Realty World Northern California & Nevada

The Realty World NCA event on Friday, August 14, was for me the jump-off point for the future of our network. The event was filled with high energy, as we had a full and fast-paced agenda. The keynote speakers were top shelf and delivered relevant information pertaining to today’s market conditions that I believe our Realty World members were able to use the very next day.

In addition, numerous new services and unique technologies, representing 20 months of hard work and investment were on display for all to see and hear more about. Five hundred Realty World NCA brokers and agents attended the event, which was an all time record our territories. Traditionally, franchise organizations consider an event a success if eight to 12 percent of members attend. Last Friday 38 percent of our members attended … I guess you can say it was a successful event!

Scott Gill
Senior Vice President
scott.gill@rwnc.net

I’ve had the blessings of great mentors and teachers in my life. A very wise gentleman I have the utmost respect for once told me during a tough time that “Nothing very bad or very good lasts for very long.” I have reflected on this lesson quite often over the years and even more so lately. I think many of us have had a tough go of it over the last year or so and it’s very easy to think that when times are tough, you’ll never see the end. But history repeatedly tells us that this just isn’t so.

I remember, as some of you might, that the early 80’s were real tough times, especially for those of us in the real estate profession. Prime lending rates were 21%, nothing was selling, and the only mortgage products available were 30-year fixed rate mortgages at 18% or “creative financing.” Adjustable/variable rate mortgages came later as a result of that difficult market. Many of us who went through that period thought it would never end, but it did! Actually, the end took only a couple of years and then the good times started to roll and continued for almost 2 ½ decades, with a few bumps in the middle.

See … nothing bad lasts for very long and, therefore, you and I should find great comfort in this valuable lesson.

So what about the flip side? Nothing GOOD lasts for very long. That’s not very reassuring, is it? This lesson, in my opinion, is more important than the former. When times are good, as they will be again soon (some say it’s starting now), we should be acutely aware that they won’t last forever. Many of us get caught up in the good times which is extremely easy to do. Then euphoria kicks in and we wind up making some pretty dumb mistakes due to arrogance or ego.

So what should we do when times are good?

1. Take advantage of all the opportunities presented before you.
2. Be positive and aware.
3. Be prudent in business and personal decisions.
4. Be grateful for the good times when they’re here.
5. Most importantly, be prepared for the next correction.

If we prepare, plan, and carefully keep our egos in check during the good times, the inevitable down cycle indeed will not be that bad at all! Make this year your “good” year!

Scott Gill
Senior Vice President
Scott.Gill@rwnc.net

I was at a meeting a couple of weeks ago at the Santa Clara County Association of REALTORS® (SCCAOR) where the President of that Association, Quincy Virgilio, Realty World-California Property Network and Gov Hutchinson, Assistant General Counsel and Staff Vice President of the California Association REALTORS® (CAR) outlined the various benefits of being a member of the local, State and National Associations of which there are many. I was actually surprised to learn that there are some real estate brokers who choose not to associate, primarily due to costs. Times are tight and I understand that; however, as I mentioned in an earlier blog article titled “Are You In or Out of the Real Estate Business?” Part 2,  there are certain costs associated with real estate that are necessary in order to function as a business and effectively compete. I believe this is one of those costs.

The annual combined membership dues at SCCAOR, including CAR and the National Association of REALTORS® (NAR) are $474.00 per year. Some of the services include the use of the REALTOR® Trademark, CAR legal counseling services, access to group medical and insurance plans, free tech support services, etc. The legal hotline at CAR is worth the annual fee alone. How many times have you had a legal question and struggled where to get a quick and accurate answer, much less how to pay for it? Well, as a member of CAR, you can call their legal hotline and get your answers for FREE within 24 hours… it’s a bargain! If you’re a broker licensee, most of the time you will get your answer that same day. Ever have a computer problem? At SCCAOR, you can have it fixed (minus parts, if required) by their tech support team for no charge. Of course, Local Associations vary somewhat in services so make sure to ask your Association exactly what services they include. In the long run, if you’re serious about your real estate practice, keep these memberships active. They are very useful.

Scott Gill
Senior Vice President
Scott.Gill@rwnc.net

There was a wonderful article written recently by Bernice Ross titled “Gen X, Gen Y Buyers Rule Market” that identifies this huge demographic, second only to the Baby Boomers (at least for now). The article briefly discusses where these generations are relative to entering the housing market and how they engage in their unique forms of communication.

Due to the decline in valuation of home prices, the glut of REO inventory, and historically low mortgage rates, this is the perfect set of circumstances for this young group of savvy buyers to jump in and get their piece of the American Dream. And, it seems they are starting to do just that!  The real estate cycle of homeownership does not move forward until first time buyers get into the market. Real estate inventory starts to be absorbed once the first time buyer purchases their first home, generally an entry-level property. At this point, the former owner can move up and so goes the cycle’s forward momentum. This is why it’s important for Gen X &Y consumers to engage in homeownership… and this Baby Boomer, for one, is thankful they are.

For professionals in the real estate business, it would be prudent to deploy a strategy to help Gen X & Y consumers today. However, if you think traditional sales and marketing approaches will work to attract them, you will be disappointed in your results. Generations X & Y consumers communicate, respond and engage quite differently through the use of technology and online social networking. If you are not using these new methods of communication, don’t despair. However, it would be wise to retool your approach and start communicating with Gen X & Y buyers. They’re out there in huge numbers and they’re looking for you to help them buy their first home!

Scott Gill
Senior Vice President
Scott.Gill@rwnc.net

Let’s face it… EVERYTHING seems to be changing constantly and rapidly these days. From a real estate industry perspective, this means that most of what we thought we knew in terms of real estate brokerages, brokerage business models, vendor services, mortgage lenders, mortgage products and guidelines, disclosures, technology, marketing, franchise affiliations, etc., is perhaps markedly different then it was from only six months ago.

To give you an example, I engage with licensed brokers and real estate salespeople on a daily basis with the intent to educate them about our new Realty World network. Most often, before I am able to utter the next sentence after introductions are made, I’ll hear something like, “Oh yea, I know all about Realty World,” abruptly shutting down the conversation. Although this might have to do with a restriction on time or simply that they are overwhelmed, shutting down the conversation short changes them on vital information they may not have. While it’s convenient and all too easy, being curious can many times pay big dividends.

The next time a vendor or competitor approaches you with “something new” give them the gift of 10 or 15 minutes of your time and be attentive. Who knows… you just might learn about something you weren’t previously aware of that can greatly impact you, your clients or your business.

Scott Gill
Senior Vice President
Scott.Gill@rwnc.net

Franchise contracts, in most industries, range from five to ten years. On occasion, a franchisor may offer early renewal incentives. This is typically done to provide additional services and benefits to their existing franchisees. In addition, early renewal allows the franchisor to position itself to more aggressively develop member resources as well as to expand market share. When market share is expanded, franchisees and franchisors secure increased business opportunities and profit potential. Therefore, early renewals can be advantageous to both parties.

Even if not publically offered, a franchisee can always request an early renewal. An ideal reason a franchisee may consider doing so would be to secure additional privileges or benefits offered in newer franchise agreements which might not have been available in former agreements. Further, royalty and service fees generally increase over time like everything else, so another reason to renew early is to circumvent fee increases that will inevitably occur. It should be noted that the franchisor generally controls the franchise renewal options.

So, if you are a franchisee who is pleased with your franchise relationship and are fully committed to the long term growth of your business, then investigating an early renewal of your franchise is by all means a good thing to do!

Scott Gill
Senior Vice President
Scott.Gill@rwnc.net

It seems like title insurance companies have forever been “buying the business” in one form or another from realtors. It’s just the way business “was” done. You know what I mean … FREE farm packages, marketing materials, use of meeting rooms, educational seminars, lunches, dinners, trips, concert/sports tickets, and the list goes on. The “quid pro quo” was always in play and, let’s face it… many partook. The State’s Departments of Insurance have been shaking their heads at title insurance companies for these types of offenses for decades. In reality, they did little to nothing to enforce regulations which were designed to protect consumers. This mentality opened the doors for title insurance interlopers to set up local shops that systematically bought title/escrow business from their realtor clients. However, when the market conditions got tough and the party ended last year, most of those title companies left town or went bankrupt, leaving many realtors and their clients holding the bag. It wasn’t pretty and was costly for many.

Those days are gone in California now that the State Legislature passed Senate Bill 133 http://www.clta.org/e-news/sep2008/sacramentoReport_sb133.html and title insurers are taking this bill very seriously. We have heard that the California Department of Insurance (CA-DOI) in collaboration with the California Department of Real Estate and the IRS are ready, willing and able to make examples and levy BIG FINES against those companies and individuals who violate the rules. Due to California’s fiscal budget crisis, we need to take their threats seriously. In addition, starting this year all Title Marketing Reps are required to be licensed by the CA-DOI and they have been told by the State and their title employers under no uncertain terms that their licenses, jobs, and careers are at risk if they get caught violating the guidelines in this Bill. Compliments of Fidelity National Title, this summary of BS 133 will give you a simple and clear outline of what title insurance companies and their Marketing Reps can and cannot do to secure your business.

Going forward, if you get an offer for freebies from minor or new title insurance companies in your area or from some Title Marketing Rep you don’t know or is new to the business, BEWARE because that “freebie” may cost you and your client more grief than it was worth! In the long run, this industry wide change will be good for the consumer and, ultimately, for the real estate and title insurance industries as well.

Scott Gill
Senior Vice President
Scott.Gill@rwnc.net