Seller Financed Real Estate Deals in Today’s Market Conditions

With stricter banking regulations because of fluctuating economic conditions and an unsteady real estate marketplace, real estate sellers today are carrying back private funding to make their property more salable. When an individual seller or broker finances a transaction out of pocket they are acting as the lender. This is beneficial to the process because the buyer doesn’t have to go through a rigorous approval process, which can prove to be very tedious because of the heightened banking standards today.

Over the past two years, the central bank has conducted several in-depth surveys of U.S. banks. The most recent survey of 55 U.S. banks’ current lending practices and standards revealed that the percentage of banks reporting tighter standards is near historic highs. One of these, found that about 75% of the banks surveyed indicated they had tightened their lending standards for prime, subprime and commercial mortgages. That was up from about 60% in the previous survey.

The Fed’s July survey covered 52 U.S. banks which hold about 80% of the residential mortgages on the books of all commercial banks. The Fed survey found that only seven of the banks said they were still participating in subprime mortgages, loans made to borrowers with weak credit histories. Of those seven, six said they had tightened lending standards on subprime loans with only one saying it had left standards basically unchanged.

Any experienced private lender recognizes this as an opportunity to salvage an unfavorable situation and turn it into a positive one. By utilizing seller financing, sellers can sometimes end up getting more money for their property and collecting interest on top of that. Seller financing can enable homeowners to receive the best selling price despite bad lending conditions. In addition, a home buyer with poor credit is able to become a home owner. It’s one of those rare situations where everyone at the negotiating table gets what they want!

Many real estate sellers never consider seller financing because they don’t understand the advantages or the process. There are also common misconceptions that it’s much too complicated to attempt to put together a seller financed deal, or that there are no buyers willing to sign a private loan. Not true! Once a seller takes the time to learn about the basic process and the advantages of offering private to sell their property, the benefits become very clear: bigger buyer pool, easy loan approval process, and a much quicker closing. Plus, a little education about seller financed loans will make it apparent that drafting a secured private loan is actually a very straightforward process.

The bottom line is seller financing can enable a real estate seller to get the best of both worlds: selling at the desired price, closing the deal quickly, and even receiving additional income from interest payments that the buyer makes.

Commercial Investment Property – Keys for Real Estate Agents to List and Sell More

In commercial real estate, getting to a closed deal and final commission is a number of critical steps. You cannot take shortcuts. Most particularly you have to understand the start of the deal and the reason for it. This is the key to long term listing and selling in the industry. So let’s put some of these steps together.

First and foremost, you should be a specialist in a part of the industry that has the opportunity for reasonable growth and reward. This could be retail leasing, retail selling, industrial leasing, industrial selling, or office leasing, and office selling. It doesn’t really matter what part of the industry you are concentrating in, but it does matter that a future exists with the type of property you have selected and that you can relate to the type of property.

The second step in the process of building your business involves understanding your market. You cannot be a specialist without completely understanding the deals that have been done and the deals that need to be done. This knowledge will involve benchmarks of property performance including income, rental type, expenditure, methods of sale, and methods of lease, construction costs, and property usage. When you pick up any information from the marketplace it is best to collate the information for future reference. It is this information that will allow you to negotiate with skill; it is this information that will give you a higher value in the marketplace as a real estate agent.

As part of this process, there is a group of property professionals that you need to know. They are an abundance source of new clients and new business. They are solicitors, accountants, architects, engineers, and property valuers.

The third step in the process of building your business involves understanding the prospects and what they need. This means getting in front of the people who need to do the deals one day in the future. In simple terms this is called relationship building and quite frankly not enough is done by most real estate people. When you establish a face to face contact with the right people you set the foundation of building opportunity. Essentially people need to build trust and respect with you. There are far too many agents are out there who are all fighting for the same prospects. The agent that wins the contact and the commission is the one that has started the relationship and continues it over a lengthy period of time.

Once you have a relationship with well qualified groups of prospects, you can start to drill down on the types of property deals they need. You can actually look for the properties that they require and put the deals together before they even reach the marketplace. In commercial real estate, it is very common to do off market deals.

This property market is currently frustrated by restrictive financing. The banks and the lenders are slow to approve or accept financing proposals on the larger property deals. The property valuers are also very conservative and reluctant to put on any higher values on property for financing purposes. This will change, however and for the moment, we must target the people who have higher equity in another property or business activities, therefore they are less reliant on higher loan value ratios.

There are many property investors and businesses out there that are quietly waiting to seize the opportunity of a new property purchase if the right properties become available. These successful businesses and investors are the ones that you need to know in this market. The more people you know, the more opportunity you will generate.

So how many prospects should you be working in a market like this? Your database should include at least 300 high end prospects, and at least another 300 other prospects that can be converted to higher value. Before you start saying that it is a high number, I will let you into a little secret. This database formula is built on the basis of five new contacts every working day. Within a period of six months, you will have built the database of this size. As you proceed down the path you will also have achieved extra sales and leasing deals that you didn’t have before. Success in the industry belongs to those that can get highly organised in the prospecting process. Persistence pays rewards in ‘bucket loads’. Good luck.

A Product Called You: 4 Ways To Stand Out For Real Estate Agents

Have you heard of ‘A2’ Milk?

Well last night anyone watching Seven’s Today Tonight Show will have.

This milk ‘product’ has broken away from the pack, it’s different and it’s getting a lot of attention (not to mention sales of ‘A2’ are booming).

‘A2’ Milk offers a really cool lesson for all would be TOP 5% REAL ESTATE AGENTS.

Here’s what we can learn from this…

Firstly, you’ve got to see your personal-brand as a product.

When you look at yourself in this way, the immediate realisation should be, hey if I’m a product so is every other real estate agent. And that’s either a good thing or bad thing in terms of you standing out and being noticed by your marketplace.

It’s a bad thing if ‘product-you’ is perceived by your marketplace to be no different than all the other ‘agent products’ out there.

It’s good, no, it’s spectacularly great if ‘product-you’ is perceived by your marketplace to be different and not only different but actually delivers them a better solution than the others.

So how can you become the ‘A2’ of your real estate marketplace?

Well, let’s take a few queues from the new milk success story, ‘A2’:

#1 – An Unfamiliar Name: The first clever thing about ‘A2’ from a positioning sense is its name, that is, ‘A2’ milk. It’s unfamiliar. Now I know I’ve said in my book and elsewhere that the ‘familiar’ win, and that’s true. But when it comes to a name or a label, often the use of an ‘unfamiliar’ in the description of something that is generally very familiar (e.g. milk) helps it to stand out. It ‘interrupts’ your thinking – when you see it for the first time you say, “What’s ‘A2’?”. That’s the first step in engaging someone.

How can you incorporate something interesting and a little unfamiliar to grab people’s attention?

HOT TIP: Here’s one way, change the term “Free Appraisal” which is very familiar and boring, you can do that by adding in an adjective. If you do, you better make sure you are offering something different to all the other agents who offer “Free Appraisals”. You’ll create more problems for yourself if you get people all hot and excited about your offer when they discover it’s the same old thing all other agents are doing.

#2 – Story: There’s a story behind ‘A2’ milk and it’s a pretty interesting one. As it turns out there’s this protein in some milk that originates from only some cows. ‘A2’ cows in fact. This protein is really good for you apparently. And to find the right cows that produce the ‘A2’ protein milk, cows undergo a DNA test, that’s right, all very CSI, haha. It’s this story that delivers on the promise of the ‘unfamiliar name’. The story engages the consumer. Tells them it really is different than all the other milk brands on offer.

What’s your unique story that makes you different from all the other agents?

HOT TIP: Come up with a 10 Point USP (‘unique selling proposition’). It doesn’t matter if several of your USP items are the same as others; you just need 3 or 4 that no one else is doing in your area, then claim them as your unique points of different and tell the world about it.

#3 – Controversy: A2′ milk stands out for another reason other than just the promise of a healthy protein. ‘A2’ have brought to our attention that the other protein that’s found in all other dairy milk products, that being ‘A1’ may be really bad for us. This is how they separate themselves from all other milk products. It’s controversial. It’s riled the likes of Dairy Australia, the peak industry body. They say the science is insufficient (and the consumers who buy ‘A2’ cynically think of course Dairy Australia would say that). ‘A2’ can’t lose. Doesn’t matter what their opposition throw at them, the more they try to undermine the ‘A2’ story, the more support ‘A2’ receives.

How can you be a little controversial?

HOT TIP: The easiest way is to know your ‘BIG Why’. When you know your ‘BIG Why’ it’s easy to make a stand for something. When you make a stand for something, there will be people in your marketplace that will support you and choose your side. That’s what we humans do. We like to choose the side we’re on.

WARNING: don’t be controversial just for the sake of standing out. That’ll back fire on you. You must only be controversial if it matches your ‘BIG Why’ and specifically your beliefs/cause/purpose/mission.

#4 – Consistency: ‘A2’ is going to great lengths via DNA testing to ensure the purity of their product. This aspect of their story alone is super powerful. In the minds of their consumers it provides certainty. They can feel confident that every bottle of ‘A2’ they buy has actually come from ‘A2’ cows. ‘A2’s consistent approach to testing creates certainty in the minds of their consumers and it’s this certainty that has built trust and loyalty.

How can you construct a system for doing what you do so that you’re consistent and so that your marketplace can feel confident you’ll deliver every time?

HOT TIP: Create your own ‘signature sales system’. It may well be auction. Or it could be private treaty. Doesn’t matter. Just break it down into steps. Explain what those steps are and help people see that your system is bullet proof and consistent.

The bottom line is, when you see yourself as a product, you can start packaging yourself up so that you stand out.

My final word on this is, and even though I’ve already said it, it’s worth reiterating… what ever you do follow your ‘BIG Why’ and be authentic with all of this.

Authentic agents win!