Provided By KW Blog
The financial challenges we’ve faced as an industry over the past four years have been nothing short of difficult. We’ve saved, skimped, sacrificed and cut back to the most necessary necessities. We’ve been to the battle lines and back and have shifted our real estate businesses in order to not just survive but to thrive, and it has paid off.
Looking at our financials at the Keller Williams Service & Support Center here in Austin, I am proud to say that we remain a financially solvent company. Not only is that statement an anomaly within the realm of real estate, it’s a significant accomplishment in any industry.
Which is why I got to thinking: how can we apply the same business-savvy saving strategies to our own lives?
If ‘leading with revenue’ works in our business lives, why can’t it also be just as effective in our personal ones? It’s time to kick credit card debt to the curb with some help from the tips and tricks below!
START THE CHANGE
If you’ve read Gary Keller’s book, SHIFT: How Top Real Estate Agents Tackle Tough Times, you know that the first tactic is dedicated to Mindset and Action. Tackling your debt is no different. In order to win the battle against the bulge you’ve got to set an end-goal. First, start by filling in the blank to the following sentence: I will be free of credit card debt in ___ days/months/years. Focus on this goal. Hang it on the refrigerator, in your bathroom – whatever it takes to remind yourself that a debt-free life is a good one that you’re prepared to achieve.
READY TO CUT BACK?
It’s time to take a good look at your current spending habits. Where are you spending the most money and where can you cut back? Are you spending on necessities, or are you trying to live up to a certain lifestyle? What often surprises most people is the amount of money dedicated to discretionary spending. Is your love for lattes putting a damper on your debit card? One too many trips to Nordstrom? Are you driving a car that takes up so much of your income that you are forced to use a credit card for daily living expenses?
If you’re really aiming to be debt-free, take a close look at your budget to figure out where you can cut back. Then set smaller goals to remove spending in each area. It doesn’t have to be much, but the more you cut back, the quicker you will reach your goal. The new credit card regulations require disclosure of the time required to pay off the balance when making just the minimum payment – it can be very eye-opening (and motivating to pay more)!
CONVERT TO CASH
While you are paying down your debt, make a commitment to yourself that you will not add to the balances unless absolutely necessary (and cute shoes on sale are not an absolute necessity!). Set a budget for your weekly spending, withdraw that much cash, and when it is gone, it is time to stop spending for the week. It is easy to lose track of how much you are spending when you are swiping a debit or credit card.
SNOWBALL
What does a snowball have to do with debt? Well for one thing, it might be how you got in a position where you have too much debt. But it’s also a great way to get out of it, says financial expert Dave Ramsey.
His method: Start by paying your smallest debt first. This can be an outstanding bill or a credit card from your favorite store. Pay it off as fast as you can, while maintaining minimum payments on your other cards of course. When that debt has been removed, shift your focus and the money freed up to the next smallest debt. The sense of accomplishment in paying off even a small portion keeps you motivated and focused on the end goal and reminds you that it is possible!
Note that if you have one credit card that is carrying a much higher interest rate than the others, you might want to focus on that one first if it is an achievable goal.
CASH IS KING
Look for cash savings anywhere and everywhere. (Seeing a trend here?) Get creative about your spending. Vacation close to home; search for coupons online; cut back on dining out and plan and prepare healthy meals at home; rent instead of going out to movies. Organize a clothing, home décor or toy swap – an outfit that has never felt right to you may be just the ticket for a friend. It may be tough at first, but get creative and have fun with it!
As real estate agents, you are also in the unique position where you can approve your own raise. What can you do to fuel your career forward, and earn more money along the way?
Here’s the bottom line.
No one is born chief financial officer of a company – and the same can be said for you as you work to build (or even rebuild) your financial well-being. It takes work, discipline and in some cases sacrifice. I commend you for taking on the challenge of being debt-free and wish you the best on your journey to having your dream life.
What strategies are you implementing to drive down debt?
Thursday, June 2, 2011
Tuesday, May 31, 2011
NAR releases 2011 Investment and Vacation Home Buyers Survey, and the numbers may surprise you!
Provided By KW Blog
Recently, I was reading through The National Association of REALTORS 2011 Investment and Vacation Home Buyers Survey and I got to thinking: With the opportunities that this market is affording us, how much of the buying population is going to be investors? Let’s start with some interesting stats: Total home sales for 2010 was 5.2 Million new and existing homes, keeping close pace with 2009 sales. The beginning of the year saw a large amount of first-time home buyers in the median and below median price range, followed by a slight lull of sales after the tax credit opportunity ended, ending the year fairly strong with continued low mortgage interest rates.
None of this is really news.
What IS interesting is that investor purchases were 17% of that amount, roughly 884,000 home sales, with an average sales price of $94,000, down from $105,000 in the previous year. This is actually a smaller percentage than in years past … in 2005, investors were buying about 25% of all residential properties sold. The decline has much to do with the tightening of the mortgage requirements, and of course was influenced by the decreasing home values.
Historically, the investor has been a relatively ignored piece of the market. Some agents have considered them too much work, because they perceive that investors only want “steals”; and want commissions to be discounted; and many other unreasonable demands. Other agents have stated that investors are very “numbers”, or “models” oriented, and require a great deal more time in analyzing properties, as opposed to more emotional purchase of a typical buyer. To the first issue, NAR reports that over 50% of the investors were simply seeking to diversify their investments and saw a great opportunity in the real estate market. In other words, 50% of investors didn’t really consider themselves investors per se, just individuals seeking safe harbor for a portion of their wealth. That means approximately half of those who purchased investment properties are unskilled investors who would benefit a great deal from professional representation; and the other half are those who may buy multiple properties, have business models and speak of “ROI, and Cap Rates, etc…” Either way, they all deserve quality representation from an educated, well-informed agent. With 52% of the investors in this survey indicating they were likely to very likely to buy another property in two years or less, the opportunity is clear.
This underserviced investor market is responsible for at least $83 billion in volume last year according to NAR, with most forecasters estimating that will increase this year. Their reasoning is that since the first-time home buyers won’t be out in full force, as they were in 2010, more investment homes will be available, coupled with the fact that many consider the down turn in home prices to be over, or at least close to the bottom. With average rents going up everywhere due to the influx of renters who can no longer purchase, cash flow is almost guaranteed in every city, every property, everywhere. In essence, it’s investors heaven! The question is, what are agents going to do about this opportunity? Here are a few ideas:
1. Get Educated! Read the Millionaire Real Estate Investor by Gary Keller, to better understand the investor mind.
2. Get certified! There are a number of certifications available for the investor agent, Certified Investor Agent Specialist (CIAS) and OwnAmerica Investor Certification Program (OICP) to name two.
3. Get connected! Join your local Real Estate Investor Association (REIA) and get into community with Investors and Investor servicing networks.
Even if investor activity holds the line at 17% of the more than 5 million residential sales expected this year, there are still more than 850,000 transactions out there, just waiting for representation! Get your unfair share of the potential $2.5 billion in commissions available in the real estate investor niche market – this could be the Market of the Moment!
Recently, I was reading through The National Association of REALTORS 2011 Investment and Vacation Home Buyers Survey and I got to thinking: With the opportunities that this market is affording us, how much of the buying population is going to be investors? Let’s start with some interesting stats: Total home sales for 2010 was 5.2 Million new and existing homes, keeping close pace with 2009 sales. The beginning of the year saw a large amount of first-time home buyers in the median and below median price range, followed by a slight lull of sales after the tax credit opportunity ended, ending the year fairly strong with continued low mortgage interest rates.
None of this is really news.
What IS interesting is that investor purchases were 17% of that amount, roughly 884,000 home sales, with an average sales price of $94,000, down from $105,000 in the previous year. This is actually a smaller percentage than in years past … in 2005, investors were buying about 25% of all residential properties sold. The decline has much to do with the tightening of the mortgage requirements, and of course was influenced by the decreasing home values.
Historically, the investor has been a relatively ignored piece of the market. Some agents have considered them too much work, because they perceive that investors only want “steals”; and want commissions to be discounted; and many other unreasonable demands. Other agents have stated that investors are very “numbers”, or “models” oriented, and require a great deal more time in analyzing properties, as opposed to more emotional purchase of a typical buyer. To the first issue, NAR reports that over 50% of the investors were simply seeking to diversify their investments and saw a great opportunity in the real estate market. In other words, 50% of investors didn’t really consider themselves investors per se, just individuals seeking safe harbor for a portion of their wealth. That means approximately half of those who purchased investment properties are unskilled investors who would benefit a great deal from professional representation; and the other half are those who may buy multiple properties, have business models and speak of “ROI, and Cap Rates, etc…” Either way, they all deserve quality representation from an educated, well-informed agent. With 52% of the investors in this survey indicating they were likely to very likely to buy another property in two years or less, the opportunity is clear.
This underserviced investor market is responsible for at least $83 billion in volume last year according to NAR, with most forecasters estimating that will increase this year. Their reasoning is that since the first-time home buyers won’t be out in full force, as they were in 2010, more investment homes will be available, coupled with the fact that many consider the down turn in home prices to be over, or at least close to the bottom. With average rents going up everywhere due to the influx of renters who can no longer purchase, cash flow is almost guaranteed in every city, every property, everywhere. In essence, it’s investors heaven! The question is, what are agents going to do about this opportunity? Here are a few ideas:
1. Get Educated! Read the Millionaire Real Estate Investor by Gary Keller, to better understand the investor mind.
2. Get certified! There are a number of certifications available for the investor agent, Certified Investor Agent Specialist (CIAS) and OwnAmerica Investor Certification Program (OICP) to name two.
3. Get connected! Join your local Real Estate Investor Association (REIA) and get into community with Investors and Investor servicing networks.
Even if investor activity holds the line at 17% of the more than 5 million residential sales expected this year, there are still more than 850,000 transactions out there, just waiting for representation! Get your unfair share of the potential $2.5 billion in commissions available in the real estate investor niche market – this could be the Market of the Moment!
Thursday, May 19, 2011
Tuesday, May 17, 2011
Thursday, May 12, 2011
Do Your Clients Get it?
Provided By KW Blog
Home affordability in the United States is nothing short of amazing. Even though current price trends for the United States and Canada are considerably different, the same principle applies in both cases: clients need perspective and they need to look beneath surface statistics before making informed decisions
The first chart below dramatically illustrates the impact of lower interest rates on housing costs, and the relative affordability of housing in the United States. The cost of a loaf of bread and a gallon of gas has more than tripled since 1989, and car prices have nearly doubled. While the median price of a new home has increased by 70 percent, mortgage interest rates, which stood at 10 percent back in 1989, are less than half of what they were back then. The impact of rock-bottom interest rates is that the monthly mortgage payment on a median priced home in the United States has increased by a mere $4 since 1989.
Unless a buyer is paying cash, the monthly payment tends to be a far more relevant number than the home’s actual purchase price. So for buyers who are waiting for home prices to hit the floor, before buying it’s important to point out that the possibility of a slight drop in the price of a home will have very little impact on the monthly payment, while even a slight rise in interest rates (a far more likely scenario) will have a significant impact.
Timing the market to a T is never possible and in the current market, staying on the sidelines is more likely to result in a missed opportunity than a small savings.
Even so, buyer reluctance in the current market can outweigh compelling facts. U.S. buyers are skittish about the housing market, and the fact is market skittishness is actually a good reason to buy now. General uncertainty about the housing market and a reluctance to take action only contributes to the number of deals and negotiating power available to astute buyers. U.S. buyers who are waiting for the real estate market to “recover” are in fact waiting for a reduction in inventory, fewer foreclosed properties on banks’ books, rising home prices and sellers who don’t need to be as motivated.
That scenario will be welcome news for sellers, banks and the U.S. economy as a whole, but not for buyers. Now is the time for U.S. buyers to act and for you to offer the perspective that helps them to understand why.
In Canada, on the other hand, average home prices are trending upwards, but as is always the case, those of us who are willing to dig beneath surface statistics are far better positioned to help our clients to understand the big picture and to take action. Before we look at housing affordability in Canada, though, I’d urge all Canadian associates to make sure that your clients also understand the opportunities that rock-bottom U.S. interest rates and real estate prices – particularly in the sunshine states – represent to them as well. In doing so, you stand to power a new stream of referral income.
As the chart below indicates, the average home price in Canada has increased by 160 percent since 1990, while increasing 9.5 percent since last year. For some buyers, this trend might contribute to a sense of urgency to buy before housing prices shoot up any further.
Others could take one look at current prices and be convinced that they have been priced out of the market. This is where your perspective proves critical. Remind your buyers that all real estate is local. The recent run-up in average real estate prices reflects above-normal sales activity in the priciest markets, so make sure that your clients are looking at local price trends within their specific price range.
At the same time, remind your clients that the monthly mortgage payment, not the actual purchase price, tends to be the relevant number. Whereas the average home price in Canada has increased by 160 percent since 1990, mortgage interest rates have decreased by 60 percent. As a result, over the past decade, the average mortgage payment has increased by less than 25 percent – a statistic that is likely to shift the perspectives of many Canadians on the feasibility buying a home in the current market.
ONWARD …
Home affordability in the United States is nothing short of amazing. Even though current price trends for the United States and Canada are considerably different, the same principle applies in both cases: clients need perspective and they need to look beneath surface statistics before making informed decisions
The first chart below dramatically illustrates the impact of lower interest rates on housing costs, and the relative affordability of housing in the United States. The cost of a loaf of bread and a gallon of gas has more than tripled since 1989, and car prices have nearly doubled. While the median price of a new home has increased by 70 percent, mortgage interest rates, which stood at 10 percent back in 1989, are less than half of what they were back then. The impact of rock-bottom interest rates is that the monthly mortgage payment on a median priced home in the United States has increased by a mere $4 since 1989.
Unless a buyer is paying cash, the monthly payment tends to be a far more relevant number than the home’s actual purchase price. So for buyers who are waiting for home prices to hit the floor, before buying it’s important to point out that the possibility of a slight drop in the price of a home will have very little impact on the monthly payment, while even a slight rise in interest rates (a far more likely scenario) will have a significant impact.
Timing the market to a T is never possible and in the current market, staying on the sidelines is more likely to result in a missed opportunity than a small savings.
Even so, buyer reluctance in the current market can outweigh compelling facts. U.S. buyers are skittish about the housing market, and the fact is market skittishness is actually a good reason to buy now. General uncertainty about the housing market and a reluctance to take action only contributes to the number of deals and negotiating power available to astute buyers. U.S. buyers who are waiting for the real estate market to “recover” are in fact waiting for a reduction in inventory, fewer foreclosed properties on banks’ books, rising home prices and sellers who don’t need to be as motivated.
That scenario will be welcome news for sellers, banks and the U.S. economy as a whole, but not for buyers. Now is the time for U.S. buyers to act and for you to offer the perspective that helps them to understand why.
In Canada, on the other hand, average home prices are trending upwards, but as is always the case, those of us who are willing to dig beneath surface statistics are far better positioned to help our clients to understand the big picture and to take action. Before we look at housing affordability in Canada, though, I’d urge all Canadian associates to make sure that your clients also understand the opportunities that rock-bottom U.S. interest rates and real estate prices – particularly in the sunshine states – represent to them as well. In doing so, you stand to power a new stream of referral income.
As the chart below indicates, the average home price in Canada has increased by 160 percent since 1990, while increasing 9.5 percent since last year. For some buyers, this trend might contribute to a sense of urgency to buy before housing prices shoot up any further.
Others could take one look at current prices and be convinced that they have been priced out of the market. This is where your perspective proves critical. Remind your buyers that all real estate is local. The recent run-up in average real estate prices reflects above-normal sales activity in the priciest markets, so make sure that your clients are looking at local price trends within their specific price range.
At the same time, remind your clients that the monthly mortgage payment, not the actual purchase price, tends to be the relevant number. Whereas the average home price in Canada has increased by 160 percent since 1990, mortgage interest rates have decreased by 60 percent. As a result, over the past decade, the average mortgage payment has increased by less than 25 percent – a statistic that is likely to shift the perspectives of many Canadians on the feasibility buying a home in the current market.
ONWARD …
Tuesday, May 10, 2011
Short Sales: Do you have what it Takes?
Provided By KW Blog
How many of us know someone who has foreclosed on their home, or is at least close to being in foreclosure? If there were 100 of us sitting in a room, 40 or more of you would have raised your hand.
As most Americans are aware, more than 40 percent of all residential real estate transactions are either foreclosed homes, or are on the road to foreclosure. Of those “on the road,” nearly one-third become short sales in which a homeowner and an agent negotiate a settlement with the homeowner’s lender to sell the property – and settle the homeowner’s debt – for less than the amount owned.
While some indicators point to positive momentum, the fact is best estimates from data firms such as CoreLogic and RealtyTrac report there are conservatively 4.5 million homeowners who are in default on mortgage payments in the United States right now.
That’s almost as many as were sold in all of 2010!
It’s time to get on board and help.
Any agent who is in the short sale trenches will agree that short sales are hard work that call for drive, dedication, persistence, patience and resourcefulness, attention to detail, organization and knowledge of local property values.
Ultimately, success in the short sale sector comes down to mindset – along with a lot of networking. Are you prepared to help? Here are three questions to ask yourself before you get on board.
Do you have the right mindset?
The short sale business includes plenty of fear and worry, conflict, resistance, intimidation, lack of focus and poor communication. Your challenge is to drive through these to success.
Fred Weaver, a short sale expert out of Tempe, Arizona puts it this way:
“Begin short sales with the end in mind. The homeowner is normally in trouble. The buyer is impatient and so is their agent. The lenders are demanding. Your task is to get the homeowner to the end – a settlement and no worse liability than in foreclosure.”
Before you begin working in short sales, make sure your mind is aptly prepared to take action amidst many challenges.
Are you aware of the expectations?
There are many players in the short sale transaction. Each one of those individuals has a motivation and even incentive to get the job done. Your ability to tap into those expectations can determine how and when the short sale transaction is resolved.
Are you committed to learning?
Best practices say you MUST be a student of the business every single day. Along with regular lead generation and an understanding of negotiation scripts and dialogues, it’s good to know local board and MLS rules, understand state recourse law, use experienced title and escrow people, and build relationships with BPO agents, appraisers, as well as lender/servicer relationships.
Keller Williams Realty has a powerful network of short sale agents who are giving of their time, ideas, and specific suggestions for how to navigate the rough terrain of short sales. They blog, teach, and advise other agents all the time. For many of them, reducing foreclosures in their markets is a crusade – it’s a serious business that enables them to help people in personal and financial distress every day.
Says top short sale agent Brett Tanner of Phoenix, Ariz., “There’s plenty of opportunity for anyone who really wants to do this. This market will be with us for years to come.”
How many of us know someone who has foreclosed on their home, or is at least close to being in foreclosure? If there were 100 of us sitting in a room, 40 or more of you would have raised your hand.
As most Americans are aware, more than 40 percent of all residential real estate transactions are either foreclosed homes, or are on the road to foreclosure. Of those “on the road,” nearly one-third become short sales in which a homeowner and an agent negotiate a settlement with the homeowner’s lender to sell the property – and settle the homeowner’s debt – for less than the amount owned.
While some indicators point to positive momentum, the fact is best estimates from data firms such as CoreLogic and RealtyTrac report there are conservatively 4.5 million homeowners who are in default on mortgage payments in the United States right now.
That’s almost as many as were sold in all of 2010!
It’s time to get on board and help.
Any agent who is in the short sale trenches will agree that short sales are hard work that call for drive, dedication, persistence, patience and resourcefulness, attention to detail, organization and knowledge of local property values.
Ultimately, success in the short sale sector comes down to mindset – along with a lot of networking. Are you prepared to help? Here are three questions to ask yourself before you get on board.
Do you have the right mindset?
The short sale business includes plenty of fear and worry, conflict, resistance, intimidation, lack of focus and poor communication. Your challenge is to drive through these to success.
Fred Weaver, a short sale expert out of Tempe, Arizona puts it this way:
“Begin short sales with the end in mind. The homeowner is normally in trouble. The buyer is impatient and so is their agent. The lenders are demanding. Your task is to get the homeowner to the end – a settlement and no worse liability than in foreclosure.”
Before you begin working in short sales, make sure your mind is aptly prepared to take action amidst many challenges.
Are you aware of the expectations?
There are many players in the short sale transaction. Each one of those individuals has a motivation and even incentive to get the job done. Your ability to tap into those expectations can determine how and when the short sale transaction is resolved.
Are you committed to learning?
Best practices say you MUST be a student of the business every single day. Along with regular lead generation and an understanding of negotiation scripts and dialogues, it’s good to know local board and MLS rules, understand state recourse law, use experienced title and escrow people, and build relationships with BPO agents, appraisers, as well as lender/servicer relationships.
Keller Williams Realty has a powerful network of short sale agents who are giving of their time, ideas, and specific suggestions for how to navigate the rough terrain of short sales. They blog, teach, and advise other agents all the time. For many of them, reducing foreclosures in their markets is a crusade – it’s a serious business that enables them to help people in personal and financial distress every day.
Says top short sale agent Brett Tanner of Phoenix, Ariz., “There’s plenty of opportunity for anyone who really wants to do this. This market will be with us for years to come.”
Thursday, May 5, 2011
Lessons in eLeadership
Provided By KW Blog
What an enormous leap forward into the future you have challenged us with, and what an extraordinary opportunity it’s been for all of us. With any new challenge, new leaders emerge, and that has certainly been the case during this transition phase. To those of you who have dug in, downloaded eEdge 101, attended classes, taught classes or even stepped up as your market center’s eEdge ambassadors, thank you! We appreciate your leadership, your energy and your example more than you can imagine.
A technological undertaking of this magnitude requires patience – as well as perspective. As he’s done so many times before, Shaun Rawls has risen to the occasion with his characteristic clarity and perspective. Here’s an excerpt of what Shaun wrote a few weeks to members of the Rawls Group in Atlanta, Ga.:
“Being a pioneer is never easy. It’s hard because it’s never been done before and there are plenty of people who like pointing out the cracks in a foundation whose cement hasn’t even had time to dry. Being a pioneer is about cutting down trees to create roads upon which people will one day drive 60 miles per hour, in the comfort of automobiles with air conditioning. The launch of eEdge and the promise of what eEdge is certain to become is a gift of pioneering proportions. And best of all, it’s a gift to me and you, the people of Keller Williams Realty.
As with any change, there are those who push back on the change, those who remain neutral and there are those who embrace the vision of the benefits of change and seek first to find them and capitalize on them.
For fifty cents a day, you and I will have a complete set of technology tools never before seen in the real estate industry – $15 per month for technology that no one else in the industry has. When completely rolled out, the technology will likely save you as much money in gas as you spend on this product.
I’m really proud of this company for having the courage to tackle this initiative for our agents. And I’m really proud of all of you who have looked for, found and embraced the benefits of something incredible and new for your business.”
Thank you Shaun! We couldn’t agree more!
Yours in embracing the benefits of something incredible and new for your business!
What an enormous leap forward into the future you have challenged us with, and what an extraordinary opportunity it’s been for all of us. With any new challenge, new leaders emerge, and that has certainly been the case during this transition phase. To those of you who have dug in, downloaded eEdge 101, attended classes, taught classes or even stepped up as your market center’s eEdge ambassadors, thank you! We appreciate your leadership, your energy and your example more than you can imagine.
A technological undertaking of this magnitude requires patience – as well as perspective. As he’s done so many times before, Shaun Rawls has risen to the occasion with his characteristic clarity and perspective. Here’s an excerpt of what Shaun wrote a few weeks to members of the Rawls Group in Atlanta, Ga.:
“Being a pioneer is never easy. It’s hard because it’s never been done before and there are plenty of people who like pointing out the cracks in a foundation whose cement hasn’t even had time to dry. Being a pioneer is about cutting down trees to create roads upon which people will one day drive 60 miles per hour, in the comfort of automobiles with air conditioning. The launch of eEdge and the promise of what eEdge is certain to become is a gift of pioneering proportions. And best of all, it’s a gift to me and you, the people of Keller Williams Realty.
As with any change, there are those who push back on the change, those who remain neutral and there are those who embrace the vision of the benefits of change and seek first to find them and capitalize on them.
For fifty cents a day, you and I will have a complete set of technology tools never before seen in the real estate industry – $15 per month for technology that no one else in the industry has. When completely rolled out, the technology will likely save you as much money in gas as you spend on this product.
I’m really proud of this company for having the courage to tackle this initiative for our agents. And I’m really proud of all of you who have looked for, found and embraced the benefits of something incredible and new for your business.”
Thank you Shaun! We couldn’t agree more!
Yours in embracing the benefits of something incredible and new for your business!
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