As a broker/owner and leader in my industry, I talk to agents in terms of reality, in terms of perception and in near future terms. This has been a tough 3 years for our industry, everything has changed and nothing that we know of our industry will be the same. The rules and the playing field have changed for the serious real estate agent. The foreclosure market, the unemployment market, the lending market is in turmoil. No one knows for sure were we are at. NAR states that we have hit the bottom and we are on our way to recovery. The Government states that we are recovering and that all figures are improving. Both of them are trying to paint a perception of recovery.
Yet, as I write this today, 14% of the nation homeownership is in default status, the highest ever. Prime loans have surpassed Sub-prime loans in default (no income, no jobs.) An official who heads one of the Short sale and REO divisions of Wells Fargo said that only 18% of modifications are approved. 70% of those approved return to default status again. They are getting a lot of pressure from the Government to keep people in their homes and prevent foreclosure. But what are you going to do when they have no income? We all agree their will be more foreclosures coming next year, possibly in the first part of next year....how soon and how much is the big mystery. That's the reality of it all. The recovery will not happen until we put people back on jobs and we sell all of the foreclosed, short sale and default non performing properties. And there is a lot of it. How much? A lot!
Short Sales will be a big factor in the next 2 years. Some areas have a shortage of inventory...especially below the $300,000 price range. What a strange market..., sellers do not what to sell...they are waiting for the values to go up.....and they also don't want to sell when they are unsure about their employment status....buyers to don't want to buy for the same reasons.....But at the same time, a lot of real estate sold this year...buyers bought and sellers sold....what type of transactions? For the most part, it was all first-time buyers. What did they buy....REO's and short sale properties? Being an REO Broker...I get multiple offers on all of my REO listings. A lot of real estate agents made more money this year than last year. I know, I have some of those agents in my office.
Agents ask themselves... What can I do, what can I focus on and what shall I do next year? Will I stay in business? The agents, brokers, owners and mangers who are left (I call them serious professionals who try to make a living as real estate agents in this market) have had a real challenge to be successful in this market that has never been faced in this magnitude before. We need to focus on the reality of the market and the reality of how we prospect and generate business in this changed market. Making sure we spent our time, money and resources in the areas that will make the biggest impact in our business.
Listings. For the most part a listing agent will always control their business and control their income. As a listing agent, if you have the inventory in any market you will be more in control of your business. By now, we all know focus on Short Sale listings right? Get a list of homeowners in default and make a commitment to visit homeowners about there options (this is still, and always will be, a contact sport). Banks are making the processing of short sales more streamline. Bond a strong business relationship with one of the major banks loan officers. They will be in control of a lot of short sale and REO business.
Social Networking. Join an organization, get involved in the community, it will probably do you good to get your mind off of this frustrating business and just enjoy yourself in organization or club of your choice. People in default are everywhere. Join a social network, become an expert of a neighborhood, association, city, etc. Talk to them about the default market, about options and tell them that you are just like them and you can help. People will start to open up to you if they know you as a person. Social networks like facebook for example work very well.
Open houses. It's a great to find leads and business....nosy neighbors are sometimes homeowners in default and just want to talk to someone about their options and they become seller leads. This helps you stock up on your qualified buyers, so that when the inventory starts to hit the market again....your ready.
Real Estate office. Be associated with an office that has a leadership that leads from the front and is looking to help their agents and the office by associating themselves with a stream of leads for this type of market. Is the leadership of your office optimistic about this market? Are they providing training and leadership and paving the way to succeed in this changed market. Are they giving the agents valuable "know how" and "valuable training" for this market. Are they providing "value added" training and sales meetings that will help you earn more business. Or are they wasting your time on house keeping topics. Does the office have the short sale and REO inventory that provides opportunities for open houses that will generate buyer and seller leads for the rest of the agents. Does your office have experienced and seasoned agents that you can learn from and who provide a positive atmosphere.
Invest in your profession. The business as we knew it is gone. We need to learn how to be a better consultant. Specialize and become an expert in a chosen field, like short sales, the senior market, probate sales, etc. Find a niche and a prospecting market. I have one very successful agent in my office that specializes it short sales. I have another that focus on homeowners with a lot of equity and "free & clear" properties. I have another that does nothing but open houses, like every other day. I have a team of two agents that specialize in the senior market. I have another who works her sphere of influences and gets a lot of referrals.
None of these suggestions are a quick fix. But if you focus on them...you will be in place to make contact with more people and close some deals. As little as they are, you will be one of the few closing deals. The volume and income levels will not be like they use to be.....but you will earn a good living. This market is for the agent that has chosen to be a real estate professional, earn a living helping people sellers and buyers. This is a profession that takes the stress out from their hands and into yours. The result, is a happy client for life....that's not an easy job. But that's why they pay you the big commissions. Not everyone can do this type of career. Unlike, the last waive of people who got their license for the sole purpose of making big commission and selling and buying homes for their family members and friends. If you have adjusted your expenses and standard of living....and are focusing on productive activities and being proactive...you will be ok. Remember, what ever prospecting system you chose to focus on now...will result in a positive outcome two to three months from now. If you are doing nothing, if your are waiting for the next waive of REO's to hit the market, waiting for financing to get easier or waiting for the government to drop a magic pill in the economy......then you will not have such a good outcome three months from now. I can guarantee you one thing; there will be a lot of properties selling next year and agents making a good income next year doing it. Do you want to be a part of it?
It's back to the old fashion reason to stay in real estate, the love of helping people in the most stressful part of their life. And for that, you get paid the big bucks and make a good living.
Short Sale Opportunities for Agents...Got Better!!!
Here Are the New Obama Administration Financial Incentives & Uniform Process for Short Sales. For all agents who are working short sales...Very Important!!
SHORT SALE OPPORTUNITIES FOR THE PROFESSIONAL REALTOR!!!! (CDPE)
Amid rising U.S. foreclosure filings, U.S. government officials Thursday announced plans to broaden their efforts to help troubled homeowners and further ease the housing crisis. Officials announced two new programs: one aimed at giving mortgage servicers incentives to relocate troubled homeowners to a home they can afford, and another that will provide lenders incentives to modify loans in areas where home price declines have been severe.
Under the new program administration officials unveiled Thursday to help provide foreclosure alternatives, Treasury plans to encourage servicers to consider a short sale or deed-in-lieu if a borrowers doesn't meet the eligibility requirements under the government's plan to encourage.
In a short-sale, a servicer would allow the borrower to sell the property at its current value. With a deed-in-lieu, the borrower would be able to voluntarily transfer ownership of the property to the servicer. Treasury said mortgage servicers have generally opted to pursue foreclosures instead of these two complex transactions even in cases where a short sale or deed-in-lieu would be a better outcome for borrowers, investors and communities.
As part of the new efforts to protect against falling home prices, the government will make payments of up to $10 billion to encourage lenders, servicers and investors to modify rather than foreclose. The goal is to boost the number of loan modifications in areas of the country that have seen prices plummet drastically.
The Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan provided an the update on their housing efforts today in a news conference.
This is going to increase the need for a professional Short Sale expert. If your serious about your career look into the CDPE designation (http://www.cdpenow.com/).
In my office I already have 40% of my agents who have earned this designation. As a REO BROKER, I burn the candle on both sides....Pre-foreclosure and Post-foreclosure (REO). This is why our office is doing well. We are focused on what is happening in the market now. I would encourage you to do the same.
SHORT SALE OPPORTUNITIES FOR THE PROFESSIONAL REALTOR!!!! (CDPE)
Amid rising U.S. foreclosure filings, U.S. government officials Thursday announced plans to broaden their efforts to help troubled homeowners and further ease the housing crisis. Officials announced two new programs: one aimed at giving mortgage servicers incentives to relocate troubled homeowners to a home they can afford, and another that will provide lenders incentives to modify loans in areas where home price declines have been severe.
Under the new program administration officials unveiled Thursday to help provide foreclosure alternatives, Treasury plans to encourage servicers to consider a short sale or deed-in-lieu if a borrowers doesn't meet the eligibility requirements under the government's plan to encourage.
In a short-sale, a servicer would allow the borrower to sell the property at its current value. With a deed-in-lieu, the borrower would be able to voluntarily transfer ownership of the property to the servicer. Treasury said mortgage servicers have generally opted to pursue foreclosures instead of these two complex transactions even in cases where a short sale or deed-in-lieu would be a better outcome for borrowers, investors and communities.
As part of the new efforts to protect against falling home prices, the government will make payments of up to $10 billion to encourage lenders, servicers and investors to modify rather than foreclose. The goal is to boost the number of loan modifications in areas of the country that have seen prices plummet drastically.
The Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan provided an the update on their housing efforts today in a news conference.
This is going to increase the need for a professional Short Sale expert. If your serious about your career look into the CDPE designation (http://www.cdpenow.com/).
In my office I already have 40% of my agents who have earned this designation. As a REO BROKER, I burn the candle on both sides....Pre-foreclosure and Post-foreclosure (REO). This is why our office is doing well. We are focused on what is happening in the market now. I would encourage you to do the same.
Running very low on my REO listings, I've sold everything and waiting for a few properties to vacate. I have been told by different Asset Managers I work with, that it will soon start to flood....been waiting for about a month now. In Northern California...it's flooding with new REO's. Anyone have any latest updates?
PLAN FOR SUCCESS, WORK HARD, AND ACCEPT NO OTHER OUTCOME...We have before us a once-in-lifetime opportunity in which hard working, forward-thinking, consistently driven Real Estate Broker/Owners and Agents will find new paths to success. In the last year or so...those who are tired, worn out, unorganized, under capitalized, dispirited or not willing to invest in themselves or their profession..have failed and have disappeared from our industry. We must all be persistent these days. As a Broker, Owner or manager, you need a burning desire to generate profits and provide services for your agents and their customers. You need a specific plan; perhaps a renewed commitment to recruiting, or a shift in your business plan. You need to block out doubt, fear and negative influences. And finally, you need people who support you efforts. From your agents and fellow Brokers/Owners. A hand for those Broker/Owners who have done this for their agents and proved to themselfs...that they are the few and the proud.
Here is an article I read while googeling Irvine.....I don't know which way to think about it. So I thought I shared it.
The Real Morons of Orange County Why America's most reckless real estate investors come from Irvine, Calif.
By Daniel Gross Posted Thursday, July 26, 2007, at 5:05 PM ET
Until recently, Orange County was the New Jersey to Los Angeles' New York City. Upscale, but generally ignored, and nowhere near as chic or happening as its urbane neighbor. Television helped change the image, with glitzy offerings like The O.C., Laguna Beach, and The Real Housewives of Orange County .
These shows portray the beachside O.C. as the capital of plastic surgery and extreme consumption. But inland, just over the hills, the massive planned community of Irvine has become the nation's capital of real estate folly. And that's surprising, given that Irvine is itself a result of one of the great real estate investment plays of all time.
The transformation of the Irvine Ranch from a sparsely populated agricultural tract into a densely populated upscale edge city is astonishing. The Irvine Ranch's owners have amassed huge fortunes through their financial acumen. ( Donald Bren is No. 27 on the Forbes 400.) Incorporated in 1971 , Irvine boasts a diversified economy and superb university, is populated by many blue-chip companies, and projects an image of suburban perfection, thanks to strict zoning laws that enforce design continuity. When I visited in the late 1990s, the mayor freely acknowledged that many non-Irvine dwellers view it as sort of a Stepford community, but smilingly noted that it was all about maintaining standards and, hence, property values.
As subprime lending grew in this decade from a tiny niche into a substantial market presence, Irvine-based companies surged. Its corporate citizens include: Option One Mortgage Corp., the subprime subsidiary of H&R Block sold in April at a knock-down price to private equity firm Cerberus; New Century Financial, which went tapioca in spectacular fashion in April; and mammoth, still-solvent subprime outfits Ameriquest and Argent.
The subprime loans made by Irvine-based subprime lenders were rapidly securitized-sliced and diced into bonds, packaged together with other securities, and molded into pools dubbed collateralized mortgage obligations. Leveraged investments in CMOs have caused a great deal of pain everywhere from Wall Street, where they helped sink two Bear Stearns hedge funds, to Australia. But the locals also ate some of the toxic effluent produced by Irvine's debt factories. In June, Irvine-based Brookstreet Securities ran into trouble after it allowed customers to buy CMOs obligations on margin. It shut down completely on June 30.
Brookstreet's rapid demise is an object lesson in how highly leveraged investments can turn sour quickly. Another Irvine-based operation, IrvineHousingblog, brilliantly drives home the same point with daily dispatches. The blog is a guide to the seventh circle of real estate hell-people who buy houses on spec with no money down. A typical entry chronicles the purchase price, tracks down the amount of debt on the property, and then calculates how much each party-the buyer, the first mortgage holder, the second mortgage holder-stands to lose assuming the seller receives the asking price. My favorite thus far is the house for which somebody paid $1.29 million in May 2006, putting down only $91,000 in cash. Today it's on the market for $850,000, a whopping 34 percent reduction in about a year.
It's not surprising that Irvine is a center of reckless real estate lending and borrowing. It's a classic industry cluster of the type seen in areas that lack natural resources. Detroit's auto manufacturers encouraged the local growth of auto parts suppliers, companies that finance auto purchases, and publications that cover the auto industry. In Silicon Valley in the 1990s, the people who created dot-com companies were co-located with the venture capitalists who funded them, the investment bankers and brokers who helped take them public, and with many of the investors who got killed when the NASDAQ tanked. Irvine may have built up a diversified economy, but it remains a company town-one whose fortunes are highly leveraged to the highly leveraged real estate industry.
I'm currently seeking an experienced agent who is currently managing or mentoring agents and is looking for a change. Or for an agent who is looking for something more in their career and would like to assist in developing and office and agents. Tremendous opportunity with RE\MAX an International company. Established training program in place. Along, with strong recruiting incentives, support systems, lead system, etc.
If you would be interested in talking with me or setting up confidential meeting, call me at (714) 453-3130 or (951) 533-5753
I'm currently seeking an experienced agent who is currently managing or mentoring agents and is looking for a change. Or for an agent who is looking for something more in their career and would like to assist in developing and office and agents. Tremendous opportunity with RE\MAX an International company. Established training program in place. Along, with strong recruiting incentives, support systems, lead system, etc.
If you would be interested in talking with me or setting up confidential meeting, call me at (714) 453-3130 or (951) 533-5753
If you missed the boat on jumping on the band wagon for generating business by representing banks on their REO's. Don't worry..every realtors mom and dad is trying to jump on boat to estatblish a bank relationship to list their REO's. The smart agents were doing this early last year predicting the market ahead of time. And a lot of the realtors that were around selling REO's in the 90's have come back and reestablished their relationships with the banks and are doing well. I know this for a fact, because I have two of them in my office doing very well.
All of the signs, news, pestimistic views of the current market we are currently experiencing remind me of the late 90"s. It's like deja vu...I and a few of agents back then were buying and making low ball offers on REO properties to rent and hold...and we ended up selling them in 4 years ago for a profit.
Prices are dropping in areas like the Inland Empire. Riverside, Corona, Moreno Valley, Perris and the High Desert Areas. A lot of REO's are coming up. If you offer the right price you can rent and hold on. There is a lot of investors that are optimistic on the market and are looking for REALTORS to guide and help them find the right properties to buy, rent & hold.
Study these areas....know the rental markets....study the vacancy markets...keep on top of the financing markets for non-owner occupied financing....study the numbers...hook up with a good property manangment company you can refer these investors too, http://www.ocremaxrentals.com/, one that will help you sell your investor clients on the investment and the market.
Advertise yourself to investors....with your knowledge....your expertise......
If you have any questions on these subject, feel free to call me.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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