Getting Your Clients to understand they need to Buy Now
By Maya Bailey, Ph.D.
RISMEDIA, April 21, 2011—Have you been feeling frustrated with clients who don’t seem to be able to make a decision? At the beginning they seem interested in buying—either they’ve contacted you or you contacted them—then, as they see some homes, they may begin listening to the news about today’s marketplace and they start to get cold feet.
They don’t return your phone calls or emails, and when you finally reach them they say, “I’m not sure this is the best time to buy. I’ve heard prices may get lower.”
At this point you can either get exasperated and give up, or you can give them a good reason to buy now, one that they can’t refuse.
First, say to them, “Did you know that Donald Trump is buying up as much real estate as he can right now?” Client: “No, really? Why?” You respond with, “Donald Trump is a very smart businessman, wouldn’t you say? What he knows that other people don’t know is that this is the best time in history to buy. Prices are at an all-time low and so are interest rates. It doesn’t get any better than this. So he is getting great deals all over the place.” After this, your client will probably say, “Wow, I didn’t know that.” You respond with, “If you’re excited about this, then let’s get you a deal.”
Notice the invitational quality of your last statement. Who can resist a deal? Isn’t this an irresistible statement? You are offering to partner up with them to help them make money.
Watch how quickly your previously “indecisive” clients start taking action. You’ve done your job to tell them the facts. You’ve backed that up with an offer to help them make money in the same way that Donald Trump is making money.
Here is the key. If you are convinced that this is the best time to buy, then your clients will be too. People can sense the depth of your conviction, so convince yourself first and then you will be attracting your ideal clients.
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
Wednesday, August 31, 2011
Tuesday, August 30, 2011
Don’t Sell Me…Help Me!
Don’t Sell Me…Help Me!
By Jose Perez
RISMEDIA, July 27, 2011—There are some interesting things happening when it comes to doing business in the current environment.
• If it used to take 30 days to get a transaction closed, it now takes 120 or more
• If it used to take 20 contacts to get someone to listen to you, it now takes 100 or more
• If someone was inclined to do business with you before, they are now inclined to make sure they are getting the best deal regardless of their relationship with you
It’s a scary world for your clients. As a result, you must recognize this and change the way you approach “sales,” or you are likely to suffer.
People just aren’t in the mood to be sold. There are a variety of reasons for this all borne from the harsh economic realities we are living through. With all the negativity surrounding us every day, consumers are thinking any financially impactful decision through much more thoroughly than they ever have. This means they are taking much longer to commit and, in many cases, postponing decisions until things “get better.”
So what can you do to increase sales?
• Don’t sell, help.
• Don’t close, advise.
• Don’t push, encourage.
• Become completely indispensable.
It’s a totally different mindset but one that must be adopted in order to survive, no matter how counterintuitive it might be to the most hardcore of salespeople. Furthermore, besides the economic reasons driving this necessity to change your approach, today’s online consumer also doesn’t want to be “sold.”
Let’s look at what we do online to engage consumers:
• We blog about interesting topics that will position us as thought leaders.
• We post interesting articles, videos, etc. that provide engaging and relevant information.
• We allow the online consumer to interact with us without forcing them to make a decision…they control the process and call the shots.
We should be doing the same thing in the offline world. The more we are able to uncover someone’s needs and help them understand how much their issue could be costing them, the more we can prove to be an indispensable resource in helping them analyze their challenges. If we accomplish this, the more likely that consumer will be inclined to do business with us when they are ready to make a commitment.
As I mentioned above, the challenge is that we now have to do this with a significantly larger number of prospects because there are fewer willing to take chances and will only do so at their own pace. If you and your team increase your prospecting activity and become indispensable, you will be able to ride out the storm ahead of your competition.
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
By Jose Perez
RISMEDIA, July 27, 2011—There are some interesting things happening when it comes to doing business in the current environment.
• If it used to take 30 days to get a transaction closed, it now takes 120 or more
• If it used to take 20 contacts to get someone to listen to you, it now takes 100 or more
• If someone was inclined to do business with you before, they are now inclined to make sure they are getting the best deal regardless of their relationship with you
It’s a scary world for your clients. As a result, you must recognize this and change the way you approach “sales,” or you are likely to suffer.
People just aren’t in the mood to be sold. There are a variety of reasons for this all borne from the harsh economic realities we are living through. With all the negativity surrounding us every day, consumers are thinking any financially impactful decision through much more thoroughly than they ever have. This means they are taking much longer to commit and, in many cases, postponing decisions until things “get better.”
So what can you do to increase sales?
• Don’t sell, help.
• Don’t close, advise.
• Don’t push, encourage.
• Become completely indispensable.
It’s a totally different mindset but one that must be adopted in order to survive, no matter how counterintuitive it might be to the most hardcore of salespeople. Furthermore, besides the economic reasons driving this necessity to change your approach, today’s online consumer also doesn’t want to be “sold.”
Let’s look at what we do online to engage consumers:
• We blog about interesting topics that will position us as thought leaders.
• We post interesting articles, videos, etc. that provide engaging and relevant information.
• We allow the online consumer to interact with us without forcing them to make a decision…they control the process and call the shots.
We should be doing the same thing in the offline world. The more we are able to uncover someone’s needs and help them understand how much their issue could be costing them, the more we can prove to be an indispensable resource in helping them analyze their challenges. If we accomplish this, the more likely that consumer will be inclined to do business with us when they are ready to make a commitment.
As I mentioned above, the challenge is that we now have to do this with a significantly larger number of prospects because there are fewer willing to take chances and will only do so at their own pace. If you and your team increase your prospecting activity and become indispensable, you will be able to ride out the storm ahead of your competition.
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
Saturday, August 20, 2011
July 2011 Real Estate Market Update
July 2011
July sales and buyer activity followed the same positive path as the prior four months. It is too early to see if any of the stock market uncertainty will trickle down to our local real estate sales but the big offset to any financial market concerns was the statement by the Federal Reserve to keep interest rates low for the next two years. Certainly a reduction in consumer spending, specifically auto, will cause a slowing of our local recovery, but as we saw throughout this recession, low rates and low prices have drawn thousands of people into the market.
Locally sales rose about 8% over last July, which was expected, and anything less would have been a concern since last year sales fell off once the tax credits expired. Buyer inquires, written contracts and in some cases home values have shown a steady rise for the past four months (on an seasonally adjusted basis). Not quite a trend you can take to the bank, but all good news. You will not see these same positive numbers for Michigan for a few months since the national indexes such as Case-Shiller use date that is anywhere from 4 months to 2 years old (example; a short sale written in 2009, based on 2009 values that finally closes in June of 2011 will show up on Case-Shiller as a 2011 sale with a 2009 price). The national data will begin to show what we see everyday late this year.
One of the biggest challenges in a market that is changing direction is managing the mixed signals of the Seller's need to still be aggressive in pricing and Buyer's need to be aggressive in their offer price for the multiple bid properties. Time on Market is a great way to look at how each should approach their asking/offer price.
The charts below show the available home inventory and home sales categorized by time on the market. Each chart divides properties on the market by 0-90 (dark bars), 90-180 and 180+(light bars) days.
Listing Distribution by Time on Market
The vast majority of homes that sell are on the market for less than 90 days. A home on the market for over 90 days has only a 21% chance of selling. So for Sellers, if their home has been on the market for more than three months, it is time for a price or condition change. For Buyers, if they are bidding on a home that has been on the market for less than 90 days, expect some aggressive competition for the home.
A little bragging, you all should have received the new Crain's Broker Rankings, our lead widened even more this past year. Another interesting point; we have four offices that would have been in the top 20 by themselves (Birmingham, Troy, West Bloomfield and Ann Arbor) and we still would be number one with the remaining offices!
If you don't remotely know how or where to begin with building or re-building your business, come work with us. We already have systems in place that do it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
July sales and buyer activity followed the same positive path as the prior four months. It is too early to see if any of the stock market uncertainty will trickle down to our local real estate sales but the big offset to any financial market concerns was the statement by the Federal Reserve to keep interest rates low for the next two years. Certainly a reduction in consumer spending, specifically auto, will cause a slowing of our local recovery, but as we saw throughout this recession, low rates and low prices have drawn thousands of people into the market.
Locally sales rose about 8% over last July, which was expected, and anything less would have been a concern since last year sales fell off once the tax credits expired. Buyer inquires, written contracts and in some cases home values have shown a steady rise for the past four months (on an seasonally adjusted basis). Not quite a trend you can take to the bank, but all good news. You will not see these same positive numbers for Michigan for a few months since the national indexes such as Case-Shiller use date that is anywhere from 4 months to 2 years old (example; a short sale written in 2009, based on 2009 values that finally closes in June of 2011 will show up on Case-Shiller as a 2011 sale with a 2009 price). The national data will begin to show what we see everyday late this year.
One of the biggest challenges in a market that is changing direction is managing the mixed signals of the Seller's need to still be aggressive in pricing and Buyer's need to be aggressive in their offer price for the multiple bid properties. Time on Market is a great way to look at how each should approach their asking/offer price.
The charts below show the available home inventory and home sales categorized by time on the market. Each chart divides properties on the market by 0-90 (dark bars), 90-180 and 180+(light bars) days.
Listing Distribution by Time on Market
The vast majority of homes that sell are on the market for less than 90 days. A home on the market for over 90 days has only a 21% chance of selling. So for Sellers, if their home has been on the market for more than three months, it is time for a price or condition change. For Buyers, if they are bidding on a home that has been on the market for less than 90 days, expect some aggressive competition for the home.
A little bragging, you all should have received the new Crain's Broker Rankings, our lead widened even more this past year. Another interesting point; we have four offices that would have been in the top 20 by themselves (Birmingham, Troy, West Bloomfield and Ann Arbor) and we still would be number one with the remaining offices!
If you don't remotely know how or where to begin with building or re-building your business, come work with us. We already have systems in place that do it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
Sunday, August 14, 2011
ForSalebyOwner.com Founder Uses Agent to Sell Home
Share this with your for sale by owners:
ForSalebyOwner.com Founder Uses Agent to Sell Home
Daily Real Estate News | Tuesday, August 09, 2011
The founder of a popular for-sale by owner Web site used a real estate broker to help sell his 2,000-square-foot, two-bedroom New York apartment after it lingered on the market for six months. Colby Sambrotto, the founder and former chief operating officer of ForSalebyOwner.com, tried to sell the property himself by listing it online and through classified ads, but after six months of it sitting on the market, he sought the help of a real estate broker.
Broker Jesse Buckler told Sambrotto the condo was priced too low and wasn’t attracting the right buyer for the condo.
"At first he wouldn't let me increase the price," Buckler said. "I told him I know what I am doing—the market is picking up."
The condo soon attracted multiple offers and ended up closing recently for $150,000 more than the original asking price.
Source: “DIY Guru Gets Broker Help,” The Wall Street Journal (Aug. 3, 2011)
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
ForSalebyOwner.com Founder Uses Agent to Sell Home
Daily Real Estate News | Tuesday, August 09, 2011
The founder of a popular for-sale by owner Web site used a real estate broker to help sell his 2,000-square-foot, two-bedroom New York apartment after it lingered on the market for six months. Colby Sambrotto, the founder and former chief operating officer of ForSalebyOwner.com, tried to sell the property himself by listing it online and through classified ads, but after six months of it sitting on the market, he sought the help of a real estate broker.
Broker Jesse Buckler told Sambrotto the condo was priced too low and wasn’t attracting the right buyer for the condo.
"At first he wouldn't let me increase the price," Buckler said. "I told him I know what I am doing—the market is picking up."
The condo soon attracted multiple offers and ended up closing recently for $150,000 more than the original asking price.
Source: “DIY Guru Gets Broker Help,” The Wall Street Journal (Aug. 3, 2011)
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
Friday, August 5, 2011
How to Stay Positive No Matter the Market
How to Stay Positive No Matter the Market
By Dr. Maya Bailey
It is more important than ever that we find ways to stay positive, especially as we continue to make our way through today’s real estate market. Your success depends on your mindset, not on the economy or the marketplace. How do I know this to be a fact? I’ve interviewed hundreds of top producing sales people all over the U.S. and Canada, and when I asked them the secret to their success, unquestionably and without a doubt and independent of each other, they all said the same thing, “my mindset.”
These are top producing sales people that have been in the business for 10, 20, or even 30 years. They’ve been through up times, down times, and all kinds of different markets, and they said, without a doubt, it was their mindset. When times get tough, people start to look outside of themselves for answers and what they really need to do is look inside themselves and ask themselves the question, “How can I stay positive, how can I stay hopeful, how can I stay optimistic?”
Here are a few tools that will make it easier to create a positive mindset, no matter what the real estate industry throws at you.
The first tool is to really stop watching, or listening, or reading the news as the news is based on negativity. The news amplifies fear and negativity in order to capture more listeners, more readers, and more viewers. The media is a business like anything else and there’s a popular saying in the media industry that describes their approach: “If it bleeds, it reads.” So the more fear the media can instill in people, the more people will turn to newspapers or the television to find out what’s going to happen, or in some way stay fixated because they’re in fear. In order to create a positive mindset, it is crucial to not become fixated on what the media is reporting.
The second tool is to stop being around negative people. Your colleagues are going to want to constantly come and talk to you and tell you how bad things are. Maybe your clients or prospective clients are going to tell you how bad things are during phone conversations, and even your friends will do the same thing. You will go through a day and everybody will want to tell you how negative everything is. If you are looking to create a positive mindset, the first step is to avoid the negative people who surround you. If you are stuck talking to someone who is speaking negatively, simply tune them out and say: “Well that may be true for you, but that’s not true for me.” This is like an inner mantra which will help you create your own inner environment.
The third tool is a technique that I’ve used with my clients throughout the past 12 years as a successful business coach. It’s a very powerful tool called The Stop Technique, and there are three steps to it. The first step is just called Stop. If you start to notice your mind going in a negative direction such as, “I can’t succeed in today’s economy,” “I just don’t have what it takes to be successful or to make money,” “I have to work really hard and struggle and sacrifice,” your job is to simply catch these negative thoughts as soon as they pop into your head and say, “Stop.” Take a deep breath, and then put in a positive new thought.
You can put in your choice of however many positive new thoughts you have ready in your arsenal. If some of your negative statements are about yourself like, “I’m not good enough, or I’m not smart enough, or I’m not experienced enough,” an empowered belief that you can substitute in its place may be: “I love and approve of myself unconditionally.” Another kind of self-limiting belief is something that you continually tell yourself, such as: “To succeed, I’m going to have to really struggle, and sacrifice, and stress out, and work hard, and then I won’t have a life.” If this has been your primary belief, it is important to put a stop to it when you hear it coming. Instead, take a deep breath and replace this negative thought with a positive one such as: “I’m committed to working smarter, not harder.”
One of the things that is great about this technique is that it really forces you to become aware of what you’re thinking from moment to moment, and it’s what you’re thinking from moment to moment that will create a negative or positive mindset. If you’re continually thinking negative thoughts either about yourself, or the market, or about money, then you’re setting yourself up for a negative mindset. Then what happens is what you believe tends to come true, and it becomes a self-fulfilling prophesy. For example, if you tell yourself, “I don’t have what it takes to succeed in today’s market,” and you tell yourself that over, and over, and over again, your thoughts will create your reality and then you’ll find that you don’t have what it takes.
Henry Ford once said, “Whether you believe you can or you can’t, either way you’re right.” The way to create a positive mindset is to continue to bring your thoughts back to, “I can do it.” You need to have unwavering faith in your ability to be successful. The way you do this is to retrain your mind. The stop technique is the most powerful technique for retraining your mind, but you may have to use it a few hundred times a day at the beginning. Your mind has been going down that negative track in an undisciplined way for a long time, and now you have to reign your thoughts in, which is going to require a lot of vigilance at the beginning.
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
By Dr. Maya Bailey
It is more important than ever that we find ways to stay positive, especially as we continue to make our way through today’s real estate market. Your success depends on your mindset, not on the economy or the marketplace. How do I know this to be a fact? I’ve interviewed hundreds of top producing sales people all over the U.S. and Canada, and when I asked them the secret to their success, unquestionably and without a doubt and independent of each other, they all said the same thing, “my mindset.”
These are top producing sales people that have been in the business for 10, 20, or even 30 years. They’ve been through up times, down times, and all kinds of different markets, and they said, without a doubt, it was their mindset. When times get tough, people start to look outside of themselves for answers and what they really need to do is look inside themselves and ask themselves the question, “How can I stay positive, how can I stay hopeful, how can I stay optimistic?”
Here are a few tools that will make it easier to create a positive mindset, no matter what the real estate industry throws at you.
The first tool is to really stop watching, or listening, or reading the news as the news is based on negativity. The news amplifies fear and negativity in order to capture more listeners, more readers, and more viewers. The media is a business like anything else and there’s a popular saying in the media industry that describes their approach: “If it bleeds, it reads.” So the more fear the media can instill in people, the more people will turn to newspapers or the television to find out what’s going to happen, or in some way stay fixated because they’re in fear. In order to create a positive mindset, it is crucial to not become fixated on what the media is reporting.
The second tool is to stop being around negative people. Your colleagues are going to want to constantly come and talk to you and tell you how bad things are. Maybe your clients or prospective clients are going to tell you how bad things are during phone conversations, and even your friends will do the same thing. You will go through a day and everybody will want to tell you how negative everything is. If you are looking to create a positive mindset, the first step is to avoid the negative people who surround you. If you are stuck talking to someone who is speaking negatively, simply tune them out and say: “Well that may be true for you, but that’s not true for me.” This is like an inner mantra which will help you create your own inner environment.
The third tool is a technique that I’ve used with my clients throughout the past 12 years as a successful business coach. It’s a very powerful tool called The Stop Technique, and there are three steps to it. The first step is just called Stop. If you start to notice your mind going in a negative direction such as, “I can’t succeed in today’s economy,” “I just don’t have what it takes to be successful or to make money,” “I have to work really hard and struggle and sacrifice,” your job is to simply catch these negative thoughts as soon as they pop into your head and say, “Stop.” Take a deep breath, and then put in a positive new thought.
You can put in your choice of however many positive new thoughts you have ready in your arsenal. If some of your negative statements are about yourself like, “I’m not good enough, or I’m not smart enough, or I’m not experienced enough,” an empowered belief that you can substitute in its place may be: “I love and approve of myself unconditionally.” Another kind of self-limiting belief is something that you continually tell yourself, such as: “To succeed, I’m going to have to really struggle, and sacrifice, and stress out, and work hard, and then I won’t have a life.” If this has been your primary belief, it is important to put a stop to it when you hear it coming. Instead, take a deep breath and replace this negative thought with a positive one such as: “I’m committed to working smarter, not harder.”
One of the things that is great about this technique is that it really forces you to become aware of what you’re thinking from moment to moment, and it’s what you’re thinking from moment to moment that will create a negative or positive mindset. If you’re continually thinking negative thoughts either about yourself, or the market, or about money, then you’re setting yourself up for a negative mindset. Then what happens is what you believe tends to come true, and it becomes a self-fulfilling prophesy. For example, if you tell yourself, “I don’t have what it takes to succeed in today’s market,” and you tell yourself that over, and over, and over again, your thoughts will create your reality and then you’ll find that you don’t have what it takes.
Henry Ford once said, “Whether you believe you can or you can’t, either way you’re right.” The way to create a positive mindset is to continue to bring your thoughts back to, “I can do it.” You need to have unwavering faith in your ability to be successful. The way you do this is to retrain your mind. The stop technique is the most powerful technique for retraining your mind, but you may have to use it a few hundred times a day at the beginning. Your mind has been going down that negative track in an undisciplined way for a long time, and now you have to reign your thoughts in, which is going to require a lot of vigilance at the beginning.
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
Thursday, August 4, 2011
Help your customers avoid credit dings when mortgage shopping
Help your customers avoid credit dings when mortgage shopping
How to steer clear of 'borrower in distress' label
By Jack Guttentag
Borrowers in distress often contact many lenders hoping to find one who will approve them. For this reason, multiple inquiries can have a negative impact on a consumer's credit score. But multiple inquiries can also result from loan applicants shopping for the best deal. The challenge to the scoring system is to distinguish borrowers in shopping mode from borrowers in distress mode.
Hard inquiries vs. soft inquiries
Consumers need not be concerned about inquiries they make, such as ordering a credit report. Self inquiries don't affect the credit score. Neither do inquiries from your existing creditors, potential employers, or businesses considering whether or not to solicit you. These are sometimes called "soft inquiries."
The inquiries that may affect your credit score are those by new credit grantors to whom you have given your Social Security number along with explicit authorization to check your credit. These are "hard inquiries."
Distinguishing borrowers in shopping mode from those in distress: The ignore rule
Two credit-scoring rules developed by Fair Isaac Corp., which pioneered the development of credit-scoring models, are designed to protect the scores of borrowers who shop multiple lenders for the best deal. The quotes below are from www.FICO.com.
The "ignore rule" is that "the score ignores mortgage, auto, and student loan inquiries made in the 30 days prior to scoring."
The 30 days includes the day of the score, which is not evident from the wording. It is a good rule, but borrowers are not warned about other types of credit that are not ignored. A very important one is credit cards. Because I happened to need a new business card while researching this article, I decided to see what impact my card shopping would have on my score.
I had a mortgage lender friend make a credit inquiry to obtain my score, then I shopped two card issuers and had my friend inquire again. My score had dropped 13 points. All credit card inquiries are treated as indicators of distress.
Mortgage borrowers today face the hazard that the 30-day period can expire while their loan is still being processed. If the lender decides to recheck the borrower's credit, which some do as a standard practice, the mortgage inquiries that had previously been ignored will then hit the score.
Distinguishing borrowers in shopping mode from those in distress: The consolidation rule
The "consolidation rule" is that "the score looks on your credit report for mortgage, auto, and student loan inquiries older than 30 days. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score."
The consolidation rule is expressed in such a way that most readers interpret it to mean that mortgage, auto and student loans are consolidated together. That is how I read it originally. In fact, what it means is that all mortgage loans are consolidated, all auto loans are consolidated, and all student loans are consolidated. If you shop for one of each type, they constitute three inquiries.
The shopping period during which inquiries are consolidated is 15 days in one version of the scoring model and 45 days in another. Because borrowers don't know which model is being used by their credit grantor, they should assume the period is 15 days.
But the most serious concern about the consolidation rule is whether the scorers can accurately associate inquiries with the correct loan type, especially in the case of mortgages.
Does consolidation always work?
One of the motivations for this article was a claim made to me by Jack Pritchard, a long-term mortgage veteran, that mortgage inquiries were not always consolidated because the reporting system did not always identify them accurately.
I posed this issue to Fair Isaac Corp. and was told that "the credit reporting system is a voluntary one and ... lenders report what they choose to report to the bureaus, and each bureau represents that information a little differently on its credit reports."
While this reply confirmed that proper identification could be an issue, Fair Isaac claims that their systems work around this problem by giving the borrower the benefit of any doubt. If the system is not sure, it consolidates.
But this leaves open the possibility that the system has no doubt but is wrong. Pritchard pointed to mortgage inquiries from credit unions and finance companies as particularly prone to misclassification because other types of loans are originated out of the same offices. At his suggestion, I asked Fair Isaac what would happen if a mortgage shopper generated an inquiry from a credit union and a finance company?
The reply was that "the credit inquiries would in all likelihood be de-duplicated by the FICO scoring algorithm. Inquiries from both credit unions and finance companies are eligible for de-duplication." The italics are mine, and clearly suggest that there is no assurance that "de-duplication" (Fair-Isaac-speak for consolidation) will occur.
Bottom line for now
A case can be made that loan inquiries should be added to the list of borrower characteristics, such as sex, race and ethnicity, that, as a matter of public policy, can't be used in developing credit scores. The information could continue to be compiled and provided to lenders, but could not be used by the credit-scoring algorithm.
Meanwhile, borrowers shopping for credit should minimize the number of hard inquiries by ordering their own score, which does not count as an inquiry, providing that score to all the vendors they shop. You tell them that they can check your credit when you are ready to authorize it. This will reduce the number of hard inquiries to one, from the vendor you finally select. And do not seek new credit cards during the period you are shopping for a loan.
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
How to steer clear of 'borrower in distress' label
By Jack Guttentag
Borrowers in distress often contact many lenders hoping to find one who will approve them. For this reason, multiple inquiries can have a negative impact on a consumer's credit score. But multiple inquiries can also result from loan applicants shopping for the best deal. The challenge to the scoring system is to distinguish borrowers in shopping mode from borrowers in distress mode.
Hard inquiries vs. soft inquiries
Consumers need not be concerned about inquiries they make, such as ordering a credit report. Self inquiries don't affect the credit score. Neither do inquiries from your existing creditors, potential employers, or businesses considering whether or not to solicit you. These are sometimes called "soft inquiries."
The inquiries that may affect your credit score are those by new credit grantors to whom you have given your Social Security number along with explicit authorization to check your credit. These are "hard inquiries."
Distinguishing borrowers in shopping mode from those in distress: The ignore rule
Two credit-scoring rules developed by Fair Isaac Corp., which pioneered the development of credit-scoring models, are designed to protect the scores of borrowers who shop multiple lenders for the best deal. The quotes below are from www.FICO.com.
The "ignore rule" is that "the score ignores mortgage, auto, and student loan inquiries made in the 30 days prior to scoring."
The 30 days includes the day of the score, which is not evident from the wording. It is a good rule, but borrowers are not warned about other types of credit that are not ignored. A very important one is credit cards. Because I happened to need a new business card while researching this article, I decided to see what impact my card shopping would have on my score.
I had a mortgage lender friend make a credit inquiry to obtain my score, then I shopped two card issuers and had my friend inquire again. My score had dropped 13 points. All credit card inquiries are treated as indicators of distress.
Mortgage borrowers today face the hazard that the 30-day period can expire while their loan is still being processed. If the lender decides to recheck the borrower's credit, which some do as a standard practice, the mortgage inquiries that had previously been ignored will then hit the score.
Distinguishing borrowers in shopping mode from those in distress: The consolidation rule
The "consolidation rule" is that "the score looks on your credit report for mortgage, auto, and student loan inquiries older than 30 days. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score."
The consolidation rule is expressed in such a way that most readers interpret it to mean that mortgage, auto and student loans are consolidated together. That is how I read it originally. In fact, what it means is that all mortgage loans are consolidated, all auto loans are consolidated, and all student loans are consolidated. If you shop for one of each type, they constitute three inquiries.
The shopping period during which inquiries are consolidated is 15 days in one version of the scoring model and 45 days in another. Because borrowers don't know which model is being used by their credit grantor, they should assume the period is 15 days.
But the most serious concern about the consolidation rule is whether the scorers can accurately associate inquiries with the correct loan type, especially in the case of mortgages.
Does consolidation always work?
One of the motivations for this article was a claim made to me by Jack Pritchard, a long-term mortgage veteran, that mortgage inquiries were not always consolidated because the reporting system did not always identify them accurately.
I posed this issue to Fair Isaac Corp. and was told that "the credit reporting system is a voluntary one and ... lenders report what they choose to report to the bureaus, and each bureau represents that information a little differently on its credit reports."
While this reply confirmed that proper identification could be an issue, Fair Isaac claims that their systems work around this problem by giving the borrower the benefit of any doubt. If the system is not sure, it consolidates.
But this leaves open the possibility that the system has no doubt but is wrong. Pritchard pointed to mortgage inquiries from credit unions and finance companies as particularly prone to misclassification because other types of loans are originated out of the same offices. At his suggestion, I asked Fair Isaac what would happen if a mortgage shopper generated an inquiry from a credit union and a finance company?
The reply was that "the credit inquiries would in all likelihood be de-duplicated by the FICO scoring algorithm. Inquiries from both credit unions and finance companies are eligible for de-duplication." The italics are mine, and clearly suggest that there is no assurance that "de-duplication" (Fair-Isaac-speak for consolidation) will occur.
Bottom line for now
A case can be made that loan inquiries should be added to the list of borrower characteristics, such as sex, race and ethnicity, that, as a matter of public policy, can't be used in developing credit scores. The information could continue to be compiled and provided to lenders, but could not be used by the credit-scoring algorithm.
Meanwhile, borrowers shopping for credit should minimize the number of hard inquiries by ordering their own score, which does not count as an inquiry, providing that score to all the vendors they shop. You tell them that they can check your credit when you are ready to authorize it. This will reduce the number of hard inquiries to one, from the vendor you finally select. And do not seek new credit cards during the period you are shopping for a loan.
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
Wednesday, August 3, 2011
5 ways to sell a real estate business: What's your exit plan?
5 ways to sell a real estate business
What's your exit plan?
By Bernice Ross
You have decided to sell your business and have located a potential buyer. What are your options in terms of maximizing the amount of your sale from your real estate business?
If you do nothing else before you sell your business, the most important step you can take is to review the tax consequences with your tax attorney or your accountant. When it comes to selling, everyone's situation is different.
For example, if you decide to sell your business and your house in the same year, you may end up paying a hefty amount in additional taxes.
On the other hand, you may have a buyer who is unable to pay all cash for your business. At this point, you may have to consider financing the deal yourself. Here are some of the most common models for selling your real estate business:
1. All cash upfront -- you exit the business upon sale
While asking for all cash upfront may seem like a good idea, it may severely limit the number of potential buyers for your business. This in turn could result in a lower price. Tax consequences are another issue. Taking all your money upfront may result in you keeping less due to higher taxes. A specific issue to watch for is the Alternative Minimum Tax.
Many of your typical deductions disappear as you hit certain income levels. Again, see your tax professional first to minimize the tax bite.
2. Installment sale with a fixed price -- you may exit or phase out of the business
In most cases, there are usually some serious tax advantages to taking an installment sale with the payments spread out over time. On the other hand, if the new owner runs your former business into the ground, those future payments may never happen.
One of the ways to limit your exposure to a buyer who lacks the skills to keep the business going is to stay involved in the business until your note is paid off. This allows you to monitor what is happening and to step in to protect the business if the new owner gets into trouble.
3. Installment sale with a referral-based model
A slightly different approach to the installment-sale method is for the agent or broker to exit the business but continue to receive referral income from any past clients he or she refers to the new owner.
4. Family transfer
One of the most common ways that real estate businesses are being sold is through family transfers. Many young people have realized that they can make serious money in real estate -- especially if they can successfully step into an existing business that their parents started.
While it may be tempting to pass the business to a loved one, it's important that you make sure that the person who buys (or takes over) your business has the skill set to keep the business up and running.
Furthermore, even if you were selling your business to your own mother, have an attorney draw up the documents of sale. This protects everyone, especially if something happens to either you or your family member before the sale is complete. The last thing you want to have happen is to have your business sale tied up in probate court.
5. Selling your franchise
If you own a franchise, it's important that you have an attorney review your franchise agreement regarding what you can and cannot do in terms of selling your franchise. In almost every case, the franchisor will have the right to approve or disapprove your sale. You can avoid needless headaches if you address this issue before pursuing a buyer for your business.
Here are some additional issues to consider:
•Is the buyer's work ethic strong enough to keep your business going?
•Does the person have the capacity to expand the business beyond what you have built?
•Is the person a good cultural match from your current client base? For example, if most of your clients are boomers, will they relate to a new owner in his early 30s?
•Another important step to take is to thoroughly investigate your buyer. This means running a full-blown credit check even if the buyer is someone you have known and worked with for years. For example, a broker owner was considering selling his business to his top-producing agent. The broker took my advice and ran a credit check. This agent never paid his bills and was a complete mess in terms of his creditworthiness. If she had sold to this man, she probably would have had the double whammy of not getting paid and seeing her business fail.
•This brings up another important issue. If you are financing the sale, it's important that your attorney puts a provision in the contract that will allow you to take the business over if the new owner misses payments or defaults on his or her obligations.
•When you are ready to sell your business, make sure that you visit your tax professional first to review the laws and the requirements at that time and to maximize the net amount that you will receive.
Do you need more help on preparing to sell your business? If so, don't miss Part 5 of this series.
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
What's your exit plan?
By Bernice Ross
You have decided to sell your business and have located a potential buyer. What are your options in terms of maximizing the amount of your sale from your real estate business?
If you do nothing else before you sell your business, the most important step you can take is to review the tax consequences with your tax attorney or your accountant. When it comes to selling, everyone's situation is different.
For example, if you decide to sell your business and your house in the same year, you may end up paying a hefty amount in additional taxes.
On the other hand, you may have a buyer who is unable to pay all cash for your business. At this point, you may have to consider financing the deal yourself. Here are some of the most common models for selling your real estate business:
1. All cash upfront -- you exit the business upon sale
While asking for all cash upfront may seem like a good idea, it may severely limit the number of potential buyers for your business. This in turn could result in a lower price. Tax consequences are another issue. Taking all your money upfront may result in you keeping less due to higher taxes. A specific issue to watch for is the Alternative Minimum Tax.
Many of your typical deductions disappear as you hit certain income levels. Again, see your tax professional first to minimize the tax bite.
2. Installment sale with a fixed price -- you may exit or phase out of the business
In most cases, there are usually some serious tax advantages to taking an installment sale with the payments spread out over time. On the other hand, if the new owner runs your former business into the ground, those future payments may never happen.
One of the ways to limit your exposure to a buyer who lacks the skills to keep the business going is to stay involved in the business until your note is paid off. This allows you to monitor what is happening and to step in to protect the business if the new owner gets into trouble.
3. Installment sale with a referral-based model
A slightly different approach to the installment-sale method is for the agent or broker to exit the business but continue to receive referral income from any past clients he or she refers to the new owner.
4. Family transfer
One of the most common ways that real estate businesses are being sold is through family transfers. Many young people have realized that they can make serious money in real estate -- especially if they can successfully step into an existing business that their parents started.
While it may be tempting to pass the business to a loved one, it's important that you make sure that the person who buys (or takes over) your business has the skill set to keep the business up and running.
Furthermore, even if you were selling your business to your own mother, have an attorney draw up the documents of sale. This protects everyone, especially if something happens to either you or your family member before the sale is complete. The last thing you want to have happen is to have your business sale tied up in probate court.
5. Selling your franchise
If you own a franchise, it's important that you have an attorney review your franchise agreement regarding what you can and cannot do in terms of selling your franchise. In almost every case, the franchisor will have the right to approve or disapprove your sale. You can avoid needless headaches if you address this issue before pursuing a buyer for your business.
Here are some additional issues to consider:
•Is the buyer's work ethic strong enough to keep your business going?
•Does the person have the capacity to expand the business beyond what you have built?
•Is the person a good cultural match from your current client base? For example, if most of your clients are boomers, will they relate to a new owner in his early 30s?
•Another important step to take is to thoroughly investigate your buyer. This means running a full-blown credit check even if the buyer is someone you have known and worked with for years. For example, a broker owner was considering selling his business to his top-producing agent. The broker took my advice and ran a credit check. This agent never paid his bills and was a complete mess in terms of his creditworthiness. If she had sold to this man, she probably would have had the double whammy of not getting paid and seeing her business fail.
•This brings up another important issue. If you are financing the sale, it's important that your attorney puts a provision in the contract that will allow you to take the business over if the new owner misses payments or defaults on his or her obligations.
•When you are ready to sell your business, make sure that you visit your tax professional first to review the laws and the requirements at that time and to maximize the net amount that you will receive.
Do you need more help on preparing to sell your business? If so, don't miss Part 5 of this series.
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
Humanization, Relationships and Likeability
Humanization, Relationships and Likeability
By Gee Dunsten
RISMEDIA, Aug 2, 2011—We can trace word-of-mouth marketing all the way back to 2000 B.C. when Eve said to Adam, “You ought to try a bite of this apple.” The Garden of Eden scenario represents marketing in its purest form—after all, trusted friends always trust each other’s recommendations.
Since then, marketing has embarked on quite a journey, of course. The invention of the printing press opened the door to mass marketing, which eventually came to use newspapers and magazines as primary promotional vehicles. The subsequent creation of the radio and television opened up yet another world for marketers, now able to promote their messages to a vastly increased audience.
Over the years, marketing has centered around the idea of pushing people to do something—try a new brand of soda, shop at a particular store, see the blockbuster debuting in theaters this weekend. The element that has been left out of the marketing equation for years, however, is the “feeling” aspect…the relationship aspect.
In today’s information overloaded culture, people are frantically trying to get away from the traditional “noise” of marketing. Think DVRing your favorite television shows so that you can avoid the commercials. Think getting your news via CNN updates on your phone as opposed to reading the newspaper. We want what we want when we want it. We certainly don’t want Madison Avenue telling us what we want.
That’s why marketing in the new world must center on relationships. And it must involve relevant content in order to build those relationships. People with good information are recognized as trustworthy and credible. As Gary Vanderchuk put it, “If content is king, context of relationship is a higher power still.” Context is about making sure we first care about our customers/clients, long before we ever try to sell them something.
Today, agents and companies in general need to be much more focused on the humanization of business. Ironically, our grandparents’ generation understood this. They knew their friends and neighbors, knew what they liked and didn’t like. They took the time to develop relationships and applied this knowledge to their businesses.
The Walt Disney Company is a wonderful example of a caring company. Disney does not have a customer service department; they have a “care and thank you” department. Disney does not hire people based on their skills; they hire people because they have a caring attitude. The firm believes that they can teach any employee the skills to be successful…as long as they are caring people to begin with.
Last fall, I was booked on a flight from Chicago to Dallas, only to be told by the airline that the flight was going to be delayed and I should stay in the area. After a four-hour wait until after midnight, I was told the flight was cancelled and I would have to rebook a flight for the next day. With no explanation or apology given, the airline agent walked away and I was left to fend for myself, along with 100 other frustrated and angry passengers. As someone who has flown over a million miles with this particular airline, it would have been nice to receive an email the next morning with an apology for the inconvenience and an explanation for the delay, such as “concern for your safety,” etc. How much would it have cost the company to say “I’m sorry” and “I care” in an attempt to turn this lemon into lemonade? It’s quite obvious that a caring attitude was not the focus of the airline.
Compare that experience to the one my friend and colleague, Mark Given, had while visiting Disney World with his grandchildren. After watching his 4-year-old grandson drop his ice cream cone and begin to cry, Mark was amazed to see a very young Disney employee come up to his grandson, go down on one knee and tell him not to cry, that Disney World is the happiest place on earth. The employee then cleaned the boy up and presented him with a new cone. This 17-year-old employee, working a summer job, remedied the situation on the spot…without even asking his supervisor.
The above two examples of corporate caring are not simply feel-good (or, in my case, feel-bad) stories. These experiences are directly connected to business success…or the lack thereof. Will my friend go back to Disney World and recommend it to countless others? Without a doubt. Will I—and my hundred other fellow passengers—fly that airline again? Maybe, but not nearly as often…or maybe not at all.
My perception is that caring is saleable. It is not a fad. People/companies will soon start battling on the likeability/care front in a revolution. And where will the battle take place for the most part? On social media turf.
The stage is already set: Facebook has a Like button. YouTube, LinkedIn, and Foursquare have added functionality that allows users to express their approval of content. Twitter has a “favorite” button that allows users to approve different tweets. Not to mention consumer critiquing sites, such as Yelp.
With so much competition today, companies that adapt and make sure their agents stay engaged and committed to giving their customers and clients the greatest possible real estate experience—the greatest possible overall care—will be the winners in the second half of this decade. So, it’s time to click your own “Like” button and start building caring and trust in the services you provide. As Dr. Seuss said, “Sometimes the questions are complicated and the answers are simple.”
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
By Gee Dunsten
RISMEDIA, Aug 2, 2011—We can trace word-of-mouth marketing all the way back to 2000 B.C. when Eve said to Adam, “You ought to try a bite of this apple.” The Garden of Eden scenario represents marketing in its purest form—after all, trusted friends always trust each other’s recommendations.
Since then, marketing has embarked on quite a journey, of course. The invention of the printing press opened the door to mass marketing, which eventually came to use newspapers and magazines as primary promotional vehicles. The subsequent creation of the radio and television opened up yet another world for marketers, now able to promote their messages to a vastly increased audience.
Over the years, marketing has centered around the idea of pushing people to do something—try a new brand of soda, shop at a particular store, see the blockbuster debuting in theaters this weekend. The element that has been left out of the marketing equation for years, however, is the “feeling” aspect…the relationship aspect.
In today’s information overloaded culture, people are frantically trying to get away from the traditional “noise” of marketing. Think DVRing your favorite television shows so that you can avoid the commercials. Think getting your news via CNN updates on your phone as opposed to reading the newspaper. We want what we want when we want it. We certainly don’t want Madison Avenue telling us what we want.
That’s why marketing in the new world must center on relationships. And it must involve relevant content in order to build those relationships. People with good information are recognized as trustworthy and credible. As Gary Vanderchuk put it, “If content is king, context of relationship is a higher power still.” Context is about making sure we first care about our customers/clients, long before we ever try to sell them something.
Today, agents and companies in general need to be much more focused on the humanization of business. Ironically, our grandparents’ generation understood this. They knew their friends and neighbors, knew what they liked and didn’t like. They took the time to develop relationships and applied this knowledge to their businesses.
The Walt Disney Company is a wonderful example of a caring company. Disney does not have a customer service department; they have a “care and thank you” department. Disney does not hire people based on their skills; they hire people because they have a caring attitude. The firm believes that they can teach any employee the skills to be successful…as long as they are caring people to begin with.
Last fall, I was booked on a flight from Chicago to Dallas, only to be told by the airline that the flight was going to be delayed and I should stay in the area. After a four-hour wait until after midnight, I was told the flight was cancelled and I would have to rebook a flight for the next day. With no explanation or apology given, the airline agent walked away and I was left to fend for myself, along with 100 other frustrated and angry passengers. As someone who has flown over a million miles with this particular airline, it would have been nice to receive an email the next morning with an apology for the inconvenience and an explanation for the delay, such as “concern for your safety,” etc. How much would it have cost the company to say “I’m sorry” and “I care” in an attempt to turn this lemon into lemonade? It’s quite obvious that a caring attitude was not the focus of the airline.
Compare that experience to the one my friend and colleague, Mark Given, had while visiting Disney World with his grandchildren. After watching his 4-year-old grandson drop his ice cream cone and begin to cry, Mark was amazed to see a very young Disney employee come up to his grandson, go down on one knee and tell him not to cry, that Disney World is the happiest place on earth. The employee then cleaned the boy up and presented him with a new cone. This 17-year-old employee, working a summer job, remedied the situation on the spot…without even asking his supervisor.
The above two examples of corporate caring are not simply feel-good (or, in my case, feel-bad) stories. These experiences are directly connected to business success…or the lack thereof. Will my friend go back to Disney World and recommend it to countless others? Without a doubt. Will I—and my hundred other fellow passengers—fly that airline again? Maybe, but not nearly as often…or maybe not at all.
My perception is that caring is saleable. It is not a fad. People/companies will soon start battling on the likeability/care front in a revolution. And where will the battle take place for the most part? On social media turf.
The stage is already set: Facebook has a Like button. YouTube, LinkedIn, and Foursquare have added functionality that allows users to express their approval of content. Twitter has a “favorite” button that allows users to approve different tweets. Not to mention consumer critiquing sites, such as Yelp.
With so much competition today, companies that adapt and make sure their agents stay engaged and committed to giving their customers and clients the greatest possible real estate experience—the greatest possible overall care—will be the winners in the second half of this decade. So, it’s time to click your own “Like” button and start building caring and trust in the services you provide. As Dr. Seuss said, “Sometimes the questions are complicated and the answers are simple.”
If you don't remotely know how or where to begin with implementing any of these, come work with us. We already have a system that does it all for you!
The best in their field, even professional athletes take advantage of coaching. If you would like the benefit of working with a full time coach, absolutely free to you, please call me directly or email to set up an interview.
Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com
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