Whenever I have asked participants in any of the workshops whether they have a business plan 99% of individuals will say “No!” or they will not answer at all and look at the floor. I KNOW YOU DO NOT HAVE A BUSINESS PLAN! is what I what I want to say. Well actually if you have been to my workshops you will know that I actually do say it!

So I decided that I will actually spend time through these postings actually breaking down the business plan bit by bit. So before we get into the particulars of the business plan I know their are more then a few of you that are questioning whethe you need a business plan.

Why do you need a business plan?

1. How do you achieve a target without knowing if you have gotten there yet?

2. If you do not have a business plan you can never adjust appropriately to the market and so basically have NO STRATEGY.

3. Both fair housing and ethics presuppose that you have a business plan. In your business plan, you are supposed to state your business policies. If you do not have those written down then how do you prove that the actions that you took were part of your “Business practices”?

4. How do you prove to yourself that you have a business with no business plan? Come on people ? If you are making no money it is ok - AT LEAST HAVE A BUSINESS PLAN!

Seriously though - you need a business plan. Once I put mine together I knew exactly where I needed to go and what I needed to get there. In this market time and time again the agents that I have seen that are still doing business are the ones who had a business plan!
Are you ready and pumped to do whatever it takes? Look to Part II where I am going to speak about goal setting

I look forward to seeing you all in a workshop soon

Prabhjit Singh

psingh@rempower.com

I apologize for not writing for a while. It has been mainly due to me getting quite a few courses together for this changing market we are in. Keep an eye out because those courses will be coming out soon! But do not worry people - I will now begin to blog very regularly, so make sure to continue to keep checking the blog for updates!

So what I am going to speak to you about today is being flexible. One of the most frequently asked questions of me during the workshops is “How do I get clients - is the marketing going to start picking up?”

I have one answer for you - Be Flexible! What does that mean? It means a whole lot.

To be flexible you must do the following:

1) Have a Business plan (if you do not kow what a business plan is - keep an eye on this blog because over the next weeks and months I will be explaining it in detail)

2) Make sure that you are changing your strategic plan as per how the market is changing. For example, it is essential that every single real estate agent understand not only what short sales are but how to work a short sale. Look for all sources on getting educated on this changing market, and also have individuals like me —> Prabhjit Singh to call when you need help! But most importantly, be in a position to help any client that you find that is either trying to sell their house or trying to buy a short sale.

3) Be the information central for your clients - understand exactly what is going on with the real estate market so you can update your clients regularly. This means email them on what is going on with home sales, prices, interest rates and the real estate market in general. How do you do this? Sign up for the rempower newsletter, but as well read the Washington Post news section online regularly.

4) Go out there and start talking to people. Tell them that you are a real estate agent that can find deals, and the best to buy is right now! The following graphs will add you tremendously to explain to any client about what is occurring in the Washington D.C. metro area is temporary. They show the economic predictions for the next 5, 10 & 15 years; they show that prices of properties are going to go up and that their is going to be a shortage of housing in the Washington D.C. Metro area. Please download the graphs from the following link: Subprime Graphs

Please let me know if you need any help and/or support in any way. I will look forward to seeing you all in a future class!

Prabhjit Singh

psingh@rempower.com

The truth of the matter is that there are more properties on the market, fewer buyers, and prices continue to drop due to foreclosures. As a real estate motivational speaker, I speak to thousands of real estate agents and the number one question I receive is “So how do I sell a house in this market?” The way a house gets sold in this market is exactly identical to any previous market, and they are the following:

1) Pricing the property for the market: This is by far the most important decision a seller needs to make to sell a house. No matter what the problem with the house, if it is priced right it will sell. If on the other hand the property is not priced appropriately, statistically speaking, it will stay on the market longer and sell for less than if it had been priced right in the beginning. So, how do you do it?

a. Work with an agent that has access to the MLS system
b. Pull properties that are in closest proximity and are similar in age, square footage, number of bedrooms, and bathrooms.
c. Pull properties that are currently active, sold, and under contract properties.
d. Only look at the above type of properties within the previous 6 months.
e. Once you have found the competing properties, list your property a bit lower than the lowest priced competing property. The reason you do this is so that you can have the most amount of offers, and therefore sell your property in less time and get the best price. Buyers, in general, first put offers on the properties with the lowest list price within a category of properties and then work their way up.

2) Great Curb Appeal: It is vital to have the exterior of the property looking its best, so that when individuals are driving by or coming to look at the property they are automatically attracted to the property.

a. First, make sure that any plants that any potted plants that are currently dead due to the winter have been brought inside
b. Second, make sure that the sidewalks and the front of the property have been properly swept
c. Third, assure that all leaves have been raked from the lawn
d. Fourth, repair any railings that are currently broken

3) Great Interior Appeal: make sure the interior of the property is in move-in condition. Currently, there are quite a few properties are in a horrible mess from the inside, and yet individuals are wondering when they are going to get sold! People fall in love with homes that are clean.

a. First, make sure that the property is sparkling clean
b. Second, de-clutter the house – take as many knickknacks and tons of furniture out of the house.
c. Third, take your personalization away – take the items out of the house such as pictures of the family, leopard skins, and anything that makes it you.
d. Fourth, try to use colors in your house that are accepted by a majority – whether it be on your walls, your carpet or the furniture you choose to keep there.
e. Fifth, if there are appliances or items in the hose that need to be repaired or replaced, go ahead and repair or replace them as purchasers generally cannot imagine how it will look in the future.
f. Sixth, make your house feel like anyone would want to move in and live in your house, similar to a model home at a new home development.

The short answer is maybe. There is quite a bit to know about the economic stimulus before we can gauge what impact, if any, it will have on the economy. Currently, congress and the white house are still trying to create a deal as to what will be in the economic stimulus plan, but there is some positive news. Basically, Bush and congressional leaders have come up with a plan to try to keep the economy afloat, so that a recession does not occur. There is strong belief in congress that if a law is not passed soon, the United States will have a recession, and some are suggesting that we are currently in a recession.

The definition of a recession is when there have been three consecutive quarters of negative GDP (Gross domestic product) have occurred. For the last 3 quarters we have been having positive GDP, in the third quarter it increased 4.9 percent and in the second quarter 3.8 percent. So a recession, not according to the definition and we are not even close until we begin to start having at least one quarter of negative GDP.

So what does this plan entail? This plan costs the American people $150 billion dollars; it gives individuals a tax rebate equating $600 for an individual and $1200 for married couples making less than $75,000 individual and $150,000 married couple. If you, either single individual or married couple, made at least $3000 in 2007 you will still receive $300 for an individual and $600 for a married couple. By throwing money back into consumer’s pockets the hope is that this will ensure that the GDP continues to keep positive and does not become negative. But there is still a clear problem of energy costs being high, and consumer confidence being very low. As well, this little amount of money will not help the ability of millions of homeowners to purchase.

But, there are some parts of this plan that would help individuals purchase and refinance their properties. Specifically, they are stating that they will increase the GSE for a conforming loan from $417,000 to $625,000 which will allow individuals to refinance at a much lower interest rate. As well, they are speaking about increasing the conforming loan limits for FHA loans from $362,000 to $725,000. By taking these two steps coupled with the reduction of the Federal Reserve interest rate, this will allow individuals that currently have subprime loans to be able to refinance them, in theory. The problem still lies in the ability for these individuals to now get approved for loans under the new guidelines which continue to keep changing. This is especially difficult if the individual has been late, and their credit scores have dropped as a result of late payments. This will make it increasingly more difficult for them to refinance their property before the loan readjusts, if their loan is an ARM.

So there has been a lot of talk about this new law that the president has signed, and I know that we all want this law to fix the subprime lending issues we are having. There are quite a few laws that are slated to go through the senate, which have already gone through the house, but unfortunately this law is not really going to be helping us. Why not? Good question. Well this law has quite a few drawbacks.

First, this law is only for those individuals which were on an ARM not for loans which just had an increasingly high interest rate to begin with.

Second, the individual must be able to pay the starter rate. This is a large issue and you will know why if you have been in my subprime class, which I suggest everyone to come. I will be teaching it in January at GCAAR. The reason is that a majority of the issues that we have seeing in terms of subprime defaults are individuals whose loans had not even reset yet. They were not even able to the starter interest rate - so this law will not help them.

Third, there are specific dates that the borrower must fit into. The subprime ARM must have been originated between Jan. 1, 2005, and July 31, 2007, and the reset for the ARM must occur for the first time between Jan. 1, 2008, and July 31, 2010.

Fourth, the borrower can never have been late on their payment by more than 60 days in the last 12 months.

Fifth, when the first reset on the ARM is supposed to occur, it has to be more then 10% of the current starter rate.

Sixth, the borrower’s credit score cannot be higher than 660 and it cannot have improved more than 10% since the loan originated.

Seventh, this law only deals with own that are owned by securities, otherwise known as mortgage backed securities. It does not deal with loans that are currently owned by banks, individuals or investors.

Eighth, the loan cannot have reset already, the first time that it is resetting must be during the dates given above.

Clearly, the program is only for a limited group of individuals. It will not help individuals already having issues, but it prevent this from continuing to occur. Basically, this law was created for individuals who are going to be having their first reset of their subprime ARM and they will not be able to pay the new higher interest rate. These individuals must also not be able to refinance their loan due to their credit score or income. If the meet the requirements set forth above, their starter interest rate will be frozen for five years. During that time the government’s hope is that the individual can be able to refinance their loan. The best possibility for refinancing the loan would be the FHA loan, only once the loan limits are increased. This is a great law for the individuals that fit into this narrow category, but for now we have to wait for laws to pass that help the individuals that are currently suffering. If you have clients currently having issues, below I have given resources that you can contact.

If you have questions or comments on this law please don’t hesitate to contact me and/or comment below.

Thanks so much and see you in an upcoming class!

Prabhjit Singh
Further Resources:

http://www.995hope.org/

Resources from NAR for your client