000 loan, an increase from 6 percent to 7 percent costs the buyer an additional $47,340 over the life of the loan.
On a $400,000 loan, a one percent interest rate increase from 6 percent to 7 percent costs the buyer and additional $94,680 over the life of the loan.
NAR Chief Economist Laurence Yun outlined the additional strategy of promoting wealth building, especially for first-time buyers. The Federal Reserve reports that the average renter accumulated $4,000 in wealth between 1995 and 2004 versus the $184,400 average homeowners accumulated. Another way of looking at this is that each year a first-time buyer waits to purchase a property, it costs that buyer an average of approximately $18,000.
3. Too many distressed properties: Two strategies suggested in the book work quite well. The first is to create a Web site that lists the best real estate buys in all categories including short sales, foreclosures, REOs, as well as properties that are not distressed, but are a good value. The second idea is to create a separate URL where you specifically market these properties. Examples include www.(YourTown)BestRealEstateBuys.com or www.Best(YourTown)RealEstateDeals.com
“Transforming the Market in 2008” also outlines a number of buyer acquisition strategies. Here are some examples:
1. Niche market for those who have disabilities: There are special programs for both children and adults. When a family meets these stringent criteria, loans are usually available.
2. Hold first-time buyer seminars in other languages: If you’re fluent in a different language, hold the seminars at your office or by telephone. It’s also smart to translate key parts of your Web site into any language in which you are fluent.
3. Hold HUD or FHA seminars: Many buyers don’t understand the financing options available to them. HUD and FHA loans have lower foreclosure rates and considerable savings as compared to subprime loans. You could hold seminars at your Chamber of Commerce, place of worship, or even a local school. You could also market to renters with materials explaining how these various programs work.
4. Market to parents of college students: Hold a seminar on “How to Buy Your First Investment Home and Save a Bundle on Dorm Costs.” You can also target medical and law students as well. Another suggestion was to target grandparents. They can purchase a property when their grandchildren are born. Once their grandchildren are ready to attend college, they have the potential to have a home that is free and clear.
5. Relocation strategies: Target new commercial construction and lessees, especially if company is from outside the area. For example, a new luxury hotel can generate one to three jobs per room. It’s also smart to establish relationships with local head hunters to stay abreast of who may be relocating into your area.
6. Guarantee the buyer’s satisfaction: (Check with your broker first before embarking on any type of guarantee program.) Advertise that, “If you you’re not satisfied, we’ll waive the listing side of the commission if you decide to sell after one year.”
Interested in more strategies from “Transforming the Real Estate Market?” If so, don’t miss next week’s column.
Bernice Ross, national speaker and CEO of Realestatecoach.com, is the author of “Waging War on Real Estate’s Discounters” and “Who’s the Best Person to Sell My House?” Both are available online. She can be reached at bernice@realestatecoach.com or visit her blog at www.LuxuryClues.com.
Copyright 2007 RealEstateCoach.com
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