As a real estate agent, you will inevitably encounter clients needing more time to buy a home. These long-term buyers may be waiting for a job transfer, building their savings, or improving their credit. Read more...
As a real estate agent, you will inevitably encounter clients needing more time to buy a home. These long-term buyers may be waiting for a job transfer, building their savings, or improving their credit. Regardless, your role as their real estate advisor remains essential. Here are some tips to help you guide long-term buyers and ensure their future success in purchasing a home. Additionally, consider enhancing your skills and knowledge through a real estate school, online real estate classes, and real estate exam prep to serve your clients better.
Caution Against Large Purchases
Buyers must exercise financial prudence when buying a home, and realtors play a vital role in guiding them through this process. One essential piece of advice that realtors should offer long-term buyers is to postpone any significant purchases that could negatively impact their credit.
Encouraging clients to prioritize their home purchase over buying a new car or financing expensive furniture can make a considerable difference in their home-buying journey.
Large purchases can increase a buyer's debt-to-income ratio, lower their credit score, and affect their mortgage approval chances. Additionally, these financial decisions might signal to mortgage lenders a need for more financial discipline, raising concerns about the buyer's ability to handle mortgage payments.
Warren Buffet's concept of delayed gratification offers valuable insight into why buyers should delay these expensive purchases. Delayed gratification is the ability to resist the temptation of an immediate pleasure in the hope of obtaining a more valuable and long-lasting reward in the long term. By practicing delayed gratification, buyers can prioritize their long-term goal of homeownership over short-term desires for material possessions.
The ability to delay gratification is linked to many positive outcomes, including academic success, physical health, psychological health, and social competence. This skill is closely related to patience, impulse control, self-control, and willpower, all of which are crucial in home-buying.
By advising clients to embrace the concept of delayed gratification, realtors can help them focus on the long-term benefits of homeownership. As they resist the temptation of immediate rewards, buyers can work towards securing their dream home, ultimately reaping the rewards of their patience and financial discipline. By incorporating this perspective into the home-buying process, realtors can better guide their clients toward a successful and rewarding home purchase.
Promote Timely Bill Payments
Stress the importance of paying bills on time, as missed payments can harm their credit and delay home-buying. If they're at risk of missing a payment, suggest they contact their creditors to work out a solution.
TLDR - Pay bills on time or early.
Discourage Large Bank Transactions
Remind your clients to avoid large withdrawals or unsourced deposits to their bank accounts, as mortgage lenders scrutinize financial history thoroughly. Unusual transactions can lead to mortgage application denial.
When purchasing a home, buyers must be mindful of their financial transactions, as mortgage lenders pay close attention to their financial history. Large withdrawals or unsourced deposits can raise questions and potentially jeopardize the approval of a mortgage application. Understanding the impact of such transactions and why avoiding them is vital during the home-buying process is essential.
Mortgage lenders evaluate an applicant's financial stability and ability to repay the loan by analyzing their income, expenses, credit history, and existing debts. Unusual transactions, such as significant withdrawals or unsourced deposits, can raise red flags and suggest potential financial issues or undisclosed liabilities. Lenders may perceive these transactions as signs of financial mismanagement or an attempt to conceal relevant financial information, leading to doubts about the applicant's creditworthiness.
Moreover, mortgage underwriters must verify the source of funds used for the down payment, closing costs, and reserves. Unexplained or unsourced deposits can complicate this process, as they need clarity regarding the origin of the funds. This lack of transparency may lead lenders to question the legality or legitimacy of the funds, which can ultimately result in a mortgage application denial.
Maintaining transparency and consistency in financial transactions is crucial when applying for a mortgage. Buyers should avoid large withdrawals or unsourced deposits to their bank accounts during the home-buying process, as these unusual transactions can raise concerns for mortgage lenders and jeopardize the approval of their mortgage application. By keeping their financial activities clear and well-documented, buyers can increase their chances of securing a mortgage and successfully purchasing their dream home.
Warn Against New Credit Applications
Instruct your clients not to apply for new credit, including credit cards and financing large purchases. Also, ask about recurring payment plans, such as the iPhone Upgrade Program, which may perform "soft pull" credit checks that could negatively impact their credit score. New credit applications can impact your credit score for several reasons, and it's crucial for people in the process of buying a home to avoid applying for new credit during this time. Here's why:
Hard Inquiries: When you apply for new credit, lenders perform a "hard inquiry" on your credit report to assess your creditworthiness. Each hard inquiry can lower your credit score by a few points, and multiple inquiries within a short period can have a more significant impact. A lower credit score may result in less favorable loan terms or even denial of your mortgage application.
Debt-to-Income Ratio: Applying for new credit can increase your overall debt and raise your debt-to-income (DTI) ratio. Mortgage lenders consider your DTI ratio when determining your loan repayment ability. A high DTI ratio may lead to higher interest rates or disqualification from certain mortgage programs, making it more challenging to secure a mortgage for your desired home.
New Credit Accounts: Opening new credit accounts, such as credit cards or personal loans, can affect your credit score in several ways. Firstly, it reduces your average account age, which can lower your credit score. Secondly, it can impact your credit utilization ratio – the percentage of available credit you're using – another factor lenders consider when evaluating your mortgage application.
Financial Instability: Mortgage lenders prefer financially stable applicants with responsible credit behavior. Applying for new credit during the home-buying process can signal financial instability or the inability to manage existing debts, which may raise red flags for lenders.
To ensure a smoother home-buying process and increase the chances of securing a mortgage with favorable terms, it's essential to avoid applying for new credit during this time. Instead, focus on maintaining a healthy credit score, paying bills on time, and keeping your debt-to-income ratio low.
Maintain Regular Communication
As a real estate agent working with long-term buyers, maintaining regular communication throughout their home-buying journey is critical to your professional success. By keeping in touch with your clients, you demonstrate your commitment to their needs and ensure that you remain their go-to expert when they're finally ready to make a purchase.
Regular communication helps build trust and rapport with your clients, which is essential for fostering a strong, lasting professional relationship. By staying in touch and providing valuable information, you show your clients that you are genuinely invested in their long-term goals and ready to support them at every step. This proactive approach to client communication allows you to anticipate their needs and provide guidance on any potential challenges they might face during the home-buying process, ultimately making their experience smoother and more enjoyable.
Additionally, consistent communication keeps your clients informed about the latest market trends, new listings, and potential opportunities that align with their preferences and budget. By providing regular updates, you ensure that your clients remain well-informed and prepared to make educated decisions when the right opportunity presents itself. This level of attentiveness can set you apart from other agents, who may not prioritize long-term clients similarly.
In conclusion, maintaining regular communication with your long-term buyers is essential for securing your position as their trusted real estate advisor. By staying in touch and providing valuable guidance throughout their waiting period, you demonstrate your dedication to their success and ensure that you remain top of mind when they're ready to buy. In a competitive industry, this level of client care can make all the difference in securing future business and building a reputation for exceptional service.
Remember, not all clients will be ready to purchase a home immediately. By following these tips and investing in your education through a real estate school, online real estate classes, and learning how to get a real estate license, you can better serve long-term buyers and improve your chances of converting them into successful homeowners in the future.
Love,
Kartik
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As we move deeper into 2021, home design trends are predicted to be rather bold and personalized. This makes sense after the nation has been spending so much time at home. More and more people are Read more...
As we move deeper into 2021, home design trends are predicted to be rather bold and personalized. This makes sense after the nation has been spending so much time at home. More and more people are becoming attuned to their daily surroundings, noticing the nuances that add character and taking joy in some of the simpler pleasures. We'll look at what's on its way out and what everyone is making room for.
Interior Design Trends Going Away in 2021
Modern farmhouses, white kitchens, fast furniture, and single-use spaces look like they're soon going to be a thing of the past. The modern farmhouse look, with its barn doors and somewhat impractical sinks, was becoming far too ubiquitous for people's tastes. While it might work in the country, it's just not natural for an NYC apartment.
Perhaps more surprising for 2021 is that open floor plans also seem to be going out of style. As people turned their homes into makeshift schools, gyms, and home offices, there was a certain drawback to having so many undefined spaces in the home. Instead, people are starting to see more advantages to walled-off rooms that can be used for a variety of activities throughout the week.
2021 Predictions for Home Interior Design Trends
Here's what's likely to dominate the interiors of the most fashionable homes this year. Don’t forget to keep these in mind when hosting an open house this year.
Self-Expression
In a world of strip malls and housing developments, plenty of homeowners long to do something a bit more daring. The pandemic has only intensified this need for creativity, with more people viewing the empty space as a fun challenge rather than a daunting threat. So whether a person drags out old souvenirs from past trips or clears out a space for a more minimal interpretation, more decisions will have a larger purpose for the homeowner.
Post-Modernism
Post-modernism doesn't always have the best of connotations, sometimes prompting us to think of horrifying photos from the 1970s of busy rooms in all the wrong colors. But there's been a comeback in this movement as we round its 50th anniversary. Essentially an adverse reaction to the bare spaces of modernism, post-modernism is debuting new materials and ornaments for this year. It's a fun trend that can breathe a little life into an old room.
Industrial Styling
If even the latest twists in post-modernism don't suit your tastes, you might consider industrial styling as an alternative. The stonework, metal elements, and neutral colors have some of the same principles as minimalism or modernism, yet incorporate more details to explore in the home. This blend of styles is most often recommended for multi-purpose spaces with high ceilings. (It's a great way to pay homage to talented craftsmen in your area too.)
Black Kitchens
White kitchens were once the rage for luxury kitchens, but as with any song that's been played too long, they're starting to wear out their welcome. Now, people are looking for sleek black countertops, cabinets, and lighting as a way to distinguish the living room from the kitchen. If you have an open floorplan, this is especially recommended if you're not planning to build any walls. Of course, don't necessarily expect this trend to replace the beloved Carrara marble just yet though.
I’m also starting to see a lot of brass and copper tones set against these darker colors.
Sustainability
This one has clearly been on the rise for a while, but worth noting for 2021. This design trend goes hand-in-hand with transparency. People are looking for brands that aren't afraid to share how their products are made and how they treat their employees Rather than giving people vague promises, this year's customers will be looking for companies that highlight diversity in their staff and how the company is doing its part to protect the Earth.
Natural Shapes
Few things in life are picture-perfect. (The edges of a flower petal would be difficult to measure with a straight ruler.) Maybe that's why we're starting to see wavy shapes nearly everywhere. These more organic choices are thought to remind us of nature and stimulate our creativity. When we've been so cooped up at home, it makes sense that we're all gravitating toward this particular form of expression — whether they're found on a table, painting or pillow.
More Plaster
On a more practical note, plaster could see more of a resurgence this year. For years, drywall has been the favorite. It's easy and fast to install, plus it offers a clean and uniform surface for the owner to decorate. On the other hand, plaster has to be layered over wood, presenting logistical challenges that don't always end well. But there's also a depth to plaster, one that offers more texture and (you guessed it) personality to the room. If you're interested in this one, experts recommend coating a drywall with a thin layer of plaster to see how it looks (and avoid demolition cost).
So there you have it, an educated guess as to what's to come. Considering the unpredictability of 2020 though, anything can happen with home design. It will all come down to how different design elements speak to the homeowners and what promotes functionality for all of the home's residents.
Love,
Kartik
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Regardless of the type of business you're running or even the industry that you're operating in, marketing is all about getting the right message in front of the right person at exactly the right time. Read more...
Regardless of the type of business you're running or even the industry that you're operating in, marketing is all about getting the right message in front of the right person at exactly the right time. This is especially true with regards to the real estate industry, where listings need to do everything they can to differentiate themselves from every other house available on the market in an effort to move as quickly as possible.
Once you've put in the hard work of collecting all information about the property you're trying to sell, taking stunning photographs and putting together that perfect listing, you then need to pull out all the stops to make sure that people actually see it. Therefore, if you really want to craft the perfect marketing campaign to make sure your listing moves quickly, there are a number of factors you'll want to take into consideration.
1. Take Full Advantage of the MLS
The first step you should take when marketing a new real estate listing involves using a multiple listing service, also commonly referred to as an MLS, to get the word out about your property. This is a database built by cooperating real estate brokers to provide data about homes for sale in a particular area. This lets agents see each other's listings of properties for sale, commission and agent details, all in the name of connecting buyers to sellers as efficiently as possible.
Important Note: The MLS and Zillow are not equal
Note that an MLS and a site like Zillow are NOT the same thing and should never be treated as such. That's not to say that sites like Zillow won't be effective for getting the word out about your property, because they will be. Buyers can visit Zillow on their own and see great information and pictures of homes currently for sale, all without ever leaving their computer chairs, but also direct them to use www.realtor.com. This provides access to the MLS database on a user side.
2. Get Active on Social Media - Connect with Your Audience
Another important step you'll want to take involves harnessing the full power of social media sites to your advantage. Sites like Facebook, Instagram and even Twitter don't just connect you to countless potential buyers - you can also use social media to target your efforts to specific geographic areas and even towards precise demographics to help get your message in front of as many of the RIGHT potential clients as you can. Be sure to include an overview of the property and as many of your standout photos as possible. Even if someone sees your information on Facebook and isn't ready to buy a home, they may know someone who is - thus allowing them to share the post and get people to contact you as well.
3. Send Emails to Past and Current Clients
Along the same lines, you should also send out email blasts to both current and past clients, as well as to all real estate contacts you've established. Again, you never know who is ready to buy a home and you shouldn't write anybody off at any point. By making people aware of the property, you could end up motivating someone who was "thinking of maybe moving in the next year or so" to get excited about doing so sooner rather than later.
4. Send Postcards to Your Real Estate Farm
Finally, be sure to send postcards to farm the area to drum up as much attention for the listing as possible. In real estate, farming is when you pick a particular geographic area and establish yourself as the local market authority. By bringing this new listing to everyone's attention, you'll likely increase the chances of selling it as quickly as you can. If nothing else, this is a way to stay in contact with those current and past clients to show them how active you are in their community.
So from that perspective, it's killing two birds with one stone, so to speak. You're not only selling your listing quickly, but you're further cementing yourself as the authority that people in the area can trust.
Love,
Kartik
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The ongoing COVID-19 pandemic has changed just about every industry you can think of dramatically over the last year, but that's especially true in the world of real estate.
Gone are the days where Read more...
The ongoing COVID-19 pandemic has changed just about every industry you can think of dramatically over the last year, but that's especially true in the world of real estate.
Gone are the days where you could comfortably hold massive open houses on a Saturday or Sunday afternoon, gathering everyone together in a confined space to try to drum up as much attention as possible. Thanks to COVID-19, you'd be hard pressed to find anyone enthusiastic about drawing that many people together - to the point where some might not feel comfortable stepping into a stranger's home at all.
However, all hope is not lost. As savvy real estate professionals have shown, it is entirely possible to manage a successful listing during COVID-19. You just have to keep a few key things in mind to help people stay as safe as possible before, during and after the period in which your listing goes live.
Be Prepared and Purchase Personal Protection Products: Hand Sanitizer, Face Masks and More
At a bare minimum, real estate agents should purchase general hygiene and other personal protection products when both pulling together the information needed for a listing, as well as when showing off the home at a later date.
This means bringing along hand sanitizer with at least 60% alcohol, for example. Likewise, face masks and other coverings should be worn for all in-person activities. Experts also agree that you should bring along plastic bags for the disposal of all personal protective equipment and related items that you have brought onto a property.
Best Practices to Follow if an Inspection is Needed
When it comes to the listing appointments themselves, keep in mind that any initial listing interviews need to take place remotely for the foreseeable future. If any type of inspection needs to be done of the property to guarantee accurate pricing or to assess safety issues, you should keep all of the following best practices in mind:
Limit the number of people who will be present for the in-person listing appointment as much as possible. Generally speaking, there should be no more than three people: the agent and the two parties involved in the sale of the home, if applicable.
Anyone who lives in the home but who is not directly related to the sale should be asked to leave until the appointment has been completed. If that isn't possible, adequate social distancing rules (staying at least six feet apart at all times) should be followed.
Anyone who is going to be at the listing appointment should be prepared to complete a verbal health screening prior to it beginning.
All people at the listing appointment need to use hand sanitizer and wear face masks.
How to Hold an Open House During COVID-19
With regards to actually showing off the property to potential buyers once the listing has gone live, it is recommended that you encourage the use of virtual showings whenever possible. Yes, this is a significant change from the way things are typically done. But to look on the bright side, virtual showings could attract the attention of a wider range of potential buyers who may not have otherwise been able to see the property. This is especially true for any buyer who may be out of state but who can't travel right now for obvious reasons.
Finally, all showings must be held by appointment only and you should schedule at least 30 minutes in between showings for proper sanitization of the environment.
If possible, you may want to consider limiting potential showings to only people who have been pre-approved by a mortgage lender. Or, you could do so for people who demonstrate that they have the money and/or financing available to actually buy the property. Doing so isn't just a great way to maximize the use of your time - it can also help significantly cut down on the risk by making sure that you're only showing to people who are actually interested buyers in the first place.
Love,
Kartik
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In any real estate transaction, there are closing costs that are to be paid by both the buyer and the seller, and it's important to remember that these can vary from state to state and transaction to transaction. Read more...
In any real estate transaction, there are closing costs that are to be paid by both the buyer and the seller, and it's important to remember that these can vary from state to state and transaction to transaction.
I wanted to give you a quick run down from both a buyer and a seller perspective for California.
Typical Closing Costs Paid by the Seller
Let’s start with closing costs that are typically paid by the seller. A back of the envelope estimate would reveal that it would cost most sellers between 6 and 8 percent of the sales price to sell their home. The majority of the this is going to be wrapped up in real estate commissions as the seller generally pays between 4 and 6 percent of the sales price to sell it. The other 1 to 3 percent may be in other closing costs like back property taxes that are owed by the seller that will have to be paid at the close of escrow.
Even if the property taxes are not delinquent, these taxes are a seller responsibility until the escrow closes. For example, if the transaction were to close on April 10th, the property taxes up until April 10th would the responsibility of the seller. Anything after that date would be passed to the buyer side of the closing. Sellers will also have to pay their share of escrow fees and any back homeowner association dues until the date that the escrow closes.
The seller will also pay for any repairs that the buyer successfully negotiates during the escrow process. A home inspection, for example, might reveal that a roof is leaking and instead of the seller fixing the roof, the buyer may ask for a $7,000 credit to fix the roof in lieu of the actual repair. This would be deducted from the seller's proceeds at the close of escrow.
The industry standard in California is also that the seller will pay for a title insurance policy protecting the buyer.
Common Closing Costs Paid by the Buyer
As it relates to the buyer, a quick estimate of their costs would reveal a range between 1-3 percent of the sales price, with most of this is going to go to fees charged by the lender.
A lender may charge a fee, known as a point that is equal to one percent of the loan amount. The point could be categorized as either a discount point or an origination point. The difference between the two is that a discount point is a point paid to the lender to lower the interest rate on the loan. An origination point, on the other hand, is a fee that is paid to the lender to compensate them for actually doing the loan.
Generally, buyers will also pay the lender a credit report fee and are also responsible for their share of prorated property taxes. Generally, buyers will also pay for a title insurance policy covering the lender. This is different than the owner's title insurance policy that I described above that the seller paid for to protect the buyer.
What this means is that there’s two policies of title insurance in connection with a real estate transaction on which there is a loan. First, there is an owner’s policy to protect the buyer as well as a lender policy covering the lender. Buyers will also pay for their share of any escrow fees which are negotiable in California.
Speaking of escrow fees, it’s important to note that there’s usually a base escrow fee of between $200 and $400 and then the escrow fees themselves are often $2-$3 per thousand per side. Larger real estate transactions of several million dollars might have a lower per thousand escrow fee. It's also helpful to remember that many of these fees are negotiable. Certainly real estate commissions are negotiable but an often overlooked point is escrow fees can also be negotiated with the escrow holder.
How to Calculate Closing Costs – A Simple Example
As an example on a $600,000 purchase the base escrow fee might be:
$300
+
$2/$1,000 = 600 x $2 = $1,200
$1,200 + $300 base fee = $1,500 for each side of the deal.
Buyers also generally pay for an appraisal on the property as required by their lender and a home inspection and other inspections as part of their due diligence.
Before you get your real estate license in California, it's important to familiarize yourself at some level with the typical closing costs, so you can properly inform your client. Often, real estate agents will produce something called a net sheet which estimates the costs to complete a transaction. Your broker should train you on how to properly fill these out so you can demonstrate that you're as informed as possible.
Love,
Kartik
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"Why do I need a Realtor, anyway? My house is beautiful and it should be easy to get the best price for my home. How hard can that really be?”
Many people pondering selling their home ask themselves Read more...
"Why do I need a Realtor, anyway? My house is beautiful and it should be easy to get the best price for my home. How hard can that really be?”
Many people pondering selling their home ask themselves some variation of those questions early in the process. On the one hand, it's natural to wonder why you need help during a process that seems fairly simple with the help of the Internet.
But at the same time, selling a home is so much more than just another transaction. It can be a long, complicated and precise process that is unfortunately easy to "get wrong" - which is why partnering with a Realtor isn’t only a recommendation these days.
For most people it's become a requirement for a lot of reasons that I wanted to outline below.
Why Realtors Matter: Breaking Things Down
1. A Realtor’s Experience is Invaluable
Maybe the most important reason to bring in a Realtor is that the process of successfully selling a home isn't just lengthy - it can also be inherently complicated. A Realtor brings with him or her a wealth of experience that you simply won't be able to match on your own.
Think about all of the forms, reports, disclosures and other documents that you'll need to complete as a part of this process. Typically these number in the dozens - all of which are filled with reams of technical jargon that can be difficult to understand. Unless you're prepared to become a master in the field while also devoting as much of your attention as possible on getting the best deal for yourself, the chances are high that you may be looking at unfortunate delays (or worse - costly mistakes) if you get this part of the process “wrong."
A Realtor, on the other hand, can help you avoid all of these issues so that you can focus on the big picture piece that matters most: the sale itself. Indeed, they're a partner in the best sense of the term - one that is every bit as vested in your own success as you are.
2. A Realtor Possesses Market Expertise
Another one of the major reasons why working with a Realtor is a good idea is because they're true experts in the state of the market. Active real estate professionals study the market intently. Not just from behind a desk, but also in the field. They are out there each and every day looking at homes and properties just like yours. They really have their finger on the pulse of the market. An overpriced listing is one of the main reasons that property doesn’t sell. A solid Comparative Market Analysis done by an active Realtor can help ensure that your property is priced realistically and competitively.
Everyone wants to get the best deal when selling their home, but everyone has a different definition of the term "best". By providing you with access to objective information rooted in the study of the local real estate market, a Realtor can make sure that everything about your deal proceeds properly.
Note that oftentimes the peace-of-mind that comes with this alone is more than worth the decision for most people.
3. A Realtor Knows How to Market
At the end of the day, one of the most important reasons why consumers hire a Realtor has to do with getting your property in front of as many eyes as possible, all in the name of building anticipation and excitement through all marketing channels.
One of the biggest mistakes that a lot of people make when trying to sell a home on their own involves the assumption that properties sell based largely on advertising alone. "All I have to do is take some incredible pictures and create listing on all of the popular sites like Redfin and Zillow", they tell themselves. "At that point, my house will pretty much sell itself!”
Wrong.
A lot of people don't realize that a significant portion of real estate sales actually come from the contacts that a Realtor brings with them. This includes relationships with past clients who may be in the market for a home again, renters looking to buy, and their own personal network of friends, family members and other associates. Because of this, a Realtor can expose your property to a wider audience than ever - something that you would again be hard-pressed to replicate on your own.
4. A Realtor Brings Negotiating Power to the Table
But overall, maybe the biggest advantage of working with a Realtor ties directly into the negotiation power and knowledge that they've spent their careers honing and perfecting.
All of this is to say that yes - it is entirely possible in 2020 to sell your home on your own. Some people even find success in it. But at the same time... is this actually something you want to do alone, especially if you've never done it before? When the stakes are this high, would you really want to turn down the opportunity to bring someone into the conversation who has been in this situation many times in the past?
In the vast majority of all situations, the answers to those questions are "no" - which is why partnering with a Realtor you trust is and will always be a good idea.
Love,
Kartik
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For most real estate agents, a cornerstone of their business is conducting successful open houses. Because of this, I wanted to write a quick article about how to have a successful one.
Open houses Read more...
For most real estate agents, a cornerstone of their business is conducting successful open houses. Because of this, I wanted to write a quick article about how to have a successful one.
Open houses are a good way to get business because it's a marketing tool that is completely free. An open house is akin to a popup retail store without actually having to pay rent. Think about it - You’re able to set up shop and have potential buyers and sellers meet you, give you their information and walk through a property that you or your company are representing. It's a great way to get business without spending any money.
There are a few things that we can do to maximize our efforts conducting open houses and making sure that we have a positive return on our time.
Tip 1: Make sure you are choosing the right property to hold open
This means the property should be easy to find as well as be priced properly. When I say easy to find, I mean that a great listing at the top of a mountain might be a good listing to have, but it might not be such a great listing to do an open house on. If it takes two GPS systems and a satellite to find the open houses, it's probably not the one that's going to get a lot of traffic.
Having the property priced right is also important. The more fairly a property is priced, the more interest it will garner and the more traffic you're likely to have at your open house.
Tip 2: Check out other homes in the area
It's pretty likely that on a sunny weekend your house is going to have a ton of competition from other agents looking to attract buyers. For this reason, it's important to understand what the competition is. If a buyer comes into your open house and asks you about the house around the corner, an easy way to establish your credibility as a real estate agent is to be familiar with all the homes in the area. For example, it would be nice to say something like, "Yes. I've seen that property. It's a four bedroom, three bathroom for $800,000. Ours is also a four bedroom, three bathroom for $780,000 and has an upgraded kitchen." This is a great way to show a buyer that you know the market well and that your product offering is superior to any alternative.
Tip 3: Make sure you market the open house properly
This means lots of signs, lots of exposure on social media, inputting it in the MLS and advertising it on other websites. You may even want to consider dropping flyers on the doorsteps of some of the neighbors, inviting them to an open house. Consider sending mail to downstream markets that might have buyers for the house you're holding open. For example, if you're holding a house open for $800,000, it would be great to send a postcard a couple of weeks before your open house to a $600,000 neighborhood. The marketing piece will inquire whether those $600,000 owners might want to list their house and upgrade to your listing.
Remember that the more traffic you have, the more lead opportunities you are going to get to pick up other buyers and listings for the open house and even other homes.
Tip 4: Follow up strong on walk in leads
The last step to a productive open house comes after the open house is completed. You'll want to follow up strong on all the leads that walk through your open house that day. This does not mean calling them two days later or even the next day. As an agent, if I hold an open house from 1:00 PM to 4:00 PM, at 4:00 PM I'll go take down all my signs, come back in the home, make sure it's clean and presentable. Next, I'll leave a handwritten note to the seller of the house I just held open.
It might say something like, "Dear Mr. and Mrs. Seller, thank you for sneaking away for a few hours so I could conduct the open house. We had 22 people come through and I'm going to follow up with them aggressively. Thank you again for sneaking away for a few hours." Put yourself in the shoes of the seller - I would want to know how much traffic walked through my home and an update from the agent will help accomplish that.
Before I leave the open house and lock up, I’ll make phone calls to all 22 of those people, thanking them for coming and asking them for any feedback they might have on the property. The reason I don't want to wait until the next day is that I know that my competitors are making those same calls later. I want to be top of mind and I want to be the first person those buyers think of when considering buying or selling a home. Following up quickly and aggressively is something that will help achieve that desired outcome.
Remember that holding open house is still a great way to meet potential buyers and sellers while exposing your listing to potential clients. Open houses also please the seller of the home because it indicates marketing activity. The internet will never replace face-to-face contact and holding open house is a great way to capitalize on a time honored tradition.
Best of all, it's free.
Good luck with your open houses.
Love,
Kartik
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Maybe you’re considering getting your real estate license because it’s time to sell your house. If you are grappling with the prospect of selling a property for the first time the process can seem Read more...
Maybe you’re considering getting your real estate license because it’s time to sell your house. If you are grappling with the prospect of selling a property for the first time the process can seem downright overwhelming.
It doesn’t have to be.
With a bit of information and the right support, you can sell your home for a fair deal with minimal hassles. Here are some best practices to keep in mind.
Step 1: Choosing The Right Real Estate Agent
When I get calls from folks that consider selling their house, one of the first questions most people ask is about real estate agents. While there is no law that says you have to use a real estate agent, there are some advantages and costs to consider.
One of the most basic advantages to using a real estate agent is that they have access to the MLS, a system that compiles all data about the property and gets it in front of other agents and their buyers. Being on the MLS is a huge win because it means more people are likely to see your home.
Another key benefit of working with an agent is that their service is all-inclusive. That means they will handle the marketing, negotiations, and contracts for you.
While there is no legal minimum or maximum commission in California, most real estate agents are going to charge between 4 and 7 percent of the home’s sale price to get your deal done. Typically, that amount is divided to cover both the buyer’s and the seller’s real estate agent fees. This is paid by the seller.
Do you really need an agent? The answer to this question really depends on what you want. Here are a few things to keep in mind:
Do you have the tools and funds to market your home on your own?
If you’re in a competitive market, you may benefit from an agent’s ability to negotiate terms and potentially increase what you get for your home.
You’ll need to meet with prospective buyers, show them your home, and deal with push back over the property.
Some buyers may not wish to work without their real estate agent. That means, if you want to sell to them, you’ll probably need to cover the costs of their agent.
Agents have access to the legal contracts and tools necessary for this transaction. You may need to hire an attorney to help you with the process if you don’t use an agent.
Since most people don’t want to do the above, real estate agents are engaged.
Step 2: Pricing Your Home
The next step is to price your home properly. This is another task that a knowledgable real estate agent can help with. Clearly, the value of your home is dependent on what buyers will pay for it. It is not dependent on what you’ve put into it or how much you think it is worth.
There are websites like Zillow which provide you with an estimate for your home. These websites use data from recent sales in your area to determine the value. Yet, they don’t come into your home to create an accurate assessment of the true worth they only use the broad data available. These site can be a good starting point for knowing what homes like yours are selling for but not the complete picture.
Your agent, if you choose to use one, will help you by creating a comparative market analysis. This provides insight into your home’s true attributes and features along with data on homes like yours that have sold recently.
Step 3: Listing Your House with Confidence
The next step in the process is to get your home listed on the market to be sold. As noted, you can do this with your real estate agent but before you list, it’s important to ensure your home is sell-ready. Here are a few things to keep in mind:
When to Sell
You can sell your home at any time during the year. The spring and summer markets tend to have more buyers, which can mean faster sales and, in some cases, better pricing. However, in the winter, there’s less competition, which can help your home stand out in a desirable market.
Prepare Your Home For Sale
Take the time to walk around your home and create a list of what needs to be updated, repaired, or cleaned. Work to remove as much clutter or extra furniture from your home as possible. This will help to make your home look larger, organized, and clean, making it attractive to buyers. Tackle any types of problems with the home that could lessen the value or throw red flags during a home inspection.
Photos and Videos
Also important is to capture beautiful, professional photos to showcase your home. That’s critical in today’s home buying process. Homebuyers shop online first. If you don’t have photos, they’ll wonder why. If the photos are not professional, that may create the wrong first impression. Professional videos provide clear information to prospective buyers. That means you’re not wasting your time on buyers who won’t fit your home’s specs.
Step 4: Managing Offers and Making Decisions
Ultimately, you do not have to sell your home for anything less than you want, but most of the time, there will be negotiations in the process. When someone comes to your home and places an offer on it, that is an opportunity for you to either agree to the offer or to make changes to it. You can also reject the offer outright. It tends to be best to counter their offer with one that fits your needs. Key things to consider include:
The sale price
Who is paying what closing costs
Any stated repairs or conditions you’re willing or not willing to make
The timeline for closing on the home
Home inspection and repair requests
After you come to an agreement with a prospective buyer, a home inspection will likely be ordered by and paid for by the buyer. Nearly all contracts will be contingent (or dependent) on the home being inspected by a professional. This is a time for the buyer to walk around the home with the inspector to learn about any concerns. They will likely examine the major systems in your home, such as the roof, HVAC, and appliances. If there are concerns, the home buyer may ask you to make adjustments to the contract or to make the repairs necessary. You don’t have to do this, but that may mean your home goes back on the market if the buyer pulls out during their contingency period.
Step 5: Handling the Legal Aspects
Once you and the buyer are ready to move forward, your real estate agent will work with you throughout the escrow process. There are multiple steps involved, including waiting for the buyer’s lender to obtain an appraisal and formally approve the loan and and to close on it. This can take some time, usually 30-60 days. Once the home is ready to close, you’ll need to work with the title and escrow companies to sign the deed and other requirements. This will involve transferring money to you from the buyer or the lender to complete the sale.
I could literally write a 50 page guide on selling real estate, but I wanted to keep this somewhat short.
If you are obtaining your real estate license in the hopes of selling your own property and saving the commission this is totally possible.
Let us know how we can help.
Love,
Kartik
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First-time home buyers need all the help they can get. That's not a derogatory statement; it's the absolute truth. Put yourself in their shoes for a moment. Making a decision to spend several hundred thousand Read more...
First-time home buyers need all the help they can get. That's not a derogatory statement; it's the absolute truth. Put yourself in their shoes for a moment. Making a decision to spend several hundred thousand dollars is not one that should be taken lightly. Because of this, some real estate professionals specialize in working with new buyers and have come to understand the unique challenges they face.
Whether first-time home buyers are your specialty or not, at some point in your career you're bound to deal with newer buyers. There are even continuing education real estate classes you can take to learn the intricacies of working with this unique group of buyers. If you find yourself with a client who has never purchased a home before, keep the following points in mind so you can do your very best for them from day-one until after closing:
House-hunting: You should help the buyer find the right location, type of home and price range of homes that fit their budget. This means taking into consideration what they want in terms of school district, nearby social amenities, prices, and much more. What comes naturally to you, as a real estate agent, is a brand-new universe to first-time buyers. Help them hunt for the ideal home.
Pre-approval: Explain the key difference between pre-qualification and pre-approval to your clients. The former is not nearly as important as the latter. Pre-approval will let them know what they can afford, and it will guide you as you begin to show them homes that fit their budget. It's equally important that you advise the buyers not to do anything that will change their financial situation between now and closing. They should understand that now is not a good time to buy a car or apply for other loans. Doing so can really jeopardize their chances of being approved as their debt-to-income ratio will be skewed.
Inspections: Help your new buyers choose a competent inspector. Remember, they haven't a clue about any of these issues. In a state like California this is extra important because there is no licensing or regulatory oversight of home inspectors in our state. Perhaps they know about having to get an inspection, but you can guide them to a professional with relevant experience on the kinds of homes they're looking at. It is also essential that you attend the home inspection. Your presence will give vital first-hand knowledge about any issues that come up. Plus, you can walk your buyers through the process of how to use inspection report data to negotiate their position if needed. This is one area where first-time home buyers often lose their way by hiring so-so inspectors and failing to use the report to tweak their offer.
Negotiation: Experienced real estate professionals know how to get the upper hand in a negotiation. First-time buyers often believe that the asking price is carved in stone. You need to show them how to make an offer based on what the house is really worth based on objective criteria. Many buyers report that when they purchased their first home, the real estate agent helped them get a significantly lower price than what the seller was originally asking. Use the tactics you learned in real estate school along with your real-world experience to get the best possible deal for your buyers.
Communication: You, the agent, are solely responsible for keeping the lines of communication open among the parties. All the parties look to you as the quarterback because you are essentially speaking for the very people who will ultimately come up with the funds to make the deal happen. Don't let anything slip through the cracks. Touch base with everyone on regularly. Being a reliable communicator is one of the things you sign up for when you get a real estate license.
Loose ends: Follow up on all the loose ends that crop up just before and after closing, and stay in touch with your buyers after they move in. As an agent, you know there are lots of little things that can slow things down on closing day. Do they have all the ID they'll need for the notarizations, for example? Remember, the buyers will think of you as a friend and mentor long after the deal is done. Maintaining this relationship can mean referrals and lasting relationships with people you enjoy spending time with. Think of it as long-term networking.
After you get a real estate license and work for a few years in the industry, you'll learn that some home buyers are much more experienced than others. People setting out to purchase their very first home need all the encouragement and support you can give them.
Agents learn a lot from their real estate course about different kinds of buyers, but it takes "on the ground" experience to fully comprehend the many ways you can put your knowledge to work for special first-time ones.
Call us at 888 768 5285 for more info on how to get a real estate license.
Love,
Kartik
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The truth is that becoming a real estate agent is a lot easier than becoming a successful one. Taking real estate classes online and passing the real estate exam is the easy part. After you get your Read more...
The truth is that becoming a real estate agent is a lot easier than becoming a successful one. Taking real estate classes online and passing the real estate exam is the easy part. After you get your real estate license, the next step is to get connected with a brokerage and jump into production as quickly as you can.
One way that newer Realtors accelerate their chances of making it in the business is by getting paired up with a mentor. There are many reasons why mentors work and can bend the learning curve for a newer agent. I wanted to share a few of these so you know that you aren’t going to be thrown to the wolves in most real estate offices. You’ll have help in the form of a mentor.
Mentors Increase Your Chances of Actually Staying in the Business
Ask any big broker and they will tell you that the biggest burden they face in their business isn’t actually getting sued by an angry client. It’s actually recruitment and retention. The burnout rate for newer agents is so high that most companies have a stated goal of hiring 5-10 new agents per month because so many new agents don’t end up making it. This in turn means that the broker has to put resources into recruitment leaving them less time to train their newer sales staff. It’s a vicious cycle.
A great mentor can give 1:1 advice to a mentee and help them work through concerns which helps retain great salespeople.
By keeping agent turnover low, the broker can build a strong network of experienced and qualified agents rather than dealing with the constant task of recruiting newer agents to replace the ones that leave.
Time Savings for The Broker
Imagine large real estate brokerages. I define a “large” real estate company as one with at least 100 agents. There is really no effective way that one man or woman can be there to answer questions, coach and train a staff that large and do it consistently.
For this reason, a well thought out mentorship program is an easy way to save the broker time and hassle. By leveraging mentors, newer agents with questions can look to their mentor for help as opposed to hunting down an already stretched-too-thin broker/owner. This frees the broker up to only answer those high-level questions that stump even the best of mentors.
Additionally, mentors also play a vital role in reducing the “on-the-job” training necessary for newer agents working on their first escrow. In effect, the mentor can act as a ‘project-based’ sounding board for help on a deal-by-deal basis. This will allow the broker to invest more time working on higher level training rather than putting out deal specific fires.
Mentors Offer Encouragement and Act as a Cheerleader
Great mentors should help us see those things that we would not otherwise recognize. For newer agents this means that their mentor is able to realize what you are capable of achieving and will put you on the track to realize your potential.
This is especially true in the real estate business where there are several ups and downs in the course of a day and that every deal is on life support at some point in the escrow process.
Helping a newer agent manage their emotions and keep their eye on the finish line is a critical aspect of the business.
A great mentor can give a boost to the confidence that a newer agent needs.
Mentors Have Experience That They Can Pass On
Every veteran real estate agent has had a buyer buy from someone else or a seller who didn’t give them the listing. Understanding how to navigate these emotional ups and downs is critical.
A mentor who is transparent about their experience has likely been where you are, and has made the same mistakes you might have made or are about to make.
A good mentor will share their own mistakes, so they aren’t repeated by a newer agent.
Before you get a real estate mentor, I’m guessing that you need to sign up for online real estate classes. Please call me at 888 768 5285 and I would be happy to discuss your career and help you get started in our great business of listing and selling real estate.
Love,
Kartik
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