Matthew's Blog

head_left_image

Proposed Bill in Congress Could Crush Housing Industry

From Matthew Ferrara & Company's Blog today:

 

If you’re looking for how the housing market double-dip will be created, here’s the answer. Never mind the endless taxpayer-backed money-pits of FHA, Fannie and Freddie: Here comes a proposal to grant defaulting homeowners the “right” to rent their homes for five years.

 

It’s called H.R. 5028 and it’s no joke. The “Right to Rent” bill drafted before Congress meets with the approval of the Center of Economic Policy and Research, a think-tank that believes home “ownership may not be the smartest option.” Not that such thinking in Washington should come as news to our readers, since we’ve reported that none other than FHA’s Director Donovan has made similar statements in recent months.

But now we’re talking potential legislation.

According to HousingWire, the bill would grant the right to homeowners entering foreclosure to occupy their homes for up to five years, making fair-market rent payments, determined by an independent appraiser, to the lender. The CEPR says this would give homeowners important “security” since they would not be “thrown out on the streets.” CEPR cites the cost savings to “homeowners” who would be able to rent their homes rather than face evictions and have to rent on the open market.

REALTORS should be horrified.

Read the rest of this blog entry at our site... 

 

SuperSmart Social Media Tips - WebTV - Aug 24 - 10AM EST ONLINE

SuperSmart Social Media TipsAugust 24th @10AM EST: Pay-Per-View $39.99 (Free to Members)

Join Matthew as he demonstrates some cool tips and tricks in Facebook and Twitter that will help you improve your online social media presence.Free to MFLN Members, or join us Pay-Per-View for only $39.99 for an hour of interactive WebTV learning where you can ask questions by text, chat or phone! Whether you’re new to social media or looking for some cutting edge ideas to maximize your network, Matthew Ferrara will show you how to take your online presence to the next level!

http://www.matthewferrara.com/mfln-ppv/

Six Steps to Increasing Social Network Referrals


Successful salespeople know their best business comes from their best friends. Past clients, family and close friends are the greatest sources of referrals and repeat business. Yet sometimes these groups need a little help to help us. Here are a few ways how. The number one source of new business in real estate continues to be referrals and repeat business. The best kind of business comes from people who want to see us successful. Most of them don't need a "reward" to help us, either. The pleasure they get from watching us do a great job is all they need. Yet even our best friends and closest allies need to be reminded from time to time how much we appreciate their help. And how much we'd like them to keep helping! Even though we're more connected to our sphere than ever, referrals aren't naturally recurring phenomenon. Beyond using social networks, blogs and tweets to let them know you're "still in the business" or update them on local markets, we need to take specific steps to prepare and encourage your friends to refer business to you. The good news is that we'll be working with people who already like us - past clients, friends and family - so it should be the most pleasurable prospecting you ever have to do. Here's how:
  1. Teach them how to refer you. Many of our closest supporters are happy to talk about us to their friends. In fact, some of our relatives could talk about us all day - which could become a liability. Teach your contacts how to talk about you when the opportunity arises by incorporating key words, phrases or business terms into your blog postings and other social marketing. Distill key terms into "elevator statements" they can simply repeat when describing you to a friend. Put these "key words" into every blog, email signature or other communication to your sphere - even your old-school voice mail message. Give friends, clients, even other REALTORS the language you want them to say when they talk, tweet or share about you to their friends.

  2. Equip them to refer you. Make sure they have the right materials to refer you. Start with the basics, like your latest contact information. Make sure your Facebook and LinkedIn profiles are up to date and accurate. Old school: send your friends a few of extra business cards. New school: send them a vCard in Outlook so they can update their contact records instantly (and even forward to friends). Likewise, produce all marketing materials in "referring-friendly" format. Printed materials  get lost, are hard to copy and never handy. Make sure everything you say - or want others to repeat - is in "share along" versions like blog content, simple email newsletter, or in helpful tweets that can be re-teweeted. Electronic materials  it a snap-click for your friends to refer-forward you to someone they see could use your help.

  3. Tell them what to expect. Some people hesitate to refer us because they don't know what we'll do to their friends and family. Seriously, they worry that we might inundate them with phone calls, postal mail, email or other pushy tactics. Make sure your allies know how you'll treat their friends: just like them! Outline your referral process, either on your website or in a short video clip. Let them know your approach and style, so they feel confident they are not betraying their friend's trust. By educating your friends and clients on how you approach new business, you can ease their minds and encourage them to make the referral.

  4. Ask them to refer you. This one seems obvious but it's also least likely to be done. We often take it for granted that our sphere will mention us - or even use us themselves - when the time is right. Yet we frequently hear stories of people who thought "we didn't need their business" or "we were too busy to handle their sale." By actively asking your sphere to refer you, you're not only hoping they will introduce you to new prospects, but reminding them how much you'd appreciate their repeat business. The best way to do this in social media isn't by posting a "please refer me" update but instead, spotlight anyone who refers you (even if it doesn't become business). Publicly praising friends' actions is a great way to encourage them (and others) to do them again.

  5. Incorporate passive options. Some friends or clients may still hesitate to actively refer you, even if you did a great job for them. It's just not in their nature or comfort zone. They can still help you in other ways, like creating a testimonial. The most powerful testimonials are video clips, but if they are shy, a written testimonial is still great. The best outcome would be if they would write it directly onto your Facebook Wall or using the LinkedIn "Recommendations" features.

  6. Close the loop. The last step of encouraging your friends and family to refer you is to follow up afterwards. Let them know what happened when you contacted their friend or co-worker. They will now be prepared for the next time they meet that person and ask how it went. Plus, it's another chance to thank them for helping you build your business. And don't forget, sometimes this can happen "offline" with a nice handwritten note.

Most businesses today are excited about the world of social networking; yet successful networking takes more than just new tech tools. It takes a strategy with specific actions that can leverage new media - like Facebook - or breath new life into old media, like business cards or the telephone. Generating referrals won't happen just because you've joined a network; but it can happen if you have a plan to help your friends help you talk to their networks.

Real Estate Home Buyers Need to Get Over It

At some point, we can't blame sellers for everything that troubles the housing market. It's time to give buyers a wake-up call - and tell them that whatever's holding them back, it's time to get over it!

It's fashionable to point out how home sellers are unrealistic - in this, or any market. Traditional real estate lore contains countless stories of sellers who think their home is "special,"  not subject to market forces that sometimes sweep away equity and exceptionalism. Many such stories may be true, but to the extent that today's buyers are still hesitating, even smart sellers have to scratch their heads.

Which is why smart REALTORS need to to kick their buyers in the butts.

In case anybody hadn't noticed, now is probably the best time to buy a home since the invention of wood. Mortgage rates at historic lows, home prices reset back almost a decade, and a weak economy pushing down the costs of buying (moving, inspecting, repairing, etc). It's simply the perfect example of a classic "low" in a commodity market. Yet even in stable neighborhoods, where prices never soared and likewise didn't plummet, buyers are waiting.

Why?

Many buyers today will tell you they're waiting because they're afraid their purchase will lose value in a few months or a year. The trouble is that most REALTORS have been trained to handle this objection by talking about how great a long term investment buying a home is, or what a smart savings vehicle it represents, or some other such investment speak, when what they really should say is:

So what? It's not like you haven't shown you're willing to buy other things that have lost value, right?

Oh.

What today's buyers need is a dose of realism. Almost everything they have ever bought has lost its initial value. Fancy new car? Loses thousands the second you drive it off the lot. Super new smartphone? Put it on Ebay in two months and see what it fetches. Designer clothing? Worth nothing at the yard sale.

Buyers are surrounded by their everyday purchases that have lost their initial value; they still bought them and they got over it.

The real estate industry has caught itself in a trap of its own makings. After telling people for decades that housing was a great investment - the jury is now out on that in consumer's minds. Today's buyers are trapped in a thought process that is causing them to hesitate: What if today's purchase isn't worth "more" at some point in the future? Even if homes still are a good financial investment by certain spreadsheet calculations of future points in time, what matters today is that Gen X and Gen Y consumers simply don't believe it. They are hesitating because they can't predict the future.

But maybe we can get them to act by pointing to what they have done in the past.

Most buyers have never cared about how much money they lost on past purchases; they bought the car, computer, vacation anyway. That's why it's high-time real estate agents started telling buyers to get over it. So what if it's possible the home will be worth less if measured a year from now? Most buyers won't be flipping it within a year. It's a fictional problem! No real loss will occur. Their down-payment equity (if any) will be trapped anyway, because no bank is going to let them pull it out ATM-style ever again.

It's housing; live in it, pay for it, get over it.

REALTORS better disabuse buyers of this non-problem soon, too. If market conditions change, it's not going to be for the better any time soon (can you say unemployment, inflation, flat income gains?). Agents can help their buyers move forward in two ways: First, stop talking to them in investment speak, about prices in a future you cannot possibly predict. Second, gently point towards their buyer's car, shoes, smartphone and kid's' college education: Remind them that they were perfectly happy losing money on those purchases.

Why stop when it comes to buying their home?


Why Overprice Property Just a Little? Go for it!

Saying a home is just a "little" overpriced is like saying you're just a "little" pregnant. Sellers who do it should insist on the full benefit of overpricing. And it's in their agent's best interest to help.

Every day, homeowners decide to list their homes at prices the market supposedly considers "over priced." Even with the benefit of the internet, showing what other homes nearby recently sold for, they do it anyway. Despite years of industry and media attention, overpricing remains the norm, in every market, every price range. Truth be told, nobody really tries to stop them from doing it either. Few and far between are the agents who refuse to list overpriced properties, or managers who reject the responsibility and cost of advertising them.

 

What I've never really understood, however, is why both owners and agents do overpricing so badly. Once you make the decision not to put the home on the market - which is what overpricing effectively does - and just list it for the benefit of wasting time, money and further messing up the MLS data - adding "just a little" extra onto the market-indicated price seems counterintuitive.

By overpricing their homes, owners are indicating they believe there's someone "dumb enough" to pay more for their home than others in the market. Why look for the "marginally dumb" consumer by tacking on a mere $20,000, when you can look for the "truly idiotic" buyer who will throw an extra $100,000 on the table? Isn't there a "certifiably insane" consumer out there just waiting to pay an extra million for your home?

As for the real estate industry, once a seller expresses an interest in overpricing their home, their agent should insist on gross overpricing. It's the only logical way to compensate for the amount of lost time, advertising money and negative public perception they will incur for listing an unsellable commodity. Since they get paid by commission, agents and brokers will need that extra money - should the truly idiotic or certifiably insane buyer come along - to cover their damages, er, expenses in listing a home not for sale for months.

There are other logical conclusions in defense of gross rather than marginal overpricing. Imagine all the time the real estate industry will save not having to sit through training classes on how to properly price commodities in a marketplace. Consider the millions of dollars saved in newsletters, training tools and marketing materials trying to educate the consumer against something they clearly have little or no interest in doing. Most of all, think about all of the money saved in stress-relief medication once we stop asking agents to argue with sellers about the negative effects of overpricing.

It will be joy, joy, joy for everyone once we all agree to overprice homes with gusto!

In fact, I think there is an opportunity here for a company to secure a new niche segment of the market. Since nobody has taken the opportunity in the last two decades to secure the "we only take good business" niche, we can only assume it's because market research shows the sellers have no interest whatsoever in proper pricing. In fact, every shred of evidence shows they expect overpricing: Why else would they insist on getting overprice for their own home, then underprice their own offer to buy their next home?

This means there's a niche opportunity to position a company squarely within customer expectations. Imagine the marketing possibilities. An infinite number of tag lines are possible:

"Supply and demand be damned!"

"Pick your price! We'll find you an idiot!"

"You're gonna do it anyway - so let's go for it!"

"Why sell it, when listing it is so much more fun?"

Maybe the real estate industry has been going about this whole pricing thing the wrong way for years. How much more fun will it be to list homes without the fear of the pricing discussion during the listing presentation? How much happier will sellers be when they find an agent who encourages them to get $100,000 or $200,000 more than their neighbor did? How much less stress will managers have, once they give up entirely on bringing homes to market, when they can go around town bragging about having the most listings worth the most in the MLS!

I think every agent should call their clients right away, and have the converstion everyone's been waiting for: "Good morning, Mr Owner! I've been thinking... I know we overpriced your home when we listed it, but heck, I don't think it's overpriced enough. What do you think if we bump it up to just under a million?"

It's not like anybody - especially buyers - is even going to notice.

 

OnScreen: Helpful Resources for REALTORS 7/10



Being prepared for the summer market means REALTORS need to know the latest trends in economics, consumers, sales, technology and management. Here's our July collection for real estate professionals to explore.

Economic Trends
  • New IRS rules for small companies will require tracking goods as well as services purchased. Get prepared! From the Wall Street Journal
  • Government Ownership of REO properties is increasing, according to the Ludwig von Mises Blog.
  • Monitor inflation calculated the 'old fashioned' way with this handy tool from ShadowStats.
  • Is the housing market simply in the middle of another 18 year cycle? This Cato article seems to think so.
Consumer Research
  • How do Baby Boomers use technology and social media? AARP's latest study tells all.
  • Researchers and pollsters may be struggling with falling land-line and rising cell phone use. REALTORS trying to prospect by phone could be next, too. Check out this Pew Research article and draw the parallels.
  • Do you know who REALTORS are? Check out our video on Realtornomics!
Marketing Trends
  • Social networks are driving customers - especially for small businesses - in this summary from eMarketer
  • Mobile advertising to cell phone is driving traffic to social medial destinations, according to research by MediaPost
  • The Top 10 Real Estate Websites are ranked for June 2010 in this graphic from MarketingCharts
Sales Technology
  • Learn to maximize your LinkedIn profile with this quick video for members of the Matthew Ferrara Learning Network
  • Learn ten different ways to take better pictures with your cell phone with this blog entry from MakeUseOf.
  • Dell has released a new tablet to take on the iPad. Find out what CNET thinks of this new gadget in this review.
Management
  • Recruiting Gen X and Gen Y REALTORS becomes easier after watching our MFLN video episode (free)
  • Are your office meetings worth the time and expense? Make them so, with these tips from our blog.
  • Managing Millennials becomes clearer with these perspectives from About's blog



New Video: Market Report on Buyers at Matthew Ferrara Learning Network

 

Have you read the latest data on buyers in the real estate marketplace? Find out who they are and why they are buying with this Market Report at the Matthew Ferrara Learning Network (members only)

Keystone Cops Meet the Modern Consumer

The bigger a company gets, the greater its opportunity to drive down costs, increase customer value and expand market share. Or, as some companies prove, simply create bigger problems.

Here’s a funny story you’ve probably experienced yourself. You try to purchase a product a service from a big company, say, a laptop from Lenovo or internet service from Comcast. Along the way, a problem arises. Maybe the product cannot be built and shipped on time. Maybe the service date for installation slips. Maybe installation goes well but the internet connection doesn’t perform as promised. So you call to speak to someone to work out the solution.

That’s when the “biggness conundrum” comes into play. As companies grow to massive – perhaps behemoth – size, their process for handling information, such as customer inquiries, problems and service requests, benefit less from the supposed economies of scale and suffer more from the scale of information dis-organization. The simplest indicator is when the person on the other end of the phone says, “We have no previous record of your request (complaint/problem/whatever).”

Huh?

It’s become almost comical these days, as if the Keystone Cops have taken over companies we try to shop. Airline personnel can’t tell you why their own planes haven’t arrived at the gate yet. Computer manufacturers have to send an email – which requires two days for a response – to their own factories in the Far East to check your order. You receive a phone call from your internet service provider confirming their technician will be arriving this afternoon, only to tell them that he’s been at your office for the last two hours. And talking to people back at their company on his cell phone.

How could they not have known?

Of course, not all companies operate this way, even when they get really big. The package delivery companies have figured out how to have customers sign for receipt on a PDA, transmit that signature wirelessly to their website, and update all parties (sender, dispatch, billing) that the job was done. Yet it seems that more companies experience escalating information-disconnect, between internal departments and between departments and consumers, despite advances in information technology. That’s how you end up with a Comcast who doesn’t know its own employee has been on-site for two hours when they call to confirm he’ll be there later in the day.

Certainly, you don’t have to be big to experience information-disorganization. Smaller organizations – even independent contractors – can have challenges keeping the flow of information moving. Ironically, it’s not technology that’s needed to solve the problem. Email, texting, social media collaboration, even a simple voice mail are more than plenty to keep all parties “in the loop.” Rather, it’s a company’s focus on the value for information collaboration that makes the difference. A commitment to gathering, sharing and using customer request information purposefully is what sets good customer service companies apart from bad ones. Knowing when a consumer inquires, what they need, who is working on the request and what’s happening to satisfy it isn’t rocket science; it’s called management science. Computer companies call it technical service requests; Zappos calls it a customer order; and REALTORS call it leads management.

And all it needs to be done effectively is management involvement; not just technology.

From the consumer’s perspective, nothing is more frustrating than the silly, frantic reactions of a company that doesn’t know anything about what you’re talking about. Today’s customers want to know that you’ve taken their request – for a product, for service, for information about a home – seriously. They expect it to be “in the system” and that all of the appropriate parties have been “updated” and set in motion. Gen X and Y consumers don’t understand why a steady flow of information doesn’t issue forth from companies they are paying money: where the plane is, where the technician is, where their offer to purchase a home stands. By the time they have to speak to the person who “actually” knows what’s going on, they have made a mental decision to just “complete this deal, but never come back.”

Unlike the Keystone Cops, information-disorganized companies don’t get the benefit of a re-run with the customer.

 

Monitoring Your Brand Buzz

After mastering the technical tools of social media, the next step is to focus on outcomes. Here’s how to find out what are people saying about you and your brand online.

Social media is a modern relationship management tool. As a prospecting platform, social media make it easy to communicate to your sphere of influence in seconds. And as we’ve said here before, sharing helpful content is a great way to multiply your audience’s knowledge, teach them a new skill, or just make their day with a little humor.

But are they paying attention?

Read the full blog entry at Matthew Ferrara & Company

Promo Pricing until Monday on Matthew Ferrara Learning Network

Just a reminder to all of our friends on ActiveRain that we're extending promotional membership prices until Monday for our new Matthew Ferrara Learning Network.

 

If you're looking for new ideas, techniques and strategies to grow your career as a real estate agent, manager, owner or trainer, we think we have some great content for you. We already have 200+ video lessons online, from live events around the world, studio training lessons and our step-by-step tutorials on Facebook. LinkedIn, Twitter, YouTube, Microsoft products and more.

Check out the preview videos at www.mflearn.com and we invite you to become a member at the special launch prices. Lots of people have become members in the last two weeks - and we've had a number of companies provide access for ALL of their agents (one company signed up more than 4000 agents!) so THANK YOU to everyone who has already become a member and helped us spread the word.