Asset Management & Recovery: October 2006

Why Isn’t My Property Selling?

Well, this is not going to be an award winning blog, but there are only three answers to the question.

1)      The agent/broker is not marketing the property. – Please people, plant the sign and pray is not a good marketing program !

2)      The property is overpriced.

3)      The property is overpriced, so the agent/broker is not marketing the property.

Is it possible that the property needs new paint and some repairs?  Yes.

If the seller won’t do the work and prices the property at retail is it overpriced?  Yes.

If you need to get the smell out and the seller won’t remove the dog is it overpriced?  Yes.

I could name 1 million things that can all be overcome by correct pricing.

If the property is priced correctly, aggressive marketing will bring in prospects.  If aggressive marketing does not bring in prospects, the property is not priced right.

That’s just my opinion America.  Let’s hear what you think.

Today I spent 8 hours in a seminar on foreclosure properties.  There were about 100 people in the class.

Distressed properties are my target market.  Auction or general brokerage, it does not matter. 

Everywhere I go, I am wearing a “Gryphon” shirt or hat.  Today was no different.

As I entered the room, I ran into the instructor.  I had never met her before.  She said “You must be Rich.  Nice Shirt”.  She is from Arizona !!?? The guy standing next to her looked at me and said “You are the auction guy!”  Ain't never met him.

On the way out at the end of the day I overheard a young woman complaining about the fees she is charged by her broker.  I handed her my card and told her that I was recruiting and, based upon overhearing her complaints, could get her a better deal.  She looked at my card and then at me and said “I know you.  Well at least my husband does.  He talks about your company all the time.”  I am pretty sure I have never met him.

So, why do I bring this up?  It is because we are obviously known in our niche.

Direct mail and email.  Direct mail and email.  Logo shirt everywhere.  Branding, branding, branding.

Branding pays off.

I was looking through some old files this evening and I ran across an old paper asking me about success and failure.  I remember writing it.  The answers are just as true and complete today as they ever were......

There have been many accomplishments as well as many failures in my life. 

Thinking back, the biggest accomplishment of my life is having the drive and desire to not let the failures take control when they so easily could have.  As a child, I was always involved in sports.  Loosing a game made me want to win the next time even more. 

At 18 I joined the US Army.  This experience taught me even more about overcoming obstacles, pushing on when your mind and body didn’t want to and making sure that the man next to you made it through as well.  I did not succeed unless others did. 

Today I run my own small business with my wife and after two years (more now) we are seeing the successes of our efforts, yet I have not achieved my final goal, my biggest goal. 

Some day in the distant future I will see my daughter graduate from college, possibly law school and marry.  That is when I want to be able to sit back, relaxed and know that I raised her well. 

This is when I will have true accomplishments.

When was the last time you worried about a meal?  I mean seriously worried?

This has nothing to do with real estate, but a lot to do with giving to the local community.

Here is some food fot thought........

About a year ago I met one of the most remarkable people I have ever met.  She was a 5ft. tall giant named Francis Carr.  Francis runs the Holy Family Soup Kitchen in Columbus, OH  (http://www.holyfamilycolumbus.org/)  where she serves over 3500 meals a week with a staff of one, a limited budget and a base of volunteers.   

When I met Francis, I was in a leadership course (Leadership Columbus http://www.leadershipcolumbus.org/).  In this one year course, individuals have an opportunity to visit with different Columbus civic and governmental leaders to find out about the City and what it is all about.  Many cities have these and if you are interested, you should call your local Chamber of Commerce.  Anyway, the group meets once a month, every month for a year.  We do projects, etc.  This is not the point. 

One session had to do with the homeless and poor in Columbus, OH.  (Yes, the people that will never buy a house.)  For lunch, everyone in the group was to eat at a soup kitchen or homeless shelter.  We were to interact with the people who find most of their meals here.  It was amazing.  After lunch, Francis gave us a tour of her facility and told us about her services.  I was amazed again to find out that her Christmas sponsor had fallen through.  Francis was going to reach into her savings to pay for the meal because “her people had to eat” and she was not going to let them go without a Christmas meal.

Meet Francis  - As She Accepts a Rotary Award

Service Above Self Lives Through Volunteers
While Frances Carr worked 70 hours a week with no pay, coordinating volunteers and raising funds for the Holy Family Soup Kitchen, she neither expected to be recognized by the Columbus Rotary, nor to receive a $1,000 donation for her cause. Frances is just one of nine individuals in Central Ohio who have been honored for “service above self” in their contributions to community and commitment to the Columbus Rotary vision “to effect positive and enduring change in the lives of others.” – Pulled from the Columbus Rotary Website.

Why are you telling us this Rich ?????

Well, organizations like Holy Family Soup Kitchen rely on individual and corporate sponsors for holiday meals.  Right now, they are looking for people who can help to provide assistance for Thanksgiving and December Holiday meals.  A little more than $500 can feed a Thanksgiving dinner to all of the needy at Holy Family.

Why am I telling you this?  Because there are Francis Carr’s all over the US.  There are people here that need your help.

So do me a favor.  Find an organization like Holy Family (it doesn’t need to be a Church) and help them out a little.  Find a military group and sponsor a soldier, airman, sailor or marine in the field.  Donate an hour of your time. 

Will I receive a lot of flack for this?  Probably.  If I get one person to donate $5.00 to a worthy cause, it is worth it.

To all of you who consistently take it upon yourselves to help those in your community who need you, thank you.

Alright, I will tie this to real estate for you....  Welcome to Columbus.  With a community full of people like Francis, who wouldn't want to live here?

Richard F. Kruse

There have been a lot of questions posted on AR lately concerning how to market a listing, how to market your services, direct mail, yellow pages ads, etc.

Over the past 10 years, I have tried many things, but the old school approaches seem to still work the best.  We do substitute email for some direct mail, but use both.

On personal promotion, I have found the key to be blanketing the farm, niche, or whatever.  We do email, direct mail, print media and press releases.  Daily I hear "I recently saw your (insert here)"  Last week I ran into an acquaintance whom I have not seen in a few months.  She told me that she saw my picture on an ad in the local business paper.  I have not run a picture ad in a long time.  I guess it made an impact that was reinforced by additional media.

The outreach is all pretty basic, but constant and not that expensive:

450 Postcards every two weeks: $360/mo.

Email Blast every two weeks (alternate) from ContantContact.com: $40/mo

Local business paper ads every 2 weeks: $170/mo

Press releases a couple times a month

Logowear everywhere - The guys at Home Depot think we have a huge construction division.  I have 1 guy, part time.

That's about it.  Not all that complicated at all.  It does take time though.  I have not found the magic marketing pill that provides instant success, but I am still looking.

We had a wonderful auction this morning.  The property had been advertised as available for auction with pre-auction offers considered.  During this time, there were 2 offers tendered.  One at $225,000 with 5% seller contribution, gas line warranty, home warranty and 5 days inspection clause.  The second offer was about the same, but at $250,000.  Both offers had about $750 in deposits.

On auction day (11am Eastern today) we had 4 bidders register with $15,000 deposits, all in certified funds, ready to bid utilizing a non-contingent contract with 30 days to close.  In addition, the buyer will be responsible for all closing costs including title insurance if they want it.

The final contract price was $253,000 and the auction lasted all of about 2 minutes.  I should also mention that it is currently 12:20 and I am on my couch 15 miles from the property.  The contracts are done, the $15,000 is already in the trust account.

One of the registered bidders who did not buy was a Realtor specializing in the neighborhood.  On the way out of the property both she and the president of the area home owners association commented that the property sold way above their expectations.  They also disclosed that they showed up because they thought they could "probably buy it low" at the auction.  While disappointed that they didn't get the property, both were thrilled that this sale will help bring up the values of other property in the neighborhood.

The sellers only comment was that he wondered how high the bids would have gone had he let me do all the advertising I had suggested.

I hope everyone else has as good of a day.   

Can you buy at the Sheriff Sale and make a lot of money?  Yes and no.

If you want to do this there are a couple of things that you need to know.  This list in by no means complete, but it is a good start.

·        Usually, the bidding starts at 2/3 of the Sheriff appraisal.  This valuation is completed by three appraisers chosen by the Sheriff and is a Drive By Appraisal only.  They do not get inside and have no idea if the plumbing is ripped out or if the basement is flooded.

·        Buyers are buying AS-IS and With All Faults

·        The deposit needs to be in certified funds.  No checks.

·        You probably can’t get in to the property before bidding.

·        There are no keys at closing.

·        If there is someone in it when you take title, you get them too.  Removal of the occupant may require a Writ of Possession and a forcible removal.

·        You may be bidding against the bank and they have the right to bid up to the amount of their debt.  They may back off early or the debtor may have equity, so there is an opportunity.

Now that you know a couple of the potential problems, consider these steps to help protect yourself a little bit.

• Read the foreclosure file at the courthouse.  It is a public record and available by request.  Typically there is an area to read through it right there.
• Look for evidence that the lender has obtained title insurance.
• Do a quick lien search and find out what else you are up against.  There may be more than just the bank.  IRS liens might not strip off.  This can be hired out to a professional searcher at the courthouse for a fee or you can do it yourself.  You are already at the courthouse anyway.
• Go down to the sale for a few weeks before bidding yourself and just watch.  There are guys down there that do this for a living.  Some of them, at least here, are willing to answer a couple of questions.  Just don’t bother them while they are bidding.
• Give a call to the water department.  Here, the sewer and water bill follows the property.  It may be another lien that you will need to pay.

I could write a book here, but it should be known that buying at Sheriff Sale is a BUYER BEWARE purchase.  You may get a discount as would be expected for taking the risk.  You may also get hung up on a detail that you didn’t know about.

RULE # 1 AT SHERIFF SALE IS IF IT SOUNDS TOO GOOD TO BE TRUE AND THE PRO’S ARE NOT BIDDING, THERE IS A PROBLEM.

I heard this last night and it got me thinking.  I'd rather be both!  But what if you could only have one?  I guess I would rather be lucky or is it good??

You roll a 7 at the craps table = lucky, but knowing how to bet = good.  Can you really capitalze on one without the other?

I guess what it comes down to is positioning yourself (good) so when the opportunity comes along (lucky) you can grab it and work it (good).

I am not so sure that you can have one without the other, but what do I know?  I am still trying to figure out that chicken and egg thing !  

The National Auctioneers Association (NAA) reports continued growth for the auction industry with a 5.9 percent third quarter increase as compared to the same point in 2005, translating into $254.4 billion total revenue projected for 2006.

The largest increase came from residential real estate auctions, which grew by 4.5 percent in the third quarter. Increasing use of the auction method of marketing to sell residential real estate has been the subject of widespread media coverage.

"These statistics show that the general public sees the value in selling their property by auction. Buyers and sellers are both turning to the auction method and we foresee this trend continuing to increase," said NAA President William Sheridan, CAI, GPPA, AARE.

In addition, forty-four percent of auctioneers say they have seen an increase in gross sales receipts in the first three quarters of 2006 as compared to the same period last year.

Funded by the National Auctioneers Foundation, the findings were gathered by the global market research firm MORPACE International. The study is commissioned by the NAA to document the growth of the live auction industry.

National Auctioneers Association

On Thursday evening my car was broken into in a parking lot in a suburban neighborhood.  The thief took my briefcase and suit coat, among other things.  He got my laptop as part of the deal.

Since I move around so much, my laptop has been configured so I can do almost anything from anywhere.  I communicate with most people via email, transmit documents via email and receive my faxes via eFax.  I keep my schedule in Outlook.  I don't have complete paper files as it is easier to carry everything everywhere if it is in electronic format.  I back up my data every week or two and try to hotsync my Blackberry every day so I am updated.

Last backup was a couple of weeks ago and I didn't hotsysnc before leaving the office as I figured I would just do it at home later.  Unfortunately, I lost a whole lot of data and think I have some appointments next week, but can't remember all of it off the top of my head.

Yeah, I can count the dollars lost on the laptop.  It is easy to count those as I have already bought another one.  It is easy to figure out the value of the digital camera sine I can look that up online. 

Now I need to have the new system set up.  More money.  I might miss an appointment.  More money ?  The whole file for a last Friday morning meeting was in my briefcase.  That meeting didn't go well when I was explaining things off the top of my head.  Prospect wanted a wirtten proposal.  More money and credibilty loss.

I would gladly pay 10 times what the guy is going to get from the pawn shop just to get my life back !

What did I learn ? Two things.

1. Thieves come from the city to the suburbs to steal more often than I thought.

2. Hooters doesn't have security cameras in the parking lot.