We have become spoiled. Whether real estate agent or real estate seller we have come to rely, even become lazy with this fast paced market. Well times could be changing! Over the past few months, in Kitsap County Washington I’ve noticed the inventory begin to grow. Nothing drastic yet, just a small dust cloud on the horizon. It could be that we are just going into the winter months, could be that interest rates have been moving upward, could be gas prices are high, could be the ¼ hike in prime yesterday……could be a little of a lot of things. None the less a few of the signs are there.
So…..how does this affect me?
If you are a Seller:
You may not sell your home in 4 days. Historically in Kitsap County 60 days was the norm. Only in the past couple of years have we seen such quick sales. You may not want to over price your homes as much as you have grown accustomed to. In fact if the market turns sharply the worst place you can be is to find yourself chasing the market down. Few Sellers have the guts to cut prices fast enough to get ahead of a falling curve. Make sure you’ve covered the basics: Interview and choose the best agent. Don’t base your decision solely on the lowest commission. Many low commission, low service companies have sprung up in this market and they may not have the resources, momentum or tools to market your home or provide you with the personal service a normal market demands.
If you are an Agent:
Pricing - Have the tough love discussion with your seller about pricing. In the past you may have been able to over price a home by 10 to 15% and get away with it. The theory was to just wait…..the market will rise to meet our price. This is dangerous thinking in a changing market.
Marketing – Get back to basics. Priced right. Staged to the 9s. Host Brokers opens…..feed the ones that are working with the buyers. Make sure you have a good web presence. Take lots of pictures. Write three ads and rotate them in the local paper. Identify and work the top selling agents in your market.
Your own business – In a normal market buyers and sellers do not spring up as perhaps they have been. Again…..get back to basics. Return all calls by the end of each day, call 20 people every day, send thank you notes every day, communicate regularly with everyone in your sphere of influence, work un-represented sellers (there will be more of them…aka FSBO), watch your hot sheets and call expired and withdrawn listings, circle prospect every listing, 50 people, 4 mailings, 4 phone calls.
After having read this post you may think I think the market is falling……not true. In Kitsap County we are due to slow, after all anything is slower compared to the crazy market of this past year. Regardless of why it is a little slow now, as professionals we need to keep our ear to the ground for change in the market. We owe it to our selves and most importantly to our clients not to get caught in a falling market without letting them know. Stay tuned……I promise it will change!!!!!
Real Estate Statistics
Watching stats like these will help you determine what kind of a market you are in.
For Kitsap County Washington as of 10/31/2005
933 Active Listings
51 Homes went Pending last week
51 Average Days on Market
$273,723 Average List Price
$274,119Average Sale Price
100+% List price to sale price ratio
18.29 weeks of inventory
Learn more about Defining Your Market.
For Kitsap County Washington as of 10/31/2005
933 Active Listings
51 Homes went Pending last week
51 Average Days on Market
$273,723 Average List Price
$274,119Average Sale Price
100+% List price to sale price ratio
18.29 weeks of inventory
Learn more about Defining Your Market.
Books to Recommend
Over the past week I've had several requests for books that I would recommend. Here is a list of books that I've given to our agents over the past few years as Christmas gifts. As with any book, there are going to be some people who love it, a few that hate it and most who enjoy it. I think I've been able to get everyones attention in one way or another over the years with this list.
Please......let me know what you think and if you have any that you would recommend.
Frankly Reading Book List
Please......let me know what you think and if you have any that you would recommend.
Frankly Reading Book List
Housing Stats 10/23/2005
Watching stats like these will help you determine what kind of a market you are in.
For Kitsap County Washington as of 10/23/2005
890 Active Listings
84 Homes went Pending last week
52 Average Days on Market
$273,981 Average List Price
$273,672 Average Sale Price
100-% List price to sale price ratio
10.59 weeks of inventory
Learn more about Defining Your Market.
For Kitsap County Washington as of 10/23/2005
890 Active Listings
84 Homes went Pending last week
52 Average Days on Market
$273,981 Average List Price
$273,672 Average Sale Price
100-% List price to sale price ratio
10.59 weeks of inventory
Learn more about Defining Your Market.
Focus
I was just cleaning out some old paperwork and found some notes for a class I put on some time ago. Thought I’d share…….
A person’s ability to focus can allow them to accomplish amazing things.
Focus on the right things in the right balance…..Wow!
What sets one real estate agent apart from the others is their ability to focus.
Without your own focus you are just living a life, day to day on someone else’s terms.
So many tasks, so many people, so little time…..it’s all about focus.
A person’s ability to focus can allow them to accomplish amazing things.
Focus on the right things in the right balance…..Wow!
What sets one real estate agent apart from the others is their ability to focus.
Without your own focus you are just living a life, day to day on someone else’s terms.
So many tasks, so many people, so little time…..it’s all about focus.
Joining a real estate office......a few thoughts.
The Process: Beware of the broker that does not have a process or is winging it. You will want to meet at least 2 or 3 times before you make a hiring decision. Keep in mind that you are hiring the broker just as much as they are hiring you.
Size of the office:
First off let me define size from my perspective.
Less than 15 agents is a small office. (a high percentage of offices in this country fall into this category)
16-30 is a medium small office.
31-60 is a medium office
61- 80 is a medium large office
81+ in my opinion is a large office
125+ is a Mega office
Size is not as important as energy, synergy or momentum. I’ve seen offices that have 75 agents and feel dead. I’ve also been with offices that have 20 agents that feels totally energized and driven. What you want to see is a balanced office. One that has a few new agents as will as some old timers. Within that group you want to see even earnings. An office in which you have a few big hitters and a bunch of low producers will not work for the long term. Even though our industry has 10% of the agents making 90% of the money you want to try to find a balanced office.
Market Share:
Having a strong market share means momentum for the office. It means business is rolling through the office and that you have a better chance of getting into that business stream. The make up of the office is more important then market share it holds. I know of several offices that are number one in their market place but they are no fun to work in. An office may hold market share only because they have more agents. What is more important is the success per agent. If an office you like has the energy, an enthusiastic manager, the tools to help you ramp up your business but is only ranked #2 or #3 in the market, go for it. If an office is full of energy and growing, market share will take care of it self. I’ve always prided my office in being number 2 in market share, but number one in individual agent production.
New agent training:
Understand one thing going in……It is always up to you. A good broker will give you the tools, teach you the concepts and offer support, but they will not do it for you. You are in business for your self, start thinking that way.
The worst of the brokers will welcome you aboard, shake your hand and say here is your desk, here is your phone, here is the phone book, now get busy. What you are looking for is a company that will offer real tangible support ie:
Post licensing classes
Weekly training
Personal time with the broker
Staff advisor or mentor program
Other agents you can model that are successful
Business Models:
Boutique or single office: This model represents one end of the office spectrum. Can be cozy and friendly though may lack support that a larger office might be able to afford. May be better for an experienced agent.
Franchises:
The true sense of this model means the core company is no longer interested in selling real estate on a day to day business. Not unlike McDonalds, their goal is to sell and open new restaurants, then sell all of the products to support the new franchise. It becomes the mission of your local McDonalds owner to sell burgers. This model seems to maximize the best of the two extremes. (OK so I’m biased. I co-own three offices that fall into this category) Offices in this category are usually owned by local owners. They often own their own buildings, they are the decision makers and can implement changes a lot easier then the corporate model.
Corporations:
We are talking the mentality here not the necessarily the business type. This represents the other end of the spectrum. There is one main office with one owner for a group of offices. Managers in each of the offices must get corporate permission to make decisions or implement new ideas. Top down management with new ideas starting at the top and filtering their way down. Though your image may be enhanced by a consistent marketing message and you will tend to have more tools and services available, you give up flexibility and ability to change.
Attractions:
Be aware that different business models seem to attack different agent types. Get an idea what type of agent is being attracted to the office or company you are interviewing with.
Tip:
Talk with local escrow officers to get an idea what agents seem to be the most prepared, most professional and seem to do the best job. This may lead you to a company that matches your ideals.
Click here for a list of 10 questions to ask a potential Broker.
Size of the office:
First off let me define size from my perspective.
Less than 15 agents is a small office. (a high percentage of offices in this country fall into this category)
16-30 is a medium small office.
31-60 is a medium office
61- 80 is a medium large office
81+ in my opinion is a large office
125+ is a Mega office
Size is not as important as energy, synergy or momentum. I’ve seen offices that have 75 agents and feel dead. I’ve also been with offices that have 20 agents that feels totally energized and driven. What you want to see is a balanced office. One that has a few new agents as will as some old timers. Within that group you want to see even earnings. An office in which you have a few big hitters and a bunch of low producers will not work for the long term. Even though our industry has 10% of the agents making 90% of the money you want to try to find a balanced office.
Market Share:
Having a strong market share means momentum for the office. It means business is rolling through the office and that you have a better chance of getting into that business stream. The make up of the office is more important then market share it holds. I know of several offices that are number one in their market place but they are no fun to work in. An office may hold market share only because they have more agents. What is more important is the success per agent. If an office you like has the energy, an enthusiastic manager, the tools to help you ramp up your business but is only ranked #2 or #3 in the market, go for it. If an office is full of energy and growing, market share will take care of it self. I’ve always prided my office in being number 2 in market share, but number one in individual agent production.
New agent training:
Understand one thing going in……It is always up to you. A good broker will give you the tools, teach you the concepts and offer support, but they will not do it for you. You are in business for your self, start thinking that way.
The worst of the brokers will welcome you aboard, shake your hand and say here is your desk, here is your phone, here is the phone book, now get busy. What you are looking for is a company that will offer real tangible support ie:
Post licensing classes
Weekly training
Personal time with the broker
Staff advisor or mentor program
Other agents you can model that are successful
Business Models:
Boutique or single office: This model represents one end of the office spectrum. Can be cozy and friendly though may lack support that a larger office might be able to afford. May be better for an experienced agent.
Franchises:
The true sense of this model means the core company is no longer interested in selling real estate on a day to day business. Not unlike McDonalds, their goal is to sell and open new restaurants, then sell all of the products to support the new franchise. It becomes the mission of your local McDonalds owner to sell burgers. This model seems to maximize the best of the two extremes. (OK so I’m biased. I co-own three offices that fall into this category) Offices in this category are usually owned by local owners. They often own their own buildings, they are the decision makers and can implement changes a lot easier then the corporate model.
Corporations:
We are talking the mentality here not the necessarily the business type. This represents the other end of the spectrum. There is one main office with one owner for a group of offices. Managers in each of the offices must get corporate permission to make decisions or implement new ideas. Top down management with new ideas starting at the top and filtering their way down. Though your image may be enhanced by a consistent marketing message and you will tend to have more tools and services available, you give up flexibility and ability to change.
Attractions:
Be aware that different business models seem to attack different agent types. Get an idea what type of agent is being attracted to the office or company you are interviewing with.
Tip:
Talk with local escrow officers to get an idea what agents seem to be the most prepared, most professional and seem to do the best job. This may lead you to a company that matches your ideals.
Click here for a list of 10 questions to ask a potential Broker.
10 Questions you will want to ask a Broker Before You Hire Them.
You have just earned your real estate license and now you are looking for a broker and company to work with. Here are 10 questions to ask
1) How long have you been in the business? (The person, not the company)
2) Why are you still in the business?
3) Why did you choose to work for this office and this company?
4) What do you do to help a new agent get started?
5) Thinking of your last 5 new agents that you’ve hired:
a) How many are still at the office?
b) How much did each of them earn so far?
c) What did they do to become successful?
d) May I talk with two of your new agents?
6) Thinking of the agents you have:
a) How many agents are in your office
b) How many do you want?
c) How many have left in the past year?
d) Why did they leave?
e) May I talk with 2 of your experienced agents?
7) What is your business model? How much does it cost me and what do I receive in return?
8) What makes you different from your competition?
9) What do you look for in an agent? What are your expectations of me?
10) When I have a problem or a challenge how do I get your attention? How do I get guidance from you? Evenings, weekends?
The answers to these questions will help you decide whether or not you want to work with this broker. Don’t forget….while they are interviewing you…..you are interviewing them. You want to make the right decision, the first time.
1) How long have you been in the business? (The person, not the company)
2) Why are you still in the business?
3) Why did you choose to work for this office and this company?
4) What do you do to help a new agent get started?
5) Thinking of your last 5 new agents that you’ve hired:
a) How many are still at the office?
b) How much did each of them earn so far?
c) What did they do to become successful?
d) May I talk with two of your new agents?
6) Thinking of the agents you have:
a) How many agents are in your office
b) How many do you want?
c) How many have left in the past year?
d) Why did they leave?
e) May I talk with 2 of your experienced agents?
7) What is your business model? How much does it cost me and what do I receive in return?
8) What makes you different from your competition?
9) What do you look for in an agent? What are your expectations of me?
10) When I have a problem or a challenge how do I get your attention? How do I get guidance from you? Evenings, weekends?
The answers to these questions will help you decide whether or not you want to work with this broker. Don’t forget….while they are interviewing you…..you are interviewing them. You want to make the right decision, the first time.
Now that you have your real estate license.
You have your real estate license……..now what???
In the state of Washington a new licensee must place their license with a Broker in order to practice real estate. This can be a daunting decision. How do you choose a broker or company to work with, what do you look for, how do you choose?
Imagine you want to go swimming. You have found a group of indoor pools. You need to figure out which pool you want to jump into. You don’t want just any pool, you want one that is clean, warm, not too crowded, one that has dry towels and nice showers. Sounds easy right……now you have to choose by looking in the windows you can’t actually go in. If you are lucky you might be able to ask some of the swimmers who are leaving the pool. You ask questions to try to get an idea what its like at that pool. You know that once you make the decision you are going to be jumping into the deep end, so you want to make sure you make the right decision, the first time.
Trying to figure out an office to join can be the same way. If you take the time it can be a little easier in that you will want to interview the manager. You will want to talk with several agents who are working for that office. Talk with a couple of long time agents as well as a couple of new ones.
This is not a time for quick decisions, even though the broker may be pushing you to join. I’ve had agents ask me if it is hard to get a job once you have a license. The challenge is not getting a job offer (many brokers will hire you on the first meeting because they just want to put another license on their wall) the challenge is trying to decide why you might want to work for a broker that is so willing to hire you after only one brief meeting.
Click here for a list of books that I recommend to agents just starting the business.
In the state of Washington a new licensee must place their license with a Broker in order to practice real estate. This can be a daunting decision. How do you choose a broker or company to work with, what do you look for, how do you choose?
Imagine you want to go swimming. You have found a group of indoor pools. You need to figure out which pool you want to jump into. You don’t want just any pool, you want one that is clean, warm, not too crowded, one that has dry towels and nice showers. Sounds easy right……now you have to choose by looking in the windows you can’t actually go in. If you are lucky you might be able to ask some of the swimmers who are leaving the pool. You ask questions to try to get an idea what its like at that pool. You know that once you make the decision you are going to be jumping into the deep end, so you want to make sure you make the right decision, the first time.
Trying to figure out an office to join can be the same way. If you take the time it can be a little easier in that you will want to interview the manager. You will want to talk with several agents who are working for that office. Talk with a couple of long time agents as well as a couple of new ones.
This is not a time for quick decisions, even though the broker may be pushing you to join. I’ve had agents ask me if it is hard to get a job once you have a license. The challenge is not getting a job offer (many brokers will hire you on the first meeting because they just want to put another license on their wall) the challenge is trying to decide why you might want to work for a broker that is so willing to hire you after only one brief meeting.
Click here for a list of books that I recommend to agents just starting the business.
Housing Stats for 10/9/2005
Watching stats like these will help you determine what kind of a market you are in.
For Kitsap County Washington as of 10/09/2005
917 Active Listings
50 Homes went Pending last week
50 Average Days on Market
$271,515 Average List Price
$271,198 Average Sale Price
100-% List price to sale price ratio
18.34 weeks of inventory
Learn more about Defining Your Market.
For Kitsap County Washington as of 10/09/2005
917 Active Listings
50 Homes went Pending last week
50 Average Days on Market
$271,515 Average List Price
$271,198 Average Sale Price
100-% List price to sale price ratio
18.34 weeks of inventory
Learn more about Defining Your Market.
A Tool For Real Estate Investors
The process of purchasing an investment property can at times seem overwhelming. Especially if it is something you've not done before or only once or twice a year. On the face of it, isn't it just like buying any other house?............No!
You actually use a different side of the brain to process the purchase of an investment property than you do when buying your own home. The motivations, concerns and thought processes are different. In fact there is a whole new language involved. Annual Operating income, Cap Rate, Gross Operating Income, and Cash on Cash are some of the words and concepts that you need to understand to make a sound investment decision. After all you could put your money in a CD, Stocks, Bonds or Mutual Funds. When considering a real estate investment you are asking yourself "Why should I put my money here? Will I do better than if I invest it in something else?"
One way to answer this question is to sit down with a potential investment and break out a piece of paper and a pencil. The upside to this method is that it takes no batteries, electricity or computer (though a calculator would be handy).
A much easier way in my opinion, is to use a software program that you load onto your computer, especially helpful if you are going to compare several properties or investments to each other.
I've come across an excellent program that does just that. It is called Star Analyzer from a company by the name of Wondering Star http://www.wanderingstar.com/
Just like any new program it does takes a few minutes to get used to the layout and the information it needs. However once you input your first potential investment it quickly becomes apparent how useful this tool is. It will allow you to input multiple potential real estate investments. It will then compare these to each other, as well as to other financial investments. It is wonderful to input once then use often. You can also play "what if" scenarios. What if I put more down. What if I charge more rent. It will also carry your investment and its returns out into the future so that you can see how much you are making in lets say ten years.
Star Analysis even comes with its own mini investment course as well as a trial period to get you settled in. I highly recommend that you check it out at http://www.wanderintstar.com/. I use it as I help investors as well as for myself.
See a demenstration: http://www.wanderingstar.com
California Home Prices May Be Moderating (October 6, 2005)
If the CALIFORNIA ASSOCIATION OF REALTORS ®' 2006 forecast proves accurate, home prices in the state will rise at less than half the rate they've gone up during each of the past four years. And that would be good news for homebuyers struggling to attain ownership there.
Only 16 percent of households could afford the median-priced home, which was $540,900 in July, according to CAR. A year ago, the median price was $461,740. In nearly a half dozen regions, only one in 10 households or fewer can afford the median-priced home, CAR says.
But based on the forecast, not all areas of the state will continue to experience the unprecedented double-digit median price increases of the past five years, says CAR Vice President and Chief Economist Leslie Appleton-Young. Some high-cost areas, especially those in the more costly coastal regions, face a potential leveling off of median price gains compared with the 10 percent gain we expect for the state as a whole."
That predicted 10 percent gain caps out at $575,500.The Golden State's perpetual supply-demand imbalance pushed home prices up 25.16 percent in the year ending in the second quarter of 2005, and 109.7 percent in the last five years, according to the Office of Federal Housing Enterprise Oversight.
In California, each year ends with an approximate 50,000 shortfall in housing units, based on the number of new households (250,000) and the number of new housing units constructed (an estimated 200,000 this year), CAR says. CAR economists say the supply-demand imbalance will continue to drive the market, but at a much moderated pace next year.
The association's annual forecast also calls for sales to fall by 2 percent. That's a switch, too. In July, sales were up 1.3 percent compared with July 2004.California's high-cost areas, including the Los Angeles, San Diego, and San Francisco Bay Area markets, could see even higher rates of constrained sales, and home price appreciation less than 10 percent, says Appleton-Young.
By Broderick Perkins for REALTOR Magazine Online
I receive this type of information from The National Association of Realtors about real estate all over the United States. I'll pass it on to you as appropriate.
Only 16 percent of households could afford the median-priced home, which was $540,900 in July, according to CAR. A year ago, the median price was $461,740. In nearly a half dozen regions, only one in 10 households or fewer can afford the median-priced home, CAR says.
But based on the forecast, not all areas of the state will continue to experience the unprecedented double-digit median price increases of the past five years, says CAR Vice President and Chief Economist Leslie Appleton-Young. Some high-cost areas, especially those in the more costly coastal regions, face a potential leveling off of median price gains compared with the 10 percent gain we expect for the state as a whole."
That predicted 10 percent gain caps out at $575,500.The Golden State's perpetual supply-demand imbalance pushed home prices up 25.16 percent in the year ending in the second quarter of 2005, and 109.7 percent in the last five years, according to the Office of Federal Housing Enterprise Oversight.
In California, each year ends with an approximate 50,000 shortfall in housing units, based on the number of new households (250,000) and the number of new housing units constructed (an estimated 200,000 this year), CAR says. CAR economists say the supply-demand imbalance will continue to drive the market, but at a much moderated pace next year.
The association's annual forecast also calls for sales to fall by 2 percent. That's a switch, too. In July, sales were up 1.3 percent compared with July 2004.California's high-cost areas, including the Los Angeles, San Diego, and San Francisco Bay Area markets, could see even higher rates of constrained sales, and home price appreciation less than 10 percent, says Appleton-Young.
By Broderick Perkins for REALTOR Magazine Online
I receive this type of information from The National Association of Realtors about real estate all over the United States. I'll pass it on to you as appropriate.
Housing Stats 10/2/2005
Watching stats like these will help you determine what kind of a market you are in.
For Kitsap County Washington as of 10/02/2005
893 Active Listings
64 Homes went Pending last week
50 Average Days on Market
$271,363 Average List Price
$270,973Average Sale Price
100+% List price to sale price ratio
13.4 weeks of inventory
Learn more about Defining Your Market.
For Kitsap County Washington as of 10/02/2005
893 Active Listings
64 Homes went Pending last week
50 Average Days on Market
$271,363 Average List Price
$270,973Average Sale Price
100+% List price to sale price ratio
13.4 weeks of inventory
Learn more about Defining Your Market.
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