Using the Web and social media to sell real estate

Every single Realtor and real estate investor should be on Facebook, right? Every real estate brokerage and agent should have a Fan Page or business page, isn’t it? The moment you have your presence and your have setup up your page you are ready to gather new business by the truck loads. This is at least what some the new born Internet “marketing gurus” tell us.

Facebook can kill your Realtor business.

As a matter of fact, Facebook can drain a lot of your resources and can jeopardize your business entirely because you will be basing your major marketing efforts on a platform that you don’t control, that keeps changing and that could eventually kick you out if they deem that your activity is contrary to their policies. This is the warning we get from street-smart Facebook marketers.

So, do your really need to be on Facebook? Well, first of all you need to decide if you want to have a personal face to your business because Facebook is first and foremost about personal information and experience. It’s about sharing amongst individuals independent of their business.

And you definitely should not use your personal profile to pitch your properties and to look for business. You would be most likely in violation of Facebook’s term of service and even if you build your own Fan Page then you need to drive traffic and people to it and there will be a lot of exploration and testing on your part to establish how to make it work well for you. And in the end you will have increased the power of Facebook but you will have no intimate and real control on what you have built.

There is no clear and defined path on how to market successfully on Facebook, since the platform is still evolving continuously. Stay clear of gurus offering you a “system” that will work every time. I would definitely advise you to have your own personal profile on Facebook just to secure your name and expand your personal Web presence, but when when it comes to allocating your time to market your business online, I would start from building a basic presence you can control, either with your own blog or your own page on a general platform offered to you by your broker; by your Realtor association or some of the many online services for investors.

Secure a spot you can fully control and then make it known in places that have already a robust traffic of buyers: Craigslist, somebody else’s blog, on your business card, anywhere you can capture some meaningful traffic. Then, you can also add some Facebook marketing when the time is right and when you have already a platform you can control and you can drive people to. Remember, the first objective is to build a list of customer. Your own list. A list you can truly own and control.

Roberto Mazzoni

In the last couple of weeks I have been conducting a very extensive research on the web presence of Realtors and in particular of their use of Social media. I have looked literally at thousands of profiles. One of the most interesting areas for creating a dialog with potential customers or with other Realtors and investors can be Twitter.

Realtors with empty social media profiles have also empty hands.

Not everybody understands it and not everybody cares, but what I found out is astonishing. At least half of the Realtors who have an account on Twitter have not been publishing a single message for one year! Could you imagine, registering your account, putting your face out there along with a bio that clearly state you are a Realtor or a real estate investor and then don’t say a word for the following 12 months?

These people evidently don’t understand that a bad presence on the web is going to recoil on them. It would be much better for them to consolidate their presence, removing the profiles they can’t keep active and reducing their actions to what they really care to maintain updated, if anything. If myou can’t be there every day you can at least automate some content publishing so that you don’t seem to be totally devoid of things to say. There are free tools can do it for you.

Evidently the old approach of placing a sign near the property and wait for someone to call stays with them also in the on line world. Investors are a bit more active better, but not much. You can find some very big names, some “guru” or real estate investing let’s say, that with account that have been silent for months.

We all know that Twitter ha still to prove itself as a money making platform, pretty much like most of social media when it comes to pure selling, but it is also proven by now that most of the activity you do on social media and blogging is aimed at procuring leads and contacts.

Once you have the leads, you then develop business through a regular personal contact. What would you think if a customer was coming by your office every day, for one year, and always saw the sign “Ill be right back?”

I guess he would stop passing by pretty soon and would know that you really don’t care for your business.

Nobody is forced to be on social media. As a matter of fact, there are investors and Realtors who are doing perfectly fine with old style referral systems; but at least they have the good sense of not even trying to pretend to be there.

Possibly some people might even figure that they would not be found out, but today your have software and services that can give you the whole history of a person’s presence on social media. A complete picture of his activity and “value”. And it is like having a personal score that anybody can look at in a few minutes and build an idea about us even before they get in touch with us.

So possibly some of these Realtors that have a totally empty and dead account might wonder how comes nobody is calling them and that they are not getting so many leads as it used to be. They could believe that social media is not working for them. Well actually it does, but in reverse, shifting people away from them and into the hands of their competitors who maintain a decent social media presence.

This subject is important for any marketing positioning strategy in the real estate field and other business fields. Today people look much more at who your are and can immediately find out by resorting to the master of all referral systems: Google and see what comes up about you. If nothing comes up at all or if they don’t like what they see, you have gotten bad publicity right thene and you have lost business. Something to think about if you want to survive the crisis.

Roberto Mazzoni

The National Association or Realtors reports that home sales have been up, nationwide, for two months in a row. Historically-low mortgage rates result in mortgage payments that sometimes are lower than rent. Indeed the national average commitment rate for a 30 year fixed rate conventional loan fell to 4.35 per cent in September 2010, which is a record low. As a comparison, the rate was 5.06 per cent in September of 2009.

Houses have never been so affordable as today.

Lawrence Yun, chief economist at NAR, states: “A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium. But the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions.” A decade ago mortgage rates were almost a double of what they are today and they are about 1.5% lower than the peak of the housing boom in 2005 and prices are 22% lower than in that time frame (in some states like Florida prices have been pretty much cut in half, really).

What is even more important, housing affordability conditions are today 60% higher than during the housing boom so it has become an even stronger buyer’s market especially for families with long-terms plan that will reap the benefits of the low rates not only now but for all the many years to come (see the original article from NAR).

The glut of foreclosure is still keeping the market down in terms of median prices, but the recovery signs are visible also in new homes sales that have risen 6.6% in September, reducing the overall inventory from 8.6 to 8 % of new homes monthly supply (see the article from Agent Genius).

Roberto Mazzoni

Several banks and loan originators have been very sloppy in taking care of their paperwork during the high time of the real estate bubble, let’s say between 2005 and 2007 and today properties are being foreclosed on without the proper documents or even with forged documents. The situation is fairly wide spread and there is no safe way of telling if the title is clear when you buy a property directly from a bank. Many major banks have frozen  their foreclosures throughout the nation in order to address this very problem, but there is not short term solution in sight because several different types of laws have been violated in the process and prosecution is expected to happen also on class actions.

Foreclosure fraud can undermine international real estate investing.

How did it work?

To gain an understanding of the complex system that brought is where we are today, you can read the following very well written articles that go in the detail on how it all worked out and the key role that the State of Florida in playing in the scene:
Foreclosure Fraud For Dummies, 1: The Chains and the Stakes that explains how the court system was fooled into accepting forged or non existing documents for their foreclosures.
Foreclosure Fraud For Dummies, 2: What is a Note, and Why is it So Important? that explains you why even having the original and proper mortgage document (that often is not there) will not do and how this could heavily affect investors.
How to Find the Owner of Your Mortgage which gives you practical tips on how to trace the paperwork back to its source.
Unfortunately there is a lot to know and understand about this subject and it is unlikely that title companies will catch up with it in the short term, so some of them already are refusing to issue title insurances on properties that are in some way connected to foreclosures.
What are the liabilities for you?

If you are an investor, you run the serious risk of acquiring properties and then have your title of ownership challenged down the road with little or no support from your title policy. If you are an international buyer or and international real estate investor you find yourself potentially mired down into a legal mess that would be very difficult to solve from a distance even if you had the rights to defend yourself and the cost of the defence would easily surpass any profit or cash flow you have gathered on the property.

If you are a Realtor you could be involved into a transaction that either can’t go through, because title companies won’t provide an insurance on the property, or that can be challenged down the road and you might have been liable for not disclosing material facts on the property of which you should have been informed (the foreclosure fraud story is all over the media now).

But what is more important here, I believe, is that this particular crisis, that is going to last for a while, until the have found a way to clean it up in a legal and orderly way, will reduce one of the attraction factors of the US real estate market for international investors and buyer: the protection of private property and the transparency of the transaction. People from all over the world have been purchasing  properties at very low prices counting on the protection of their investment, many of these properties where bought, remodeled and rented on a lease option basis. This whole flow or capital into the US was based on the reasonable certainty that the investment was going to be protected by a very solid and tested judiciary system that has always been protecting private property. With a significant percentage of foreclosures running the risk of being challenged what do you think will happen to this flow of money?

It is likely to flow elsewhere, in other countries or maybe towards properties that have been owned free an clear for some time by private sellers, or there will be a whole new market for people and companies providing services in checking out the legal status of a property.

Roberto Mazzoni

Associated Press reported yesterday that JPMorgan Chase has stopped foreclosures so that it will have the time to review loan documents for errors. Another major lender, GMAC Mortgage had done the same about ten days ago.

Less houses for sale from banks and lending institutions.

There is a growing percentage of litigations following foreclosures that often leverage on the fact that the bank doesn’t have adequate documentation to bring the cause forward and therefore it is stalled in court for quite some time.
Halting the foreclosure process before it gets to court will help these two companies in straightening out their paperwork and will generally slow the foreclosure flow, so there will be less foreclosed houses on the market and this will improve a bit prices that already seem to be increasing in some areas.
Banks and lending institutions are getting very active also in other areas: Fannie Mae and Freddie Mac are reported to have launched a project to unload 150,000 foreclosed properties: there will be low down payments and no requirement for mortgage insurance and $ 30,000 will be added to the mortgage for renovations.
Individual buyers will have a 15 day chance of submitting offers before investors can step in and Fannie and Freddie will also go the extra mile of repairing themselves any major areas, like the roof, the plumbing and electrical works. Also other banks are doing this: brokers and investors have turned into contractors and REO properties are sometimes repaired directly by the bank so to be able to then market them directly to home buyers at the best price the market can offer.

Roberto Mazzoni