How a short sale starts

In Oklahoma the use of sub-prime financing was little used. Certainly there was 100% financing, and  less than prudent use of 2nd mortgage equity lines of credit. There will always be people who want everything now, and the ease of obtaining cars, furniture, and credit cards can add to the problem. Many people just don’t budget or plan for a rainy day. Other standard reasons can include divorce, loss of job, or medical problems that can cause someone to get behind on a mortgage. In Oklahoma, once three payments are missed, the lender has to step into legal action and file against the owner. It is not unusual for the owner to want to give up, or not understand what their alternatives are. In the moment, many of them feel that the world is falling in on them not realizing that the future can change for the better. Asking for a short sale can get them on the road to recovery.

What is the next step?

The first move is to find a Realtor who knows how to work the system. Our team members who specialize in short sales have been able to get the lender to pull the home from the sheriff’s sale list. This can give us the time to complete the first part of the process which is to find a buyer quickly. One of our advantages is that we have a list of over 600 individuals who have bought investment property from us in the last four years plus over 2000 more in our database. many have put themselves on a waiting list for short sale purchases. It is normal for us to have a buyer in a matter of days. Lenders are more willing to listen to you when they know that you can complete a contract as soon as they are contacted. For the lender, the whole reason for going with a short sale is the time value of money. if they can take a loss up front, and it that can be completed quickly it is off their books, and the up fron loss is not as great as going through the full foreclosure process. They also see the current statistics about refinancing these toxic loans with over 50% of recent workouts not working almost from the day they are done. In this our team is unique in that not only do we have experts who can negotiate with the loss mitigator, we have others who work with investors on a daily basis.

The Advantage to the owner    

When the time comes for a short sale to be asked for, the owner is already behind on payments which are reflected in their credit report, and nothing can be done to change that. With a short sale the damage can be minimized. At this time the IRS cannot charge taxes on the deficiency, but the lender can. In better days lenders would just write off the loss but not anymore. Deficiency notices are being sent out after foreclosure and that can force people into bankruptcy which deals a more serious blow to credit ratings. Doing a short sale gives the owner the ability to eliminate the deficiency judgement. One misconception that is very important to note is that a short sale is not a foreclosure, but it does not erase the process for the participant. It will be noted as a write off by the lender but that is not as much of a serious hit to the owner than just letting it go. Plus, at some time  people will repair their credit and have the ability to buy another home, and participating in a short sale that aids the lender will show responsibility in dealing with this problem versus just letting it go. So for those who may be in this position, avoiding a deficiency judgment, and having a faster track to repairing your credit are strong reasons for you to making this happen.

Conclusion    

If you are a person or family in this economic plight, the sooner you contact us the easier it will be for us to prevent the foreclosure. If you are a potential buyer, getting on our short sale list will give you the ability to buy one before it hits the market. Either buyer or seller can contact us by emailing me at joe@joepryor.com.

Bounty of Blessings

This Thanksgiving I have lots to be grateful about, but I thought I would hit the highlights. Hopefully this will get you in the mood to create your own list. There is plenty we can be negative about, not just in these perilous times, but always. I don’t highlight family and friends becasue we should be gratful every day for that blessing. Today to use the Monty Python song, “Always look on the bright side of life”!

The Election

As a 60 year old man I would have never thought that this country would elect a black man as President. First, it shows you that for all our problems, there is a deep goodness and an openness to change in Americans. It can also show grace as exhibited by John McCain’s concession speech that was deeply moving and his best speech of the election.

The iPhone

Before I came to Houston for cancer treatment I wanted to give myself a present, and the iPhone is wonderful. The down loadable apps give me traffic problems, the restaurants and more around me, the ability to hear a song and to find out who it is, and the complete works of Shakespeare all for free. The Google earth free app is worth the purchase of the phone. The computer just got smaller.

Gas Prices

I know that as an Oklahoman in an energy state i should want high gas prices, but can you imagine the misery of a financial meltdown and $4 gas? This is the biggest tax cut incentive plan that the American people can have. Just filling up for $30 and not $50+ is a psychological boost.

Sheila Blair of the FDIC

President-Elect Obama should return her. Her workout package of IndyMac was genius, and her recommendations on how to handle the housing crisis was genius. Finally it looks like the Bush Administration got the message and the Treasury is dealing with toxic mortgage assets, and money will flow again.

Oklahoma!  

Not the musical but the state. Finally Oklahoma and my city of Oklahoma City is the place to be. With a diversified economy, energy and agriculture, a robust housing market that is still going up, and Indian Tribe corporations that are making brilliant investments outside of casinos, the state although affected does have a distance from the economic plight of the country.

Political Satire

Tina Fey, Colbert, and The Daily Show gave me reason to smile. National elections have a meanness to them, and sometimes it’s hard to separate truth from fiction, but the purpose of satire is to put meaning in perspective, lets us laugh at ourselves, and often speaks truth we need to hear.

MD Anderson Cancer Center

As I write this in my apartment a mile from the center, my thoughts, prayers, and tears are with the Doctors, Nurses, and staff of this miracle in a building. I came to MD Anderson with what I thought was a death sentence, but through these caring people and great medical technology, I am leaving cancer free. The fact that I can breathe, smile, and live gives me the ability to give to others. The first thing I will do when i get home is open a chapter of a head and neck cancer group so that I can give comfort to others who are diagnosed. This Thanksgiving please remember those who come hear every day. Some will not live but many more go home like me. Please also consider giving to Stand Up to Cancer. It is one thing to treat cancer, but it equally important to work on prevention and ways to help the body heal itself instead of chemo and radiation. I wish you Happy Holidays. Please share with me what you are grateful for.

What is a short sale?

A short sale is a mortgage company willing to take a loss up front from what is owed instead of going through a costly foreclosure process and a sometimes lengthy process of getting it back on the market to sell the asset at the highest price possible. There is no national standard for how much loss a mortgage company is willing to take. In hard hit areas like Florida and Arizona I have seen a 60% reduction from the original purchase price if the home was bought in the last five years. In Oklahoma, the short sales I have been involved with have normally been within 20% of purchase price. The difference is in the appraisal. Oklahoma is still appreciating so there is not a lot of downward pressure on homes, so when an appraisal or brokers price opinion is done, it reflects current value which is stable, so individual markets will have different evaluations.

The Buying Process

First, you should only deal with a Realtor who is an expert in negotiating with lenders and our team has this expertise. The loss mitigators for the mortgage companies often have over a hundred files to process at a time, so dealing with them is a delicate matter and they cannot be bullied into a price. You have to know how to deal with them. Another problem is that some owners have taken out a second mortgage which also has to be dealt with. Because of the sheer volume of potential short sales the time it takes to close can be much longer than a normal sale, sometimes as long as seven months so you need staying power. Short sales are also “as is” purchases, so if repairs are needed, a buyer needs to be prepared to foot the bill for fix up. You can do an inspection on the property to insure that you don’t have serious problems beyond the value of the total expenditure, but it is not a tool to get the lender to pay for repairs.  

A case history

My team currently has a property that is the above picture. It is a 1998 built 2300SF(mol) single family home with 4 bedrooms, 2.5 baths, 3 car garage, on a 1/3 acre lot with a shop with electricity in the back. A current value is at least $215,000 according to recent comparable sales in the neighborhood, and it has 2 mortgages. If the property was rented it should bring $1500 to $1700 per month. The short sale price should be around $170,000 and it is in good condition. In a market like Oklahoma where only 6% of MLS reported sales are distressed property sales, and a market that has not gone down in value, this is real equity. When you combine $45,000 in equity in a market without excess inventory and appreciation still appreciating, this is a great buy for an owner-occupant or investor. You might get a bigger discount in a state that has really melted down, but those markets have a conditions that indicate further losses of value becasue of the years it will take to absorb the excess inventory of property.

Conclusion

Mortgage interest rates continue to drop now, but soon we will pay for the myriad government bailouts with inflation that comes from printing too much money, and rates will rise. There is no better time to buy than now, and a short sale is a fast track to creating an instant wealth increase. Short sale possibilities are happening across the price spectrum, and often they are sold before they hit the public listing time. If you would like to be on a list for a short sale purchase before they hit the market, please email me at joe@joepryor.com, and let me know some basic guidelines of whether you are an investor or owner-occupant and a general price range that fits you. If you know the Oklahoma City area you can include what areas you are most interested in.

Check you health insurance for proper coverage    

I spent a time in my early forties where I thought I was invulnerable and if i didn’t have health insurance I could invest that money instead. yes I was an idiot. When you see teenagers on up with cancer you know not to gamble with your life. I asked the radiologist what it would cost for radiation alone with no health insurance and he only went so far as to mention the $85,000 deposit. When I needed nausea pills, and the retail price for the prescription was marked at $2800 I was so glad for  my prescription add on. My 3.5 month stay in Houston cost me $8000 of my money just on housing. You can get a rider for housing on a policy. If you have cancer you want to go to where the best are working and you have the best chance of cure, and for that it might pay you to add this on, especially when you see the 1 in 3 Americans who will get some form of cancer.

Real Estate Lessons

As a Realtor I have been focused like a laser beam on success. it is not that I haven’t taken care of people, it is just the amount of stress I was willing to absorb to be successful. Trust me, after this experience and with the knowledge of the effect on health because of stress, no amount of money will make it worth going back to the stress I had. But speaking of taking care of clients, this place is amazing. The level of coordination and communication between all department is fantastic. The radiologist knows what acupuncture treatments I have had. The primary care doctor knows what the PET scan says, and the Dentist knows I am going to Yoga. This is the way everybody should be treated if they pay a full commission. They don’t just deserve excellent care, they are owed extrordinary care. I know that real estate doesn’t involve the possibility of death, but you want a full commission then give people what they deserve.

Know what is important

I am tempted to quote the Dalai Lama, but I will refrain. First, your family and friends are all wonderful. They are not perfect, my mother did not do everything right, and some friends have forgotten my birthday, but no one is perfect including me and you. I had a friend I got mad at years ago because she did offend me for real. I decided to cut her out of my life years ago. After no contact for those years, before I left for Houston I got a call from her to tell me she heard of my cancer, and gave me an amazing pep talk which included a complement about my fighting spirit. I learned a valuable lesson. A good friend goes to the a friend that has offended them and talks about it. Years later we are friends again, but I have missed out on years of friendship, and when things go horribly wrong like with a cancer diagnosis you can’t have too many friends. I have been amazed by the goodness of people since my diagnosis. Sometimes our lives can become so busy that we forget what is right in front of us, a caring family, friends with hearts of gold, an a universe that doesn’t feel so empty anymore. The picture above is me ringing the bell which you do after your last treatment. Sometimes it takes a serious jolt to your system to know what is really important and it isn’t money or recognition. The answer is as clear as the ringing of that bell today.

How to take care of past history

So far, mortgage workouts for troubled loans have not worked out. Over 50% of the workouts will still go into foreclosure. What has to be done is Fannie, Freddie, and FHA need to absorb losses so that principle amounts can go down, and we can reduce rates below 5% or whatever is required to give a fixed rate that works within the maximum debt percentage of a normal fixed rate A rated mortgage. The fact that foreclosures are accelerating, and six months extensions for bad loans that delay the problem will not stop the home values from its . As values go down more people become negative on equity, then even more foreclosures happen.

Take care of real estate Investors

No talk of mortgage workouts by the federal government has ever addressed the multitude of investors that speculated especially in formerly hot markets like Florida, Arizona, and Nevada. There is no way to draw a line between who deserves a break on a mortgage versus those who were foolish. 40% of foreclosures in these areas are investors. If a house goes into foreclosure does it really matter if it is a homeowner or an investor. Maybe you can have them share their equity on point of sale, but any foreclosure affects values in that neighborhood or city. If an investor can get that low fixed rate mortgage and it results in neutral or positive cash flow then the investor will hold on to their properties. The renter also gets a break because they do not have money out of pocket to move to a new rental property. To not address the investor in any real estate bailout will defeat the purpose of rescuing the owner-occupant, the stabilization of home values, and the preservation of a local tax base.

The Future has to be addressed too  

While we are keeping people in their homes will real modification, they housing industry has another problem. People are scared to buy a home. Psychology and fear are keeping people on the sidelines. We need to have special low interest loans for people to buy. By making it compelling, again by doing something like a 5% 30 year fixed rate with no points is a way to get people off their couches and buying homes and condos. This also benefits retail because people go to carpet stores, Lowe’s or Home Depot, appliance stores and more to put extra money in the home to make it their own. Improvements also make taxes go up so that local governments don’t have to cut services and jobs. Finally, let the investor loose. In Oklahoma back in the 1980″s when our economy was bad, the investors took the excess inventory out of the system, which eventually led to a sellers market. Fannie Mae has cut the number of properties for 10% down loans to 4 from 10, so that it is harder for investors to buy more property. Also mortgage insurers are not backing 10% down investor loans so that 20% down or more is all you can get. As an investment specialist and investor, return on investment can be enhanced by lower down payments. Also, I am selling out of my portion of a commercial building. If 10% down is available, i will buy two properties instead of one. The result? Less inventory on the market because that can cause price drops just like foreclosures.

Conclusion    

We have got to rescue Main Street. While it is important to save the financial system, the toxic assets they were supposed to be relieved of where the derivatives that were packaged using sub-prime loans. This rescue of the housing industry contributes to the stability of the financial system and our country, and the rest of the world. This means everyone who is in trouble whether they were foolish or not, or whether they were owner-occupants or investors. Housing is a huge part of our economy, and it seems that Washington does not understand what you and I see everyday. It is great that they can have genius theorist who can tell you why something has happened, but don’t have the common sense to help us get out of the problem. It is time that government officials get their heads out of the clouds, and see what is happening on the ground in our neighborhoods.

Gas Prices

Gas in Oklahoma has gone down in Oklahoma from $4 a gallon to $1.70. It is estimated that in short order nationally this will result in A $225 Billion dollar savings. this is the equivalent to a massive tax cut. With more money in peoples pockets there is more money to spend. Some of it will go into savings but that is good to. If financial institutions get your business, they have that money to loan. This is bigger that the stimulus package that Bush initiated.

Interest Rates

Rates dropped today on the ten year note to 3.01%. One week ago it rose to 3.93%. Let’s use a $160K home mortgage and see the effects of lower rates. If we take this loan and lower the fixed rate to 5.75% from 6.5%, we lower our payment around $77 per month. Using the cost per thousand of a 30 year mortgage of $6 then that is the equivalent of approximately $12,800. That means that I just got a discount of $12,800, or because of the lower interest rates, I now have $12,800 in buying power. We all go by the monthly PITI payment, so that is the economic value of lower rates.

Inventory and Foreclosures     

Oklahoma City still shows a sellers market below $200K overall. Edmond, Oklahoma, the most affluent suburb shows 6 months of inventory on the market from $150K to 200K, and 3 months inventory below $150K. This is a condition for prices rising. A discount in an over inventoried market doesn’t help you becasue that with foreclosures will put tremendous pressure downward on pricing. You want a market that is rising to protect your largest investment. On foreclosures, Oklahoma City has only 6% of all listed homes as foreclosed property on the market. In areas of Arizona, Florida, California, and Nevada, it has run as high as 65%. In those markets the scary thought is that you don’t know what the bottom is. Chances are in may be 2010 or 2011 before the bad inventory works itself out of the system.

Oklahoma Economics

The larger Oklahoma cities like Oklahoma City is sitting on 3.7% unemployment which is dramatically below the national average. Federal government statistics show that Oklahoma is leading the country in the rise of the average and median price, and the economy is stable and not dependent on manufacturing like the Rust Belt and Midwest. Plus, having strong industries in energy and agriculture creates strength. Although prices are down on energy most Oklahomans are grateful. Can you imagine the current U.S. economy with high gas prices. The prices will rise again, but hopefully when we have recovered, and Oklahoma will benefit greatly. The push for 25% biofuels by 2025 will create 160,000 jobs and billions of dollars in revenue. Oklahoma is growing and if you look to a long term purchase you want the economic prospects to be bright. The time to buy is now. To get set up on an auto-email notification of property listings in real time, go to www.homesearchbyemail.com, fill in the information with your guidelines, and we will get you started.

Whether you are in the city, state, or out of state, the buying process can start as early as six months ahead of contract. The first thing you can do is sign up for an auto-email notification of homes that fit your profile. That profile can be adjusted as you go along, but in that process you can get familiar with what our market gives you to buy. It also can give you questions to ask us. If you want to know about the schools that take care of an area, distance to work, or other amenities, it lets us give you the answers you need so that the process will be easier by the time you are ready to physically look at your choices. To sign up go to www.homesearchbyemail.com and put in your parameters and we will start sending you listings in real time.

Representation  

Oklahoma has statute law for real estate representation. previous to this was the law of agency based on the results of national court decisions on representation, making it common law. Oklahoma moved to stronger standards that are specific about how Realtors behave and act. The most used choice is Single Party Brokerage. This is like the old buyers agency with the addition of stronger wording about our responsibility to obey your wishes unless they are unlawful acts like discrimination or purposeful misrepresentation. Where it works well is when you qualify for a $225K home but you only want a $160K home. If we constantly show you $225K homes we are acting without ethics. Our job is to get you the house you want. Transactional brokerage is where you don’t want or need advice, you just need someone to write a contract. Very few people would need this, so it shouldn’t happen much. On single party brokerage you would sign an  exclusive contract with a Realtor to represent you. The only exception is when I would be writing an offer from another realtor in my agentcy. In that case the company policy is for the sellers Realtor to move to transactional brokerage.

Making the Decision 

Once you at the time to make a decision it normally would be within 60 days of occupancy unless you are wanting a new custom home which could take 4 months to a year to build depending on complexity. You should have chosen a mortgage company which we can help you with because in Oklahoma you need to be qualified by a company no longer than five days from contract acceptance. The normal process is to hone the acceptable houses to around 3 and revisit them a second time to look in great detail. I would show you comparable sales in the neighborhood and area to insure that pricing is right, and we would look at a sellers property disclosure to see if pre-exisiting conditions might effect resale. Structural issues would be the most problematic. We may want one final look before contract offer.

Contract Time  

When the offer is written it is done with contingencies. Contingencies include an acceptable appraisal of value by an independent appraiser, and inspections for the house including electrical, mechanical, plumbing, structure, and pests like termites. You may want to specify environmental inspections at the time of contract. The offer should be biased in your favor but my advice is to never insult the seller by offering a very low offer. If we have done our homework and the house could be worth the $200K they are asking, a $100K offer doesn’t start the negotiation in good faith. By law I am required to write that, but it normally stops communication. Hopefully we will get the price where you move in with equity beyond your down payment.

Inspections and Appraisal

The mortgage company will get an appraiser from a pool so that there is no collusion, and the appraisal has to be for at least the purchase price or the contract is void and subject to renegotiation. You will choose a home and pest inspector from a list because a Realtor who tells you to use only one is quality of possible collusion. You want the inspectors to give you fair estimates of repairs and they should be within the limits you set in the contract. If they are greater again you can at your request renegotiate the contract for the added repairs. The repairs should be done by licensed contractors if required. A homeowner doing the repairs is unacceptable. You want warranties from the licensed repair people.

Closing and Possession

Closing and possession are often negotiated separately. Be mindful that Oklahoma is a table funding state. That means that when papers are signed, you bring the certified funds for your down payment and closing cost, and the mortgage company funds, then at that moment you own the house. Hopefully you have reasonable sellers and you are too. The seller doesn’t want to move out before closing in case you back out, and that has happened. Often the seller is buying another house locally and can’t move until they close on their property which is contingent on you closing. It is not an exact science, but it should be decided before you are at the closing table. There is lots more to this process, but that is the detail you and my team will go over during the process. Remember, if you want to get started go to www.homesearchbyemail.com and we will start you up.

25×25

T. Boone Pickens is the only proposal for lessening our dependence on foreign oil with an alternative energy plan. 400 groups have endorsed the vision of 25×25. This is an non-fossil fuel renewable energy program that would supply 25% of our energy by 2925, hence the name. The Pickens Plan depends on a dramatic increase in wind power and a complete rebuilding on the energy grid, then the natural gas that fires electrical plants would be used for domestic vehicles which would also require an expensive retooling of gas stations where none exist for natural gas. It also has an advantage in that we have headed in that direction with ethanol production. The plan does call for changes that would not put so much pressure on items like corn production that has had detrimental effects on food prices. If you want more detail go to this link to download the fuel plan or a summary of the program. The following hits the highlights.

Economic Strategy

25×25 should increase farm income by $180 billion annually including 37 billion in 2025 alone. It will generate $700 billion in new economic activity annually which ironically is the size of the recent bailout package. It would create 4 to 5 million new jobs and reduce oil consumption by 2.5 million barrels per day. That is 10% of our projected consumption in 2025.

Policy Recommendations

Energy efficiency should be America’s highest priority energy resource and the energy option of choice. We should increase renewable energy production to 65 to 85 billion gallons per year of bio-fuel production by providing $808 million in new funding to expand R&D, new incentives for farmers, ranchers, and forestry landowners to use agricultural and forestry residues and grow dedicated energy crops for cellulosic biofuel production and a new generation of refineries. 800 billion kilowatt-hours of renewable electricity and boosting renewable heating and cooling with 3.7 billion incentives. Deliver transmission from rural areas to urban areas by an expanded network of pipelines, ports, shipping facilities, new transmsission  lines, and expanded availability of E85 fuel pumps for 85% ethanol.

Expand Renewable Energy Markets

The plan would insure that 50% of registered vehicles in 2012 are flex-fueled. Increase consumer purchases of renewable electricity by increasing federal government purchases to 25% by 2025 and a new national Renewable Energy Credit trading market. The plan would also improve soil and water quality and wildlife habitat by establishing a new Residue Management Assistance Program and increasing funding for existing Farm Bill and other conservation programs by $3.2 Billion. Finally it would enable more farmers, ranchers, and forest landowners to adopt renewable energy and energy efficiency projects by increasing funding for the Energy title of the Farm Bill by $1 billion.

Summary

Renewable energy represents only 6% of the energy consumed in America, and with an estimate of a 24% increase in energy use projected by 2025, all forms of alternatives need to be explored. If Congress joins with President Obama in his goal of not only energy independence, but also increased infrastructure spending, we need to do more than just roads and bridge building and repair. The 25×25 plan plus the upgrade of our energy delivery system will not only enhance our security by freeing our foreign policy from our oil addiction, it also creates 21st century jobs and technology that can improve our way of life, and give us something new to export. By also adopting policy that reduces green house gas emission, we can improve our economy while we are responsible stewards of our environment.

Here is how it works. First it always helps to buy undervalue. Starting with equity is great, especially if you are in an area like Florida that has a good chance of losing that equity in the next few years. Pay attention to inventory levels. If the average time it takes to sell the existing inventory which is called absorption rate is measured in years, then you have a declining market. Miami Florida has a ten year inventory so watch out. A $150K property in Oklahoma City has a 2.85 month absorption rate which means a bias toward appreciation. Not only that we are half the property tax rate of Texas, and more than half less the insurance of Florida. If you put 20% down you have positive income. For instance if it is $200 per month you don’t pay taxes. This is because the house less the land is depreciated over 27.5 years. Lets say the $150K home has an improvement value of $135K then the monthly depreciation is larger than the cash flow. it also helps to buy in places like Oklahoma and Texas because unlike the coast, land values are low therefore your depreciation is greater. Even if the appreciation is only 4% per year, after five years you have enough equity to buy two properties with the sale of one, because you bought under value in an appreciating state unaffected by the sub-prime meltdown. And you won’t pay taxes on the sale because of a special government sponsored program.

It is called a 1031 tax deferred exchange. The government allow you to defer taxes if you invest all your equity and buy for more than the sale of your home. Now you have two sources off tax deferred income. Then 5 years later you could have 4 sources of tax deferred income, and depending on your age you can keep going. In other words, after an initial investment in one home, you can buy more over time without another penny.  Of course you will have maintenance so there are cost, but buying right can put you in the black even with yearly expenses. If this works for you then you may want to buy more with extra money. The point is to create new sources of revenue that is not subject to the greed of Wall Street or incompetence of the government. Plus you have a tangible investment of bricks and mortar that has a long history of being able to access real value. Now that we have passed through the insanity of the recent real estate bubble, let’s get back to the fundamentals of long term investments based on solid principles.

Strength in Numbers?

For money organizations minting as many Realtors as possible is all about money first and money second. The more members NAR has, the better the lobbying. The real estate schools, the Boards of Realtors, and the State administering the test, have a vested interest in increasing revenue. Is it any wonder why we have more Realtors than hairdressers. The answer is it is much harder to get a hairdressers license. Less than 120 hours of education sure beats 1500 hours, hence too many Realtors. Then you have the brokers. I believe the worst business purchase you can make right now is a brokerage. The average dollars made per transactions is much lower, so throw as many inexperienced undereducated Realtors up against the wall and see if they stick. Then you have the downstream marketing agencies that recruit like crazy because they want a source of extra income. Maybe soon the lawsuits will exceed the transactions, and we will get off this roller coaster. The common demominator is now less than zero.

Image is Everthing  

The classic cliche is the bigger the vehicle the more successful you look. If it’s bigger then we are obviously the top dog. Not! I saw a Realtor driving a Hummer H2 with 360 degree advertising. First, our environment is in trouble and even though gas prices are low now, with China spending 600 Billion in the next few years on infrastructure, oil reserves diminishing it won’t stay that way, so what kind of signal is that. Also, when did it become a great idea to have your vehicle look like a house painters? Hopefully, owning a Toyota Prius Hybrid instead of a monster should be considered cool. Plus at 40 mpg plus, you can keep more money in your pocket.

Be like Doctors 

Should anyone be surprised that the largest deficiency in Doctors are general practitioners. They make the lowest amount of money. Almost all Doctors coming out of school will become specialist. We should do the same. Every Realtor show have something they know cold. The days of all things to all people Realtors are dead. If you have a team assembled you can have different specialist. As an individual choose sellers, or buyers, or investors, or first time buyers, or whatever looks like a niche you can compete in. For instance, I am tired of Realtors trying to do short sales not knowing the first thing about it. Not being able to give wise advice and follow through with expertise is a disservice to our clients and in the case of a possible foreclosure, knowledge is crucial.

Go Green 

Like the image part, show reverence for the environment. Don’t just downsize, also use recycled paper, recommend non-toxic products, and push the industry to a paperless transaction paradigm. With computers, air cards, electronic forms, we can move towards using less raw materials. Plus, contracts can be done on the spot, fly through cyberspace saving time which benefits your client. If you are an older Realtor like me you may need to get some new skills, but the young people coming into this business will love it. We also need to educate ourselves about environmental issues so that more builders will build Energy Star or LEED ceritified type homes, and existing homeowners can find out about special loans and tax breaks that come with greening your home. They will also thank you and refer you after the first few energy bills after the work is done.

Get out of town 

One of my frustrations is when I talk to Realtors who are not producing much, and I talk to them about going to CRS seminars out of state where they might even get referrals, or attending conventions or meetings like Inman News Real Estate Connect, they always have an excuse like, I am so covered up, or I have an inspection that day. These are the same people that complain about bad sellers or buyers that did stupid things. What is stupid is the Realtor. When I talk to new Realtors who ask for my advice is make sure you have $10,000 set back for specialized education and national meetings. That way they can start off with fresh ideas and tools to thrive. And again, it is all about the client. That is why we should be Realtors because often we help people make the biggest decision of their lives.

Throwing Money on a fire 

Too many times Realtors think that if they just spend more money on marketing, then things will get better. Not so. There has been a dramatic shift to the Internet. National statistics show that newspapers, magazines, and traditional media are increasingly ineffective. Today it is all about the Internet. Realtors need to learn about blogging and social networking. The average age of our clients are 28, the millenium generation. However, even post war boomers have developed computer skills. 86% of home searched begin on the Internet, and in surveys the Internet is No. 1 in importance, and gratefully we are No. 2. We need  use the blog platform to educate our buyers and sellers because that is our No. 1 responsibility. If we have done the above things like educating ourselves, finding out about current trends, and specializing to the point of truly being an expert, then we can do the No. 2 responsibility will be realized which is protecting our clients from harm. So my New Years wish for 2009 is a smaller, leaner, industry of incredible expertise. I will do my part. If all of the above organizations need more money from a smaller industry just triple our fees, because it should be a privilege to be a Realtor.