Property ManagementAuctions, Internet Marketing, and Forbearance Facilitators Will Dominate New Homes Services in 2010
Opportunities for real estate agents to build a profitable new homes niche in their markets could explode in 2010. Traditional new homes marketing is out. Innovative value-driven service is in. What were sold as leading edge marketing tools no longer matter. Such as:
The fact you have a website
The size of your franchise
The number of agents in your office
Your experience (unless it is related to the above services).
You will hold open houses.
You will "sit the models."
You will run ads in the local paper.
What has worked in the past is broken, but doesn"t need fixing. It is being replaced. Even MLS is not always a "must have." This is why the playing field is level and the grass freshly mowed for those agents willing to focus on the real needs of the "new homes" market.
To dominate your market, you must build your own marketing team and learn to facilitate forbearance agreements. It"s a new way for a new day.
Your focused goal is to build and deliver a strong on-site sales team and a proven prospect delivery system. Your team"s goal is to help lenders and developers with two important marketing resources:
1. Auctions - With the liberating FHA lending guidelines established for condominiums effective December 7, 2009, look for lenders to turn to auctions, as opposed to wholesale dumping. Get to know a good auction company. Chances are they know a good internet company. Ask them about stealth auctions that don"t require public disclosure, but give the owner time to test the auction concept.
Stealth auctions are conducted on line quietly over a short period of time to test pricing, products and the market in general. It is also a way to test the auction alternative without going public with a distressed sale. If it works, great. If it doesn"t, the developer or lender can move to a formal auction with more confidence. Quickly, without much risk.
The good news; you don"t have to be an auctioneer.
2. Internet Marketing – Introduce an aggressive, proven real estate-focused internet marketing service to the owner. The right internet program can be implemented easily, quickly, and without overwhelming costs. There are thousands of internet companies out there. Find the few that are specializing in commercial condominiums, new homes, and call their clients. The ability to leading the builder to the right company is priceless.
There are builders in 2009 who sold their condominiums, home sites and single family homes without the use of MLS, newspaper advertising or an active cobroker program. Some used their own staffs. Some used brokers. Some used stealth auctions. Auctions houses made internet sales from around the world as part of full blown traditional auctions. All depended heavily on internet marketing. This dependence will only grow.
The good news: you don"t have to be an internet geek.
3. Forbearance Agreement Facilitator - This is a high sounding term for a service your auction/internet team can easily provide. Your job is to show the lender what your team can bring immediately in terms of sales.
Become a local hero in your community by helping just one asset owner save his equity, or one lender keep one major community from foreclosing by facilitating a forbearance agreement. Attorneys will take care of the legal side. What your marketing team provides is the all important marketing support. Then as part of your compensation, you become the listing broker for the entire condominium or subdivision.
The benefit to you would be fees, commissions, exclusive listings for the entire property, and perhaps a large bulk sale. Even more important, if you are the broker driving prospects and getting sales, the market will soon realize you moved its cheese to your house, and will come knocking on your door. That will be when you know you are the dominant new homes marketing broker in your area.
The good news: This is nothing more than making a presentation much like you would to a developer who is not in trouble with the lender, but you are doing more than selling. You are truly helping a developer or lender prevent serious financial losses.
Since the "facilitator" service might be new, consider the following paragraphs a coaching session:
Your role is as simple as it is important. Your role is to understand why the lender will not give the asset owner a forbearance agreement. If it is marketing related, show the lender why it makes marketing sense to grant one, if it is marketing based.
To be effective, you need to mentally seat yourself behind the stack of files on and under the lender"s desk. Many, if not most, of these files contain requests from builders and developers who need more time to make their mortgage payments, or their property will be considered to be in pre foreclosure or foreclosure.
The lender does not want to foreclose, but may have no choice. The lender has no reason to give the asset owner a forbearance agreement if the owner cannot satisfy the lender that his marketing strategies and tactics work. Until now, all the lender has heard are pretty much the same old ideas. They don"t work. Everybody knows it.
If you are thinking, "Hey, I have an idea; let"s put the property in MLS and pay higher than usual commissions for sales", you are insulting just about everybody and showing how "yesterday" you think.
First, you would be signaling that sales are horrible or there is something wrong with the property. Otherwise, why would you try to attract those brokers who care more about the commission, than the needs of the buyer? Second, this is a common, but no longer effective strategy.
Here"s what you do (Ienders will eventually figure this out on their own, but you can be the first in your market).
Lenders need someone with a proven, effective, easy-to-manage marketing idea to step up. This is where you enter stage left with an actual solution.
The lender, without a quantified marketing plan, has no, nada, none, zip reason to restructure the owner"s loan if he does not have solid reasons to believe he will be repaid. There may be other reasons, such as a bad location, bad experience with the borrower, but for our discussion let"s stay with this one.
So it follows that if that is the only reason he will not consider a forbearance agreement, the only concern you have to resolve is the marketing issue? Hint: MLS, A newspaper campaign, open house, and broker opens are not the answer.
There is only one solution that is quantifiable, low cost, and easy to manage.
But before you tip your hand, you must ask the lender, with the owner"s permission, if you brought them a marketing plan that you could prove delivers enough sales to meet acceptable sales projections, would the lender be willing to consider mortgage forbearance for say a year or two? If the lender says "no", move on. If his eyes widen, he clears his throat, squints, or mumbles "maybe" here is your next move:
Think. Think about marketing strategy. Get your marketing team (auction company and internet company) on a conference call with you. Tell them both that you need a proposal fast, with contact information for references. Write a one or two-page executive summary on top of the proposal. Include best case, worse case and probable sales projections.
It is important to understand that you do not have to become the expert in auctions, internet marketing or forbearance agreements. Your job is to put your "new homes marketing team" together, and it is 100 percent internet driven.
Be specific in your proposal. Tell the internet company you want "call to action" ideas, a two-week start up, a sample of what the traffic, sales and closing reports will look like, and how they expect to be paid. Make sure you call their references, because the owner or lender will certainly be expected to call them.
If the developer is involved, he must approve the proposal before the lender sees it. If the property is already in foreclosure, you will be dealing directly with the hapless "special projects" manager or his overworked kind.
Call a meeting with the lender. Ask him to bring his most experienced IT manager to the meeting to make sure it is understood exactly what is going to be done for the lender, including you becoming the broker of record for the property. He may not include him, but you had to ask.
Here"s a key: The lender may or may not approve the proposal for the subject property, but he may buy it for others in his portfolio. Worst case: you leave the lender"s office with a relationship with a commercial lender and a real good idea of how your team responds. You are on your way!
There is also an excellent chance that the developer has a website and an internet marketing service. They are not delivering prospects for whatever reason. Otherwise, he would not be discussing a forbearance agreement.
When it comes to forbearance agreements, builders/developers are already passed being embarrassed, feeling hopeless, and without answers.
They need a marketing advocate to help with their lender. Who better than you? You can do this. When better to start building your marketing team than now?
Happy "New Homes" Year!