Speaking of Real Estate
You might have missed it, but about three years ago enforcement of our country’s mortgage settlement laws switched to the Consumer Financial Protection Bureau (CFPB) from HUD. The switch is more than just a bureaucratic footnote. Several weeks ago, CFPB levied a $500,000 fine against a real estate company for not getting its disclosures exactly right under the Real Estate Settlement Procedures Act (RESPA). That half-million-dollar fine is not a typo, and more attention-grabbing fines might be on the way.
That RESPA fine is the lead story in a new twice-monthly video news program NAR launched this week. The program is called The Voice for Real Estate, and the goal is to give you thumbnail sketches of the top four or five issues NAR is working on. REALTOR® Magazine is the producer and we’re excited about the program, because it gives you a way to stay on top of real estate news without spending time searching for articles or videos. Stephen Gasque, NAR’s director of broadcasting, is the host of the show. You might be acquainted with Gasque’s work already; he’s the producer of Real Estate Today, NAR’s consumer-facing radio show.
In addition to the RESPA fine, the first show features quick sketches of NAR’s efforts on the growing student debt problem, what’s happening on net neutrality and why that issue is of the utmost importance to you (net neutrality is about keeping the Internet open equally to all), and what’s the latest on existing-home sales (they’re up solidly).
In a few months the program will increase to three times a month. You’re encouraged to post the show on your website or blog. Just go to the video on YouTube, cut and paste the URL—it looks like this: http://youtu.be/Xtfhmtuiygo–and you’re all set; the video will be embedded on your site.
Your customers and clients should find the information of interest as well, because the issues the video covers ultimately impact them in their pocketbook and the quality of their buying and selling experience.
Learn about the RESPA fine and the other issues of importance to you and your customers in this first show of The Voice for Real Estate:
From a safety standpoint, it makes sense to set aside a percentage of your commissions in a reserve account. That way you can cover your obligations come tax time and have back-up money for when business is slow. And since the time horizon for these funds is short, it makes sense to deposit them in the safest savings vehicle you can find. The return won’t be great, maybe 1 percent, since that’s about what federally insured savings accounts are getting these days. But the point isn’t about making big gains; it’s about having the money available when you need it.
But for your long-term retirement savings, the calculation is different. You want something with a little more risk because your goal is to get a little more gain. If you put your money in a super-safe account, you can’t expect to earn much more than that federally insured 1 percent. Considering that inflation historically runs at about 3 percent, your 1 percent is unlikely to cover your loss of buying power as the years mount.
In REALTOR® Magazine’s latest Your Money Matters video, Victoria Gillespie of REALTORS® Federal Credit Union, a division of Northwest Federal Credit Union, suggests you invest your money in a mix of safe and slightly less safe investments. That way you can cover your principle risk with your safe accounts and cover your inflation risk with your slightly riskier accounts.
To help you make sense of it all, Gillespie suggests you think of investment options as levels on a triangle. Put a portion of your money in the safest investments, which are at the base of the triangle, put some in the next level up, where investments are a bit riskier but still conservative, and so on up the triangle until you get to the top, where the riskiest investments are found.
Gillespie also suggests you save your riskiest investments for those with the longest time horizon, maybe seven to 10 years. That way you can ride out the inevitable ups and downs of the market.
Watch and share the 7-minute video, the sixth in the Your Money Matters series, in which Gillespie walks you through the financial triangle as a tool for weighing risk vs. reward as you make your long-term investment decisions.
Watch all Your Money Matters videos:
“You absolutely do not need to spend money in this business to make money,” says Joshua Smith, an agent with RE/MAX Professionals in Surprise, Ariz. He would know: In his first year in real estate, he did 48 transactions without spending a dime on marketing. That’s the kind of wherewithal that landed him on REALTOR® Magazine’s 30 Under 30 list in 2011, as well as on The Wall Street Journal’s REAL Trends list of the top 1,000 agents in the country.
So how on earth can you do so many transactions without spending anything on marketing? Listen to Smith’s story in the podcast below with SuperAgentsLive.com founder Toby Sagado.
In the podcast, you’ll learn, among other things:
- Why you should never get comfortable with your business
- Why you should be a prospecting machine
- Why you should know your numbers and truck everything to build a predictable business
- Why you should have your scripts down
- Why you should dig in and do lead-source analysis
The pioneering class of REALTOR® University’s Master of Real Estate program is re-entering the industry armed with new knowledge and a new title that can help lift their careers to new levels.
Since claiming their diplomas at REALTOR® U’s first-ever MRE graduation ceremony, some of the graduates — nine in total — say that they have already used the teachings from their classes to advance themselves in their local markets. Graduating from the program has also allowed them to add the MRE designation to their titles.
The ceremony was held during the REALTOR® Party Convention & Trade Expo in Washington, D.C., in May, when more than 8,000 REALTORS® descended on Capitol Hill to talk real estate policy with their elected members of Congress.
“We didn’t make it easy for you,” REALTOR® University President and National Association of REALTORS® CEO Dale Stinton told graduates at the ceremony, which was held in a room of about 200 attendees at D.C.’s Omni Shoreham hotel. He noted that the graduates each put in 2,000 hours of coursework over two years to attain their degrees. “That’s half your life for two years. That’s amazing,” he said.
“You are truly pioneers in the best sense of the word,” Stinton continued. “You represent a powerful knowledge gained through rigor and curiosity. Yet your degree comes with a great responsibility, as the challenges we face are not insignificant in our industry. Now you are charged with expanding the borders of knowledge for all REALTORS®.”
Becoming a Better Communicator
Tami McHugh, broker-owner of Heritage Real Estate in Meridian, Idaho, was the first person to sign up for the MRE program. She was honored at the ceremony for having the top Capstone project among the class. For her project, McHugh looked at the top 100 performers in her local MLS to see if there was a correlation between their sales volume and their educational background. She found that 60 percent of the top 100 performers had earned a bachelor’s degree or higher, and mean sales volume increased with higher educational degrees. (The mean sales volume of practitioners with a high school diploma was $10.8 million, while the mean sales volume for those with a post-graduate degree was $15.5 million.)
McHugh says the MRE program taught her how to be a better communicator and makes her more relatable to a wider pool of potential clients.
“The reputation that real estate professionals are like car salesmen has been a struggle,” she says. “In this industry, education helps you communicate better — to write more concisely and speak more eloquently. It makes you more relatable to people who are more highly educated themselves.”
She also learned about topics that she was unfamiliar with prior to her coursework.
“I learned more things about sustainability and expanded my understanding of real estate law,” McHugh says. “I have a wider base of knowledge to pass on to my clients. As issues like sustainability become more and more important, I now know what questions to ask my clients. And I can write a better contract that protects’ my clients’ rights.
“I’m a strong supporter of education, and I encourage people to think bigger than [the real estate market in Idaho] — to think globally. People often look at the microcosm of our market, and they think that’s all there is. Education brings us together as REALTORS® of our country, not just our states or our communities.”
Spreading the Knowledge
Vernice Ross, GRI, PMN, broker-owner of Ross & Ross Realty in San Diego, admits that the MRE program was incredibly strenuous. Over two years, she logged 20 to 25 hours a week in coursework, all while running her business and being a single mom.
“I had been out of school for a while, so the first couple of classes were very challenging, and I was like, ‘Oh my gosh, why did I do this?’” she says. “But after the first couple of classes, I got the hang of it.”
Ross says every class she took was a practical one that she applies to her business in the field every day. Her favorite classes include developing online marketing plans, how to examine the competition, commercial real estate issues, risk management, and using the latest technology for the industry.
“This program makes you look at your business differently,” Ross says. “It has been eye-opening.”
She’s so thrilled with her experience that she says she plans to become an ambassador to REALTOR® University. “When my local association has orientations or conventions — or wherever there is a platform to speak — I would like to speak on behalf of REALTOR® University.
“Because of REALTOR® University, I have new contacts all over the country, and if I need anything, I know I can call them up. They’re part of my family now.”
Putting New Skills to Use
Kirill Gorbounov, SRES, associate broker at RE/MAX Allegiance in McLean, Va., has already begun applying the things he learned through the MRE program to his everyday business. Not only does he help clients buy and sell, but he’s also an investor. He’s in the process of buying a new investment property, and he’s using skills he acquired through REALTOR® University to close the deal.
“My depth of understanding of the investment process has improved a lot, and I’m now more confident in my approach in deals,” Gorbounov says. “And just having this degree allows me to be more competitive in my marketplace. It decreases my competition because so many people are not on my level anymore.”
He says that he expects many more doors to open for him in the future, both in his real estate business and investment practice. He works most often with buyers and sellers in the high-price market, and those clients, he says, are more likely to be influences by a real estate professional’s educational credentials.
“A lot of people probably don’t notice your educational background,” Gorbounov says, “but individuals in the upper price range, they care about that stuff. They see me as being of more value to them.”
McHugh, Ross, and Gorbounov all got their MRE degrees with a concentration in residential real estate sales, marketing, and management. See all the concentrations that REALTOR® University offers.
In some ways you couldn’t invent a better platform for marketing than Facebook. It adds rocket fuel to your communications by giving you a way to reach way beyond your sphere of influence each time you post a status update. But the platform’s been around for a while, everyone’s using it, and it’s becoming part of the noise that’s so hard to cut through.
But there is a way to use it effectively, says Shaun Nilsson, a Toronto real estate professional whose success on Facebook spurred him to launch a company called CityBlast with a partner.
Nilsson says the key to using the platform successfully is posting genuinely useful and interesting content on the site on a consistent basis so that you’re always top-of-mind. And because what you’re posting is good stuff, you do your winning of friends and influencing of people without becoming a burr in people’s sides. That’s not a small consideration when you think of how easy it is to cross the line from being useful to being just another noisemaker.
All that sounds good, but how do you put that into practice? Finding and writing quality content takes time, especially when your goal is to post consistently throughout the day. Clearly, using Facebook the right way threatens to take you away from your core business. Enter Nilsson’s company.
You can learn more about using Facebook for marketing in a webinar REALTOR® Magazine is hosting with CityBlast on Thursday, June 26, at 3 p.m. Nilsson’s company is the sponsor, so the webinar will come at the topic from the perspective of this one company. But there’s a lot to learn and you could take away useful information. Learn more and register for the webinar.