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Opinion Editorials

How agents on the ground are impacted by the foreclosure crisis

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It’s too early to tell how bad the foreclosure freeze is going to be for consumers and lenders, but make no mistake, this recent turn of events will be especially painful to one group… agents. Now most of us have dabbled with short sales and closed an REO here and there. It certainly does not constitute the bulk of our business. However, there are some of us who solely rely on these types of transactions. The rise of the REO/Short Sale Specialist is about the take quite a fall.

After the bubble burst, many struggling agents reinvented themselves as Short Sale/REO experts. And those agents who were doing ok also hopped on the bandwagon. There was a mad dash to court these deals because we were told this was the wave of the future. The recession hit. People couldn’t keep their jobs. A slew of ARMs were set to expire. The massive shadow inventory was lurking in the background. There would be tons of listings to supply the sales pipeline for years! Who could have foreseen this?

I feel really badly for this group of agents. Faced with the possibility that their sales pipeline was evaporating right before their eyes, last week, scores of my colleagues were stricken with panic as foreclosures threatened to come to a screeching halt. With their livelihoods hanging on a thread, agents (along with their deals) were paralyzed. These agents spent the past several years procuring connections with REO departments, perfecting their shortsale/REO protocol and rebranding themselves as REO mavens… all to have it possibly come crashing down on them.

One agent, the self-professed “Top REO Queen,” confided in me this weekend that she’d focused too much time and energy into building her foreclosure empire with her harem of REO assistants. Like many REO big players, she made her money in volume. If things don’t get resolved soon, she may have to lay off her team and totally restructure her business model. To start from scratch is daunting, especially since her sphere of influence for the past few years consisted only of asset managers! “I’m afraid I’ve painted myself into a corner,” she confessed…

There is something to be said about specialization. When executed properly, it can be a powerful branding strategy to set yourself apart from the sea of other agents. Yet, over-specialization can also lead to the danger of the proverbial phrase “putting all your eggs in one basket.” It’s great to have a specialty in one segment of the business, but always keep in mind that segment can dry up. Nothing lasts forever! Diversification is key. So, from this foreclosure mess, we are all reminded to try to cultivate a mix of revenue streams, clientèle & transaction types in order to buffer any drastic changes to our core business. Variety is the spice of life… and real estate!

Watch Real Estate Expert Herman Chan put the REAL back in REALTY. In his show Habitat for Hermanity, Herman skewers the real estate business and pokes fun at his fellow agents, all the while empowering buyers & sellers with behind-the-scene tips & secrets of the industry! Get a glimpse beyond the glitz & glam of real estate. It's a hot mess! Featured on HGTV, House Hunters & other media outlets, Herman is the undisputed Real Estate Maven whose helpful & hilarious commentary you just can't live without! In fact, his real estate TV show has just been optioned in Hollywood!

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27 Comments

27 Comments

  1. Gina Kay Landis

    October 11, 2010 at 11:27 am

    Yep, I was one of the BPO queens locally, doing about 20 + a month – for many different vendors, and felt that I should move back into residential sales along with other diversification – well! Good move, have had 2 closings thus far, wrote an offer yesterday, and BOOM – let’s hope this continues!

    • Herman Chan

      October 11, 2010 at 12:59 pm

      you’re a wise lady Gina. keep it up!

  2. Sheila Rasak

    October 11, 2010 at 11:43 am

    So this explains the panic in which I awake each morning! That being said, I’d entertain the opinion of the author on the merits of poising oneself for the glut of the opening gates of inventory once released. I think we’re in a holding pattern much like what happens when holiday time hits. How long can the icy freeze last?

    • Herman Chan

      October 11, 2010 at 12:59 pm

      hi sheila!
      one day we will all say “do u remember that foreclosure freeze back in 2010?” but who knows how long that will be? who knows how long the holding pattern will last. but hey, if you can hold out indefinitely and not let it affect your lifestyle, income, payroll, etc, then knock yourself out! most ppl don’t have that luxury though…
      thanks for your comment!

  3. Waterfront Jacksonville

    October 11, 2010 at 4:19 pm

    Maybe I’m missing something.

    I see how an REO agent is hit with the foreclosure freeze now that the banks have started taking the listings off the market. I don’t see how this affects the Short Sale agent and I’ve been unable to find anything saying how it will affect short sales.

    How does this affect the Short Sale agents?

  4. Kelsey Teel

    October 11, 2010 at 4:52 pm

    “Variety is the spice of life… and real estate!” — So true, Herman!

    Finding the balance is key and it can be very hard to do! I’ve seen agents go both ways…in this case, becoming too specialized while in other cases spreading themselves too thin. (i.e., having 10 different designations that don’t really mean a darn thing.)

  5. Jim Gatos

    October 11, 2010 at 7:11 pm

    Almost all of the local REO Bank real estate agents I am dealing with are genuinely nice people and for those I feel. They have to put up considerable money upfront to carry the repairs and maintenance on properties they don’t even own and also fill out disbursements to get paid. If they don’t they potentially lose a lot of money. For those agents, I feel bad if their business gets impacted. There are a couple of agents I have dealt with that had absolutely NO personality; no communication skills, nothing. It was dealing with “The Borg” from Star Trek! For THOSE agents, I’m gonna say; I hope you have listing and selling skills buddy, a HIGH level of listing and selling skills, buddy! YOU’RE GONNA NEED IT!

  6. Jamey Prezzi

    October 12, 2010 at 9:15 am

    Although it’s not easy, that’s the nature of our business now…… a constant shift. I do agree with Watefront Jackson, not sure how it will affect short sales as much in fact some are predicting that this will be better for short sale deals. My business is a different model so I don’t really do either from a listing standpoint but it will be interesting to see how it works itself out. Something tells me that the agents who did brand themselves in this field will easily shift to another but I have a feeling REOs aren’t going anywhere.

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Opinion Editorials

Will shopping for that luxury item actually lower your quality of life?

(EDITORIAL) Want to buy yourself a pick-me-up? Have you thought of all the ramifications of that purchase? Try to avoid splurging on it.

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shopping bags

In an era of “treat-yo-self,” the urge to splurge is real. It doesn’t help that shopping – or what ends up being closer to impulse shopping – provides us with a hit of dopamine and a fleeting sense of control. Whether your life feels like it’s going downhill or you’ve just had a bad day, buying something you want (or think you want) can seem like an easy fix.

Unfortunately, it might not be so great when it comes to long-term happiness.

As you might have already guessed, purchasing new goods doesn’t fall in line with the minimalism trend that’s been sweeping the globe. Being saddled with a bunch of stuff you don’t need (and don’t even like!) is sure to make your mood dip, especially if the clutter makes it harder to concentrate. Plus, if you’ve got a real spending problem, the ache in your wallet is sure to manifest.

If that seems depressing, I’ve got even more bad news. Researchers at Harvard and Boston College have found yet another way spending can make us more unhappy in the long run: imposter syndrome. It’s that feeling you get when it seems like you’re not as good as your peers and they just haven’t caught on yet. This insecurity often arises in competitive careers, academics and, apparently, shopping.

Now, there’s one big caveat to this idea that purchasing goods will make you feel inferior: it really only applies to luxury goods. I’m talking about things like a Louis Vuitton purse, a top of the line Mercedes Benz, a cast iron skillet from Williams Sonoma (or is that one just me?). The point is, the study found that about 67% of people – regardless of their income – believed their purchase was inauthentic to their “true self.”

And this imposter syndrome even existed when the luxury items were bought on sale.

Does this mean you should avoid making a nice purchase you’ve been saving up for? Not necessarily. One researcher at Cambridge found that people were more likely to report happiness for purchases that fit their personalities. Basically, a die-hard golfer is going to enjoy a new club more than someone who bought the same golf club to try to keep up with their co-workers.

Moral of the story: maybe don’t impulse buy a fancy new Apple watch. Waiting to see if it’s something you really want can save your budget…and your overall happiness.

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Opinion Editorials

How to ask your manager for better work equipment

(EDITORIAL) Old computer got you down? Does it make your job harder? Here’s how to make a case to your manager for new equipment without budget worries.

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better equipment, better work

Aside from bringing the boss coffee and donuts for a month before asking, what is an employee to do when the work equipment bites.

Let’s be frank, working on old, crappy computers with inefficient applications can make the easiest tasks a chore. Yet, what do you do? You know you need better equipment to do your job efficiently, but how to ask the boss without looking like a whiner who wants to blow the department budget.

In her “Ask A Manager” column, Alison Green says an employee should ask for better equipment if it is needed. For example, the employee in her column has to attend meetings, but has no laptop and has to take a ton of notes and then transcribe them. Green says, it’s important to make the case for the benefits of having newer or updated equipment.

The key is showing a ROI. If you know a specific computer would be a decent upgrade, give your supervisor the specific model and cost, along with the expected outcomes. In addition, it may be worth talking to someone from the IT department to see what options might be available – if you’re in a larger company.

IT professionals who commented on Green’s column made a few suggestions. Often because organizations have contracts with specific computer companies or suppliers, talking with IT about what is needed to get the job done and what options are available might make it easier to ask a manager, by saying, “I need a new computer and IT says there are a few options. Here are my three preferences.” A boss is more likely to be receptive and discuss options.

If the budget doesn’t allow for brand new equipment, there might be the option to upgrade the RAM, for example. In a “Workplace” discussion on StackExchange.com an employee explained the boss thinks if you keep a computer clean – no added applications – and maintained it will perform for years. Respondents said, it’s important to make clear the cost-benefit of purchasing updated equipment. Completing a ROI analysis to show how much more efficiently with the work be done may also be useful. Also, explaining to a boss how much might be saved in repair costs could also help an employee get the point across.

Managers may want to take note because, according to results of a Gallup survey, when employees are asked to meet a goal but not given the necessary equipment, credibility is lost.

Gallup says that workgroups that have the most effectively managed materials and equipment tend to have better customer engagement, higher productivity, better safety records and employees that are less likely to jump ship than their peers.

And, no surprise, if a boss presents equipment and says: “Here’s what you get. Deal with it,” employees are less likely to be engaged and pleased than those employees who have a supervisor who provides some improvements and goes to bat to get better equipment when needed.

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Opinion Editorials

Minimalism doesn’t have to be a quick process

(EDITORIAL) Minimalism is great and all…but how do you get started if you’re not sold on getting rid of basically everything you own?

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minimalism desk

Minimalism. This trend has reared its head in many forms, from Instagram-worthy shots of near empty homes to Marie Kondo making a splash on Netflix last year. If you’re anything like me, the concept of minimalism is tempting, but the execution seems out of reach. Paring down a closet to fit into a single basket or getting rid of beloved objects can sometimes seem too difficult, and I get it! Luckily, minimalism doesn’t have to be quite so extreme.

#1 Digitally

Not ready to purge your home yet? That’s fine! Start on your digital devices. Chances are, there are plenty of easy ways to clean up the storage space on your computer or phone. When it comes to low stakes minimalism, try clearing out your email inbox or deleting apps you no longer use. It’ll increase your storage space and make upkeep much more manageable on a daily basis.

It’s also worth taking a look through your photos. With our phones so readily available, plenty of us have pictures that we don’t really need. Clearing out the excess and subpar pictures will also have the added bonus of making your good pictures easily accessible!

Now, if this task seems more daunting, consider starting by simply deleting duplicate photos. You know the ones, where someone snaps a dozen pics of the same group pose? Pick your favorite (whittle it down if you have to) and delete the rest! It’s an easy way to get started with minimizing your digital photo collection.

#2 Slowly

Minimalism doesn’t have to happen all at once. If you’re hesitant about taking the plunge, try dipping your toe in the water first. There’s no shame in taking your time with this process. For instance, rather than immediately emptying your wardrobe, start small by just removing articles of clothing that are not wearable anymore. Things that are damaged, for instance, or just don’t fit.

Another way to start slow is to set a number. Take a look at your bookshelf and resolve to get rid of just two books. This way, you can hold yourself accountable for minimizing while not pushing too far. Besides, chances are, you do have two books on your shelf that are just collecting dust.

Finally, it’s also possible to take things slow by doing them over time. Observe your closet over the course of six months, for instance, to see if there are articles of clothing that remain unworn. Keep an eye on your kitchen supplies to get a feel for what you’re using and what you’re not. Sure, that egg separator you got for your wedding looks useful, but if you haven’t picked it up, it probably has to go.

#3 Somewhat

Sometimes, minimalism is pitched as all or nothing (pun intended), but it doesn’t have to be that way. Just because I want to purge my closet doesn’t mean I’m beholden to purging my kitchen too. And that’s okay!

Instead of getting overwhelmed by everything that needs to be reduced, just pick one aspect of your life to declutter. Clear out your wardrobe and hang onto your books. Cut down on decorations but keep your clothes. Maybe even minimize a few aspects of your life while holding onto one or two.

Or, don’t go too extreme in any direction and work to cut down on the stuff in your life in general. Minimizing doesn’t have to mean getting rid of everything – it can mean simply stepping back. For instance, you can minimize just by avoiding buying more things. Or maybe you set a maximum number of clothes you want, which means purchasing a new shirt might mean getting rid of an old one.

The point is, there are plenty of ways to start on the minimalist lifestyle without pushing yourself too far outside your comfort zone. So, what are you waiting for? Try decluttering your life soon!

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