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April 2009
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June 2009

May 2009

Real Estate Marketing with Stats: Why Market Data Matters Now More Than Ever

In today's market, understanding market trends is more important than ever.  Buyers and Sellers are looking for transparency and insights. 

The quality of your answers to these common questions:

  • What's my home worth?
  • What's for sale (and is it a good value)?
  • How's the market?

will define your level of success. 

Confused people don't buy, and your ability to demonstrate your expertise and lift the fog of confusion with simple and accurate answers based on trustworthy data is the key to successful differentiation. 

Yesterday Scott Sambucci and the the team at Altos Research discussed success strategies for doing just this in our May Webinar for members. 

In case you missed it, the slides from the presentation are below, and in the next couple of days we'll be posting we've posted a recording of the full webinar (along with a special freebie for you from Altos Research) here in the Members Only section of our website.

We work with Altos Research to produce our weekly ILHM National Luxury Market Report (members have free access to the more detailed version here) which is the only real-time report looking exclusively at the luxury market nation-wide.

Don't forget too that they are offering discounts to members on all of their fantastic products.  So whether you want to supercharge your website and blog with market trend charts that update automatically, or create a custom market reports that is automatically updated and distributed every week, they've got you covered!  They even have a tool that allows you to do instant market trend analysis on your mobile phone--a great tool when you are face-to-face with clients.

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Many thanks to Scott, Michael, Ricky and the rest of the Altos team for hosting the webinar and sharing their insights.  


Luxury Home Short Sales Grow in Importance

The luxury market is facing increasing pressure, aggravated by credit market difficulties in the jumbo mortgage market. As a result, The National Association of Realtors reported that the share of home sales above $750,000 has fallen from 4.4% of total home sales in 2007 to a projected 2.3% of total sales in 2009 (NAR Projection based on partial year statistics). 

Limited loan availability, higher than usual interest rates for jumbo loans (from 150 to 200 basis points higher than conforming loan rates), and stringent loan qualifying requirements have slowed sales of luxury properties.  This has caused the national inventory level of homes priced above $750,000 to rise from 18 months worth in 2007 to more than 40 months worth as of the second quarter of 2009.

The lack of refinancing opportunities, fewer qualified buyers for luxury homes, a growing inventory of unsold luxury homes, and an economy in recession are all creating the “perfect storm” for luxury homeowners who need to sell and can’t.  NAR also reported that as of October 2008, the foreclosure rate on jumbo loans was more than double the rate on conforming loans. 

You can expect to see growing numbers of luxury homeowners in default.  These consumers not only need your help.  They represent an important opportunity.

Some of these homeowners will qualify for short sales and debt relief under the government’s new programs (see Making Home Affordable Fact Sheet: Foreclosure Alternatives and Home Price Decline Protection Incentives PDF 50k), others will have high mortgage balances, which will exclude them.   However, the chances are good that servicers doing Short Sales outside of the new government programs will follow the same basic process and paperwork  utilized in government programs.  Knowledge about these programs will be necessary for some luxury Short Sales and to your advantage in others. 

Watch this blog for more info on how The Institute can help you successfully target the growing Luxury Short Sale niche.


Sample Script for Extending the Listing Term

Recently an Institute member approached Laurie with a question about how to deal with the owner of a $6+ million home who listed with her for just a few months and has been  renewing for just a month or two at a time.  The agent was eager to get a longer term listing, but unsure how to accomplish this.  

We thought other members might find Laurie’s suggested strategy and scripts useful.  Here’s Laurie’s response about the situation (with sample scripts)…

Your seller is used to being able to extend for a month or two at a time. Shifting his attitude about renewing will be tough.  You’ve invested in marketing, have buyer prospects, and don’t want to lose the listing.  At the same time, with short term renewals, it is hard to justify doing more marketing.  The questions become -- can you create a “WIN” for him with a longer term renewal and how tough are you willing to be?

I don’t know his personality, but I’m guessing he is tough and needs to feel that he a winner in any negotiation with you.  With what limited information I have, here is one possible approach …

First, analyze the price range this property falls into.  Pull the statistics. 
  • How many homes are on the market in the $6 million to $7million price range? 
  • How many sales (REAL BUYERS) have there been in the last 12 months? 
  • What is the median days on market statistic for solds in this price range? 
  • The days on market range (from ___ to ____ days) ? 
  • How many months of inventory now exist? 
  • What percent of the list price did the sold properties sell for? 
  • Are there any sales pending?  
I’m guessing that your listing term to date will be less than the median days on market – that means you haven’t had a fair chance to sell the home.  If that’s true, make some charts to share the reality of the market with him.  Even if you’ve done this already, do it again, unless it been fewer than 30 days. 

Send him the market update. Then, sit down with him and say, “You and I have the same goal – to sell your home as quickly as possible for the highest price the market will pay.  I have spent thousands of dollars toward that goal and my team has spent countless hours working for you.  We are committed to continue until the job is done.  We have a number of good buyer prospects with whom we are aggressively working and we will sell your home. Hopefully we are close to the right deal.  It is listing renewal time, so let’s discuss three options.

Option one:  You can start all over with another agent, but you will lose ground by starting over. This is dangerous in a declining market and you won’t find anyone more motivated to sell your home than my team and I are.  In fact, please know if you decide to do this, my commitment to you is that we will take your listing in the future if and when you decide to change real estate professionals again. “

It is important to START with this option so he knows you understand it is an option.  You have the advantage by putting it on the table first. 

Option two:  You can renew for the short term.  However, please understand that if you do that, you are shifting all the risk to me and this also is a negative for you.  Here’s why --You are asking me to continue to invest more time and more money in a month-by-month marketing plan.   In your business would you be willing to make a significant long term investment for a client who renews their contract with you month by month?  Probably not.  If you want to continue to renew every couple of months, we can do that.  I will commit to implement the marketing plan which we agree is most likely to accomplish your objectives, and we can agree upon the budget. We’ll just shift to a standard seller-funded marketing model.”  (At this point, you may need to say, “Wait, hear me out on all three options here – there will be one you’ll like.”)  “With the short term listing and seller-funded marketing arrangement, I’ll agree to refund ___% of the marketing costs at closing." (This of course assumes that you are the closing agent!)

Option three:  The last option (unless you have another to propose) is that we continue to work together with a listing term that reflects the reality of today’s market, and gives my team and me a FAIR chance to sell it, so that I can invest in the marketing of your home and have the necessary time to work the active buyer prospects we have.  I’ve written 12 months in the listing extension agreement.  That seems fair to both of us."
(Be sure to give yourself adequate time based on the market conditions.)

 “What would you like to do?”

 Obviously there is some risk of losing the listing, but it seems to me the higher risk is spending lots more money and still losing the listing.  It’s time for him to get serious about selling his house.  If he expects an agent to upfront the marketing time and dollars without a fair chance of getting the home sold, he is really not going to get anyone’s best effort – the risk for the agent is too high.  He needs to understand this and recognize that he wins with an agent who can afford to make the investment of time and dollars in selling his home. 

If you are interested in more scripts, be sure to participate in our June webinar for members.  Top agents will share the specific scripts and strategies they are using to stay successful in today’s market.  Watch your email for more information. 


CLHMS online training launch just days away!

We are happy to announce that our Certified Luxury Home Marketing Specialist™ (CLHMS) online training is set to launch on Monday, June 1st.  That's only about two weeks away!

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Early Bird Special

Get on our notification list and save $$$ on registration.

On June 1st we'll be sending the hundreds of patient folks on our Online Training Notification List list an email with a "early bird special" discount code.  The discount code will be good for discounted registration through July 4th, 2009. 

This special "early bird" offer is limited to those who have signed-up on our Online Training Notification List by May 31st.  If you would like to take advantage of this limited-time offer, sign up here.  There is no obligation to buy--it is just a list of folks who would like to receive a discount if they do.

Standard pricing for the full training program will be $495. 
"Early birds" will receive a substantial discount!


May Wealth Report Newsletter

The Wealth Report

Members can find the May issue of The Wealth Report Newsletter from The Luxury Institute on our website.  This issue features:

  1. Luxury Retail - Sales Still Suffer But Stocks Soar
  2. Wealthy Consumers - Spending Plans
  3. Financial Services/Wealth Management – Marketing and Sales Practices
  4. Luxury Home Appliances – Brand Status
  5. Luxury Bathroom Fixtures – Brand Status
  6. Luxury Hotels – Brand Status
  7. Luxury Jewelry – Brand Status
  8. Excellence In Luxury Leadership – Fine Jewelry

Members can download it here (login required).


Recording of April Webinar now available

Just a quick post to let Members know that the recording of the April webinar, How to promote yourself and your listings to Institute Members and other agents around the world, featuring Janet Case, CEO of Proxio is available for viewing anytime. 

You can find the link here in the Members Only section of our website. 

For more info on ProxioPro and the benefits Members receive, see our previous post and the Member Benefits section of our website (login required).