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.

You Know Real Estate Has Crashed When…

• You forget how miserable 2006 was and instead think of it as the Good Old Days.
• You have a price reduction form available to clients as a “fax-on-demand.”
• The customer service number for a referral company you attempt to register with is now a chat line.
• A competitor’s website redirects to their Amway business.
• When you tell a stranger at a cocktail party you are a broker they give you a hug.
• The next day they bring a casserole to your house.
• You no longer have to explain to anyone what a short sale is.
• You no longer have to explain to anyone what a BPO is.
• You laugh at an appraiser when they use comps from 6 months ago. 
• You notice how generous commissions have gotten.
• Mainly because the sellers are banks.
• Half the expired listings you find aren’t prospects because the seller is a bank. 
• You hate banks.
• Your wife asks you why you shake your head anytime you hear the word “Countrywide.”
• You get more spam about second income opportunities.
• You read it.
• When a prospective listing says what they paid for the house you mentally start subtracting.
• When an overpriced client tells you that this will all be sorted out by the Spring you tell him to shut his pie hole.
• You get startled when your cell phone rings.
• You are disappointed when it is a social call.  
• You have more time to blog.
• You have more time, period.

and the best one…

• The only agents left are the professionals like US.

I have a great deal of contact with people outside my home state of New york and they are shocked to hear how high property taxes are. In Ossining, where I grew up, the taxes on the rather average 2000 square foot home I grew up in are over $12,000. I remember the rent for my apartment after college was $500, and the taxes on my home were twice that. Our current home’s taxes? Forget it. Of course, when someone from Texas or Nevada tells me the taxes on their newer, nicer place are $3000 annually, I want to scream.

Why are taxes so high here? My observation is that in New York we have far more layers of taxation than most states. For instance, I live in the village of Briarcliff Manor, which is in the Town of Ossining. The Village of Ossining is also in the Town of Ossining. If I drive the 1.5 miles from my home to my office, I can plausibly drive by patrol cars for FOUR different police departments: Village of Briarcliff Police, Village of Ossining, Town of Ossining, and Westchester County highway patrol. We also have state troopers in a pinch. Leaving out the state police, that is 4 police stations, 4 police chiefs, and 4 dispatching staffs for sleepy suburbia. That are many duplicated expenses, and the police are a 24-hour operation.

In the town of Ossining, there are two village governments, one town government and 3 department of public works. One notch up, we have an enormous county government with still another county highway department. Almost every county department is a duplication of town or village government. There have been calls for reduction or elimination of county government

School districts range from small village districts with 300-student high schools to larger districts with 2000 student high schools. The town of Greenburgh has 6 villages and at least 8 school districts- Tarrytown, Elmsford, Irvington, Ardsley, Hastings, Dobbs Ferry, Woodlands, and Edgemont. That’s 8 superintendents, 8 high school principals, 8 football teams…are you getting the picture? Of the 8 school districts, none have a high school with more than 1000 students (9-12). Edgemont high school has about 300 students. Some district consolidation would make fiscal sense, but the ramifications are too incendiary to even discuss in a forum of licensees. Greenburgh is also home to part of the Valhalla and Pocantico Hills districts, but I excluded them because of overlap with adjoining towns.

In nearby Connecticut, 10 miles away as the crow flies, there is town and state government, period. No county government. Villages are for mail delivery purposes only. You have town and state police, that’s it. School districts are larger. And somehow, they make it work.

When a relatively modest home has taxes of $12,000 and a nicer home is pushing $20,000, something has got to give. This is the Empire State, but the only one who seems to be benefiting from that moniker is the emperor.

I got a call from a very annoyed agent at once who was attempting to show my listing. There was no key in the lockbox. Naturally, I called my seller client, who was perplexed.

“Don’t they know there is a lockbox?” she asked.

“Of course they know, but there’s no key in it.”

Silence.

“It needs a key?”

The showing was rescheduled, after I showed my client a second time how the thing worked.

I was complimented on the use of this aphorism recently but cannot take credit. Whoever did actually say it first was wise:

Some people have 30 years of experience, others have one year of experience repeated 30 times.

In general, if you are passive aggressive, refuse to submit an offer in writing, claim to have a cash but won’t submit proof of funds, and feel the need to repeat that you have been in the business 30 years multiple times, you fall into the latter group.

In a recent posting, I made a reference to the “bedroom counties” of New York City, meaning the suburban counties surrounding the Big Apple. The term was based on “bedroom community,” which is defined in the dictionary as a suburb. You can get more specific, as some suburban locales are more destinations in themselves, but the context was more geographical than socioeconomic.

I actually googled the term and found only one use prior to mine by Kansas State University economist David Darling:

A bedroom county is where more people live in the county than work in the county – the daily net flow of people coming into work is smaller than the net flow out.

Darling’s use never took, perhaps because, as he acknowledges in his work, some bedroom counties are also job centers. My own home county of Westchester, for example, has long been filled with bedroom communities popular with Manhattan commuters, but many municipalities here, such as Yonkers, New Rochelle and White Plains are small cities popular as employment locations. This makes Darling’s rigid numerical definition awkward for use in real estate. Bedroom communities were defined over the years more by their location more than numerical statistics. First and foremost, they are good places for commuters to live.

Bedroom counties in my view therefore are suburban counties that are commuting distance from a major city. I would characterize the bedroom counties of New York City as Westchester, Rockland and Putnam to the north; Fairfield in Connecticut; Nassau and Suffolk to the east; and in New Jersey, Bergen, Hudson, Essex, Union, Passaic and Morris counties. You can differ if you wish.  I never won an argument with anyone from Somerset County, NJ anyway. All metropolitan counties of New York are also job centers, but they are also all suburban and that locational component trumps who works where in this day and age.

If, at some point the commuter population of Westchester were to overtake the population of those who sleep here I would still consider it a bedroom county. It is one of only two counties to physically border New York City. We are in real estate. It is a location thing.

Dear Bank:

I am in receipt of your extortion short sale approval contingent upon the reduction of my commission.

I decline your offer. I do not play chicken with my business, and no, something is not better than nothing. I did great work to produce a buyer for this property in spite of rather shabby and unprofessional conduct by your negotiator, who, by the way, I would not hire to walk my dog.

I earned every penny of that commission and more. If you do not close on the deal as proposed, then you will lose, by my conservative calculations, another $75,000 in legal fees for foreclosure, more back taxes, accrued interest and arrearage, and a reduced sales price after the home is vacated and, um, “staged” by Slob Contracting, LTD.

If you choose to foreclose, you are overtly stating that my earning less is more important to you than maximizing the revenue for your company. That would be breathtakingly stupid, which would not be a first for you.

I encourage you to reconsider our offer as proposed by employing the use of something known as “Math.”

Very Truly Yours,

J. Philip Faranda

I just got an email from The National Association of REO & Short Sale Professionals offering to make me a certified short sale expert.

Frankly, I have no badge or initials after my name, but a filing cabinet filled with closed short sales and about 12 in the pipeline so I kinda thought I was an expert. I am all for professional affiliations and that sort of thing, but does anyone know about this organization? There seem to be lots of foreclosure-related designations cropping up and I am trying to separate the wheat from the chaff, or at the least the worthwhile ones from the ones who want $100 for a web-course and logo on my website.

Any input would be appreciated.

I just got an email from The National Association of REO & Short Sale Professionals offering to make me a certified short sale expert.

Frankly, I have no badge or initials after my name, but a filing cabinet filled with closed short sales and about 12 in the pipeline so I kinda thought I was an expert. I am all for professional affiliations and that sort of thing, but does anyone know about this organization? There seem to be lots of foreclosure-related designations cropping up and I am trying to separate the wheat from the chaff, or at the least the worthwhile ones from the ones who want $100 for a web-course and logo on my website.

Any input would be appreciated.

I just got an email from The National Association of REO & Short Sale Professionals offering to make me a certified short sale expert.

Frankly, I have no badge or initials after my name, but a filing cabinet filled with closed short sales and about 12 in the pipeline so I kinda thought I was an expert. I am all for professional affiliations and that sort of thing, but does anyone know about this organization? There seem to be lots of foreclosure-related designations cropping up and I am trying to separate the wheat from the chaff, or at the least the worthwhile ones from the ones who want $100 for a web-course and logo on my website.

Any input would be appreciated.

I just got an email from The National Association of REO & Short Sale Professionals offering to make me a certified short sale expert.

Frankly, I have no badge or initials after my name, but a filing cabinet filled with closed short sales and about 12 in the pipeline so I kinda thought I was an expert. I am all for professional affiliations and that sort of thing, but does anyone know about this organization? There seem to be lots of foreclosure-related designations cropping up and I am trying to separate the wheat from the chaff, or at the least the worthwhile ones from the ones who want $100 for a web-course and logo on my website.

Any input would be appreciated.

I just got an email from The National Association of REO & Short Sale Professionals offering to make me a certified short sale expert.

Frankly, I have no badge or initials after my name, but a filing cabinet filled with closed short sales and about 12 in the pipeline so I kinda thought I was an expert. I am all for professional affiliations and that sort of thing, but does anyone know about this organization? There seem to be lots of foreclosure-related designations cropping up and I am trying to separate the wheat from the chaff, or at the least the worthwhile ones from the ones who want $100 for a web-course and logo on my website.

Any input would be appreciated.

I just got an email from The National Association of REO & Short Sale Professionals offering to make me a certified short sale expert.

Frankly, I have no badge or initials after my name, but a filing cabinet filled with closed short sales and about 12 in the pipeline so I kinda thought I was an expert. I am all for professional affiliations and that sort of thing, but does anyone know about this organization? There seem to be lots of foreclosure-related designations cropping up and I am trying to separate the wheat from the chaff, or at the least the worthwhile ones from the ones who want $100 for a web-course and logo on my website.

Any input would be appreciated.

If you are an agent in or around the bedroom counties of New York City (suburbs, Hudson Valley, Long Island, Fairfield County, CT) I am hiring both full and part-time agents. I offer ongoing mentorship, help with prospecting, training, and, oh yes, LEADS. Email me for details. I belong to the following MLS systems:

• Westchester-Putnam (includes the Bronx)
• Greater Hudson Valley (Rockland, Orange, Ulster, Sullivan)
• MLS of Long Island (Nassau, Suffolk, Queens)
• Fairfield and CT Statewide MLS (All of CT)
• Mid Hudson (Dutchess)
• I am open to joining REBNY or another local MLS for the right agent’s needs. This could mean Brooklyn, Staten Island, or Greenwich. The Bronx MLS appears to be approaching obsolescence with the expansion of Westchester-Putnam.

If you are not an agent but in a related industry and would like a Scarsdale mailing address, I have an open desk available in a very nice office in Scarsdale. This is perfect if you do mortgages, survey, appraise, are an attorney and need a pit stop locale, or do commercial brokerage. The facility has parking and many other amenities. I am willing to rent the desk to an agent, but only under specific circumstances. It goes without saying that you have to be of top notch character to be considered for either opening.

Email me for details on either possibility.

I was inspired by Bill Gassett’s recent posting on why listings expire unsold to share what I tell people when it comes to pricing their homes. Simply put, time costs money and money costs time. The faster you need to sell, the less you’ll get. The more money you want, the longer you’ll have to wait. Let’s take a house that I think will probably sell for $375,000, bearing in mind that in my market, the same house may have sold in 2005 for $475,000 (ouch).

Some people are more motivated than others. It need not be duress, they just want to get the show on the road and get packing. These are the people who don’t need their arms twisted about the whole different set of eyeballs their home will get at $399,900 than $409,900. The house shouldn’t take too long to sell. It may not sell the first weekend, but the odds of it getting stale are low.

Others are in hot water. They can’t wait 90 days. They need to tell a collection department (or a judge) that they have a contract on their home in order to hold off a foreclosure proceeding. They may need to price it at $349,900. It might get bid up higher because the market is efficient, but regardless, that will get the people moving on the place. They get less money but they benefit with a faster timetable. Time costs money.

The last group isn’t motivated by time so much as they are on money. For one reason or another, they want to hold out for their price. Let’s suppose these people want $400,000 or more. They might be stubborn, egotistical, or just in doubt about the true conditions of the economy. Or, they might just be of a more speculative mindset and believe that there is one special buyer out there that might pay them a premium for the place because of scarcity or condition. They might be right, but these clients will have to be prepared to wait longer than most of their peers. Again, time is paid for in money, but money’s cost is more time.

If the latter group is educated by their experience after a month or two, they’ll reduce their price. Some don’t get it and are on their 3rd broker in 2 years. Sometimes they will get an offer from that one special buyer but there’s no guarantee that the appraiser will agree, and that is a discussion for another day. If higher-priced people know in advance that they’ll have to wait, they should have less of a problem with a higher commission, a longer listing contract, or both.

It is an immutable dynamic in my experience, and if explained to sellers in advance, it saves me from being blamed for poor price advice, or, worse, priming the pump for another broker later on.

I have a listing priced at 219,000, and we received an offer of $185,000. Not uncommon in this market. The pre-approval included was also for $185,000. Now, I know that the buyer probably qualifies for more, but they don’t want to tip their hand. Some of you may not agree with me, but this strategy can backfire. I’ll say that in stronger terms:

It is a DUMB strategy.

What that $185,000 pre approval said to my seller was that the buyer is low balling him because they only qualify for $185,000 (a $35,000 price reduction, mind you) by an eyelash. They do not look like strong buyers. And their agent look silly for showing a $219,000 house to $185,000 buyers. So, instead of countering, my client had to be convinced that we wouldn’t be wasting our time dealing with unqualified people. And all in the name of people playing an antiquated head game. Do they really think we’ll just cave in and give them the house for $185,000 because that is all they qualify for? If they qualify for $275,000 are they afraid we’ll counter offer them for $275,000 for the $219,000 house? Madness!

The criteria for any wise strategy is a winning outcome, a losing outcome, or a break-even outcome. With that 185k letter there is no winning. The best they’ll do is break even. Break even/lose is not a wise tactical outcome. We countered them, but only with a promise of an updated preapproval. I am all for confidentiality, but not at the expense of making you look like a weaker, less qualified purchaser than you truly are. What if we get another offer and the people qualify for a bigger mortgage? You just sabatoged your case!

There may be scenarios where not tipping your hand is wise. However, with a starter home and 3% down, you’d better come up with a way to make your buyer look strong, or, at the very least, not overthink things to such a degree that they look weak. You just looked all through our closets when you saw the house; we’re not hung up on your secrets. Confidentiality is mean to protect, not weaken, a buyer’s case. Give me the real pre approval, and we’ll be as up front as you are going forward. Show me how strong your buyer is.  Give it to me straight!