Connie's Blog

Bad Buyers

Connie Erickson (Door County Realty, Inc.) — Mon, 30 Nov 2009 10:31:45 -0600

A few weeks ago, a Buyer couple requested to view a local Door County condominium development. When I asked how they had obtained my name, they told me that they had called some unit owners and the unit owners had recommended me.

After being in the business for 25 years, I can usually select five properties, and if a buyer wants to buy, we can usually find a match within that inventory. With this couple, I spent nine hours showing them condominiums within their area of interest, as well as a couple of other developments.

My service includes counseling throughout the viewing process. Part of the counseling is that there really aren't any "deals" in Door County. Where our number of sales have decreased somewhat, our list price to sales prices statistics have really not decreased significantly. Because this market is a discretionary one, our sellers REALLY never have to sell; they never REALLY had to buy.

My goal with my counseling sessions is to encourage a fair offer. I am interested in facilitating fair and positive transactions. Usually, the Buyers and Sellers follow this advice.

The Buyers settled on a condominium that was listed at $259,900. The price had been reduced, and it was a new condominium, and as a rule, new condominiums are not negotiable on price in Door County. As I began to assemble the information to write the Offer to Purchase, I reminded the Buyers about the fixed price and the history of new units in Door County. They retorted that they were not going to pay full price. When I asked what price they would pay, they said $172,000 or a 66% offer.

I was flabbergasted and silent. As a matter of fact, after a few moments, they asked me if I was still there. These buyers had asked me to represent them in a Buyer Agency contract so I asked them to be prepared to give me "fuel for my fire" so when I presented the Offer to Purchase, I would have some justification for submitting an Offer at such a low level.

The next day we met to sign the Offer to Purchase and my first statement to them was that I hoped that they had some good arguments for me to submit the Offer. They indicated that the market was bad all over the United States and that is why they wanted to submit this Offer.

Respectfully I told them that their Offer to Purchase was awful. While there are areas of the United States that are suffering from, Door County is not one. Therefore, I made it clear, that their justification was weak. They were unwilling to change any terms of the Offer to Purchase.

Perhaps I am fortunate, as I have never been, in 25 years, in this situation. I had to represent the Buyers, and to be quite frank with you, I was appalled to present an Offer at this level. The listing REALTOR was appalled and was concerned, to say the least, about submitting the Offer to the Seller. Apologies were all around.

What's the point of this? A good REALTOR gives counsel so that transactions can go together. I learned my lesson, and I am going to be asking more qualifying questions in the future when I am working with Buyers. If they are buyers who are looking for a deal, and desiring to submit an offer which is insulting, I am going to decline the opportunity to work with a buyer such as this and refer them to someone else.

A Man of Principals

Connie Erickson (Door County Realty, Inc.) — Wed, 07 Oct 2009 14:15:46 -0500

Yesterday a friend in real estate asked me to stop by as he wanted to chat so I did.

He'd listed an Open House for REALTORS, one of many. As usual, no one showed up to view the product. George was discouraged.

We spoke for well over an hour about the lack of focus most REALTORS have on learning the product. He just doesn't understand how or why his fellow professionals in the business don't go on tour to see the product (houses, condominiums, etc.) even when it is made easy and welcoming like the way George does it. George always has a welcoming attitude. George is thankful that you came and if you would like a warm cookie or some M&Ms (yes, peanut ones too), he has those also.

We spoke about his past life when he was a trainer for the "newbees". He spoke about how important product knowledge is to succeed. George continued to vent and then he said something that really stuck with me. George said, "But they all took a Pledge." He was speaking of the REALTOR Pledge all REALTORS take before they are inducted into the Board of REALTORS.

The idea of this Pledge made me pause and think and my conclusion was this is a thing of the past. I thought how fortunate I was to be with a REALTOR who adheres to this daily AND believes in it with a passion.

When you choose a REALTOR whom to work with, ask them when was the last time they toured the "product". And I caution you, choose only a REALTOR who does because...if you are a Seller, that REALTOR will be strong and educated enough to guide you to correct pricing (no matter what the market is) and therefore a timely sale. If you are a Buyer, you'll be dealing with a REALTOR who can give you good product knowledge, help you submit a fair and reasonable Offer to Purchase which will be accepted, and still get the property for a good price.

There are tons of REALTORS from which to choose. Choose one like George, a man of principals.

Is the Buyer Qualified?

Connie Erickson (Door County Realty, Inc.) — Mon, 27 Jul 2009 16:30:22 -0500

Pre Qualification/ Pre Approval

After 25 years in this business and consistently selling more than anyone else (I say this not to brag, but to make a point), I am always amazed TIME after TIME to receive offers from REALTORS who have NO idea if the buyer is qualified.

So, when I receive an Offer, I ask the selling REALTOR if the buyer has talked with a lender. Answer: "No, but they are nice people and wont' have any trouble getting the loan." My comment is: "How do you know, since you haven't talked to the lender of the buyer's choice? Are you clairvoyant?"

Next, I ask the selling REALTOR, "Where did the buyer get the terms written in the Offer?" (Terms are: amount down, interest rate, amortization, mortgage payment, loan origination fee, fixed rate, adjustable rate, etc.) Unusually the REALTOR informs me "It's what they want to get."

So, now I have an Offer from some buyer who has no idea if he/she qualifies for a loan and who pulled the terms of the loan out of the air!

Now, a good REALTOR (that's a REALTOR whose transactions close and whose properties sell) will present an Offer to Purchase with a pre-qualification letter attached. An EVEN BETTER REALTOR will present an Offer to Purchase with a pre-qualification letter that INCLUDES the terms of the loan that are written in the Offer to Purchase. Without this, you have no idea if your deal will to together or if you'll be in that group of Sellers who never make it to Closing. You then fall into the 23.7% of the Sellers in the United States who never closed. (See my previous blog: "What Do Those Initials Mean?".

When you obtain that initial Offer to Purchase, make sure you have a pre-qualification letter attached to it and then your changes of closing have increased substantially.

HOW TO HIRE A REAL ESTATE AGENT: List Price to Sales Price Statistics

Connie Erickson (Door County Realty, Inc.) — Thu, 18 Jun 2009 13:40:21 -0500

Last month I spoke about designations, this month I will speak about how dollars really matter.

When you interview a REALTOR for hire, make sure you ask them how many properties they sold in the last 4 years. Then, follow up the question with this next question: May I please see the list and I would like to see your list price and sales price results?

A list price to sales price statistic (LP/SP) is how much on average, a property sold for last year. For instance, if a condominium was listed for $100,000 and the LP/SP static was 93.34%, on an average, the unit sold for $93,340. Ask the agent: How many condominiums they sold last year, what was the market LP/SP stat and then what is the LP/SP result for the REALTOR you are interviewing and how many condominiums did they sell?

If you look at my home page, you will see the markets List Price/Sales Price and this graph compares the market results to Connie Erickson's LP/SP stat. You will see that on an average, I NETTED my Sellers 5% - 13% more than the market paid in what all could say is a challenging market. That means I put that much MORE money in my Seller's pocket than the market paid.

Few Sellers really know this interview technique. In fact, in 25 years in the business, I have NEVER been asked this important interview question.

Do numbers really matter? You bet, but only if you care about your bottom line net.

HOW TO HIRE A REAL ESTATE AGENT - What do those initials mean?

Connie Erickson (Door County Realty, Inc.) — Mon, 20 Apr 2009 15:06:15 -0500

What do all those initials after my name mean? Basically they are designations I've attained by leaving the office, sometimes for a week at a time, to improve myself educationally.

When I obtained my GRI (Graduate, REALTORS Institute) and my CRS (Certified Residential Specialist) designations, I was in a class 90 classroom hours and took 9 hours of exams. I obtained the ABR (Accredited Buyer Representative) designation after 3 days of classes and 2 hours of exams. For this plus the CRS designation, I also was required to sell a certain amount of real estate or have a certain number of Buyer Agency Contracts closed.

The SRES (Seniors Real Estate Specialist) designation took me away from my business again to travel to the class location. Here I learned many helpful strategies to help me in assisting seniors. The class helped me be more sensitive to the needs of this age group and taught me how to better assist them. Four more days of classes were necessary to obtain designation.

Lastly, RRS (Resort Recreation Specialist) designation. Again, out of the office to attend 4 days of class. This fabulous course was one of my favorites, as it helped me to learn how to better serve the resort Seller and Buyer.

Other designations include RSPS (Resort and Second-home Property Specialist), ALC (Accredited Land Consultant), PMN (Performance Management Network), CRB (Certified Real Estate Brokerage Manager), CCIM (Certified Commercial Investment Manager), and the list goes on and on.

As a REALTOR, I must take 12 hours of courses every 2 years to maintain my real estate license. I love going to these courses; they make me better at what I do. I have spent hundreds of hours outside my office and hundreds of dollars to better myself to serve my public.

Who would you rather deal with? The brain surgeon who just takes the minimum number of hours required to keep his license? Or, the surgeon who elects to take other courses to become better at what he does, to learn more. This surgeon knows this extra education may help if a problem happens during the surgery for which the "standard" classes don't cover or don't teach? I'll put my money with the surgeon who learns more, goes to more classes, and is continually improving himself more than "just what is required". That way, I'll probably live and have no extra complications after the surgery.

A few years ago NAR (National Association of REALTORS) did a study. They studied hundreds of thousands of transactions which had an accepted Offer to Purchase across the United States. 23.7% never closed. The public really has, and I say this respectfully, no idea for what you really hire a REALTOR to do, just like I don't know, REALLY what the better brain surgeon does. You pay a good REALTOR to negotiate your transaction, get a Contract for Sale, hold it together, and close the deal!

When you work with a REALTOR who has taken the time to better educate themselves, you can be pretty sure your property will make it to the closing. It will close and you will get your proceeds. And, with me, it will be win/win transaction.

What do you think? Comments, questions, statements, a good story, a bad story, we can all benefit. Let's blog!

Next month I'm going to write about how numbers really matter. Enthusiastically.....

Your Door County REALTOR,

Connie Erickson, ABR, CRS, GRI, RRS, SRES

How to Hire a Real Estate Agent

Connie Erickson (Door County Realty, Inc.) — Thu, 05 Mar 2009 14:55:10 -0600

I've considered writing a Blog but until recently, I really didn't know what to say or what topic to address.

Since I began selling real estate (25+ years ago), I've always kept in contact with my customers and clients by mailing value added pieces to them consistently every month of every year. This has been 14,500 pieces every month for every year! A lot of paper went into these mailings! I have wanted to GO GREEN for a long time now...so, here I go!

Recently, on a listing appointment, I realized that often the public, as a whole, and I say this respectfully, do not know how to interview and select a REALTOR. Since I've been fortunate to list and sell 85 - 135 properties a year (with the average Door County REALTOR selling only 4 a year), I have the privilege and opportunity to meet often with hundreds of Sellers a year. I also am called into homes of Sellers which were listed for sale, but did not sell with their prior REALTOR. "If you really want to sell, call Connie Erickson" is a statement I hear repeatedly by Sellers.

For those properties which don't sell, I find the Sellers beat themselves up for not making a correct choice in REALTORS or saying (and I this hear often) "I can't believe I was so stupid". I am quick to respond, "You just received bad information!"

So, for this year my blog will center around "How to Hire a Real Estate Agent". I will break the topic down into 8 total blogs and I hope you will correspond with me, asking questions, sharing a real estate agent hiring story which worked or possibly did not work for you or a friend or family member. Stories are a great way to share and learn.

Let's start with referrals. Your agent at home, finds out you're moving or buying real estate in another location. He/She says, "Let me find an agent in that area." Sounds like the right thing to do. Right?

Let me tell you how a referral really works...

If a REALTOR refers another REALTOR for you to work with when buying or selling, that referring REALTOR receives a referral fee or a check for giving the listing or selling REALTOR the lead. Not a bad thing for the REALTOR. Just make sure your REALTOR really wants to help you and is not just looking to receive the referral fee and that your REALTOR really knows the other Agent and his/her credentials.

There are a few ways a REALTOR finds the other agent:

Your REALTOR knows a local company, calls the company and makes the referral to an agent he/she really does not know, or worse, you end up with whomever answers the phone - probably not the BEST way to success.
Your REALTOR has their ABR, CRS, GRI, RRS, SRES, or other designations (to be discussed later) or belongs to a National referring network and selects a local REALTOR for you by "looking up" a REALTOR with a similar designation. Usually a REALTOR with a designation has invested hundreds of dollars in their real estate education, left their office for days or weeks at a time to get to the educational conference to improve their skills and is more educated than your average REALTOR. This process usually results in a better quality referral.
Or, your REALTOR went to a conference which was taught by another REALTOR, was impressed by that instructor, and feels that you can benefit from this REALTORS expertise. Since these educators are usually successful in their own business, it means he/she may do a better job than another REALTOR who hasn't been selected to instruct their colleagues across the Nation and share their successful systems. These speaking/teaching REALTORS usually have all the designations in paragraph 2 above. REALTORS in these categories generally sell hundreds of properties a year and therefore, this results in the best referral.

I have a client who a few weeks ago said to me, "Why should I switch REALTORS, aren't they all the same? Don't they all do the same things?" My response to this...

If you're looking to have brain surgery, would you go to a surgeon who does the surgery 4 times per year, one who elects to educate him or herself the minimum amount as required to maintain the state licensing, one that is not respected enough or good enough to speak and teach other brain surgeons?

Or....

Would you select a brain surgeon who does it hundreds of times a year, continually educates him or herself, never missing an opportunity to attend continuing education opportunities and obtain designations to better themselves and their skills, and then because they are so good and well respected others actually ask them to speak, teach, and train other brain surgeons?

With the first surgeon you would probably die or have so many complications, you wish you would have died. With the second surgeon, you would increase considerably your chance of living and your life quality.

REALTORS are no different. If you let someone make a referral for you, ask that REALTOR how they will do it, what standards and REALTOR qualifications and experience level they will select for you. This will help insure you get a quality REALTOR who knows their business and can provide you with the very best service.

Oh, by the way, the client at my recent listing appointment that gave me the inspiration to write this blog, came to me after having their home on the market for 4 ½ years. I listed their property $200,000 lower than their original list price. The price reduction has little to do with a decline in local property values. The property was originally overpriced by $200,000. Is it the Seller's fault for the high pricing? No, they simply were given real bad advice from a REALTOR who was referred to them a long 4 ½ years ago! If that Seller only knew that the REALTOR they were referred to only sells 2 properties a year!

What do you think? Comments, questions, statements, a good story, a bad story? We can all benefit. Let's blog!

Enthusiastically, I remain........

Your Door County REALTOR,

(for life)

Connie Erickson