Apr 212017
 

It takes more than fast food to stay healthy.

You’ll sometimes hear me confess, “I can over-simplify with the best of them.” But a better confession is that I make a bit of a hobby out of challenging over-simplification. So it won’t come as a surprise to those who know me that a statement made by a nationally recognized real estate “guru” got my brain working:

Where agents get in trouble is working low probability prospects for long periods of time.

On the surface, it’s a hard statement to disagree with–that’s true of most generalities. But one of the stories I relate in class is about a client I worked with for three years before a deal was completed. When we first started talking, she would have been easily labeled “low probability.” Fortunately, I wasn’t being coached by this particular guru. In fairness, he also says that we shouldn’t waste time with prospective clients unless there’s at least a 51% chance they will commit to working with us exclusively. So while I wasn’t sure how long it would take, I was quite certain I would be the agent she would work with exclusively–unless of course, I gave her a reason to go elsewhere. One reason to go elsewhere would have been to send her packing with the instruction, “Call me when you’re ready to do something.”

A key to success in this business is to balance short-term and long-term perspectives. Agents who are not committed to the business long-term must have a short-term vision. The previously mentioned guru suggests 80% of the clients we sign on should be expected to buy or sell within 30 days. Considering it often takes 30 days to go from under-contract to closing, that seems perhaps a bit optimistic.

One of my favorite questions of a prospective client is “And how long would you like it to be before you have bought (or sold) your property?” The answer to that question will not only tell a lot about the client’s motivation and expectation, it will help determine a strategy. Personally, I always tried to keep things moving just a little faster than the client expected or wanted.

During my years as a consultant to companies, one of the oft-discussed factors discussed was “client-readiness.” There’s really no difference in the practice of real estate–every transaction is made up of a series of decisions–some are tougher than others. Very often the decisions we think are easy are difficult for the client. And sometimes the ones we think are easy can be difficult. Client-readiness is about the client being intellectually and emotionally ready to make the required decision. Whether it’s consulting or real estate an important part of our task is to help those clients become ready. We need a plan, but we also need to understand that we can’t force that readiness.

That’s why it’s important to have a good mix of clients who are in various states of readiness. We can put some structure on it. Buy or make one of those grid-type calendars. List all your clients (and near clients) down one side and then project when they will buy or sell. I’ll use a monthly example.

(Hopefully you have more than six clients and prospects–this is just an example!) What you’re actually doing here is comparable to project planning. You can beef it up by using letters or codes to indicate key steps in the transaction, starting with your first contact through closing.

The process will help you keep some balance in your business. I can assure you that I did not book three days of showing appointments when I first met my three-year client. She would have enjoyed it, but she wasn’t ready for it. (We did look at a couple of houses, but our goal was for her to get a sense of what she might be prepared to buy… one of the early issues was the responsibilities of home ownership truly petrified her. As a result, she was focused on buying a “cheap” house and the minimizing the financial commitment believing that was a low-risk strategy. There was truly a long learning curve for her.)

By the way, if it’s not apparent this chart gets made in pencil because you’ll be changing it regularly as your client’s change. All the chart does is help you decide how and where to invest your time. “Invest” is an important word, because you want to make the decision based on the anticipated return. Showing a buyer who isn’t ready to make a decision 18 properties will not make him any more ready–it may have quite the opposite effect. Conversely, brushing off a buyer who seems reticent may result in a missed opportunity.

While it might seem tempting to go only for clients with high probably and fast closes, what that means is you are constantly on the run trying to grab every “hot” opportunity. An interesting question that too often goes unasked is “What is the ideal number of clients to have?” It can be hard to answer, but thinking about it is important. What you need is a balance of clients at various stages of the process. It’s called “keeping the pipeline full.”  We can make it a numbers game, but there’s some art involved.  It can be simple, but not always easy.

One of my very good friends likes to say, “I’m always working; I just don’t always know when I’m going to get paid.” He’s also someone who works smart–he knows that it’s important to pay attention to everything and everyone. I experienced that first hand when I received a call from a prospective real estate client. He explained that he called me because “You’ve been a substitute teacher at the school and my daughter really likes you so I think I will too.” Who would think that a sixth grader would qualify as a potential real client, albeit indirectly?

I once had a licensee brag that she had 60 listings. I wanted to ask how she managed them. Being a numbers kind of guy, I immediately did this math in my head: If she’s spending 20 minutes per week on each of those listings (staying in touch with the seller, advertising, making sure information stays current…) that’s twenty hours per week. Did I mention she also works with buyers?  That’s not a pipeline–it’s a raging flood. I suppose dumping as much as you can is a valid business strategy, but if we’re going to work smarter instead of harder (and longer) we really need to manage our business.

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Mar 082017
 

The following article is reprinted with permission from “State News Updates” — an e-newsletter from Representative Paul Stearns, District 119.

Foreclosure Diversion Program

The Foreclosure Diversion Program (FDP) in the Maine courts gives lenders and homeowners in foreclosure a chance to explore other options and work out their differences.  In mediation, both parties, with the help of a neutral mediator, talk about whether it is possible to avoid a foreclosure on the property.  Some other options include a loan modification or short sale.

To participate in mediation, a homeowner must live in the home, and the property must have no more than four (4) units.  When a qualified homeowner in foreclosure requests mediation, the case enters the FDP.  Homeowners attend an informational session, where a judge explains the court process and a housing counselor or legal services attorney explains more about working with lenders to modify loans.  The homeowner attends the first mediation session on the same day.

At mediation, the homeowner(s) and their attorney(s), if they are represented, meet with the lender and the lender’s attorney.  A mediator is present to help the parties to make sure that everyone is heard and that important issues are discussed.  The mediator submits a report about the mediation to the court.  Sometimes parties return at a later date for another mediation session.

How Do I ask for mediation?

All requests for mediation must be in writing and given or sent to the court clerk.  A copy of the request must also be given or sent to the attorney for the lender.  Homeowners can request mediation by using the one-page Answer form attached to the foreclosure complaint, by filing an Answer without the form, or by writing a letter to the court to ask for mediation.

How Do I prepare for mediation?

Homeowners can call the Bureau of Consumer Credit Protection’s foreclosure hotline:  1-888-664-2569 to discuss the situation, to find a housing counselor, or to be directed to legal assistance.  In addition, the best preparation is to decide on your goals.  Do you want to stay in the house?  Do you have money to pay for it?  Lenders can best prepare for mediation by knowing the status of the loan, having all documentation of the loan in order, and by bringing any forms required for review of the loan to mediation, even if the forms were previously provided with the complaint.  Lenders should know what options for loan modification apply in each situation and should have obtained a reasonable fair market value of the property.

What is the benefit of mediation?

Parties have a chance to talk with each other in an informal setting.  The mediator is impartial and is trained to help parties discuss issues and explore options.  New ideas for settlement may come up at mediation that neither party knew were possible before meeting.  Parties make the decisions.  The mediator does not decide your case.  Because of the communication established in mediation, many foreclosure cases are dismissed.  More than half of the foreclosure cases mediated in the FDP from 2010 through 2015 were dismissed.

How Do I contact the Foreclosure Diversion Program staff?

If you have questions or suggestions about the Foreclosure Diversion Program, please contact:  Laura Pearlman, the Foreclosure Diversion Program Manager at (207) 822-0706 or by email, FDMP@courts.maine.gov.

How Do I contact a Foreclosure Mediator?

All Foreclosure Diversion Program mediators are independent contractors to the Judicial Branch.  Their names appear here by consent.


Operation of the Foreclosure Diversion Program is governed by: 14 M.R.S. §6321-A and Maine Rule of Civil Procedure 93.

For more information, click here.

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Feb 282017
 

Dagnabbit! I can’t make things work!

Imagine your buyer client calling you in panic or frustration because the lights in their new home keep going on and off… the garage door is opening by itself… and the thermostat refuses to affect the temperature of the house. Would your first instinct be to suspect the house is haunted? (Bonus point available–that’s called a stigmatized property. Is that a required disclosure in Maine?)

Well, there might just be another explanation and an item for you to add to your closing checklist. (You do have one, right?)  Here’s a link to a recent article in USA Today reporting how “As the Internet of Things finds itself into houses via connected devices, more and more homes contain hot new tech gadgets that can all too easily become unlocked digital backdoors.”

In non-technical language, if the seller forgets to reprogram his smartphone, he could end up opening the garage door of the home he sold.

Speaking of closing checklists,  the article includes a link to a one-page “smarthome checklist” created by the Online Trust Alliance. It’s not exactly free of technical terms but is definitely worth a look. Sorry if it makes your head hurt! Those with kids have access to technical support with this language and these devices.

Seriously, there are some potential issues here to think about–including what electronics “go with the house” and what programming changes need to happen when a property changes hands.

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Feb 102016
 
Photo courtesy of Pixabay

Photo courtesy of Pixabay

A recent accident in Harrison, Maine involving a fire truck raises more questions regarding private roads, a complex topic that has always affected those dealing in real estate. In spite of recent efforts to clear up issues surrounding abandoned and discontinued roads, the legal and practical aspects of going over the river and through the woods can be daunting.

As reported in The Sun Journal, a Harrison Fire Department truck slid down a hill while responding to a carbon monoxide alarm, suffering major front end damage. Fortunately, the driver escaped with only a few scratches.

As a former volunteer firefighter, I can recall some heartbreaking calls when we found ourselves unable to reach a home on a private road that was poorly maintained–or not maintained at all. Those were simpler times and a call to the road superintendent would bring a plow, sander, or in some cases the town grader, even if the road wasn’t officially maintained by the town. But precious minutes were lost. Difficult judgments had to be made quickly–is this road passable? Am I going to risk people and equipment if I proceed?

Those decisions are no less simple today. If anything, they have become more difficult as entities and individuals must consider liability and legality. Some towns are adopting ordinances and policies to deal with these issues.

Property purchasers need to be aware of the potential issues and problems if access to the property is anything other than a public road. Since this is truly a local issue, research and diligence are required. Happily, buyers do not need to make split second decisions, but they do need to be aware that purchasing property on private roads always means assuming risks.

Reading the entire article will heighten awareness, certainly. And if you read all the way to the end, you’ll discover an interesting story of how some homeowners “solved” a problem with access to their properties.

 

 

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Dec 152015
 

Jack is a longtime friend and colleague… one of the things I love about him is the way he shakes cages and challenges traditional thinking. The following piece is his Daily Investor Brief published by St Anselm College on December 14, 2015, challenging some of the traditional thinking often touted by the real estate industry.


Jack F HeadshotJust because everybody is doing it is no reason to do it! You’re allowed to be who you are and to plan your financial life as you please. “I’ll never have to cut the grass again!” is a poor reason for uprooting your life. Roots are worth a lot.

When the grass is cut by a condo association, you pay to have it done. You can pay to have your grass cut in the house in which you live. Think a little bit about the devil you know versus the one you don’t. Things change, and you may want big changes in your life at any time, but don’t let convention dictate your life.

In doing financial planning, your plan dictates your finances. If you want to fund a downsize move, so be it. Think through your goals and objectives, plusses and minuses, and then see what you can realistically finance. Your finances, of course, limit your plan, but get first things first. What do you want to do and why do you want to do it?

Many people live in the same place for many years and suffer no adverse consequences. Others have wanderlust and enjoy gypsy genes. Following children and/or grandchildren is not a bad strategy.  Think through your reasoning and then test the waters. What looks good in your imagination may not be ideal in practice. Then again, it might be far better than you ever imagined. Your reasons, whatever they may be, are the right reasons. Make sure they are your reasons.

Going home to the home you’ve lived in for forty or fifty years is not a bad place to go. Your investment in a home can also be an investment in a community. First it might be for schools. Next it could be for a religious congregation. Neighbors might become lifelong friends. All of this factors in. Next time you are cutting the grass, think about all this.


Jack Falvey is a widely published freelance business writer, contributing to Barron’s, The Wall Street Journal, and The New Hampshire Union Leader and Sunday News in the areas of sales, sales management, and marketing. He teaches professional sales and sales management at both University of Massachusetts Boston and at his alma mater, Boston College.

Falvey is currently a fellow at the New Hampshire Institute of Politics & Political Library at Saint Anselm College in Manchester, New Hampshire where he offers daily Investor Education Briefs.


 

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Erosion Control Requirements

 Posted by at 10:39 am
Feb 012013
 

shoveling_hole_pc_400_clr_3788Way back in 2008 a bill was passed that required, beginning on January 1, 2013, any activity that adds or displaces more than one cubic yard of soil in the shoreland zone, must either 1) be done by a certified contractor, or 2) a person trained and certified in erosion control by the Department of Environmental Protection (DEP) must be on-site while the activity is being done.  The law does not apply to homeowners doing the work themselves.  The long lead time between passage of the statute and final implementation of the law allowed excavation contractors and other interested parties ample time to become certified.  Certification is achieved by attending an eight hour course given by DEP.  There are currently 1,524 individuals on the list of certified contractors.  For a list of contractors: www.maine.gov/dep/land/training/ccec.html 

This information was excerpted from information provided by the Maine Association of Realtors… one thing I haven’t researched is what the penalty (if any) might be if a buyer purchased property where this requirement was not met by the previous owner (seller). I’d recommend buyers ask questions about any work done in a Shorelands Zone prior to purchase as part of their due diligence!

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Foreclosure Buyers Beware

 Posted by at 7:41 am
Jan 222013
 

There are still a number of buyers who seem determined to buy a foreclosure. My personal rule is “you need a strong stomach, a lot of patience and courage, a good wad of cash, and an attorney on retainer.” I have yet another example of why that’s my rule.

The Bangor Daily News recently reported an interesting tale of a foreclosure purchase made in 2009. The original owners are claiming the foreclosure process was flawed–therefore they still own the property and have refused to leave the home. The “new” owners are paying the property taxes but haven’t had access to the property they “purchased” for over three years. You can read the details for yourself, including the fact that the case is now before the Maine Supreme Court. We can debate the validity of the original owners’ claim, but not the reality they made it and the court is apparently taking it seriously.

This particular case happens to be a tax foreclosure, but bank foreclosures are no less risky. Buyers love to point out that foreclosures can be a heck of a deal and think they “can’t lose.” I suspect these buyers would not agree. Even if the court eventually declares them the rightful owner, they are left with a huge legal bill and the need to evict the original owners.

 

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There Might Be A Reason…

 Posted by at 7:16 am
Jan 022013
 

Let me start with a disclaimer: I am not in any way, shape, or form a reverse mortgage expert. For that matter, I’m not sure I know anyone who is… but with that, let me share a news story with you. The Bangor Daily News recently ran an article Seldom-used financial tool helps seniors purchase new homes without mortgage payments. I will tell you that the tool involved is a “reverse mortgage for purchase” and the story involves a woman in Westbrook who successfully used one.

The article notes that while these loans have been available since 2009, there haven’t been very many issued. There might be a reason for that. Understanding the concept will make most people’s head hurt and I don’t know too many lenders who are familiar with the program. If you are over 62 years old and would like to downsize–it will be worth reading the article and doing some research. Just use some caution and consider all of the financial implications.

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Gram’s Moving In!

 Posted by at 8:24 am
Dec 052012
 

A recent article in Real Estate Economy Watch offers a wealth of statistical data supporting the observation that “Today’s housing depression has again forced generations to move in together, but as the housing recovery takes hold, many plan to stay together and revive the multi-generational lifestyle of the past.” The article also, quite naturally, focuses on how this changes the real estate market. At least one commenter notes that the “biggest upside” of the trend is “more housing for the money.”

I’m not sure I agree. I might agree if the analysis was that this trend means different housing for money. Too often, we view the world as one dimensional and in America, it’s all about the money most of the time.

When I am teaching people who are studying for a real estate license, I tell them the biggest mistake one can make after getting licensed is to start out “poor.” It’s a horrible basis on which to make decisions and one can discover him or herself chasing commissions instead of objectively counselling clients.

I think that advice applies across the board. A real estate buyer who posted about a “Catch-22” he’s caught in is clearly caught there in a large part because he doesn’t have the money required to complete a painless transaction. Even he sees an option of passing on the current purchase until he can save up some more money.

We shouldn’t–can’t really–ignore economic reality. But when we are thinking about living arrangements, we need to look beyond the economics. The personal and social impact of multi-generational living arrangements can be both positive and negative. Those impacts are something we can have some control over.

The Amish understand this with homes and farms where multi-generational living is the norm. (I would suggest you research “Gros Daddy Haus” except when I did, most of the references are to porn sites! That might say something about our society…) Actually, it’s more than a norm–it’s an expectation that is based on their larger definition of community and their tendency to carefully consider how changes will impact that and their way of life.

Given our economic environment, the likelihood of families facing these sorts of choices in clearly going to increase and in many cases “there won’t be a choice.” Even if you believe that, don’t just add up the dollars in the process–consider how that “forced” choice is going to impact you and your way of life. You aren’t just letting somebody move in with you, you are changing your way of life and with some forethought you can control the impact.

If, as the article suggests, you want to “stay together and revive the multi-generational lifestyle of the past,” understand that lifestyle isn’t something that just happens to you–it’s something you can consciously define and adopt.

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Estimating Heating Costs

 Posted by at 7:11 am
Aug 252012
 

Estimating the heating costs for a specific home is an extremely difficult task. There are just too many variables–including the type of fuel and fuel costs. The Governor’s Energy Office recently established a website that will help you compare the costs of heating a “typical” 1500 square foot home based on fuel. I was a bit surprised to discover that based on current prices, pellets are actually less costly than wood. (The site makes a number of assumptions regarding efficiency.)

One of the conversations I often have with home buyers is a reminder that we pay for our homes more than once–when we buy it, certainly. But we also pay to maintain it, to heat it, to clean it… While this site won’t help with your specific home, it will provide some interesting things to consider. Check out: http://www.maine.gov/energy/.

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