FANNIE MAE FINALLY GETS IT RIGHT FOR REAL ESTATE AGENTS WITH SHORT SALE TRANSACTIONS

It’s about time that somebody figured out that real estate agents have been fighting an uphill battle when it comes to short sales.  After months of nightmare scenarios coming to life, Fannie Mae has finally done something about the problem.

With new rules in place effective as of March 1, real estate agents will have an easier time getting short sales closed—and getting paid for their efforts.

Any real estate agent who has ever been involved in a short sale transaction knows too well what I’m talking about.  The situation has played itself over and over again—too many times.

Here’s what happens:

The agent works overtime to put together a fast transaction to get a property sold.  Everything progresses swimmingly.

Then, right before closing, the lender calls and says, “Everything is all set.  We agree on all terms—oh, except for the real estate commission.  You’re going to have to lower that.”

Nothing infuriates me more when I hear this—and I hear it way too often from too many agents.  It’s reaching epidemic proportion.

After all your hard work—performed at triple speed to satisfy the demands of a short sale—suddenly you’re held over a barrel by an unscrupulous lender.  The demand to cut your commission lands on you like a load of bricks, burying you in its insensitivity to your efforts.

Short sales have enough emotion surrounding them.  Now, the lender takes this snake-like final step, sending you through the roof with anger.

In short sales, the real estate agent is the hero who swoops in to make the transaction a reality.  Then, somebody has the nerve to say in effect, “Thanks for everything.  You’ve done a great job.  But we’re not going to pay you.”

Talk about a slap in the face!  It makes me so angry just writing the words.

It’s not just the audacity of expecting work for very little or nothing.  It’s the fact that by taking this low road, the lender puts the real estate agent in a horrific position.

If the agent doesn’t agree to take a reduced commission, he or she looks like the bad guy.  The lender goes to the client—your client—and says, “We just couldn’t put the deal together because your real estate agent is so inflexible.”

No agent in his or her right mind wants to see their client get treated this way, especially considering all the emotion already present with a short sale.

But now—thank heaven!—somebody has recognized this problem and is taking the first step to doing something about it.  It’s not the biggest step in the world, but it’s one heading in the right direction.

According to the exact words from Fannie Mae (Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers):

Effective March 1, 2009, closing of preforeclosure sales may not be conditioned upon a reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales price of the property in aggregate.  Servicers are reminded that they must continue to obtain any approvals that may be required by interested third parties in connection with preforeclosure sales.

Great news.  Fantastic news.  I almost leapt for joy when I read it.

Because somebody out there “gets it”.  Somebody out there knows that real estate agents have been getting the short straw on this for a long time.

Yes, the rule is tiny in comparison to the wide-ranging short sale nightmares now commonplace in the industry. 

But this is a good start. 

Yes, I’d like to see this apply to more than just Fannie Mae and not just to loans in default (which is the case with this new rule).  But at least somebody—somewhere—heard our complaints.

Sample Before and After Images for Marketing Makeovers by Denise Lones

Here are a few samples of ‘Before and After,’ images that we have done for some of our past clients. Feel free to click on each image to enlarge it to see the images in more detail!

Before Image

After Image

Let’s look at another sample! 

Before Image

 

After Image

Here is one more sample!

Before Image

After Image

To take your real estate marketing to the next level and receive more information on our marketing makeover give us a call today (360) 527-8904 or go to our website: www.thelonesgroup.com

The Lones Group

Our Marketing Makeover Programs Explained by Denise Lones

More often than not your materials are seen long before you are! Remember the old adage “You only get one chance to make a first impression?” In any business your marketing pieces or ‘materials’ ARE your first impression. What do your current business marketing materials say about you and your business? Are they consistent and dynamic? Or are they sporadic, and unprofessional?

Marketing Makeovers are a standout and effective solution that not only helps agents simplify their business processes in order to maximize their potential, but a system designed to increase income and maximize quality of life. With a Marketing Makeover, you won’t just get a collection of attention-getting marketing materials; you will receive an integrated branding, follow-up, and client care service, coupled with powerful property marketing collateral.

As Denise Lones says during her packed Safari Club classes, “Combine a strong, consistent marketing message on a unique and memorable marketing piece and watch the business flow in!”

Marketing Makeover by The Lones Group

The Signature Makeover Program  (view now)

• Custom design, theme, fonts, colors, the works
• Work directly with our design artist professionals
• Marketing customized to you, your market, your goals

The Instant Image Makeover  (view now)

• Fast turn-around lets you quickly begin your marketing campaign
• Largest online Real Estate design gallery complete with follow-up and business building tools
• Ability to retire a design of your choice

Take a look at our next blog that shows you actual ‘Sample Before and After Images,’ of some of our past marketing makeover clients.

The Lones Group

CURRENT ECONOMIC CRISIS (BAILOUT OR BUYOUT)

By Denise Lones

Lately, it seems as if we are living through history every day.  Not since the Great Depression has the United States seen such turmoil in the financial markets.  What started in the subprime mortgage industry has now bled over into Wall Street.

 

When investment houses that have been around since the Civil War close their doors, it’s a sure sign that something’s gone terribly wrong.  First Bear Stearns, then Lehman Brothers and then Merrill Lynch and Washington Mutual.

 

We all can’t help but be a little rattled by what’s going on.  But while I and others have been pointing out that the markets are only going through a “correction”, you may be asking, “Denise, how much of a correction do we need to make?”

 

Obviously, a big one.   Too much money lent to too many people who couldn’t afford to pay it back is a surefire recipe for disaster.  Now it’s time to pay the price.

 

Some analysts are even comparing what’s going on now to the stock market crash of 1929.  However, there is one major difference between then and now—we aren’t even close to being in the same economic hole our great grandparents fell into back then.

 

Case in point: The $700 billion bailout (or is it a buyout?) being debated by lawmakers as of this writing is a giant sum of money, the equivalent of which was not available in 1929. 

 

Today, we are better prepared to handle such challenges as they arise—partly because we’ve learned from history.  When the Great Depression began, there was no backup.  The U.S. Government was in a much more “hands-off” position than today.

 

While some like to argue it’s a good thing for government to stay out of the free market, the new and upcoming legislation promises to bring at least some security back to the United States economy.  The time for argument from political principle is over.  Something has to be done—and thankfully our leaders are finally stepping up to actually do something about it.  The question is will these leaders help the problem or add to it, only time will tell.  As of this writing they still have not been able to get it together.

 

After four (or more) years of unsupervised lending, exotic loans, predatory practices, and the ensuing subprime mortgage meltdown, the government is finally taking measures to step in before it all spirals into oblivion.

 

Of course many are asking why Treasury Secretary Hank Paulson and Fed chair Ben Bernanke didn’t do something before this mess happened.  While it’s true that nobody could predict how bad the fallout would be, it’s obvious that when banks start handing mortgages out like candy, something is amiss.

 

Two to three years ago, every time I heard a mortgage ad on the radio touting low numbers for adjustable rates, I winced.  I wondered how long this could last.  During the boom, it seemed like we could never run out.  Now we’re suffering from a huge reality check.

 

So what does this mean for the average real estate agent?  First of all, the media has it wrong.  It’s not a bailout.  It’s a buyout. 

 

A bailout is when you give a corporation money while forgiving their debt.  A buyout is when you come in to save the day—but there is an asset to be traded.

 

The latter is what the U.S. Government is proposing: supplying funds to take over the mortgages on real estate property.  Real estate properties are assets.  Therefore, by definition, this is a buyout.

 

Based on my own personal experience with the markets, I think the government could do quite well on this deal.  Think about it.  They step in, take over loans that are in trouble, and refinance them at a lower rate.  It’s a win-win situation.

 

Ultimately, there is always money to be made in mortgages.  Even if government restructures these mortgages, we all know that real estate is still the best long-term investment. 

 

Which I believe will be the harbinger for the “great real estate appreciation of 2012”.  Real estate will go back up again.  It’s always rebounded.  It always will.  And all the major factors are pointing toward it going up anyway—population, immigration, migration, a senior community with buying power, higher divorce rates, and people living much longer than they used to.

 

Personally, I would like to see all of the corporate executives who led the failed companies down this horrific financial path be denied their bonuses.  How can a CEO get a $22 million bonus when he’s bankrupted the company and left shareholders with the bag?  To me, this is one of the most important parts of the mess to be cleaned up.

 

So only time will tell how long it takes for our leaders to get this right.  What is for sure is that something has to be done!!!

 

And remember when the consumer gets nervous about Wall Street they tend to invest their money in real estate.  So don’t jump to conclusions and believe that the real estate market is going down with Wall Street, it is the real estate market that will lead our economy back to where it should be.

Routines, Powerful Tools for Your Real Estate Arsenal by Denise Lones

What’s the secret to success in any endeavor on Earth?

One word—routines!

What do I mean by routines?

A routine is something that you do on a consistent basis that becomes second-nature to you. You do it without even thinking about it. Or it could be a learned behavior that you do for a short period of time with the purpose of generating some kind of effect.

Let’s look at Dancing with the Stars. If you’ve been living under a rock for the past two years, Dancing with the Stars is a popular television program. Twelve celebrities who can’t dance to save their lives are chosen to receive training from professionals. Over the course of several weeks, they compete until one dancing couple is remaining.

What a perfect example of routines in action! What exactly is it that the professional dancers teach the celebrities? The very same routines that they themselves use every day. And suddenly, voila! You can’t tell that the celebrities could never dance. (Well, for the most part. Some will never be able to feel a rhythm, but those are eliminated fast.)

Most become incredible dancers (practically overnight!) because they’ve subjected themselves to the routines of the professional. They learn the basic ones, then add subsequently more difficult ones as they master them.

It is the same for every field of endeavor on Earth.

Look at Tiger Woods. From an early age, his dad Earl instilled in him the basic routines of golf. They were programmed in his head. As he matured, he perfected his routines. He follows a set list of things he does every week and every day to stay the World’s Number One golfer.

Tom Hanks once said that the reason he has so much success isn’t because he’s a great actor. He said that he made it a routine to only audition for movies that would be directed by certain directors. This kept him “in the loop” of the big-name Hollywood elite.

When I read this, it was powerful to me. I started to think about the routines that are the foundation of my success. Everything I do is a routine.

Years ago, I set up marketing routines. I still do them every day. I have routines for everything—communication, office management, and dealing with crises.

All successful people have routines. They may not even be consciously aware of them, but they have them. Routines are the key to success.

I’ll ask an agent, “How’s your lead generation?”

“Well, it’s kind of rough right now”, they may say.

“The reason it’s kind of rough”, I say, “is because you don’t have a routine.”

The same applies to following-up, client care, and marketing. Creating and managing routines for each of these areas—a set series of steps you do without even thinking about them because you’ve done them so often—is the missing element from many agents’ lives.

Develop strong routines and you can’t help but succeed.

Having trouble coming up with routines? Give me a call and I can help you. I started creating powerful real estate routines over twenty years ago. I’ve refined them, improved them, and now have them down to a science.

You could be successful beyond your wildest dreams with just a few of them.

“But Denise”, you may say, “I already have routines!”

That’s great. Good for you. But how successful are you? It’s one thing to have good routines, but it’s something else to be banging your head against a wall every day because you’re doing the wrong routines. Bad routines will knock your business into the ground as quickly as good ones will propel it skyward. Never underestimate the power of a good routine.

It’s the Little Things That Count by Denise Lones

You’ve been told your entire life “It’s the little things that count.” Well, I’m here to tell you it’s true! How does this apply to your real estate business? Read on.

When people come to us to buy or sell a home, it’s our job to help them navigate the rough waters of the process. We create the CMA, write market activity reports, and keep our clients updated on current market conditions.

It can be overwhelming, especially for our client. They don’t experience all the daily complications we’re used to dealing with. Every little thing we do to make the process flow smoothly adds to our value as a trusted advisor.

It’s those little things—the “value-added” finishing touches that you do for your clients that are sometimes the most memorable. Some of my favorite things people should do to leave a lasting mark on their client’s experience are:

1. Say “Thank you.”

It’s almost silly that I’m telling you this one, right? Well, you’d be amazed at how many homeowners I’ve talked to who told me that once the real estate transaction was completed, the agent disappeared without a word. Now, I’m sure this isn’t you, but it’s worth mentioning because I’ve heard it so many times.

2. Follow up.

Let’s assume you always say “thank you.” Do you call 30 days after the transaction and say it again? I bet you’re afraid of hearing a litany of complaints, aren’t you? I have news for you. This rarely happens.

And even when it does, what an opportunity for you! You can be a part of solving the problem for them. If they don’t tell you in words now, they’ll show you later by telling people not to do business with you.

For example, if your client discovers that flying ants have nested in the eaves, they may get aggravated. Maybe you have a connection with a local exterminator who will take care of the problem quickly. Trust me, if it’s 30 days after closing and you do this for someone, you will be talked about! Most agents shriek and run from such situations, but by facing it head-on you will come to be known as a rare bird indeed—a professional who truly cares about people.

3. Stay in touch.

Now, I’m not talking about calling them up, going to their kids’ soccer games, or having them over for dinner. I’m also not talking about hounding them for referrals. If you’re good at what you do, referrals will come to you all by themselves.

Just keep them on your list of people to whom you send important real estate information. That’s all you need to do. Perhaps mortgage refinance rates have just dropped and you want to let your past clients know so they can call their broker. They’ll appreciate the gesture and say to themselves, “Wow, Judy Smith is a fantastic agent.” The next time a friend says she’s moving, the homeowner will say, “You’ve got to call Judy Smith. She is unbelievable. She helped Tom and me save a bundle by refinancing.”

I once did a study of homeowners who used a different agent than the last time they bought a property. Eighty percent of the responses were something like “Cliff was great, but we lost touch. We haven’t seen him since the transaction, and totally forgot about him.” Don’t be Cliff!

4. Be Your Client’s “Closing Day” coach.

Now, I know you’ve been told that for legal reasons, it’s best for you to stay away and let the lawyers handle closing. I say just the opposite.

On Closing Day, drop by. Or even be there with them. (Heresy! How dare I suggest this!) If you can’t be there, show up an hour later and congratulate them. Or, at the very least be available by telephone and tell them, “Call me and I’ll look anything up for you that you need…or if the process gets to you and you just need a friend to talk to, I’ll be here.”

As for not being at the closing table due to legal reasons, this is ridiculous. If there’s a legal issue, do you think hiding from the closing table is going to help? It needs to be addressed. Who better to help your client address the issue than you?

5. Send a “thank you” gift.

Yes, send a gift. Nothing expensive—just a thoughtful housewarming item. A great gift is a Homeowner’s Record Book. This keeps all their important documents in one volume. You could even emboss it with their name and new address…even put a picture of their new home on the cover! What a great way to say “I appreciate your business AND I’m on top of all the details for you.” This is a prime example of a little thing that goes a long way.

6. Get feedback.

Business owners of all kinds need to get better at this one. Feedback is the only way you can find out what you may be doing wrong. People are afraid of hearing anything bad, but isn’t it better to find out now so you can stop doing it?

Make it an “imperative” that in addition to a “thank you” call 30 days after the transaction, you also send a letter (with a stamped return envelope) that says, “If I could have done anything different during your transaction, what could it have been?”

Give several examples to stimulate their thinking. Ask, “Would you have looked at more homes? Would you have waited for more offers? This will help me better understand the buying and selling experience through your eyes to better help my future clients.”

People love it when you do this. It says all the right things. Instead of badgering them for a referral, you’re demonstrating that your job is very important to you and you are a true professional.

I’m sure you’ve heard the old phrase “It’s the little things that count”. Well, it’s true. Find areas you can add nice touches to your business and you will be rewarded with more success.

What’s the Price of Your Money? By Denise Lones

Buyers today are definitely playing the game. They’re perched high on the real estate fence, waiting and watching for prices to fall. But these people are missing a critical factor that may cost them even more money: interest rates.

When a buyer sits on the fence waiting for prices to come down, they may end up with a big surprise if interest rates rise even a quarter of a percent.

Let’s look at an example. A home you absolutely love is priced at $550,000 but you’re waiting for it to drop to $525,000. You’re looking for a 30-year fixed rate loan and you’re planning to put 20% down. If interest rates go up a quarter of a percent, that house is actually going to cost you more money—an extra $25,000. Which brings the price back up to $550,000 again. So much for saving money.

This is why it’s important to stop looking only at prices of houses and ask yourself, “What’s the price of my money?”

The only way to answer this question is to take a good hard look at interest rates. Why? Because they’re starting to trend up again.

Don’t be afraid of the math. When buying a home, it’s important to “crunch the numbers”—numbers that can be deceiving at first glance.

Interest Rates Are Important for Sellers Too by Denise Lones

Why do interest rates matter for home sellers? While you may think that interest rates are important only to buyers looking for a new home, as a seller you should consider how they affect your pricing and position in the market.

Sellers today must keep a very close eye on interest rate prices. If your home is listed on the market for $500,000 and interest rates go up just a quarter of a percent, it’s going to end up costing the buyer an extra $25,000 over the lifetime of a 30-year loan.

So how does this affect you? If interest rates go up, the number of buyers able to purchase your home goes down. The pool of buyers shrinks. People who may have been on the verge of making an offer are suddenly unable to do so.

If you’ve been in your home for longer than five years, you’ve probably seen record appreciation and made oodles of money. The last five years were an unprecedented growth wave that some people thought would never end.

Now that the ceiling has been reached and prices are tumbling nationwide, sellers need to look at the “big picture”. While many are unwilling to lose even a penny of the appreciated value of their home, what they don’t realize is that it’s already gone. They would have had to sell two years ago to realize those gains.

All financial markets ebb and flow, just like the ocean. At “high tide”, your home is worth X number of dollars. As the tide recedes (which it’s doing now), so must your expectations.

But think about it. If you reduce your selling price by 5%, is that really such a big deal when you’ve appreciated by 80% or more in the last five years?

The answer is no.

The sellers who are willing to do a 5% price reduction now and get their homes sold are saving the money they would have lost by trying to hold on to the prices from two years ago. The sellers who are steadfastly clinging to a “high tide” that has long since gone will end up lingering on the market for months—and end up losing money in the process.

Be smart in the current market. Don’t wait so long that interest rates go up and you lose potential prospects for your home’s current value. And don’t forget—the seller of the home you’re about to buy must reduce their home by 5% as well.

Do “For Sale By Owner” Listings Really Save Money? By Denise Lones

I’m sure you’ve seen the signs—“For Sale By Owner”—or FSBO as it’s sometimes called. Many people think they can do better selling their home on their own, supposedly saving the commission they would pay to a real estate agent.

But the truth is that without the power of a real estate agent plugged into the MLS (Multiple Listing Service), you are hardly ever successful at getting your home sold. Even the tiny percentage (less than 1%) that do sell their homes “For Sale By Owner” are the ones in a neighborhood that’s usually very desirable and has a waiting list of buyers hoping for a listing to pop up.

This prompts the sellers in this exclusive area to proclaim to their friends, “Aha! I sold my home without a real estate agent and saved thousands of dollars!”

But did they?

Actually, they likely left thousands of dollars on the table—and never even knew it. With a waiting list of buyers for a particular neighborhood, a good real estate agent would have been able to negotiate a higher price. Agents do this every day. They know how to talk trends, rates, pricing, and the current condition of the market.

Add in the power of the MLS and there is just no competition. While you may think that a lot of people drive by your house every day and may be impressed by the sign you put in your yard, the truth is that you reach a hundred times more people when your home is listed on the MLS.

Also, the only people searching the MLS are pre-qualified. They’re already looking for a home. The vast majority of people driving by your “For Sale By Owner” sign are NOT in the market for a new home. This is why 99% of FSBO’s don’t sell.

With the MLS also comes an unbeatable sales force. You could spend all the marketing dollars in the world to publicize your FSBO home, but it wouldn’t even approach the already existing marketing machine your local real estate agent has in place.

The numbers don’t lie. When a seller decides to sell on their own, they usually end up losing thousands of dollars because:

1.The home sits on the market so long it depreciates in value.
2.The owners still must shell out the maintenance costs of the property during this waiting period.
3.Most sellers are not as adept at negotiation as a professional who negotiates every day of his or her life.

And perhaps most importantly—

4.Most buyers can’t see your property for sale because 99% of them are looking in the MLS.

When you add it all up, selling on your own will most likely end up costing you money instead of saving it.

Discover What Works for You and What Doesn’t by Denise Lones

By Denise Lones M.I.R.M., CSP

Agents are always looking for “The Plan.” You must have heard of “The Plan.”  It’s that super secret 1-2-3 magic set of instructions that if you just plug it in, it will magically catapult your business to the next level.

Newsflash: This just in.  There is no “Plan”!  We do not live in a cookie-cutter world.  There is no one “magic pill” that will work for everybody.  Everybody is different.

On the Safari At Sea last week, again I was amazed at how different we all are.  So many different personalities.  So many different ways of doing business. 

The theme of the Safari at Sea was “Find Your Formula.”  It’s different for everybody.  One of the reasons why it’s so important to embrace differences is that every agent requires a different plan-a different formula for success.

What works for one person doesn’t necessarily work for another.  Why is it that so many agents are doing different things to be successful?

Because some people’s personalities are better suited for one method over another.  This is why The Lones Group is focused on creating custom solutions for our clients-because what works for Agent A may be a disaster for Agent B.  Cookie-cutter solutions don’t work.

And this point was driven home on the Safari at Sea for me when I saw how many different “formulas” are out there that actually DO work.

Cookie-cutter solutions don’t work for most people because their very existence is to create profits for the author/creator.  For example, we’ve all heard the “send-this-postcard-campaign-out-and-it-will-bring-you-riches” spiel.  These programs are misleading because sometimes they work and sometimes they don’t.  It all depends on your target market, your local population, and other factors beyond your control.

It frustrates me when a client says to me, “Denise, I’m nervous to do anything with you because everything I’ve done so far hasn’t worked.”

But the reason those things haven’t worked is because that agent hasn’t taken the time to get to know themselves.  They’re listening to an outsider who says, “This works, do this,” but it might be something that agent doesn’t like to do and will be unable to maintain in the long run.

Each one of us has strengths and weaknesses.  If you think you don’t have any weaknesses, then you are in denial.  Which is why I encourage agents to do what you do best and hire the rest out.

To even further drive home the “Find Your Formula” message, we did an interesting exercise on the Safari at Sea.  It certainly raised a few eyebrows.  Each participant sat down and answered 482 questions-yes, 482 questions!  Talk about dedication to uncovering the truth.

Not one of them came out alike.

In terms of how they approached their businesses, each one had unique ways of implementing their marketing, managing their files, and contacting their clients.  We discovered business styles, personality types, tolerance levels for work, and prospecting abilities that were all over the charts.

The 482-question Business Analysis we did on the Safari at Sea was enlightening in more ways than one.  Not only did we highlight the different personalities and strategies of agents, but we also clearly saw what each agent needed to do.

It was like finding a personalized roadmap for each agent-detailed directions to a destination of success.

This is the part where I toot my own horn.  The Safari at Sea was the primary introduction of my new Business Analysis.  I know that it sounds daunting to answer 482 questions, but think about what you’ll learn!

Once you answer them, it will be clear-crystal clear!-what will work for you and what will NEVER work for you.  Without discovering who you really are, you won’t know what strategies to implement.  And which ones to avoid!

Not sure?  Then just call me at 360-527-8904 and let’s chat.  I won’t bite.  I’m very easy to talk to.  Prefer e-mail?  So do I! Then drop me a line at denise@thelonesgroup.com.  I’m happy to answer any questions.

I’m here to help you succeed.  And I’m excited to bring to you my new Business Analysis.  Be one of the first agents who has a personalized road map to success-based on who you really are.

Stop looking for “The Plan.”  Instead, find what you’re good at.  Then, find what you’re NOT good at.  Use what you learn to create a formula that works for you.