10 Tips to successfully build relationships with prospects

10 Tips to successfully build relationships with prospects
RISMEDIA, February 18, 2011—In today’s challenging economic climate, everyone needs a bigger piece of the pie because the pie itself just isn’t big enough anymore. Everyone is talking about how to get more prospects. I constantly hear agents say, “I need more people in my database,” “I need more friends.” As a result, agents are exhausting much time, money and energy trying to find more friends. But today, we know that one could spend decades trying to convert random prospects into trusting relationships. Especially in the last six years where people have become less trusting and more cynical, and have actually created barriers to prevent people from intruding on their privacy.

I actually think a lot of agents feel the same way and, therefore, have stopped prospecting all together. But to me, prospecting and networking are much different than connecting, so what you really need to do is start looking at the Whos in your Whoville. Anyone who has lived in your community—aka, your “Whoville”—for five or more years automatically qualifies as an interested person—aka, a “Who”—that you can build a relationship with.

The fact is, there are different categories of Whos that we have already subconsciously quantified and qualified, not just by level of trust, but by level of importance and expertise in certain subject areas. For example, if I was going on a cruise for the first time, there would be two or three people in my Whoville who I would turn to as “cruise experts.” That’s the whole premise of Whoville—to understand and identify who your Whos are. Let’s pay more attention to who these people are. I’ve broken them down into five groups:

1. Your core group, or your advisors, are those you are closest to who you’ve built strong bonds with and in whom you have ultimate confidence and trust. You communicate frequently with this group on a variety of topics. Most people have somewhere between five and 12 people who fit into this category.

2. The second group is your advocates or raving fans. These are people who have a connection with you and who have an already-established list of experience. Perhaps you share responsibility with them in a social environment or through your kids’ activities. You are proactive through the connection process with this group, but not as frequently as with your core group.

3. Friends or allies are people who you know, like and trust. You have a feeling they are also knowledgeable, but you are less inclined to go to them. There’s always a little bit of reluctance because you’re not sure they’d be anxious to help you and you don’t want to overstep your boundary—you don’t want to be too pushy. By spending more time with this group, however, they could easily become raving fans.

4. Acquaintances or neighbors are people we recognize, may or may not know their first name, but we do know their last name. We see them once or twice a year at certain functions but we are not seeking them out as an opportunity or to help them with a need or concern.

5. The last group would be acquaintances we think we know. We may not know them by name, but we know who they are. You might recognize them at the salon when they’re getting their nails done, but you wouldn’t sit down next to them and start chatting.

Once you’ve segmented your Whos, the key is to come up with a system and a strategy to leverage those relationships in Whoville, thereby getting more people to be proactive advocates, which will then lead us to some of the upper levels of their Whovilles. As a consequence, we can end up with more business than we can handle. Where we fall down is not having systematized the people who live in our Whoville.

That said, here are the 10 Rs of taking care of your Whoville:

1. Research. Constantly stay in tune with what’s happening on a local level. You are the local ambassador for your community and neighborhood.

2. Recognize and prioritize the people in Whoville. Know what is important to them; what are their areas of significance? If they have children in elementary school, then know what’s going on in the school system. If they’re retired, then know about tax issues or who to call if a streetlight needs to be fixed.

3. Reach out. Elevate their level of awareness of you by reaching out to them with something that reminds them that you are available.

4. Remind them that you are able to assist them.

5. Review again what their needs are to see if their passions have migrated into an area you can offer help on. Maybe they’re planning a trip to Greece and you just came across an article you can send them.

6. Respond. Make sure you are proactive in responding to them and make sure you are reminding them that you are happy to help other friends, relatives and neighbors with any questions they may have.

7. Reward them by being a good listener and providing them with information that is relevant to their needs.

8. Refer them to people that you are highly confident will be able to take care of their needs.

9. Rework them to make sure that after you have handed them off to a referral, that individual has succeeded and your Who is satisfied.

10. If not, do what needs to be done to rectify the situation. Reconnect with them by reaching out with relevant information.

A tool like Facebook is the perfect way to proceed on the 10 R’s of Whoville and make sure you’re connecting effectively and building relationships with all the Whos in your community. After all, if you’re not the REALTOR® of Whoville, who is?

How To Find Unlimited Listings

A full 53% of our business last year was potential short sales; 13% sold as short sales and 40% of which became foreclosure inventory for all of the REO agents we envy so much because we didn't get to them before they became foreclosures. That short sale percentage in just the first part of this year has already increased from 13% to 23%. Now that HUD and HAMP have loosened their criteria for qualifying and offer from $1,000-$3,000 in incentives to the homeowner to do a short sale, those numbers are even more likely to increase. The following is a sure fire way to build your listing inventory and carve out a huge chunk of market share and earnings for yourself this year.

Step 1: Identify the cities you wish to work in
Step 2: Secure an account with access to the legalnews.com in the counties
those cities reside. (Our office has an account for the tri county area for
all agents to access)
Step 3: Login to your account on legalnews.com and click advanced search in the top
right of the screen
Step 4: select Forclosures, select city from the pull down menu, and then type in the
city you wish to research.
Step 5: select dates for just the previous week in the "First Published" area. (The
earlier you reach someone in this circumstance the more likely they are to
still be living in the home.
Step 6: Click search
Step 7: Scroll down to view the results; then click download to excel spreadsheet
Step 8: Open another window and go to Switchboard.com; then click find a person
Step 9: Click on reverse lookup
Step 10: Input the address of one of the results and click search. (If there is a
number listed, it will appear)
Step 11: Pick up the phone and call them. Let them know that you would like to help
them make a good decision to minimize the damage this situation is causing.
Empathize with them and let them know that they are not alone and there are
several people in their same circumstance
Step 12: Repeat daily for each city you are planning to build your business within

If you would like some direct - live coaching with this, feel free to contact me and I will be happy to walk you through it.
Happy listing!

5 Short Sale Myth Busters that will earn you a Living

There is much confusion surrounding short sales that is not only confusing consumers, but also making it difficult for us to understand why a short sale is such a good idea. If we aren't convinced, why would we recommend it as a potential resolution for our clients? An article was recently brought to my attention from a couple of our agents and it was interesting to see the different understanding they had after reading the article. The Article was recently published in the Detroit News regarding the ability of lenders to come after the foreclosed and short sale individuals for the deficiency. The view from the article was that the lenders or those collection agencies that had purchased the debt for pennies on the dollar, from the original lender, would have more than the 6 years, which is the statute of limitations, to come after the borrower for deficiencies. That is not the case, whether the original lender files suit or a collection agency or purchased the debt, the timeframe for action is still 6 years. See below from the article:

"Lenders have up to six years to sue for the bad debt and, once they obtain a judgment, can pursue the borrower for 10 years. If they still haven't collected, they can renew the judgment for another decade, repeating the process indefinitely."

"Collection agencies buy the debt for pennies on the dollar, and then try to track down the debtor with threats of legal action and damage to credit scores. Often, the debt may not even be legally owed because it's beyond the statute of limitations, which is six years in Michigan."

As is the case in America, anyone can sue for any reason at any time. This does not mean the threat is valid. Certainly, as the news media often does, the article made it sound as though debt collectors could drag this on and on once they had purchased the debt. The article suggests that these debt collectors will attempt to bully those who aren't familiar with the law into paying off a debt they no longer legally owe. That does not make the action legal or binding because it is beyond the statute of limitations. A judgment must be issued against the borrower within the 6 year statute of limitations. If the judgment is won, the collection agency then has up to 10 years to collect on the judgment.

Short sales, like the rest of our industry are a work in progress and the processes and rules are changing every day. That makes consumers need our expertise all the more and creates an opportunity for us to grow our income if we are willing to put effort into getting the education.

5 Biggest Short Sale Myths:

1.) I will be taxed on the forgiven debt. Through 2012, any primary residence that is approved for short sale is exempt from paying income taxes on the forgiven debt.

2.) It will ruin my credit. Most lenders do not require that you miss a payment to qualify for a short sale. It used to be a requirement, but many of those have changed. Without missing payments, credit is minimally affected compared to a foreclosure.

3.) I have to suffer a financial hardship in order to qualify. This is a common misunderstanding. Non-financial hardship examples that are eligible include medical, increase in family size beyond the home capacity, divorce/separation, etc.

4.) I won't be able to buy another home right away. If your hardship is not financial, you may qualify to be eligible for another mortgage immediately. For example, a person who is relocated more than 50 miles for their job could qualify for a short sale and still be eligible to receive financing to buy another home. Of course, there is always the option of paying cash or land contract if resources are available to you.

5.) The lender can still come after me for the deficiency even after the short sale. Not true if your loan is owned by Fannie Mae or Freddie Mac, this is about 80% of the mortgages out there. According to guidelines, any Fannie or Freddie loan makes you eligible for the HAFA program. As such, the deficiency on your loan is forgiven when the short sale is approved and the property sold. If not Fannie or Freddie, the debt can be extinguished as a piece of the short sale settlement directly via the contract between the lender and homeowner.
***** By the way, if the customer decides foreclosure is their best option because they think it removes them from the debt obligation, please advise them to look at the note they signed. Most notes will indicate that the lender reserves the right to come after them for any deficiency if a foreclosure sale does not result in full repayment of the debt. The decision to let the house go to foreclosure is more likely to allow the lender an opportunity to come after the homeowner within the next six years.


From The Detroit News: Even After Foreclosure - Debt Collectors still pursue borrowers for repayment

How to Beat a Bad Day Before It Starts

How to Beat a Bad Day Before It Starts Adam Dachis — It often seems like the moment a bad day begins there is no way out of it—we're just doomed to failure until it ends. But it does end, and trick to making that happen a little sooner involves one part "time travel" and one part humor. Here's how to beat a bad day before it starts.

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Photo by Paul Downey

We've taken a look at the science behind bad days (along with a few solutions). While operating under some of the same principles, this is a different approach to solving the problem.
The False Start
A bad day generally begins with a false start, or even a series of them. You might get up in the morning, get going a little later than you'd hoped, and then when you're rushing out the door you get to your car and realize you've forgotten something. You need it. You head back. You start driving, rushed, and then realize you're out of gas. You exit the highway but you don't know where the nearest gas station is. You search big streets and finally find a gas station. You end up overpaying. You're definitely going to be late today. The gas pump doesn't accept your debit card because it's a piece of crap. You have no cash. You have to use the ATM. The ATM is one of those slow ATMs that still uses a dial-up mode. Wait, dial-up, seriously? I DON'T HAVE TIME FOR THIS CRAP!!

And then the rest of the day just gets progressively worse.

This is an example of how a bad day begins, but it's really not a bad day at all. What happened here is that 1) you made a couple of small mistakes that happened to affect you at the same time, and 2) you've started considering normal behavior and events to be bad luck directed at you. You're not that special. You're just being self-absorbed. We create bad days by thinking too much about what's happening to us and not enough about what's actually happening. We give significance to minutia rather than look at that minutia for what it is. Realizing this is the first step in beating a bad day.

Awareness is Key
When something bad happens—whether you've caused the pain yourself or you were just the unlucky victim of poor timing—the first thing you need to do is quickly deconstruct the moment, then look at the bigger picture. If a bird needs to evacuate its bowels and you're unlucky enough to cross paths with the jettisoned poop, there's really nothing you can do about that. A bird just crapped on you. In a week, you probably won't even remember it happened. If you forgot to fill up your car with gas, that's all you did. You'll lose ten minutes of your morning. The world will remain unchanged. These things all seem very obvious right now but they're not when you're angry and emotional. The key to beating a bad day is to quickly convince yourself that what just happened is not a big deal and there's nothing you can do about it. Of course, that's a little easier said than done.

Believing the Unbelievable
While you know right now that a little bird crap isn't going to kill you—well, in most cases—you are going to have a hard time believing that while you wipe poop off your face and out of your hair. Fortunately, the way to get around this problem is to do a little time traveling and look to the future. Most of the time, you're going to laugh about this with friends later. Your friends are going to make fun of you for getting pooped on, and you'll find it funny too. You need to be a friend to yourself at this moment and start to find it funny. Pretend it happened to someone else if that helps. If you start thinking about the situation abstractly, and then remember it happened to you, you'll have a much lighter attitude about the entire thing.

The same goes for the gas situation. If you tell your friends about all the mistakes you made that day, and how late it made you that morning, they're going to laugh at you for being dumb. You got lost finding a gas station less than half a mile from your house. That's something only someone with your horrible sense of direction would do. Your horrible sense of direction is something you and your friends probably make fun of on a regular basis. It's not that you're having a bad day, it's just that the part of you that's a total idiot decided to make an appearance. That part of you can have a cameo or a starring role. It's your choice. Make fun of yourself and laugh about it now, or let these bad events compound and affect you more and more dramatically as the day goes on.

Some Bad Days Cannot Be Beaten
Sometimes you're going to get bad news about the death of a loved one, that you've lost your job, or something else that's going to be less of a bad day and more of a sad streak in your life. These are not things you can necessarily laugh about and pass off. Sometimes bad things are going to happen and you have to let them. Sometimes we need to feel sad. If you can shake off your unnecessary bad days, however, the tragedies that sometimes appear in your life will be much easier to handle. Save your energy for truly bad days and, when you can, beat the ones you're really just causing for yourself.

The Short Sale Simplified

Are we complicating these phenomena known as the short sale? Most agents will tell you they don't like short sales because they take too long. In reality, the process has been streamlined by most lenders out of necessity. They simply wouldn't have the time to manage every file without a process. I have personally closed several short sales within 45 days. Not to mention, we have the ability to set the price aggressively for multiple offers and a quick sale. The entire process takes no longer than a traditional sale. Consider the good ole days when you would secure a purchase agreement on a home within 60-90 days along with closing time (up to 45 days); the entire process consumed 90-120 days. Now consider the short sale. With the ability to price a home aggressively, the sale happens more quickly, but the closing process takes a little longer. A contract for purchase is easily secured within 30 days and the process to allow for the mortgage and get approval from the lender 45-90 days. The timeframe is the same, 90-120 days. The second most common objection agents have to pursuing short sales is that they are complicated and so much more work is involved. In reality, there are only 6 items that need to be included in the paperwork that are above and beyond the traditional paperwork and they are items that your seller has to provide; not anything that the agent has to craft (see below). The third most common misperception about the short sale is the negotiation process, because there is no negotiating. The banks all have a set of boundaries dictated by the investor with regard to what warrants an acceptable offer. In most cases the offer price must fall within 80% or more of the appraised value as indicated by the lenders own BPO or appraisal. If the offer is unacceptable, the lender will counter within acceptable range and the buyer has the ability to respond. Communicating the facts is a better description of what it is we do in dealing with the third party lender. Remember, foreclosures are first short sale opportunities before they become foreclosures. This means that 50% of our market is short sales. We should be looking for people who need our help, which is why we subscribe to a publication that supplies us with every notice of foreclosure in all three counties. This provides an unlimited number of leads for all of our agents and we also provide specific coaching and role playing to make agents effective in their dealings with short sale customers. The next time you ask yourself if you really want to do short sale business - you should really be asking if you can afford to ignore 50% of our industry.

If you or someone you know would like to participate in a free workshop or get free coaching on this topic - please make the request here.

Documents required for short sale:

1. Dated, signed listing agreement with commissions listed.

2. Full MLS report from your real estate agent.

3. A seller signed authorization form for the agent and/or attorney to negotiate with the lender on seller’s behalf.

4. Signed, handwritten hardship letter explaining the circumstances.

5. A complete seller financial statement.

6. Two (months) recent bank statements.

7. Two months of pay stubs or written explanation of unemployment. Proof of Social Security or pension if receiving.

8. Dated, signed purchase agreement — the sale contract.

9. Buyer’s fresh proof of funds or preapproval.

10. Three recent, like-kind, comparable sales.

11. Last two years of seller’s tax returns.

12. List of repairs for the residence, if needed.

13. Preliminary HUD1 statement provided by attorney or title.

January 2011 Real Estate Market Update

January, 2011

Dear Team,

January kicked off 2011 with the same positive momentum shown in November and December. The inventory of available homes for sale declined, with listings down in all price ranges and markets, furthering our move towards a stable market. Even in this freezing month, buyers visiting open houses were up by 50% and showing appointments were up by 25%, compared to December.

So far it appears 2011 home inventories will remain close to 2010 levels, with a decline more likely than a rise over last year based on an improving economy (an increase in bank inventories would be the only reason for a rise). The months supply of inventory in the under $100,000 range is below the 6 month mark, moving towards a normal market. It is a bit too early to truly claim a normal market, but we should know by the end of the first quarter of 2011. In the over $100,000 price range, the move to a normal market has been slower, but still moving in a positive direction. See a full breakdown of the inventory supply below.

The successful formula for this year so far looks like low interest rates + renters coming back into the market + homes getting priced right + banks moving faster = homes selling faster and possibly for more money. A large factor will be the renters who have repaired their credit from as far back as 2006 and still want to own a home. In fact, a National Association of Realtors (NAR) study showed that 95 percent of owners and 72 percent of renters still believe that it makes more sense to own a home; which further supports consumer confidence going into 2011. NAR economists expect 2011 to be the third best year on record for housing affordability.

All of this good news does not mean values are going to jump or sales will skyrocket, after all, 2010 was a pretty good year in terms of the number of homes that were sold. But all are clear signs we have moved off the bottom and have enough market momentum that, at least for Michigan housing, we will be able to handle any economic “double dips” that some economists have predicted.

Dan

Dan Elsea
President-Brokerage Services
Real Estate One Family of Companies