Real Estate Investing

When real estate agents market themselves as being a member of a “Million Dollar Club,” they gain the perception that they are rolling in the dough, wear beautiful jewelry, and drive expensive cars because of their success.  In reality, if you have sold a “million” dollars in real estate and your broker’s side of the commission is 3%, here’s what that million looks like:

Commission:  $30,000
Broker’s Share (at 70:30): $9,000
Uncle Sam’s Share (at 25%): $5250
Net January-June: $15,750

At this rate, a yearly salary edges up to $31,500.  That doesn’t even account for your expenses which I assure you will easily be another $5,000 (mine were $9,000 last year).

It’s no wonder so many agents are looking for the greener pastures of a steady paycheck. In my office, we’ve just lost two of our best agents because they’ve been lured away by regular-paying non-commission jobs. Other agents, like Washington state’s Deborah Starnes is doing whatever it takes to make ends meet,

Deborah Starnes is in a race to keep her beautiful Renton home from foreclosure.  “Going from having everything, being on top of the world, two cars, house, nice yard, and then you don’t have the money to pay for it all,” said Starnes.

The real estate market has tanked and so has this realtor’s chance to make ends meet. A recent medical condition means she can’t work, and that’s set her back even more.

Deborah has begun taking her belongings to her local pawn shops.  These types of stores have seen a huge surge in business, mostly from people selling items just to pay for gasoline.  Pawn shops aren’t the only successful businesses these days.  Several months ago a blogging friend of mine opened his second (or third) second-hand clothing store called Plato’s Closet and had people lined up outside to get in.  Teens are catching on to the thrift trend - I know my teenager and her friends love finding deals.

But in real estate, we are doing what we can.  We’re trying to drive less (good luck with that since we have to drive clients from house to house), my digital picture frame is off to save $9 in electricity per year, and if the empty offices here at work are any indication… people are working from home.

Angelina Jolie, Brad Pitt, and their four - soon to be six - children will be moving into a home located on 1,000 acres in the south of France.  In addition to 35 bedrooms and a forest surrounding the estate for privacy, the home has some mighty fine neighbors including Bono and Johnny Depp.  The rest of the story.

I’m not kidding when I tell sellers that the return isn’t as great when placing ads in magazines and newspapers rather than investing in some online promotions.  I use Visual Tour software and Animoto (we talked about that earlier this week).  But another company offers “short documentaries” about high-end homes which I find fascinating.

In today’s residential real estate market, off by as much as 20- to-30 percent on a year-over-year basis in some regions of the country, brokers and home sellers have been forced to find ways to get biggest bang for their marketing bucks. And it’s no surprise that most of their budgets are being spent on the Internet.

According to the National Association of Realtors, between 85 percent and 90 percent of today’s buyers depend on the Internet for links to individual real estate agent home pages, ColoradoRealtor.com, Realtor.com, Zillow.com and corporate real estate Web sites.

The rest of the techno story here.

I still believe we are near the bottom of the market, though this writer disagrees. 

Can we expect a lone realtor to determine the exact bottom of the market for a potential buyer? NO! Not even the most esteemed experts know exactly when the real estate market is at bottom. What the realtor must do is give the best assessment possible and the best advice they can muster, and let the buyer decide - without hype.

And even if we haven’t reached the bottom … who cares?  If you are ABLE to buy a home at a GREAT INTEREST RATE and you NEED to buy a home, then by all means:  Buy a Home.  The thing is, it’s not just about your “investment” - rather it’s about having a place to live.  If you’re qualified and find a place you love, it may or may not be there in a month or two or five when the real estate market “hits bottom.”  If you feel like it’s home, then make it your home without being distracted by the yaysayers and naysayers.

If you’re waiting to see what the future holds, remember the future never comes. 

Unless you live on Mars, then the future could be coming.  And it could look like this.

Photo from here.

First came phonographs, then record players.  We knew 8-track tapes were the shiznit, then regular audio tapes blew them away. Those were replaced with CDs which I would’ve never imagined they would disappear as quickly as they did thanks to this digital age.  But they did and now MP3’s and iPods rule the roost. 

Just two years ago, videotaping listings was the talk of the real estate marketing world.  My friend and I actually taped one of my listings and posted it on Blip TV.  We were especially delighted that we captured a white-tail deer leaping away from the camera in the woods behind the house.  Apparently Bambi wasn’t enough to sell the house, though, because even after a thousand views without a contract, the video was yanked because it was an “advertisement” (oops!).

This site that describes terrible real estate videos beckoned me back to my old Blip TV spot.  The agent that was highlighted as a “bad video” on this post had used a slide show to pull her feature together rather than a video camera.  If you’re going to use a slide show to make a video, then use the right tools.  I had the great fortune of finding Animoto.com last September which is my Number ONE choice for Slide Show videos.  You can make as many 30-second spots as you want for free, but it costs $30 per year to go “full length.”  I spent the $30 with great success.  I pulled together a neighborhood tour several months ago and heavily promoted it through my Animoto Slide Show.  We did end up selling two or three of the homes featured (not mine, though… boo!).

To make the SLIDEO (like that new word? slide/video combined) you’ll need at least 20 photos to upload.  Then you can pick your music and this is where Animoto excels because they have several song categories.  You can choose from classical to indie rock to rap, or you can download your own music (keep it legal, music geeks!).  You’ll title your creation, give producer credits, etc. and push the magic button that enables the software to build the video.  It’ll take 10 to 30 minutes depending on how many photos you use and how busy they are.  If you don’t like the results, you can remix.

Here’s the best thing about Animoto … it doesn’t have to be about real estate to use it!  I’ve loaded family Christmases, photos from a daughter’s birthday party, Easter egg hunts, and more.  My heart swells for technology that I can use for work AND play!

OH WOW… I just learned you can now export to YouTube and so I give you this example of Animoto.  Here’s the link if the video doesn’t load…

[youtube=”http://www.youtube.com/watch?v=kdZNsggkD-8″]

Here’s some Memorial Day homework if there are any takers.  Take some photos of your activities (kiss a soldier, have a barbeque, go swimming) and put together your own Animoto video.  Send us a link!  We’d love to feature your work!

Have a safe holiday weekend!