Looking ahead to 2009

I'm looking for things to pick up very soon in the real estate marketplace. Maybe, just maybe, all of this will weed out the "I'll sell only if I can get a high enough price" sellers and have the serious sellers with properties on the market at fair value.

On the mortgage lender side, I see a need for the lenders to increase their role and become more of a consultant or advisor to home owners and first time buyers. Too many lenders, which frankly includes some of my clients around the country, have gone to a "today" mentality and not thinking long term. Whether or not this is really the case, some come across with the attitude of "If I can't do this deal right now, I don't care about later on". And this will hurt them in the long run.

Even as some lenders have closed their doors, there are still plenty out there. Don't ever forget this. The lower mortgage rates are prompting some home owners to check with their previous lender about the possibility of refinancing. However, their home might not currently be worth enough to make a refinance worthwhile, such as when the market value of the home drops to the point where it goes below the current equity. I already know of lenders who make this discovery and then fail to handle it properly.

"Properly" means addressing this head on with the potential client, letting him/her/them know that you will be watching the marketplace and area property values and rates with an eye toward the first available opportunity to make it worthwhile. Make a note to follow up with them every 45 days or so no matter what.

Chances are that homeowner will start watching on his/her/their own. And if you have not indicated a responsible follow up, chances are they won't feel obligated. Do not overlook how today's work can produce benefits months from now instead of thinking it won't help you next week and forgetting a once solid potential deal. Six months from now you could be "that guy who never called back and couldn't do it" OR you could be the "guy who we used before and told us last month this could be the time". Some lenders think that "we get referral business", but a negative referral doesn't count.

If you are a home owner (consumer), you can and should do your homework. You already know what rate you are now paying. A rate lowering even 3/4 of a percentage point could mean a $150 or more per month decrease in your monthly mortgage. If the last mortgage lender you used hasn't been in contact with you, do your homework. Start checking area sales for property values. If your home is still worth close to or more than its original value, you have a great opportunity to shop for the true best deal out there that fits your needs. You do have a choice.

And if you are a realty agent, a consumer interested in a refinance who maybe can't get one just might be a candidate to move to a "better" property for the same or less on their mortgage. You can certainly help to keep your previous clients posted on trends in their area for very much the same purpose. If you are not keeping in contact, you add to the negative beliefs about the current marketplace.

Speaking of which, one more gripe session for this year about how the real estate industry is, unfortunately, helping to fuel the negative publicity about the marketplace. This time with more proof to make my point.

For November, 1100 homes sold in the Columbus OH area. As a stand-alone, that is actually an impressive statistic. Yet, here's how the member based realty association presents it:

http://www.bizjournals.com/columbus/stories/2008/12/22/daily2.html?ana=from_rss

In the Pittsburgh PA area, 1,800 homes sold during November, but here is how it was reported:

http://pittsburghlive.com/x/valleyindependent/news/s_604041.html?source=rss&feed=30

In Houston, 3,900 properties sold in the one month period, but it comes out like this:

http://www.bizjournals.com/houston/stories/2008/12/22/focus5.html?ana=from_rss

Nearly 1,000 homes sold in Austin TX, yet it is made to look like nothing:

http://www.statesman.com/news/content/business/stories/realestate/12/19/1219homesales.html?cxtype=rss&cxsvc=7&cxcat=3

And don't think this is only for bigger cities. Almost 300 properties sold last month in Erie PA. That's an average of 10 a day including weekends in a smaller market, and that is impressive. Until you read it this way:

http://www.goerie.com/apps/pbcs.dll/article?AID=/20081221/NEWS02/312219878

And I could go on.............

If I were paying dues to any of these (and other) realty associations, I'd be strongly suggesting that some of my dues money go toward a publicity writer.

Have a great holiday !!

2 great ideas - same week!!

While the loan rates dip for the 7th consecutive week and my real estate and mortgage lender clients across the country tell me that they are getting more responses, a couple of very good ideas have come across my desk already this week.

One was from an article about a "Micro-Unit" apartment buidling in the Dallas TX suburb of Plano. As much as I have encouraged those with credit struggles to find a "rent to buy" and increasingly desparate sellers to "rent to sell" as an alternative, this "Mirco-Unit" idea has a lot of merit. "Legacy Village" has three of its units measuring 264 square feet. Yet - all three units are rented and the article says "never vacant". Units such as these are usually offset by common areas with amenities ranging from health clubs and/or juice bars to free wireless and playrooms.

The three units profiled rent for $418 per month. Let's look at this from all perspectives.........

For the renter, this represents a low cost way to live in a "better" neighborhood. This amount in rent is too low to be a "rent to buy" but it does give the renter the opportunity to save up for a down payment in the future.

For the "landlord", this could mean higher income compared with one larger unit. Under the aforementioned rent and size, this "landlord" is effectively generating $1,254 per month for about 1,000 sqaure feet (allowing for three 264 square foot units and space for amenities).

If a seller has a multi-bedroom home or townhouse available and is legally allowed to rent, they might consider adding a few locking doors, amenities, and attempt to rent out multiple rooms simultaneously. Sort of an upscale version of what often happens near university campuses.

(To that point, MortgageMarketInfo.com has information about a new Re-Hab Loan Program available in about 40 states so far.)

To those that are realty agents and lenders, this concept may or may not pay immediate dividends, but I certainly suggest using this idea as a building block of your own. Helping a potential future client find a good rental or a good tenant will win you good favor for when the time comes.

The other sharp idea comes from an article in the suburban Chicago Daily Herald about a realty agent (not a client) who found a niche with helping people to find the best contractor for their present home. Whether for an upgrade or repair. I like this idea for very much the same reason as the above one. When this agent helps a homeowner make their home more valuable, it helps both the eventual seller and the agent in the long run.

If you wish to read this article, there is a link to it via the Powerhouse Real Estate blog in the column to the right.

It's nice to see some true innovation come into the marketplace. Please let me know if you have any such innovations to share. The publicity about the real estate market can be positive, if we all work at it.

Getting The Dirt On Your Local Real Estate Market

All this concern about the environment and "going green" continues to increase in our daily lives, yet I am not seeing it reflected in the local real estate community. I'm not talking about throwing soda cans into the recycle bin at the real estate office. I'm talking about the history of both commercial and residential properties.

If you are considering a purchase, lease, or rental of new construction, shouldn't you know what used to be there?

Last week I happened to be driving through the neighborhood in Chicago that I grew up in. I noticed a recently built condo building that appeared to be almost if not completely full within a short period of time for this market. That's fine and dandy. Until my mind raced back about 20 years and I remembered the number of years that location was a gas station.

What I don't know is if or to what extent that information was disclosed to the buyers within this condo building. Did they know that they could (emphasis on "could") be living directly above pipes and coil which used to carry gasoline before buying? Maybe they did not, since a number of years have passed since that usage was taking place on a daily basis. Or maybe they did, but looked an excellent deal in the eye at the same time and chose to overlook the underground.

Perhaps 20 years is enough time for unused gasoline pipes to clear out or even be removed. This still brings up the point that with the change and growth in big cities and further reaching suburbs, we often don't know, don't recall, or aren't told what is and was underneath the home we now live in.

This doesn't always mean that potentially unhealthy chemicals lurk just below. I recall the time many years ago I was taken to look at some undeveloped land near Cape Coral FL. This was before that community had become much more than a few houses. I was being shown several residential lots that were available at the time, while I could see patches of standing water in several places. No way, Jose!

How could they expect someone to buy property when we don't know how much and how easily there could be standing water nearby. How solid is the ground in the surrounding area? I didn't hang around long enough to see if there was any wildlife on the property. However, years later when I returned to that area, it was a city with houses and stores everywhere.

You are probably asking - What does this have to do with real estate marketing?

My answer is - PLENTY.

Speaking as a consumer, the real estate agent should KNOW the answer about what is or was underneath when selling a property, whether commerical or residential. As it so happens, I happen to know what used to be in the new construction townhome I presently live in, but I'm happy to say that the builder told me anyway before making the purchase. And since then, I have made a positive personal recommendation of that builder. It's these "little things" that make a huge difference with me as a consumer.

Believe it or not, our government actually has a helpful resource available. You truly can get "the dirt" on a property online.

http://websoilsurvey.nrcs.usda.gov/app/

That is for the USDA Natural Resource Conservation Service's Web Soil Survey.

This is a big part of why I constantly tell consumers (friends, family, acquaintances) to do as much research as you can before making a real estate or big ticket purchase. The realty agent (or whomever) doesn't know how much or how little you know. You should ask these questions anyway, even if you know the answer. I'm disappointed to report that 2 of the first 3 realty agents I asked did NOT know the above site exists.

When you are considering a realty agent and/or a mortgage lender, test their knowledge before proceeding.

Since this blog is just as much for those realty agents and mortgage lenders within the industry, the message should be clear. A property you are representing or assisting with is a big ticket item for the buyer and seller. You can't treat it like another brick in the wall.

My best advice is to treat a listing appointment or loan application like a job interview. In addition to making sure the needed paperwork is on hand and accurate, you should use every opportunity to reinforce that you are the person to handle this transaction. Even AFTER the papers are signed.

I don't know the person who wrote this about job interviews, and will mention that the comments which follow present just as many interesting views, but this will hopefully bring out the importance of my "job interview" theory:

http://glipress.blogspot.com/2008/12/5-interview-questions-that-mean-youre.html

During the course of my personally contacting more than 1,000 lenders and realty agents every month about a variety of advertising and marketing concepts, I have several of them each day tell me that "I work by referral".

If only it were as simple as they make it seem. There are a number of times I ask a realty agent or lender a specific question about a property or a loan, and the answer I get is not the correct one. He/she figures I won't know the difference. They probably get away with sounding like an expert most of the time because consumers don't do their research. My point is that a BAD referral is going to cost them additional business.

Yet, they didn't need to spend more for advertising or marketing, as much as that would help. They did need to have done their homework in order to clinch the sale.

Rent To Buy - and How It Can Create Business !

It is always good to see a positive slant on the real estate market, and the San Antonio Board of Realtors has finally done just that. They have issued a report about the increase in local homes being rented and the positive impact on the market. The report claims that “the number of sales of rented homes jumped 8.6 percent in August and September from the same two-month period last year.”. It goes on to say that the number of sales of rented homes jumped more than 8% in August AND September compared with the same two-month period in 2007.

First of all, this is what a realty board SHOULD have been doing all along over the past year or two. Finding the positive statistics and putting them out there. I have already voiced my opinion about member dues going toward stories being published about the comparative drops in home sales and how much that has contributed to the public’s negative perception about the marketplace.

Second, this proves that what I call “true creative financing” is starting to take hold. This report (at least what I saw of it) does not have details about the number of people who executed a “rent to buy” situation went on to purchase, but I have to believe it is a major factor toward this new trend. An empty home is a tougher sell, especially when there is so much inventory out there. Sellers need to see the value of renting or simply doing what they can to have their home for sale occupied if and when they need to vacate.

By the way, that same report shows that the average rental rate for single family homes in the San Antonio region was up nearly 5% for the month of September when compared with one year ago. Some seller/landlords (to coin what should be an often used title!!) realize that many who are renting houses are doing so because they may have enough for a down payment to purchase a home, but do not have the credit.

Even with mortgage rates dropping to their lowest in 4 years this past week, I am seeing the initial crunch of responses from consumers geared more toward refinance rather than purchase. This is certainly good news for mortgage lenders. And my real estate agent clients are going to be reminded about touching base with some of their lender contacts. A candidate to refinance might be ripe to listen to a pitch about a comparable home available at a bargain price. The agent and lender work with the client to rent or sell their current property to, while finding a bargain on an even better comparable property. This is what will kick start the industry back toward where it should and will be. That scenario results in anywhere from one to three commissionable transactions. Compared with zero if the client has no idea they could do this and benefit.

However, I still hear lenders complaining that they can’t refinance some of their clients because the value of the home has dropped to the point that a refi doesn’t make sense. They feel as though the “short sales” going on are knocking them out of the box on refi’s. Taking into account the scenarios such as I have just described opens up additional possibilities of making them happen. Granted, not every possible refinance will be willing to pursue another property and move, but if one out of twenty such possibilities comes to fruition, that is one more commission than would otherwise have been. This is a time of great opportunity.

This reminded me of a story I saw in the early 90’s when I was in the Los Angeles area during the California real estate boom of that period. I was attending an agent and broker meeting as an affiliate member of the (then) San Fernando Valley Board of Realtors when it was already among the top 5 largest membership bases in the entire country. While the market was hot, this was during the period when home prices were inflating in excess of 20% over the course of a single year.

A broker/owner went up before a group of agents to pitch a property and explained that he has the most motivated seller in the area. To the point that he offered an ADDITIONAL $10,000 commission (above and beyond the contracted percentage) to the buyer’s agent who brings him a qualified and eventual purchaser by the end of that day. I remember that to this day because he is the only agent I have seen or heard do that in my 20 years of advertising and marketing for agents and lenders. And I remember the buzz going around the room for the rest of that meeting as agents were making note of that.

Later that month, I asked him if he had been able to make good on that bonus offer. He told me that he wasn’t, but did manage to sell that property just a couple of weeks later. Then he went on to tell me that a couple of the other agents in attendance that day had brought buyers to a couple of his other (lower priced) listings who had not come his way before.

My point here is that agents and lenders do have a choice this minute. I would rather hear about creativity toward making deals than hear complaints about today’s market. You do have a choice.

For consumers participating in this blog, you can heed that advice on your own. If you already know that your home isn't worth what it was a couple of years back and thus would have a challenge to refinance, do your homework about bargains in your area of comparable or better houses. You just might be able to get yourself into a home originally valued at $50,000 to $100,000 more than yours was for the same or perhaps less money each month. If you can find a sharp enough realty agent and lender to work with you on this, you could go for a "rent to buy" as a form of seller financing and try and get a steal on a "better" property in your same area. One that will be worth even more when the market bounces back.

Aggressive Marketing for 2009

Here it is late November of a challenging year for realty professionals and mortgage lenders. And here I am continuing to contact more than 250 different realty and mortgage offices every week about making themselves known and stand out at such a crucial time.

Just today, I had 3 lenders tell me that they are or will no longer be in the mortgage business come Jan. 1, 2009. But the ones that are planning on staying and being in the business for next year need to rise to the occasion.

Recent research by the likes of McGraw Hill and PWC showed that businesses which increased, or at the very least maintained, their ad spending during the previous recession period enjoyed noticeable sales growth over the following 3 years - when compared with companies that reduced or eliminated advertising during the same period.

To put it into a sports term, don't let the other team back into the game when you have a lead.

This article puts it even better than I can:

http://www.managesmarter.com/msg/content_display/marketing/e3i4f5a5225e24b60e0f289cef3344b80eb?imw=Y

Granted, I complain a lot in this blog about the negative publicity which is mistakenly generated from within the industry. But I will admit that negative pub, such as mortgage rates rising and fewer homes being sold, does generate a significant increase in the number of consumers who will check for themselves.

http://www.comscore.com/press/release.asp?press=2516

Put it together, and I'm here to tell you that this is the time to increase or start advertising as much as possible. If consumers STOP seeing your name and/or your company name in the midst of the negative publicity, two things will likely happen:

1) Consumers will remember the advertisers keeping their name out there during tough times as soon as things pick up. If the rates dropped significantly this afternoon, they are not going to say "I'll wait until after the first of the year to see what happens!". They will say "I'm going to look right now and see which lenders and realty firms can help me!".

2) If you have reduced or eliminated your advertising and marketing presence, consumers could easily think that your office or company is among those which have closed their doors. You would have to spend double your previous budget to merely try to get those impressions back. And if you aren't spending now, I wouldn't count on having double the money and manpower available when the time comes.

Meanwhile, I'm pleased to learn that there are some positive efforts coming from some companies within the industry to reach consumers.

Kudos to Coldwell Banker corporate in New Jersey for compiling a list of "Major college football towns by home affordability". Great idea! This is the sort of list which will attract alumni of the more popular colleges across the country, who will want to see where their school ranks. Especially those whose football teams are having a subpar year. Gives 'em something to brag about. Of course, many are home owners.

If you are wondering, Akron, Ohio (University of Akron), was the most affordable market with an average price of $135,780. At the other end of the field ios Palo Alto, CA (Stanford University), with a $1.7 million average home price. Texas wound up with 3 of the "top" 11 areas on the list, by the way. Ft. Worth came in #6, Houston came in sixth with an average home price of $158,412, and Lubbock TX came in at #11.

Houston is a major example of the benefits of a story like this. All I have been reading and hearing about the Houston real estate market over the past six months is language not suitable to print here. If I were a CB agent or lender in the Houston area, I'd be all over this story. Finally, a positive and a fun slant.

Finally, there is the recent N.Y. Times story about the J.D. Power study of 4,300 mortgage loan applicants and their positive spin about the loan application process. Considering all of the funding and loan issues of late, this is a ray of hope.

Personally, I am already planning ways to make 2009 even more successful for my clients. But if they are not going to plan, and not planning to spend to establish or maintain a market share, the only way I can help them will probably be as a job reference in some other line of work.

Happy Turkey!!

It is time to show the potential................

If your income depends upon the sale of real estate, you have no choice but to continue to mine for new business and maintain the contacts you have from previous or attempted business.

These days, there is something to be said for still being around and having your doors open.

But you also need something to tell people and not sound like a recording. That is the less diplomatic way of saying "keep it fresh". One avenue that I am hearing from some, although too few, of my clients is the comparison approach.

It is still a problem that many people are right now afraid to invest in real estate. Now is the time to ask them to compare.

I can't believe I saw an advertisement that a bank actually spent money on touting a return in the 3% range on a CD for $100,000+. I would think that bank would be to embarassed to promote that yield, which is just over half of what it once was.

Now the stock market has gone haywire, and people are afraid to invest significant sums into stocks. It is possible that not all of them will actually bounce back to previous levels, even if bought at bargain basement prices.

Yet, as we all know, real estate will always be there. People don't have to have a CD or stock, or a new car or other big ticket item, but they do need a place to live, and some place to keep their working capital for the long term.

An individual or family with $100,000+ to invest in a CD could "earn" $3,000 on a CD in today's market. Suppose they purchased a parcel of land for that same $100,000. That same land could easily be worth $110,000 a year or two from now. Hopefully more.

Just an example. But if you are sitting there reading this and thinking "I know of a parcel that will be worth even more than that in 2 years!", you should finish this column and then get your contact book open and smile and dial.

Keep in mind that you are no longer selling one property vs. another property. You should be selling buying "this" property vs. investing in a CD, the stock market, or other uncertain field.

If you are not selling, but instead have capital to invest in today's marketplace, you should keep this in mind and look around for a real estate value. Land or an investment property doesn't have to be located in your neighborhood. If your real estate professional can't find anything to fit your needs, do your own research online. Watch for foreclosure auctions, properties in lower income or rural areas which can be bought in full with the amount of available capital you have, and other such opportunities. It is possible to invest in real estate without gaining another mortgage and be able to cash out at a reasonable profit in a couple years.

Personally, I'm finding it harder and harder to believe that real estate is not being marketed as a comparison investment. Here I am pointing it out to real estate professionals every day.

Meanwhile, many kudos to a developer named Jimmy Gierczyk. His latest venture received a well-deserved write up in the Chicago Sun-Times this past week.

Gierczyk has a new luxury condo and townhome development in New Buffalo, MI, which is about 2 hours from Chicago. He was able to do a successful pre-sell on several of his units. How? By putting an Amtrak station within walking distance with a train line going to and from downtown Chicago. And I mean literally putting that train station in.

He reportedly spent over $1.5 million to have a 2nd Amtrak station built near his newest development. The article quotes an Amtrak official as saying this is the only "privately built" station he knows of. The non-stop train runs will take a little more than an hour each way.
I certainly am not suggesting that every developer build a train station nearby. But I think there is more to this story.

The new Amtrak station in New Buffalo, expected to be completed by the end of this year, will be public. It is not only for residents of his development. I'm here to tell you that if I were a real estate professional in Michigan, Indiana (which sits in between New Buffalo MI and the Chicago area) or Illinois, I would be fast and furious about going for a Michigan R E license.
I would be seeking potential buyers looking to have a country or lakefront lifestyle seeking less than 2 1/2 hours of daily commuting to downtown Chicago. (I spend most of my time in Chicago and see people riding the train for longer than that round trip every day.) What a tremendous selling point!

The thing is, other than this one brilliant developer, I'm not seeing anybody else truly selling it.

The marketing of a commerical investment property in today's market

My clients don't always like to hear it, even if they appreciate it. More than ever in today's economy, it takes an extra and a different type of effort to sell a high end or investment property, whether residential or commercial. The days of "here it is, come and buy it" are long gone.

One of the networking sites I frequent had a post from a realty agent I do not know and had never contacted before to the best of my knowledge. He basically announced that the property is for sale and linked to its web site as well as to another version of the listing on a commercial property listing service.

This is for a waterfront restaurant and property in Rhode Island, with the web site he gave being WaterfireDining.com.

My curiousity got the best of me. In better times (as in a few years ago) I did extensive market research to prepare brochures and presentations on a waterfront restaurant in Indiana, and a family owned restaurant in Wisconsin, among others. And this Rhode Island property is priced higher than those I have worked on. I decided to visit the site as if I were a potential investor.

I don't often quote myself in an article, but in this case, it gets my point across. This agent asked for comments, so after visiting the links he gave, here is what I replied with:



"Don - the site and the listing impressed me but didn't "sell" me on why it would be a good investment. (OK - I'm not an investor and don't play one on TV, but I do point these things out to realty agents who are already my marketing clients.) So far I want to eat there rather than buy the place, and that isn't your intention. There is nothing to show a potential buyer why he/she/they should spend over $2,000,000 on this property. Why is it a "former" restaurant? That would potentially scare me off before I would contact you about it. I could go away thinking it has been closed for years and you are still another agent trying to unload an overblown listing. Or, I could come away thinking that it just closed due to insufficient financing in a challenging economic time and that someone could get a good deal if they open it again by the end of the year. And if I had over $2,000,000 for an investment, I'll think the worst of an opportunity. And all the photos in the world don't answer that important question for me. Also, it is located near a major college campus. But is it a place that students go and hang out? Unless I know it is, the proximity to campus doesn't necessarily sell me on this as a good investment. If the students do not frequent the place, the location could be more of a negative than a positive. But I don't know either way. This looks to be another instance where "reasons and benefits" should come before the pictures, bells, and whistles. The site and the listing do not tell me why I should invest in the property."

In other words, I only got part of the overall picture. That part I can understand, but my entire point is that I got the "wrong" part.

This, like thousands of others, is an investment property. Potential buyers are not going to compare it to other restaurants or buildings. They are going to compare it with other potential investments. The potential buyer for this property may not care if it is waterfront, in a college town, or in the middle of a swamp near New Orelans. That potential buyer wants to know, first and foremost, how he/she/they can serve their purpose by purchasing the property.

That purpose could be specific to wanting to own a restaurant, expanding a college town or coastal restaurant concept, starting a family run business, a plan to establish and then re-sell in five years for a hefty profit, or as a tax shelter to pour some money into "improvements" for.

Yet, the majority of the points raised in the previous paragraph were not addressed. I'm sure that those of you who are realty agents are saying to yourself "Of course not, that's why you need to contact me!".

And that's where I come back with my explanation that times have changed. If I am considering an investment of more than $2 million, I am just as likely to say "next!" and look for another possibility as I am to contact the agent and have to give out information before I can get answers to what really are qualifying questions.

If I really was a potential investor in this property, a visual presentation (and I consider a dedicated web site to be one of them) needs to start me up with more important information.

The presentation needs to answer the questions that an investor or investment group of this magnitude needs answered. Like the questions I raised in my response to Don the agent.

Then, if I am still interested, I'm sure I'd be impressed by the pictures.

Now, I'm sure that Don and many other agents I talk to want to tell me that this disappoints them because by doing it the way I suggest they will not be contacted by as many potential buyers.

I disagree. This is not just another condo in a 20 year old development. This is a serious investment property. As an investor of this magnitude, I would be well versed enough to take note that a realty agent has started off by targeting the most important factors. Even if he/she did not target my specific needs, I might still be tempted to contact him or her. Why? Because it would come across that this person understands the marketplace and likely could address my specific need. Or know enough to refer me to someone who does.

Sell the sizzle, and not the steak. At this level of investment needed, market the property and not the agent.

Let me assure you that I am not here to attack agent Don or the property one bit. This is what I would tell him if he were my client. But I will also tell you that in the first 6 days of Don's post about this property, mine remains the only response, and I haven't heard from Don about it either. And the property is still for sale.

To be or not to be? That is the question

Those in the industry need to work a lot harder these days in order to succeed, rather than just to "survive". I get the feeling that some experienced professionals would rather give it up than pick up the pace.

First, let me ask you (the realty agent and mortgage broker) this. If you are looking at closing up shop based on the current economic state, what do you plan to do from this point? What looks like a better opportunity to you?

I contact an average of 300 mortgage lenders per week around the country that I am not currently doing business with. Over the past two months, I find an average of higher than one per day that I had contacted previously that how has or is shutting down or is already disconnected. Yet, I haven't read or heard about another industry that is aggressively growing via sales.

On the realty agent side, my feeling is that the final two months of the year will see a reduction in the number of realty professionals out there. I was working in Southern California in the early 1990's when the joke going around was "If stopped by the police, you can show either your Real Estate License or your Driver's License, whichever is handy". Agents were part-time, full-time, any time, and all the time.

As we come toward the end of the year, it will be association dues time for hundreds of thousands of agents. My gut feeling is that a sizeable percentage will look at spending hundreds of dollars (and thousands in the case of numerous association memberships) in an uncertain marketplace and decide not to renew their license. They may take the "when the market picks up I'll get back to it" approach.

I think everyone loses if that happens. Consumers will lose out if there are way fewer realty agents to choose from. The remainder will figure they won't have to work as hard and consumers will receive even less information and need to track down agents instead of being courted.

Agents and lenders will collectively throw away years of exerience and expertise, perhaps to embark into an industry they are inexperienced in and have to start at the bottom of.

Meanwhile, for those who know that thousands of home sell every month in any market, it is time to develop a creative plan of attack for the coming holiday season and to start 2009.

For example, the "rent to own" market continues to be underserved. I can't believe how very few ads I see about this concept.

Let's say you have already moved out of a house or condo and are stuck with a monthly mortgage payment in addition to the payment on your current home. If nobody is buying right now, then you need to get something toward your payment. If it were me, I would be all over my realty agent to bring me a potential buyer looking in my area who hasn't been able to qualify for what they need. (And these days, that shouldn't take more than an hour!) I would make them an offer to "rent to buy", starting off at a rent below comparable market value for a rental.

I would get them in at a very reasonable rental price for 3 to 6 months. Even if I am not making enough to cover the mortgage, it is far better than having it sit empty and getting nothing for it. Have a provision that after 6 months (or the pre-determined time frame) they can buy it from you for only a slightly increased monthly payment. This increase would bring their monthly fee up to the amount of the mortgage on this property or slightly higher. For example, if your mortgage payment is $1,644 per month, make their "rent to buy" fee $1,700 per month.

You are, in effect, providing them will seller financing. The "renters" will take good care of the place if they may own the place, along with handling some of the maintenance for you.

When the time comes and they want to "rent to buy" you can accept their down payment and go from there. If they do not wish to stay, several months will have past, giving you the chance to assess the local marketplace. You can try to sell again, find another "rent to buy" possibility, or somewhere in between.

Yet, I don't recall the most recent time I saw any advertising for "rent to own". The marketplace demands this and other options.

So if you are an industry professional and are about to pay your association dues for the coming year, now is the time to plan your approach. There is no shortage of elbow grease.

where the money is not.........

The more realty agents and lenders I talk with each week recently, the more I still wonder if people outside of the industry understand the magnitude of the real estate and mortgage fallout on the overall economy.

We are all impacted by the home sales that are not happening. Think about it. On average, with commissions, closing costs, home inspection, title search, legal, and other related services to a home transaction, you can figure that an average of 7% of the purchase price goes to the aforementioned. That provides individuals and companies with revenue. Revenue that normally goes right back out into the economy in the form of small, every day, and big ticket purchases.

Let's look at the figures. Say 1,000 homes with an average sale price of $250,000 each are sold in your community this month. The 7% in fees that go "into the economy" based on those 1,000 homes totals $17,500,000. If that figure maintains for 3 consecutive months, it would add a total of $52,500,000 to just the local economy. And that is just for your community.

Now, let's look at today's market. In many of the nation's larger cities, the percentage drop in home sales over the course of a month is DOWN by more than 1,000 homes compared with as recently as 2 years ago.

Based on the last two paragraphs, let's look at the results. Ouch. Put those together and you see the size of the impact on the overall economy. Cities, counties, and states losing upwards of $52,000,000+ during one quarter of the year compared with what used to be there.

There is no easy solution.

Meanwhile, the public continues to be swamped with mostly negative publicity about the industry. They don't want to sell at what they perceive as too low of a price in order to attract buyers more quickly.

Personally, I am not showing these links each week as an insult to the industry. My point is that there is far too little positive publicity geared toward generating buyer and seller activity.

http://www.wibw.com/localnews/headlines/30823619.html

http://www.bakersfield.com/102/story/576637.html

http://seattletimes.nwsource.com/html/businesstechnology/2008263348_redfin14.html?syndication=rss

http://www.idahopress.com/?id=14959

http://www.roanoke.com/news/roanoke/wb/180055

Don't Stop Short

I've been hearing it all week from realty agents and mortgage lenders. Now it seems the banks are, understandably, waiting for their government money to help bail out the mortgage crisis. However, this is not without short term effects.

Some of the investors ready to cash in on a bargain have lost out to even lower offers on homes entering foreclosure. Now that it appears the banks will receive additional funding, some of these banks are rejecting the "even lower" offers because they will soon be able to sell for even more with government funding.

This means that for right now, the "short sale" is again a thing of the past in many instances.

Regaining the public's trust

Finally, this week not all of the home sales publicity has been a total negative. But it is more than just the news that needs to be addressed.

In my position of working with realty agents and mortgage lenders around the country on a variety of advertising and marketing campaigns, I also hear my fair share from consumers, and do my best to apply their input and feedback to my clients and via this blog.

Frankly, if the mortgage rates and home prices both dropped tomorrow and the stock market went back to normal, the realty agents would still face an image challenge from potential buyers and sellers. The trust still isn't there like it should be.

Let me illustrate my point. After I read this recent article about the Denver housing market, I read the reader comments below. I have no idea who these people are and had not seen this publication in recent memory, but those commenting echo what I have been hearing even more in recent weeks.

Those of you who are realty agents should take note of the comment about how they don't believe that a Realtor will find them a bargain deal because it would net him or her a lower commission.

http://www.9news.com/rss/article.aspx?storyid=101352

This week, the problem is that everyone is "waiting to see what happens". With everyone waiting, nothing is going to happen.

If you are a potential home buyer, whether looking for a bargain or with a serious need to move ASAP, you shouldn't be waiting for anything. If I was looking for a bargain or for an investment right now, I would put a reasonable offer on the table with a deadline of one week to accept or to negotiate. I would want to get my "bargain" before the majority finds out "what happens".

If you are a realty agent, I'd be all over my buyers and contacting buyer agents about my fairly priced and most motivated listings. I would be asking potential buyers about moving their money from the stock market to real estate ASAP. A 3 bedroom Colonial style house with a yard and basement is going to be there for years to come. The company they own stock in that plummeted by 25% in the past week may not be there in six months. Waiting to see "what happens" could cost them a lot more than the downpayment on a "permanent" piece of real estate.

If you are a mortgage lender, you should be advertising to have local home owners contact you to review their current status. Get them help, whether showing them about downsizing to a smaller home to maintain affordable payments, referring them to a credit restoral service, or possible refinancing to consolidate expenses.

The longer you wait to see what will happen, the longer nothing happens for you. Here's hoping that changes............

How to prepare to sell your home.........

This is most definitely a buyers' market. Not to sound like a continuous loop recording, but I keep seeing the negative instead of the positives about the current real estate market. And the negative "news" continues to come from within the industry. I can't figure it out.

http://www.chron.com/disp/story.mpl/business/6017926.html

http://wbztv.com/local/home.sales.condo.2.823598.html

http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20080923/BUSINESS/80923011 http://www.news-daily.com/Main.asp?
SectionID=2&SubSectionID=2&ArticleID=25227

http://www.jsonline.com/story/index.aspx?id=798582

http://www.buffalonews.com/cityregion/northernsuburbs/story/446045.html

Home owners and potential home buyers don't care about the statistics compared with a month ago, a year ago, or a decade ago.

Of course, I get asked by my clients about ways to combat this. I thought I'd pass some along here. Please let me know what you think, and pass along some ideas. But I am going to present them for home buyers.

If I had a true motivation to sell my home today, I would do my homework before calling my realty agent. First, I would look in the local paper and online for similar local homes for sale based on the features I will be offering. That is so important. I would read every description carefully, and compare it with what I will have to offer. Then I would consider what "buzz words" I could add.

For example, my home right now is within walking distance of 2 bus lines and a commuter train line. With gas prices being what they are, my pitch might just start with "close to train and bus" ahead of "3 bedrooms....." and the rest. My home also just had zero water come in following an 8 inch deluge of rain during the mid-September storms that drenched much of the nation. Yet, some streets were closed within a mile of where I live due to standing water. You had better believe I want that highlighted. Pets are allowed where I live and that was also a consideration in purchasing the home years ago. Yet, other than some of my clients, I very rarely see "Pets OK" in an advertisement or description of an available home.

Frankly, not enough realty agents consider these points when marketing a specific property. I could let it slip years ago, but not in this market. And in my role as a motivated seller (for the purpose of this example), I am taking charge.

Once I list my "weapons", such as proximity to schools and transportation, pets, less likely to flood, near shopping and expressway, pets, and the like, THEN I find and compare descriptions and prices on homes with similar features in my area.

Let's say that 3 bedroom homes within 5 miles of mine are all listed between $300,000 and $375,000. Then I know my range. Next, I compare my "weapons". This is where marketing comes into play. I might not know that 3 other homes nearby are pet friendly, didn't flood, and are also near the train and bus lines, because it isn't in the advertised description of the property. My mission is to make that the fault of the listing agent for not pointing out every strength possible.

But that factors into my price strategy. A potential buyer looking in that price range (or higher) knows to look at more than one price vs. another. To put it another way, I can appeal to a potential buyer by getting them to see that my home will enable them to house their pets and walk to the train or bus. In the long run, that should be worth $2,000 more than a similar house that doesn't offer those benefits. That is just an example, but my point is to use every weapon about your house and show potential buyers the added value.

Think about when you go into a convenience store to get a soft drink. You can get a 12 oz. drink for 89 cents. But you can get a 20 oz. drink for 99 cents. You are getting over one-third more for merely an extra dime. You see the value and think the 89 cents drink isn't worth it. But in fact, you really are spending 10% more than you need to in order to get your drink. Keep that in mind when you are setting an asking price for your house.

Keep in mind that the other homes in the area are already priced to include the agent commission. So you don't need to add any more than necessary.

Now that I have an idea of what I would sell for and have done my own local research, THEN I would contact my agent. But I would not just ask him/her/them to come over and list the home. I would ask them to show me some of the other properties in the area as if I am a buyer. And I would spend a couple of hours going to see those homes. Then I would see how the other potential sellers are staging and presenting their home, and hear the listing agent point out the major weapons for that home.

After that, I present my 'weapons' to my agent, review what was learned and observed during my tour of other available homes, and get down to business. I then request the selling weapons that I want pointed out and why I should get $360,000 (example) for the home.

If my agent does the "let's list it for $390,000 and go down to $360,000" routine, I would refuse. Just as an agent should walk away from a listing from an unreasonable seller, I think a seller should only work with a reasonable agent. It goes both ways. At least it should.

The idea is to show that my home is worth $4,000 more than a similar home down the block and show the reasons why. If my agent can't do that, I'll find somebody who will.

Granted, I have 20 years of experience working with agents and lenders on advertising and marketing over the years, but I really did personally use this 2 years ago for some relatives with a property to sell. I found a similar property a block away that was listed for more money and then found two features "my" property had that were better. Sure enough, my relatives got an offer higher than the other home nearby was listed for at the time. Frankly, too many agents out there would react by pricing my relatives' home for a few thousand LESS than the other home. Therein lies the problem.

If you are seriously ready to sell your home, find your weapons, then find your agent.

House it going? Sept. 19th update

There are days I get past all of the negative publicity within the industry and come up with some helpful resources. Thought I'd pass some along to everyone instead of only my clients:

This one shows an aspect to investing in real estate......

http://www.investopedia.com/articles/tax/08/real-estate-reduce-tax.asp

This one explains FHA programs pretty well.........

http://www.baltimoresun.com/business/bal-bz.ml.fha14sep14,0,1868288.story?track=rss

And for those of you in the industry who still don't realize that you need multiple sources of advertising and marketing........

http://www.immi.com/platform.html

Meanwhile, I'm looking for some additional feedback about open houses. As you know, holding them is either a love it or hate it for most agents. Upcoming columns will detail some of the good ideas surrounding open houses, but I'd like to hear from you about your experiences, good or bad with them.

Stop the madness

I'll swear it is getting even worse. Realty professionals and mortgage lenders tell me every day how challenging the market is. Yet, the realty associations and boards seem to be leading the way in publishing the negative news.

The more they tell people about the decline in home sales, the more they help consumers to lose interest in buying. If this were "my" association, I'd be at every meeting asking questions.

Again, without trying, here are stories I have come across while checking the industry news within the past 24 hours:

http://www.2theadvocate.com/news/business/28403244.html
http://www.bizjournals.com/sacramento/stories/2008/09/15/daily28.html?ana=from_rss
http://www.fresnobee.com/updates/story/868334.html
http://www.bizjournals.com/columbus/stories/2008/09/15/focus1.html?ana=from_rss
http://news.rgj.com/apps/pbcs.dll/article?AID=/20080914/BIZ/809140326

So how do these stories make me want to contact a realty agent today?

Keep It Creative!!

The news stories which could impact the real estate community do not always show up in the Real Estate news. Another case in point today. I see where Google News is embarking on a mission to compile archives from local newspapers across the U.S. and Canada and have articles going back years and years available when searching only on Google. Word is that this will be starting in the very near future and that Google hopes to have these massive archives completely available within a year.

How does this impact the real estate community? It can if you want it to. Keep in mind there is now a new generation of potential first time buyers. They don't remember when mortgage rates were in double digits and homes were selling within days of being listed. What they know is now, and as I have been pointing out, it is way too much on the negative side.

Being able to archive a local or regional newspaper going back for many years will enable you to show the "first time buyer generation", or FTBG's as I will name them, how things used to be around here. Show them a "(local) Journal" article from 1990 about real estate in your area. Or whatever positive spin you can put on it. You will have the ability to go back to your best year in the business - and find stories to support your "new" selling tools.

Right now, your potential clients are probably comparing mortgage rates and closing costs to two or three years ago. And YOU lose in that comparison. Starting very soon, I'm going to make certain that my clients benefit from this wonderful Google feature, and let these same potential clients compare to when mortgage rates were over 15% and homes were selling.

The market is not terrible. It is how YOU present it to your potential clients.

How I would save residential real estate

This week I had a mortgage lender that has been a client for more than a year decide to cancel an advertising campaign I helped him to secure. He told me that he wasn't drawing enough business from it. Some people just don't get it.

Lately, consumers are bombarded day after day with negative news about the real estate industry, ranging from mortgage loan problems, foreclosures, fewer sales, and the illegal actions by people trusted within the industry.

As I have done in recent weeks, here are a few stories about people in the industry I have found as part of my daily reading.........

http://www.law.com/jsp/article.jsp?id=1202424077252&rss=newswire

http://www.dailyherald.com/story/?id=229999&src=109

http://www.canada.com/theprovince/story.html?id=1fb3c5da-cc5f-4f00-ab45-492b77621a9c

http://www.latimes.com/business/la-fi-harney24-2008aug24,0,4322966.story?track=rss

But that's not important now.

I told my client that this is the worst possible time for him to stop his campaign. Consumers used to seeing his campaign every week in the same place will "figure" this lender has also closed its doors. He will lose the "recognition by repetition" factor he built up over the past year. Those consumers who are looking at options today for what they want to do when conditions get better will see his competition instead.

No, I'm not complaining because I lost a sale. Truth is I am complaining because I could lose a quality client forever because he wasn't getting enough instant gratification.

Consumers know it is a buyers' market at the moment. When they are poised to jump on an opportunity, they will jump with whoever is there at the moment to jump with them.

This morning I was talking with a Realtor in the business for over 25 years. She told me about a colleague who showed a first-time buyer more than 50 different houses. Her client made several "low ball" offers, but none of them were accepted. The potential buyer was upset with the Realtor for taking him to all of those houses and not being able to buy. The lady I talked to expressed her frustration with the potential client.

From my corner, I'm going to side with the potential buyer that his time was basically wasted. That realty agent should have stopped after no later than the second "low ball" offer. If the offer was for $200,000 on a home listed at $230,000 and it was rejected, it is up to the agent to step it up. Find that potential buyer a similar home that he could get right away for $200,000. Don't keep taking him to homes he isn't going to get.

Instead, the sellers are still sitting there upset that veteran realty agents aren't bringing them a good enough offer to sell. These "low ball" buyers get upset that their agents aren't finding them these good deals in a "buyers' market".

It is up to people in the industry to make a possible transaction work for all concerned. No agent should be showing a buyer 50 houses and not have an offer accepted - in any market.

Meanwhile, a thumbs up for Forbes for their recent story about using real estate investing to put off tax bills. That is what I call creative financing. I regular contact some mortgage lenders who are also CPA's or also have a tax service in order to diversify. Yet, I wind up reading about this years old concept in Forbes.

(If you didn't see that story, please contact me and I'll send it to you.)

And then.....

I read that the NAR admitted to spending more than $3,000,000 in just the 2nd quarter of this year to lobby for measures related to the housing market. And I'm upset about that.

Give me the chance. I'm not the brightest bulb on the planet, but I would have done things way differently than the Association has. For next quarter, give my company the $3,000,000 to work with.

Let me work with a P R expert on changing the negative reporting. No more of the "sales are down 22% from a year ago" stories. Those should be billed as "more than 26,000 homes sold during July....." and forget the negative comparisons. A $100,000 public relations campaign blitzing the media with only positive facts and happy homeowners would be a solid start.

Next, I would implement an Association promotion. As of a pre-determined date, the first 10 homes sold in each of the 50 states will receive a $1,000 closing rebate from a fund started in conjunction with the Association. That would total $500,000 in rebates. I'll allot $400,000 in legal and administrative costs to make that happen. No advertising or P R costs because I would expect aggressive agents to get their buyer clients in gear.

This promotion would be a major score. Buyers and sellers not going through an agent would not be able to partake. It creates much needed urgency in a starving marketplace.

And, I just showed how it could be done and benefit people in all 50 states on a budget.

Of course, doing all of the above with a budget as large as $1,000,000 will pay off for the industry.

My next step after that? Take the $2,000,000 profit I would have made and buy a $2,000,000 mansion and live happily ever after.

Meanwhile......

Let's watch the Kolter Group, based in West Palm Beach, FL. Commercial Property News reports that they have become the second large commercial real estate company to announce a financial commitment into residential. To the tune of a $1 billion joint venture including residential developments within Florida.

Later that same day, I read the story from Hawaii about how the number of inactive licensed agents in that state has increased to 6,254 (as of July 30) from 4,702 last year, according to the Department of Commerce and Consumer Affairs' professional licensing division. Try that on for size. More than 1,400 licensed agents not even paying dues to remain active in local real estate.

Shows what can happen if you, as an industry professional, stop advertising.

Keep Looking For Positives !!

Still looking for more positives about the market while others, including those in the industry itself, continue to spread the word about doom and gloom.

Now, an article in the Nashville Tennesseean caught my attention, about how appraisers are coming under fire:

http://www.tennessean.com/apps/pbcs.dll/article?AID=/20080818/BUSINESS01/808180322

An article in the Kane Country Chronicle (suburban Chicago) over the weekend further illustrates my point. First, it shows declining home sales figures again. Released by the local realty association.

Then, it quotes, among others, Linda Ayukawa, who is managing broker at a local Coldwell Banker office as saying “People for whatever reason just haven’t been that motivated to buy,”.
Let me get this straight. Another local realty association continues to make lagging home sales figures available on a regular basis. A managing broker in the same area gets quoted as not knowing why consumers aren't motivated. Thousands of consumers saw that article.

If I was a real estate professional or a lender in the Kane County area, I'd run ads with Linda's quote, identify her CB office, and in big letters, state that "We work with the motivated buyers and sellers in (name of community)." There is a saying among marketing experts that "Sometimes any publicity is good publicity". Someone should tell Linda that this is the furthest from "any time" I have personally seen in years. But she is probably busy bragging about how she was an expert quoted in the local paper.

Perhaps the rise in some of the homebuilder stocks last week will make some investors and potential buyers take notice. D. R. Horton, Pulte, Red Bank, and Centex, all showed increases in share prices at some point last week. A bit of consumer confidence could go a long way.

Nice reporting by HispanicBusiness.com, with a recently completed study showing that lower home prices are "more than offset" by higher mortgage rates, even to the tune of 10 - 20% more. This came out the same week as a report showing state-by-state which areas have the highest closing costs.

I take that as a message for investors to explore joint venture possibilities with other investors to grab some of the good deals out there. It's not easy, but nothing successful ever is. Get together a group of 6 investors with $50,000 each. A barrel filled with $300,000 CASH up front just might get you a property listed in the $500,000 range since the seller receives all cash immediately. No waiting and waiting and waiting for a qualified buyer to come along. The buyer group can then re-list for a $450,000 - $500,000 sale price without having its own mortgage payments to worry about. Some will call it "group flipping", but it is a way to do some power buying.

Finally some positive sales statistics from a big city. The Detroit Free Press reports that home sales in metro Detroit rose 15%. Before I could join you and say "that is because of foreclosures", that same article added that during the month of July foreclosure activity fell by percentage points. While the article contained many more positive and negative statistics, its most important points were positive toward the industry.

An Aspen CO real estate firm came up with a way to keep the local market going. Chaffin Light Real Estsate purchased a $7.65 million office building to house its operation. How does this impact the local market? I'd say with the right advertising campaign. I am not their marketing consultant, and normally don't give valuable free advice, but in this market I need to get industry professionals thinking and acting positively. Chaffin Light should point out that "We invested over $7 million into this community, and we'll get you the best local investment for your money". And show off their newest listings.

No matter what you read, think positive. Create opportunity.

Where are the challenges of the market coming from?

I’m disappointed at what I hear from experienced real estate and mortgage lending professionals in recent weeks. Let me change that. I’m disappointed in what I am NOT hearing from these same people. I’m not hearing the positive.

Those of us on the inside realize that there are more challenges than ever before in the real estate market. But we have the choice of responding rather than accepting. As a consumer, I tune to the electronic media and check for information online just like the next guy. It seems like all I hear, see, and read, is the negative. Where is the response?

New stories pop up every day about how many banks are now struggling because of problems with outstanding mortgage loans, foreclosures, and funding sources. It seems the perfect opportunity for established mortgage lenders to advertise and promote “All we do are local mortgages. We do not have the problems your local bank faces.” Instead, the media keeps story after story about the banks in crisis going day after day.

Same thing on the real estate side. I’ve been seeing realty boards and association monthly statistics report “June sales down 15%” or whatever it is. Why can’t they report that 5,740 homes sold in just the Dallas-Ft. Worth Metroplex for the month of June? Even if that amount is lower than previous years, realty firms need to point out that homes ARE selling in the area.

Instead, without specifically looking, I found several stories about problems with realty agents and crime. Here are a few from the past few days: (You can look if you want to, but this is to make my point.)

http://www.newsday.com/business/ny-lsbirth5797493aug13,0,5752132.story?track=rss

http://www.newsobserver.com/business/story/1175429.html

http://www.myfoxla.com/myfox/pages/News/Detail?contentId=7185501&version=4&locale=EN-US&layoutCode=TSTY&pageId=3.2.1

http://deseretnews.com/dn/view/0,5143,700250103,00.html

http://www.aspentimes.com/article/20080729/NEWS/222688344/-1/rss02

http://www.myfoxorlando.com/myfox/pages/News/Detail?contentId=7081078&version=2&locale=EN-US&layoutCode=TSTY&pageId=3.2.1


Let me put this another way. The news is overflowing with reports about banks and sub-prime lenders in serious trouble over hundreds of millions of dollars. Realty firms are downsizing and closing, and professionals are finding legal trouble on a regular basis.

Yet, most of what I hear and see is about dealing with a challenged market. Don’t you wonder where the “challenge” really is?

This is the time for creative advertising and marketing. Mortgage brokers and realty agents can and should bury the hatchet and truly work together. With gas prices still outrageous, even working to find someone the “same” house 10 miles closer to work can be presented as monthly savings. Consumers could get the tax advantages of a move, and a new mortgage even for the same amount brought by a local move brings a realty agent commission and a mortgage where a refinance isn’t justifiable.

In the days to come, I’ll try and share specific stories of creative real estate and mortgage business. If you can contribute to the positive, please let me know. I’m happy to share!

Keep Marketing During Challenging Times !!

I continue to contact at least 300 potential clients every week, regardless of market conditions. Realty agents on mortgage brokers should continue to market their individual ideas and capabilities to as many potential clients as possible, and not fall victim to the statistics game.

Keep in mind the old joke that "38% of statistics are meaningless". It's how you use them. Coke & Pepsi both have plenty of geographic and demographic places to tout themselves as "#1". CNN and Fox News both claim to be the most watched, and in certain age groups, they each are. It is not what you advertise and market - it is HOW you advertise and market.

Last week a read the statistics for May 2008 about the drop in home sales in the Dallas area since one year ago. I went past them, actually, and saw that 5,088 homes sold just in the Dallas Metroplex within the month of May. To my way of thinking, that was cause to call 100 mortgage lenders in the Dallas area to let them know that "more than 5,000 homes in the area have sold within the past 60 days, and that is over 5,000 mortgages". Yet, many of the lenders I spoke with continue to tell me to "call when the market picks up because I don't have any money now". Obviously, they stopped reading after the "home sales are down...." part of the story.

You need to use information to your advantage, along with some creativity. This week started with IndyMac Bank in the headlines, and not good ones. Another large bank in serious trouble.

For as much as outside advertising and marketing helps, you can use news such as the above to your advantage in your weekly or monthly contacts. Realty agents should be calling their investor type clients to remind them that with more banks now in trouble (you) could help them find the best deal on a bank owned property. Mortgage lenders should be calling past and potential clients to let them know they have more funding options than the bigger banks that are being shut down, even with so many great deals out there right now.

Desperate times call for creative measures. (That's my personal saying!) Let's use builders and developers as an example. Many builders continue to force their internal mortgage company on buyers. Some of those same ones have not been Realtor friendly. That was then. Now that buyers aren't lining the streets to enter a model home, the time is right to make contact.

Centex is now offering "special bonuses" for realty agents. And what does a builder's own mortgage company do if a potential buyer doesn't qualify? They could lose a much sought after sale. What if you could bring them and/or qualify a buyer they can't?

It also amazes me that I am not seeing advertising or marketing from realty offices and lenders to encourage downsizing. Gas prices are now the biggest concern for most of us. Some people live in fear of making their mortgage for the coming month.

Instead of sitting there waiting for rates to drop so you can think about advertising for refinance clients, your time could be used to seek and find more viable options for current and open potential clients. Don't forget that for your sales and refinance clients, you have their information about where they work and what their payments are.

Let's say you handled the purchase for John & Mary 3 years ago on a 2 bedroom $300,000 house 20 miles from where John works. John & Mary aren't likely to refinance at today's rates, as it wouldn't make sense. So instead of saying "next!" do a little research.

What if you found a $225,000 house with 2 bedrooms and similar amenities that was 5 miles from John's work? (And don't think it would not be as good of a property - given the home buyer's market in many areas!) John would save 30 miles per day (over 1 gallon of gas each day - and around $100 per month at today's outrageous gas prices). And the lower mortgage on the "new" house would save them at least $200 per month additional. Presto! There is a way to save John & Mary at least $300 per month and take advantage of the buyer's market. Even if John & Mary tell you "no thanks", you will have impressed them with your creativity and knowledge of the market. They won't forget that when they are ready to say "YES!" in the future.

It is your creativity that can win you more business. One of my most creative clients within the past couple of years include a mortgage lender advertising a loan program benefitting public service professionals. That is hitting a niche market, both for now and the future. Another set up a separate loan office down the street from a new development, advertised himself as the lender specialist for that plot, and got the most loans of any mortgage broker when the development finally sold out.

It is a big country out there. The more creative ideas you share with me, the more business we can all generate.

Lenders and realty agents are both faced with the same challenge, which right now is survival for many individuals and offices. Even those who have been savvy enough to continue to budget a portion of income toward advertising and marketing (instead of waiting until it's too late to spend) are running into obstacles while riding the storm out.

You have to have a plan of attack. I personally communicate with at least 300 potential clients by phone or e-mail every week whether the market is good, bad, or indifferent. I have products and services to market just as you do. Yet I hear the "business is bad so I'm not going spend anything right now" line at least once a day.

But the question remains, what are you doing to generate new or additional business, whether you are spending or not? Just as important, who out there is watching out for you?

For example, the mortgage broker I use knew my "magic number" even though I had not spoken with him for more than a year. During first quarter of this year when there was a 2 week "teaser" period where mortgage rates dropped enough to notice, I got an e-mail from him about my "magic number". The end result is that my wife and I refinanced our mortgage and the lowest rate we have seen available (including since we locked in), and saved just over $200 per month on our mortgage. The closing for this refinance was arranged at a title company closer to home than his office. Not only do I have the savings to show for this, but I only missed one hour of valuable work day "sales time" to get the papers signed. And my mortgage lender didn't even show at the closing. While I haven't seen him in person in somewhere around 2 years, he got the job done.

How many "magic numbers" do you have on file from your past and potential customers? That doesn't cost you any advertising dollars, but I'm here to tell you can make a difference.Real estate agents should be checking with their clients to find their "magic number" just like lenders should. Why? Let's say you call John Q. Public and he says he would refinance once he could save $200 per month. With today's buyer's market, and your knowledge of your client's property, you might be able to find him a nearby property with the amenities he is seeking that would automatically lead to a lower mortgage.

If you can get a buyer for their current property, you wind up with 2 commissions. And the mortgage broker(s) you work with are brought more business due to your efforts, and should reciprocate in order to keep your business.

Mortgage lenders should likewise know the "magic number" of their current and potential clients. If they are having difficulty affording their present mortgage and rates don't justify a refinance, perhaps a move to a more affordable property is the ticket. What a perfect "lead" for the realty agent(s) you work with.Direct communication is such a key. Knowing what information you can get and who you need to give it to. I can show you how to get past the conventional "send this to everybody out there" thinking that has some mortgage brokers and realty agents closing their doors this week.

Your best information might only go to a handful of people, maybe even to one or two people. The more specialized you target, the more of a quality lead or tip you deliver. People notice when they are the only or primary target. Think of it as if you have a hot stock or a hot investment tip and you are only going to share it with the one person who could best take advantage. In a sense, you are. Use your personal pipeline to your advantage.

For example, a colleague representing an export company asked me if I knew someone who operates a plumbing or commercial contractor business. My colleague's source could save a business thousands of dollars by purchasing water sprinkler pipe from a very reputable overseas source. Well, some mornings operating my shower at home can be a struggle. But a residential lender client of mine has a colleague who does commerical and business loans. Within 3 days, a connection was made. I only told one person, but now I have at least 2 more people that will refer business to me at some point.

And that business owner who gained from this just e-mailed me this morning about being able to save Fire Sprinkler Dealers at least 50% on steel and galvanized pipe by purchasing from his new source in China. I wouldn't know galvanized pipe if it was in the room, but I'll certainly mention it to a few people. (If you know of someone, please e-mail me, even if you are not a client. I'll get the referral ball rolling your way, and at no cost.)

These are a couple of the "lead sources" I get on a regular basis from my personal contacts, because I can generate business and revenue for all concerned" line. I have actually started conversations at networking functions asking "so how can I get you more business". It is sort of a business twist of John Kennedy's "Ask not what your country can do for you........" quote. And it works.This is methodology for a down market, and how I can benefit my clients who don't have more to spend on outside advertising. If I can help them increase their revenue, I'll benefit right along with them because they will be able to spend to increase their business and revenue.To me, it is only a "down" market when my idea and "feed" lists are too low.

How can I get YOU more business?