realdiablog

Day 9 - A Pleasant Surprise

Tony Arko (Market Advantage Real Estate) — Thu, 15 Mar 2007 08:59:54 -0500

Day 9 - March 12, 2007

My appointment from Saturday sent me an email this morning saying that she went to a new home community on Sunday and registered me as her agent. She wants to go down with me and check out the community and possibly write an offer. I said that would be great and I also found 3 homes in the Broadlands area of Ashburn that might also fit her criteria. We made plans to look at those 3 houses this afternoon.

1:30 - 3:00 Showing Property

I usually preview property before I take a client just to make sure we are looking at appropriate homes but I was able to ascertain from the online descriptions and pictures that the three homes would be fine. All three were the same exact floor plan and it was just a difference in lot and upgrades between the three. We went back through one property a second time and my client was ready to write an offer. Problem was she did not have a lender letter and she still has to sell her townhouse.

3:00 - 4:00 Prepare Offer

I get back to the office and call my lender. I have my client call my lender. I have an approval letter within the hour. Having a responsive and reliable lender is invaluable. I put together a contingent offer on the property.

4:00 - 5:00 Sign offer with Client

We go over our offer to buy the property, paragraph by paragraph. I have structured it in a way that allows my client 45 days to sell her house. If she cannot then we are not obligated to buy the house. If the offer is accepted we will have her house on the market the next day. I have explained all the aspects of this offer to my client and she has signed the contract.

5:00 Submit offer to Listing Agent

I have the offer faxed over to the other agent and include the comparables that support the sales price of my clients house. I am trying to build a case that the likelihood of her house getting a contract is high and therefore would be less risky for the sellers.

5:30 - 6:00 Listing Paperwork

My appointment from Friday meets me at the office and we go over the listing agreement. We set a price for his house and he signs all the necessary paperwork. He will go on the market next Monday.

Day 8 - The Week in Review

Tony Arko (Market Advantage Real Estate) — Thu, 15 Mar 2007 08:58:34 -0500

Sunday March 11, 2207

3:00 to 6:00 Floor Shift

I finally got the condo sold and my client came in to initial off on the final price and terms. After severals days of negotiations and a couple of heated discussions and emails, I think everybody is happy or in my clients case, relieved.

A three hours shift and only one phone call. But I did get 6 email leads.

The week in review looks like this: 36 hours of prospecting, meeting, negotiating and blogging. One sold contract, two listings and some potential new clients. Not a bad week.

Day 7 - Nobody's Happy (I must be doing something right)

Tony Arko (Market Advantage Real Estate) — Mon, 12 Mar 2007 08:25:54 -0500

Day 7 - March 10, 2007

9:00 - 12:00 Floor Shift

I was greeted this morning with an email from a home inspection that was 27 items long. This house and its owners have tested all my negotiation and communication skills from the beginning. The sellers have been on the market 381 day. That doesn't include 4 months of being under contract with a buyer in late 2005 and early 2006. That contract fell out because the agent they were using failed to explain the dangers of a lease option in a falling market. They thought they were going to sell the house for $600,000. The current contract is for $492,000. That has been a bitter pill for them to swallow and they have blamed everyone but themselves.

The current home inspection items come from 18 months of renters and neglect. I forwarded the list to my client in Colorado and he immediately told me he wasn't fixing anything. 20 of the 27 items are plumbing, heating, air conditioning issues that will have to be fixed unless he wants to sell the house as-is. As-is will put the value of the home closer to $450,000. For some reason he doesn't understand that making $2000 worth of repairs is a better option, but given all that he has done it shouldn't surprise me. I let him vent for about twenty minutes, we go over the list one by one and come to a much more reasonable response to the items. It takes about 2 hours but it keeps the deal together.

I think my main job is not to sell houses but to keep people from making dumb mistakes and failing to do that, my job becomes trying to keep people from compounding their mistakes with even bigger mistakes.

Negotiations continue with the condo. I think I have come up with a solution that will save my client about $2000 thereby making the current offer from the buyers only $450 worse for my seller. By moving the settlement date up three weeks, we save the interest, taxes, insurance, HOA fee, and utilities for 21 days. This takes about 2 hours and one elaborate spreadsheet to explain to my client. Thank god for a background in finance. Even after explaining the net difference is only $450, my client sends me an email that is the ultimate vent. It has cuss words and various other references to getting the shaft but in the end he finally sees the light. Maybe we can get that wrapped up tomorrow.

12:30 - 2:00 Listing Appointment

Another appointment with a lady who wants to make lateral move and exchange her three story, one car garage townhouse with a two story, two car garage house. Her house was very nicely renovated so selling it will not be a problem. Finding her a house might take some time, if in fact it even exists.

I'm taking the rest of the day off and going for a bike ride.

Day 6 - The Problem with Agents

Tony Arko (Market Advantage Real Estate) — Mon, 12 Mar 2007 08:24:19 -0500

Day 6 - Friday March 9, 2007

It seems the agent I am in negotiations with thinks we are bluffing but we are not. I explained to her that my client doesn't have any more money and he is already going to be writing a check at settlement for more than he has. She asked me if I could prove it. I said sure I can prove it. Don't accept our counter offer and watch us walk away from the deal. Sure enough, this afternoon she responded to our counter with a request for $2500 more. I tried to explain to her that we just don't have the money. Her advice was to get a personal line of credit from the bank for the difference. I suggested that if her client couldn't pay and additional 37 cents per day for the condo, then maybe he is buying too much house. She didn't like that. I'd hate to blow the deal up over $2500 but sometimes it happens. Fortunately, our market has showed signs of firming up so I think we can get another contract fairly soon if this doesn't work out.

1:30 - 3:00 Previewing

I hate previewing because it is so time consuming. But because of the complete lack of reliable information online, I have to do it so that I can know what the inventory is like, what condition the houses are in and what the trends are. This afternoon I went through 12 houses in a section called Belmont Greene. I have a listing appointment there this afternoon so I want to have a good idea of the comparables. I sold 5 homes in this area last year but haven't had a good look at the properties here in 3 or 4 months.

3:00 - 4:00 Listing Appointment

I had a very good appointment with a gentleman looking to sell his small single family home. He home was very clean and he was very organized. He had type written his questions on a piece of paper and was working down the list asking me each one. He also had an article titled "Questions to Ask yourAgent". We went down the list and answered those questions too. He never asked about the value of the house. He just wanted to make sure that he used the right agent.

4:00 - 6:00 Floor Shift

Friday shifts are usually good for getting new clients but this shift was very quiet. I had to tell one client he has termites and a major plumbing problem. He wasn't too happy. I also tried to come up with a way to get this condo sold but right now I think we need to just sleep on it and see if we can find a solution tomorrow.

Home by 6:05. I live right down the street.

Day 5 - Contract Negotiations and a New Listing

Tony Arko (Market Advantage Real Estate) — Fri, 09 Mar 2007 15:32:43 -0600

Day 5 - Thursday March 8, 2007

9:00am

Went to the office early to pick up the contract from last night. Sure enough it was lower than I expected or hoped. The agent submitting the contract included comparable sales from similar units however she did not include the last sale because it has not gone to settlement. Fortunately, I knew one of the agents in that transaction so I made a quick call. I didn't ask for the sales price but I did ask if it was sold for over a certain amount. If it did than it will be a comparable that will support our counter offer. Fortunately it did sell for higher. I called my client and emailed the contract to him and explained the contract and provided a net sheet showing his costs and how much it was going to cost him to sell the condo.

In this case he was actually going to have to come up with money at closing in order to settle because his condo had not appreciated since he bought it 2 years ago. So we spent about an hour or so figure out his bottom line and strategizing our counter offer.

10:00 - 12:00 Floor Shift

I spent most of the floor shift working on getting the counter offer back from my client, calling the other agent and briefly explaining our situation and letting her know we would have an answer back this afternoon. I explained that my client was going to have to come up with cash to settle and that we were working on figuring out how much he could come up with. At this time she let on that her client's best friend lives across the hall and he had seen 4 other units and he liked this one the best. I told her about the yet unsettled condo and that it was going to sell for more than the last 4 sales. The negotiations are my favorite part of selling homes and one area that I believe is overlooked in training and discounted by the public. But just one slip up or miscalculation can cost a client thousands if not tens of thousands of dollars.

The entire process from getting the offer, to explaining the offer to the client, to preparing the counter offer, to calling the agent and explaining the reasoning behind the counter offer and finally sending the counter offer back took about 4 hours. This part takes the longest to prepare and explain but if you do it right it makes the rest of the negotiations a lot easier.

Oh, and I also finally got a decent lead on my shift today. A couple wants to upsize their home in Leesburg. I sent her out some listings but nothing caught her eye. I will put her in a saved search file and check the neighborhood every couple of days to see if a new listings that meets her criteria comes on the market.

12:00

I finished working on the counter offer and faxed it over to the selling agent.

3:00

Emails and follow up phone calls to my listing clients and past clients.

6:00 - 7:30

Picked up listing paperwork from a relocation client I met about 3 weeks ago. I had followed up with them after the appointment and submitted the required paperwork to their relocation company. The paperwork was mainly a market analysis for their home and our marketing plan for selling it. I have done probably 20 or 30 relocations in the last 3 years so I know the routine. My meeting with the sellers took longer than usual because I explained the entire relocation process in detail. The listing goes on the market next Wednesday.

Transparent Real Estate Agent - Day 4

Tony Arko (Market Advantage Real Estate) — Thu, 08 Mar 2007 09:15:14 -0600

Wednesday March 8, 2007

I took the morning off. I never know when I'm going to get a half day to myself so I spent the first half of the day lounging around. That's one of the good things about being an agent. You can sit around in your sweats, drink coffee, answer emails and watch some TV right in the middle of a Wednesday.

I do not let voicemail or email go unanswered so I always check those in the AM. It is always easier to just answer them immediately instead of letting them pile up. It takes 5 or 10 minutes 3 times a day to handle any issues that come up. That way they don't escalate into bigger problems and take up a whole lot of time at the worse possible moment.

4:00 - 6:00 Floor Shift

Another slow floor shift with 2 internet leads coming in. I followed up with them immediately. I also got a call from an agent. Her client is going to submit an offer on one of my listings. My client has already called twice asking if I heard anything yet from the agent. He has already bought another townhouse and needs to get his condo sold so he is understandably anxious. However, this anxiety was almost certainly apparent when he was at his condo while the buyer and the buyer's agent were going through. If she is a good agent and picked up on this desperation it will most certainly show up in the offering price. I always tell my clients to never speak to the other agent but for some reason they hardly ever listen. And then they are disappointed when they see the "low" offer. We'll see what happens.

Transparent Real Estate Agent - Day 3

Tony Arko (Market Advantage Real Estate) — Wed, 07 Mar 2007 10:25:17 -0600

Tuesday March 5, 2007 - Day 3

8:30 - 10:00

We have a meeting every Tuesday for the agents and support staff on our team. For this meeting I prepare a report on sales and listing activity for my farm area. I also do some basic analysis for the surrounding areas. It takes me about an hour to pull the various statistics because I do a pretty in depth analysis that gets into things like inventory loads by zip code, weekly, monthly and quarterly trends, variances over prior year months and quarter, median sales prices, days on market, etc. I do the report so that I can speak intelligently about the market at all times. I do this because my background is in finance and I used to do these reports for the executives of a company I used to work for.

10:00 to 11:00 Sales Meeting

This week's meeting was not too good. We usually go over our team statistics for the week but those were not completed. Our broker usually does that but she has been given too much work lately by the team owner and she couldn't complete the package. One thing we usually talk about is inventory, more specifically any good deals we have run across while previewing the inventory. This week was very busy and I don't think much previewing was done. I usually try and preview 15 to 20 homes per week but I didn't get to that last week.

11:00 to 12:00 Floor Shift

A very quiet floor shift. I did get an email regarding tax assessments. I recently did a post on the tax assessments and offered to help any residents get their assessed values reviewed. I have gotten 4 clients take me up on the offer. I did this in place of the typical agent crap like recipes and gardening tips. I hate that stuff.

12:00 to 3:00 Lunch at home/Emails and Blogging

I had a free afternoon so I caught up by reading blogs, writing a small post about the Inman blog and following up with listing appointments, buyer leads and my current sellers. I do 90% of my communication online. I contact everyone with emails and also refer them to the blogs I write. I feel it is way less intrusive for most of my contacts. They can get back to me at their convenience or just ignore me. I got emails from two listing leads that said they are going to list with me. I set up appointments to pick up paperwork this week. Keep the pipeline full.

Overall a quiet day, with a couple of good results.

Transparent Real Estate Agent - Day 2

Tony Arko (Market Advantage Real Estate) — Tue, 06 Mar 2007 13:19:10 -0600

Monday March 5, 2007

9:30am to 11:30 am

I had a home inspection for a first time buyer in Leesburg. They bought a 12 year old townhouse and it needed some repairs. I use a very good home inspector. He is a structural engineer and is very knowledgeable. I go to all home inpections so that I know what to ask for on the addendum and how to explain the repairs we want made. Plus it is a good time to talk to the client, see how they feel about the house, find out more about them and hopefully get future business from them and their friends if possible. The home inspection typically takes 1.5 hours for townhouse and 2 to 2.5 for a single family. No major problems so it went well.

11:30 to 1:00

Mondays are busy because of all the activity that takes place over the weekend. Clients get antsy regarding showings and call or email me to see if anyone sent in contracts. I also like to talk to all my listings and if the activity is down or we have been on the market for 3 or 4 weeks without a contract, I want to get a price adjustment so that we don't lose momentum.

1:00 - 2:30

I had a listing appointment last Thursday that needs to go on the market immediately. It's a divorce situation and I met with the wife and emailed the husband to discuss their options. He wants it sold as soon as possible. She is upset that she has to move and it was apparent at the appointment. Sometimes you need to have a little counseling experience to do this job.

3:00 - 3:30

I went over the inspection addendum with the client from this and we chose the items we want fixed and the things that were minor enough to overlook. I faxed it over to the other agent and now we just wait for their reply. Hopefully they are reasonable. Reasonableness is the key to getting homes sold.

4:00 - 5:00

I have another listing that will be coming on this week. It is a relocation and we needed to sumbit a Broker Market Analysis (BMA) to the relo company before we can get the ok to list the house. I am running a little low on listings (7) so I need to start filling up the pipeline again. I have several others that are at various stages. I will contact them regularly to make sure they know what is going on in the market and also so they use me when it comes time to list.

Not a bad day for a Monday. Time went by fast and I got to leave a little early and go for a run.

Transparent Real Estate Agent - Day 1

Tony Arko (Market Advantage Real Estate) — Tue, 06 Mar 2007 13:17:48 -0600

One concept that has been written about widely in real estate blogs is the concept of transparency - the idea of making the business of real estate less secretive and more open to the consumer. There is even a very good blog dedicated solely to this subject - TransparentRE.com. The internet has facilitated this through the rapid and inexpensive dissemination of information. Blogging communities such as ActiveRain talk openly about real estate although there is the ability to hide certain posts from the general public if you so choose. But you don't have to be an agent to join. And once you do join, you can get information on a wide range of topics such as commissions, dual agency, ethics, etc.

This series of posts will be be dedicated to making the daily life of a full-time agent as transparent as possible over the course of the next sixty days. I will let you know exactly what I do every day for the next two months. I will try and be as transparent as possible. I will answer all comments immediately. I will respond to any requests for more information as quickly as possible. You will know what a full-time real estate agent does each day. You will see what an agent makes, how they get leads, what they spend money on and what else they do besides real estate. It will be very transparent.

I hope you find it interesting. Here goes...

DAY 1 - Sunday March 4, 2007

Today is Sunday and I was supposed to be off today however, another agent called and asked if I would cover her shift. There are only six agents on our team so it will not be easy for her to get her shift covered especially if the other agents are showing property or otherwise working with clients. I agree to cover the 3pm to 6pm shift, which is where I am right now.

The reason I agreed to cover the shift is two-fold. It will force me to focus on writing this post. I have been thinking about doing it for several weeks, but keep putting it off. I have been extremely busy and productive the first two months of the year. And that is the other reason I wanted to take the shift. When things are going good, when business is brisk, I don't want to lose momentum. Maybe I am superstitious, but after the horrible end of year I had last year, I am not taking anything for granted.

I write two different blogs, this one and another that is specific to my marketing area. It is easier to write that blog because more of what I do on a daily basis applies to that blog. Things like how the market is doing, what is selling, local market trends, etc.

I sold my second listing of the week and 10th of the year yesterday. It took me three price adjustments (that's agent talk for lowering the price) over 124 days to get them to the right listing price. They were sure it would sell for at least $550,000. After 3 contracts we finally got it sold at $492,000. All three contracts came in at the same price, but the sellers finally realized that maybe their house was in fact worth about $490,000.

I received a ridiculous call from another seller whose house I sold 3 weeks ago. They have relocated to Rhode Island and came down this week to fix the items on the home inspection report. The wife called me from her house to complain that I didn't make sure the thermostat was not tampered with. It was set at 75 degrees and it was going to cost them a lot to heat the house. I had explained earlier to the husband that it was not possible to continuously monitor their thermostat, but we would check on it once a week. I also explained to her that I told her husband we are not a management company, but we could put them in touch with one that would monitor their house. They are very cheap so I knew they wouldn't get someone to do it.

I also knew that the husband doesn't tell the wife anything. Most of the time I tell both parties separately, but in this case the wife was not an owner of the house so I did not. I asked her if her husband had mentioned this and she got very quiet. She told me how unprofessional I was and hung up on me.

About once every 6 months I get a client that is so completely out of touch with reality or so completely miserable that I wish I never met them.

The shift has been very quiet. Only one phone call in 2 hours. I did receive one lead from the internet. It came in from one of our listings that we have on 20+ websites. This is the primary source of buyer leads for us. I will send her a link to these blogs as well as a group of listings that are similar to the one she requested information on. It takes an internet lead on average 6 months to actually respond to me, but once they do they are pretty much ready to buy or sell immediately.

I just finished writing a post on Loudoun Stats about a new blog on Washingtonpost.com. The author of the blog put us on her blog roll which is pretty exciting. I'm getting a lot done on the blogging front today which is good because the shift is almost over and the phones haven't rang and only one other lead came in online and it was a bogus email address.

It's 6pm and I'm off to have a nice dinner.

Coinciding Settlements are the Worst

Tony Arko (Market Advantage Real Estate) — Wed, 24 Jan 2007 09:30:17 -0600

As a seller of a property a Coinciding Settlements Contingency is worse than a Sale of Home Contingency in a couple of ways. You must be aware of these differences when explaining the contingency with your seller or you could be in for a very bad experience. Here are the items that make the Coinciding Settlements Contingency good for the buyer but bad for the seller.

No Kick-Out Clause - A seller has no opportunity to have another contract bump the current contract like you can with a sale of home contingency. (Keep in mind I, this is the contract in the D.C. metro area. The contract you use may be different.)

No Continued Marketing - Because our MLS system has only Under Contract/No Kick-out or Under Contract/Kick-out, the MLS system is setup unfavorably for the Coinciding Settlements Contingency. It's already bad enough to not be able to leave it in the system as Active (MRIS will fine you if you do), but you can't enough mark it as having a kick-out.
No Information until it is too Late - If you happen to get stuck taking a Coinciding Settlements Contingency, here is a scenario you just might face. Settlement day is here. Your clients have spent $5000 to move to their new home. The house is vacant. They made all the repairs and cleaned it professionally. Maybe they drove up or flew up from Florida just for the closing. The lender has assured you that everything is fine. You show up to settlement and there are no loan documents, no money, no buyers. You call the other agent. The closing on the Buyers house did not go through this morning. They will not be closing on their house. They will not be buying your clients house. They will exercise the Coinciding Settlements Contingency Clause. Sorry. Good Luck.

Whoops. Didn't see that coming. Now your clients will look at you and say "I want the earnest money deposit". No can do. The Buyers didn't do anything wrong. The buyers agent protected his clients, you did not. You can't keep the EMD. Not only are you not getting paid, you look like a complete idiot because you let this happen.

Fortunately, you can prevent this from occurring without blowing the deal.

Know Thy Seller

Tony Arko (Market Advantage Real Estate) — Wed, 24 Jan 2007 08:42:51 -0600

In the last three years I have gone on over 500 listing appointments in and around Loudoun County, Virginia. In that three year period I spent my time focused on things like knowing the marketplace, perfecting my listing presentation and generating listing leads. I also learned early on that it was important to quickly determine the personality type of a seller in order to cater a presentation to the person. I used the DISC profile system. It had 4 personality types and ideally a listing presentation should be tailored to each personality type. Problem is, this is not always easy to do because most couples were two different personality types or a person was a mixture of both.

After a while I stopped thinking about personality types and focused on the type of house or neighborhood or age of the sellers and tried to give a listing presentation that my match these things. Not very scientific and not very effective.

In the course of the last year I have come to realize that sellers in my market are unique when it comes to three things: technology, time and commissions. These three things along with real estate knowledge can be used to categorize almost all the sellers in Loudoun County and Fairfax County, Virginia.

Here are the 4 Personality Types:

Mr. or Ms. FSBO

This home seller comes in two varieties. The first is the Investor. He or she has done this before. They have bought houses to be fixed up and flipped or they have rental properties that they buy and sell with some frequency. At one point in time, he was probably in the business as an agent or lender. By handling the listing himself, he is trying to increase his profit margins. He also is aware of market conditions and is probably in a sellers market. This makes it a lot easier to get the home sold in a reasonable amount of time. He is very commission sensitive.

The second Mr. FSBO is the Reader. He has seen and read about other people who go the FSBO route and now that he needs to sell his home he thinks he can do it also. Usually, the Reader has bought several books about selling his own home as well as some on buying homes with no money down and real estate investing. Although sometimes this need to sell the house himself comes from necessity (house is worth less than when he bought it), most of the time it comes from a combination of too much time coupled with disenchantment with the real estate profession.

Mr. or Ms. In-the-Know

This person is a very experienced home seller that either doesn't have the time or realizes that the current market is not conducive to FSBO's. At one point in time, he or she probably handled a FSBO and now realizes just how time consuming the process is. They are aware of the added benefits that come with using an agent, to include the use of a lockbox, a larger professional yard sign, and most of all, access to the Multiple Listing Service. They are aware that being easily accessible to all agents and advertising to these agents will be reflected in the sales price as well as the length of time spent on the market. In today's market, Mr. or Mrs. In-the-Know is well aware of agents with lower commission models that offer access to these services to experienced and knowledgeable sellers. Mr. In-the-Know doesn't need advice or information.

Mr. Tech

The majority of the sellers in Loudoun County can placed into this category. We are a very tech savvy region with many companies in the high tech fields of telecommunications and software development as well as government contracting firms focused on programming and technology. High speed Internet connections are the standard as well as cell phones, Blackberry's, PDA's and laptop computers. Because of this, most sellers will do a considerable amount of research online regarding the real estate market in the area. They will research specific homes in their neighborhood, prices reported on recent sales and will investigate the web presence of agents they are considering using to list their home. They will create a list of agents to interview based on referrals from friends and co-workers, agents who have sold homes recently in their area, and Internet exposure on search engines. They will interview 2 or 3 agents and go with the one that they feel will do the best job. In their research they will have come across articles about commissions and they will ask each agent they interview whether or not their commission is negotiable.

Mr. and Mrs. Traditional

Mr. Traditional is the "old school" home seller. They found their current house after seeing an Open House advertisement in the local paper. They went to the open house on a Sunday and called up their agent that they have used 3 times before. It is now time to sell and either downsize or invest in vacation home down south. They are aware of the internet, but not too sure of its effectiveness. They have relied on relationships in the past and will continue to do so into the future. In their minds, nothing can replace face to face contacts, inkprint on a newspaper and handshakes at an open house. They would never consider a commission to be negotiable.

A lot of times, a seller with one level of experience is in a category that does not fit their know-how or another seller who is expecting a certain type of marketing finds themselves using an agent that does not provide these services. These are the instances that invariably lead to agent dissatisfaction, lost opportunities, wasted time and botched sales.

A Crash Course in the Economics of Real Estate

Tony Arko (Market Advantage Real Estate) — Thu, 18 Jan 2007 15:28:42 -0600

How is the market? What is the market doing? What will the market be like in 6 months? Is the market going to keep going down? These are just some of the questions we get asked every day by our clients, our prospects, friends and acquaintances.

It is a question we need to be able to answer without hesitation and with conviction because the answer to this question if done correctly can lead to higher close rates and more business. So how do we figure out what is happening in the market? Being that we are just one little agent in a sea of thousands in our markets, our activity is not a large enough sample to draw from. We must be able to analyze the marketplace with the data we have available to us. Now this might seem overwhelming especially if you are not an economist or a statistician, but I'll show you that it is easier than it seems. There are really only two variables to the market question: SUPPLY and DEMAND.

Let's first look at DEMAND. This is the pool of people that are in the market to buy a home. They are looking to make a move in the next day or the next year. The problem is we don't know when they will buy, they don't know when they will buy, and they can change their mind at any second. Analyzing demand is very difficult. Therefore, trying to answer the question of what is the market doing from the demand side is not usually the best way. In the last 4 years there have only been two times that the activity of the buyers was so clear that we could use it to talk about the direction of the market. One was when interest rates hit 35 year lows and the Fed had dropped rates 14 or 15 straight times. The other was right after Hurricane Katrina hit and gas prices went through the roof. In my market place, you could sense the increase and decrease in demand caused by these two events.

That leaves us with SUPPLY. This is the inventory of available homes that are for sale at any point in time. This is a very easy number to determine and one that we will use when answering the question of market conditions. We can go to the MLS and search for Actives for a geographical area and it will tell us how many houses are for sale and available to be bought. This is SUPPLY. Now we all know there are FSBO's for sale that aren't in the MLS and in some areas of the country New Homes are inventory that is not reflected in the MLS. But for our purposes, as long as we always use the same search criteria, we will have an apples to apples comparison and a strong starting point. But it is only a starting point.

The number of homes for sale is just one number and by itself has no relevance, so now we need to put it into context. Is the current supply more or less than last week, last month, last year? If you haven't kept track of the actives in your market and have the information readily available, you are going to have a problem making the comparisons and establishing what the trend is. I would suggest doing so now. I can tell you how many homes were available for sale at the end of each month for the last 3 years but that is because I created a spreadsheet and update it weekly.

If you don't have the number of actives, you can try and recreate it from the data in the MLS or you can see if anyone else was keeping track. Usually the local associations have a database of statistics although it probably won't be broken down for the exact area you want. Nonetheless, looking back at this data can give you an idea of what the market was like in past years.

In lieu of the actual actives data, we can do a quick search of the database for a certain time period and establish whether the inventory was increasing or decreasing and to what degree. The way to do that is to do a search of all homes with a list date of a certain time period, for instance January 2006. You want all homes that had a list date of that month, regardless of the current status. This includes solds, withdrawn, expired, actives, etc. Then do a search of all homes that have a contract date of the same month. Only solds. The difference between these numbers will be the net increase or decrease in inventory during that period. Doing this for each month or quarter will give you a good idea of what the supply was doing during that period.

So now we have some concrete information in which to intelligently discuss the current condition of the marketplace. To put it into context I will use the data from my market, Ashburn, Virginia, to give you an idea of what I am seeing from the numbers.

First, the current number of homes for sale not included new is 407. The number of homes for sale at the end of December 2006 was 383. This tells me we have had a slight increase to the inventory during the first half of January. Looking closer at the number I find out that there are 62 new listings since January 1st and 31 re-listings, offset by 63 sales. This is an interesting discovery and one very few people will ever know. Even though our inventory has increased in the last two weeks, the entire increase can be attributed to homes that relisted. Homes sold and new listings are virtually equal.

Next I compare last years numbers to this years numbers. On January 16th, 2006 there were exactly 389 homes for sale. Also very interesting given the incredible roller coaster ride the last twelve months, we are at virtually the same place from an inventory standpoint as we were last year at the same time.

What does that mean? I think it means that if we have another surge of homes and an increase to the inventory similar to the one last year, we should expect prices to continue down. However, if the inventory stays at the current levels we should see some stability in prices and a return to a "normal" market. That is, of course, if nothing crazy happens to the demand side of the equation.

Hopefully this will help you out the next time someone asks you about the market.

What is the Future of Blogging and the Real Estate Agent?

Tony Arko (Market Advantage Real Estate) — Wed, 17 Jan 2007 11:04:23 -0600

A couple weeks ago I wrote a post about the Top 50 Teams and their contributions to the blogosphere. A new list of the Top 25 Power Teams according to RISMedia and Real Estate Magazine. These 25 teams were selected because of, amoung other things, their "innovative marketing and management skills". Several of the team made both lists but their are a lot of teams that were not on LORE Magazine list.

When asked by RISMedia what contributed to the success of their teams only one agent made any mention of technology, no one mentioned anything regarding the internet or blogging. Direct mail, referrals, Brian Buffini, newspaper ads, radio ads, team building excersises, mentoring were all mentioned.

With no mention of blogging and only one team even attempting to blog out of close to 70 industry recognized team, what does that mean for blogging? Where does it fit in? Are we so far ahead that we aren't even seen? Is it just a passing fad? Will it ever replace the "old school" marketing tools? Will it just be another arrow in an agents quiver?

What do you think?

One Additional Sale per Quarter - Guaranteed

Tony Arko (Market Advantage Real Estate) — Mon, 15 Jan 2007 19:49:09 -0600

To all the agents out there who want to do more business this year, I have a GUARANTEED way for you to do it. It will work if you do mostly listings and it works if you just work buyers. PREVIEW your market. If you spend one 3 or 4 hour block each week previewing houses for sale in your area you will close at least one listing lead or one buyer lead per quarter. You could probably close even more if you previewed more. There are 4 reasons why this works.

Previewing gives you confidence. When you know your inventory, it comes across to your client, whether they are a buyer or seller. When they ask a question about a house they saw online and you can give them specific details about the home, you have just validated your position as an expert.
Previewing gives you enthusiasm. Somewhere I read long ago that the definition of sales was the ability to transfer emotion. If you just previewed the perfect home for a client, that energy and enthusiasm will be transfered to them. If you are at a listing presentation at the best condition house in the neighborhood your enthusiasm will come across to the sellers. You can only get to this point by previewing.
Previewing gets you in front of sellers. If you have expireds and withdraws in your marketplace it is a lot easier to call them on the phone and get their listing. One of the keys to previewing is going when there is a high chance to see the owner. Not during dinner, though.
Previewing gets other agents to call you. It is a perfect opportunity to network with other agent, much like we do here on AR. An honest assessment of a listing will be appreciated by any good agent. It will also guarantee reciprication. It will also allow you to call to see if they have any buyers for your listings. You could see if they are on Active Rain and if not invite them. These are just a few ideas.

Keep in mind that previewing should be done no less than once a week. You should also concentrate on a manageable area so that you can become an expert in that area. Too large of an area and you end up getting spread too thin.

Whenever my production is waning or I am unmotivated, I force myself to preview. It always seems to work even though I hate the idea of calling everyone up, getting in and out of my car and getting the follow up calls from the agents. The additional revenue is well worth it. And I don't know if its a coincidence or not, but I always seem to get a buyer or seller in the area of my previewing.

42956 Ohara Ct., Ashburn Virginia

Tony Arko (Market Advantage Real Estate) — Sun, 14 Jan 2007 08:45:46 -0600

Beautiful 4 BR, 3.5 BA colonial on cul-de-sac Lot with privacy and mature trees. You can check out the pictures of the views and the interior at the CC Sells website.

Best Features:

1. New Hardwood Flooring Throughout Main Level

2. Kitchen wiht New Granite Countertops and Stainless Steel Appliances

3. Home Theatre System Including 106" High Definition Projection TV with 7.1 Channel Surround Sound (Valued at $20,000) Conveys

Not so Good Features:

1. 1 Car Garage

2. Corner Lot

If you have been through this property and have any comments we would greatly appreciate your feedback.

http://realdiablog.typepad.com/blogback/2007/01/42956_ohara_ct_.html

Activity Strong in Loudoun County

Tony Arko (Market Advantage Real Estate) — Sun, 14 Jan 2007 08:40:15 -0600

Real estate sales were very good during the month of December. The question is would that strength carry over to the new year. The answer is yes. In the first 10 days of the year, both buyer activity and seller activity has been very brisk. Although this is readily apparent in the actually contracts ratified or listings activated, it is apparent in the activity that is a precursor to sales and listings.

In our office the number of buyer leads and buyer search activity has increased 75% in the last 10 days. We are seeing a spike in the number of people registering at our website and signing up to search for properties. Our agents are all working with buyers who are at or very near making offers on properties they have seen since the new year started.

On the listing side, we have had 4 of our listings go under contract this year. We have also had 3 others receive offers that have not been ratified. This is very strong activity. We have also had 4 homes listed by our agents and 3 others that are going to list in the next week. Also, our agents have gone on more listing appointments in the first ten days of January than the entire month of December.

Right now there has been a balance of activity with regard to buyers and sellers. Active listings has held steady throughout Loudoun County. Traditionally, the listing activity has not picked up until the month of February but with warmer weather this year, we are keeping an eye out on the inventory. The inventory level will dictate whether prices will hold up during the first quarter.

You are How You Rate!!

Tony Arko (Market Advantage Real Estate) — Fri, 12 Jan 2007 08:22:32 -0600

The guys at AR have designed the posts we publish to be rated by the bloggers on AR. I really like this feature for a number of reasons, both as a reader and a writer. And when used in conjunction with the other cool features on AR, it can be useful in making the posts we read and write more relevant. But if we don't use it correctly or don't use it at all, I think we will be missing out on an opportunity to strengthen the site. Here is how I use it to analyze other posts and analyze the posts I have written.

First, the ability to rate a post gives me the opportunity to provide feedback to a post without having to actually write comments. In fact, a lot of times a post is written that doesn't necessarily generate an open discussion or forum for others written opinions. It is just a well written post with anecdotes or experiences that can help us do our jobs better. Or is just makes us laugh. There might be 20 out of 30 comments that say "Great Post" or "That Happened to Me". When I see one of these posts I just give it a 4 or a 5 and move on. No need for a another thoughtless comment. This rating will definitely have an effect on the post and will give the writer a higher score for the post but if you are just looking for 25 points, go ahead and comment but also give it a score.

When I score a post, I never score a post I haven't read. I'm not sure how you can unless you are just trying to keep your favorite blogger on the dashboard without regard to the quality of the post. I score the ones I do read on two categories: Content, Mechanics.

Content is usually the reason I stopped and read a post in the first place. We all like humorous stories and funny pictures, but we also like real life stories and battle stories. I definitely read these posts. But I also rate posts very high if they are thought provoking, witty and/or imaginitive. I also like posts that provide insights into resources and new and better ways of doing things. One thing I do not do, is give a post a low score just because I don't like the point of view of the writer. If it well written and thought provoking I will probably give it a 5 but I will make sure I also leave a comment. Also, I don't rate posts that just spit out data without any opinion or analyses included. I have run across a lot of post that read like a law journal. Very boring.

Mechanics are the one area for me that will make a potential 5 drop down to a 3. Spell check is available. There are also the things called Dictionaries. If you can't take the time to use one, you deserve a lower score. Bad grammar is another pet peeve that will drop you down on my scale. I usually only need to see verbs used in their correct tense and I'm happy. Also, split a post up into paragraphs. One huge paragraph is torture on the eyes and usually doesn't even get read no matter how good it might be.

Just to give you an idea of how the ratings affect the scoring of posts I want to show you the scores of two posts that I have had featured in the last week and you can see for yourself how it works.

"Top 50 Teams Don't Blog" Featured Jan 4th.

34 Comments 596 views 241 clicks 522 points

"Who Cares if You are a Realtor? Nobody it seems!"

87 Comments 1025 views 687 clicks 513 points

Who Cares if You are a Realtor? Nobody it seems!

Tony Arko (Market Advantage Real Estate) — Wed, 10 Jan 2007 06:43:33 -0600

In the last ten days I have performed an unofficial poll regarding Realtors. I polled two sets of people, real estate agents who are Realtors and people who know I sell real estate but are not in the real estate business. I asked one question of each set of people. The realtors were asked "How many times has a client or potential client, who knew you were in the real estate business, asked if you were a Realtor?".

About a dozen agents from my office as well as a couple of agents I am transacting business with now were posed this question. Not one has every been asked this question. Not one. Combined there were approximately 90 years of experienced represented by the polled agents. Not one single time was it important enough to a potential client to ask this question. A couple of points to make regarding this finding. It didn't take into account that maybe some one had investigated before contacting the agent whether or not they were Realtor or not. It also doesn't take into account that maybe the client saw the Realtor symbol on a business card or somewhere else and therefore didn't need to ask the question. I personally do not have the symbol on my card and neither does anyone in our office so I can't see this being to prevelant. So the question I asked myself is "Why did I become a Realtor?". Obviously I am only speaking for myself but my reason is probably a common one. I was told that after I passed the licensing exam it was the next step. In order to get a lockbox key, access to the MLS and a copy of Autocontract I had to go sign up with the local association. In this case it was Northern Virginia Association of Realtors. And when I went to sign up it seems I had to also join the Virginia Association of Realtors and the National Association of Realtors. I have no idea why I had to join all these different associations. I just paid all the dues and got my lockbox key so that I could be a "Realtor".

The second group of people, the non-agents, were asked "What is the difference between a real estate agent and a Realtor?" The answers to this question ranged from "I don't know", to "Nothing", to "You Joined an association", to "I'm not quite sure". Not once did anyone mention ethics, higher standards, code of conduct or anything resembling the correct answer. Or at least the answer that the NAR would have us believe. The message that we are better than the normal real estate agent has been completely lost on the people that matter, the general public. According to them, being a Realtor does not matter. There is no value to them. I'm not sure how much money the NAR spends on educating the general public on the benefits of using a Realtor, but it seems to be a complete waste of our resources. Much like the last marketing campaign that said it is a good time to buy or sell a house . That one cost about $40 Million. Who is holding these people accountable? I think we need to start doing a better job or at least elect people that will.

Tag - I'm It - 2007 Goals

Tony Arko (Market Advantage Real Estate) — Tue, 09 Jan 2007 18:52:47 -0600

I was tagged this morning for a list a my 2007 Goals. I will try and make this short and sweet. I limit it to 3 Real Estate related Goals and 1 Personal Goal. Thanks Danilo.

1. My goal this year for real estate transactions is 60 sides. Mostly listings because that is my specialty but I want to add a small number of buy side transactions this year. I will say 12 is my buy side goal.

2. Blog consistently throughout the entire year. I have 4 different blogs that reach 4 different audiences. My goal is to keep these blogs full of solid posts about relevant topics. I want to post a minimum of twice a week to each blog, including AR. I also want to comment on more blogs. I read a lot of the posts on AR but I find myself watching and reading rather than participating. I know that somewhere there is a general rule that you should write 3 comments on other blogs for every post on your own blog. Sounds like a plan.

3. Be more proactive with my clients. My biggest fault is that I wait to long to call my clients and usually they contact me first. I need to do a better job of calling up listings even if I have no good news. Sometimes they just want to know I haven't forgot about them and that is reason enough to call.

Personal Goal - I have signed up to run in the Cleveland Half Ironman Triathlon on August 12th. My goal is to finish the race in 5 hours 30 minutes. Let the training begin.

And I am tagging Teresa Boardman, John Novak and Chris Gabriella.

Good Luck in 2007

Zillow Responds to Active Rain Blog

Tony Arko (Market Advantage Real Estate) — Thu, 04 Jan 2007 15:40:58 -0600

I want to write a follow up to a post I wrote last month regarding the new Listing service Zillow rolled out in December. I wrote about what I saw as a serious flaw in the posting of listings to Zillow. It seemed as if Zillow was using credit card verification to verify Listings as belonging to a particular agent. I couldn't for the life of me figure out why they did that.

But give credit to David G. over at Zillow for reading my posts on Active Rain and on my personal blog and responding to the posts and the comments that followed. It took a while but I think they figured out a way to get out of their own way, so to speak. As of today, we were able to put 26 listings into zillow without once being asked for a credit card.

Thanks go out to the bloggers that commented. This was a good example of the power of the blog.

And my hats off to David G. for changing the policy so quickly.

Top 50 Real Estate Teams Don't Blog

Tony Arko (Market Advantage Real Estate) — Thu, 04 Jan 2007 08:17:02 -0600

Back in November, Lore Magazine published the list of what it determined was the top 50 Agents and Teams by Volume and Transactions for 2005. I'm sure there is a reason for taking 11 months to compile the data (perhaps they don't use computers), but that is for another post. The question that came to my mind was how prevelant was blogging in the marketing plans of the top performers. I took some time yesterday to run through the list of the top teams by volume and do a little investigating.

I first looked for the websites of each of the teams. I used Google to try and find the main website for each team. In my search I found that the level of internet presence of these top teams varied from extremely flashy and sophisticated to overwhelmingly cheesy, and from childish to non-existent. I also found that the search engine optimization for a lot of these websites left an awful lot to be desired. In fact, some of the main websites of these top brokers didn't appear when doing a search for the team name or the team's namesake.

After tracking down the websites, I search each team's site for any mention of a blog. The results were remarkable. Only one team made any mention of a blog whatsoever. That team was Sherry Wilson's from my neck of the woods here in Northern Virginia. She has a link to her AOL blog on the front page of her static website. Unfortunately, she has made only 9 posts since March 2006 and hasn't had an entry since September 10th. But hey, at least she had a blog.

So after finding only one mention of a blog on the main websites I used google's blogsearch to see if maybe they had blogs separate from the main site such as here on AR. I couldn't find one single top performer with a blog. Now I didn't do a comprehensive search using all the major search engines but if search by my name turns up my blogs, I would think someone's blog would turn up.

This leads me to two conclusions. First, blogs are a very personal and individual undertaking. They are also not a part time job. As any successbul blogger knows, it takes a lot of time to research, read, comment on and write blogs. Most rainmakers have gained success by mastering the traditional marketing of real estate. It has obviously worked for them. But will it continue to work as well in the future?

That thought leads me to my second conclusion. As the profile of the home buyer changes and the baby boomers move off to pasture, the top performers of today will not be the top performers of tomorrow. And those that embrace Real Estate 2.0 have a good chance of supplanting them on top of any Top 50 list.

Real Estate Agents pay to have Buyer Leads taken from them, then Pay to Get them Back

Tony Arko (Market Advantage Real Estate) — Thu, 28 Dec 2006 08:52:57 -0600

I have been trying to wrap my head around the advertising of listings for sale on the Internet. What companies are doing it? What are the source of the listings? Who pays for the listings? What business models are being used? And most importantly how does it affect us as realtors and agents?

They only way I can sort this out for you without getting completely confused is to follow a listing through cyberspace. Follow along...

A home seller has called and asked you to sell their house. They could have come from a number of sources including but not limited to a sign in someone else's yard, a referral from a past or current client, a call from a print media advertisement, your personal sphere. My point here is that few listing leads currently come from the internet. They are mostly buyer leads. So you have spent time, money, effort and expertise to generate a listing. And anyone who has been in the business knows that listings are golden. They generate leads for more listings as well as buyer calls.

Now we take this precious listing, this generator of leads and we give it to the MLS. What does the MLS do with our listing? Well, it bundles it with all the other listings and does three things:

It puts your listing on its own website. The website that my reagional MLS runs is called homesdatabase.com. How this website makes money, I am not sure. But it does not send email inquiries directly to the listing agent. (I am still trying to track where a lead goes.)
The MLS then sells the listings to other sources, the main one being realtor.com. Recently the MLS serving the Northwest has decided to stop sending the listings directly to realtor.com as of April.
It sells a listing feed called IDX back to agents so that they can put the feeds on their own websites. I will discuss this crazy relationship shortly.

The websites that get the feeds from the MLS services then use that data to generate revenues based on several different business models. One model generates revenue by selling banner ads and text ads on the website. The more visitors to the website the more click-throughs and the more money for the website owners. Yahoo has sold its entire real estate section to Prudential. Every listing has a Prudential banner ad at the top, another ad that directs a buyer to call a Prudential 800 number for more information and another mention of Prudential at the bottom. If the listing wasn't mine, I would have thought it was Prudential's. (I do not work for Prudential, but it seems like Yahoo does).

Another business model used by websites is to get buyers to sign up online to get more information or get notified of other listings that meet the buyer's criteria. These websites then sell the leads back to the agents whose listings are generating the leads. And I use the term "lead" loosely because 4 times out of 5 these "leads" have no intentions of buying a home now or in the near future and a lot of times, they are completely unreachable. But it's a good business model as long as agents are willing to pay for their own leads. And in fact, if you follow the lead back, we actually pay the MLS, to sell the listing to the companies who generate the leads that we pay for. Are you getting ill yet just thinking about that?

Now, the IDX feed is the ability for an agent with their own website to allow home buyers the ability to search the entire database of listings on the MLS. It is sold to agents and I think we pay $30 per month to have the feed. What is interesting about this setup is the chain of ownership of the listings and where the $30 goes.

Agents must join one of the associations that is an owner of the MLS. For instance, I am forced to join the Northern Virginia Association of Realtors or the Dulles Area Association of Realtors if I want access to the MRIS-MLS. That is because NVAR and DAAR are two of the ownership associations. The MLS is owned by the associations. Since I am a member of the association does that make me an owner of the MLS? I can't really tell, but I think it does.

So I pay my dues to join the association so that I can pay MRIS to put my listings into the MLS database and search the database. Then the MRIS sells the listings to other websites or sells an IDX feed back to me. If they sell it to other websites then these other sites sell the leads back to me. So what happens to the money that the MRIS makes from selling the feeds? Shouldn't it go to the shareholders?

I have personally contributed over 300 listings to the MRIS in the last 3 years and our team has contributed over 500. But I just keep getting a bill and haven't seen any profit sharing. This doesn't seem right. And in the end, we as realtors just pass the costs on to the consumers in the form of commissions and fees.

But the consumer is getting weary and I recommend that we get a little weary as to where all the money and all the leads go.

Bloggers and Real Estate are Major News

Tony Arko (Market Advantage Real Estate) — Mon, 18 Dec 2006 08:44:35 -0600

There were two major news stories in the last couple of days that are of interest to the AR community. First, it seems we all were named Person of the Year by Time Magazine. The magazine put a mirror on the cover of the Person of the Year issue to symbolize the contributions of the general population to the explosion of the internet and more specifically Web 2.0. Bloggers were mentioned as well as YouTube and Myspace.

The second story is the selling of Realogy to private equity firm Apollo Management. That means that anyone working for Century 21, Coldwell Banker, ERA or Sotheby's will have a new owner shortly.

Just a quick couple of stories to get the week started.

www.realdiablog.com

Business Week Article about Buyers Agents

Tony Arko (Market Advantage Real Estate) — Fri, 15 Dec 2006 12:19:36 -0600

I just read an article in Business Week that paints buyers agents in a bad light. In a nutshell it accuses buyers agent of steering clients toward listings that pay higher commissions. It makes the assumption that if a home seller or builder pays out more than the standard commission the buyer is overpaying by that amount. It does not however take into account that maybe the seller has a lot of equity in a property and instead of selling at a discount to market prices, they choose to pay a real estate professional a higher commission rate.

These are the kind of articles we need to comment on in order to educate consumers. These articles do damage to the industry.

www.realdiablog.com

Real Estate Agents are Bad Drivers

Tony Arko (Market Advantage Real Estate) — Fri, 15 Dec 2006 08:52:18 -0600

It's official, or at least one study shows that real estate agents have more accidents than the average driver. According to the San Francisco-based Quality Planning Corp., an insurance research firm, real estate agents were the 5th worst drivers of 40 professions.

Agents ranked 25th in getting speeding tickets as well as all moving violations. Both are below average. The explanation for the divergence of the two numbers would be pure speculation but I'm going to give it a guess.

Agents drive really slow while they are talking on the phone, looking through MLS printouts for addresses, searching for street signs and house numbers. This causes the number of moving violations to decrease however, they are only looking where they are going about 50% of the time. That is my hypothesis.