Residential real estate, once known as the bedrock of our communities, the pillar of stabilization is causing wide spread havoc with our financial system and our economy. It was local, went regional, spread national and grew globally. The crisis has come full circle as many real estate agents who once prospered are now forced to leave the business as their incomes have severely diminished.

We Want Our Government Cheese

“If you thought that the government bailout was limited to auto executives and fat cats on Wall Street think again”, said Ms. Nayber Hood Special-List, who sells Pasadena real estate. She is also spokeswoman for the newly formed group of real estate agents and office manager’s. The group formally known as “Neighborhood Interest’s Matter, Return Our Dignity” (NIMROD) is accepting members to rally and March on Washington. Their goal is to testify before a government sub committee and enlist congressional support for a bailout that would provide every one of their members a $225,000 payout.

“Once the sub-prime issues began to surface and a few of the congressman received their sweetheart loans, the real estate market begin to slow and houses quit selling” said Ima Clozr, a co-founding member. “Many of the agents in our association have no education and no corporate experience to look for another job. Heck, some who have been in the business for 30 years don’t even know how to turn on the computer. These people need financial assistance, where else are they going to find comparable income”?

In an email blast sent to its members, NIMROD requested that its members who own BMW’s, Lexus and Mercedes not drive these cars to Washington. Instead they recommended renting a US made vehicle and showing their support for the auto industry. It was not clearly known if this strategy would work as many of the emails from real estate agents go directly into the “junk” email folder.

Declining Foreclosure Activity

On of the concerns expressed by the NIMROD’s was the reduced number of expected foreclosure filings. The recent decision by Fannie Mae to suspend foreclosures until January 2009 was met with mixed results. “Fewer foreclosures translate into fewer bargains which mean fewer home sales, which is why we are seeking a bailout”, said NIMROD spokesperson Getta Minenow.

The NIMROD Association is expecting the “welcome” mat to be out and a very warm reception when they meet on Capitol Hill. After all, it is the Holiday Season and our government has been in a very giving mood lately.

The following video chronicles all of the common themes in the last few years and even today, to provide four minutes of entertainment.

A Good Salesperson Turns Negatives Into Positives

This is a fictitious tongue in cheek approach on selling a home and the options that exist. There are always two sides to every story. The question becomes the manner in which the property is presented. Depending on what is described, it can offer a summation of the negative aspects or it can sell the opportunity and potential.

Either way you have to read through the lines. Perceptions often differ, especially on something as emotional as the purchase of a home.

Pasadena Home for Sale

Option 1

This home is a major fixer. Previous occupant neglected the property and is in need of much repair. Not in the best location as it sits on a high traffic street across a gas station, a firehouse and emergency medical transportation. The property is sometimes noisy as it sits close to the freeway and police helicopters flying overhead can often be heard.

Now we will present the second option, turning the above negatives into selling positives:

Option 2

An incredible opportunity for the new owner to start fresh and make this home their own. Bring your own decorating ideas and custom touches to create your dream home. Imagine the convenience of driving across the street to fill your gas tank or pick up a soft drink. And for those of you that may require medical attention, you can rest assured that a paramedic or fireman is just steps away. Your drive to and from work just much shorter as the house is freeway adjacent. The police constantly patrol the area to keep you and your new home safe and secure.

As you can see, the language used to describe the house is dramatically different. If you are in the market to buy a home (1) do you look through the clutter, the filth and the existing conditions to see an opportunity, or (2) Do you read past the puffing, and the fluff to remain skeptical of the selling process?

It was none of those. Just another house which had completed the foreclosure process and was now owned by the bank or more appropriately, Fannie Mae. Wow was this listing agent clever. I would have to trust my assumptions due to the fact that emails and phone calls to the agent and his company went unreturned. This must be the new consumer centric real estate models I have heard about. If consumer centric is defined as enhancing marketing practices to improve effectiveness in reaching consumers, this company represents the new paradigm in how real estate will evolve into the 21st century. I don’t know about you, but when I call a business and my phone call goes into a continuous voice mail loop, I know immediately this is a company I want to work with. Furthermore, my intentions are confirmed when emails and faxes do not receive a response.

I thought real estate was a service industry. To that I have to say “where’s the beef”? In this fast paced, bottom line, results oriented, electronic delivery text message world in which we do business these days, is it possible to reduce the 5 P’s of Marketing (product, price, promotion, place and people) down to only 1, which is price? This strategy can be effective if the price makes people take notice. A price that is about 20% below the other houses in the market area is an effective use of this strategy. Just like the old song from Badfinger……”If you want it here it is come and get it, but you better hurry because its going fast”.

Actually when you think about it hasn’t the number one retailer in the world used this low price strategy? To their credit, Wal Mart does do other promotional vehicles and a broad product assortment, but they have built their reputation on having the lowest price. Are we preparing to enter the Wal Martization of the housing industry as bank owned properties populate the landscape?

Bank owned or REO properties occupy a different thought process. Banks are taking huge loses on real estate and when a property is re-acquired through foreclosure they have one priority which is to sell it immediately if not sooner. No color flyer, no flowered painted picture description, no open houses, no staging, and no just baked cookie aroma. Just price it low and watch it go. Sans the emotional appeal.

Is it effective? Sure seems to be. Many of these properties receive multiple offers and bid up very close to the actual comps in the area. The bank gets a solid buyer with good financials and a quick escrow. Wal Mart gets a satisfied customer with a full shopping cart.

Miss USA Predicts Housing Market Direction

Just like Punxsutawney Phil can tell us if winter is over, Miss USA can tell us the direction of the housing market. When Miss USA parades herself for the judges, slips and falls on her housing bubble, well folks the news is just not favorable. Last year when Miss USA fell for the first time, we had hoped that our new Miss USA could turn the other cheek. Apparently not, our housing situation will continue to be the butt of many untold tails. Would someone please place some rubber soles on the shoes of next years contestant?

And to add insult to injury, this week’s issue of Barron’s, right there on the front cover proclaims “Home Prices Are About To Bottom“. Now that is what I call foresight.

And finally, the “Wall Street Journal” chimes in,

Today’s special feature “How to Sell A House, When You Have to Sell It” provides readers with 7 timely tips which include:

1. Fix it and Clean it up
2. Price it Cheaply
3. Hire a top real estate agent

Now I can understand why this is one of the most respected newspapers in the nation. Wait a minute; I think we have covered much of the same material.

Here at up2date we have written extensively about preparing your home for sale the importance of pricing your home for sale and working with a top Pasadena Realtor.

Maybe if this real estate thing doesn’t turn around I can get a job freelancing for the “Journal”.

Telling the truth attractively and with a positive spin is an art form. It has been used very effectively for Budweiser and their Real Men of Genius advertising campaign. So we thought we would start another and call it “Real Estate Agent of Genius”.

Up2date Presents Real Agents of Genius

Today we salute you, Real Estate Agent of Genius:

Armed with your disposable camera and 25 hours of continuing education, you set out to make your mark. Open the aperture and eliminate the dark, you sultan of the shutter.

You’re really onto something with this wine cellar idea, Stir up the dust to make the bottles look old and valuable; did someone say “Two Buck Chuck”? What’s next an old table next to the street your calling a sidewalk cafe? You were born to sell.

These home sellers should be glad they have you on their side you maven of marketing. You were the head of your correspondence class. So snap open a cold Bud Light, you Ansel Adams of the basement.

Today, we salute you, prince of the photo, and illusionist of the image, Real Estate Agent of Genius

Beautiful triplex featuring a classic craftsman with 3 beds and 2 baths in the front. Two cozy 1 bed, 1 bath units in the back. All of the units need some TLC, but have great potential. Perfect for the owner who wants to live in the front and rent the two units in the back for extra income

Use Ugly To Your Advantage

Rather than trying to paint an idyllic picture of this property, the agent should have gone ugly early. Ugly Sells! It indicates a distressed property that could be picked up at below market. Instead people go over to the house expecting one thing and being extremely disappointed. The lady I showed the house to commented “I have been looking at property for 30 years and I have never seen anything like this”. It was awful.

The description which would have been more indicative of the condition should have read:

Craftsman property in need of re-crafting. Bring your Bio-Hazard suit. Enter at your own risk and be careful you do not twist an ankle on the buckled and termite infested wood floors. If skid row is your ideal of cozy, then you will adore the units in the back. Be careful of the pit bull (Named Killer) in the back. He is usually chained.

Now, if this were the description, then potential buyers would be very impressed because their expectations have been set so low that there was no where to go but up. It lets them know that the term “fixer” is far to mild for the condition and this is not for the faint of heart. Sometimes all you have is all you have and no matter what flowered description you put on it, it just won’t help.

I cannot think of any US companies that have been able to build a brand that has become so ubiquitous. And in the manner in which they have done it. Think about it. When was the last time you saw a Starbucks ad or flier in the newspaper offering a discounted price on a cup of coffee to get you into the store? What if Target or Best Buy could generate increased store traffic week after week without those fancy colorful 12 page Sunday circulars? It just can’t be done. The American economy is built on advertising and promotion. However, their strategy is to blanket an area with retail stores and forgo the advertising. Or at least it was.

Has Starbucks become the new American icon?

Here in Pasadena I count 9 freestanding Starbucks stores to only 3 McDonald’s. Some of the stores are so close you can walk from one to the other. However there may be storm clouds brewing. Starbucks introduced this week a national TV campaign and indicated that sales growth may be slipping. Other fast food competitors see the margin to be made in a $2.00 cup of coffee and who better to go after than the company that created it. Is the sale of a single cup of coffee impacted by competition or by the economy?

Has the Housing Market affected Starbucks?

A slowing housing market impacts many industries. It may not be felt immediately but over time its bound to catch up. Consumers have a choice to make in the morning. Spend $3.50 on a jumbo half caf, double down latte or buy a gallon of gas. Spend $4 for an extra espresso shot or buy a gallon of milk. There comes a point when external forces place too much financial pressure on the American consumer, then they step back and say UNCLE. No mas. Enough already.

Could this be the scenario in the housing market? Are consumer’s saying prices are too high, and homes are unaffordable? The price of money is fairly inexpensive and thereby the housing market should be much more bullish if past history would be any indication. Consumers may just be feeling uneasy about the economy and thereby avoiding a 30 year commitment in the form of a mortgage.

As we drift into unchartered water, consumer buying habits may become harder to predict. Gas prices previously flirted with $3.50 to $4.00 a gallon, but last time we had a housing market. Oh well, enough analysis for the evening. It’s getting late and if I am going to finish my other projects tonight, I need a cup of coffee.

For instance, take the home seller who continually proclaims that they must sell, yet when agents call and try to set an appointment to view the house, repeated calls to the owner’s home, or the two cell phone numbers go unreturned. The lockbox still sits empty because the seller refuses to make it easy for an agent to show the home and allow easy access.

Take the seller who has refinanced and taken money out of the house several times only to find themselves owing more that the house is currently worth. Hoping beyond hope that someone will offer a higher than market price for the home, because that is what is needed in order for them to walk away with some cash.

More from the excuse file: “Well my house is a wreck and I did not have a chance to clean it, therefore I cannot have anyone show it today”. “We have people over this afternoon, so now is not a good time”. “Unfortunately, I did not get to paint it as we discussed”. “You need to give me at lease a 24 hour notice before you can show it.”

The list goes on, but now you get the idea. Selling a home is a partnership between the agent and the homeowners. Some homeowners get it, some are slow to catch on and sometimes, oh well. These days it is a must to capitalize on every opportunity. That means forget your schedule and time frame. If you really need to sell your house then bend over backwards if necessary in order to comply with an agent who is attempting to show and sell your home. Drop the mentality that is “me vs. them”, because if you don’t there is probably a house just around the corner that is ready to go into escrow.

Selling you home will be an inconvenience at times. Albeit a minor inconvenience. Your regular routine will be interrupted for a while. Accept it and keep the end goal in mind when an agent calls and says that they are just around the corner and will be there in 15 minutes.

How’s that for a greeting?

Nice to see you as well.

I met with a couple the other day and was greeted outside by the husband. He immediately informed me that his wife had a tremendous dislike for real estate agents. Actually that is not news. Right or wrong, just or unjust, most people have an immediate opinion of people in the real estate profession. We’re in good company though. Right up there with telephone solicitors, used car salesmen and lawyers. I don’t understand how lawyers made it into this elite field.

Maybe I was being placed on notice, or I was in for the good guy bad guy routine. I’m thinking “who called who here”? They approached me. They ask me to come meet with them.

I learned early on in my career not to take anything personally. Many times people will chide you or say things to see what kind of reaction it solicits. There are very few things that anyone can say to me that I take personally or get upset with.

Maybe the deeper issue here is “Why do people have a dislike for real estate salespeople or salespeople in general? I have seen salespeople practice hit and run tactics including here today, gone tomorrow or anything to make a sale. Quite frankly I don’t hold these people in high regard either, but that does not mean one size fits all.

A consultive salesperson, one that can truly advise you and represent your best interest is an amazing ally. Come to think of it that is the relationship you should have if you work with a Realtor. The reason is simple, a Realtor has an obligation to act in a fiduciary capacity.

So the next time you find yourself in a situation, a negotiation, a purchase decision or just plain conversation, ask yourself, “Is the other party looking out for my best interest, or their own”?