Your August Membership Access
UP! Magazine - August 2019, Vol 2, Issue 8
How to Negotiate More Effectively with Clients from Other Countries
by Bernice Ross, Editor-in-Chief
PODCAST OF THE MONTH:
The Best Social Media Tips from Katie Lance’s Book: Get Social Smart
OFFICE MEETING TOPICS
Optimist or Pessimist—Which One Are You?
How to Avoid the Dreaded Back Button
Ad Words that Can Save or Cost Your Sellers Money
Creative Strategies for Overcoming Seller Staging Objections
QUICK HINTS: Weekly Tips to Build Agent Profitability
Podcast of the Month
Katie Lance: The Best Social Media Tips from Katie Lance’s Book: Get Social Smart
This month we are excited to welcome Katie Lance, whose book, Get Social Smart, shot up has been an Amazon best seller reaching #2 on Amazon out of over 62,000 marketing books. Here’s what Katie she will be covering:
- Why your social media efforts should begin with LinkedIn.
- Where to get the most out of the social media in just a few minutes a day.
- The Ins-and-Outs of visual marketing with Instagram and Pinterest.
- “Snackable content:” what it is and how to use it.
- How to generate more engagement on the social media.
- Cool tools to use.
Reggie Nicolay: How New Changes at RPR and New Agent Mobile Use Survey
This month we’re happy to welcome Reggie Nicolay of NARRPR.com. RPR has come out with a very cool mobile app you can use for buyers or on open house. They also have a new study out on how agent’s use mobile in their businesses. Remember, if you belong to NAR, RPR is free. Here’s what he will be covering:
- How to create a buyer tour on your mobile device with a few simple clicks.
- How to create a “local activity” report to use on your open houses.
- Create a CMA and adjust your comps all in the mobile app.
- The five top client communication vehicles on mobile (RPR is at the top!)
- Which tablets Realtors use most.
Inexpensive Ways to Generate Leads
Are you paying hundreds or event thousands of dollars for your lead generation? If you would like to reduce your ad spend while increasing the number of high quality leads that you generate, it’s much easier than you realize if you know where to look and what to do.
Agents needlessly spend millions of dollars every year marketing their services and searching for listing leads. If you would like to make better use of your marketing dollars here are five simple steps you can take to achieve that goal.
1. Identify a Target Market
To really do this right, begin by looking at where you did the bulk of your transactions in the last 6-12 months. This is the geographical area where you are achieving the greatest success. Next, look for patterns among the clients with whom you have closed deals. What professions are they in? Approximately how old are they? Are you attracting clients born outside the U.S.? What price range do you sell to the most often? Are your clients predominantly younger or older singles, married couples, families, or some other type of household?
Once you have this information, you have a picture of the type of client who consistently closes business with you. This is where you should target your marketing efforts.
The next step is how to reach them. Most title companies have a program called REI Source that allows you to obtain lists of names that meet the criteria you specify at 8-10 cents per name. This is much more effective than paying for Internet leads where you know nothing about the person.
For example, if you find that you are attracting a lot of teachers and police officers, this service will allow you to identify those people who fall into this category and who make enough money to afford to purchase. The secret is to design your marketing piece specifically for this group.
To illustrate this point, a program called “Homes for Heroes” provides a five percent grant to assist buyers with their initial down payment. Your marketing piece would briefly explain the program and the opportunity. When a lead contacts you, help them become pre-approved with a lender. If they qualify, you have a strong buyer who will probably be telling his or her colleagues about this program and your services as well.
2. Prospect For-Sale-by-Owners (FSBOs) for Free
There are two great places where you can locate potential FSBOs at absolutely no cost to you. The most obvious place is on the For-Sale-by-Owner sites. While this is not for the faint of heart, if you have good FSBO conversion skills, this one tactic can be a goldmine for your business.
The other place to search is on Zillow’s “Make Me Move” section. This is a place where people who may be considering moving or preparing to move often post the price at which they would be willing to sell. An important caveat: make sure the property is not currently listed with an agent.
3. Search Twitter
You can find potential buyer leads on Twitter by using the Twitter search function. Simply search your city’s name and the term moving. When I searched “Moving to Austin,” there were six matches posted in just 12 hours.
Another smart strategy is to actually search for high school students who will be attending the local university next fall. When they post “Just accepted to UT” (University of Texas or Tennessee), follow them. If they follow you back, congratulate the person on being accepted. Let them know that if they plan on living off campus, there are condos their parents could purchase that could be an excellent alternative to renting.
4. Capitalize on Instagram and Pinterest
As with Twitter, you can search “moving to your city.” When I searched “Moving to Austin” on Pinterest, I pulled up a number of matches.
A different approach is to create a board under your city’s name and the term “real estate.” When I searched “Austin Real Estate,” a number of savvy agents were marketing their listings there. In addition, there were boards posted on “New Home Construction Questions,” “Austin Real Estate Rebates,” and “Austin Horse Properties.” Remember, you can also post videos to Pinterest as well.
5. Search Pre-Foreclosures and Auctions for Free
There are two great sources here that will cost you nothing. If you search “homes” in your area on Zillow and sort by “cheapest,” you will bring up the auction feed from Auction.com. If you have investor clients who like to purchase this type of property, this can be an excellent source.
A second source is E-Property Watch (www.epropertywatch.com). If you live in the area where you sell real estate, you can sign up for this service. They will alert you to the changes in your property value, however, they also provide a list of properties that have had a foreclosure notice filed on them. This gives you an opportunity to contact the owner and see if there is any chance of selling the property before it goes to sale. In many cases, the owners may not be aware that a short sale or some other alternative may be an option.
If you’re still blindly marketing using the same old tactics and not generating the results you want, experiment with one of these resources. The ideal place to start, no matter what or how you market, is by having clarity about who your target market is.
Let’s Tell the Truth: iBuyers Are Really iInvestors
The iBuyer model has hit the industry by storm, but will it be only a small portion of the market or something much bigger in the long run?
Offerpad, Opendoor and Zillow Offers are the latest darlings in the real estate press and certainly with major venture capital firms. For example, Opendoor, one of the early leaders in this area, has garnered a whopping $3.8 billion valuation and has raised $1.3 billion in funding with some $3 billion in debt financing to purchase properties.
A mislabeled model?
You’ve probably heard the term iBuyer at this point. An iBuyer, for our purposes, is a direct-to-consumer homebuying and selling service. The process of iBuyers generally looks like this: they purchase a home, directly from homeowners, offering a quick-close and all-cash. Generally, they will then do some light maintenance and resell for a profit.
Davis’s “How to Defeat iBuyers Every Time” already has his speaking schedule completely booked up through the end of 2019. According to Davis, the first step in defeating an iBuyer is to help consumers understand that the so-called iBuyer model has been mislabeled.
According to Davis, they’re not “iBuyers” — they’re actually “iInvestors.”
In other words, the iInvestor purchases at a lower price so that they can later sell at a retail price and make a profit. Davis calls the traditional model the iRealtor model. The iRealtor model is a retail model — the iInvestor is a wholesale model.
According to a recent report from MarketWatch, the convenience of working with an iBuyer comes at a substantial cost:
A MarketWatch investigation of multiple transactions involving iBuyers shows that their offers would net their customers, on average, 11 percent less than owners who choose to sell their homes on the open market, when fees and other costs are considered, translating to tens of thousands of dollars lost. The findings also revealed considerably more uncertainty around the transactions — the scope of inspections, for instance — than the iBuyer model purports to offer consumers who are looking for ease.”
When there’s an iBuyer involved
IBuyer or iInvestor, if you’re faced with the possibility of sellers choosing to forgo the iRealtor model, here’s what you should do:
Compare the Numbers
First, when you find yourself competing against an iBuyer, educate your sellers about the difference of seeking a retail versus a wholesale price. Even if they lower their asking price by 5 percent to 8 percent using the retail model, they will still normally net more than selling at the discounted wholesale price with an iInvestor.
Next, use Zavvie’s Offer Optimizer that compares instant offers side-by-side so the seller can determine which one will net them the most money. It also compares the best instant offer net with the expected “retail” net from working with a traditional broker.
Have the Best of Both
Byron Short, the broker-owner of Success Property Brokers in Phoenix, has created a very effective approach to coping with all the iBuyer models in his market. Short educates sellers on how to have it both ways — they can sell for a retail price by listing with him, but if the property doesn’t sell during the 29-day listing period (iBuyer offers are generally good for 30 days), the sellers can still sell with an iBuyer if necessary.
Second, it’s imperative that they sellers have their house inspected to determine how much any repairs will be. Because iInvestors use their own inspectors and contractors to do repairs, the sellers won’t know if the bids they’re receiving on the work are inflated or not.
Once the seller has prepared the house for sale and just prior to posting the property on the MLS, the seller contacts Opendoor, Offerpad and/or Zillow Offers and obtains a bid from each company that shows what the seller will net.
(Please note that Zillow Offers shows sellers how much they typically will net from a Zillow Offer vs. working with a Realtor.)
What’s Happening in the Field
iInvestors target median priced homes, preferably in cookie-cutter subdivisions where, if you know the price of a particular model, you can closely predict how much that model anywhere in the subdivision. Only about half the homes in the country even qualify to use this model.
Moreover, Davis has interviewed agents across the U.S. whose clients sold their house to an iInvestor. Every single one of these sellers were unaware of the true costs of that model because none of them had talked to a Realtor. As Davis said, “They didn’t know any better.”
Consequently, Davis strongly recommends that both companies and Realtor associations aggressively create marketing campaigns to educate consumers about their choices. They need to understand how much each model costs, what the trade-offs are for a fast sale and then make a decision once they are fully informed. Again, they can get a quick comparison by using the Offer Optimizer from Zavvie.
‘iBuyer’ models that solve an age-old problem
One of the stickiest situations in the business occurs when a seller must sell their home to buy a new home. Two players serving the contingent sale niche are Knock and newly launched BoardRE.
According to MarketWatch, “Knock is often lumped into the category of iBuyers, but its model is quite different from theirs. Knock advances homeowners cash to buy their next home and, once the customers are settled, sells the previous home. Customers pay a fee for the overlap period.”
Knock charges a 6 percent seller’s fee. MarketWatch goes on to explain:
In most cases, however, Knock determines it’s preferable that its agents list a property on the open market rather than accept an iBuyer offer.
BoardRE (Board.live) offers to buy a house for its customers and then lends them the money to buy it back. Board’s closing costs are the same as they are in a standard transaction.
Board generates its profit from the 1 percent to 2 percent loan origination fee and from having salary-based rather than commission-based loan officers. One other important point: Both the buyer’s and the listing agents’ commissions are paid at the all-cash closing.
Inform the Buyers in Your Market
If you have iBuyers in your market, create digital, postcard mailing and social media campaigns that share actual statistics on the costs of working with iBuyers in your market.If one of your sellers wants to consider using that model, provide them with the choice of listing for 29 days and then taking the alt model if they don’t sell. That’s the best strategy to give them the best possible outcome for their situation.