Just a random thought, and I’ll feel better after saying it:  the next agent who asks me how I got all my listings (especially the ones in “their town”) will be told the following:

I prospect at funeral homes. I attend all wakes in my area, and I hand out my business card to all the bereaved. I make sure my brochure is in all their lobbies too.

Some people ask innocently. Those I can finesse. Some ask almost out of reflex and they don’t really expect to get the keys to the kingdom. But some deserve the above answer, and you can tell- they have a brief hesitation of actually considering it, their eyes even wondering why they hadn’t thought of it yet.

I’m not the first to express this pet peeve (although my solution is creative). Andrew Monaghan said the same thing a while back with respect to his niche.

You know what? I do feel better.

Remaining in touch is the best way to generate referrals and repeat business. You don’t need lame excuses to remain in touch with old clients. Here are 5 things I’ve done in recent months for people I’ve done business with:

1. Help them grieve their taxes. Unless you sell in an area where prices are rising, the taxes on homes you’ve sold in recent years may be reduced. I just emailed 4 recent sales to someone who bought a house with me in 2006 and it looks like his assessed value should go down by $50,000.
2. Market updates. People are curious about how much a new listing as asking or what a nearby home sold for. Better that they ask me than another licensee.
3. Make them hip to your blog. Past clients may wonder what your thoughts are about the stimulus bill, where the market is going, or just how you are doing in this economy. Tell them. Clients are a built in readership, and they select themselves- no emails for them to delete and they visit when convenient.  
4. Service directory. Most of my clients use the lawyer, lender and home inspector I refer. I also have a filing cabinet filled with plumbers, carpenters, electricians, landscapers, chimney sweeps, heating & cooling firms, oil companies, and other sources that homeowners need. I may not be the good housekeeping seal of approval, but whoever I refer will make me look good for doing so.
5. Network them too! I count among my past clients physicians, restaurateurs, free lance artists, contractors, insurance brokers, roofers, teachers and dozens of other professionals. If someone needs E & O insurance, a tutor, artwork or a new driveway and they ask me if I know someone, why wouldn’t I give business to the people who gave business to me?

Many of us market ourselves by saying we want to be our client’s only agent, or their REALTOR for life. These things are an easy way to make that so.

I sold my first short sale in the 90’s. I have over 10 in my pipeline. I am known in my marketplace for the specialty. Buyers are justifiably interested in the savings a short sale can offer. However, few buyers are prepared for the process, often because it is new terrain for their agent as well. Forewarned is forearmed. Here are some things that you should be prepared for if you have a short sale in your sights:

1. You must be prepared to wait…and wait. Occasionally, we get some short sales where everything just clicks and the thing is done almost as quickly as a regular sale. Those are the exception and not the rule. Typically, and it all depends on the lender, short sales can take months. Here is part of what is going on behind the scenes: the lender’s loss mitigation department is inundated with short sale applications. Often, the negotiators are rotated every 30 days. Faxes get lost. Responses take a long while, and the seller’s negotiator (typically the agent or in New York, the lawyer’s office) can be on hold for an hour waiting to speak with a human, only to hear that they were given the wrong fax number last week. It is a maddening, daily battle. Be glad you aren’t in the front lines. Eventually, it gets sorted out.
2. You are buying the house AS IS. Just like with a bank-owned foreclosure, it is “an as” is transaction, because no principal has the funds to remedy any physical issue with the house. Get an inspection for sure, but understand that unless it is an environmental problem, the lender won’t address anything and the seller cannot financially.
3. You WILL get clear title. In an approved short sale, none of the seller’s back taxes, arrearage or other issues convey to you. The lender is hitting the reset button and releasing all liens. That may not mean that a non-conforming bathroom shed or finished basement is compliant, but financially the title is whole.
4. No, you may not speak with the bank. Some buyers get frustrated with the process and figure that all they need to do is speak to someone and fix the short sale. They cannot. The lender will speak ONLY with the borrower or an authorized party about the mortgage being worked out for the same rules of confidentiality that prevent your bank from talking with anyone about your finances. Even if you were to get hold of a loss mitigator, your input will be as welcome as if you walk into a stranger’s operating room or onto a construction site.
5. You probably can’t “steal” the house. As a matter of fact, your offer may not even be submitted unless it is your best offer. Once the seller’s hardship package is approved, the bank will order a BPO (broker price opinion) or appraisal to ensure that the sale price is in line with market conditions. You might get a $400,000 house for $365,000, but you won’t get it for $250,000. Short sales are good deals, but they are seldom steals. Which brings us to this point:
6. The lender may counter your offer.  The house may appraise considerably higher than your offer, or your offer may indeed be too unrealistic. If the bank counters you, look on the bright side: the finish line is in sight! If the counter isn’t to your liking, the smart move is to counter back. If you simply walk away, you may have nailed the seller’s coffin, who has, in good faith, been working and waiting just like you have been. Negotiate. If the seller chose your offer to submit to the lender over the others, you should operate in the same good faith and negotiate. The lender may still come down some.
7. Once approved, you have a deadline to close. The biggest irony in real estate is how glacially slow lenders are in approving short sales and how impatient they are to close once they rubber stamp one. Typically, it is only 15-30 days to close or the offer is rescinded. Therefore, you should have your act together with regard to your appraisal, rate lock, inspections, and so forth. When that approval come down the pike, you need to be prepared to pull the trigger.

My view is that if the short sale process were easier and more streamlined, the market would stabilize far faster, doing the economy a world of good (are you reading this, Mr. Obama?). Unfortunately, the process we work with now is often bloody difficult more often than not, with lots of moving parts and a shifting landscape. Understanding that going in can lessen your frustration and minimize the confusion of a process that is anything but simple. Few worthwhile things are.

One of the biggest thorns in my side is how Zillow offers to estimate home values for consumers. It never fails to amaze me how I can walk through a home, sit with the owner, apply my 13 years of experience to a detailed market analysis, quote the owner my best price opinion, and then be told with a straight face “but Zillow said it is worth $50,000 higher.” I have had irate buyers call me at 9pm, almost screaming that they just overbid on a home because Zillow said it was worth $25,000 less.

There was a time that I just thought that Zillow hated agents. After watching the site evolve and reading Sara Bonert’s writing, I no longer hold that opinion. I believe that Zillow does want to be a valuable tool. Sara tipped us off to Zillow’s self-published accuracy statistics, which are very instructive.

According to Zillow’s own data, in my own Westchester County, Zillow’s median error is 18.3%. Now, this is Zillows own data, which to me speaks volumes.

What they are saying is that they aren’t throwing agents under the bus, or that they are 2nd-guessing our local knowledge. 

Consumers who use this feature would be well advised to read the small print and take this into account when using the zestimate feature. Knowing that this transparency is evident at Zillow gives me far more peace of mind in dealing with their valuations.   

There is some debate going on in some Inman News stories as to whether or not agents ought to be on salary in order to improve the industry. The author, Buz Hurley, is actually an Active Rain member and has a few blog entries.

I don’t see it. It wouldn’t improve the quality of service, for one thing. It would kill it. I offer as an example the failure of Foxtons here in the New York Tri-State area. Foxtons gave their agents a $35,000 salary and a smart-looking Mini Cooper to drive.

I wouldn’t work for $35,000 if you gave me a Bentley, and that’s why they closed up shop. The best agents, who do most of the business, remained at their companies where they would make more money.  

The market has already determined how we should be paid. Agents who want the security of a salary may not truly be cut out for real estate, or should get a part-time job. I did that in 2000 when I moved back to Westchester and became a loan officer (which, by the way, is also straight commission). I bartended for a year to pay the bills while I built my business. It ended up putting me in contact with some good prospects later on when I started my company.

Commission-based compensation pays us based on our production. The better you produce, the better you’ll be compensated. It ensures that you’ll give your best. I love that. I don’t see how anyone would hire an agent who gets paid whether the house sells or not. Where is the incentive to give your best if the paycheck comes Friday no matter what? I have dug out deck footers in rainy 40 degree weather for Certificate of Occupancy issues just to get a deal closed. Why? I had a commission on the line.

I am sure there will be more alternatively styled real estate companies with agents on salary, but they’ll never grow organically from the ground up- it will always be well capitalized from venture investors and make waves while the money lasts, but they won’t last because security is not why the high producing agents are in our business.

Consumers who hire an agent should want just that-production.

I awoke this morning to an offer faxed on company letterhead, complete with a preapproval. While the offer was low, it was clear that the selling agent had his act together. I spoke with him on the phone briefly, and he was, as I thought, a pretty together guy. In the ensuing conversation, he shared the following saying which resonated with me:

You want to be the first love, second marriage, and 3rd listing agent.

Funny, wise words.

Who or what is ANNLEE55? I’ll tell you at the end of this post.

After my post yesterday I received mostly positive comments but a few thought that I was either advocating that people cold call FSBOs instead of blogging or anti-blogging & anti web 2.0 for real estate altogether. One blogger said I “denigrated” what she did. Nothing could be further from the truth. I was calling for balance, especially in cases where all you do is blog and you aren’t making any money. If blogging makes you money that is great. DUH. Don’t fix what isn’t broken. There are some people who do the Internet better than others. They are to be applauded and emulated. Some do it poorly, literally and figuratively. They need to diversify their approach. Real estate is a multi-media practice, not a suicide pact.

When I When I started my own brokerage in 2005, the first thing I did was get a get a good website up. I now have several. I have a web page, blog, or extensive profile on directories for almost every niche I work. I’m not going to give you the keys to the kingdom in this blog post, but we are very happy with how our web marketing alone is making us money. A rather telling endorsement of my belief in the web is my efforts right here, on Active Rain.

In 1996 I knocked on Expired and FSBO doors. In 2009 my targeting of that segment is more hi tech, but I still target that market. You can target whatever market you wish. Do it your way. Whatever niche you work should not be done to the exclusion of blogging and web marketing (and vice versa), but most blogs I see don’t play to a niche, and that’s why some bloggers are unsuccessful.  

Consider this. Next to my laptop is a weekly business journal. It is filled with lis pendens, many of which probably need to sell. Some are short sales you can either list and sell yourself or refer to a short sale specialist and get a referral fee. They may not read your blog. They may not care about the new library or market stats. They are trying to figure out how to avoid a foreclosure. Now, if you blog about avoiding foreclosure they may find you. But you know what I’d do? I’d write them a polite letter. That isn’t an archaic, 1970’s troglodyte approach any more than the wheel, which, I am told, remains a popular device. It is a basic, and it makes money. Want to marry the 70’s and web 2.0 without wearing disco pants? Send them a letter or card that will drive them to needed resources on your blog or website.

I was criticised  for this statement: “If you aren’t speaking with someone daily about buying or selling real estate with you in the next 30 days, you aren’t selling real estate.” It’s true. And you can deal with people in person, via email, through online inquiries and many other things that don’t involve being a carnival barking door knocker. If you got a realtor.com inquiry or an email asking about getting prequalified, you are selling real estate. The medium is not subordinate to the function.

OK- Me and ANNLEE55, now known as Ann Lee Faranda, on September 29, 2001:

We met on the old AOL personals in 1998. The first listing I ever marketed on the Web was ME.

We have 4 beautiful children and run J. Philip Real Estate together. And while some of you married guys might joke that this alone would have me shrieking & pulling out my hair at the very mention of the Internet, let me assure you that even in 1998 I knew and appreciated the possibilities of the medium. We were Instant Message buddies for 7 months before we broke bread. Now there are crumbs everywhere.

I get the Internet. It got me, too.

If you are pressed for time and need to skip the rest of the post, I’ll sum it up for you. Blogging is supposed to supplement what we are already doing to grow and manage our business. It should not be done to the exclusion of growing our business. OK, if you have to go, catch you later. If you have time to read on, I’ll expand.

I cut my teeth as an agent knocking on FSBO doors, calling expireds, sending out just listed and just sold cards, and flat out hustling. I still target that niche. I added some innovative marketing, but my core practices, that is, the girl I brought to the dance, remain. I blog and I have a web page. But I am a broker first. I am always prospecting and experiencing my share of rejection and negativity. The nuts and bolts of growing in this industry remain human and not digital.

Some agents have a prolific web presence. They have six figure points on Active Rain. They have a Zillow profile, a Trulia blog, a Point2 fiefdom, a YouTube channel, a tomato blog and an enchilada, cold antipasto blog for all I know.

And many are broke. I know why, too. They are so busy twittering and facebooking and blogging and vlogging that they forget what this industry is about. If you aren’t talking to someone new daily about buying or selling a house with you in the next 30 days, you aren’t an active agent. You are hiding from the business part of the business and hoping that some ripe buyer or seller will fall in love with your rich prose or your glitzy home page and commit to hiring you. Or you hope that some Active Rainer in Shamokin will refer their cousin to you.

Maybe that will happen. But in this day and age, if you aren’t active in the field, consumers will know it. If you have a hot prospect dumped in your lap and you act like they are the first human being on your desert island in years (quick tip: they don’t like to be called “Spaulding.”), you’ll repel them. They may not say it to your face, but we’ve all been out with someone once and then gotten an email that their father died or they lost their job and they’ll get back with us when things are sorted out, but they never do. That’s buyerspeak for “you’re fired.” Even if you close a transaction with that client, you cannot do it in the volume you need to truly establish yourself in real estate. Not online alone, not yet.

When I got into the business in 1996, the Internet was just beginning. As a matter of fact, I remember being told that we should only do a website on spec and not expect it to generate any business. Frankly, even today I have yet to meet a full service licensee who makes 6 figures from their website alone. The web presence helps more and more, but it cannot stand alone while other profitable avenues are neglected.

You cannot get rich in real estate brokerage in your pajamas. Yet.

If you are a broker who blogs, I am preaching to the choir. If you are a blogger who brokers, close the laptop, take a shower, and start working with humans again. You’ll know you are on the right track when you are uncomfortable now and again. Feel the burn. Your checkbook will thank you.