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Looking to make the most of your open houses? The following three tips can help up your open house game.

  1. Digitize

For REALTORS® who want to enhance the Open House experience for prospects and bolster their own system for capturing leads, Open Home Pro fits the bill. An excellent alternative to paper sign-in sheets, this free download offers users the ability to create a comprehensive digital experience for prospects through sign-in forms, photo displays, customized questions, and automated thank you messages.

No more wasted time trying to decipher handwritten sign-in sheets that offer little other than a name and email. Based on your customized questions, this innovative program will send you a list of leads who don’t have an agent or have a home to sell, or who are pre-approved for a mortgage. Open Home Pro also allows users to easily export collected data to a CSV file.

  1. Deliver

Handouts make great icebreakers and takeaways at any Open House, and Realtors Property Resource® (RPR®) makes it easy to create them. The real estate data platform offers REALTORS® several customizable reports perfectly suited for Open Houses. Start by offering an RPR Property Flyer. Branded with your name and contact info, the flyer offers just enough data about the property to give clients a solid understanding of its attributes, including photos and insights on how you came to the list price via comps.

Two of RPR’s flagship reports seen frequently at Open Houses are their Neighborhood and School Reports. The Neighborhood Report presents an in-depth portrait of the people who live in a target area, in addition to key economic and quality of life indicators. The report also includes median list and sales prices, listings and sales volumes, and per square foot pricing on sold homes.

Similarly, RPR’s School Report report summarizes student populations, testing outcomes, parental reviews, and ratings about a public or private school. Must-have information for parents.

Here’s a tip: Print a few of these insightful reports to showcase on a kitchen table and when the supply dwindles, ask potential buyers for an email address. From that spot, use your tablet or phone to retrieve your saved reports from the RPR website and send it to the client in just a few quick clicks.

  1. Drip

Another radically simple idea for converting leads to clients post-Open House is to create a homes by email campaign. Here agents can send newly listed homes to prospects via an automated delivery system offered through their MLS. When a home is listed that meets your client’s specific criteria (location, square footage, number of bedrooms, price), the listing is automatically delivered to the client, complete with your personalized greeting. This type of drip campaign will keep your client in the loop and requires little to no effort on your part.

For more information, visit www.narrpr.com.

Posted on June 28, 2016 |

rookie-pic (1)Today I’m sharing an article originally posted on REM written by Joanna Dermenjian. This article explains the reality for new Realtors just starting out and the demands for any agent who wants to be successful in their new career. Enjoy!

Joanna writes:

You’ve passed your exam, signed on with a brokerage and received your license. Now, where is the instruction manual on how to be a real estate professional? There isn’t one! It’s Day 1 in your new career and you have no idea what to do, what to expect and how to get started. Here is what we have learned that you need to know:

Your first year will be very hard. If you make it through the first year and do 10 transactions, you have a chance to gain enough momentum to build a career in real estate. In the first 100 days, you need to gain traction. The clock is ticking, and the first 100 days are counting down. Get yourself one firm transaction and at least two more buyers you have already started working with in that first 100 days. There needs to be urgency in everything you do.

1. You are now a brand.

You are being watched – when you are out with friends, when you are eating in a restaurant, when you are shopping at a retailer or are receiving a service. Everywhere you go, people will start to know who are. They will watch you and listen to what you say and how you say it, even if you aren’t talking to them. Think about that.

2. You are a professional.

You want to be a very successful professional. Dress for the job. Arrive on time. Clean your car. Be organized. Be well groomed and presentable all the time, even in your leisure time. Behave.

3. You are a salesperson.

The public perception is that we sell houses, but truly we are selling ourselves. Our knowledge, our expertise, our competence. You don’t have those yet, so you have to work very hard to get them quickly. Until then, sell yourself as enthusiastic, hardworking, ethical and available, with support from a great brokerage and colleagues when you need assistance.

4. You are now a business.

Project your expenses for the year and your net if you do five sales in the first year, at the average residential selling price in your board area. Do a budget. Don’t spend money you have not made. Set up files, keep receipts. Remit taxes at source, HST and personal income tax. It is not your money and never will be. You do not want to be hounded by the CRA.

5. You are your own administrator.

Create an excellent calendar and keep a log. Write down everything you are doing in your business. Track where your time is going and what is bringing you success. Where are your leads coming from? What isn’t working for you?

6. You are your own PR department.

Write down the names and contact information of everyone you know and create a database. Grow your sphere of influence. Let everyone you meet know you are in real estate and ask them if they have a trusted real estate advisor, or if they would they consider working with you. Email or snail mail some information of value to your database at least once every quarter.

7. Project that you need to talk to 100 people about real estate before you get one firm transaction.

This doesn’t include friends and family, who may or may not want to do business with you. If you want to do 10 transactions this year, you need to talk to 1,000 people about what you do. If you don’t believe this, start counting.

8. Do 100 open houses this year.

Yes, 100. That is your magic number. It could be one or two or four a weekend. It could be some weeknights or non-traditional times. Try various times and see what works for you. If you don’t like open houses, go door-knocking. You need to talk to people face to face about real estate.

Don’t just do 100 open houses, do 100 great open houses. Quantity isn’t enough. Learn which agents have properties where you can host an open house and introduce yourself. Develop an open house plan for yourself, a system, to make sure you are well informed about the house, the neighbourhood amenities, recent neighbourhood sales and new listings. Preview the property. Spend two hours of prep time for each hour of every open house. Show the listing agent you are organized and committed. Arrive at least 15 minutes before you open – be there before the buyers! Treat each open house like a job interview. You are looking to find a buyer or a seller who will “hire” you.

9. Do floor time, duty.

Yes, it is boring to sit in the office waiting for someone to call, but many agents don’t show up so there is real opportunity here. It might not amount to a lot, but it gives you a chance to talk to more people about real estate. Study pricing or neighbourhoods while you are waiting for the phone to ring, not YouTube videos of cat capers. But don’t only do duty and don’t do it on weekend afternoons when you should be doing open houses.

10. Go to your weekly sales meeting and agent tour, if your brokerage offers it.

See as many houses as you can. Study the pricing, listen to what other agents are saying about the listing, research how the agent might have come up with the list price. Watch how much it sells for. You need to see a lot of houses before you can become good at pricing. Research neighbourhoods. Every week, study a new neighbourhood. Drive around, walk around. Learn amenities, schools, parks and places of worship. Study typical home styles. Study pricing history of that neighbourhood for the last 12 months. Next week, do the same for another neighbourhood. Next week, do it again, until you know the whole city this way.

And show up. The first few weeks can be very discouraging. Keep on with the basics. After awhile of doing the core things over and over again, something will take hold. You will find your niche, your best way of engaging with clients, and you can build on that. But it won’t happen if you don’t show up. You are a million times more likely to pick up a duty call if you are at the office than if you are sitting at home or hanging out around town.

A key tool for successful realtors is a real estate CRM. A CRM can be a game-changer when it comes to contact management, as it contains all your client contact profiles, can be setup with automated email and e-newsletter campaigns, and has reminders for your clients special events so that you’re always in-the-know! Try IXACT Contact real estate CRM. IXACT Contact offers Rookie Realtors a 6 month FREE trial! Sign up today and kick-start your new business!

 

When traditional lending avenues fail, seller financing can help seal the deal. But watch out for pitfalls.

If you’re working with sellers who have seen offers collapse because buyers can’t get a mortgage loan, you might want to suggest they consider offering some variation of seller financing. If structured carefully, seller financing not only makes deals possible but also can typically help transactions close quickly, as less due diligence is required. After all, who knows the property better than the sellers?

There are other perks, too: Sellers can often negotiate an interest rate that’s more favorable than would be available for other sorts of investments. And they might also get a higher selling price as compensation for assisting the buyers. Finally, there can be some tax benefits; if the seller structures the loan as an installment sale, for example, there can be tax advantages based on how recognition of the capital gain is timed.

But against these benefits is the big downside of seller financing: the potential for buyer default. This risk is compounded if the deal is structured as a wrap-around deed of trust, as many are. With a wrap-around deed of trust, the seller issues a promissory note and deed of trust for the dollar gap between the amount of the first mortgage and the buyer’s down payment. When structured this way, the seller’s performance on the underlying first mortgage is linked to the buyer’s performance. If the buyer defaults, the seller will likely default, too.

Here are some ways to help sellers minimize such pitfalls, no matter how the transaction is structured.

  • Request a credit report and credit references. Sellers can get a credit report from any credit reporting agency, but they’ll want to get a signed consent letter from the buyer first. For credit references, one place to go is the buyer’s landlord, if they’re renting. Sellers should also ask for in­dependently audited financial statements.
  • Consider loan assumption. In many cases, the seller’s existing mortgage loan has a due-on-sale clause that requires the principal to be paid upon sale of the property. Having to settle their own financing makes it hard for many sellers to offer financing, especially if they’re buying a house themselves and need their sale proceeds to make their own down payment. In these cases, it might be better to simply have the buyer assume the seller’s existing loan. The buyer still must submit to the lender’s underwriting analysis and get the lender to approve a modification, but the process should be less time-consuming than if they were applying for new financing.
  • Provide expanded remedies. For many sellers, the only remedy for buyer default included in their loan documents is foreclosure. But it’s best to include lower-level remedies so foreclosure doesn’t have to be the only option. Suggest that sellers set rules for imposing late charges or default interest. Or suggest that sellers hire a property manager to keep track of incoming payments and to spearhead collection efforts, because these activities can be time-consuming.
  • Understand the risks to buyers, too. Although it might seem like most risks are on the sellers’ side since they’re putting their resources on the line, there are risks to buyers as well—and if you’re working with buyers, you’ll want to be aware of them. First, buyers could pay the loan in full but still not receive title if there are encumbrances that were never divulged by the seller. Second, if the transaction is structured as a wrap-around deed of trust and the sellers are supposed to be making payments on senior debt, the buyers could be at risk if the sellers fail to make their loan payments, even if the buyers are scrupulous in holding up their end of the deal. Third, buyers might not have the protection of a home inspection, mortgage insurance, or an appraisal to ensure they’re not paying too much.

These are challenging times in credit markets, so there’s a role for seller financing. But be aware of risks so you can help protect your clients.

If your buyers are being ignored by the bank, consider a loan from the seller.

In today’s stymied real estate market, lenders are more cautious about making loans and sellers are more inclined to agree to carry financing to sell their properties more quickly. Here’s a look at how installment sales could work for your clients.

Installment sales are structured so that the seller receives payments for parts of the purchase price over a period of time following the closing.

If a buyer makes a substantial down payment and is sufficiently creditworthy, and if the seller either owns a property outright or has the resources to pay off any remaining mortgage, installment sales can be beneficial to both parties.

An installment sale also enables a seller to defer income taxes when at least one installment payment is received after the tax year in which the transaction closed. The seller recognizes the gain over the taxable years in which the payments are actually received.

Deferring taxes can be a real benefit to home owners whose capital gain exceeds the $250,000 individual exemption on the sale of a principal residence or who haven’t held the home for the two-year period required. Installment sales also benefit investment sellers who don’t want to use a Section 1031 exchange to defer taxes.

Each installment payment consists of three elements:

  • A partial return of the seller’s adjusted basis in the property sold, which isn’t taxable to the seller.
  • A portion of the taxpayer’s realized gain on the sale, which is taxable as a capital gain.
  • Accrued interest, which is taxable as ordinary interest income. An installment note must include an adequate stated rate of interest to be paid by the buyer. An adequate rate of interest is equal to or greater than the rate published by the IRS.

Each year, a seller receiving payments from an installment sale must determine how much of the year’s payments are taxable as capital gains and how much are a nontaxable recovery of the seller’s cost basis.

The taxpayer’s adjusted basis starts with the original purchase price, including initial closing costs. It then increases by any capital improvements and the selling expenses incurred in the sale. It’s reduced by any depreciation taken during the time of the seller’s ownership. The taxpayer multiplies the non-interest portion of the total payments received in that year by the gross profit ratio for the sale.\

The gross profit ratio is the taxpayer’s total anticipated gross profit divided by the total contract price. The anticipated gross profit is the contract price less the taxpayer’s adjusted basis. The contract price is equal to the selling price, reduced by the amount of any qualifying indebtedness that is assumed by the buyer.

Qualifying indebtedness is limited to the seller’s adjusted basis in the property. If the seller has refinanced the property and taken cash in an amount that creates indebtedness greater than the seller’s adjusted basis, the qualified indebtedness for purposes of calculating the contract price is limited to the adjusted basis.

Consider the example of a sale of raw land (below). In Year 1, Seller sold Black Acres to Buyer for $1.2 million. Buyer paid $200,000 in cash at closing and agreed to assume the current $200,000 mortgage. Seller agreed to finance $800,000 of the purchase price over a five-year installment note, with the first installment being due in Year 2.

The gross profit of $400,000 is divided by the seller-financing contract price of $1 million to determine a gross profit ratio of 40 percent. In applying this gross profit percentage to the $200,000 received in Year 1, the seller will recognize $80,000 of gain in the year of the sale. If the principal portion of the payments received by seller in Year 2 is equal to $160,000, the seller will recognize gain equal to 40 percent of $160,000, or $64,000 in Year 2. (Note that gain on real property that depreciates, such as an office building, would be calculated differently because gain from depreciation is taxed at 25 percent.)

Installment sellers should consult an attorney to better understand the risks of default by the buyer and inquire about ways to reduce the risk.

Calculating Gain

Selling price: $1,200,000

Less assumed mortgage: ($200,000)

Contract price: $1,000,000

Adjusted basis: ($720,000)

Selling expenses: ($80,000)

Gross profit (selling price minus adjusted basis minus selling expenses): $400,000

 Find out what tools the honorees from REALTOR® Magazine’s 2016 class of 30 Under 30 are using to get the job done on behalf of their clients.

young business people discussing ideas

Online reviews aren’t just for restaurants; they are equally useful for real estate marketing. They also happen to be Kimberly Sethavanish’s secret weapon.

Sethavanish, a salesperson at Century 21 Alliance in Santa Rosa, Calif., has gained three listings from clients finding her positive reviews on Yelp. After each transaction, Sethavanish asks her clients to share their experience with her services and, for the most part, they are happy to help. And best of all, these highly persuasive online reviews are free.

“If you’re not putting yourself out there, you’re not able to be found. That’s worse than anything else,” says Sethavanish, a member of REALTOR® Magazine’s 2016 class of 30 Under 30.

For this year’s 30 young entrepreneurs, technology and online tools are a way of life in their business, keeping them connected to clients and organized at the office and helping to smooth out any bumps in the road to a successful transaction.

We asked a few of the 30 Under 30 honorees to share the tech tool that keeps them on track. Here’s what we found:

They’re Paperless

In addition to online reviews, Sethavanish is also a fan of DocuSign because it helps cut the response time in her hot seller’s market. “I’ve seen it make or break a sale,” she says. “With DocuSign, you can get your counteroffer in before someone else does.”

Several other 30 Under 30s also attest to the benefits of electronic signatures.

Shari Anhorn, CRS, GRI, team member and broker-owner at Brokers 12 Inc. in Minot, N.D., has been using DocuSign, a REALTOR Benefits® Program partner, since 2011, putting her among the first agents in Minot to use electronic signatures.

“This is rural North Dakota, and to be able to have a seller or buyer who is two hours away sign a document from afar is tremendous,” she says. What’s more, many of her clients are military personnel who have to purchase property sight unseen, and DocuSign has eased the process, Anhorn says.

But some 30 Under 30 members are careful not to assume every client knows how to use even the most basic technology.

The market that Diego Espinoza-Martinez, salesperson with Keller Williams Realty-Tulare in Visalia, Calif., serves is largely agricultural and heavily impoverished. While he uses DocuSign with some clients, it’s not always appropriate, he says. Instead, Espinoza-Martinez takes the time to learn his clients’ comfort level with technology and then decides on the appropriate tools for the transaction.

Another tool for going paperless is Genius Scan, available through both the App Store and Google Play. Wade Corbett, CRS, GRI, salesperson with Keller Williams Realty in Raleigh, N.C., is an avid user. “I scan a business card and import it into my database. That way, I don’t have to carry around a bunch of cards,” he says.

Genius Scan can be used to scan forms, receipts, or a multitude of other real estate documents from your smartphone. Save the images as PDFs and email them on the go. You can also export the files to your cloud service of choice, such as Dropbox or Google Drive.

Alexander Parker, also a 2016 30 Under 30 honoree, creates property folders in Dropbox for his clients, where they can share pictures, maps, and other relevant documents. Parker, salesperson with Lord & Stanley Realty in Tallahassee, Fla., is also rarely without his iPad so that he can access files anywhere and look them over with clients in the field.

In San Diego, Sarah Davis, SRES, broker owner of Davis Estates, takes her Surface Pro tablet to every client meeting. “I can take it to a showing and the buyers can sign a purchase order and send it to the listing agent while we’re still in the house,” she says. In California, agents are required to give a copy of the contract to the signer at the time it is signed, so she emails a copy to her clients directly from her tablet.

For software, she uses Microsoft OneDrive for Business, a secure cloud service, for all her transaction files. “It’s safer than email, and if my computer dies, everything is still in the cloud,” Davis says.

They Work Hard at Staying in Touch

Connie Chung, salesperson with Vanguard Properties in San Francisco, considers herself old-fashioned when it comes to staying in contact with her clients. She prefers dinners and coffee meetings over informal emails. “I can see their facial expressions, hear the tone of their voices, and have them hear mine,” she says.

And when a client needs more attention — when they’ve expressed unhappiness with a property or have an issue that needs to be resolved — Chung says that writing an email is the last thing you should do. “I find it simplifies my life if I pick up the phone, so I can really hear where they are coming from and ask if we can meet for coffee,” she says. “A lot of times, meeting face-to-face takes away any discomfort for both parties.”

On the social media front, she engages with clients and her sphere predominantly through Instagram. “Recently, I was touring a new development. It was great to wear a hard hat and neon vest and post behind-the-scenes photos that a lot of people don’t usually get to see,” she says.

Corbett describes his database as the core of his business, so he uses Brivity, a cloud-based CRM, to stay in touch. “It helps me follow up better and makes me able to utilize my time better,” he says.

Honoree Rebekah Eaton, associate broker with RealtySouth-MB-Crestline in Birmingham, Ala., is always looking for meaningful ways to stay connected to her sphere. So she recently started using BombBomb, a service that helps users produce video greetings that can be shared via email or text. “I take a little time to record a short video saying, ‘Thinking about you.’ And then I send it on. Bam.”

They Prefer to Market in a Meaningful Way

Scott Steadman, a Windermere Real Estate agent in Draper, Utah, uses his real estate blog to tell the story of his clients. “I talk about the family who spent years gathering around the fireplace for birthdays and holidays, and how that room was the place where they felt whole,” Steadman says. “Pairing posts like that with social media always gives my followers a reason to come back to my website for more info.”

Consistency is also key, Steadman says, so he rarely lets more than a few days separate his posts, which cover everything from market trends to before-and-after renovation photos.

Brittany Barsky-Allison, team member with Wydler Brothers in Bethesda, Md., focuses on promoting her business on Facebook in a “fun, organic way.” She creates an advertising campaign for every one of her listings, and she often posts pictures with clients or of homes she’s toured on her personal and business pages. She celebrates each closing with a status update and is frequently “liking” and commenting on her friends’ statuses and photos.

“This has helped me to pick up referrals and create a sense of expertise amongst my peers,” she says. “Brokerages must continue to place more emphasis on the people in the real estate industry and recognize that people buy homes, not computers, robots, or smartphones. Technology strengthens our industry, but people are at the core, and we cannot forget that simple fact.”

Barsky-Allison uses Salesforce.com to track her pipeline and communicate with her sphere of influence. She sends out weekly and monthly emails as well as monthly market updates, and acknowledges the buy or sell anniversaries of her clients by sending a note or gift.

Customer service is a top priority for honoree Jessica Bean, salesperson with Century 21 Price Right in Lewiston, Idaho. That’s why she arms herself with data from NAR’s Realtors Property Resource® before every marketing or listing presentation.

“It’s one of the most integral pieces of my business,” says Bean, who will compare RPR’s detailed reports against her own research on comps as well as the assessed value of a property. The reports also help her make the case that presale updates can make a listing much more attractive.

Bean also notes that RPR can help her craft a competitive offer in the seller’s market that currently defines much of her area. She uses it to help buyers put themselves in sellers’ shoes, explaining how she’d use the RPR data to price the home if she were the listing agent on the property. And finally, Bean loves the fact that she can pull RPR up on her phone on the go: “I literally use it every day in my business. Man, it’s a lifesaver for me.”

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