It was just a short time ago that investors from all over the world were hot for US Mortgage Backed Securities (MBS). Historically these investment vehicles performed well as US home owners made good on their mortgage payments. Think about it, in the olden days home buyers needed at least 10% down to even qualify to buy a home. Anyone who could manage to save a 10% down payment obviously had to be very responsible with their personal finances, and this fact played out in the return and relative safety of the MBS.
All of the sudden, there was more money available for people to buy homes than consumers were demanding, a liquidity surplus you might say, and with no room to muscle in on the "A" paper conventional mortgage markets, clever investors decided to create new and different types of mortgage loans to take advantage of all this investor money. Hence the birth of the Sub Prime mortgage industry.
With very little history as to the performance of these MBS, and a very hot US real estate market, investors and home buyers plunged into the market with reckless abandonment, ultimately leading to a person who was one day out of a chapter 7 bankruptcy with only a 580 credit score qualifying for a 100% home loan. (Credit scores range from 350 -850). By all known standards, this was a loan destined for default and in the past, no investor in their right mind would have made this loan. But money kept pouring in and an endless stream of home buyers and now people wanting cash out refinancing kept showing up at their local mortgage companies door and more recently at all the internet mortgage sites that promised hundreds of thousands of dollars for unbelievably low monthly payments.
It took a while but eventually, as history started to accrue for these sub prime loans, there appeared to be higher than expected rates of delinquency and default, which brings us to today and our current liquidity crisis. As more and more investors stop investing in these sub prime MBS vehicles, there is less and less money in the US for people who want to buy or refinance homes. Couple this with the fact that even some of the conforming or non-sub prime lenders are seeing higher rates of delinquency and default, and you have a situation where the mortgage arena, which recently had more available money than it knew what to do with, now is left with only a handful of investors who only want to buy the most secure of the MBS, those made up of people with high credit scores, a good solid track record of income, money in the bank and either a down payment or significant home equity in the case of refinance.
So there you have it, Liquidity Crisis, and if you are a real estate agent or mortgage professional, boy does it hurt!
This real estate blog represents the voice and thoughts of Agentopolis, A National directory of Real Estate Agents, real estate brokers and Realtors. Use Agentopolis to find a local real estate agent.
Wednesday, August 8, 2007
Friday, July 6, 2007
Recent Google Searches for Realtors
In order to help real estate agents get a better idea of some of the different ways consumers are looking for agents on the web, I thought I would share with you some of the most recent Google searches from the web analytics of Agentopolis. Agentopolis is seeing a growing trend in consumers simply typing in agents names in different combinations in order to get the agents phone number or contact info.
To see the results for any of these searches, simply copy and paste them into Google.
remax canton ohio bartolone
"marsena dixon"
Sonia Hodgin, prudential
lori millard
Dawny Corsaut
floridagreathomes.comcast.net
"daniel c asleson"
"gary mccoy" +realtor
top 100 real estate agents in san antonio tx
larry@newhomesexclusively.com
Nelson Sumner realty listings
rosekeyser@ comcast.net
www.kathyberger.com
www.northwest-wisconsin.com
shelly executive realty milford massach
margaret bouldon realtor, 49230
Jacky Waggoner Realty, Birmingham, ALabama
tracey, anderson , realtors, massachusetts
There are many more everyday. Let me know if you find this information helpful or interesting and I can continue to share from time to time.
To see the results for any of these searches, simply copy and paste them into Google.
remax canton ohio bartolone
"marsena dixon"
Sonia Hodgin, prudential
lori millard
Dawny Corsaut
floridagreathomes.comcast.net
"daniel c asleson"
"gary mccoy" +realtor
top 100 real estate agents in san antonio tx
larry@newhomesexclusively.com
Nelson Sumner realty listings
rosekeyser@ comcast.net
www.kathyberger.com
www.northwest-wisconsin.com
shelly executive realty milford massach
margaret bouldon realtor, 49230
Jacky Waggoner Realty, Birmingham, ALabama
tracey, anderson , realtors, massachusetts
There are many more everyday. Let me know if you find this information helpful or interesting and I can continue to share from time to time.
Wednesday, July 4, 2007
Changing of the Guard
Many things are changing in the real estate business this year and some things faster than others. Two of the biggest changes are the number of agents that will be leaving the business between now and the end of the year and the evolution and or demise of the web 1.0 companies. The web 1.0 companies have built their business based on the hay days of late, more transactions and more agents competing for their business, and rapid home appreciation across the country. This is a huge problem as today there are fewer transactions and agents, and home prices in many markets are flat or declining which means there are fewer dollars for marketing. Couple this with the fact that consumers are being fed a new expectation, web 2.0 and are less and less willing to pony up their personal information just to have a real estate agent hunt them down.
So what does all this mean?
There will be more good internet marketing opportunities for the remaining real estate agents and they will cost less and reach more and more consumers. Gone are the days of paying hundreds of dollars a month for a zip code and then having to cough up 25%+ of your commission. As Greg Robertson of eNeighborhoods pointed out, "it's the upstart innovators -- "the guys that come out of the garage" -- to watch for in the real estate market these days" These are the companies that agents need to be on the look out for and there are many very good blogs to help you find and keep track of these new real estate web marketing companies.
These garage companies have the advantage of super low over head while being able to match or exceed the technology of the big boys and because they haven't already built their business on having consumers give up their personal info in exchange for nothing, and they can build their companies on a solid foundation based on today's volume of transactions and the shrinking marketing budgets of the agents who will survive this dip.
What this means for agents is that now is the time to stake out your territory on the internet. Anywhere you can, buy up exclusive territories, shore up your domain names, and start taking advantage of new technologies like map based search, that until recently, were only available to the big companies with big budgets.
So what does all this mean?
There will be more good internet marketing opportunities for the remaining real estate agents and they will cost less and reach more and more consumers. Gone are the days of paying hundreds of dollars a month for a zip code and then having to cough up 25%+ of your commission. As Greg Robertson of eNeighborhoods pointed out, "it's the upstart innovators -- "the guys that come out of the garage" -- to watch for in the real estate market these days" These are the companies that agents need to be on the look out for and there are many very good blogs to help you find and keep track of these new real estate web marketing companies.
These garage companies have the advantage of super low over head while being able to match or exceed the technology of the big boys and because they haven't already built their business on having consumers give up their personal info in exchange for nothing, and they can build their companies on a solid foundation based on today's volume of transactions and the shrinking marketing budgets of the agents who will survive this dip.
What this means for agents is that now is the time to stake out your territory on the internet. Anywhere you can, buy up exclusive territories, shore up your domain names, and start taking advantage of new technologies like map based search, that until recently, were only available to the big companies with big budgets.
Sunday, June 24, 2007
The “Google Effect” on the Real Estate Agent, (part 1)
Years ago life was very different for real estate agents, listing agents would put a sign in the yard, list the property in the MLS book!, take out a few print ads, talk to some of their peers and eventually your clients house would sell. Buyers agent would interview a prospective home buyer to discover exactly what they were looking for in a home, pour over the available listings and information, mostly available to agents not consumers, pick 7-10 homes and make an appointment to take the prospect out to view these homes, ultimately ending in an offer if all went well. Agents promoted themselves through word of mouth, the yellow pages, print ads with their listings, flyers and post cards in their "farm" neighborhoods, and other low or no-tech advertising vehicles. Today however, times have seriously changed for both the real estate agent and the consumer as, according the NAR, 80% of home buyers are using the internet to find a home.
As I think about how my own behavior has changed because of the internet and broadband connections, I notice things like; I no longer use the yellow pages, EVER, I no longer call 411 for a missing phone number, I pay far less attention to ads because I know that when I am looking for a product or service in my area, all I have to do is Google my request and a qualifying response will come up in seconds, I no longer ask for directions as now I simply map quest everything, I communicate with a lot more people that I might not otherwise because of the ease and speed of email, and on and on and on... No doubt about it, we live in a different world today. So the question for real estate agents is "how am I going to adapt to these changes in order to continue to grow my real estate business and not become a dinosaur?" And one of the most relevant answers to this question lies in search engines.
What conversation about search engines would be complete if we didn't talk about Google? Sure there are other search engines and it IS important to have a strategy to be found in those as well (yahoo, msn, ask, etc.) but the bottom line is that most of the buzz about search and finding what you want leads back to Google. So the trick for a real estate agent or any one else trying to grow their business on the net is getting indexed and found on Google. And all wise discussions about search engine marketing must begin with the topic of keyword research. This is the art and science of determining what people are already typing into the search engines and how these searches relate to you, your company, and your industry. Search engine marketing is then finding ways to make us and our site come up first for those queries. Notice I included the word US.
More and more people are remembering our names but for getting our contact info or loosing our business cards (how many business cards do you have sitting on your desk or in a draw right now that you are planning to organize some day) So what does a person do when they remember the name of their realtor from 5 yeas ago but have thrown away their business card (and that clever post card that you send them every month.) It's simple, they Google your name!
In today's world, if a person thinks they are in business for themselves, realtor, cpa, lawyer, mortgage, mechanics, etc. and they don't come up in a search for their own name on Google, they got a problem. As the founder of Agentopolis, a database/directory to over 1.3 million real estate agents, I can tell you, from pouring over reams of analytical data about how people find real estate agents on Agentopolis, that there is a growing trend of consumers typing in the name of their past agent, or an agent whose name was given to them by their friend, into Google as a search phrase.
Check it out, you'll be surprised by which pages you show up on and which pages you don't. Notice also that the search results for your name are different across the different search engines (Google, Yahoo, MSN, etc) This is why it is critically important for real estate agents to make sure their name and their property listings appear on a number of different real estate web sites. If you want to be found on the first page of the biggest search engines more often then not, you must be on many different sites and places where you can be found.
And before you stop me and tell me that you already come up first on Google by your name, understand this, the algorithms the search engines use to determine who ranks where in the search results can and will change without warning. Company after company who was dependent on a first page listing on one search engine for the bulk their business has seen their fortunes change as a result of a slight change in a search engines algorithm which resulted in them now appearing on the 7th page of the search results. Don't let this happen to you. Make sure your name, listings and contact info are on as many sites as possible and be glad that many of these sites like Activerain and Agentopolis are free.
Blogging in-and-of-itself is not that great of an activity unless you simply love to write. Google has changed all that. In part two we will look at how Google has made blogging so important to real estate agents.
As I think about how my own behavior has changed because of the internet and broadband connections, I notice things like; I no longer use the yellow pages, EVER, I no longer call 411 for a missing phone number, I pay far less attention to ads because I know that when I am looking for a product or service in my area, all I have to do is Google my request and a qualifying response will come up in seconds, I no longer ask for directions as now I simply map quest everything, I communicate with a lot more people that I might not otherwise because of the ease and speed of email, and on and on and on... No doubt about it, we live in a different world today. So the question for real estate agents is "how am I going to adapt to these changes in order to continue to grow my real estate business and not become a dinosaur?" And one of the most relevant answers to this question lies in search engines.
What conversation about search engines would be complete if we didn't talk about Google? Sure there are other search engines and it IS important to have a strategy to be found in those as well (yahoo, msn, ask, etc.) but the bottom line is that most of the buzz about search and finding what you want leads back to Google. So the trick for a real estate agent or any one else trying to grow their business on the net is getting indexed and found on Google. And all wise discussions about search engine marketing must begin with the topic of keyword research. This is the art and science of determining what people are already typing into the search engines and how these searches relate to you, your company, and your industry. Search engine marketing is then finding ways to make us and our site come up first for those queries. Notice I included the word US.
More and more people are remembering our names but for getting our contact info or loosing our business cards (how many business cards do you have sitting on your desk or in a draw right now that you are planning to organize some day) So what does a person do when they remember the name of their realtor from 5 yeas ago but have thrown away their business card (and that clever post card that you send them every month.) It's simple, they Google your name!
In today's world, if a person thinks they are in business for themselves, realtor, cpa, lawyer, mortgage, mechanics, etc. and they don't come up in a search for their own name on Google, they got a problem. As the founder of Agentopolis, a database/directory to over 1.3 million real estate agents, I can tell you, from pouring over reams of analytical data about how people find real estate agents on Agentopolis, that there is a growing trend of consumers typing in the name of their past agent, or an agent whose name was given to them by their friend, into Google as a search phrase.
Check it out, you'll be surprised by which pages you show up on and which pages you don't. Notice also that the search results for your name are different across the different search engines (Google, Yahoo, MSN, etc) This is why it is critically important for real estate agents to make sure their name and their property listings appear on a number of different real estate web sites. If you want to be found on the first page of the biggest search engines more often then not, you must be on many different sites and places where you can be found.
And before you stop me and tell me that you already come up first on Google by your name, understand this, the algorithms the search engines use to determine who ranks where in the search results can and will change without warning. Company after company who was dependent on a first page listing on one search engine for the bulk their business has seen their fortunes change as a result of a slight change in a search engines algorithm which resulted in them now appearing on the 7th page of the search results. Don't let this happen to you. Make sure your name, listings and contact info are on as many sites as possible and be glad that many of these sites like Activerain and Agentopolis are free.
Blogging in-and-of-itself is not that great of an activity unless you simply love to write. Google has changed all that. In part two we will look at how Google has made blogging so important to real estate agents.
Thursday, June 21, 2007
Real Estate Agent rating sites and systems
I don’t think anyone will ever build the perfect ranking/rating system for real estate agents, by perfect I mean a system that is all I need to be SURE I chose the best agent. Choosing a good agent will always involve feedback and information from different sources and related to different criteria. Geographic location is important, whether I’m buying or selling a home, I want a local expert. Testimonials are a form of user feedback but as many of you pointed out, it is not hard to “game” the system on most agent referral sites.
That said, I think a simple measure such as “number of recommendations” is slightly more useful than a system that uses only a 5 star rating. Anyone can give themselves a 5 star rating and using a system that uses an email address for verification, if this same agent has 3 or 4 different email addresses, can give themselves 3-4 five star ratings. Even asking your friends to cheat the system for you is going to run dry after a few of your lying cheating best friends anti up their fraudulent reviews. When you see an agent with somewhere between 10 and 40 testimonials, you have to wonder if at least a few of them aren’t real. Also, the longer you have been in the business and exceeding client expectations, the easy it will be for you to get to a higher number of clients willing to take the time to visit a site and give you a testimonial.
As I said above, I don’t think agent ratings will ever be enough to insure a perfect choice but they will always be a part of the process to help you choose.
That said, I think a simple measure such as “number of recommendations” is slightly more useful than a system that uses only a 5 star rating. Anyone can give themselves a 5 star rating and using a system that uses an email address for verification, if this same agent has 3 or 4 different email addresses, can give themselves 3-4 five star ratings. Even asking your friends to cheat the system for you is going to run dry after a few of your lying cheating best friends anti up their fraudulent reviews. When you see an agent with somewhere between 10 and 40 testimonials, you have to wonder if at least a few of them aren’t real. Also, the longer you have been in the business and exceeding client expectations, the easy it will be for you to get to a higher number of clients willing to take the time to visit a site and give you a testimonial.
As I said above, I don’t think agent ratings will ever be enough to insure a perfect choice but they will always be a part of the process to help you choose.
Monday, June 11, 2007
Broker Brand Versus Real Estate Agent
I saw a really nice TV commercial for Coldwell Banker the other day which seemed to imply that if I use them to sell my home, I would be more successful. They had a “SOLD” sign in all the shots. So I started to wonder, does it really matter which real estate brokers sign is in my yard or is it simply enough to have a great real estate agent market my home no matter which company they are with?
Thursday, June 7, 2007
What's The Big Stink About Real Estate Commissions?
It kills me to see real estate agents or anyone else for that matter getting beat up about their compensation plan. All this talk about the commission structure being antiquated and in need of revision is insulting. All this talk about how the internet has changed the game and given the consumer more control over the process, hence agents should be charging less is intriguing but definitely requires closer review.
To say that ALL agents are worth the full commission would be a lie, but it is also a lie to say that every doctor, lawyer, or mortgage professional is worth their industries average fees. I don’t see this as an industry issue but more of an agent issue. The question isn’t whether or not real estate commission rate are too high, the question should be, “Where can I find an agent who is worth the money and how will I know?”
Listing agents
Good listing agents are worth their weight in Gold! I think it is far more difficult to be a great listing agent than a great buyers agent because, at least in today’s market, it is easier to find a home than to find a buyer. Above average listing agents need to be;
1. A marketing geniuses, both online and offline,
2. An expert in staging,
3. An expert in negotiating and
4. They need to be experts in the markets they serve so they can price the home correctly in order to balance the sellers financial and timeline needs.
The best testimonial a listing agent can get is, “They sold our house fast and at full price!”
Buyer’s agents
It costs money to deliver the best home search technology to their buyers. A good buyer’s agent, someone who is definitely worth the commission, must provide a buyer with at least these three components;
1. Access to technology to help the buyer find the right home, (idx broker reciprocity mls site)
2. Superior negotiating skills and
3. Superior knowledge of marketplace. (i.e. city, neighborhood, schools, etc)
The best testimonial a buyers agent can get is, “The found exactly the home we were looking for and got the sellers to drop the price!”
It is critical that every agent be able to answer the question, “What is my competitive advantage in the marketplace?” or “What do I do as a listing agent or buyer’s agent for my clients that totally justifies my compensation?” When you can answer this question in a way that is relevant to a home buyer or seller, compensation will never be an issue.
At the end of the day one of the best ways for any agent to prove their value in their market place is with agent recommendations/testimonials. I’ll be the first to admit that I hate asking for testimonials, even when I know I have exceeded expectations, so before anyone goes off on me about how this is an unfair measure of value because not every agent is comfortable asking for them, let it be known that I am not saying it is easy. Agentopolis tries to help address this concern by being online and making it easy for agents to simply email their past clients with a link and a simple request, versus having to call each one and ask. (Although the top agents tell me that this call for a testimonial is where they generate a number of their referrals)
Threats by Refin, Zillow and others to change the Realtor profession into that of a hourly wage factory worker makes great news stories but I for one don’t think it will create a wholesale change in the industry. The bottom line is that the internet is changing the way people buy and sell homes but the fact is that the Human Side of Real Estate is not going away anytime soon. People will continue to do business face to face with people they like and trust so my advice to consumers is find a great agent to help you buy or sell your next home and be glad you are only paying 6 or 7%.
One of the advantages to using a recommendation such as Agentopolis’s system is that because of the way we have set it up, only one recommendation is allowed per verified email. (see recommendation process) This prevents an agent from giving themselves 25 glowing reviews. Yes it’s true that every agent can give themselves at least one glowing review with their own email, but that is why we made each recommendation worth 1 point and rank order agents in total number of points. Any agent can get one glowing review from a client but only an experienced agent who consistently exceeds expectations can generate a larger number (see Agentopolis Top 100 Agents)
Real Estate Agent Income Numbers from NAR
Median income was $47,700 in 2006, down from $49,300 in 2004, which had also had declined from 2002. Members license as brokers earned a median of $73,700 last year, while sales agents earned $34,600. During the last two years, NAR membership increased 23.2 percent.
Realtors® in the business for two years or less earned a median of $15,300, while those with three to five years of experience earned $44,200. For six to 15 years, the median was $64,600, while members in the business for 16 years or more earned $76,200.
Clearly Realtors are not getting rich off the public. Once again, what’s the big stink about real estate commissions?
To say that ALL agents are worth the full commission would be a lie, but it is also a lie to say that every doctor, lawyer, or mortgage professional is worth their industries average fees. I don’t see this as an industry issue but more of an agent issue. The question isn’t whether or not real estate commission rate are too high, the question should be, “Where can I find an agent who is worth the money and how will I know?”
Listing agents
Good listing agents are worth their weight in Gold! I think it is far more difficult to be a great listing agent than a great buyers agent because, at least in today’s market, it is easier to find a home than to find a buyer. Above average listing agents need to be;
1. A marketing geniuses, both online and offline,
2. An expert in staging,
3. An expert in negotiating and
4. They need to be experts in the markets they serve so they can price the home correctly in order to balance the sellers financial and timeline needs.
The best testimonial a listing agent can get is, “They sold our house fast and at full price!”
Buyer’s agents
It costs money to deliver the best home search technology to their buyers. A good buyer’s agent, someone who is definitely worth the commission, must provide a buyer with at least these three components;
1. Access to technology to help the buyer find the right home, (idx broker reciprocity mls site)
2. Superior negotiating skills and
3. Superior knowledge of marketplace. (i.e. city, neighborhood, schools, etc)
The best testimonial a buyers agent can get is, “The found exactly the home we were looking for and got the sellers to drop the price!”
It is critical that every agent be able to answer the question, “What is my competitive advantage in the marketplace?” or “What do I do as a listing agent or buyer’s agent for my clients that totally justifies my compensation?” When you can answer this question in a way that is relevant to a home buyer or seller, compensation will never be an issue.
At the end of the day one of the best ways for any agent to prove their value in their market place is with agent recommendations/testimonials. I’ll be the first to admit that I hate asking for testimonials, even when I know I have exceeded expectations, so before anyone goes off on me about how this is an unfair measure of value because not every agent is comfortable asking for them, let it be known that I am not saying it is easy. Agentopolis tries to help address this concern by being online and making it easy for agents to simply email their past clients with a link and a simple request, versus having to call each one and ask. (Although the top agents tell me that this call for a testimonial is where they generate a number of their referrals)
Threats by Refin, Zillow and others to change the Realtor profession into that of a hourly wage factory worker makes great news stories but I for one don’t think it will create a wholesale change in the industry. The bottom line is that the internet is changing the way people buy and sell homes but the fact is that the Human Side of Real Estate is not going away anytime soon. People will continue to do business face to face with people they like and trust so my advice to consumers is find a great agent to help you buy or sell your next home and be glad you are only paying 6 or 7%.
One of the advantages to using a recommendation such as Agentopolis’s system is that because of the way we have set it up, only one recommendation is allowed per verified email. (see recommendation process) This prevents an agent from giving themselves 25 glowing reviews. Yes it’s true that every agent can give themselves at least one glowing review with their own email, but that is why we made each recommendation worth 1 point and rank order agents in total number of points. Any agent can get one glowing review from a client but only an experienced agent who consistently exceeds expectations can generate a larger number (see Agentopolis Top 100 Agents)
Real Estate Agent Income Numbers from NAR
Median income was $47,700 in 2006, down from $49,300 in 2004, which had also had declined from 2002. Members license as brokers earned a median of $73,700 last year, while sales agents earned $34,600. During the last two years, NAR membership increased 23.2 percent.
Realtors® in the business for two years or less earned a median of $15,300, while those with three to five years of experience earned $44,200. For six to 15 years, the median was $64,600, while members in the business for 16 years or more earned $76,200.
Clearly Realtors are not getting rich off the public. Once again, what’s the big stink about real estate commissions?
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