October 2010 Real Estate Market Update

October 2010 Real Estate Market Update


October 2010


It is a bit to early to announce a definitive trend but historically the combined October and September sales have been a reasonable indicator of the up coming year (in this case a post tax credit market). Although less than last year, unit sales still showed a reasonable pace (close to 2006 levels), with sales values holding steady since the spring, down about 40% from 05' peak values. It is still a Buyers Market at over 5 months supply, however the number of homes available for sale continues to shrink, helping move us towards stability.

Nationally, both NAR and the Mortgage Bankers project an increase in the number of homes sold in 2011 over 2010 based on continued low interest rates, affordable home prices as well as an improving economy. They also say values will continue to settle downward and bottom out next year. With that said, remember that real estate is local, not national. The various markets across the country will recover at different rates. In general, the Midwest, including Michigan, seems to be faring better than the South and West, however we are more cautious about growth in the number of sales next year, considering we had a 10% boost this year from the tax credits. Our data indicates most markets have shown a stable and even slightly rising value trend however, even in markets that continue to settle downward, it will not be significant enough for Buyers to delay purchasing, since any rise in interest rates will off set any savings from a potential price decline.

Also on the positive side, the latest Comerica economic activity report continues to move in the right direction since bottoming out in January of last year. Economic activity and hiring is slow, but it is still moving in the right direction.

One indicator that the market still has some work to do is our percentage of lease transactions, currently still running at about 20%. A good recovery indicator will be when the percentage of leases falls to under 10% which will go hand in hand with available home inventories falling to a three month or less supply.

With generally better news about the direction of the market in the past nine months, should Sellers be expecting the same in terms of rising values and offers? We are not quite there yet, however there is a growing pent up demand from buyers. In many cases aggressively price homes in good, updated condition are getting multiple offers and selling quickly. These homes represent less than 30% of the market and for the most part are priced below their competition. The rest are typically priced or "conditioned" out of the current Buyer demand.

On a bragging point, Hitwise once again ranked our web site as the most viewed broker site in the state and our new First to Know voice and text programs generated 1,150 client registrations in the past two months.


We are using a new format for the Market Summary this month. With the tax credits influence, comparing to last year can be misleading. A better current trend comparison is to the most recent months using a seasonal index so we can compare “apples to apples” months. These charts follow the current market trend over the past 90 days ( up, down or neutral).


Data Source: MIRealSource, Realcomp, Ann Arbor MLS, TAAR
Months Supply Inventory represents the rate (months) to sell the current listing inventory
*Includes Eastpointe and Harper Woods ** Includes Grand Traverse, Kalkaska, Antrim, Leelanau and Benzie Counties,

October 2010 Real Estate Market Update

October 2010 Real Estate Market Update


October 2010


Dear Team,

It is a bit to early to announce a definitive trend but historically the combined October and September sales have been a reasonable indicator of the up coming year (in this case a post tax credit market). Although less than last year, unit sales still showed a reasonable pace (close to 2006 levels), with sales values holding steady since the spring, down about 40% from 05' peak values. It is still a Buyers Market at over 5 months supply, however the number of homes available for sale continues to shrink, helping move us towards stability.

Nationally, both NAR and the Mortgage Bankers project an increase in the number of homes sold in 2011 over 2010 based on continued low interest rates, affordable home prices as well as an improving economy. They also say values will continue to settle downward and bottom out next year. With that said, remember that real estate is local, not national. The various markets across the country will recover at different rates. In general, the Midwest, including Michigan, seems to be faring better than the South and West, however Stu and I are more cautious about growth in the number of sales next year, considering we had a 10% boost this year from the tax credits. Our data indicates most markets have shown a stable and even slightly rising value trend however, even in markets that continue to settle downward, it will not be significant enough for Buyers to delay purchasing, since any rise in interest rates will off set any savings from a potential price decline.

Also on the positive side, the latest Comerica economic activity report continues to move in the right direction since bottoming out in January of last year. Economic activity and hiring is slow, but it is still moving in the right direction.

One indicator that the market still has some work to do is our percentage of lease transactions, currently still running at about 20%. A good recovery indicator will be when the percentage of leases falls to under 10% which will go hand in hand with available home inventories falling to a three month or less supply.

With generally better news about the direction of the market in the past nine months, should Sellers be expecting the same in terms of rising values and offers? We are not quite there yet, however there is a growing pent up demand from buyers. In many cases aggressively price homes in good, updated condition are getting multiple offers and selling quickly. These homes represent less than 30% of the market and for the most part are priced below their competition. The rest are typically priced or "conditioned" out of the current Buyer demand.

On a bragging point, Hitwise once again ranked our web site as the most viewed broker site in the state and our new First to Know voice and text programs generated 1,150 client registrations in the past two months.

As always, thank you for your hard work and support.

Dan

We are using a new format for the Market Summary this month. With the tax credits influence, comparing to last year can be misleading. A better current trend comparison is to the most recent months using a seasonal index so we can compare “apples to apples” months. These charts follow the current market trend over the past 90 days ( up, down or neutral).


Data Source: MIRealSource, Realcomp, Ann Arbor MLS, TAAR
Months Supply Inventory represents the rate (months) to sell the current listing inventory
*Includes Eastpointe and Harper Woods ** Includes Grand Traverse, Kalkaska, Antrim, Leelanau and Benzie Counties,

Social media a tool for real estate pros

Social media a tool for real estate pros
Nick Nolf, head of Nolf Group, who uses social media as a business tool, is flanked by listing agent Tiffany Sims, left, and buyer’s agent, Anne Caparaotta.

By Amanda Finnegan (contact), In Business reporter

Fri, Nov 12, 2010 (3 a.m.)

Sun Archives
Gaming companies turn to technology to better cater to customers (5-26-10)
Vegas tourism companies embrace social media strategies (11-11-09)
Sun Coverage
More stories about business and the economy
Real estate professional and Nolf Group head Nick Nolf encourages his agents to spend one hour a day on social networking sites such as Facebook, a behavior most company leaders would frown upon.

They’re asked to post photos from the weekend’s events, update their statuses and put a face to the small Las Vegas real estate company. It’s not just a hobby, Nolf said, but a viable business opportunity to retain current clients, gain new ones and save face with old ones.

“We’re doing it so that five, 10 years down the road, our clients are still fans, and when they know someone looking for real estate in Las Vegas, they’ll send them our way,” Nolf said.

Social media is the latest tool in real estate agents’ tool belt, one that was virtually unheard of until only a few years ago. In order to stand out in troubled and oversaturated markets, real estate agents and brokers in growing numbers are fixing up their Facebook pages, tweeting marketing news tidbits, launching blogs and posting property tours on YouTube.

An estimated 84 percent of agents and brokers are using social media for business purposes, according to the National Association of Realtors’ annual technology survey released in October. That number compares with 67 percent of agents and brokers who said they were not using social media in 2008.

Real estate professionals are seeing the need to make social media an integral part of their strategies as more homebuyers and sellers are turning to the Internet as the first stop in their process. The National Association of Realtors estimates 90 percent of homebuyers start their search online before contacting an agent, a dramatic increase from 2 percent in 1995.

Nolf started his venture into social media about five years ago with the original social network, MySpace. His company eventually moved away from MySpace and onto Facebook and has gained more than 350 fans. The Nolf Group page includes links to staff members’ personal pages, photos of company events and integrates the company’s blog, where weekly posts range from community events to the latest market statistics.

In the social media discovery process, real estate companies have realized that there is a fine line between spamming fans and followers with information and informing potential buyers. Social media is, after all, about being social.

“Our page kind of has a more personal, warm fuzzy feeling. When you’re constantly saying, ‘Here are our listings,’ people want to turn it off. We tried it and it wasn’t beneficial for us,” Nolf said.

Nolf knows buyers and sellers aren’t coming to Facebook and Twitter to find property listings, but rather visiting company and personal pages to learn more about their agents. It’s also another place to send referrals, which Nolf said is a big chunk of their business.

“It’s the equivalent of going to a very large cocktail party in the middle of the day. It’s an opportunity to visit with people and build rapport, and through that, build relationships. I think it’s absolutely essential in our industry right now,” said Rick Shelton, president of the Greater Las Vegas Association of Realtors.

Social networks have become so ingrained in the Las Vegas real estate culture that the GLVAR hosts classes and seminars on social media etiquette half a dozen times a month. Social media novices can find a field guide to social networking for Realtors on the National Association of Realtors.

Much like Las Vegas, real estate agents in Miami’s equally distressed market are using social media to stand out from the crowd.

South Florida-based agent Kevin Tomlinson, a vice president at one of the largest real estate companies in Miami, ONE Sotheby’s International Realty, said he feels one social media platform performs better than the rest.

“The best use of social media is blogging by far. It’s perhaps the oldest, but the most effective. Real estate agents that are most successful at social media are blogging and then using Twitter and Facebook to disseminate it. You can’t produce really great content in 140 characters,” Tomlinson said.

Tomlinson, whose South Beach Condo Blog receives more than 1,000 views per day during Miami’s peak season, said he prefers blogging because of its longer shelf life through Google. His blog comes up as one of the top searches in Google when searching “South Beach real estate.”

In Las Vegas, real estate professionals are all approaching social media differently and learning as they go.

Ken Lowman, who owns Luxury homes of Las Vegas, posts listings through his Facebook page, where his company’s presence is smaller than Nolf’s with 129 fans. His presence through YouTube is much larger, where Lowman does property tours for almost all of his listings. Lowman’s massive, multimillion dollar luxury listings lend themselves to that type of media, where another agent’s smaller condos might not.

The Prudential Americana Group, the largest real estate brokerage company in Las Vegas, has a blog integrated into its website that agents post to almost daily. CEO and owner Mark Stark began posting his weekly conference call on the company’s YouTube channel, which has more than 3,000 views.

“Social media gets your hands out there. I’ll get comments back on a blog I’ve written from people I’ve never met before, so that opens me up to different areas. But again, that doesn’t mean that person is listing their house that day,” Stark said.

Stark echoed other real estate professionals’ sentiments about overselling through social media, saying “if you’re selling all the time on these different sites, you’re going to get slammed pretty hard.”

Shelton said he hopes agents aren’t using social media in that way. That’s part of the behavior the GLVAR is trying to combat in its etiquette courses.

“It’s not about doing business online,” Shelton said. “It’s about building relationships online.

4 Ways to Get More High-Paying Clients with Your Blog

4 Ways to Get More High-Paying Clients with Your BlogBy Traci Feit Love and Rudy Nelson

RISMEDIA, November 4, 2010—Do you have any idea how many--if any!--new high-paying clients you get for every hour you spend blogging? What’s that? You have no idea? We need to talk. Building a client-based business isn’t easy. But if you’re spending hours every week on an activity that’s not generating qualified leads, you’re making it harder than it has to be. You’re keeping yourself from making money by wasting the most valuable resource you have: your time.

Wouldn’t you rather spend your time as efficiently as possible, so you can have that “life” you thought you were going to have when you went into business for yourself?

Of course you would. Here’s how.

Strategy #1: Solve one problem per post
High-paying clients tend to be busy. They’re willing to pay more to get things done because (1) they don’t have time to do everything themselves; and/or (2) their time is worth a lot to them.

Which means that they aren’t just browsing around the Internet, looking for interesting blog posts to peruse. If they’ve made it to your blog, they’re probably looking for something specific.

Give them what they’re looking for, and make it easy for them to find.

If you solve one — and only one — problem per post, your readers will be able to do a quick search, find the relevant post, and find the answer they needed in the first place. You want to be the person they turn to when they need something, so when they need something bigger than a blog post, your name is the first to come to mind.

When your prospects think of you, you want words like these to pop into their minds:

• Quick
• Smart
• Helpful
• Knowledgeable
• To the point

Most of all, you want your prospects to see how highly you value their time. Treat their time like the precious resource they believe it to be, and you’ll become a precious resource to them.

Strategy #2: Speak your clients’ language
Your ideal clients don’t know as much as you do about your area of expertise. That’s why they need you.

If you’re talking about their needs in technical terms, instead of in the terms your clients actually use, you’re missing an opportunity to connect with the people who need you.

Say your ideal clients are local businesses who want to use the Internet to expand their client base. How do they describe their needs?

• “I need to learn how to install WordPress.”
• “I need to get a web designer, an SEO expert, and a social media consultant.”
• “I need to figure out this whole Internet thing.”

It could be any of these, of course. The trick is to figure out how your ideal clients actually speak, so you can relate to them on their terms.

Strategy #3: Tell your readers what to do next (and make it easy)
Your ideal client shows up at your blog. She reads your post, loves your work, just generally thinks you’re awesome.

Now what?

Are you telling your reader what to do next, or are you just letting her wander around your blog, looking at all the things she might do:

1. Go to your “Contact” page, fill out the form, and wait for you to call her back.
2. Sign up for your e-mail list.
3. Go to your “Services” page, find the relevant service, and pay for it using a Paypal button you conveniently placed at the bottom.
4. Call the phone number on your “Contact” page.
5. Set up a free consultation.
6. Download a free resource.
7. Check out your “links you love” page.
8. Read other posts on your blog.
9. Leave a comment on your blog.
10. Subscribe to your RSS feed.
11. Sign up for your free webinar.
12. Etc.

How much time do you think your prospect will spend trying to figure this out?

Probably about as much time as you spent reading that list (not much).

Instead of letting them stumble around, become your prospects’ guide. At the end of every post, tell your reader exactly what to do next. Make it a simple, low-risk task that requires next to no thought. For example:

Click here and enter your e-mail to learn more about how [your great service] can help you with [their pressing problem].

Then follow up with some useful information about your services and an invitation to talk by phone for a few minutes. Keep it simple.

Strategy #4: Stop writing about yourself (or stop blogging)
Your business blog shouldn’t be about you. It should be about your clients.

That doesn’t mean you can never write about yourself — only that you should write about yourself in a way that’s relevant to your prospects.

Telling a personal story that helps potential clients understand your commitment to quality? Good.

Telling a personal story that helps potential clients understand how big a crush you have on the hot new boy at Starbucks but your roommate thinks he’s really not that cute but your mom wants to know whether or not he’s Armenian or just looks Armenian but how can you ask that without sounding like a total weirdo and by the way you’re thinking of switching to decaf?

Not so good.

Sharing some details of your personal life can help potential clients know, like and trust you. And that can be useful.

But oversharing is not interesting to your clients. (It’s not interesting to your friends either, but that’s a post for another blog.)

The thing that interests your prospective clients is how you can help them, and what you would be like to work with. Give them what they want.

If you can’t give potential clients what they want, stop blogging.

Yes, this is a radical solution to propose on a website called Copyblogger. But the truth is, if you’re spending several hours every week on a blog that doesn’t interest your potential clients, you’re not marketing. You’re either wasting your time, or writing what should be a personal blog.

And one more thing …

If you’re spending a lot of time wracking your brain trying to figure out what to write about, you should probably be blogging less and talking with your prospects more.

Seriously. Just talk to them.

Offer a free consultation, spend some time helping them with their current issue, and then ask a few questions. See what comes up.

Talking (and listening) to people in your target market is the best way to generate ideas for your blog, because it’s the best way to find out your prospects’ problems, concerns, and the language they use to talk about those things.

Wondering how your blog stacks up?

If you’d like your blog to generate more leads for your business (or higher quality leads), leave a comment below with your URL and whatever questions you’d like us to answer.

Traci Feit Love and Rudy Nelson are the co-authors of “The Top 7 Reasons High-Paying Clients Aren’t Choosing You (and What to Do About It),” a 50-page downloadable book you can currently get for free at The 180 Journey.

The Future of Your Business is in the Palm of Your Hand

The Future of Your Business is in the Palm of Your Hand By Ford Saeks

RISMEDIA, November 4, 2010--If someone had told Alexander Graham Bell that one day his invention would evolve into a device that could turn your lights on and off, he would have taken your temperature with a mercury thermometer, which incidentally, in 1876, hadn't changed much in over 100 years.

Remember when cell phones first emerged? Chances are, you were just as cynical as Mr. Bell. You probably made that first call with a furrowed brow, skeptical to the possibility it promised. You were certain that your call wouldn't connect, or at the very least your voice would be overridden by static. Like the rest of us, your bulky cordless phone had conditioned you to only walk within a certain "range" to avoid disconnect. Then you made that first call… from an oversized bag-type cell phone and shazam… how cool was it to have the umbilical cord of your landline cut and the freedom to connect anywhere in cell phone range?

What started as a must-have device that didn't tie you down has now morphed into a texting, tweeting, multi-tasking productivity and entertainment gadget that offers a wide range of possibilities for you and your business.

The lightning-speed advancement of the Smartphone has left many companies scrambling to keep up with the technology and new opportunities. According to ComScore, there are 45 million Smartphones now active in the U.S. alone.

Like social media, they are the new wave of communication and the only place they are going is into the hands of more and more consumers.

So, how can you capitalize on the growing popularity of this new technology?

Here are four things you can start doing today related to Smartphone technology to increase brand awareness, build relationships and grow your business:

1. Text Message Advertising
2. Create a Smartphone App
3. Make your website Smartphone compatible
4. Engage mobile customers through social networks

Text Message Advertising
More people now use their mobile phones for texting, rather than making a phone call. Plus, most users have it attached to their hip; figuratively speaking. Imagine the impact of advertising to your target market via SMS (Short Message Service) text message; you have the opportunity to get their attention… anytime, anywhere. Smart marketers get creative with these campaigns and often include a chance for the recipient to win something by responding to the text. Other ideas include mobile coupons, event invitations, mobile alerts, and special promotions.

SMS text marketing works for virtually any industry, is relatively inexpensive, and allows businesses to create highly targeted campaigns. The first step in launching a text-messaging campaign is to find a company that provides subscriber lists and can distribute your ads. Search your favorite search engine for "mobile marketing", "SMS Text Marketing" or "SMS Advertising" and you'll get plenty of options.

Create a Smartphone App
Like most things, Smartphone apps have been created to solve a problem, increase productivity, offer an intrinsic benefit, or for pure entertainment. Apple's IPhone store alone has more than 150,000 apps available for download and users have downloaded more than 3 billion apps. The HTC and Motorolla Droid, a.k.a, Android phones, also have millions of users and offer thousands of apps.

You don't need to be a member of the geek squad to capitalize on this trend; all you need is an idea for an app; there are plenty of companies who can help you develop an app for your idea for you to sell or offer for free. A word of caution; do your due diligence and check the developers' references to ensure your intellectual property and ideas are protected.

If your app can solve a problem (i.e. the Jott app records voice messages and converts them to text messages) then you're on the right track. If you own a Smartphone, think about your favorite apps and how you heard about them. Most likely you heard about them from a friend. Viral word-of-mouth marketing is why popular apps can grow in use so fast with virtually little marketing expense.

Make Your Website Smartphone Compatible
The Internet is going mobile. Have you visited your website using a Smartphone? What type of user experience did you get? If you want to gain a competitive advantage over your competition, your brand needs to be as mobile as your customer. Your customers and prospects don't have the patience to view websites on their phone that aren't user-friendly.

Start by viewing your current website on a Smartphone or Ipad. If you haven't designed a mobile specific website, it probably won't look the same.

Text is smaller, graphics may not show up and you have to scroll up, down, left, right, etc to view content. You'll get much more targeted traffic and improved conversions if you create a mobile-enabled version of your site's main content to meet the demands of today's multifaceted Internet mobile user. Creating the mobile version of your website's content from a layman's point-of-view requires reformatting the navigation, text and graphics to fit the smaller screen size of smartphones. The files are then published on your web server and special code is added to your regular website to identify the type of device accessing your website. When a user visits your website, the appropriate version of your website is displayed.

It's a good idea to provide links from your mobile version to your full site as some users will elect to visit your full-size website.

Engage mobile customers through social networks. If you're not friending and following, tweeting and YouTubing, you're missing out on a lucrative opportunity to connect and engage with your target market. Social networking has leveled the playing field; it's no longer just the companies with an over-inflated ad budget who can make waves. If you learn to add value and create a presence on websites like LinkedIn, Facebook and Twitter, you can expand your reach, increase awareness of your brand, and create a loyal following of customers who will help promote you!

Research shows that more people access social media via Smartphones than with their desktop computers. People who access the Internet with their Smartphones are more likely to socialize online than their desktop counterparts, according to a Ruder Finn study. The study found 91% of mobile Web users socialize online, while just 79% of desktop users can say the same. The average American spends 2.7 hours a day on the mobile Web, the study found, with 45% of those users commenting on social networking sites and 43% contacting friends through the sites.

Imagine the impact you can have when your customers can view your YouTube videos anytime they want using their Smartphones. Just think of the effect a viral video could have on your business success. This can only happen if you create and upload the videos to content sharing websites like YouTube or
Vimeo. There are hundreds of video sharing websites, but start with
YouTube since it's the 2nd largest search-engine.

Keep your videos short, authentic and to the point. If you have a larger message, you may want to break it down to shorter segments as user's attention spans have shortened.

Don't Wait… Make Your Brand Mobile
Not only is mobile marketing a great way to gain and connect with new customers, it also enables you to add value for your current customers. By making your brand mobile, you will increase awareness about your company, products and services.

The future of your business is in the palm of your hands, and in the handheld devices of your customers and prospects around the world. If you aren't on board already, make sure you jump on or you and your business will surely get left behind.

Ford Saeks is a business growth expert who specializes in helping businesses find, attract and keep their customers through innovative integrated marketing and social media campaigns. He is a renowned keynote speaker, author, successful entrepreneur, and CEO of Prime Concepts Group Inc. Learn more about Ford Saeks and his profit-producing resources at www.ProfitRichResults.com and www.PrimeConcepts.com.

RISE ABOVE THE MORTGAGE CHALLENGE

Current REBAC News

RISE ABOVE THE MORTGAGE CHALLENGE
Tips and advice for helping buyers reach the closing table

Today’s mortgage environment is unlike any we’ve seen before. Having weathered the worst financial crisis since the Great Depression, lenders and mortgage insurers have understandably rewritten the rules of what it takes for consumers to acquire a mortgage.

In fact, when REBAC surveyed members last spring, ABR®s said that difficulties obtaining financing was the top issue preventing buyers from completing a purchase. People associated with the lending industry agree that the lending process has never been more complex and that the rules are changing much more rapidly than before.

Since the crisis began, there have been extensive modifications to existing mortgage programs, plus the creation of several new ones, prompting enormous challenges for lenders to train staff and keep them up-to-date on revisions. With the rules constantly changing, it’s no wonder that it takes longer to process mortgage applications.

While the current environment is admittedly challenging, it’s still quite possible for qualified buyers to secure attractive financing. Granted, it takes more work than before. But buyer’s representatives can provide a valuable service to their clients, and themselves, if they learn how to navigate the current lending environment and share their knowledge with their buyers.

What steps can you take? Read on for expert advice from several ABR®s and mortgage lenders.

1. CLEAR UP MISCONCEPTIONS
One of the biggest mistakes consumers now make is sitting on the sidelines and waiting to buy a home because they are under the impression that it’s impossible to get a mortgage, or that the minimum down payment is 20 percent. But FHA loans, with just 3.5 percent down, now dominate the market. Even in today’s tougher lending environment, FHA remains flexible and buyer-friendly.

Another common misconception concerns the home buyer tax credit. “There was a massive race to get under contract before the home buyer tax credit expired,” observes Katy Kitchin, Retail Sales Supervisor with Edina Realty Mortgage in Lakeville, Minnesota. “But what buyers don’t realize is that today’s rates are much better than last spring. It may help to explain that even if they missed out on the tax credit, today’s lower rates provide lower monthly payments and reduced interest expense over the life of the loan.” Depending on the amount borrowed and terms of the loan, these savings could easily exceed the former tax credit.

2. QUALIFY YOUR BUYERS
Don’t waste time showing homes to consumers who can’t buy them. As John Anderson, ABR®, CRB, CRS, GRI of Twin Oaks Realty in Crystal, Minnesota, points out, “Nothing is more frustrating than spending time with a buyer who doesn’t qualify, or spending time trying to hold a deal together. Both scenarios can be avoided by taking a few key steps up front.”

Anderson admits that even the best transactions are going to take more time and work now than before. But in a market where there are fewer transactions, it’s far preferable to concentrate on buyers who will be able to close.


How? Before you begin showing properties to a buyer, set up a time to discuss the current mortgage situation. Ask questions about their financial picture, including how much money they can apply to a down payment and their credit history. Find out if they might qualify for any special loan programs offered at the federal or local level. Educate them on current mortgage options and the steps needed, starting now, to get their financing lined up.


This initial conversation may reveal warning signs. Even if it doesn’t, it’s a good idea to suggest that buyers consult with a qualified mortgage specialist and secure a preapproval. “Good agents don’t work with buyers unless they take care of this first,” says Kris Drake, Branch Sales Manager for Plaza Mortgage Services in Leawood, Kansas.

Even though buyer’s reps are at greater risk of wasting their time with unqualified buyers, Drake has actually observed more reluctance among agents to insist on preapprovals. “Buyer’s reps don’t want to appear overbearing or turn away hard-to-find buyers,” says Drake. “When the market was more active, they seemed tougher on this point.” From a lender’s perspective, however, it’s much more important to weed out unqualified buyers up front, simply because it can prevent so many problems down the road.


John Jeffries, a Home Mortgage Consultant with Plaza Mortgage Services in Kansas City, Missouri, agrees. “Encourage buyers to fill out an application right away,” says Jeffries. “It’s the best way to look beyond their credit score and see if any other hurdles exist.”

And what if a buyer doesn’t qualify now? You—or your lender—can offer or recommend credit counseling services instead, so these buyers understand how to get back on track. In this way, you are still providing a valuable service to them.

“Never turn a buyer away completely,” says Anderson. “You’re going to feel a lot better about helping them work on their credit if you haven’t already amassed a lot of time and frustration heading down a dead-end path. And when they are ready to buy, it’s very likely they’ll come back to you.”

Continue reading this article in the Today's Buyers Rep Newsletter.