Category Archives: Agent Advice

Rain City Guide has been covering Zillow since before they launched… Some of our more popular articles include a story about the accuracy of a Zillow Zestimate and as well of some ideas around how you can interpret a Zestimate.

In Search of a Secret Weapon

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You: An articulate, interesting and dynamic real estate agent/broker with a desire and determination to turbo-charge your online marketing activities. You have a wild streak and are willing to consider the day (potentially sooner than later) when nearly all of your business is generated online (a la Ardell)

Me: A ruthless online real estate marketing machine looking for a short-term commitment so that we can walk on stage in San Francisco at Inman’s Bloggers Connect conference as the winners of Project Blogger. 🙂

I happen to know that Ardell already has already chosen her secret weapon… so has Jim. While I have a few people in mind, I figured I’d open it up to the RCG community before I commit to anyone. (While not required, it would be helpful if you’ve either already attended one of my seminars or would be willing to attend the March 30 seminar in Pasadena…)

Note that there are a bunch of rules and guidelines, but we’ll do our best to differentiate ourselves by not following too many! I’m of the opinion that no one wins in marketing (personal, professional or corporate) by following the rules. 😉

Also, there was discussion while developing “the rules” on the appropriate amount of money that a participant could spend promoting themselves. If you team with me, this will be a very cheap endeavor. I need someone willing to commit time not money…

You can apply to take part by leaving a comment below. My recommendation is to read up on the event and then convince me that you are hungry and can commit to focusing your marketing activities to the online environment over the next few months. There WILL be a lot of publicity around this event, so this is not for the timid.

And in all seriousness, expect to have a lot of fun!

Zero Down Loan? You Better Have a 620 Credit Score or Higher

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Update 11/11/2008:  This is post is more of a reflection of the times.  Zero down loans are not available with convetional financing at this time.  Private or hard money may have zero down loans available.   FHA with a loan from family members is the closest to 100% financing that I’m aware of.   As with any posts about mortgage guidelines, be mindful of when they were written as guidelines have (and will continue to) change.

I’ve been working on a zero down rate quote for Jillayne, since she requested that two weeks ago when I did my posted my first Friday rate’s on RCG.   She was curious how 100% loan to value mortgages compare based on different credit scores.   At the company I work for, we have around 80 (woops…make that 78 now) lenders we work with.   A majority of our business is handled in our credit line (Mortgage Master is a Correspondent Lender) and some business is “brokered”.  Typically this is subprime or unique loans with added risk.   As a Loan Originator, you wind up selecting 3-5 of your favorite “a money” sources, a few “alt a” lenders and of course, and I like to have around 3-5 sub-prime lenders.   These are the lenders and representatives you rely on, get to know their products and trust their underwriting.   

Back to Jillayne’s request, last night I called my three preferred subprime resources for my rate quotes…what’s the lowest credit score they will lend to at 100% ltv and is the rate and program?  Thanks to RCG’s Tim, I’ve just learned that one of those resources I’ve relied on, New Century…and the only one that I work with who did quote yesterday an 80/20 with a 600 mid-score is facing troubling times to say the least.

“New Century Financial Corp. said it’s the subject of a criminal probe and Fremont General Corp. agreed to a cease-and-desist order with bank regulators in the biggest regulatory actions to emerge from the subprime mortgage meltdown.”   To read the entire article on Bloomberg, click here.

Every day I’m receiving memos from various subprime lenders with details of (much needed) tightening guidelines.  If you currently have clients shopping for a new home and they are using subprime financing (you might know this if they’ve told you their credit is not great, if the mortgage is a 80/20 with a prepayment penalty, etc.) you just might want to contact the Loan Originator to make sure the preapproval is still valid.  If that client has a credit score below 620, they may (1) not be approved any longer or (2) be approved for an entirely different rate (much higher). 

Subprime lenders are either eliminating their zero down products all together or are raising the credit score requirements.  Previously, a 580 – 600 mid-credit score was no problem for 100% financing.   They were beating down our doors to do these loans!  Now, the new standards for mid-score (with the lenders I work with) seems to be 620.  This is a significant jump that will delay some rentsers from buying homes until they improve their credit.   Which again, I think this is good.

I’ve mentioned this before, but this is so important.  If you have clients who have used subprime financing who have purchased homes in the past 1-2 years, this could be a good reason to pick up the phone and call them.   Hopefully they received good counseling from their Mortgage Planner AND they took the advice to heart…working on cleaning up their credit usage, managing their spending, etc.  With the subprime market tightening, if those subprime borrowers have credit scores below 620 when their prepayement penalty is up and their fixed payment is adjusting towards the sky, they may be are in a very tough situation.

Jillayne, this post is all ready a bit long… I promise I’ll have your zero down rates posted soon!

Use Your Sent-Items Folder as Inspiration

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It was so much fun to stop off in Seattle last week to give the seminar in downtown. Meeting up with Rhonda and Jillyane (and potentially a new contributor I’ll introduce soon!) was awesome!

One of the tidbits I share with the real estate professionals in the audience that seems to resonate well (at least based on the feedback I’m getting) is when I explain to them that even the non-bloggers in the audience are already writing blog posts, but they are not getting credit for it. Here’s my logic in a nutshell…

Assumption #1: Writing a blog post is just like sending a webmail (via Hotmail, Yahoo Mail, Gmail, etc), except that it is one step easier. With a webmail you need to (1) click on “write” or “compose” message, (2) fill in the email address of recipient, (3) fill in the title of email, (4) write your message, and (5) click “send”. Blogging is one step simpler because you do not need for step 2, i.e. fill in the email address of the recipient since a blog post is essentially an “email to the world.” Otherwise, all the steps are essentially the same with the final step being “publish” instead of “send”.

Assumption #2: The sent-items folder for most real estate professionals is already filled with good stuff that they are already experts on… For most real estate agents, the sent-items folder of their email program is likely to find information on neighborhoods, mortgage and closing process, local events, etc..

Because most agents are already sharing lots of their knowledge via email and because a blog post is nothing more than an email to the world, hopefully, you’ll start to see how I can say that most agents are already blogging… The idea that they are not getting credit for their knowledge stems from the fact that if a professional has a lot of stored up information in their “sent items” folder, then the search engines and other bloggers can’t give them credit for this knowledge. The last bit is critical to the seminar, but not necessarily to this blog post… 😉

Interestingly, both Steve Rubel (Turn Gmail Into Your Personal Nerve Center) and Greg Swann (Feed guarding: Protecting your weblog content from theft — or worse fates . . .) wrote articles today that either demonstrate the blurring of email and blogging (i.e. blogging via email) or take it for granted (i.e. RSS syndication).

By the way, I’ve been taking my own advice about unleashing the “knowledge” from my sent-items folder over on the seminar blog by publishing answers to many of the questions that I’ve been getting from seminar participants. I’ve been inundated with email questions lately which is great for providing me blog content, but not so good in terms of providing me time to answer everyone quickly! 🙂

There's No Love for the Subprime Borrower

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It’s all over the news, we’re hearing about major subprime lenders having to restate their losses and every day, lenders are coming into my office to inform us of changes to their guidelines.   This is all good, right?    It will be tougher to provide loans for home buyers who maybe should be spending more time to learn about budgeting and using their credit cards.    What about the people who are all ready in these programs?

First, allow me to explain the basic dynamics of these loans.  Many of these mortgages are zero down, 80/20s (80% of the loan to value for the first mortgage/20% of the value for the second mortgage).   The first mortgage is typically offers a fixed rate for 2-3 years with a prepayment penalty (the standard is six months interest) that matches the fixed rate period.   In addition, the mortgages may be interest only or amortized at 30, 40 or 50 years.    The rates on these mortgages are completely dependent on credit score. 

When I meet with Mr. and Mrs. Subprime, I advise them of their options of buying now using this type of subprime mortgage or that they can work on their credit, job history, etc. and buy later with a better mortgage program.   Because there are no guarantee of what rates will be (or maybe because they know there’s not guaranteed they’ll clean up their act) and because they want to buy a house now, they often opt for the subprime mortgage.   Once this happens, I heavily stress (or Jillayne would say, I lecture 🙂 —which I’m sure I do) to Mr. and Mrs. Subprime that they have 2-3 years to change their spending habits because once their fixed period rate is over, their mortgage is going to adjust and do so big time.    I let them know that I want them to be in the best position for a refinance into permanent financing (or to have a better mortgage should they decide to sell the home assuming they have any equity) and that the subprime mortgage they are using to obtain their home is temporary financing.  

Many of my clients in these mortgages have done very well and I’m proud of them.   They have taken the responsibility of owning a home and having a mortgage to heart.  I’m able to restructure the original mortgage and improve their situation greatly.   The concern is for Mr. and Mrs. Subprime who just didn’t get the hang of it.   They continued to charge up their credit cards, they bought or leased a new car to go in their new driveway and maybe a new TV, too.   They’ve been sliding ever since the holidays and are now having a tough time paying their mortgages on time.   Maybe they just have one mortgage late.   Their credit is rough at best.   Their fixed period (and prepayment penalty) is over and now they really need to refinance fast because their mortgage has adjusted for the first time—their rate is now 2% higher.  Their situation has gone from bad to worse.    With all the tightening in the subprime market, even if their credit scores and scenarios are the same as when they bought, there may not be a program for them to refinance out of now.   They will be forced to sell (hopefully they have enough equity to pay commissions and other closing costs) or to somehow manage to choke down their increased payments.

I guess this post is a plea of sorts.  If you currently have a subprime loan (especially the type I described) please contact your Mortgage Planner to have your credit reviewed to make sure you’re on the right track to be able to refinance (or have a better loan for when you sell) when the time is due.   Do not assume there will be a program for you if you have not made significant changes to your spending and use of credit cards.   If you’re a real estate agent or loan originator, check in on your subprime clients to let them know of the changes in the industry…see if they need guidance to stay or get on track so they don’t wind up stuck with a higher mortgage payment, being forced to sell or foreclosure.

Web2.0 is About You

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Wonderful video from a Kansas professor…

(via ProBlogger)

I’ve been told I move a bit fast in my seminars (more than once!), but I found this guy to move at light-speed! Interestingly, if the video makes complete sense to you, then you will have no need for my presentation. However, if you’d be interested in learning a bit more about how consumers matter in this web2.0 world (i.e. “you matter”), and how you, as an agent, can flip this logic to use these web2.0 tools so that you matter (i.e. “brand you”), then I’d love to see you at my Seattle seminar on February 20th! (Or in Oakland, CA the next day!)

So far, the feedback from the seminars has been overwhelmingly positive. I was a little hesitant to make a big deal out of the seminar before I ran a few trials because my presentation is more-than-slightly unconventional and I started to doubt myself. It wasn’t until I heard from some of the attendees that it was one of the best real estate presentation they had ever been to that I started to feel more comfortable that I might be on to something big. 🙂 Also, both Jeff, Rudy and Brian give some encouraging feedback that will definitely keep me presenting at a few more seminars!

By the way, my presentation style was highly influenced by a short presentation given by Chris Smoak where he was able to move at the speed of light because the presentation moved with him. (Chris is the guy behind one of my favorite mash-ups ever, Bus Monster.) After witnessing Chris in action, I just knew I’d have to create a similar presentation some day.

Finally, Greg has been posting the audio from my presentation over on the Bloodhound blog (Part 1, Part 2). Personally, I think the seminar is simply too long for an audio presentation (it NEEDS the visuals!), but some may find it interesting, nonetheless.

Getting Ready for a Home Inspection

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Having attended many, many home inspections, I would like to offer a few tips regarding getting ready for an inspection (sellers) and what to bring to an inspection (buyers).

There are a few things that a seller should do to get ready for an inspection. One is to change your furnace filter. I like the big bright blue ones for the inspection. When the inspector pulls out a filthy, dirty sometimes crumpled up filter in front of the agent and buyer, there is always a 15 second staring at the filthy thing that transpires. Just take my word for it. It’s not a pleasant 15 seconds. Check your filter before the inspector arrives.

For those not buying or selling property, go check your filter. They cost very little. Keep a new one in there monthly or every other month during heating season and year round if you have forced air and air conditioning.

Also for sellers, the inspector will be spending some time with the buyer at the furnace, hot water tank and electrical panel. Make sure these are not covered with an inch of dust and dirt and are not blocked by boxes and storage items. Most times the inspector has to move things to get to these, which can put him in a bad mood. Trust me, you don’t want a crabby home inspector. At a recent inspection we had to move a whole storage cabinet to find the whole house GFI in the garage. So yes, wash that hot water tank and change that filter and make sure three people can comfortable get to and stand in front of these areas.

Buyers should bring some graph paper for drawing out the floorplan, a measuring tape for measuring the refrigerator opening if you are going to buy a new refrigerator, a clip board and pad for making notes, and of course your check book to pay the inspector. The Home Inspection is one of the few things you pay at time of service in a real estate transaction and is generally not transferred to the closing sheet. Sometimes you can be reimbursed for the inspection, so be sure to tell your agent or escrow closing person to show the cost as a POC on the HUD 1 if you have seller paid costs built into the sale price.

There are very few things you can do to get ready for a home inspection. Putting in a clean furnace filter is #1 for a seller.

Linkation, Linkation, Linkation

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(I enjoyed writing my previous article on the reasons that real estate agents should blog, and it got me thinking about all the other bits of advice I’d like to share with real estate agents… I have a bunch of ideas, many of which are still only half-baked, so I’m looking toward your comments and suggestions to see where I should take this mini-series on blogging basics for real estate agents.)

What are the three most important factors in determining the value of real estate?

  1. Location
  2. Location
  3. Location

grow-a-brainWhile this well worn mantra forms a fundamental building block of real estate value, the concept of location is nearly irrelevant in the on-line world. I’m located in Seattle, WA, the servers hosting this site are in Santa Monica, CA, and you could be reading this from anywhere in the world.

If you’re an agent thinking of moving on-line, there are a bunch of real estate fundamentals that you’re going to want to relearn if you are going to be successful. I’ll start be revising the well-worn mantra to make it relevant on-line…

What are the three most important factors in determining the value of your real estate site?

  1. Links
  2. Links
  3. Links

And just as all locations are not created equal, not all links are created equal.

If you’re looking to build up a website that ranks well with search engines, then you’re number one focus should be on getting high quality inbound links (i.e. other sites linking to your site!). In particular, you want to build up as many inbound links from popular blogs and websites as you can. It’s common knowledge that 3 high-quality inbound links are more valuable than 1000 links from lame link farms… You want links into your site, but more importantly, you want quality links into your site!

Note that you do not get any search engine benefits from outbound links (links from your site to other sites). At best, outbound links won’t affect your ranking and at worst, they can seriously damage your ranking should you link to spam sites. In other words, if you’re linking to quality sites, you’re fine… If you’re linking to spam sites, you can expect the search engines to label you as spam.

Since there’s no benefit to outbound links, does this mean that you should not link to other sites?

No Way! Quite the contrary! Linking to other sites is critical to building up your site’s credibility with other bloggers. Join in some of the wonderful conversations that makes up the web and you’ll likely find that more and more people begin to link to your site. Find a blog you really like and then write articles about their articles! Link back to them and you’ll be surprised how quickly they start linking back to you! It’s actually a lot of fun to be part of this process.

There are very few sites that can build up credibility without linking to other sites and if you’re reading this blog looking for advice, you are probably not one of them. My advice to new bloggers: link… link… link… and link some more. Link to a blog saying something nice about their site, and there’s a pretty good chance they’ll link back to you!

So why are links so important

Links are the lifeblood of the web. The search engines rely heavily on links to determine how to rank your site. And more than any other factor, the rank of your site on search engines determines the value of your site. Granted, if you’re writing a blog for personal reasons, then you might not care how many people reach your site via search engines, but if you’re blogging to get clients, then you’re sites success depends on your how you are ranked by Google. Ranking high on Google searches generates web-traffic which generates leads which generate sales.

There are other ways to generate web-traffic, but none of them are as cheap and/or effective as generating leads through searches. (This site has a nice overview of how of how search engines work!)

So, all of this leads to an obvious question… How do you generate inbound links? Check back in a few days. I’ve got a bunch of ideas/thoughts on this subject. I’ll try to gather my thoughts and turn them into a post!

On a related note, I get asked by other bloggers on a regular basis if it is okay if they link to Rain City Guide. My answer is always “Yes”. I love links! Any business blogger who refused a link would be nuts.

7 Reasons for Real Estate Agents to Blog

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A recent conversation on Tribe got me thinking about my experiences with being a real estate blogger. Here are my seven reasons real estate agents should consider blogging:

  1. Fun. I really enjoy the many conversations that I’ve had with real estate professionals from all over the world that would never had taken place had I not started this blog!
  2. Expertise. By simply writing about real estate and your local community in a public forum (like this!) you become an expert. Anna gets emails and calls from people on a regular basis asking for her opinion on real estate issues. I’m a transportation engineer, but even my opinion on real estate issues holds some weight! For example, someone from my wife’s corporate office recently called to get advice on how to better use technology in real estate.
  3. Trust. A client recently told my wife that he completely trusted her advice because of the honesty in her writing! That’s darn near impossible to get with a regular website.
  4. Knowledge. I follow local news, national news, local blogs, real estate blogs, tech blogs, etc, because I feel a responsibility to my readers. Maybe you won’t feel that internal pressure, but it definitely drives me to ensure that I’m up-to-date on real estate news.
  5. Ranking. Because of all the unique content, we get hits on all kinds of unusual real estate searches. In addition, because we’ve gotten some links from some high-ranked websites (mostly other blogs), her site ranks really well when compared to most real estate sites. Additionally, on typical real estate searches like “Seattle real estate”, we’re ranked very high (#7 on Google) for such a new site and I know that we’re beating out sites that are spending $1000s a year on marketing their site.
  6. Cost. Compared to most marketing techniques that agents are using, blogging might as well be free. I pay $100 a year to host this site. That’s it! The cost of blogging is measured in time, not money!

    7. [photopress:Sasha_Drawing_1.jpg,thumb,alignright]

  7. Potential. Rain City Guide is not even 10 months old yet. Give us two or three years of blogging, and we’ll easily be the most popular real estate site in Seattle. Ideally, the site will continue to grow as the web technologies evolve and more perspectives are added. I’d love to do more podcasting and videoblogging. I’d love to have someone document the building or remodeling of their home. I’d love to have some more real estate agents blogging about their local areas (Seattle, Bellevue, Redmond, etc. neighborhoods). I’d love to have someone take on some more analytical issues (Tom?). There are so many interesting ways that Rain City Guide can evolve that I feel like we’re only touching the surface of it’s potential.

When I look into my crystal ball to see the future of real estate blogging, I see one or two real estate blogs in each major city that have really captured the local market by having a group of prolific real estate professionals (agents, brokers, lawyers, etc) writing about local issues. I see people turning to these blogs to get unique and personal perspectives on issues like moving, building, buying and listing. I don’t think you’ll be surprised to hear that that is where I plan on taking Rain City Guide!

What's in a Name?

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[photopress:thor.jpg,thumb,alignright] I like to think that Rain City Guide is constantly growing and evolving… Along those lines, Anna has been doing some growing (and evolving?) of her own lately. (She’s going to kill me for saying that!)

For those that don’t already know, Anna is expecting to have our second child in a little over a month.

So, let’s get down to business… What should we name the child?

Some ground rules:

  1. Boy or Girl: We don’t know if it is a boy or girl, so you’ve got twice as many names to suggest…
  2. Bilingual: Like her big sister, this child will grow up to be fluent in two languages (it is a must since one set of grandparents speak only Russian and the other only speaks English!). While I encourage you to suggest all types of names, if the Russians can’t pronounce it, I’m pretty sure that it won’t end up flying with Anna
  3. Outrageous: I love unusual names. Anna hates them. While I might be able to sneak past a name like Thor or Tyr, you can be pretty sure that we wont’ be naming our child after a major corporation.

Beyond that, I just look forward to reading your suggestions!