• Home
• About Us
  • Meet Matthew
  • Building Better Real Estate Brokerage
• Services
  • TECH HOTLINE
  • Courseware Services
  • Online Training Services
  • Web Strategies
  • Deployment Services
  • RE Techhotline
• Seminars Catalog
  • Webinar Workshops
  • The Ultimate Technology Certification Course (UTC)
  • Secrets of Social Networking
  • Certified Home Marketing Specialist (CHMS)
  • Integrity Coaching
  • Integrity Selling
• Next Generation
  • Real Estate, the Next Generation
  • Five Myths of Leads Management
  • Optimize! Leads Management
  • Partnership Program
  • Next Generation of REALTOR Associations
• Resources
  • Webinar Calendar
  • Affiliates
  • Media/Podcasts
  • Career Opportunities
  • Coaching Resources
• Our Instructors
  • Accolades
  • Meet Bruce Downs
  • Meet Rich Sands
  • Meet Robert Byrne
  • Meet Amy Chorew
• Contact Us

The Dangers of Housing Inflation

It’s true that I’ve never agreed with the National Association of REALTOR’S Chief Economist Lawrence Yun. It’s nothing personal; but it’s everything professional. I just don’t understand why today’s economists can’t figure out why inflation is bad. Of all of the complexities of economics, inflation is pretty much the easiest to understand. We’re not trying to figure out the reasons for irrational exuberance or call the bottom on the stock market. Inflation is simply the slow and steady erosion of a currency’s value. And with a devalued currency comes devalued everything. Including housing. Yet for some reason, NAR’s chief money-thinker is still wishy-washy on whether inflation - triggered by 3 trillion stimulus dollars - would be good or bad for home ownership. I guess it depends on whether you want to turn American into a banana republic or not.

Read more

No Wonder Consumers are Confused about Real Estate

Why is it impossible for anyone - REALTORS, banks, media or economists - to accurately describe what is going on in the marketplace? If buyers are going to feel confident about moving back into the market, we should expect all of these groups to be providing clear, verifiable market facts that back up the “best time to buy” sloganism thrown at consumers. Yet most of the punditry has left consumers - especially skeptical Gen X’ers and impressionable Gen Y’ers - more confused than ever. And with a few trillion extra dollars sloshing around the economy and gas prices already moving higher nationwide, time is running out to make the clear-minded case that, by next year, real estate will be back to a “bad” investment once inflation roars back. Subtract the free-Federal-money for first-timers and add in a few million FHA loans that are about to default, and we’re actually on the verge of destroying the near-historic affordability levels once again.

Instead we’re left with “pay no attention to the man behind the curtain” proclamations from questionable analysts, partial data, a local appraiser and a journalist. We’d probably be better assessing market conditions with a Barney-Frank-roll-of-the-dice.

Read more

The Power of Anticipation

For the past few years, one trend in the real estate industry has increasingly worried me. Without hesitation, most REALTORS in our workshops can tell us all about their local market: the number of homes available, listed and sold this month, the average days on market, even the top agents by inventory or revenue. They know the market share by dollar, number of agents and most yard signs. They can rattle off housing statistics like they were a search engine, organized by price, bedrooms and baths. For all appearances, REALTORS seem to know a whole lot about the marketplace.

Unless you ask them about consumers.

This point occurs in every class, every marketplace, with REALTORS old and new. It’s proven itself to be a major knowledge gap in a sales industry that has steadily lost consumer loyalty every year. When you ask REALTORS what they know about the consumer, the come up blank. Guesses, estimates and defenses against facts - because when the research is presented, it’s never accurate to “their market.” But overall, it’s fairly clear that REALTORS know more about the physical houses than the actual people they work with every day.

And it’s proving to be a serious problem for real estate sales. Read more

Jim Calhoun Could Fix the Housing Industry

This video made me jump up out of my seat and cheer! Finally, a businessman who isn’t embarrassed by what he earns - and is willing to defend it in front of the mass purveyors of guilt, the Media. Every REALTOR should watch this clip and see what it looks like when someone stands up and says, Yes, dammit! I’m worth every penny! I may get paid a lot, but I create a LOT MORE value in return. We need a lot more of this kind of attitude in the industry these days - rather than the doom, gloom, hat-in-hand wimpishness that’s rotting our industry. From the inside out.

REALTORS face this kind of “you are overpaid” attack every day. From the media. From dis-intermediaries who think their fancy websites can kill the traditionally paid agent. As if there were something wrong with being paid, traditionally. And of course, we hear it from consumers sitting across the table from us. You want how much in commission? Wow, that’s a lot! Do you deserve it? Shouldn’t you charge less because my house is declining in value? And suddenly, the consumer has the upper hand, doling out guilt without the facts. And most REALTORS simply cave in.

They could learn a lot from Jim Calhoun.

What Mr Calhoun showed us in one minute is the result of years of pride of ownership. He owns his career. He earned his pay. And he did it by producing more for those he “serves” than they could have on their own. Jim certainly was rude - he even admitted it. But it’s the kind of rudeness we need a whole lot more of in real estate these days.

It is the rudeness of self respect that refuses to accept guilt for being great.

In previous blog entries, I have asked REALTORS why they don’t have the success they deserve. Some agents blame the market. Others the consumer. Brokers blame lame agents. Or the secretary. Or technology. Yet Jim Calhoun’s sixty-second outburst reminds us who is to blame for our failures. And for our successes.

And if we want to be paid what we’re worth, we have to believe we’re worth it, and be willing to say so when it counts.

The Calhoun Outburst makes a perfect business principle for overcoming much of our industry’s challenges. For example, when faced with a seller who insists we list their home at an overpriced amount, a Calhoun Outburst recommending they “get some facts” would certainly put things in perspective. Equally helpful, an Outburst telling sellers to just “shut up” when they insist we run a newspaper ad would nicely remind them who knows how to do the job: Go out and show me the newspaper ads YOU are using to find YOUR next home, Mr Seller, and then we’ll talk about using the newspaper to find a buyer for your home….

Maybe if our industry’s leaders had a few more Calhoun Outbursts, confidence in the housing sector would recover sooner, too. The next time the media claims house prices dropped another 20%” last quarter, without offering a baseline or a location, brokers and agents could “Go Calhoun” on them. Pick up the phone, call the radio and newspaper, and post on their blogs, “Like hell it did! Get some facts - because there are more than 25 major cities in America where prices are stable or rising!” It’s not all doom and gloom. But we have to learn to speak up for the facts, and loudly, Calhoun-style.

I’d even go so far to say that a few Calhoun Outbursts might work wonders inside many real estate offices. Brokers face the firing squad like Calhoun faced the media every day, especially from whiny agents who haven’t sold a thing in months. Has the agent done their homework, following up on every lead, before making claims and demands for more from their broker? Like the off-camera journalist in the video clip, many agents take for granted that the best of us - like Calhoun, and brokers - have to “sacrifice” for the sake of others. Calhoun should take a pay cut because times are tough; so brokers should spend more to generate more leads - even though the agents just throw them away. Calhoun-style Brokers need to just say, “meet me outside” and we’ll settle this once and for all.

Of course, none of this is really surprising to me. Jim Calhoun is a coach. His outburst was really a coaching moment: He was trying to teach the journalist an important lesson. His style was classic - something lacking in today’s “be nice, don’t offend, hug everyone” world. Maybe it’s time the for a little less tolerance for “say anything, do anything” antics from the media - and from non-producers in our offices? Calhoun wasn’t willing to accept guilt for being successful - especially from someone who didn’t do their job well (get the facts) in the first place. Could there be a new model here for dealing with agents who feel entitled to more of the broker’s money while simultaneously refusing to prospect or come to meetings? Hmmmm?

At the very least, the industry as a whole can learn from Calhoun: Sometimes, we need to stand up and demand a little respect for ourselves. And any journalists, agents or sellers who don’t agree can meet us outside to talk about it….

- M

Voodoo or YouTube Real Estate

At first, I thought it was a joke, something to lighten the mood of an otherwise dour real estate industry. Yet a few clicks of the email invitation told me it wasn’t a joke, it was actually back by “popular demand” of a lot of REALTORS.  If I hurried, I could save a seat at the “all new and updated” course that would unlock my power colors and align my compass at a very affordable price. I couldn’t help it, and just laughed out loud.

Feng Shui for real estate is back. It’s being conducted in the Temples of Real Estate Associations across America. Even more incredibly, in some states it has been approved for Continuing Education, a sanctioned topic that deals with “consumer protection.”

The high priests of Feng Shui contend it will help you be a better professionals, maximize referrals and increase sales. Their rites-of-passage into this sales Nirvana include:

• Using “success colors” in marketing pieces, like business cards and brochures
• Conducting space clearing and blessing ceremonies to chase away stagnant energy
• Written instructions on how to use “success symbols” to energize your office

Just bring your compass directions and floor plan and the Wizard will teach you how to rearrange your furniture and your career. Read more

Next Up: Fannie and Freddie Propose Commission Caps for REALTORS

Like a three ring circus, the housing bill distracts the American taxpayer with shiny baubles. Behind the scenes however, the bill will likely destroy the housing industry and the careers of millions of REALTORS. Yet the moths continue to fly toward the fire, praising the insidious federal policy of giving away down-payments to buyers, forcing banks to write down mortgage principle, and protecting non-paying borrowers. All this , and more, just to set the stage for the big act:

Commission caps for REALTORS. Really.

Haven’t Fannie Mae and Freddie Mac done enough harm already? Remember Barney Frank’s “roll the dice” policy of funding credit-less borrowers? Not any more. Faster than slippery snakes shedding their skin, Fannie Mae and Freddie Mac’s political patrons have shifted the media’s attention towards “evil bankers” whose Vegas junkets on corporate jets were the real cause of the current recession. This is not to say that bankers were asleep at the wheel during the credit boom, but they are taking their lumps in devastated stock prices today.

We should not forget, however, that Congress put up the Big Tent under the name of “Everyone has a Home” and gave out tickets with cheap Greenspan money. Pointing the legislative gun called the Community Reinvestment Act (CRA) at banks, Fannie and Freddie sent the message: Put people in homes.

Read more

Numbers and Sense: Social Networking in Real Estate

As part of a new ongoing series of posts on our blog, we’re going to apply our brainpower here at Matthew Ferrara & Company to looking at the latest numbers from real estate industry research and helping our readers make sense out of their meaning. Many organizations from NAR to Case-Schiller to research firms and universities worldwide study consumers, agents, brokers and the business of real estate. They release “findings” - lots of numbers - but rarely interpret their meaning. Of course, that’s where we have always been helpful to our clients: leveraging the research facts about the marketplace to make sensible decisions - not gut reactions - to be one step ahead of the consumer.

And forget about the competition - since they’re mostly not really competition, when you look at the numbers. In that spirit, let’s start with some startling numbers that may indicate that NOBODY in this business is really in competition for the online consumer: The sorry state of social networking usage by real estate professionals. Read more

More Meaningless Marketing

When I read this headline this morning, I immediately thought of that Britney Spears song, “Oops! I did it again!” Once again, another real estate company is reporting some “numbers” designed to get people - consumers, agents, Martians - to gasp. Seems like their website has generated some few millions of “leads” to their agents. You know, buyers who go on their website and ask for more information. It’s another orchestrated PR campaign to get the public to say, “Wow! That’s a lot! It must mean they are really good!”

Too bad, then, that it’s just another example of totally meaningless marketing. What’s worse: Generation X and Y know it.

Read more

Five Reasons REALTORS Are Losing Market Share

Amongst the growing list of reasons some REALTOR firms are losing market share today, there’s no lack of ‘blaming the consumer’ causes. Brokers and agents who repeatedly target the “market” or the “economy” as the culprits are just substituting politically-correct keywords for “the consumer” as the problem. Buyers won’t come off the sidelines. Sellers are unreasonable and won’t price their homes to market conditions. Lenders won’t offer credit easily. The usual suspects of the downturn are either consumers or third parties working together in a full-blown conspiracy to destroy the real estate industry.

Perhaps we could find a few simpler reasons?

Read more

Poor REALTOR.COM!

I feel bad for REALTOR.COM. Let me start by saying that I like REALTOR.COM - I really do. They’re a hard working bunch that puts lots of time, energy and effort into promoting other people’s products. They aren’t always perfect - yet they keep trying, and trying, and trying. And they do have the number one real estate destination on the web - so they are doing something right. But for long?

This week they announced their their latest round of new features for the website. Too bad it’s still fairly clear that REALTOR.COM is destined to fail.

Why? Because one group of people hates the site most of all:

The REALTORS themselves.

Read more

So Long, Housing Crisis

Well, thank goodness for someone who understands the markets - other than the lopsided “woe-is-us” viewpoint of the National Association of REALTORS (NAR). In fact, when it comes down to it, maybe we should ask more Wall Street analysts and hedge fund managers to really monitor the markets for us. Here’s the good news, from the Wall Street Journal:

The Housing Crisis Is Over
By CYRIL MOULLE-BERTEAUX
May 6, 2008; Page A23

The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now….

Apparently, the real estate market is better understood by measuring housing inventory than simply hand-wringing over dropping prices. Since bubble-pricing had nowhere to go but down, then the true measure of the market cycle is better monitored by measuring absorption rates rather than price swings. This makes sense because commodity prices rise and fall with the volume of sold; not the other way around.

Of course, in REALTOR mentality, the reverse is true: if prices rise, the number of homes is expected to rise; when prices crash, REALTORS can’t sell homes - not because buyers don’t like a bargain, but because too many REALTORS don’t know how to put homes on the market at the right price. And the right price is always determined by the buyer, not the seller. As long as REALTORS take their pricing orders from the sellers, they won’t recover their sales volumes. Once they understand that their job is to create a transaction, not represent the pricing strategy of an unskilled seller, they will be back in the saddle. Commodity (stock) brokers have always understood this: If a stock holder calls and asks to sell their shares at 20% above the current selling price, the broker attempts to explain to them how a market works. If the seller insists on an inflated price, the broker hangs up the phone. Only REALTORS agree to take on the expense and waste their time trying to sell overpriced commodities - because they agree to run their business according to the seller’s insanity, not the buyer’s authority.

Read more

New Housing Deal or New Deal Housing?

Real estate professionals should be upset today. A terrible blow for the integrity of the real estate industry - for housing as a foundation of personal equity and wealth, for the rule of law in mortgage lending, for simply doing good for ordinary Americans - has just been dealt by the government. A so-called “great compromise” has just laid $300 billion - financed by Fannie Mae and Freddie Mac - in bad debt at the footstep of the taxpayer. According to the Wall Street Journal:

The legislation combines the regulatory reforms for government-sponsored enterprises Fannie Mae and Freddie Mac with a proposal to use the Federal Housing Administration to offer up to $300 billion in federal guarantees to help refinance struggling borrowers into new mortgage loans.

One compromise proposal discussed last week would use the money from an affordable housing fund created from Fannie Mae’s and Freddie Mac’s earnings to help pay for the FHA guarantee program.

Read more

REALTORS’ Deal with the Devil

After recently taking REALTORS to task for advocating more “government backed mortgages” and looser credit limits as the way out for the real estate industry crisis, I thought perhaps I was too harsh on the industry. It’s possible that most REALTORS don’t realize that every time they argue for the government to subsidize un-credit-worthy taxpayers that they are really arguing that the government steal money from the existing homeowners - through taxation to bail out Fannie and Freddie everu so often. Maybe most REALTORS were just too shortsighted to understand that every increase in taxation hurts their future source of business - the future seller who becomes the future buyer. And since most REALTORS only last about 18 months in this business anyway, maybe most REALTORS really don’t care about this stuff, since they are only focused on where they can get a commission in the next 45 days.

Then, something frightening was quoted in the Wall Street Journal on Friday, May 9th, page A3 and I realized that the REALTORS have made the ultimate deal with the devil. In an article by Ruth Simon and Nick Timiraos entitled “Mortgage Firms Cool to Principal-Cut Plan,” no REALTORS are mentioned. There is a proposal by the U.S. House of Representatives that was passed this week that calls for:

…mortgage companies to reduce the principal on troubled loans. In exchange, the Federal Housing administration would pay off the current loan and issue the borrower a new FHA-backed mortgage.

Read more

Death Throes of the Old REALTOR Ways

How do you know when an industry is dying?

Simply look for the Luddites.

As in the 19th century, when technophobes sought to smash the emerging factories who were “taking their jobs, the the spectacle we have seen in the past few years across the REALTOR community is not much different, as it tries to use MLS rules to smash challengers to its Old Ways. That’s the only way to explain why the U.S. Department of Justice announced it was suing the Consolidated MLS of South Carolina for restraint of trade.

Regular readers of my columns know that I’m no fan of government interference in the economy. The free market is the best regulator of freely competing companies. Consumers, through free market mechanisms (choosing to purchase services or not) are quite capable of protecting themselves. And in cases of fraud, there are plenty of legal remedies that don’t require Uncle Sam’s preemptive strike. But in the case of the REALTOR Luddites versus the Industrialists, I’ve got to say: The DOJ has it right for a change.

The DOJ’s lawsuit is correct because the purpose of government is to protect one’s rights from harm from others. Consolidated MLS’s attempt to create artificial barriers to working with all consumers was exactly that: harming some people’s right to make a living (their right to life, exactly). Let’s look at the case.

The DOJ claims that Consolidated MLS was trying to impose “minimum standards rules” on their members. Essentially, the MLS was attempting to set a standard of performance for all members to practice “the same way” (at least same way minimally). The rules would impose subjective whims that abrogated the rights of some members to do business the way they see fit. And the only purpose of imposing these rules was to restrain the practice of some other members.

Essentially: One rival gang got control of the system and was using the rules to beat up on another gang. The “full (or more) service” brokers were preventing “less” or discount service brokers from participating in the marketplace.

According to the DOJ:

By providing an efficient means of exchanging information on home listings, MLSs can benefit consumers, but that same role makes access to the MLS database – and therefore MLS membership – critically important for any broker seeking to serve clients efficiently in the MLS’s service area, the Department said. Consequently, the rules adopted by CMLS governing who can be a member and how members must run their businesses have a significant impact on competition among brokers in the area served by the MLS.

http://www.usdoj.gov/opa/pr/2008/May/08_at_373.html

Read more

Copyright © 2009 · Matthew Ferrara & Company · (800) 253-2350 · Privacy Policy · Revolution News theme by Brian Gardner · Log in