There is no doubt that this year has been important for real estate and our economy on many different levels. What matters most to REALTORS® is how changes in the industry and government policy affect our clients, customers and our businesses.
One of my greatest concerns as an NAR leader is that members feel helpless; that they do not have a voice in the changes that are happening in the industry; that too many of us have spent our entire careers building something that may not survive the current downturn.
As the largest trade association in the world, yes, NAR’s voice on Capitol Hill is very important when it comes to resolving the issues facing the economy. Fortunately, members of Congress and regulators are seeking our input to solutions to this housing crisis.
Consider how much influence we have now, imagine what would happen if more of our members responded to NAR’s “Calls for Action” when asked to do so.
The new Broker Involvement Program is designed to give the principal broker a quick tool to enlist your company’s agents in bring to Congress’ attention issues of concern to you and your business. The program provides agents a direct communication link to their lawmakers and in just seconds allows agents to express their opinions on those business issues with a personal letter that’s ready for them to sign and send.
We have discovered in the past year that when brokers alert their agents to key issues, agents listen and respond. In fact, since this program was initially launched, we have gone from just 30 brokers participating to now well over 1,000. Our goal this year is a 15 percent response rate, and with your help, I am certain we will achieve it.
If you are a broker and would like to join the effort – or, if you are an agent and would like your broker to participate – please contact Ed Lawler at elawler@realtors.org. Your involvement in this important program will strengthen our REALTOR® influence in determining outcomes of legislation that is important to our industry.
Please don’t sit back and see what happens. You DO have the influence to shape our industry and your business. –Vicki Cox Golder, 2009 President-Elect
After a couple of weeks, two impressions remain with me from NAR’s Midyear Legislative Meetings and our first-ever Real Estate Summit.
First, it never fails to amaze how both in-touch and out-of-touch real estate and public policy “experts” are with the realities of the market.
All the Summit speakers expressed profound insights into how the whole housing debacle occurred. All made good suggestions as to how we could recover. However, few, if any of the speakers understood the realities of our market until one REALTOR® stood up and talked about challenges that military homeowners in Honolulu, Hawaii, are facing. You could hear the gasps as she described how those serving our country are being forced into foreclosure when they change duty stations.
Another REALTOR® explained how the short sale process – or lack of a consistent one – is really hurting home buyers, home sellers and REALTORS® across the nation. Finally, another REALTOR® related how lenders are now telling clients to stop paying their mortgages so they can get help. Everyone knew about that, but what this REALTOR® pointed out to our panelists is that everyone who does this is out of the market for five to seven years, meaning this “short-term” problem will have major long term implications for housing and our nation.
These are real people with real problems.
I watched the speakers, including FDIC Chairman Sheila Bair, HUD Secretary Shaun Donovan, Alan Greenspan and others, listen – really listen – to what we shared. I realized that, until then, they had not fully grasped the long-term effects. It took REALTORS®, who are in the trenches, doing business each and every day, to help these experts in charge of finding solutions to more fully understand the scope of these problems. Judging from their honest hesitation in answering the questions raised by our members, I think they finally began to see what needs to be done.
And so my second impression, which is really more of a conclusion, is that in order to effectively move forward, REALTORS® must be at the table to help government leaders develop policies to stabilize our industry and the economy. As the “Voice of Real Estate”, the country needs us. — Steve Brown, VP and Liaison to Committees
In 30 years in the real estate business, whenever the prospect of handling a short sale came up, I cringed. I avoided them at all costs.
Earlier this year, I listed a property for a client who owed the bank more than the home was worth. I thought, “the only way we are going to sell is through a short sale.” So, we prepared all of the materials and submitted them to the bank about three months ago. One month ago, we got an offer and the bank was willing to accept, contingent on the inspection.
As some of you know, in any short sale, a full inspection is required – just so the buyer understands the condition of the property. During the inspection, they found 32 items that needed repair or attention. I had never seen that in 30 years in the business, and I thought to myself, “There goes the offer.”
But, the buyer said: “Let’s get a contract, and if the seller is willing to reduce the price by $25,000, we will proceed with the transaction.” One week later the bank accepted the offer, and we closed on the deal.
My experience is certainly not the norm, but it taught me a valuable lesson.
Before I tried a short sale, I was scared. I knew nothing of the process, and I didn’t want to get involved. Now, I realize how they work, and I see that I can actually make money on them. I am already working on my second one, and I would love to do more.
The point is, after 31 years in the real estate business, I am still learning. I am grateful that NAR offers me the resources I need to learn about short sales and foreclosures, and other areas of the business that are growing. In fact, our short sale classroom course is available now, and the online version will be available through REALTOR® University at the end of June. I encourage all members to take the time now to learn new skills. If I can do it, you can, too. – Dick Gaylord, 2009 Immediate Past President
Oh, how things have changed over the past six months, or so! And, I am not just referring to the economy. After 30 years in real estate, I am seeing real changes in how I do business, and how the business is changing me.
For the first time ever, I negotiated an entire lease by texting. The prospective tenant was an incoming first-year resident at one of the area hospitals. We had only one brief face-to-face meeting, and that’s when I showed him the property.
All subsequent conversations and communication with him were via text message.
What surprised me most is how quickly the buyer responded to this communication stream – it was, essentially, instantaneous. I could learn to like doing business this way. Think of how much I could do if all my clients were instantaneous!
In another deal, the listing agent on the property “preferred” that all communications were emailed, including all paper work in connection to the lease of the building. For an industry and community that prides itself on personal contact to get things done, this is REAL change.
Considering that I travel quite a bit, doing business via text and e-mail is not only convenient for me, but the other agent also had no clue that I am working out of the state the entire time.
Given these changes in the business, it is not surprising that my most profitable contacts these days are not my client base of 35 years, who all seem to have fallen off the planet, but the first-time buyers I have connected with through Facebook and other social networking sites. I go to these networks every night before I go to bed, just like I used to go to meetings. It works about the same, only it takes less time.
My clients are experiencing other changes, too. I recently received a pre-approval letter from another agent that read: “Buyer has been approved through desktop underwriting. However, ultimate approval is subject to underwriter approval and a level-one and potentially a level-two audit”. Needless to say, this “pre-approval” did not leave me thinking I had much of a “pre-approved” buyer.
Worse is the offer I wrote for a first-time home buyer nearly three weeks ago. Her parents are going to help her with the down payment of 20 percent. She has perfect credit. We are still waiting for an approval. In this case, change isn’t for the better.
For years we have been talking about how thing will change, but it seems that the day-to-day reality of change (both good and bad) has really, finally and fully hit – at least where I am. If I were unprepared and unaware of what was happening, I know I would be one scared selling broker. But, I am not scared. I am prepared to do what I need to do, thanks to the education I have received from the REALTOR® organization. And, yes, I am really using the resources and support NAR provide.
The truth is I am also looking at NAR differently than I used to. Not just because I am involved in the leadership team this year, but because I think of NAR now as more of a partner in my real estate life, rather than just a big organization I belong to. And, I am not alone. I have hundreds of colleagues and friends who continue to encourage me during this time of change.
Of course, I would have preferred not to change…I liked the way things were. But, now I am beginning to see the advantages of negotiating through texting from the Lake, rather than being trapped, sitting on the phone and faxing from the office. I guess some changes are good! – Steve Brown, Vice President & Liaison to Committees
On Tuesday, I held a tour for one of my current listings for fellow REALTORS®. It’s a Tuscan villa, valued at $2.575 million. This is not my run-of-the-mill transaction. My average listing runs at a modest $600,000 or so. Honestly, I had no idea what to expect, and I admit that I was more than a little nervous about it.
As it turns out, about 150 REALTORS® came through the house, and every single one recognized me for my involvement in the national association. They each thanked me for my work on behalf of our industry. And, many of them promised that they would call me first if they had other clients looking for homes in the area. One lady immediately went out to the back yard and called a client to say she had “the perfect house.”
We often talk about the value of being involved in the organization – you are the first to receive information on new laws and policies, industry trends, and the market. Not to mention, you have access to outstanding resources. But, from my perspective, the most valuable part of being involved in the REALTOR® association is the connections you make with other professionals. When people see you serving the industry, they know you have the knowledge, information and passion required to close deals in ANY market. They want to work with you first, and that means more business.
I have always said that I have received more in return than I have ever given to the association. I encourage you to get involved, and experience for yourself, just how much you can reap when you give a little to your local, state and national association.
Take the time to volunteer today, and you’ll see your business opportunities grow well into the future. – Dick Gaylord, 2009 NAR Immediate Past President
Scientist Hugh Miller said: “Problems are only opportunities with thorns on them.”
We have a great opportunity right now to get the housing market back on track. Affordability is at an all-time high, thanks to low prices and record low interest rates. And, for the first time in a long time, consumers are actually returning to the market. With Spring home-buying season around the corner, we have a real chance to increase momentum in the market.
Yet, standing between us and this great opportunity for business are a few remaining thorns. Perhaps the biggest one is mortgage credit.
Sure, Congress raised the loan limits, purchased troubled loans from big lenders, and we even handed money to financial institutions and encouraged them to dole it out. One might say that large banks are awash in government money and support. So, why isn’t that money making it into consumers’ pockets?
We know that many banks have made underwriting so restrictive that good-credit buyers can’t get a loan. In many cases, they also have shut down their warehouse lending arms, making it all but impossible for small and mid-sized lenders to access funds. And, some of the largest banks are using pricing and market power to limit the flow of funds. In other words, while REALTORS® are working to help the economy, lenders are doing everything they can to boost revenue and avoid the costs of increasing capacity.
A couple of weeks ago I sent a letter to Treasury Secretary Geithner, Federal Reserve Chairman Bernanke, FHFA Director Lockhart, and FDIC Chairman Bair, asking that they get together and resolve this problem now. Our message is clear: The “buck” should not stop with big banks. – Charles McMillan, 2009 NAR President
Late last week, NAR Chief Economist Lawrence Yun was in Dayton, Ohio for an economic summit at the University of Dayton. That afternoon, Lawrence met with about 200 of my agents at the Dayton Area Board of REALTORS® to talk to them about the economy, the fixes that are now in place to improve it, and the near and long term outlook.
Lawrence gave an in-depth presentation supported with comprehensive statistics. One stat was, for a brief moment breathtaking – and not necessarily in a good way. Lawrence explained that the Dayton area has seen a loss of jobs for the last seven consecutive years. Of course, everyone in the room witnessed the closing of the last GM plant in the area over the summer, and we are all aware of the potential loss of a major DHL transport center. While both closures account for thousands of job losses, none of us realized how many years we had been watching as jobs left our area. And, of course, when people lose jobs, fewer of them can afford to buy and keep their homes.
I was sitting in the front row when Lawrence’s slide hit the screen. For a moment, all of the Blackberry email scanning stopped. A rush of thoughts went through my mind, among which was “Oh no, I want my agents to be encouraged by this presentation, not discouraged.” Yet, the reaction of my agents was, in fact, very different than I thought it would be. They paused, but they did not blink. Instead, they pressed Lawrence on the issues and questioned the rationale of recent legislative moves.
Such an amazing energy rose up in the room. Instead of leaving the presentation depressed, the audience was determined to survive and plan for a better future. Shortly after the meeting, my managers met to plan an in-house education session on what it takes to succeed in this market. Next week, we are going to meet with all of our agents over a four-day period to talk about what we can do to help them, and what they can do to help themselves. We already are reviewing the Right Tools, Right Now offerings from NAR, and we are partnering with the national association on solutions, like we have never done before.
The point is this: If you need some reassurance that REALTORS® will get through this cycle, I encourage you to talk with some of the agents in my company. This positive energy is not just here in Dayton. I witnessed it first-hand in the people of NAR. The staff has the exact same determination as I now see in my agents.
So, I am genuinely optimistic. I love my job, I have great agents and a great national association. I don’t just believe that we will get through the current cycle and be stronger for it – I know it. Steve Brown, Vice President & Liaison to Committees
I’m no different than any other REALTOR®. Like you, I’ve had some very tough moments during the past several months. I’m used to handling twice the number of transactions and listings. After returning to my business full time this past fall, I thought to myself, “What’s going on here??”
It was in December that I realized that I was part of the problem. I had a condo on the market for several months and nothing was happening. I was discouraged, and I wasn’t doing much to move the property. Part of the problem was that I was exhausted from all of the travel during the previous year. The other part was hearing so many sad stories from REALTORS® who have been struggling in their businesses.
Then, during the holidays – when we don’t expect anything to sell – three other condos in the same building sold. I decided to take my own advice, which I had been giving REALTORS® all year long. I re-tooled the listing brochure, as if it had just been put on the market, and I even worked with the seller to lower the price. Not only did we get a good offer, but we managed to get a loan, and the property sold and closed within a short time.
For a while, there, I wondered if I would be OK – if I would be able to make enough to survive in the business. Now that my attitude has improved, I am seeing a BIG difference in my prospects. In fact, I just landed a $2,575,000 listing, and I heard from one former congressman who wants me to help him find a home in Long Beach.
When I am up and moving, I know nothing can stop me, but I am the one who has to move. I can’t wait for someone else to do the work for me.
As I have said before, real estate is like fishing – you have to be out there every day. Some days, you won’t catch any fish; other days, you’ll catch small fish; and sometimes you get the really big fish. Thanks to our hard work, the fish are coming back. Will you be there to catch them? — Dick Gaylord, 2009 NAR Immediate Past President
I turned 55 years old last October. For the record, I’m fairly technologically savvy for a guy my age. I can do lots of “things” on my computer and most of my friends call me (unfortunately) when they have problems with their machines. I have a Black(Crack)berry. Yes, I’m addicted to it – I don’t go anywhere without it AND my computer.
Please understand, I believe in the entire concept of social media. It actually makes sense to me. The idea of blogging, email, LinkedIn, text messaging, FaceBook, Twitter and even MySpace have a logic behind them, albeit all for different reasons. I can’t and won’t deny that I’ve wasted more than a few minutes responding to my friends and business associates when any of the aforementioned social networking groups forward a notice that I’ve been pinged, invited to join, had my “wall” written on or been emailed in an attempt to contact me – the reasons don’t matter.
In a world where the speed of communication increases exponentially on a regular basis, I wonder how many ways we’ll find to communicate more effectively (I remember bag phones). Sometimes I worry that I won’t complete my real job because I’ll feel obligated to tell someone that that I just filled my car’s gas tank and that the price of fuel has gone down – in 140 characters or less. Or, I might leave a message on everyone’s wall that “I am preparing to pack for the Midyear Meetings in Washington because I don’t want to miss the Housing Symposium”.
Now, having poked fun at the many social methods of communicating, let me say that I find these new ways of talking to each other, and of promoting ourselves and our business, fascinating. If you haven’t found the reason to use the latest technology-based communication methods, then you are probably behind the times. They all have good reason to exist. It’s just a matter of what works best for you.
Twitter, one of the newest ones, definitely intrigues me. Over the long run, it might even cause users to shorten their communication to what is necessary…if it doesn’t, that’s ok, too. After all, good communication is the basis of everything. Best to everyone. Spring is almost here!! – Jim Helsel, 2009 NAR Treasurer
This past week I attended the Region One meetings in Portsmouth, New Hampshire. Dr. Paul Bishop, Managing Director of Real Estate Research for NAR, presented some extraordinarily enlightening stats from recent homebuyer research:
• 67% of first-time home buyers purchased a home in 2008 based upon their desire to be homeowners – not as an investment strategy.
•87% of home buyers still viewed their home purchase as a “good” financial long term investment.
I must say, these figures prove what I have known and experienced as a selling Broker. In the Dayton, Ohio, market where I have lived and worked in over the past 30 years, home prices have appreciated between 2 and 4 percent, until the past 2 ½ years. We have never seen double-digit appreciation. For the most part, people buy a house here because they want to have a home, a place of retreat, a place of comfort, a place to live out life – not because they think it will it turn a staggering financial gain.
REALTORS® know that homeownership is more than a financial investment. Call it the American Dream, whatever; owning a home is as central to our life. It’s an investment in our families, our communities and our future.
So, why is it that Wall Street geniuses were allowed to construct faulty financial networks and programs, so they could make money on the backs of homeowners? And, now that so many of those homeowners are at risk of losing their homes, why is it that housing solutions are being conceived of and designed by people who have never sold a home in their lives, and do not have a clue as to what can help a buyer buy and a seller sell?
Jim Cramer can scream all he likes, but it was people like him who supported and nurtured a faulty financial market that lead to the down turn of at least a third of our economy – an economy built on housing. Wall Street, not Maple Street, attached itself to what looked like easy money. But in the end, someone had to pay, and it’s all homeowners who are suffering.
I applaud Jon Stewart for (finally) taking Jim Cramer and Wall Street to task in a public forum. If you haven’t seen the interview on the Daily Show, you can watch it here, and send the link to your fellow REALTORS®.
| The Daily Show With Jon Stewart | Mon – Thurs 11p / 10c | |||
| Jim Cramer Extended Interview Pt. 1 | ||||
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As Jon says, we don’t find any humor in any of this when the American Dream has been taken away from so many.
The past two years have taught us all valuable lessons about the financial system that most of us simply took for granted. We are smarter now, and I am confident that the proper regulations will be put in place so that this never happens again. Next time you watch Jim Cramer scream at your TV, go ahead and scream right back at him: “You will never know a better return than when you have a place to call home”. – Steve Brown, 2009 VP & Liaison to Committees
