Realtors become own media to sustain market optimism

Real Estate Agent with Keller Williams Realty


 This was on the Inman Real Estate News , its really good please read. If you guys have any other suggestions please comment.

Realtors become own media to sustain market optimism

Negative news scares off clients

Are we going to let the negativity in the media continue to create irrational fears in our clients? Or are we going to fight back and tell the truth about all the good things that are happening in today's real estate market?

There are more than 1 million Realtors in the United States and approximately 2 million people who hold real estate licenses. What can we do to counteract the flood of negative press?

1. Stage a frontal attack

Whenever you read or hear a piece of news that uses a percentage, remember there are two ways to view that percentage. Take these two examples:

Negative Media: Twenty-five percent of the subprime mortgages in the U.S. are not performing.
Positive Realtor Response: Subprime mortgages represent 25 percent of all mortgages in the U.S. Of these, 75 percent are performing. This means that only 6.25 percent of the total loans are NOT performing (25 percent of total loans that are subprime) X (25 percent not performing) = 6.25 percent.

Negative Media: Prices are down in 15 states.
Positive Realtor Response: Prices are stable or increasing in 35 states.

I find examples like these daily. Take the negative example and make it positive. To do this with percentages, simply subtract the negative percentage from 100 percent. Using the example above, if prices are down in 15 states, the percentage of states with a decrease is 30 percent. To find the percentage where property values are flat or unchanging, subtract 100 percent minus 30 percent. In the example above, prices are stable or are increasing in 70 percent of the states.

Once you calculate this number, share it in your blog, in your marketing materials, and talk about it at every possible opportunity. Not only will you help stem the tide of negative news, but you will also attract more clients.

2. Go Long Term, Not Short Term

There's no doubt that many areas are experiencing a slowing market. We have been doing business in a paradise of exceptionally low interest rates, easy lending, amazingly high demand, and a flood of money created by the strong economy and lower tax rates. These factors lead to unprecedented numbers of sales as well as extraordinary appreciation in some areas.

For example, my father died in 1998 when his house in Los Angeles was worth $168,000. According to the comparable sales data, it was worth $600,000 at the beginning of 2007. Based upon current sales data, it's currently worth about $575,000. Thus, the value is down $25,000 from Jan. 1, 2007. Here's how the negative media would spin this versus the more accurate long-term assessment of the situation:

Negative Media: "Owners Face Massive Losses As Values Plunge By Over 4 Percent In Just 10 Months."
Positive Realtor Response: "Property Values Soar 300 Percent Over The Last Nine Years."

With the exception of a few states that have experienced massive job losses in the manufacturing sector, most areas have seen a substantial increase in property values. All markets go up and down. The larger and quicker the run-up, the more likely it is that there will be a downturn. Nevertheless, real estate continues to be a fabulous investment, especially when it comes to the difference between owning and renting. At the National Association of Realtors' mid-year meeting in May, Lawrence Yun, the chief economist for NAR, shared the following data from the Federal Reserve: "The median wealth accumulation for renters from 1995 to 2004 was $4,000. The median wealth accumulation of a homeowner was $184,000."

3. Record years are always followed by declines

One of the negative media's favorite ways to tell us negative things about the real estate market is to quote how much sales are down from 2004, 2005 and 2006. We had the lowest interest rates in more than 30 years, which in turn, triggered massive numbers of sales and price appreciation. For example, the $400,000 mortgage on my house in 1986 had payments of $4,220 per month. That same $4,220 today buys a $670,000 mortgage at 6.5 percent. When I started in the business in 1978, interest rates were 9.75 percent for fixed rates. They climbed to 13 percent in late 1979. No one ever envisioned the low rates we have today.

The negative media hammer the fact that the volume of sales is down. In most markets, if you compare the volume of sales today with what it was five or 10 years ago, the sales numbers look quite good. In fact, with the Federal Reserve cutting its target interest rate to 4.5 percent, we can look for an improvement in sales, provided we get the word out to our clients.

Negative Media: "Real Estate Sales Slip 20 Percent From 2006."
Positive Realtor Response: "2007 Real Estate Sales: Fourth Best Performance Since 1997."

We can win the war against the negative media by sharing how much prices have increased over the last 10 years and that the demand for FHA loans is up substantially. Let everyone you talk with know that places all over the country are reporting declines in listing inventories. In fact, some are still reporting multiple offers.

We need to ban together to get the positive news out there. Write letters to the editor, post the news on your blog, use it in your marketing materials, and talk about the good news to everyone you know. Realtors are a positive force for good in this country -- let's harness our energies to jointly respond to the attacks on our industry and to renew the hope and optimism of the homeowners in this country.

Comments (9)

Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes
Exactly. We all have to be positive and it will help.
Nov 23, 2007 03:11 PM
Tony & Darcy Cannon
Aubrey and Associates Realty - Layton, UT
The C Team

Sako, great post, and thanks for the ideas.

Nov 23, 2007 03:15 PM
Andrew Trevino
ADT Real Estate - Wilkes Barre, PA
Wilkes-Barre Homes For Sale


It's important to know the positive facts about our own markets, so we can be the source of the good news. The unfortunate part of this equation is that bad news sells and there are plenty of under-performing Realtors who are buying into the bad media they're being fed. Thanks for the reminder to see the positive side of things. Now, if we can get the rest of the 999,999 real estate agents to do the same.

Nov 23, 2007 03:24 PM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

You may scream your lungs out that this is honey, it ain't gonna get any sweeter. I guess I start understanding why general public has less and less regard for REALTORS.

I would have been deeply ashamed if my customers read something like that.

How much further in the left field should we go to start seeing the obvious and stop denying certain things?

This is a slow market, and it has all the markings of it. Why do you need to try to present it as a hot market, which it is not?

Actually, we all know the answer. Green blurs the vision. And it blurs it beyond the decency.

Nov 23, 2007 03:29 PM
Sako Baghoyan
Keller Williams Realty - Redondo Beach, CA
Redondo Beach Homes


Don't take this post the wrong way, all I am saying is that we need to educate our clients about the market, the reports that are out there are national report and we all know that Real Estate is a local business. the media is putting out reports that are NOT accurate for all market centers. I do business in S. California the beach cities and our median home prices have gone up from the year before. I will like to thank you for your comment and your knowledge. FYI this article came from google search and it is out there for everyone to read I did not get from any paid site.

Thank you




Nov 23, 2007 04:05 PM
Brian Hoots
Real Living Speckman Realty, Inc. - Bourbonnais, IL

Sako, great reminder to be positve and educate our buyers that real estate has always been a great investment. 

Nov 23, 2007 04:36 PM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices


I do not have anything against you. I am just deeply frustrated. There was a post today, calling for a boycott, etc.

In our area 3-4 years ago agents were pushing people if taking upon themselves as many pre-construction deals on condos, as they could afford in down-payment only.

I had a client, who registered for one condo for over half a mil, then for another $660K, then he went and registered for 2 more units in another pre-construction condo development. He was so hyped, but I did not feel comfortable. I did not feel quite comfortable asking him how much money he could spend without going under, but I had to. So I asked him whether he would be OK having spent $2 Mil on these properties. He jumped at me. According to him, he did not need to have $2 Mil to do it, as I would have to sell his unit before or do the simultaneous closing. I told him that tis is great, however, one can't rely on flipping and they need to be able to sustain the property for at least 2 years (I weas wrong with this 2 years anyway). He was nuts. He was furious with me. Haven't I told him that the market was good, haven't I told him about the simultaneous closing, and so on and so forth.

He got rude and obnoxious, and finally I asked him why in his opinion I was not doing it myself. IT never occurred to him that if I could do miracles for him, I could do it for myself, and the only reason I did not do it, was because I could not have sustained the drought should it happen (and it did happen).

The guy cancelled two last reservations, and fired me, and never spoke to me again. But I know people who reserved 8 units and all in the same building (which is beyond imagination) because the agent told him that he would make $250K on a unit, and he wanted to hit the biggest jackpot. Of course, the closing is coming and he can't do anything. At 15% down for units averaging $600K, he stands to lose 3/4 of a million. Another lady has 2 units in the same building, and there is not way she can close.

That's why I can't take it when I see the calls to make them buy, buy, buy...

Sorry for the tone. I really wish you well.

P.S. Are you Armenian?

Nov 23, 2007 04:45 PM
Sako Baghoyan
Keller Williams Realty - Redondo Beach, CA
Redondo Beach Homes


 Thank you for the input, I do agree with you on that , there are agents making promises and predictions just for the sake of a sale. I on the other hand I am  honest with my client's and tell them as I see it, I have told client's not to buy a property because of the area , price and etc, I have also lost listings to agents saying they can more for there properties just to get them to sign . I love Real Estate....... I want all my clients to be happy to have me help them in the process.......Yes I am Armenian and have lived here for 27 years now.....Are you Russian?


Nov 23, 2007 06:16 PM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices


The problem that I often see is that we tend to be very short-sighted. Agents lost easy income of the crazy hot market, want it back and are angry that this is happening. And angry with everything that they perceive is threatening their well-being.

Hence these irresponsible expectations that in 2 - 3 moths or whatever it would be better. They refuse to accept the notion of cycles.

And yep, I am from Russia.

In US since 1991.

Good luck

Nov 24, 2007 02:52 AM