It’s easy to get excited about getting an offer, but I caution you not to be too eager to accept just yet. There are a few things you will want to consider.
The Terms Of The Deal Matter As Much Or More Than The Purchase Price
The purchase is pretty cut and dry until you get into the realm of being asked to pay some, or all, of a potential buyer’s lender fees, closing costs, title insurance, and pre-paid items like first year tax and insurance escrows. Tax prorations and possible credits due a new buyer at closing will also impact your bottom line. My point is, the terms of deal matter as much as the purchase price.
Closing, Occupancy, Contingencies
Other terms to negotiate are the closing and occupancy dates. You will want to be sure that what the buyer wants is acceptable to you. Another consideration is whether the buyer’s offer is contingent upon the sale and closing of their current home. Your agent can do some investigative work to get a sense how realistic it is that the buyer’s current home will sell and close in a reasonable amount of time.
More About Paying Some Or All Of A Buyer’s Closing Costs
Many first-time buyers are going to be obtaining FHA financing. The reason is that FHA backed loans currently require a down payment of just 3.5%. It is very unusual for young people today to have any more money than that on hand for a down payment.
The challenge is that closing costs required to get an FHA mortgage can easily total as much or more than the down payment itself. Legally, a seller can pay a buyer’s closing costs and pre-paid items totaling a maximum of 6% of the selling price. The actual percentage tends to drop as the purchase price goes up. Closing costs may still run $3000 or so on a $50,000 sale which is 6%. ($50k X .06 = $3000)
A Win/Win Counter-Offer
If your house is competitively priced, and you receive an offer that asks you to help with closing costs, it is entirely within your discretion to make a counter offer high enough to cover the costs and preserve the net proceeds you require. If you receive an offer for $100k asking you to pay $5k in buyer closing costs, consider a counter offer of $105k and pay the costs. As long as the house appraises, you are both happy.
Ask For An Estimated Seller Net Sheet
A seller net sheet is a simple spreadsheet that shows the purchase price of the house and an accounting of your selling expenses including seller paid closing costs, local taxes, conveyance fees and credits, professional service fees due your listing brokerage, and miscellaneous fees like deed preparation.
The beauty of a well-prepared seller net sheet is the ability to set multiple offers, and possible counter offers, side by side so you can compare them. You may find when comparing offers that on the surface, a lower purchase price may ultimately put more money in your pocket depending on the terms.
Sometimes The Highest Offer Is Not The Best Offer
In a more extreme example, a cash offer that nets you less than a competing financed offer, may be a better choice. Depending on your situation, the benefit of closing quickly and cleanly for relatively less money may be worth it when compared to the demands that may arise with a financed transaction.
Make Sure The Buyer Can Get A Mortgage
The last and perhaps most important item you should expect to receive with an offer is a prequalification letter from the buyer’s lender. If the buyer is paying cash, you have every right to request to see their proof of funds as well. This is generally in the form of a bank statement. In the event that your buyer is bringing a large down payment to closing, it is entirely appropriate to request proof of funds for the down payment, and their mortgage prequalification letter.
Pre-Qualified Buyers Vs. Pre-Approved Buyers
Being pre-qualified for a mortgage is not the same as being pre-approved. A prequalification letter generally means that the buyer’s lender has pulled their credit and verified their technical ability to obtain a mortgage. It does not necessarily mean that they have sat down with the buyer and gone over their bank statements, pay stubs, and W2’s to verify their income.
Final Loan Approval
Final loan approval requires a verification of income and credit worthiness, as well as a satisfactory appraisal of value verifying the home is worth at least as much, if not more, than the mortgage amount. Once the lender completes their due diligence, a clear-to-close (CTC) will be issued and the closing scheduled. Verifying a buyer’s ability to close up-front is critical. The last thing you want to do is to go into contract with someone who cannot close and lose valuable marketing time.
Care To Learn More About Becoming A Home Selling Genius?
Take 10 minutes and complete the Home Selling Genius Mindset Scorecard at www.HomeSellingGenius.com. I guarantee it will be time well spent. And, after you complete the scorecard, I will email you a link to a FREE download to my latest book Your Guide to Becoming a Home Selling Genius – The Eight Mindsets That Make The Difference Between Home Selling Success and Disappointment.
I am going to use a house that I own in Springfield to illustrate the cost and benefits of financing a purchase. First I am going to show you the numbers if I had paid cash. Here is the return on investment analysis:
Murray Street – As Cash Purchase
Single Family Home
Purchase Price:
$25,000
Rehab:
$0
Total Investment
$25,000
Potential Rent
Monthly
Annually
Unit 1
$550.00
$6,600.00
Unit 2
$0.00
$0.00
Total
$550.00
$6,600.00
Vacancy Reserve 10%
-$55.00
-$660.00
Repair Reserve 20%
-$110.00
-$1,320.00
Insurance
-$40.00
-$480.00
Property Taxes
-$48.00
-$576.00
Interest Expense
$0.00
$0.00
Water
$0.00
$0.00
Trash/$18 Per Unit
$0.00
$0.00
Mowing/Average Over 12 Months
$0.00
$0.00
Professional Management 10%
-$55.00
-$660.00
Total Expenses
-$308.00
-$3,696.00
Net Profit
$242.00
$2,904.00
Estimated Appreciation:
0.00%
Annual Return on Investment:
11.62%
In Springfield, I Look For 15% ROI
My ability to buy this house via land contract was the main reason I compromised on my 15% default goal. I paid $25,000 and it had a tenant in place at closing. I agreed to a $2,500 down payment and a mortgage of $22,500 at 10% over 10 years. This meant a monthly principal and interest payment of $296.
Loans Cost Money and Negatively Impact Return
From a profitability perspective, the interest I pay becomes an expense and negatively impacts my return. As you can see below my ROI drops from 12.10% to 6.38% with the added interest expense factored in.
To simplify this example, I am averaging the total amount of interest I will pay over the ten year period. In reality, the interest peaks during the first year and steadily declines over the remaining term until the last few payments are almost all principle. (Bankrate.com has a great mortgage payment calculator that allows you to print amortization schedules based on whatever parameters you choose.)
Murray Street – With Interest Expense
Single Family Home
Purchase Price:
$25,000
Rehab:
$0
Total Investment
$25,000
Potential Rent
Monthly
Annually
Unit 1
$550.00
$6,600.00
Unit 2
$0.00
$0.00
Total
$550.00
$6,600.00
Vacancy Reserve 10%
-$55.00
-$660.00
Repair Reserve 20%
-$110.00
-$1,320.00
Insurance
-$40.00
-$480.00
Property Taxes
-$48.00
-$576.00
Interest Expense/Average over 7 Year Term
-$109.00
-$1,308.00
①
Water
$0.00
$0.00
Trash/$18 Per Unit
$0.00
$0.00
Mowing/Average Over 12 Months
$0.00
$0.00
Professional Management 10%
-$55.00
-$660.00
Total Expenses
-$417.00
-$5,004.00
Net Profit
$133.00
$1,596.00
Estimated Appreciation:
0.00%
Annual Return on Investment:
6.38%
① Total interest over the life of the mortgage is $13,031.35/120 months = $108.59 per month.
Cash Flow Suffers Even More
Now let’s look at how having a mortgage on this property affects my cash flow. Financing negatively impacts my cash flow because I have to pay the total amortized payment of $296 a month out of my gross income. The interest portion of each payment over the term of the seven-year loan is expensed while the principal portion of each payment is part of my profit.
Murray Street / Cash Flow Analysis
Single Family Home
Purchase Price:
$24,000
Rehab:
$0
Total Investment
$24,000
Potential Rent
Monthly
Annually
Unit 1
$550.00
$6,600.00
Unit 2
$0.00
$0.00
Total
$550.00
$6,600.00
Vacancy Reserve 10%
-$55.00
-$660.00
Repair Reserve 20%
-$110.00
-$1,320.00
Insurance
-$40.00
-$480.00
Property Taxes
-$48.00
-$576.00
Total Monthly Mortgage Payment, Principle and Interest
-$296.00
-$3,552.00
Water
$0.00
$0.00
Trash/$18 Per Unit
$0.00
$0.00
Mowing/Average Over 12 Months
$0.00
$0.00
Professional Management 10%
-$55.00
-$660.00
Total Expenses
-$604.00
-$7,248.00
Free Cash Flow Until Mortgage is Paid Off
-$54.00
-$648.00
Estimated Appreciation:
0.00%
I Am Actually Losing Money
As you can see I am planning to be upside down from a cash flow perspective as much as $648 a year on this property. I am comfortable with this possible worst case outcome but so far I have had no vacancies and my repair expenses have been minimal. Consequently, I am breaking even on this property and have yet to put to put any additional cash towards it to keep it afloat.
Financing Made Sense For Me
Financing this property made perfect sense for me. I was able to buy a house I did not have the cash for and at the end of a 10 years I will own it out right. I structured the deal so that if I do find myself in a negative cash flow position my exposure is limited. There is also room to raise the rent another $50 to $75 a month after this tenant moves out, and in all likelihood, I will pay the mortgage off early. In my opinion this is how an investor should utilize financing.
The Cost of Financing a Side By Side Double
Here is another property that I financed:
Center Street / As Cash Purchase
Side By Side Double
Purchase Price:
$20,000
Rehab:
$43,125
Total Investment
$63,125
Potential Rent
Monthly
Annually
Unit 1
$550.00
$6,600.00
Unit 2
$550.00
$6,600.00
Total
$1,100.00
$13,200.00
Vacancy Reserve 10%
-$110.00
-$1,320.00
Repair Reserve 20%
-$220.00
-$2,640.00
Insurance
-$60.00
-$720.00
Property Taxes
-$26.00
-$312.00
Interest Expense
$0.00
$0.00
Water
-$35.00
-$420.00
Trash/$18 Per Unit
-$36.00
-$432.00
Mowing/Average Over 12 Months
-$35.00
-$420.00
Professional Management 10%
-$110.00
-$1,320.00
Total Expenses
-$632.00
-$7,584.00
Net Profit
$468.00
$5,616.00
Estimated Appreciation:
0.00%
Annual Return on Investment:
8.90%
This property is comparatively superior to most of the other properties I own. It is also in a neighborhood that has been easy for us to rent in. I initially bought the house for $20,000 on a 7-year land contract and sat on it for almost 3 years before rehabbing it. The house had new vinyl siding, a new roof and all new windows but it was just bare studs inside. It cost me an additional $43,125 to make it habitable over the course of a year.
How I Did It
I did over-improve this property to some degree but I did a quality job and I expect it to outperform my portfolio over the long term. By the time I started the project I had opened a line of credit at a local bank secured by a couple of properties I owned free and clear. I used the line of credit to rehab the property. Once it was completed, I financed the property with a $33,800, 15-year mortgage at 5% interest. I used the proceeds to pay down the line of credit.
By The Numbers
Here are the numbers including the average monthly interest expense. Like with the Murray Street property, I averaged the total amount of interest I will pay over the 15 year / 180 month term of the mortgage. In reality, the interest peaks during the first year and steadily declines over the remaining term until the last few payments are almost all principle.
Center Street / With Interest Expense
Side By Side Double
Purchase Price:
$20,000
Rehab:
$43,125
Total Investment
$63,125
Potential Rent
Monthly
Annually
Unit 1
$550.00
$6,600.00
Unit 2
$550.00
$6,600.00
Total
$1,100.00
$13,200.00
Vacancy Reserve 10%
-$110.00
-$1,320.00
Repair Reserve 20%
-$220.00
-$2,640.00
Insurance
-$60.00
-$720.00
Property Taxes
-$26.00
-$312.00
Interest Expense/Average over 15 Year Term
-$79.51
-$954.12
①
Water
-$35.00
-$420.00
Trash/$18 Per Unit
-$36.00
-$432.00
Mowing/Average Over 12 Months
-$35.00
-$420.00
Professional Management 10%
-$110.00
-$1,320.00
Total Expenses
-$711.51
-$8,538.12
Net Profit
$388.49
$4,661.88
Estimated Appreciation:
0.00%
Annual Return on Investment:
7.39%
① Total interest over the life of the mortgage is $14,311.88/18 month = $79.51 per month.
Cash Flow Analysis
The cash flow analysis for this property shows that worst case, I should have positive flow.
Center Street / Cash Flow Analysis
Side By Side Double
Purchase Price:
$20,000
Rehab:
$43,125
Total Investment
$63,125
Potential Rent
Monthly
Annually
Unit 1
$550.00
$6,600.00
Unit 2
$550.00
$6,600.00
Total
$1,100.00
$13,200.00
Vacancy Reserve 10%
-$110.00
-$1,320.00
Repair Reserve 20%
-$220.00
-$2,640.00
Insurance
-$60.00
-$720.00
Property Taxes
-$26.00
-$312.00
Total Monthly Mortgage Payment, Principle and Interest
-$267.08
-$3,204.96
Water
-$35.00
-$420.00
Trash/$18 Per Unit
-$36.00
-$432.00
Mowing/Average Over 12 Months
-$35.00
-$420.00
Professional Management 10%
-$110.00
-$1,320.00
Total Expenses
-$899.08
-$10,788.96
Free Cash Flow Until Mortgage is Paid Off
$200.92
$2,411.04
Estimated Appreciation:
0.00%
Cash on Cash Return = 15.9%
Another way to evaluate this property is to look at its ‘cash on cash’ return. I have roughly $29,325 of my own money in this deal. The bank started with $33,800. My net profit after interest expense is projected to be $4,661.88 annually. (See Case Study #8) Taking the net profit of $4661.88 and dividing it by the $29,325 I have in the deal equals a cash on cash return of 15.9%. I really like owning this property.
Care To Learn More?
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Foreclosed Properties Have Traditionally Been The Best Bets
There are a lot of misconceptions out there about what it takes to get a great investment property at the best possible price. In my experience, foreclosed properties have always offered the most house for the money. These purchases however are more complicated than buying a house from a private seller, and often not for the faint of heart. In this post , my goal is to give you the secrets you need to know to complete a bank owned property transaction.
Sheriff Sales Are Hit Or Miss At Best
Buying foreclosed properties at a foreclosure auction, or sheriff sale as they are commonly known, is a hit or miss prospect because more often than not the foreclosing bank will bid the price up and buy it themselves. The property will eventually come on the market as an REO property. REO stands for Real Estate Owned and is a term used by banks to refer to housing stock they have in their inventory. The other disadvantage of sheriff sales is that you cannot view the property before bidding. Estate auctions can sometimes yield good buys and you can generally view the property prior to making a bid.
Short Sales
Buying ‘short sales’ often worked well in the years immediately following the 2007 – 2008 housing crash. Most of the major national and regional banks and mortgage companies were willing to allow an owner of record to sell their property for less than was owed because it was cheaper to do that than to foreclose. Short sales are less likely to be completed today because the banks have less financial incentive to do so. However, you will still see short sale situations pop up on www.Auction.com or www.Hubzu.com prior to the home going to sheriff sale. In my experience these seldom result in great deals as the goal is to try one last time to make the bank whole.
Properties Listed In The Local MLS
Properties listed by Realtors® in the Multiple Listing Service (MLS) are by far the best method of sourcing great deals. All of the major government players including the Department of Housing and Urban Development (HUD), Fannie Mae and Freddie Mac list and sell their distressed properties with local real estate firms. Investment firms looking to sell properties they purchased as part of pool sales will list with local real estate firms as well.
The Purchase Process Is Nothing Like Sale With A Private Owner
The process for purchasing homes is different for each of these entities. HUD for instance only allows bids to be placed on the HUD affiliated website HUDHomestore.com. A real estate agent experienced in REO listings and sales will know what is required and can help you get to the closing table regardless of who the seller is.
Owner Occupants and Non-Profits VS Investors
HUD, Fannie Mae, and Freddie Mac all have an initial period of time where they will only accept offers from either certified owner occupants or non-profit organizations. Generally the time frame is a week to 21 days. They will sometimes dictate another owner occupant period after a price reduction.
It is a felony to attempt buy a home as an owner occupant if you are not an owner occupant. If you own property in your name, or in the name of an entity you control you will likely not be considered an owner occupant buyer. The penalties are severe. See below from HUDHomestore.com.
What are the penalties for a HUD Home owner-occupant purchaser that does not occupy the property?
When a purchaser buys a HUD Home as an owner-occupant, it is expected that the purchaser will live in the property, as his or her primary residence, for a minimum of 12 months. Intentional violation of this requirement could be punishable by a fine not to exceed $250,000 and/or a prison sentence of not more than two years.
A good listing agent will do everything they can to let their past clients know about a new property as soon as it goes on the market. Zillow.com also lists properties that are in foreclosure based on public records but are not yet for sale. The problem with these listings is there is no guarantee they will ever actually be listed for sale. You could be waiting a long time for some of these properties.
Your Buyer Agent Can Make Or Break You
The best REO agents have detailed knowledge of what is on the market regardless of who has them listed for sale. These agents tend to have great working relationships with other REO agents and can represent you when you wish to purchase a property. Your agent also has the ability through their Multiple Listing Service (MLS) to set up an email ‘flash’ for you. He or she can program your property preferences into the MLS and set it up so that whenever a property is listed which meets your purchase criteria, you will be notified via e-mail immediately. As I have written many times, there is no substitute for a relationship with an experienced real estate professional who knows your goals and the local market.
Here is a quick refresher from the Ohio Association of Realtors about the legalities and responsibility of licensees when a listing agent receives more than one offer on a property.
Q: If I receive multiple offers on my listing, am I required to notify all of the agents/buyers that they are in a multiple offer situation?
A: Even though there is nothing in the license law that requires such disclosure, many agents believe doing so is a good idea for two reasons. First, they believe this is fair to all of the parties involved. Secondly, they believe that making all parties aware of this situation is in the seller’s best interests because it could cause the buyers to increase their offers.
While both of these may be true, disclosing that there are
multiple offers could result in one or more of the buyers withdrawing their
offer because they don’t want to be in a “bidding war.” If this occurs, it is
certainly not in the seller’s best interests. More importantly, the fact that
the seller has received other offers could be considered confidential
information. For these reasons the fact that there are multiple offers should
not be disclosed without explaining to the seller the benefits and risks of
such disclosure and obtaining the seller’s informed consent.
Standard of Practice 1-15 of NAR’s Code of Ethics likewise provides that the existence of other offers can only be disclosed if the listing agent has the seller’s consent to do so. However S.O.P. 1-15 goes a little further. It provides that if the seller authorizes the listing agent to disclose that there are multiple offers, that the listing agent must also disclose whether the other offers were written by the listing agent, another agent in the same brokerage or a cooperating agent — but this is only required if the listing agent is asked who wrote the other offers.
More on
Multiple Offers from the Ohio Association of Realtors
1. A listing agent describes an offer to an out-of-town seller
over the telephone. The seller verbally indicates his acceptance of that offer,
which the listing agent communicates to the buyer. Before the seller receives
and signs the original offer, the listing agent receives another offer, which
the seller wants to accept. Is there a binding contract with the first buyer?
Answer: No. Although the seller verbally accepted the first offer, under the Statute of Frauds there would not be a binding contract because the seller did not sign the offer. Therefore, the seller would be free to accept the second offer.
2. Negotiations have been going back and forth between a seller and a buyer for over a week. The seller is considering a counteroffer from this buyer, when another higher offer is received. Is the listing agent required to notify the first buyer that another offer has been received and give that buyer an opportunity to increase his counter offer?
Answer: No, there is nothing that legally requires the seller to give the first buyer an opportunity to raise his offer. Of course, if the seller wishes to give the first buyer such an opportunity, he may do so, and the listing agent would have to follow these instructions.
3. A listing agent has received an offer which he is planning on
presenting to the seller that afternoon. Before she makes this presentation,
she is notified by a cooperating agent that another buyer will probably be
making an offer the next day. Should the listing agent wait until this second
offer is received to present the first offer?
Answer: The listing agent must present the first offer she has received as soon as possible. Therefore, she should present the first offer that afternoon as planned. However, her fiduciary duties to the seller also require her to notify the seller that another offer may be forthcoming. It will then be up to the seller to decide whether he wants to wait for this offer. This listing agent should review the first offer to determine how long it is open for acceptance, so that it does not expire before the seller decides to accept or counter it.
4. A seller has received two offers to purchase his property.
Can he make counteroffers to both buyers?
Answer: While he can do this, it is not recommended for the seller to make more than one counteroffer at a time. This is because both buyers could accept the counteroffer and deliver notice.
5. An offer is presented to the seller which is signed by the
seller. The listing agent immediately calls the buyer and leaves a message on
the buyer’s answering machine that the seller has accepted his offer. The buyer
receives this message. Five minutes after the seller signed the offer, another
offer is received which is higher than the signed offer. Can the seller accept
the higher offer or is he bound to the contract he signed? The contract is
silent regarding the method and delivery of acceptance.
Answer: The seller accepted the offer by signing the contract. To have a binding contract the seller’s acceptance must be communicated to the buyer. As the contract does not require that the communication be by physically returning the signed contract to the buyer, verbal notification to the buyer, would be sufficient. Therefore, the sellers have entered into a binding contract with the first buyer.
6. If I receive multiple offers on one of my listings, must I
notify all of the agents/buyers that they are in a multiple offer situation?
Answer: There is nothing in the license law that requires such disclosure. Most agents do so because they believe it is the fair way to handle negotiations and that it could get the buyers to increase their offers. While this may be true, disclosing that there are multiple offers could result in one or more of the buyers withdrawing their offer because they don’t want to be in a “bidding war.” For this reason, Standard of Practice 1-15 of NAR’s Code of Ethics states the existence of other offers should only be disclosed with the seller’s consent. For more information, click here.
I’d love to
hear your questions and comments.
First Things First – What Is The Home Worth?
The first step to making an offer
is figuring out what the home you have your eye on is really worth. There are many places on line that will give
you an estimate of a home’s value. The
Zestimate that Zillow provides is one of the best known. However, the data they use may not be up to
date or consider the actual condition of the property.
Recent Sales of Similar Homes In The Area Tell The Story
The best way to figure out if a
home is priced competitively, is to look at sales of similar homes in the
neighborhood, in similar condition, going back at least six to 12 months. This is where your Realtor’s experience and expertise
is invaluable. Zestimates, are a good starting point but they cannot account
for all the factors that determine value.
Successful Sellers Know Their Zestimates As Well As You Do
Most sellers
today are as aware of their homes Zestimate as you are. They know that if they price their home too
far above the estimated value without proper justification, that most buyers
will simply move on. The price of ‘being
greedy’ these days usually means no activity, or offers, at all.
We Still Have More Buyers Than Houses
It’s true that in today’s market we
generally have more buyers than great houses priced to sell. This means there may be multiple buyers
making offers on the most attractive properties at the same time. Knowing what a house is truly worth based on
comparable sales gives you the information you need to make an informed
decision about how much to offer.
Acknowledge The Seller’s
Advantage and Create a Win/Win Negotiation
None of us want to overpay for a home and we all want the best deal
possible. However, this is not a
win/lose situation. A successful
negotiation ends with both parties getting what they want, or at least need,
out of the transaction.
If a home is priced right it may be prudent to make a full price offer,
or an even higher offer. This is
especially true if you need the seller to pay for some, or all, of your lender
closing costs and pre-paid loan items.
Remember, if a house is priced at $200K and you ask the seller to pay
$5000 of your closing costs for you, you really only offered $195K for the
house. A better decision is to offer the
seller $205k with them paying $5000 in closing costs. This way the seller gets what they want, and
you get what you need.
Make Your Best Offer Up Front
There is an argument for making
your best offer up front. With the help
of your Realtor, start by determining what the house will likely sell for given
the sales history in the neighborhood.
Then, figure out what it is worth to you. Make your offer and be prepared to stick to
your decision.
Acceptance, Rejected, or Countered
Once you make your offer one of
three things are going to happen. Either
your offer will be accepted, rejected, or countered. If countered, you may be informed that you
are in a ‘multiple offer situation’ where the seller is trying to get the
interested parties to bid against each other.
If you have made your best offer, stand your ground and be prepared to
move on to the next house. If your offer is accepted, then congratulations!
Become the Home Buying Jedi
Master Your Are Meant to Be
When you find the home you want, don’t hesitate to make an offer. You’ve done your homework and are well-prepared to move forward. Click hereand find out your Home Buying Jedi Master Mindset Score. I guarantee it will help you find home buying happiness. Take your time and fill in the comment sections too. You’ll be glad you did.
A Culture of Support
and Productivity
First of all you should expect a company, an
office and a culture that is committed to supporting you so that you can
support your clients.
You should expect to receive the tools,
training, coaching, and support that will keep you focused on what you do
best: generating leads, building
relationships, earning referrals, closing transactions, and making dreams come
true.
You should expect a broker committed to helping
you build a business plan that will allow you to realize your personal and
professional goals. A broker whose job
it is to see you succeed on your own terms and by your own rules.
You should expect an administrative and support
staff that share your commitment to your clients and are prepared to help you
offer world class service every day.
You should expect the latest technology that
supports your business, mission and values.
You should find technology that supports your marketing and advertising
initiatives, technology that supports working by referral, and technology that
allows you to focus on what you do best.
Technology that Supports Your Marketing and Advertising Initiatives
We use the internet to not only advertise our
listings but also to build brand awareness and to make an emotional connection
with the public.
Each agent has a personalized ROOST Real Estate
Co. landing page that puts them front and center as the brand. Our company website offers detailed
information about our company and the services we provide. Each agent receives
a @ROOSTRealEstateCo.com email address.
Social Media has become the number one tool for
building brand awareness. ROOST Real
Estate Co. has a dedicated marketing service building our presence and brand
awareness through Facebook, Twitter, Instagram and YouTube.
Our marketing and advertising initiatives also
have a place for print. We have
partnered with Holmes Marketing Services
to create on-demand business cards, marketing brochures, postcards and various
other mailers and collateral materials designed to build brand awareness and
market share.
Technology that Supports
Working by Referral
We close transactions – a lot of transactions –
but it is the relationships we build along the way that keep our business
growing and flourishing.
We offer each agent Referral Maker CRM (Client Relationship Manager). This desktop and mobile platform is
offered by Buffini and Company our
training and coaching partners. Referral
Maker will allow you to track your referral creating activities, relationships,
and transactions. Most importantly, it
will help you turn these activities into an income stream that will support
your personal and business goals now and well into the future.
A key tenant of ‘working by referral’ are the
personalized Buffini and Company designed monthly Item of Value mailings. We will mail up to 100 Items of Value each month to your very best clients at no cost
to you. This jump start to the Working
by Referral business model is one of the most valuable services we provide.
Technology That
Allows You To Do What You Do Best
A real estate professional focused on building
relationships, generating leads, and closing transactions doesn’t always have
time for all of the ‘backstage’ activities that make the ‘on stage’ work
possible. That is why we offer each agent
a complete productivity package designed help our agents more time with their
clients and customers.
Each agent is set up with an account at Centralized Showing Services or Showingtime
Showing Service to eliminate the need to personally set up showings on
their listings. Both of these services
provide a mobile app that allows each agent to quickly and easily tailor the
service to the needs of each seller. CSS
also will automatically ask the showing agents for feedback and that feedback
can be shared directly with the seller in real time.
Each agent is set up with a Dotloop account. Dotloop
allows agents to create contracts and listing packages electronically on their
desktop computers or mobile devices. It
provides a secure platform for obtaining signatures electronically and ensuring
that contract packages are complete for compliance purposes.
Each agent is set up with a personal 8X8 Phone Number. Our offices are equipped with an 8X8
state-of-the-art cloud based auto attendant and voicemail system. Through either a desktop computer or mobile
app, agents can direct their incoming calls to ring through to their desk, home
office, cell phone, a fellow team member, or to voicemail at select times of
the day. Agents can be notified about
voicemail messages via email.
The 8X8 system also allows each office to tailor
their answering and communication services to the needs of their specific
clients and market.
Making Sure It All
Works – The Agent Service Manager (ASM)
A key member of each office staff is the Agent Service Manager (ASM). The Agent Services Manager’s sole
responsibility is to support the daily business activities of the agents
assigned to him or her.
The ASM manages all of the agent services
discussed above and provides ongoing training and support as needed.
The ASM’s number one goal at ROOST Real Estate
Co. to ensure that our agents are getting the greatest benefit from the tools
we provide.
Year after year, surveys tell us that one of the top complaints
from listing clients is that they never hear from their agent. In the worst cases, sellers feel like their
agent stuck a sign in their yard and left town. Selling your home is a big
deal. Any agent who doesn’t understand
that does not deserve a real estate license.
The Right Partner Makes A World Of
Difference
For many agents, selling a home is a transaction. For the most
successful professionals in the field, selling a home is a collaboration with
the home owner to achieve a common goal.
It is only by approaching a home sale as a collaborative relationship with your Realtor, will
they understand what is truly important to you about your move. Once they understand that, your goals become
their goals. Communication between
people who share the same goals is much easier than communication between
people who have no idea where the other is coming from.
Sometimes There Really Is Nothing
New To Report – And We Feel Bad
I am not trying to defend the indefensible here but sometimes we
do everything right and nobody raises their hand to buy. It is frustrating for you and your
agent. Often it is just easier for a
Realtor to say nothing than it is to disappoint you.
On the other hand, an extended period with very few showings, or
several showings that do not result in purchase offers may mean a re-evaluation
of your marketing strategy is in order.
And yes, this may mean a discussion about the list price of your
property.
You And Your Agent Need To Touch
Base A Minimum of Once A Week – No Matter What
The best of all worlds is for your agent to contact you every week
or so no matter what. It is true that
the calendar, the weather, and a whole host of factors unrelated to real estate
can impact the number of potential buyers your listing attracts. However, most
of us would like to hear something, even if it is nothing.
Listing, pricing, and selling a home is a process, not a one-time
event. In a collaborative relationship
with your Realtor, regular dialogue about your asking price, and potential
course corrections, should be a regular occurrence. Remember, this is your
house. You are in charge. Your goals and expectations need to be as
clear as you can make them.
People ask me all the time, what do you think is going to change about our business in the next 25 years? I believe that the digitization of content, interpersonal communication technology, and automated transaction management, will likely accelerate in the coming years. The widespread proliferation of artificial intelligence and predictive analytics will make what has happened over the last 10 years look tame by comparison.
Technology Will Thin Our Ranks
Technological acceleration will result in a thinning of the Realtor®, lender, and title professional ranks in the years ahead. The more routine the transaction, the more likely it will be completed directly between a buyer and seller using an app on their iPhone. The broker owner that is suffering in the face of commoditization today, has likely more misery to look forward to tomorrow.
A Better Question to Ask
A more interesting question to ask is, what is going to stay the same?
There will always be a market for skilled professionals to help and guide people as they navigate their real estate investments. However, the skills and capabilities that make the best of us successful today, will not be the skills and capabilities that will keep us successful tomorrow. The bar will continue to be raised.
Relationships Are Where It’s At – Now and Forever
I believe that a referral based business mindset will always be an advantage. Relationships will continue to be infinitely more valuable than transactions. To succeed in future, we must continue to offer greater and greater value and expertise, much of which we may never be directly compensated for.
We Excel By Each Doing What We Do Best
Twenty-five years from now there will still be great strength in the intentional identification, and exercise, of the unique talents and abilities of everyone we work with. We will always do better when everyone is free to do what they do best. This is the only way to ensure each other’s long term success.
I like to think I am a pretty good Realtor and advocate for my clients. My clients appreciate me and I appreciate them. I am eternally grateful for their referrals and their business. At the end of the day however, I will never be what I consider to be a world-class Realtor®. I am simply not wired for it. I am however a really good broker and I think I can become world class at this one day. I have to believe that hard work, curiosity, ambition and dedication will never become obsolete.
My Job as a Real Estate Broker Supporting Agents and Their Clients
Regardless of which way the wind blows or what the future brings, I am certain that my job description and responsibility to my agents, brokers, and franchisees will stand the test of time. My job is to:
1) Make our company the most referred real estate brand in the land.
2) Help our agents keep their clients for life.
3) Be the only partner our agents will ever need.
4) Lead the industry in average agent productivity and income.
5) Support the most profitable broker / owners and franchisees in the business.
The Danger of The Shiny Object Syndrome
The danger to all of us in the real estate community is The Shiny Object Syndrome. When we are distracted by the next new thing, we tend to shy away from the basics of the business including focusing on our clients and further developing our unique abilities.
There is no question technology has empowered legions of home buyers and sellers to facilitate their transactions with a better understanding of their local markets, and how the business works in general. However, these same buyers and sellers count on their agents for helping to assess fair value, advice for making offers that will be accepted, negotiating price and terms, and getting to the closing table. I doubt I see the day when an artificial intelligence can do that.
This ROOST Hero Spotlight is a little different because it highlights one of our favorite loan officers to work with.
Her name is Tashia Perry from Wright Patt Credit Union. Tashia cares deeply about her member clients and their home ownership goals. Her passion for getting her members where they want to be is infectious.
Your can reach Tashia directly at tperry@wpcu.coop or 614-270-8105.
Agents Want Training
Aside from
technology and tools, agents express time and time again in survey after survey
that they want more training from their broker.
Training at ROOST Real Estate Company is a core value that we never
waiver on. Our training and development
partners are a company out of San Diego, California called Buffini and Company.
I First Heard Brian Buffini Speak At A RE/MAX Convention
in 2005
I was introduced
to Buffini and Company in 2005. I
discovered a world class group of people who shared my view of the business and
helped me become more intentional about my daily business activities.
Each ROOST Office Has A Buffini and Company Certified Trainer On Staff
We offer Peak Producers training at least twice a year to our agents.
We also provide the Referral Maker contact relationship
manager to our agents free of charge.
We believe in Buffini and
Company’s One To One Coaching so
much that we offer a $50 credit on the monthly office invoice of any agent that
hires a Buffini and Company personal coach.
I Am A Client Too
I have personally
worked with a Buffini and Company coach at different times in my career and my
results each time far exceeded my expectations.
I urge you to learn more about why ROOST Real Estate Co. has chosen to
work with Buffini and Company at www.BuffiniandCompany.com.
