Marketing 101?

I hope this entry will be of some general interest and I hope I'm able to be coherent. It has to do with our perception of the role of the real estate broker and how we fulfill our obligations to those we set out to serve. In my view we are essentially a marketing engine. We sell things which are not ours and in which we have no control over design or utility value. We cannot for the most part create the desire to buy the "things" we sell, we can only attempt to identify the people who already have an interest in ownership and attract them to our door to view the products we have in our "inventory". None of this has to do with the nuts and bolts of the sales process itself, negotiation, legal requirements, escrows, inspections and all of that. We all do those things and while I think we're better at them than most, that's subject to competitive challenge. I'm interested here in the marketing, the thing we promise to listing sellers that we'll do more effectively than others, and to buyers the promise of a broad inventory of fairly priced and honestly presented homes. Historically brokers put out some signs, bought some newspaper ads, held some "open houses" and hoped for the best. With the advent of the internet that approach required some serious adjustment and that's really the place I was trying to get to with this blog. We're adjusting almost on a daily basis to discover the best venues, the proper mix of media, the frequency of appearance, etc. I know we're on the leading edge of the learning curve, but could we be doing even better? That's the type of thing I worry about every day, and I suspect that the answer is always yes, and that's a challenging thought. Following successful precedent is good, establishing new precedent is better. Statistically over 80% of home buyers now begin their search on the internet. The next most effective advertising strategy is the sign at the property, falling into a distant but necessary third is print media, and last, and in our office, the discouraged practice of the "open house'. Open houses account for less than 1% of home sales and we simply can't justify agents spending hours sitting like a spider in a web. Our listed homes appear on approximately 20 national real estate web sites, all linked back to us and we can provide a count of views. Our own site is heavily trafficked for a small real estate company, averaging over 1000 visits and almost 3000 page loads per month. This is the kind of traffic that leads prospective buyers into the neighborhoods of interest, and there, waiting for them are our reflective signs at the property, providing 24 hour a day visibility. Our print advertising covers our market area, newspaper, magazine and periodical, and we are visible daily on local TV. This was not intended to be a sales pitch. We're excited by the prospects of constantly shifting strategies to take advantage of changing opportunities. I thought you might get a kick out of sensing what we do to try to improve our service and just maybe have an idea of what else we might try. We don't even know all the questions, let alone all the answers. If you think that real estate marketing is running ads with pictures of 50+ smiling agents we're probably not your best choice for selling your home.
As always, thanks for visiting.

Unsettling news?

At what has become for us an upbeat time in real estate activity we were saddened to hear of a problem afflicting some homeowners. An account executive for a sub-prime wholesaler that calls on us, "account executive" by the way is what they call the field sales reps for mortgage companies, brought the news that in some areas south of us, that would be Yuba City, Marysville, etc., some of the developers are sharply reducing prices to drop inventory. As you can imagine, there is financing in place for all those unsold units and the dollar drain can be substantial. Some of these reductions are reported to be in the $40,000 range. Pretty big chunk of change. While the reduction may be bad for developers, good for new buyers, here is the sad domino result for many homeowners. Many of the folks bought these homes at or near 100% financing with mortgages that contain variable features that are just now kicking in. These are 2/28 and 3/27 programs designed to help people gain entry to home ownership. The plan for these mortgages is to re-finance out of them to avoid the substantial interest and payment jump when they roll over into a variable rate. Now, because of the reduction in price of brand new homes, appraisers are unable to support the value needed to justify a re-finance loan. In short, the market is now saying that these folks owe much more than their home is worth, so no re-finance and they are stuck with what has become a bad mortgage. This is really sad. As mortgage brokers we take delight in rescuing people right at the deadline so they avoid any pre-payment penalty on the old loan and never have to pay any increase. This requires of course that the home has held value or improved, and the credit of the borrowers has not worsened. We like doing this because we can bring a lot of flexibility to the process and save clients a bunch of money. Plus of course we get paid.. When market forces take away the equity of the homeowner we're pretty much dead in the water to do anything, and that's a shame. We're real estate agents and we're mortgage folks and we enjoy doing those things for people, but we also have a responsibility to counsel people as to the wisdom of their choices, and that sometimes means advising against a purchase, even though the mechanics of the transaction might be easy for us. If our experience and our licenses have any value at all we should share our cautionary feelings with prospective buyers and borrowers and attempt to keep them from harms way. If we can't help people we surely can refrain from hurting them. I have great pride in all of our agents and their determination to place their client's interests above all else. If you or someone you know is in a hole or headed for one, call us. If we can't help we can surely make sure you stop digging.

Thanks for visiting

2007 Is Off and Running

The world of real estate, that is the business of real estate, is not a carefully controlled or predictable, or rational place. Certainly not one for the faint of heart. The tail end of last year was a really dreadful experience for most of us, and a serious drain on capital for those who share our advertising philosophy, namely maintaining a high level of exposure regardless of market conditions. Since everything seemed to favor the market, at least technically, the only thing lacking was the active participation of people. We were convinced that people were going to stream back into active behavior with the introduction of some catalyst, and boy were we right. We have no idea if the simple change of calendar from '06 to '07 is the only catalyst, but lacking anything better to point to we'll accept that. Both of our offices are on fire, listing, showing , selling, and mortgage refi activity is up as well. Are we "stoked", as one of our agents describes her feelings? You bet. To steal a line from an old joke, if I were to die right now it would take the undertaker a week to get the smile off my face. What does this mean to individual buyers and sellers? As silly as it may seem, happy people are easier to negotiate with, the process flows more smoothly, agents are less likely to be "urging" you to action and more likely to be considerate of your wishes. All winning teams enjoy a much higher support level from their fans, and all highly supportive fans enjoy greater efforts from their teams. This circularity is true in business as well. You support us because we are successful. We are successful because you support us, and it makes us work even harder. Serendipitous, and are we ever grateful. We think this is the beginning of a very good real estate year, not simply a minor surge. Further we don't think it's a return to the nonsense of escalating prices as recently experienced. Simply a strong, healthy market serving the buyer and seller equally. Please keep in mind that our comments are reflective of our market area, generally Butte, Glenn and Tehama counties in California. If you're reading this in New York, I haven't a clue what's going on in your back yard.
As always, thanks for visiting.

New Year-New Beginning?

Almost a month since last entry and I suppose a good blogger makes entries even when there is nothing to say, but why? December is characteristically a nothing month in real estate and last year was no exception. Simply very little to excite comment. Now however things are starting to pop. Our web site traffic is up, the leads coming in from other web site sources are up dramatically, our showing activity is way up, and our listing activity, at realistic prices, is also up. All this is no surprise to me. Interest rates continue to be favorable, inventory of single family residences in greater Chico is still good, right at 400, up about three times from two year ago figures, but down from the peak of about 600 just a few months ago. Most, but not all, of the overpriced speculative offerings have been removed from the market. Gas prices are low and going lower still, employment is high. Should have mentioned above that our mortgage business is also up, refi and purchase business both. Our Orland office is really surging, is it ok to use that word or has it been preempted by Bush? Chico maybe would be but we are seriously under-staffed in that office. If you know of a high ethic licensee who would like to make money and have fun doing it have them call. Our agents list and sell and also originate mortgages, both residential and commercial. Genuinely serve the real estate community. In mortgage origination we're an actual mortgage broker, not simply entering applications in some web site designed to funnel commissions to a real estate broker. We're uniquely positioned to provide the highest level of service to our clients while offering them fair pricing in everything we do. End of sales pitch.
This blog is ending with the same note as previous blogs. If you are in the market for a home, circumstances could not be more favorable for you. If you wish or need to sell your home, price it realistically and it will sell fairly quickly. The buyers are stirring.
Thanks for visiting.