Archive for October, 2010

Your Weakness is my Gain!

October 30th, 2010

By Shirleen Von Hoffmann, Sales Coach-President HomeBuilders AdvantEdge® Copyright 2010 ©

I am sitting here giggling to myself because using the “old school” method of picking up a phone and talking to someone, still proves to be one of the best ways to build rapport and get the sale.  For once, I am proud to call myself an “Old School Girl” or as the kids say, “OG”.

I recently was on a training trip and received a call from a Banking Regional Manager, wanting to use my services for one of their Builders via a webinar.  I returned the call promptly but had to leave a message and informed my new prospect that I was predisposed in training sessions, out of town and would do my best to call back so I could speak with her directly.  I then had my assistant email her, on my behalf, to get some of the details of her phone call so I could call back on a conference call at a set time.  When I spoke with her, I wanted to be prepared in advance.

Once we made contact, I was surprised at how appreciative she was that I made time in my schedule to speak with her in person.  I asked her how she found me and she said that she had searched many people for the same job through NAHB (National Assoc. of Home Builders) and many of the names she mentioned, I knew.  She said that a few of them would not consider doing a webinar and that is the first service she needed, it was too “small” for them.  She then said, ”A few of them only responded through email and didn’t call me back to discover my needs, they had their “people” email her with their take it or leave it terms to speak and she didn’t like that at all.”  She thought it was rude and was turned off by their response.  She said, “It was like my business didn’t matter to them”.

She said, “The fact that we are now talking and getting to know each other gives me a great deal of comfort. I really like you and your background.  It’s amazing how much we have in common and how much you fit the bill for what I need.  I had three others to call but call no more, you are my girl!”

The best part of the story is that upon first hearing her request you might think that she wanted a small time job.  One webinar and she is from a small Midwestern town.  But upon speaking with her, questioning her and finding out her needs, I found out that this will be the first of many jobs with her branch and her company.  They had a conference call last week and many other Regional Managers with her company want the same thing and can’t wait for her to do her trial so they can do the same thing with the same person…ME.   She wanted to make sure I had plenty of books because the last person they brought in sold thousands of books and was hired across the country for many seminars to new home builders and realtors .

I thought, “How easy is this?”  I love it when my competition makes my life easier.  Or maybe I shouldn’t call them my competition because we are not competing with the same tools, skills or mindsets?  Once you are using strategies other aren’t, they seize being your competition.

The moral of the story…There is nothing like the power of picking up a phone or taking the time in person to really get to know your prospects, their needs and selling them what they need.  You just may be surprised with the results you get.  You will come out the winner and far surpass any competition you have, every time!                                                                                          Happy Sales!

Top Producer Report: Your Sales Personality= SALES! Game On!

October 24th, 2010

By  Shirleen Von Hoffmann, President & Sales Coach of Homebuilder’s AdvantEdge ®   Copyright 2009©

One of the most powerful sales tools some sales people overlook is their personality.  Your personality is a key influence to a sale.  It is proven people buy from people they like, trust and have confidence in.  So each day that you are at work you must wake up, brush off that personality, check your attitude and go to work as if you don’t have a problem in the world.  You must have your Game on!

When a prospect walks in the door or calls on the phone, you must be ready to get your game on, after all it’s what you do!.  You must be prepared to give them your undivided attention to establish the rapport that will be necessary to close the deal! It’s not always easy to set paperwork aside or juggle two different prospects at once but you must find a way to make them feel important and make time to build rapport and get to know them through time and questioning. Make it a goal to spend at least 30 minutes of quality time with your prospects; that will increase your chance of a sale by 30%. In order for them to want to spend that much time with you, you must have your sales personality in check.

Here are eight areas of a Sales Personality that you can work on.

Confidence

You must be confident about yourself and your abilities before you can be confident about what you are selling.  Confidence comes from knowing your trade, your capabilities and loving what you do.  Your confidence should come across as secure and dependable not arrogant. A confident salesperson is willing to take the time to find out what the real needs of their customers are.  They don’t jump at the person’s first comment and try to close. » More: Top Producer Report: Your Sales Personality= SALES! Game On!

Pent Up Buyers?? Where??

October 18th, 2010

by Shirleen Von Hoffmann President and Sales Coach of HomeBuilders AdvantEdge  Copyright 2010

Throughout this recession most cities have seen home values drop dramatically.  Along with values we have seen sales drop dramatically as well.  In Sacramento, my hometown, we have seen a 90% drop in sales from 2005 to 2010.  The San Francisco metro area has seen its home values drop by 25% to 35% or more in some neighborhoods and these two cities still have some pain to work through along with many others throughout the country.

Going beyond this and looking for the big picture, I am predicting that in the not so near future we should prepare ourselves for the market to make a roaring comeback.  There are three compelling reasons why I think this comeback will be upon us soon.

Predicted Gains

First, we are starting to receive predictions for gains in 2011. There are predictions of a 10-14% gain between June 2010 and June 2011 for San Francisco.  So at least we are headed in the right direction.

Inventory

Secondly, let’s talk about inventory. Resale inventory is practically gone.  There is hardly any decent resale that doesn’t have a short sale attached to it and let’s face it, short sales are messy.  Most Realtors are steering clear of short sales as they prove to be a waste of time.  Inventory is always a predictor in real estate markets and when it is lacking, it can drive a market from a buyers’ market to a sellers’ market.  Builders slowed production across the country when our sales dropped so drastically, so the inventory we do have will be snapped up immediately as soon as the market turns even slightly.  It’s already dropped by nearly in half over the past year.

Pent Up Demand

Don’t get me wrong we need to weed through the rest of our foreclosure debacle but speaking of foreclosures…can we talk about all of the people that have been involved in foreclosures and short sales, millions right?  This is the most important part of my comeback prediction.

We started this recession 3-4 years ago.  That’s the time you have to wait to age a foreclosure or short sale in order to buy again.  You have a large amount of people out there who are waiting patiently for their foreclosures to age so they can take advantage of this buyers’ market.  This process is happening now.  Ask any lender and they will tell you that these pent up buyers are jamming the phone lines checking to see when they have aged their credit enough to go out and purchase again.  We are talking about a huge amount of potential buyers out there who will be streaming into the buying market again over the next 3 years, starting now.

Great Mortgage Rates

Oh and let’s not forget our last ingredient…the great, low mortgage interest rates we now have. With predictions of a better market in 2011, inventory low, an abundance of willing buyers and great rates, it’s a perfect storm to turn our real estate market around very quickly.

The Selling Solution

The smart Builder and even smarter Sales Person will be marketing heavily to these potential buyers right now.  We should be building relationships with these pent up buyers by figuring out ways to assist them in credit repair and pre-approvals.  If a Builder were to spend marketing dollars in this arena and leverage their lending capacities to convert these pent up buyers of the 2010, I would imagine they will be greatly rewarded in the very near future.

Just something very important to think about…My job is to make you great at what you do!  Happy Sales!

Mortgage Mayhem

October 12th, 2010

Courtesy of HanleyWood Marketing  Written by Jonathan Deinhart and Ken Lee

Bank of America halting foreclosures in all 50 states is the latest shoe to drop in a growing debacle which calls in to question whether large financial institutions have adequately documented all the vital details surrounding repossessed properties. The already-fragile housing market certainly didn’t need any more problems, and the full ramifications of this situation are not clear. What is clear, however, is that many areas still have a substantial backlog of foreclosed properties that will at some point be unloaded onto the marketplace. Since these distressed properties tend to be priced well under the going market rate for regular resales and new homes, understanding the scope of that pipeline is key in determining how deep of a hole a particular market is in.

Our data feature this week, courtesy of Housing IntelligencePro, looks at which markets have the most months supply of homes that have been foreclosed, but not yet resold to the market. These six markets are the only ones out of the Top 100 which have a months supply of greater than 10 when it comes to the REO Pipeline. The REO Pipeline is determined by looking at all the foreclosures in these markets since 2005, and subtracting the REO sales that have put those homes back into the market. What is left is our hang-over of REO supply, and based upon the last 12 months of closing activity we can determine how long it would take to get through those remaining foreclosed homes at the current average monthly closing rate. Because of that, a high months of supply can be indicative of a large pipeline, or a low closing rate, or both. Luckily for users ofHousing IntelligencePro, the details of this situation are available at the press of a button.

In broader economic news, weaker labor market conditions and new FHA lending guidelines may serve to dampen what small improvements we’ve seen in housing activity recently. The Labor Department reported this morning that the U.S. economy continued to shed payrolls in September while losing slightly more jobs than most economists had expected. The private sector continued to add payrolls, which is a positive sign, but it was not enough to offset job losses in the government sector. Although 95,000 payrolls were lost in September, the unemployment rate remained unchanged at 9.6%.

New guidelines for FHA mortgages that went into effect starting Oct. 4 will likely put further pressure on housing activity going forward by reducing the pool of potential buyers. The newer guidelines will make obtaining a FHA mortgage more difficult to qualify for while increasing its borrowing costs. Since the financial meltdown started, private banks have been significantly more stringent with their lending standards which have increased the amount of FHA mortgage activity because of its lower credit score and down payment requirements. In 2009, the FHA accounted for roughly 30% of all home purchase loans. That increase in activity has pressured the organization’s capital reserve ratio down to just 0.53% which is substantially lower than the 2.0% required by law. In efforts to improve loan quality and boost financial stability, the FHA set guidelines for higher credit scores and raised down payment requirements and private mortgage insurance premiums for their loans.

Buyers with under a credit score under 500 will no longer qualify for a FHA-insured loan while those with credit scores between 500-580 will be required to put down 10% compared to the 3.5% down payment previously required. Mortgage insurance fees will increase to 0.95% compared to 0.50% before and can go up to as high as 1.5%. According to the Mortgage Bankers Association, purchase loan application activity picked up for the second straight week due to a jump in FHA applications.

Because of the new measures that were set to take place starting Oct. 4, applicants rushed to get their paperwork in before that date which resulted in a 17.2% increase in FHA applications last week. Purchase loan applications in the coming weeks will likely correct from this artificial increase in activity. » More: Mortgage Mayhem

A Housing Rebound? Yes it’s possible!

October 5th, 2010

Posted by Nin-Hai Tseng, reporter for CNNMoney.com

Despite continued discouraging data from the real estate sector, a few bullish arguments are beginning to emerge. One MIT economist even believes that demand for new homes exceeds residential construction.

At a time of slumping home sales and a glut of unsold inventory, it’s hard to imagine how anyone could form a bullish take on the troubled U.S. housing market. Even though home prices have risen slightly in recent months, experts in charge of Standard & Poor’s Case-Shiller index, a crucial indicator of the health of the housing market, warned as recently as last month that the market remains weak. And some analysts think home prices could fall further by 15% to 20%.

But talk about real estate has shifted somewhat lately. It looks as if the contrarian view of the housing market is beginning to gain traction, if ever so slightly.

Credit Suisse says the worst is behind us and that fear of another hit on the housing market is just overreaction. The bank offers a few factors that could help home prices from here on out, including government support of about 70% of home mortgages that will likely keep prices from revisiting the nerve-wracking plunges seen in 2007 and 2008. Also, The Wall Street Journal’sBrett Arends earlier this week listed 10 reasons to buy a home, countering a recent TimeMagazine cover story earlier this month that questioned the pros of homeownership. Arends lists everything from record low mortgage rates to savings on taxes to guarding against inflation.

All are worth noting, but one of the more striking bullish arguments come from an economist at Massachusetts Institute of Technology’s Center for Real Estate. Bill Wheaton, who thinks the housing market is poised to make a strong comeback, calls home construction “a sleeping giant that is about to wake up.”

Wheaton thinks much of the excess home inventory would either be sold, occupied or otherwise absorbed by 2013. But from 2011 onward, demand should return to pre-recession levels. What’s more, he says, the recovery of home construction could boost overall GDP at levels unseen during recoveries after previous recessions, with the exception of the massive building that happened right after World War II.

Not just a comeback, but a strong one

“Housing construction will not only rise, but it will stay high for a while, which didn’t happen in previous recoveries,” Wheaton says, commenting on a paper he wrote for the center in 2009. “It won’t just be a one or two year blip.”

So is Wheaton really onto something, especially at a time when so many people are jobless and housing units sit empty — an unknown number of which could eventually fall to foreclosure?

The crux of Wheaton’s argument lies in the rate of residential construction today. It’s been historically low – so low that he believes demand is actually exceeding the level of building going on. This helps set the grooves for a relatively large comeback in residential investment.

Here’s how Wheaton backs the imbalance of demand for housing units and residential construction.

He estimates that housing demand in 2009 was at about 1.1 million units – more than twice construction at the time. At this rate, the excess inventory will eventually be absorbed. “It’s going to be a long time before construction picks up with demand,” Wheaton says, adding that this should help housing prices. Foreclosures won’t stop anytime soon, he says, but demand will return to a more normal level, clearing out the inventory and eventually sparking more new construction.

Housing construction could hugely drive America’s economic growth over the next few years, Wheaton says. Residential investment as a share of GDP is relatively small, averaging about 3% to 4%. But given that there’s so little building going on today, it’s plausible housing construction could add an average of 0.7% to GDP growth per year over five years – a level far greater than what has been seen during recoveries of previous downturns.

Some might think Wheaton sounds way too bullish given what most experts are saying about America’s housing rut. He could be wrong. He might only be half-right. But the bull’s side is worth hearing as much as the bear’s.

California Housing Prices on the Rebound

October 2nd, 2010

By Les Christie, Staff writerSeptember 15, 2010: 5:43 AM ET

NEW YORK (CNNMoney.com) — The national housing market is shrouded in uncertainty. But in California, there are glimmers of stability.

Home prices are rising in virtually every corner of the state. They’ve climbed for nine consecutive months, and in July posted a 10.4% gain year-over-year. That puts the state’s median price at $315,000 — nearly twice the national median of $183,000.

And the news is even better in coastal cities.

San Francisco posted the biggest gain of any U.S. metro over the past year, rising 14.3%. The median price there is now more than $607,000. Meanwhile, San Diego has climbed 11.2% (median price: $389,000) and Los Angeles jumped 9.2% (median price: $345,000).

Meanwhile, Florida, Arizona and Nevada — California’s erstwhile bubble-state partners — continue to struggle. So where is the Golden State’s strength coming from?

“I think it comes from the fact that prices went down so far and so quick,” said Lesley Appleton-Young, California Association of Realtors’ chief economist. “That left a lot of people here saying, ‘Wow, affordable California housing.'”

However, a quick home price rebound was delayed by the crush of foreclosures that accompanied the subprime mortgage meltdown. California real estate had become so expensive that a basic single-family home required many buyers to overextend themselves with exotic loans.

CALCULATOR: What’s the home price forecast in your city?

That is no longer the case. Most of the subprime-related distressed properties have been flushed from the system. And when a foreclosure does hit the market, it’s snapped up. The median days it took to sell a home in July was just 44 — lightening fast.

“It’s the dearth of supply for distressed properties that has put pressure on home prices,” said Appleton-Young. “More than half the homes on the market last year drew multiple offers.”

Plus, the California economy is picking up. Even in a recession, it has remained one of the world’s 10 largest economies, mainly because it is driven by every major industry — aerospace, tech, software, finance, agriculture, tourism. So as more of those industries recover and employment picks up, demand for housing will jump.

“California is a much larger, stronger and more diversified economy than the other [bubble] states,” according to Stuart Gabriel, director of the Ziman Center for Real Estate at UCLA.

Another factor that has helped lift prices is a trend toward more short sales. Fewer of the distressed properties are going all the way through the foreclosure process. “The shift to short sales in itself would increase home prices,” said Mark Goldman, who teaches real estate at San Diego State University.

That’s because short sellers usually occupy and take care of the homes until they’re sold, leaving the properties in better condition and worth more than similar foreclosed homes.

Goldman added that California markets are, generally, more constrained than any of the other bubble states. Florida and Nevada, for example, still have room to develop and grow in most areas. But the lack of developable land is especially acute in California, pushing home prices up.

Condos for less than the price of a Corolla

Finally, the California state government has not sat idle. “California provided markets with more significant price support,” he said, “That played a role in elevating prices.”

The state support came in the form of tax credits of up to $10,000 for first-time homebuyers and buyers of new homes. Some purchasers were able to combine the state credit with one from the federal government to reduce their costs by $18,000.

For home sellers in other states, what’s happening in California is encouraging. Trends often begin on the coast, so they’re hoping the recovery will roll eastward. 


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