Real Clues

[RealClues] #258: Trends (part 1)

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SPECIAL ANNOUNCEMENT: If you are a female broker owner, executive in a real estate brokerage, or a vendor who provides services to the real estate industry, I have a limited number of invitations to a very special conference designed to help you cope with the issues women in leadership face. This by-invitation-only conference will take place from March 19-21, 2007. Please email me at Bernice@RealEstateCoach.com for more information.

This week at LuxuryClues: Updates from the Inman Conference, luxury marketing tips, plus much more. Also, don't miss the post about my first subway ride as well as Frances Flynn Thorsen's pictures from the conference. http://realtownreport.realtownblogs.com/news/bigappleconnect

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Table of Contents
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1. CoachingClues: Twenty-One Trends that Will Influence Your Business in 2007 (Part 1 of 5)
2. Welcome Notes: More Change on the Way--Are You Ready?
3. Reprise: Thirteen Tips for Becoming a Top Producer
4. Create a Better Life: The Price of Procrastination
5. Featured Products:
*Need a Great Postcard Campaign? We've got it!
*Earn More Full Commissions; Convert More FSBO and Expired Listings (Free downloads)
*Our Printer Goofed--Great Deal for You
6. Increase Your Production with Personal Coaching
7. Give Us Your Feedback on this Newsletter
8. How to Subscribe/Unsubscribe

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1. CoachingClues: Twenty-One Trends that Will
Influence Your Business in 2007 (part 1 of 5)
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From Blogging to Zillow, today's rapidly changing real estate environment continues to challenge both agents and brokers alike. What changes should you implement? Where are your advertising dollars best spent? What are the economic, demographic, and digital trends that will influence your business in 2007? More importantly, what is your strategy for selecting the unique combination of innovations best suited to your personal business model? Over the next few weeks, we'll look at what's coming in 2007 as well as what to implement in your business to create a competitive advantage.

Economic Trends

#1: The demise of the real estate ATM machine and the high cost to consumers
One of the most serious concerns for 2007 is the high percentage of debt that today's consumers are carrying. In 1950, the average consumer's debt was 18 percent of their annual income. In 2006, that number is 117 percent. For those who have equity in their homes, we have turned our houses into ATM machines to buy cars, to pay for college, and to finance big screen televisions or other non-essential purchases. The challenge for many home owners is that the ATM machine has closed. They no longer have the ability to refinance their homes because of market stagnation or market depreciation. This means that unless many homeowners change their spending patterns, their debt will continue to increase. Since they can no longer use low interest mortgage rates to finance their excessive spending, their ability to meet their fixed obligations such as mortgage, taxes, insurance, and car payments may be in jeopardy.

Opportunity: If your past clients are having financial difficulties, refer them to a reputable credit counseling service in your area. You could also speak to local lenders about programs to lower the homeowner's interest rate on their credit card debt. If they must list their home, they are more likely to hire you since you helped them cope with their debt. For those who are not having financial problems, you can create a "Save Thousands on your Mortgage" report that you deliver in person or by mail to your past clients. For owners who opted for an interest only loan, urge them to make at least one additional payment a year to start bringing down the principal. Use your report to show them how much they will save over the term of their loan. For example, on a $250,000 loan at 7 percent, switching to a 15 year payoff saves your client $194,299 in interest payments. This represents enough money to fund a retirement account or to put a down payment on an $800,000 building that will generate substantial cash flow. On a $250,000 loan at 7 percent, a homeowner who increases the monthly payment $100 per month saves $56,780 over the term of the loan. The savings are even more substantial for the homeowner with a smaller loan. An owner who has a $150,000 loan at 7 percent saves $58,320.

#2: Foreclosure and short sales: new income streams for your business
With over 9,000,000 loans readjusting in 2007, many owners will not be able to afford the increase in their interest rates. Equally disturbing is the high percentage of homeowners who have opted for 100 percent financing options or who have elected interest only loans. If these owners have to sell, they are already in a short sale situation even if there has been no decline in prices. A typical sale requires approximately eight percent in seller fees (i.e. six percent commission plus two percent in closing costs.) On a $200,000 property, this means the seller nets $184,000. This will not be enough to pay off the loan balance unless the seller puts 10 percent down or has owned the property long enough to pay down the loan or to experience appreciation.

Opportunity: This would be an excellent time for your past clients to refinance into a fully amortized fixed rate loan. Currently, the differences in ARMs and fixed rate loans are as little as 1/4 percent, which is a negligible amount in terms of payments. Show them the difference in the payment schedules. Furthermore, UCLA is predicting a gradual decline in interest rates that will continue until mid-summer. For sellers who must sell and lack sufficient equity to close the sale, you have the option of helping them with a short sale. A better approach that protects their credit, however, is to help the seller negotiate a personal loan to pay off the balance after their property closes. A third opportunity is to become a foreclosure specialist. When markets slow, professional investors come back into the marketplace. Consider linking to ReatlyTrac.com or to Foreclosure.com. These sites allow your website visitors to access over 1,000,000 foreclosure and bankruptcy listings from your website. Better yet, both offer an affiliate program that actually pays you for the leads that you generate to their websites.

#3: The Real Estate Futures Market: Equity Insurance, not just Title Insurance
One of the most exciting innovations for 2007 is the creation of a real estate futures market. The contracts are based upon the Standard & Poor's Case-Schiller Metro Area House Price index that tracks price changes on existing homes in ten major metropolitan markets.

Opportunity: Expect new products to evolve that will include "equity insurance," based upon this new stock market product. For buyers or homeowners who are concerned about loss of equity in their properties, they can "sell short" to protect their property value from a downturn. For agents who are savvy stock market investors, representing high-flying real estate purchasers may represent an important new market niche.

Want to know more about how to capitalize on the trends for 2007? If so, see next week's article, "Demographic Trends."

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2. Welcome Notes:
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Welcome to our new subscribers this week. Each week RealClues provides you with great strategies to improve both your business and your life. If you find this issue of RealClues helpful, take a moment to hit the "forward" button and send it to another friend in the business.

Over the next few weeks, I'll be writing about important trends that are affecting our industry. We are in the midst of another profound change. First, advertisers have done almost a complete 180 degree flip. For as long as any of us can remember, we have had to pay for advertising. Now numerous websites allow us to post our listings for free. The most notable entry into the fray is Zillow.com. Their goal is to create a website for every home in the country. Also, they will let you advertise your listings at no charge. Given that their traffic is almost as good as Realtor.com and better than most brokerages, this is an important development. The second major development is the consumer's expectation to be actively involved in the creation of web communities. Blogging is giving way to social networks such as SecondLife.com and MySpace.com. If you are not actively using the Internet in your business, please get the training you need to catch up. Look for our new edition of training products coming in the very near future that will address these issues.

Have a great week!

Warmly, Bernice Ross, MCC, and Byron Van Arsdale, MCC
www.RealEstateCoach.com, www.LuxuryClues.com, www.RossdalePress.com, www.ConferenceCallTraining.com, and www.TeleconferenceLine.com

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3. Reprise: Thirteen Tips for Becoming a Top Producer
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The difference between top performance vs. mediocre performance is often quite small. To see how you measure up, examine your business and personal skills in light of the thirteen tips below.

http://www.realestatecoach.com/articles_archive/art20050321.html

In case you missed parts 1 and 2 of this series, the links are below:

http://www.realestatecoach.com/articles_archive/art20050307.html

http://www.realestatecoach.com/articles_archive/art20050314.html

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4. Create a Better Life: The Price of Procrastination
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During the last week, what did you postpone until tomorrow that would have been better handled today? Tracking your expenses for tax purposes? Saving for a rainy day? Going to the dentist? Paying your bills? Calling a loved one? A physical check up? The price of procrastination is high. If you want to learn more about how to break this money-costing habit, click on the link below:

http://www.realestatecoach.com/articles_archive/art_procrastination.html

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5. Featured Products: Make More Sales & Take More Listings
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**Do you need a cool postcard program to help you earn more commissions? If so, check out three samples from our Waging War Postcard program at the link below:
http://www.realestatecoach.com/samplepostcard.html
**Do you want to convert more expired and FSBO listings. If so, the two articles below can help as can ordering a copy of Who's the Best Person to Sell My House. Click below to learn more.
http://www.realestatecoach.com/postcard.html
http://www.realestatecoach.com/download/FSBOlistings.pdf
http://www.realestatecoach.com/download/ExpiredListings.pdf
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**Our Printer Goofed--Great Deal for You!
We recently received a batch of Waging War on Real Estate's Discounters that was printed partially on white-white paper and partially on a light cream colored paper. We are offering these "seconds" at $10.00 each plus S & H with an order of seven or more. If you haven't ordered this powerful book, it shows you how to get listings and to persuade sellers to pay full commissions. These make great gifts for a 2007 kick-off, for awards in a 2007 listing competition, or for your new or experienced agent training. Learn why many real estate leaders have called this book, "The best real estate book ever written."

http://www.profcs.com/app/netcart.asp?MerchantID=35347&ProductID=3355716
(When you update the shopping quantity to 7 or more, the price will change to $10 a book.)

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6. Increase Your Production with Personal Coaching
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Looking for a well-trained coach who knows the real estate business? Our coaching team can help you increase your production and make your dreams come true! Send an e-mail to Shane@RealEstateCoach.com and we'll help find the right coach for you.

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7. Give Us Your Feedback On This Newsletter
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We want your feedback-to share your thoughts and suggestions, please e-mail us at Shane@RealEstateCoach.com.

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8. How to Subscribe/Unsubscribe
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Visit our Web site, http://www.RealEstateCoach.com to subscribe/unsubscribe to RealClues.

Copyright (c) 1996-2007, RealEstateCoach.com and Teleclass4U.com, LLC. All rights reserved. Permission is granted to reproduce, copy or distribute RealClues as long as this copyright notice and full information about contacting the contributors to this newsletter is attached.

Contributors to this newsletter:
Bernice Ross, MCC, and Byron Van Arsdale, MCC, Owners, www.RealEstateCoach.com, www.LuxuryClues.com, www.ConferenceCallTraining.com; www.RossdalePress.com; and www.TeleconferenceLine.com
Shane Bowlin, REC General Manager

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