There is a famous story told from the 1979 Class at the Harvard MBA program. Mark McCormack tells of this study in his book, “What They Don’t Teach You at Harvard Business School.”

In that year, the students were asked, “Have you set clear, written goals for your future and made plans to accomplish them?” He reports that only three percent of the graduates had written goals and plans; 13 percent had goals, but they were not in writing; and a whopping 84 percent had no specific goals at all.

Ten years later, the members of the class he interviewed again, he writes, and the finding, while somewhat predictable, were nonetheless astonishing. The 13 percent of the class who had goals were earning, on average, twice as much as the 84 percent who had no goals at all. The three percent who had clear, written goals? They were earning, on average, ten times as much as the other 97 percent put together.

So, let’s think about this for about two minutes. Okay, time up!! Now, it is time to write your goals. Let’s learn from history!

The $8,000.00 is in effect until June, 2010. Congress is seriously considering extending it into 2010. Stay tuned to learn exactly when that announcement will be coming forth.

So, in the meanwhile, go buy NOW and seek a “quick closing” or get yourself positioned for the proposed extension, which experts agree is going to happen. The two big issues are credit and down payment. To increase your chances for loan approval:

1. Get your paperwork ready. You will need bank statements (usually the latest two months), W-2 wage and tax statements, and pay stubs (usually the latest two).

2. It is best to have “too much documentation” that too little. Having all the documentation together will actually help to speed the process. (And, sometime it is truly lengthy!)

3. Check your credit score. The most widely used score is one called “FICO” (which ranges from 300 to 850). Your score is based upon information in your credit report. It is used to help lenders predict how likely you are to make your payments on time. The higher the FICO score the better the chance your chances for loan approval at a low interest rate.

4. If applicable, “clean up your credit score.” The best way to do this is to catch up on any late payments and pay off or pay down your debt.

5. Be sure your down payment is where it can be “seasoned” in a savings or checking account. The lender wants to know that you have “skin in the game” (as they say) and that it is not money pulled from a credit line or place on a credit card at the last minute.

6. Be aware of the required down payment on the loan you seek. The majority of loans today are from the Federal Housing Administration (FHA). The minimum loan for an FHA loan is 3.5% of the total purchase price. The FHA allows a gift from a family member, employer or charitable organization. Most non-FHA-insured loans require a 10% down payment.

7. Check with your lender early in the process and have your “ducks-in-a-row.” before selecting the property you want.

8. Call your REALTOR to begin the search. BTW, I am a great source to help you find a professional in your area. I am the Designated Broker with over 1100 agents in 5 office locations across the Valley of the Sun. Also, I can help locate an agent anywhere in the USA with my sources.

Now is a great time to buy, especially with the financial incentive being available.

The social media is literally exploding. It is a new found way to find long lost friends and family. People are finding each other and are now staying connected and communicating with each other. Others have found it a great way to build business. However, be aware of the match and the trade-off.

In the personal realm I’m sure telling each other about your kids and your activities is great. However, are you sure that posting your score on the multitude of virtual reality games is best for your business? Many prospective customers and clients may not care “what animal represents your spirit” or “what character from ‘The Godfather’ are you.” So, it is best to separate your personal information and postings from your business postings.

I have read that prospective employers, law enforcement personnel, and even college officials are regularly checking the Web to find out more about you. You have to wonder what they are finding about you from your “postings?” What impression are you giving? Be sure to send the message about yourself that you want to send if you are using the web to communicate your business.

With the new social media coming into its own, the question is now whether or not I should put my personal real estate business or my company on Facebook. What is one to do? Here are a few questions to ask and a couple of tips from those who have done it. Maybe these quick pointers will help you decide:

1. When the site is “all about you” it looks a bit pompous. If the site is for your past clients, business associates and family, that may not matter. It is important how you attract people to come to the site. E-mail is a common way to invite people. Suggestion: “Oliver suggests you check out his site at …”

2. Naming the company as the site seems to open it up more for you, even if you are a company of one person. This allows you to talk about more topics in the industry … market conditions, financing options, interest rates, etc.

3. It might be a good idea to sign on for yourself first — just to experiment and get comfortable with how the program operates. Once you are experienced with a few of the basics, you can open a separate site to expand. In skiing they have a “bunny hill” for beginners, you know.

4. As basic as this is … be sure you fill in all the details correctly and completely. Check for spelling errors, grammar and punctuation. It is totally unprofessional to have these blatant errors on your site.

5. Establish your guidelines and rules. It is important to know the “toleration level” of those you invite to be on your list. How many messages will they allow before they “block you” and begin to get annoyed with your constant sending to them. This is a delicate balance, especially with more and more people sending more and more “spam-type” messages.

6. Mix up your style. Do a status update or post a note or link on the “wall” … That way your message shows up on a fan’s news feed.

7. Learn the various methods of communication within Facebook.

8. Have fun and learn and communicate.

Okay everyone … Things are changing for both Buyers and Real Estate Agents in promoting and checking out Open Houses. Here are a few tips for both agent and buyer:

1. Technology is forcing new ways to promote and research for open houses.

2. According to a recent Trulia (website) survey conducted by Harris Interactive, homebuyers are twice as likely to look for Open Houses online than in print media. Some 62% reported using online sites, compared to less than 33% who used print sources of any type (including newspapers and local flyers).

3. Homebuyers like the internet research better because they have more information about the property(ies) — more photos, better property description, and sometimes even school data and local price trends, which go beyond a newspaper staying simply the number of bedrooms and baths.

4. Many homebuyers like to do their own homework and get a more comprehensive view of a listing before making the effort to do a “drive by” or “visit” to the property. If they see that an Open House is scheduled they will more apt to go see the property.

5. The comment of one prospective buyer was captivating from the survey. The person said, “I search online because I usually only have time to do my research late at night. I don’t do newspapers!” Wow…that is eye opening.

6. Another prospective homebuyer gave this one-word-answer. “Easy.” He was referring to the internet search.

7. Moving forward in your thinking to — get ready for this one — the mobile phone. Many of the prospective buyers who are “tech savvy” are open to Sunday iphone type applications with the “on-the-fly” approach to seeing available Open Houses. This may be the new major source of Open House information.

8. Agents: go to the basics with the scheduling of your Open House — post it on your personal website, your company website, highly trafficked locations and even national real estate sites.
9. Agents: Pique consumer interest by showing multiple photos, detail information and links for more information on said property. And, be sure to interview your attendees to the Open House to see how they found it.

Recently, Mr. Scott Dixon, President of the real estate division, Network Communications, reports the seven habits of successful real estate agents. His company commissioned a study through OSR Research of more than 1,000 top agents to learn how they create and sustain successes in this recently turned real estate market. Some agents have reverted to the basics and are doing them in a more aggressive manner, while others are thinking “outside-the-box” to stimulate more business. The results of this study are summarized below:

Habit #1 – Invest in Marketing — Top agents know that to build their business and attract a high amount of activity they must invest in their own business. The average of these agents revealed that they spend about $7,500 a year on marketing…that computes to approximately 8.4% of their income. They spend their funds on advertising, internet promotion, direct mail, e-mail and personal websites. The top tier of these agents spends approximately 10% of their income in similar marketing approaches to get their name in front of consumers frequently and professionally.

Habit #2 — Spread the Wealth — Smart agents don’t put all their marketing eggs in one basket and they don’t take shortcuts. About 25% of their budget is spend on real estate magazines and related websites; 25% on their personal website; and 25% on all internet marketing. They realize that the home shopper starts researching on the internet, looking everywhere for information. They make sure their personal brand is everywhere – in print, online and all around town.

Habit #3 — Track Your Results — The high majority (approximately 85 % of the study group) measure their results. They want to spend they money where they get the best results. They monitor phone numbers, leads to closed sales, and sources used to attract their leads. They make no assumptions, says President Dixon.

Habit #4 — Set Clear Marketing Goals — 76% of the agents asked considers marketing essential to their getting and maintaining listings. They strive to show sellers exactly how they attract buyers, gain more good prospects and sell more homes.

Habit #5 — Experiment with New Technology — 25% of the agents are testing new tools like blogs and social media. They don’t abandon the tried-and-true sources, but explore the “new” after their base advertising decisions. They evidently are not afraid to experiment with the new media.

Habit #6 — Stand Out from The Crowd — The top leaders in the tested field likes to appear larger and more prominent within their recognized brands.

Habit #7 — Work with Market Leaders — They believe the consumers like to deal with brands they know and trust.

While one test group does not prove everything it does give an opportunity for an agent to examine what it is they are doing within their own business. Explore these items and compare to your own business model and see what you might like to change, expand, and/or abandon. Develop strong, productive habits.

As children we are taught by our parents to always say “Thank you.” That lesson learned as a youth will go a long way in building your business as an adult. It is amazing what a simply “Thank You” does to people. The well known phrase is usually delivered with a smile…and almost always answered back with a reflective smile in return from the receiver of the thoughtfully expressed note of appreciation.

Most experienced real estate agent strive to build a business and then expand that business with referrals — from past clients, friends, family and other business associates. We cultivate these relationships in order to have them refer us to their circle of influence and offer them our services. This leads to us applying the basic teaching of again saying “Thank you.” This simple declaration of appreciation spawns yet more referrals.

Everyone likes to be appreciated and saying “Thank You” is one of the easiest and most effective ways of showing your appreciation when one refers you business. So, expand your expressions of appreciation and learn to say “Thank You” often and even more often. Then, watch your business grow. Oh, and, “Thank You.”

The lenders made the original loan and now are being asked to discount the amount of the debt rather than foreclose on the property. ? Many of the original loans were performed by a mortgage broker who “originated the loan” with the buyer and then “sold the loan” (i.e. transferred the loan to a different loan company — one who “services” the loan; i.e. receives and processes the monthly payments from the borrower).  So, the offer comes to the seller through the listing agent, who has made it known in the MLS that this sale is “contingent on lender approval.”

The next step is the one frustrating the buyer, the seller and both the listing agent (representing the seller) and the buyer-agent (representing the buyer).  It is the long wait for the bank or lender to make a decision. ?We have seen banks/lenders take four-to-six weeks normally, and not uncommonly six-to-twelve weeks for a decision to finally be made and often the offer after this long wait is rejected.

In talking to several escrow officers we hear that most of the cancellations are occurring when the buyer gets tired of waiting and in frustration simply withdraws and cancels the escrow and goes to find a different property to purchase.  No one can truly blame the buyer after a reasonable period of time for cancelling such an escrow.

Other issues facing the seller for an acceptable acceptance by the bank/lender is how much is forgiven?  Will the seller have to pay taxes to the Internal Revenue Service (IRS) for the amount forgiven (which is viewed by the IRS as “ordinary income”)?  (Note:  Talk to your tax advisor regarding the bill signed into law by the President, called “The Debt Forgiveness Act” that applies to homeowners with personal residence.  Namely, no investors need apply for this one.  This forgiveness only applies for personal residence.)

Again, another question for your tax advisor:  the debt forgiveness is for the original “mortgage money loan” (money loaned to the buyer for the original purchase — established by the value of the home at the time of the purchase).  It is my understanding, in discussing this with an attorney with a legal hotline service, that the “Arizona Deficit Disclosure” allows the bank/lender to go ONLY after the property “and NOT the borrower” for any deficency.?

However, be aware that two other issues are not up for discussion:  1) was the house re-financed, and if so, was additional monies received, namely “cash out” to the borrower.  If so, that money may be interpreted as “a personal loan” (debt consolidation, college loan funds, car loan, property modification, etc.).  This opens another discussion of both the “debt forgiveness vs. personal loan)  (Note:  Again, check with your tax advisor), and, 2) was the loan a “Home Equity Line of Credit” (HELOC).  It is not uncommon for the bank/lender to ask the seller to sign an agreement to “repay the amount of funds forgiven” on a HELOC.  This is clearly a personal loan secured by both the property and a “personal guarantee” by the borrower.  Now will the seller sign this to get the property sold and closed or not?  So many questions; so few answers.  As the Designated Broker of a large firm I see various and confused answers given by agents in the industry which frustrate the buyer, the seller, and usually the other agents.

“Game playing” of all sorts is also taking place in the MLS marketing of homes.  Some listing agents hide the fact that they have an accepted offer and continue to market the home as though it were not in escrow.  (A clear violation of the MLS rules.)  Other agents do not have the seller sign the contract and submit the offer to the bank as though it were signed and is truly a contract, when it is not — if not signed.  Some will do other variations to avoid noting in the MLS system that they have an offer to keep the house showing as “active” in the MLS to attract additional offers.  So, the system has been compromised in efforts to get the house sold while “cheating the system” with other buyers and agents in the market place.

Those agents who play-by-the-rules and mark the MLS as “pending” or “AWC” (accepted with contingency) are put into a “waiting game” with the bank/lender keeping the house off the market only to have days go by without an acceptance from the bank/lender and run-the-seller-out-of-days on the forthcoming foreclosure date.  If the agent could find another buyer in time they could perhaps sell the house before the seller goes into foreclosure.  It seems that something needs to be done, but what?  No one has the solution and therein is the problem.?

Actually, we know the solution, but how can we force the banks/lenders to make an immediate answer of yes/no, so the seller could re-enter the property back on the market with an acceptable sales price for the next buyer?  If only the banks/lenders would apply the “Golden Rule” in these sales.  Meanwhile, we will remain frustrated and do the best we can.

C Dale Hillard

In 1991 in Arizona the Arizona Association of REALTORS (AAR) drafted a contract (2 pages in legal length; front and back) that stated, “Agency Confirmation” for the first time.  Ironically enough, the AAR committee followed the 80-20 rule of what is happening in the real estate industry as a guide.  At that time sub-agency was still holding approximately 80% of the contracts as sub-agency.  By 1993 the pendulum was at a ration of approximately 50-50.  Thus a major revision was made to the AAR residential purchase contract with a clear view toward “equating the terms of the contract” to remove the seller bias that was the direction of sub-agency.  (”Caveat Emptor” — Latin:  “Let the buyer beware.”)  The re-addressing of this issue focused on the fact that the contract should no longer favor the seller.  Rather, the contract should protect both the seller and the buyer.  Equally of concern was the fact that the contract should not show bias toward the listing agent; but, also level the playing field for both the listing agent and the selling agent.  If the seller has a right to an agent, shouldn’t the buyer have the same right?  Therefore, the seller has a listing agent representing them and the buyer has a selling (buyer-agent) representing them.  Equality for all.

From this time forth the overwhelming percentage of agents began representing the buyer and almost completely abandoned the sub-agent position.  Companies started drafting office policies and establishing their way of doing business — some elected to “force” buyer brokerage on all transactions when their agent wrote an offer for a buyer.  Other companies allowed sub-agency to remain.  There were two other alternatives that I experienced:  Sub-agency was allowed on properties where the company already had a listing and the “old guard” refused to shift from sub-agency and did NOT allow any buyer-brokerage.  (This latter group faded away very quickly in almost all cases.)  Why did they disappear?  Because most consumers who were slowly behind the curve, when asked by an agent if they preferred to have the agent represent them in a transaction almost always said yes.

 Today, I would tend to believe there are two general policies among companies:  1) you must be a buyer-agent if you represent the buyer in all cases;  even those where the company already has the listing.  (This creates what is generally termed a “Dual Agency.”)  Across time the language has become more sophisticated and is called now (at least on the AAR form) “Consent to Limited Agency” with the terms spelled out to clarify what is “limited” in this agency relationship, and 2) the agency is given the option by the company to elect to remain a representative for the existing listing (representing the seller) and when the buyer appears to clarify that the agent will represent the seller only and serve the buyer as a sub-agent only.?

Documentation is signed to clarify either position.  This form is widely used in Arizona and is called the “Agency Election” form.  Most companies require this form be used so the consumer is informed how agency works in the state.  Most companies require the agent to submit this signed form into the Designated Broker.  The agency relationship is further clarified on the contract with a statement of “Agency Confirmation” so each party will see and sign acknowledgment of knowing the real estate agent representation in the transaction.

Various attempts were made across the years to regulate and later to legislate a mandatory agency disclosure in Arizona.  Each of these various attempts was thwarted — first, by the Attorney General, and later by the legislature itself.  The real estate community has done a superb job of disclosure from the onset of the discussion and today has a nearly perfect record of satisfying the respective consumers about the agency representation issue.

To my knowledge there has been no lawsuits ruled on by the courts on this full disclosure of agency.  That is not to say that threats of lawsuit and various mediations and/or arbitrations have not addressed the respective concerns of “was I represented” or “was I represented fairly” (an Arizona term in the commissioner’s rules — A.A.C. — R4-28-1101(A).)  (NOTE:  The REALTOR Code of Ethics calls this “honest dealings.”)

So, in conclusion, having served on many of the early AAR committees and task force groups, President of the AAR in 1991, and through the changing of several real estate commissioners, including one temporary commissioner (who prompted the AAR to draft an “emergency measure” of change on agency), we came through the growth process with a very workable solution — namely, full disclosure with well prepared documentation for the mutual benefit of consumers and agents alike.

– C Dale Hillard

Chances are you have someone to whom you can go with real estate questions, but it is extremely helpful to have someone who has “been down that road before” to assist you and help you avoid the pitfalls.

Rely on the experience of your Broker.  This is the reason the Arizona Department of Real Estate placed a Designated Broker in place over the licensed agent — to provide supervision of agents to avoid problems with sellers and buyers.  CDH