BY JACK COTTON, CRS, CRB

The real estate business is a relationship business. This statement is never truer than it is in the luxury end of the market. High-net-worth individuals like to be with others who are like themselves and want to deal with people they know or are known by someone they know.

Depending on who you listen to, there are those who tell you that the concept of geographic “farming” in real estate is over; it’s dead; it’s for the losers of the business.

I don’t subscribe to this extreme position, but I do believe that we need to elevate the process of finding luxury clients to be more on the level of “gardening.” Farming is a hot tractor tilling hundreds, if not thousands, of dusty, manure-laden acres.

Gardening takes place in a smaller area, it is more precise, and there is rarely a tractor involved.

Gardening is so effective because the decision to buy or sell high-end real estate often is impulsive.  A high-end owner of real estate will wake up in the morning, look out the window and wonder what the view of the mountains or water are like from another angle.  That afternoon the call goes out, the house goes on the market and the search begins for a home half a mile away.

This concept of musical houses is why it is critical for you to use gardening to be “top of mind” with high-net-worth owners of real estate in your desired market area.

Select a small, defined geographic area in where you want to dominate the market.

Gardening this geographic area based on an organized plan of action can yield results because people of means like to be around people like themselves. Gardening geographically, therefore, can yield results as high-net-worth individuals are given the opportunity to “hand pick” their neighbors. In addition, a neighbor will often purchase adjacent property for added privacy or for a family member.

How do we garden? Again it is like farming, but on a smaller, more elegant scale:

Mailings: Mailings should be consistent, planned about a year in advance and reflect the quality of the service and product that you are representing.  The services, of course, are you, and the product is the high-end real estate you represent. 

Calling: The method of calling that has returned the greatest results for me is to call first with a very brief explanation of a mailing, usually a survey, they are about to receive and ask them to keep an eye out for it.

Events: ”By invitation only” property previews are a great way to meet people in your garden. You can join forces with a high-end retailer to enhance your event.

A master gardener would never till, plant, water and feed and then expect a beautiful floral display by the weekend. You might be surprised, however, at how fast results can come from real estate gardening.

Jack Cotton, CRS, CRB, has worked continually in the real estate company he started in his college dormitory room 37 years ago. Over the years, Jack has been involved in most of the record breaking luxury residential sales on Cape Cod, either directly or as coach to the agent involved. His books, Selling Luxury Homes: 12 Secrets Luxury Home Buyers Know and 12 Secrets Luxury Home Sellers Know  hit the Amazon bestseller list at the same time in October of 2011. Connect with him on Twitter or Facebook.

Photo courtesy of Flickr user HarshLight

I brought my husband, mother-in-law and two kids along to Anaheim this past weekend so that they could do Disneyland while I did the National Association of REALTORS® annual convention. Because I was bringing the kiddos, I chose to stay at the Disneyland Hotel rather than a Hilton or Marriott.

It was my first time staying at a Disney property. I’ve been to the Magic Kingdom plenty of times, but growing up, my family generally stayed at a motel down the road to save money. Why pay more when all you’re going to do is sleep in the room, right?

During the convention’s general session, I was fortunate to hear former Disney CEO Michael Eisner speak. He had two main messages: practice creativity in a (financially responsible) box and don’t be afraid to micromanage.

Eisner was promoting micromanagement? Yep, that’s correct. But what he calls “micromanagement,” others might call “attention to detail.” He talked about how nothing was too small to escape Walt Disney’s notice. He would pick up litter as he wandered the park—the guy in charge setting a priority on cleanliness that is still evident at Disneyland today.

When I checked in to the Disneyland Hotel, the kids had not yet arrived. As I unpacked my bag and tidied up, I kept finding Mickey Mouse everywhere. He was subtly in the tiles of the bathtub. His familiar white-gloved hands held the lights by the mirror. His distinctive ears swirled in the carpets. A Mickey treasure hunt for my four-year-old son, I thought with delight!

As I passed the nightstand, I noticed that the lamp had two switches. A tiny Tinkerbell pointed to one of them. Intrigued, I hit the switch. The wooden headboard, carved with the familiar Disney castle, suddenly lit up with stars and fireworks as “A Dream Is a Wish Your Heart Makes” started to play in a music box tone. Magic!

I couldn’t wait for my kids to arrive. The four-year old found all the Mickeys, with a little help from Grandma, but I saved the best for last. When I lit up the headboard, my nine-month-old cooed and reached out for the stars. And my son’s look of wonder was so heartfelt and intense that it nearly made his mama cry.

That headboard was our night light, and the wonder of turning it on and hearing the music play lasted throughout our stay. The motel down the street is a cheaper place to rest your head, and there’s nothing wrong with that. But this past weekend, I discovered the value of Disney’s fanatical attention to detail. That kind of magic is hard to resist.

What do you do in your business to enchant your customers? What is your signature service? It may be time to let Disney work his spell on you and inspire you to find your own magic.

(Want to see the headboard in action? It’s on YouTube, of course.)

MongoFAX, a free AAR member benefit, does one thing and it does it extremely well: it faxes a document to an email address and converts the document to a PDF attachment.  If you haven’t tried it, give it a go. You’ll like the simplicity and ease of use.

If you’ve tried this, you know that the PDF attachment contains the MongoFAX cover page in addition to the document.  But did you know that there’s a way to make that PDF simply contain the document itself – without the cover page?  To make the MongoFAX attachment exclude the cover page, simply add noecp@mongonet.net as a CC: recipient on the fax cover page before sending. The PDF will simply be the document you intended sending.

There are other tips and tricks for MongoFax available are available on the MongoFAX user tips page. Or contact us at AAR Business Services support by email or by phone (480-304-8930, toll-free 866-833-7357).

Real estate market statistics are an important tool for REALTORS® as we work with our clients. Timely statistics presented in a meaningful way can help communicate the history of the market, current trends and the reality of what buyers and sellers are facing today.

We have many useful statistics generally available to us, most from our MLS, such as:

• Median Price
• Homes (Units) Sold
• Dollar Volume Sold
• Listing Count
• Months of Inventory
• Days on Market

Another source I use for statistics is the House Price Index (HPI) from the Federal Housing Finance Agency (www.FHFA.gov).

The HPI indicates the rate of appreciation or depreciation for single-family homes, compared with one year ago, and is updated each quarter. From FHFA.gov:

The HPI is a broad measure of the movement of single-family house prices.  The HPI is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or refinancings on the same properties. This information is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975.

The HPI serves as a timely, accurate indicator of house price trends at various geographic levels.  Because of the breadth of the sample, it provides more information than is available in other house price indexes. It also provides housing economists with an improved analytical tool that is useful for estimating changes in the rates of mortgage defaults, prepayments and housing affordability in specific geographic areas.

Here is detailed information on how the HPI is calculated and a good FAQ on the HPI. FHFA also provides a calculator to use the HPI to determine the change in value on a home, based on where it is located, when it was bought and for how much.

FHFA updates the House Price Index each quarter for the entire United States–9 regions across the country, all 50 states and over 300 Metropolitan Statistics Area (MSAs). There are 6 MSAs in Arizona:

• Phoenix, Mesa and Glendale
• Tucson
• Prescott
• Lake Havasu City/Kingman
• Flagstaff
• Yuma

I have taken the HPI data for the 6 Arizona MSAs and generated charts of the data. All 6 charts are available on www.ArizonaHPI.com. I also created charts for Arizona and the U.S.

They are unbranded charts, and you may use them however you would like.

Below is an example of the HPI chart for the Prescott MSA. Each bar represents the HPI for that quarter. Its value represents the appreciation or depreciation compared with one year ago. So a Q1 2011 value of -9.8 means that the House Price Index, or basically the value of a single-family home in the Prescott MSA, has gone down 9.8% from one year ago.

The values in the chart show whether the House Price Index has gone up or gone down from one year ago. Values above the line represent a time period where there is appreciation in the market. Values below the line indicated periods where home prices have depreciated from one year ago. The trends in the chart (the upward and downward movement) show whether we are heading in a positive direction or negative.

We as REALTORS® are often asked when will we see appreciation again in our market. I wish we had a crystal ball. But when we get close to that time, the HPI should be approaching zero, and when it does happen, the HPI will be a positive value.

And that is something we can all look forward to.

Visit www.ArizonaHPI.com for complete House Price Index charts for all 6 Metropolitan Service Areas in Arizona.

As American Idol starts to wind down with only 4 contestants left, it is getting much harder to watch. I am an American Idol junkie and a secret shower singer. My husband is astounded at my inability to carry a tune or pick out the beat. He was a drummer and this is close to a cardinal sin to him. Luckily he overlooks it and recognizes my other talents and charms.

The reason I find it hard to watch is because some of these talented singers may lose faith in continuing to pursue their dreams. Some may think the hard part is reaching for your dreams but I think the hard part is letting yourself dream. Mary Tyler Moore once said “having a dream is what keeps you alive”. Isn’t that the truth? A dream causes us to set goals and make plans. It motivates us, keeps us focused, and challenges us. A dream allows us to be bold enough to let go of our fears and insecurities and to believe that we have what it takes to be something, do something, have something.

If we fail to dream, we think we will never fail. Isn’t failing really opportunities? The opportunity to be creative, to look at new possibilities, and to take turns on a road that we may not have thought possible. Just like the incredibly talented contestants on American Idol, many people who had a dream of homeownership may have given up. How many people are afraid now to dream of owning a home? Yes, the economy is not positive. Yes, it is getting tougher to qualify for a loan. Yes, the media seems to focus on the number of consumers losing their homes. But you can change that. Don’t let consumers give up or fail to dream. Through your experience and knowledge as a REALTOR, you can help the dreams stay alive. How? Continue to educate yourself. No, don’t just continue, step it up! Now is the time to challenge yourself. Attend classes that teach you about market conditions, new lending products, new practices, laws, and regulations. But don’t just take what is convenient or free. Don’t cheat yourself or take the easy road.

The American Idol contestants have trusted advisors, and so do you. Your REALTOR associations (national, state and local) are your coaches/advisors. We are here to give you the best and highest quality programs possible. Programs that focus on today’s issues and today’s practices, using experienced instructors who have a proven track record in “educating”. Your REALTOR associations are vigilant watch dogs on the industry, and we have dedicated ourselves to be a partner in your career. We are your biggest champions and want you to succeed! Take your career seriously…spend your money and time wisely…choose your education opportunities carefully and wisely. Choose REALTOR education programs. Keep the dream of homeownership alive! As I end this post I’d like to share a poem that Jim Hogan handed out at our recent Instructor Development Workshop, author unknown…

“I am Real Estate”
I am the basis of all wealth
The heritage of the wise, the thrifty and the prudent
I am the poor man’s joy and comfort
The rich man’s prize
The right hand of capital
The silent partner of many thousands of successful men
I am the solace of the widow
The comfort of old age
The cornerstone of security against misfortune and want
I am handed down to children
Through countless generations
As a thing of greatest worth
I am the choicest fruit of toil
Credit respects me
Yet I am humble
I stand before every man bidding him to know me for what I am and possess me
I grow and increase in value
Through countless days
Though I may seem dormant
My worth increases, never failing, never ceasing
Time is my aid
And population heaps my gain
Fire and the elements I defy
For they cannot destroy me
My possessors learn to believe in me
Invariably they become envied
While all things wither and decay
I survive
The centuries find me younger
Increasing in strength
The thriftless speak ill of me
The charlatans of finance attack me
I am trustworthy
I am sound
Unfailing I triumph
And detractors are disproved
Minerals and oils come from me
I am solid
I am producer of food
The basis for ships and factories
And the foundation of banks
Yet I am so common
That thousands unknowingly and unthinkingly
Pass me by every day
I am your future
I am real estate

Sweet dreams!

First, I will admit broccoli is not my idea of a good time.  Mixed with other stuff a la fettuccine Alfredo or in stir fry, now we are talking.  But broccoli on its own – steamed or (eek! even worse)  raw?  Yeah, I’ll pass.   As kids, we tried to feed it to the dog or hide it in our milk (which I don’t recommend, by the way).  Once you become the adult or parent, now you are begging to get the kids to eat their veggies or at least you know you should be yourself.  That whole healthy thing we are supposed to do as we get older and cannot survive on mac ‘n’ cheese & Pop Tarts alone.

This is a business blog – what’s up? We really don’t care about your eating habits. Well, let’s talk about the broccoli in your business. We all have it.  The broccoli are those things we should be doing each day in our business.  It makes it healthy, grow stronger and not die of malnutrition.  Oh, I agree, I like my share of Pop Tarts, but it only lasts so long.

So let’s talk about the broccoli. What is that thing each morning when you go to the office & start your day you drag your feet on?  So much so that you will do anything, including unloading the dishwasher in the kitchen, to avoid picking up the phone and calling a client. Reaching out to that next client who may need you? Finding that next client who may need you? Calling a client that already needs you but their personality is a bit like eating raw broccoli every time you talk to them – a little tough & bitter?  What’s great about all these people, they still need you. 

We are at a time in our industry where consumers need professionals more than ever.  As professionals we are asked to know more, monitor more and reach out in more ways than we ever have.  Have you reached your client via text today? Facebook? Twitter? Did you knock on their door? Yeah, I said it…did you go see that client in person?

It’s easy to hide behind the screen of our laptop or smartphone; believe me, I am a culprit. Send a text rather than call the client directly. One of the best things I ever heard at a technology class was: “Know when to take online – off line.”  So subtle, so easy, so…. broccoli.  Reaching our clients, picking up that phone, makes a huge difference.  I have sat in an office with very talented agents who spent their days looking very busy shuffling papers, checking email, and didn’t understand why their business atrophied and died.

The biggest impact you will ever have in your business is to remember it’s about people. How we relate to them & have that personal connection.  You are assisting people with not only the largest single purchase they may ever make but also one of the most personal.  I can’t tweet that in 140 characters or less.  The smiley face doesn’t do it justice.

You absolutely can develop relationships online, get your foot in the proverbial online door. There are thousands of agents who have mastered this.  But what I love about working with these agents is they are extremely personal, approachable & are never afraid to eat their broccoli first.  They are quickly becoming the leaders in our business, the influencers & difference makers.

Today, I personally was reminded, if I started my day off first by eating my broccoli…the day got a whole lot sweeter. The afternoon was dessert.

Ever hear a REALTOR® say that?

When the market gets better …

What they typically mean is when they don’t have short sales anymore, when it’s not so hard to get a loan, when there are more cash buyers, when properties easily appraise, when foreclosures decrease, when people buy land again, when buyers walk in the office again, and when the buyers really come back to the market.

The REALTOR® means when some combination of these things go back to the way they used to be, then their business will come back.

A couple of thoughts on that:

• First of all, look around you. There ARE properties being bought and sold every day in your market. Are you part of that?
• Second, it is ill advised to wait for something else to occur, something outside of your control, for your business to improve.

In the the words of the renowned TV celebrity psychologist Dr. Phil:

“If you need a miracle, be a miracle.”

I will often say that the best thing a REALTOR® can do today is to forget everything they know about how the business used to be and learn the new real estate business.

“In times of rapid change, experience is your worst enemy.” – John Paul Getty

We all know the real estate business has changed. And although we were always used to cyclical real estate markets, it may be that we are experiencing a complete shift in our business that may never be reversed.

So my advice – assume that the way the real estate business is today is the new norm.

And then do what it takes to excel at it.

That applies to what is selling, how it is sold, where buyers are, and what buyers are looking for in their REALTOR®.

“The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.” – Alvin Toffler

For those waiting for the market to get better, I suggest now is the time to unlearn, and then relearn, the business of real estate.

View of Backup Folders

Here’s one of the very best tips I got at RE BarCamp last week:

“Backup to Gmail” is  a Droid application that you can download immediately from the Marketplace.

This is a MUST HAVE type of app for any REALTOR®.

Download and install it, and then your call log, multi-media messages and simple text messages are backed up to your Gmail account in folders called “Call Log”, “MMS” and “SMS.”

It’s easy, simple AND cheap.

Cost: $1.99

With this app, or something similar like Backup SMS+,you will have a history of your conversations with clients, office and servicers, which is searchable.  And, as we become more and more reliant on texting as a way of communicating in our business, it’s absolutely critical to be able to document and track our conversations, easily and effectively.

Sample Text Backup

For those of you who’ve tried to use Digital Ink™ on your own, you know that it takes a little practice and a little getting used to; but once you know the tricks, it works great.  Here are a few tips to get you started:

• Always check your forms before sending them out for signature.  Digital Ink™ is pre-mapped to zipForm® documents, however there are fields that may not need to be signed or initialed.  There are many such fields throughout the forms; it is critical that you review your forms to make sure you’ve eliminated non-essential signatures/initials.  Two examples:
  • Residential Purchase Contract -
    • Lines 156 & 157:  The lead-based paint disclosure has two lines, one of which needs to be initialed depending on the date the property was built.  The agent should remove the initial field for the unnecessary initial.
    • Lines 412 & 416:  The seller will be prompted to sign line 412 to accept the contract and yet still ask for inititals on line 416 to reject it.  One of the two required fields must be removed.
    • Counter Offer – Lines 32, 34 & others:  There is no logic between Digital Ink™ and zipForm® at the present time.  Digital Ink™ knows a signature is required but doesn’t know who needs to provide it; the agent needs to “tell” Digital Ink™ who needs to sign these lines.
• Once forms and parties have been selected in the eSign Selection window, click the “Continue to zipLogix Digital Ink™” button to continue; do not use the “Review” or “Send Now” buttons.  The “Continue to zipLogix Digital Ink™” allows you to add parties/documents and edit prior to sending submitting for signatures.  Soon, the “Review” and “Send Now” buttons will be removed.
• Watch one of the online training webinars.  Click on a date/time to register for a webinar:
  • Wednesday, March 23  |  1:00pm – 2:00pm
  • Friday, March 25  |  10:00am – 11:00am
  • Monday, March 28  |  3:00pm – 4:00pm
  • Wednesday, March 30 | 9:00am – 10:00am
  • Thursday, March 31  |  12:00pm – 1:00pm
  • Monday, April 4 | 1:00pm – 2:00pm
  • Wednesday, April 6 | 10:00am – 11:00am
  • Friday, April 8 | 10:00am – 11:00am

AAR now offers unlimited zipLogix Digital Ink™ electronic signatures to AAR members included in your membership dues.

zipLogix® Digital Ink™ is a digital signature solution for signing transactional documents within zipForm® 6.

Digital signatures improve your efficiency while reducing costs, saving time, eliminating delays, and better serving customers. They facilitate quick, easy interaction between REALTOR® and client, and encourage a paperless transaction. Digital signatures revolutionize the customer experience and offer your customer a truly paperless electronic process that can be trusted. Instantly e-mail real estate forms requiring signatures and eliminate the cost and time expense of printing, faxing, or cross-town meetings to get paper copies signed.

Start planning for a more efficient 2011 by trying your zipLogix® Digital Ink™ member benefit today.

Sign up today for one of the online training webinars:

Friday, 3/11     2:00PM – 3:00PM
Tuesday, 3/15     1:00PM – 2:00PM
Thursday, 3/17     1:00PM – 2:00PM
Wednesday, 3/23     1:00PM – 2:00PM
Friday, 3/25     10:00AM – 11:00AM
Monday, 3/28     3:00PM – 4:00PM
Thursday, 3/31     12:00PM – 1:00PM

Digital Ink Support:

Direct: (480)304-8930
Toll Free: (866)833-7357
Email: support@aaronline.com