While the figure indicated above may not be statistically valid, it should nonetheless worry brokers and raise some flags. Mainly because it is based on a real, recent experience a close business partner of mine had when attempting to purchase investment properties.
Another reason for concern is that responsiveness has been an ongoing issue in the industry. Considering it is well known that one of every four consumers will do business with the first real estate agent they connect with, one would think agents across the board would have by now figured ways to bank on the statistic.
The story I’m about to share is actually scary.
This cash-ready investor was out to make several property acquisitions about four weeks ago, in different parts of the United States. During one morning, he called one hundred real estate agents (yes, ONE HUNDRED) to inquire about one or more of their active listings. The intent was in fact to place offers on the properties, not just ask questions.
The shock came when most of the calls went unanswered. You’d think that 75 percent of calls in any sales oriented business would be picked up. If that was your guess, you were wrong. In fact not 50, 40, 30 and not even 10 percent of the calls were answered. Only ONE out of the one hundred agents contacted that morning actually picked up the phone!
Now if that shouldn’t sound the alarm, not sure what will.
It gets worse though.
This buyer left messages to all 99 remaining agents clearly stating his wish to place an offer on a property. I repeat. He told the agents to call him back because he wanted to BUY their listing. Most were traditional for sale listings, others were REO auctions or regular residential real estate auctions.
Not to belabor the point, only five agents returned the call at some point that day.
This puts six percent of agents at a clear advantage over the remaining 94 percent, with only one percent set to truly clean up.
The difficulty in answering the phone in real estate remains a mystery and obviously an insurmountable challenge. But if the industry is to edge forward, someone has to figure this out.
Maybe it’s time brokers took a closer look at the issue – and perhaps a more active role addressing it.
One thing is certain though. Sites like ListedBy that allow buyers to instantly place offers online are a breath of fresh air and great time savers. But even these would only be of real value if agents are more click than phone friendly.
You eat an elephant one bite at a time.
Often, having a clear vision and the courage to start working towards an opportunity is what stands between man and his or her ultimate goal. With a little bit of study and appetite for some risk, the goal may in fact be closer than one might think.
The first order of business is to spot the opportunity. The next order of business is to remove anyone from sight who’s job seems to discourage us from moving forward. This is frequently the reason why most people freeze. In his famous The Law of Success in 16 Lessons book, the success bible, Napoleon Hill specifically discusses how you must keep your chief aim shielded from others who are likely to challenge or resist it. Even your spouse. Take this as law in achieving the success that you want, even though it is contrary to all the modern guru teachings that you must publish your goals far and wide so you may be more committed to achieving them.
In real estate, an opportunity of a lifetime came to those who saw a buying window when everyone ran the other way in 2008, 2009 and even up until last year. Those who made the move and acquired as much property as they could, boarded or not, with spouse approval or not, are on a different plane now. We all know where these investments stand today. Up some 20-25 percent in the past year alone, in many states and cities across the US. They hopped on the Web and onto online auction sites to grab REO auctions, government real estate auctions, residential real estate auctions, commercial real estate auctions, you name it. Some flipped them right away while others rehabbed and held the assets for rental income with high annual cash on cash returns unlike we’ve seen for decades.
The biggest complaint circling the sector today is lack of inventory, especially distressed assets. Whether that’s in Detroit, Las Vegas or any other market.
The next time I come across a hot deal in Detroit or otherwise, boarded or not, shabby or not, I’m jumping on it. That’s just what I did earlier today, when opportunity presented itself. I bid on five residential properties in Detroit on ListedBy.com, going for just tens or mere hundreds of dollars to anyone willing to take on just a few thousand dollars of back dues taxes. A great deal if you ask me. At worst, the land will always be there for me or my kids to farm someday. Each will have their profiting strategy. Some will resell the assets immediately for a bit of profit, taxes still unpaid. Others will hold till values increase, then sell at that time, still passing due taxes to the next investor. Yet others might pay due taxes in order to obtain title insurance, rehab the properties and rent them for regular cash flow. That is, if the neighborhood and overall conditions are adequate, an insurance provider is willing to provide the service in the area, and the risk of another round of vandalism of the property has been well considered. Risks are out there and professional advice and due diligence on any investment is always necessary.
But first I must win those bids. Some astute investors seem to have spotted the same properties. Until then, I’ll keep scouting the site for more. Here great deals still do come by.
I also like it here not just because of my obvious bias towards ListedBy, but because I also don’t need to pay registration and technology fees like on most other auction sites. Nor do I have to contend with buyer premiums like most everywhere else. Here it’s all free. So each bite I take at my goal, goes further. In English? More dollars in my pocket to go towards buying more assets (with or without spousal approval), instead of handing them to the auctioneer.
There you have it. That’s one of my paths. I’m pulling ahead in the game of real estate just one small bite at a time, until the elephant is in the bag.
The main message we delivered through our presentation (SJREI021313) at the SJREI (San Jose Real Estate Investors) two days ago was that transparency, or its lack thereof, is a critical catalyst that is preventing the industry from being what it can be, and the real estate professional, agent or investor, from being as efficient and productive as they should be. The underlying force being that a new paradigm shift in real estate is in underway, fueled by consumer insight, powered by technology and new business models.
We stressed and showed how these models will threaten the existence of organizations, large and small, that refuse to notice the oncoming change and tune in to new consumer expectations in how the real estate business is handled, especially online.
This would include real estate auction companies and real estate auction sites, sites that enable REO auctions and real estate government auctions, and organizations dealing in any shape or form with public real estate auctions or foreclosures and distressed property data and listings.
Notwithstanding, regular consumer portals were discussed in the same context, be it publicly traded companies or startup. That the threat is real.
The good news was that the undercurrent also brings with it potentially huge opportunities for those same organizations who tune in to the change and adapt, as many have magnificently done over the years.
Within the context of a session meant to explain to experienced real estate investors what ListedBy.com is, we took the path of focusing on industry concerns that when addressed by platforms and open environments such as ListedBy.com, should result in far greater efficiencies (operational and cost) and productivity for the investor and anyone engaged in the buying and selling of real assets. This, on the premise that all technology we elect to deploy in business is meant to enhance one or the other, in some shape or form.
The paradigm shift would consist of three key pillars with transparency at its core. From these new levels of transparency, the benefits far greater efficiencies and productivity will be drawn. Lack of transparency, today a detriment to economic growth and sales productivity will be replaced with an environment where full transparency is an expectation. Vis:
We have a long way before everyone buying and selling real estate realize how deep the benefits of transparency would run within an organization, and how much of a boost in operational and sales productivity such transparency and access to information can drive.
If participant feedback at the session was any indication, the thinking behind ListedBy.com is definitely something more and more real estate professionals will be gravitating to.
An exciting development for all ListedBy users and site visitors today, as well as for service providers who offer services to the real estate industry in the U.S.
We just launched the Service Providers section of the site, which allows ListedBy users to research and find services related to real estate from across the country. If anything, the Service Providers module roll out is another example of our commitment to making ListedBy.com the place for everything real estate.
Whether it’s painters, movers, insurance providers or any other service, and whether you know the area or if you are from out of town or out of state, this is a key peg in helping you to find and get information about the services that you need, at a local level, as you make either an investment decision or need a service for your own property.
As a service provider, the exposure is entirely free. Just drop by the Service Providers page and add your company to gain exposure. We’ve also added enhanced placement options, which gets your company to the top of the search results in the states of your choice.
Here is the full announcement released earlier today on the wire:
Public Real Estate Auctions Site ListedBy Launches Service Providers Directory
Self-Managed Search Database Gives ListedBy Users Access to Information on Local Real Estate Related Services, and for Service Providers, Free Exposure and Leads
NAPA, Calif. – January 28, 2012 – ListedBy (www.ListedBy.com), the first free online real estate marketplace and social network with live bidding public real estate auctions and ‘Best Offer’ functionality today announced the launch of its Service Providers module, a self-managed, self-populated directory designed to give ListedBy users convenient access to information on local real estate related services across the United States.
“As a platform that truly stands out among other real estate sites and real estate auction companies, part of our mission at ListedBy is to constantly elevate user experience and value,” said Stephan Piscano, CEO and Founder, ListedBy. “Whether it’s homeowners, buyers and sellers, or investors involved in REO auctions, government auctions and regular assets, identifying and connecting with local service providers is an on-going requirement. ListedBy is now positioned to deliver on this need like no other site online.”
Free to join, the ListedBy Service Providers tool is organically populated and currently covers all U.S. states and territories. International search is planned for release later this year.
Service providers can join the new directory at https://www.listedby.com/ServiceProviders/ServiceProviderMaster. Additional categories can be requested through the company’s online Forum.
Enhanced placement in the directory is available as an option in one of two packages offered at $50.00 per month per state, or for $248.00 dollars per state for a full year subscription.
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Not long ago, many markets were literally frozen. Today we went to the opposite extreme. Agents and investors in a number of markets are complaining from low inventory, with many having closed over one hundred deals last year. A good sign if banks are able to continue to manage the inflow of foreclosures into the market. While inventory control and Federal Reserve money printing policies have directly led to a demand-based market within an inflationary environment that further helped to boost prices, the reality is that agents and investors are now looking for ways to manage multiple offers more efficiently. Irrespective of market conditions, allowing offers to fall through the cracks has deep implications on sellers, agents and buyers, and must be effectively addressed.
One of the emerging trends in real estate is fully transparent public real estate auctions. The idea of ‘auction’ is making its way into agent and investor plans, slowly but surely. But if the statistics offer any reliable indication, real estate auctions will become significantly more prominent over the next 2-3 years. In fact, NAR (National Association of REALTORS®) projects that the auction market will consist of one of every real estate transaction, by 2014-15.
As in any industry, there are visionaries and pioneers who embrace new technologies and adopt new ways to manage and grow their businesses. Automating offer management is now emerging as an effective means for real estate agents and real estate investors to manage incoming offers and counter offers while maximizing property value at the same time.
The idea and execution are both extremely simple:
1- Set a start and end date to auction a property online. Traditional on location auctions tend to be relatively cumbersome, resource intensive and expensive. New 100% online auction platforms are replacing the old model and are entirely free of charge.
2- Pre-market the auction to investors, brokers, agents, consumers and anyone you would usually reach out to through your usual marketing channels, and direct them to the online auction page. Include the auction open and expiry dates and times. Use email, post cards, your website and social media channels to create excitement around the auction, and include the link to the auction page.
3- Watch offers come in and get outranked automatically by other interested buyers, through your online dashboard and at your convenience.
4- Contact the buyer with the highest bid, at auction expiry (the auction end date and time), to begin the legal paperwork.
Along the way, advanced platforms such as ListedBy should enable you to view bidder profiles and contact information, so you may connect with them directly if you wish to flesh out the more likely buyers, much like you would in a typical, non auction environment.
Letting technology take in bids, update bidders and automatically increase bids based on preset limits each interested buyer inputs into the system is a surefire way to manage hundreds of offers simultaneously, especially important in a hot market. So you can seal that crack once and for all, and maximize sales and property value.
WOW Inman News was the best that we have seen yet with some great moments and great feedback for ListedBy from users and some of the top industry pros!
Also never a bad thing to get to play a bit in NYC!
- As my esteemed colleague noted, the industry is taking more and more of the home buying process online and seems to be a real drive towards completing transactions online and eliminating the paperwork nonsense that we have dealt with for so long. This obviously was a big part of why we founded the ListedBy.com site. To allow users to not only research homes online but actually buy homes online, and we are excited to be a part of that for the industry as a whole. Ideally we would like to incorporate a paperless system into our site that would perhaps make it even easier for our users to not only submit offers on homes online but actually complete the transaction. Who knows, we might have made a partnership for that at this event.=)
- NYC is enjoyable and one heck of a place to go, but those stories that you hear about the airport at JFK are all true!
- It was a pleasure for me to get to chat with a couple of industry rockstars in particular that had some sentimental value for me. Won’t state their names as don’t have authorization to, but one CEO in particular still owns the site where I bought my first Detroit, MI property online that to some extent started the whole idea for creating the ListedBy site. It was great to chat with someone of his caliber for an hour and hear he actually really liked the concept of our site! Also, great to see a few good friends and partners like Bill from Revestor, the boys from NuOffer, my main man Hector from Trycera (All great companies to check out) and many more.
- We REALLY got some positive comments from a lot of the industry’s top agents about the website and saw that they really love the ability that ListedBy allows for them to have direct offers from the buyers, which allows them the opportunity to double their commissions by representing both parties. Also, agents and users all loved the new and improved page for service providers where you can search services for free like you would on a servicemagic.com and other similar websites, but with us of course it is all for real estate management and purchases.
- We once again had a helicopter to give away to one lucky user. Roger always tries to get it out of the box and fly it around, which sometimes results in the police being called. Luckily I was there to save him from himself! Another personal note highlight for me is that we got to have a great dinner with a killer view of the city with my big guy Roger. It was nice to have a moment like that with a great business partner and friend to look at where we have come and where we hope to go with the site as we continue to grow. As we all know, running startups and really any business has ups and downs, and takes a certain level of dedication. So moments like that, events like NAR Orlando and this one are really a big part of what makes it so enjoyable and rewarding, and why I am so thankful to all of you for using the site and allowing us to keeping putting out those 15 hour days to try and get better all the time.
To clarify, the gentleman noted in the photo there is Hector from Trycera, not Roger.
All in all it was exceptional and we look forward to being a part of many more events like this one in the future and hopefully seeing some of you there also. Who knows, you might win a helicopter, or even better, private dinner with me and Roger!
Interest Rates, Real Estate Auction Companies, Inventory, Inflation, Pricing Predictions
What we think you will see and how we recommend you act on it!
As my real estate mentor always did tell me, “My opinion and a dollar will buy you a cup of coffee.” But for all those who care to listen, here is the way that I see the real estate market as a whole going in 2013, and some strategies that in my humble opinion could benefit our users.
To start, I will give some background to my opinions and what I have done so far to capitalize on the market. At the end of the year in 2011 and the beginning of this year 2012 I told all of my friends, clients and all those who would listen that I strongly believed that the bottom of the market had come and gone and that we would look back at 2012 and ask how much did we capitalize on it. If you look at the stats and all of the trends, that has proven to be true. The market nationally has started a slow rebound, and as predicted, the areas hit hardest by the crash such as Las Vegas, NV, and here in California have rebounded the strongest. With hopes that this would happen, I started investing very heavily in Las Vegas in July 2011 and since that point the market as a whole there is up 37%! My thought process has remained the same for the market as a whole in 2013 as there are still exceptional buys out there on a national level and in some of these key regions like CA and Las Vegas, and while they may not be the 15% cap rate rental properties that we saw every day for a while, the ROIs are still dramatically better than what you would get in the bank and once again I strongly believe you will see continued upswing in the market in 2013 and beyond. There are two possibilities for the market that I see that both result in pricing rising:
Possibility #1: The economy crashes hard once again and the fiscal cliff destroys the markets:
This, believe it or not, could result in house prices going dramatically higher, as if this happened it is likely that we would see some form of rapid-inflation which although a slow process would ultimately hit the housing market. This means house prices would go up not so much because the house is worth more, but rather because the dollar is worth less. This means that condo you bought for $90K could and will likely someday be worth $1 million just like how a house you bought for $2,600 in 1944 would be worth dramatically more today. Inflation always happens and it always at some point hits the real estate market. It is simply a question of how long that will take. If the economy crashed and we had another dip in the market briefly, it would create another exceptional buying opportunity before inflation kicks in and you can see that exceptional long term growth.
If this happened, the way to capitalize on it is by having as much leverage as possible. So instead of buying one rental property cash for $200,000, you would want to buy 10 rental properties with 10% down and maximize your leverage so you can pay off the loans with cheap dollars. It can be a bit in-depth so if you have questions about this email me through my user profile on ListedBy.com and we can go in to some extra stats and detail.
Possibility #2: The economy and the markets get a bit better
This obviously results in having the economy and the market in a better condition, which helps buyers to have the resources needed to purchase, which should continue a slow upswing in home prices and purchases as a whole as we grow. Also, note that many Americans with foreclosures that happened in 2008 will now have more than 5 yrs since that foreclosure, which for many is enough time to rebound their finances to be able to buy another home, which will also help the market.
As you can see, the stats and the details seem to point towards a strong market recovery regardless of the economy as a whole which is obviously great extra security for all of us who invest in real estate. I think that it is likely that you will see a combination of the two where the economy stays well and we see some rapid inflation also, which is why in 2013, I will be trying to buy as many units as I can the same way that I did in 2012 hopefully with the same result!
What do you tell potential clients that others haven’t yet pitched? What do you have to show to stand out from your local competition?
The single property website story has been played. So has listing syndication, property videos, commitment to doing open houses and other typical advertising and marketing strategies. In a distressed market, pre-forelcosure and short sale experience also tend to make a huge difference. But on any day, highlighting online auction as one of your strengths and unique strategies to marketing client property is a significant differentiator.
Whether you are working to win a large commercial or residential deal, your prospect will be delighted to hear how you can use online auction technology to market their property to buyers worldwide, and set up an environment that can ignite a bidding competition on their house or office building.
The next generation agent is going paperless, and negotiating deals is a critical piece of the puzzle. So is the ability to bid buyers against each other to maximize asset value, without breaking a sweat. Online auction delivers these benefits easily and efficiently, and is a rapidly growing trend that pioneering agents and top producers are and must pay attention to.
A house that’s walking distance to Union Station in DC recently listed for $337,000 and sold for nearly $761,000 after approximately 170 bids in just two weeks, as reported today by the Washington Post. Imagine enabling out of area, out of state and foreign bidders to chime in as well, online. Now how about firing up the bidding process even more, by allowing bidders to see each others’ bids online, and enabling them to increase their bids with a click of the mouse, while you and your client watch in real time?
New online commercial and residential real estate auction technology is extremely easy to use, and is completely free of charge for all parties involved. It allows you to manage and oversee hundreds of bids without lifting a finger, and gives you the chance to market to buyers out of state and across the world, with no added effort.
Now that’s the kind of pitch that stands to snag you more listings, while others stand in wonder.
Online auction accelerates sales by significantly cutting down negotiations time consumed in traditional buying and selling.
Breaking it down to a few of the many time intensive components of a traditional transaction that selling or buying through online auction alleviates or eliminates:
- Playing telephone tag
- Recording and accessing voice mails
- Drafting and chasing all the email correspondence
- Traveling back and forth to personal meetings with a seller’s or buyer’s agent and their customers
- The direct involvement of actual buyers or sellers in the negotiations process
Instead, use new online auction technology to negotiate multiple initial tender offers at the same time. Click to present offers, click to counter, reject or accept offers. It’s that easy and takes just seconds.
As to what real estate auction sites are best, always go for the entirely free venues. Ensure that these also do not charge any buyer’s premium, which traditional online or on location auctioneers still charge to this day. This fee can reach up to ten percent over and above the value of the property.