Phil's Blog

The Two Things You Don’t Need to Hear from Your Listing Agent Posted: 29 Jan 2014 04:00 AM PST You’ve decided to sell your house. You begin to interview potential real estate agents to help you through the process. You need someone you trust enough to: Set the market value on possibly the largest asset your family owns (your home) Set the time schedule for the successful liquidation of that asset Set the fee for the services required to liquidate that asset An agent must be concerned first and foremost about you and your family in order to garner that degree of trust.  Make sure this is the case. Be careful if the agent you are interviewing begins the interview by: Bragging about their success Bragging about their company’s success An agent’s success and the success of their company can be important considerations when deciding on the right real estate professional to represent you in the sale of the house. However, you first need to know they care about what you need and what you expect from the sale. If the agent is not interested in first establishing your needs, how successful they may seem is much less important. Look for someone with the ‘heart of a teacher’ who comes in prepared well enough to explain the current real estate market and patient enough to take the time to show how it may impact the sale of your home. Not someone only interested in trying to sell you on how great they are. You have many agents from which to choose. Pick someone who truly cares. ____________________________________________________________________ Agents: If you haven't already, make sure to watch the replay of our most recent webinar, How to Become a Rainmaker for Listing Leads, to learn all about how to approach each listing appointment with the 'heart of a teacher' and earn the trust of clients.

Don’t Wait! Move Up to the Home You Always Wanted Posted: 28 Jan 2014 03:00 AM PST Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates are still below 5%. However, sellers should realize that waiting to make the move while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can buy will decrease. Here is a chart detailing this point:  ____________________________________________________________________________ Attention KCM Members: Charts showing the impact at multiple price points are available in this month’s edition of KCM. Not yet a member? Go here to try a FREE 14 Day Trial of KCM.

Home Sales Reach Seven Year High Posted: 27 Jan 2014 04:00 AM PST There are many naysayers declaring that the housing market is still challenged. Young adults are burdened with too much student debt. Interest rate increases are killing demand. Homeownership is no longer seen as part of the American Dream. We just want to let these naysayers know three things: 13,945 houses sold yesterday, 13,945 will sell today and 13,945 will sell tomorrow. 13,945! That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. According to the report, there were 5.09 million homes sold in 2013. Divide that number by 365 (days in a year) and we can see that, on average, almost 14,000 homes sell every day. NAR revealed that sales had increased 9.1% as compared to 2012 and that it was the market’s strongest performance since 2006. We realize that these numbers are below the record for homes sold during the boom. We also know that we may not see those numbers again for a long time (and that is probably a good thing). But to say that the current real estate market is challenged is totally inaccurate. We have about 14,000 pieces of evidence to prove that.

Even a Duck Knows the Importance of Prospecting Posted: 23 Jan 2014 04:00 AM PST You can learn so much just by observing nature. Last year, Steve was staying at a fabulous hotel in southern California. He and his wife were having lunch at an outside table at the hotel restaurant. It was impossible not to notice the ducks that gathered around the tables at the restaurant looking for food. The birds would wait for the people to leave and then they would flock to the tables looking for crumbs that were dropped to the floor. There were dozens of birds fighting over the scraps left behind. Every duck did the same thing; except for one. This duck was different. Instead of waiting for the couples to leave, this duck would wait only until the food was originally delivered. At the moment the staff delivered the food, the duck would race to the table and look up at the people who were about to eat. Surprisingly, every person immediately took something from their plate and fed it to this duck. They fed the duck BEFORE they began to eat. This duck didn’t settle for scraps and leftovers. He ate the best food off the plate. This duck didn’t fight with dozens of others. He was alone when the customers fed him. It was truly amazing. It made us think about the difference in real estate agents. Some will list a house, put it on MLS and hope for the best. Others will represent a buyer by simply checking the MLS to see if a suitable house is available for sale. They are like many agents in the marketplace. They are waiting for something to happen. Just like all those other ducks. Then there are agents who will take it upon themselves to make something happen. They will diligently search for the buyer of their new listing. They will knock door-to-door looking for the perfect house for their new client who is dreaming of a new home for their family. They are like that special duck. They are not waiting for the leftovers. Bottom Line In all of nature, some wait for things to happen and others make things happen. Don’t settle for scraps. Join us today at 2pm ET to learn How to Become a Rainmaker for Listing Leads! Learn how to make it happen… not wait for it to happen.

Difference Between a ‘White Lie’ and Lying Posted: 22 Jan 2014 04:00 AM PST Growing up it seemed ‘white lies’ were okay while lying was a sin. As children, we sometimes had difficulty understanding where the line was. As we matured, we realized there most definitely was a difference. If a husband or wife asks if it is okay to invite their parents over for dinner, the spouse would probably say ‘sure’ even if it wasn’t 100% the truth. That was a ‘white lie’. If a young boy dresses up as a monster on Halloween and asks his father if he looks ‘really scary’, it was okay for his dad to say ‘YES’! That was a ‘white lie’. In both cases, the person telling the ‘white lie’ was saying what the other person wanted to hear. In both cases, there was no harm in not telling the 100% truth. In both cases, it was a ‘white lie’. However, if we are not telling the 100% truth in order to save someone’s feelings AND IT HURTS THEM, we are lying. What does this have to do with real estate? We believe there are some in the real estate industry more worried about a homeowner’s feelings than they are about telling the truth about the current value of their home. These agents are not necessarily malicious. They just realize they may disappoint a seller at a listing appointment by telling the truth about what the house will sell for. They find it difficult to deliver tough news. To make sellers feel better, they lie. Good agents can deliver good news. Great agents know how to deliver tough news. In today’s real estate market, you need an agent that will tell you the truth, even when you don’t want to hear it. You need an agent more worried about your family than they are about your feelings. You need an agent who can get the house sold! What this means to you If you are interviewing potential listing agents, demand they tell you the truth. Don’t hire the agent that tells you what you want to hear. Hire the agent that tells you what you need to know. Reward their honesty.

4 Things You Need from Your Listing Agent Posted: 21 Jan 2014 04:00 AM PST Are you thinking of selling your home? Are you dreading having to deal with strangers walking through the house? Are you concerned about getting the paperwork correct? Hiring a professional real estate agent can take away most of the challenges of selling. A great agent is always worth more than the commission they charge just like a great doctor or great accountant. You want to deal with one of the best agents in your marketplace. To do this, you must be able to distinguish the average agent from the great one. Let us help. If we were hiring an agent to sell our home today, we would require that they: 1. Understand the timetable with which my family is dealing You will be moving your family to a new home. Whether the move revolves around the start of a new school year or the start of a new job, you will be trying to put the move to a plan. This can be very emotionally draining. Demand from your agent an appreciation for the timetables you are setting. I am not suggesting that your agent can pick the exact date for your move. You just want the agent to exert any influence they can. 2. Remove as many of the challenges as possible It is imperative that your agent know how to handle the challenges that will arise. An agent’s ability to negotiate is critical in this market. Remember: If you have an agent who was weak negotiating with you on the parts of the listing contract that were most important to them (commission, length, etc.), don’t expect them to turn into Superman when they are negotiating for you with your buyer. 3. Help with the relocation If you haven’t yet picked your new home, make sure the agent is capable and willing to help you. The coordination of the move is crucial. You don’t want to be without a roof over your head the night of the closing. Likewise, you don’t want to end up paying two housing expenses (whether it is rent or mortgage). You should, in most cases, be able to close on your current home and immediately move into your new residence. 4. Get the house SOLD! There is a reason you are putting yourself and your family through the process of moving. You are moving on with your life in some way. The reason is important or you wouldn’t be dealing with the headaches and challenges that come along with selling. Do not allow your agent to forget these motivations. Constantly remind them that selling the house is why you hired them. If they discover something needs to be done to attain your goal (i.e. price correction, repair, removing clutter), insist they have the courage to inform you. Make sure you let your agent know what you and your family expect from them. _______________________________________________________________________ Agents: If you would like more explanation on the four points above,get your free copy of  The 5 Steps to Becoming a Listing Machine Webinar!  Also, don't forget to register for Thursday's Webinar: How to Become a Rainmaker for Listing Leads!

3 Questions to Ask Before Buying a Home Posted: 20 Jan 2014 04:00 AM PST If you are thinking about purchasing a home right now, you are surely getting a lot of advice. Though your friends and family have your best interests at heart, they may not be fully aware of your needs and what is currently happening in real estate. Let’s look at whether or not now is actually a good time for you to buy a home. There are three questions you should ask before purchasing in today’s market: 1. Why am I buying a home in the first place? This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. A study by the Joint Center for Housing Studies at Harvard University reveals that the four major reasons people buy a home have nothing to do with money: A good place to raise children and for them to get a good education A place where you and your family feel safe More space for you and your family Control of the space What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the biggest reason you decide to purchase or not. 2. Where are home values headed? When looking at future housing values, we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number. Here is what the experts projected in the latest survey: Home values will appreciate by 4.3% in 2014. The cumulative appreciation will be 28% by 2018. Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of over 16.8% by 2018. 3. Where are mortgage interest rates headed? A buyer must be concerned about more than just prices. The ‘long term cost’ of a home can be dramatically impacted by an increase in mortgage rates. The Mortgage Bankers Association (MBA), the National Association of Realtors, Fannie Mae and Freddie Mac have all projected that mortgage interest rates will increase by approximately one full percentage over the next twelve months. Bottom Line Only you and your family can know for certain the right time to purchase a home. Answering these questions will help you make that decision.

'Boomerang' Buyers Flying Back [INFOGRAPHIC] Posted: 17 Jan 2014 04:00 AM PST Note: “Boomerang buyers” are former homeowners who have gone through a short sale, foreclosure, or bankruptcy in the past few years and are saving up for a down payment to purchase a home again.

Super Bowl Appearances vs. Real Estate Prices

What it Cost if You Waited to Buy Posted: 15 Jan 2014 04:00 AM PST __________________________________________________ With a rise in interest rates on the horizon... How will your Buyer's Purchasing Power be impacted? The latest edition of KCM explains the TRUE cost of waiting and provides you with the tools to educate your buyers. You can start your 14-day free trial of the KCM Membership at keepingcurrentmatters.com/trial. Current KCM Members can log in now to get this information.

The Impact of Increasing Mortgage Rates on Prices Posted: 14 Jan 2014 04:00 AM PST Many pundits are warning that there will be a drop in real estate values because mortgage rates are beginning to increase. The logic makes sense. However, history shows that increasing rates have not negatively impacted home values in the past. Four times over the last 30 years mortgage interest rates have dramatically increased. Here is the impact the increases had on home values at the time: Dates Mortgage Rate Home Values May ‘83 - July ‘84 12.63 – 14.67 + 6.6% March - Oct ‘87 9.04 – 11.26 + 5.2% Oct ’93 - Dec ‘94 6.83 – 9.2 + 1.2% April ’99 -May 2000 6.92 – 8.52 + 10.9% Perhaps the impact of increasing rates on future home prices won’t be as dramatic as some are predicting.

Predictions for 2014: Go Mobile or Go Home Posted: 10 Jan 2014 04:00 AM PST There is no doubt that the consumer’s desire to access housing information through the internet will continue to increase throughout 2014. However, that doesn’t mean the value of the real estate agent has diminished. Inman News recently cited a NAR survey when they reported: “Use of the Internet among consumers in the home buying process continues to grow, but those buyers are more, not less, likely to use a real estate agent.” To continue to remain relevant, real estate professionals must keep pace with the changes in how the consumer is viewing pertinent housing information. According to a recent joint study by Google and the National Association of Realtors, The Digital House Hunt: Consumer and Market Trends in Real Estate, consumers are using mobile devices more and more to access housing market information. The study revealed the percentage of new home shoppers who use mobile devices for housing information: 51% to read general home information 28% to call a brokerage 21% to locate a listing agent 20% to research mortgage information Those agents who have a strategy to deliver powerful, highly visual content which can be easily viewed on mobile devices will prosper in this environment.

Predictions for 2014: Consumers Will Demand More from Real Estate Professionals Posted: 09 Jan 2014 04:00 AM PST Home search will become a given to the real estate consumer in 2014. In order to differentiate themselves from other agents, real agents will need to bring strong, meaningful content to the table in all their offerings. And we are not talking just about more information. There’s a large gap between information and actionable knowledge. Information by itself is essentially useless. What’s truly important is being able to understand, analyze, and use the information for the best outcome. That’s what the consumer will demand of real estate professionals in 2014. The agents who don’t evolve into what the consumer now demands will not survive. Clients no longer need us for information regarding which homes are for sale or what houses in their neighborhood sell for. They can easily find that information online. What clients really want is someone who can… Analyze all the available information Connect the dots and let them know if now is a good time to buy or the right time to sell Take the time to explain their options—simply and effectively It’s a big change…and it’s one you need to embrace to move forward. For a deeper explanation of this issue, download our free eGuide, Unlocking the Secrets to Real Estate’s New Market Reality.

Predictions for 2014: Interest Rates Will Increase Significantly Posted: 08 Jan 2014 04:00 AM PST Most experts are calling for an increase in mortgage interest rates in 2014. However, we believe the increase will be more dramatic than is being projected. We believe rates will be closer to 6% than 5% by year’s end. The Fed announced last month that they would be pulling back some of their stimulus package which has helped the housing market by keeping long term mortgage rates at historic lows for the last few years. This should come as no surprise as the KCM Blog has been warning of this likelihood over the last several months. Above are the most recent projections of where rates will be at the end of 2014 by the four major agencies. However, we believe that the government is not afraid to shoot right past these levels. Doug Duncan, chief economist for Fannie Mae, this past summer announced: “I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.” And Frank Nothaft, Freddie Mac VP and chief economist, at virtually the same time explained: "As the economy continues to improve, we expect to see continued upward movement in long-term interest rates… At today’s house prices and income levels, mortgage rates would have to be nearly 7 percent before the U.S. median priced home would be unaffordable to a family making the median income in most parts of the country.” Only time will tell. However, we feel that rates will be in the 5.75-6% range by year’s end. ------------------------------------------------------------------------------------- For more in depth coverage of mortgage interest rates and what impact tapering will have on future rates, sign up for a FREE 14 Day Trial of our full membership service, Keeping Current Matters here.

Predictions for 2014: Supply Will Struggle to Keep Up with Demand Posted: 07 Jan 2014 04:00 AM PST With a dramatic increase in demand for housing expected this year, it will be up to real estate professionals and builders to make sure there is the necessary inventory to satisfy this demand. This will be a challenge for much of 2014. For a balanced real estate market, there should be approximately 5-6 months of inventory for sale (example: if 100 homes sold last month, we would need 500-600 homes available for sale). Nationally, we are just now hitting the five month level. As the spring selling season begins to heat up, a new wave of housing inventory would have to come to market to keep up with the increasing demand of buyers. If we couple this seasonal increase with the other dynamics that will increase demand for housing in 2014, we believe that housing inventory could drop substantially. This, in our opinion, is the biggest threat to a full blown surge in sales this year. Some experts have looked at the recent monthly decline in existing home sales nationally as evidence that a lack of consumer confidence or the increase in interest rates has buyers back up on the fence. However, a closer look at existing home sales reveals that sales remained unchanged in one of the four regions of the country (the Midwest) and actually increased in two other regions (the Northeast and the South). The only region that had a decrease in sales was the Western region (down over 10%). If it was a matter of consumer confidence or mortgage rates, there would have been a similar decrease in sales throughout all four regions. The fall-off in sales in the West is directly attributable to a lack of salable inventory in the hottest markets in the region. It is up to the builders and real estate agents in each community to make sure this doesn’t happen. -------------------------------------------------------------------------- Real estate professionals need to increase their inventory of salable listings. To assist you in accomplishing this goal, we want to offer you a free replay of our last webinar, The 5 Steps to Becoming a Listing Machine. You can download the replay here.

Housing Predictions for 2014: Sales Will Surge Posted: 06 Jan 2014 04:00 AM PST Many housing pundits are calling for home sales to do slightly better in 2014 than they did in 2013. To the contrary, we strongly believe that home sales will skyrocket with increases of 10-15% in 2014. Here are the three categories of buyers we believe will create this strong demand. The First Time Buyer The Urban Land Institute recently released a report, Emerging Trends in Real Estate 2014, projecting that 4.48 million new households will be formed over the next three years. Millennials will make up a large portion of these new households. With the economy improving, we believe they will finally be moving out of their parents’ homes and, when they compare renting versus buying, many will choose homeownership. The Move-Up Buyer Over the last several years many homeowners were trapped in their home by negative equity. This prevented them from moving up to the home of their dreams. Zillow has just revealed that home equity increased by $1.9 trillion dollars in 2013 an increase of 7.9% in the last twelve months. With home values rising, this pent-up demand will finally be released and move-up properties will be in high demand. The Immigrant Buyer No one knows what will happen with immigration reform. However, we do know what such reform would have on housing demand. A recent study released by the Immigration Task Force of the Bipartisan Policy Center (BPC) found that immigration reform, if passed, would dramatically increase demand for housing units; increasing residential construction spending by an average of $68 billion per year over the next 20 years. We realize that our projections are based on three situations that are still uncertain. However, we believe that these issues will come to fruition and thereby dramatically increase demand for homeownership.

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~~KCM’s Housing Predictions for 2014
Posted: 02 Jan 2014 04:00 AM PST
 Making predictions in what is still a somewhat volatile housing market can be tricky. That being said, we are going to give you what we believe will be the five biggest headlines for housing in 2014.
Home Sales Will Surge
Many housing pundits are calling for home sales to do slightly better in 2014 than they did in 2013. To the contrary, we strongly believe that home sales will skyrocket with increases of 10-15% in 2014.
Supply Will Struggle to Keep Up with Demand
With a dramatic increase in demand, it will be up to real estate professionals and builders to make sure there is the necessary inventory to satisfy this demand. This will be a challenge for much of the year.
Interest Rates Will Increase Significantly
Most experts are calling for an increase in mortgage interest rates in 2014. However, we believe the increase will be more dramatic than is being projected. We believe rates will be closer to 6% than 5% by year’s end.
Consumers Will Demand More from Real Estate Professionals
Home search will become a given to the real estate consumer in 2014. In order to differentiate themselves from other agents, real estate professionals will need to bring strong, meaningful content to the table in all their offerings
Go Mobile or Go Home
Any content strategy the industry contemplates must have a mobile component. All information will be accessed 24/7 in every conceivable environment. The professionals who understand and act on this will dominate 2014.
We will break down all five projections next week, covering one in greater depth each day.