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Proven, successful real estate prospecting strategies include:

• Calling expired real estate listings (perhaps their listing price was too high or their previous agent was not of the highest quality; a word of caution - these people are likely frustrated with real estate agents and so you must work extra hard to convince them that you are hardworking and smart)
• Talking to For Sale By Owners (over 85% of people trying to sell their own homes give up and hire an agent)
• Going door-to-door
• Calling past clients
• Sending holiday cards/ small gifts with your name and contact information (my family is a big fan of magnets)
• Calling people in your social network (everybody knows someone that wants to buy or sell a house)
• Calling out-of-town owners (a lot of them may be facing frustrations with managing a home from a distance and be ready to sell)
• Sending a notice to your alumni or fraternity/sorority newsletter (there could be alumni in your area)
• Paying for the White Pages to make your name distinct, such as bold or large lettering
• Organizing neighborhood parties (what better way to build rapport with the people that live around you)
• Creating a quarterly neighborhood newspaper that includes news such as weddings, honors, college acceptances, move ins and outs, selling prices of homes, etc (of course the newsletter will include your photo and contact information)

Why you want to refinance before fall

Considering refinancing your mortgage? If you hold off
until the fall, you might not be able to afford it.
If you've been putting off that mortgage refinance you've been thinking about, beware: you might
not be able to afford it - or even qualify - if you wait until fall.
Why? Rising interest rates, an improving economy, and impending stricter lending guidelines
mean waiting a few months to refinance a mortgage could be a costly mistake.
Here are three reasons mortgage experts say you should refinance before fall arrives.
The Government May Stop Investing In Mortgage-Backed Securities
Are you holding off on a refinance until the government confirms the economy is improving?
Doing so could make your refinance more expensive. Why?
In March 2013, Federal Reserve Chairman Ben Bernanke said the Fed may adjust the pace of
buying mortgage-backed securities according to the pace of economic recovery - which means
slowing purchases if the economy improves.
The problem is that the buying of mortgage-backed securities has been a large contributor to
rates staying low, says Dean Vlamis, VP of Residential Lending at Perl Mortgage in Chicago, IL.
In fact, rates have already jumped in recent weeks since the Federal Reserve Board starting
hinting at ending the buying program. For example, the average interest rate in May 2013 for
a 30-year fixed-rate mortgage was 3.54 percent, and jumped to 4.07 percent for June 2013,
according to Freddie Mac.
So with rates already on the rise, the time to lock in a rate is now - before they go up even more.
Tightening Credit Guidelines May Make it Difficult to Qualify
Though they won't come into effect until January 10, 2014, changes are coming to laws that
govern how strict lenders have to be when qualifying borrowers for mortgages, including
refinances. And your lender may soon start getting ready to use the new guidelines.
Amendments to the Dodd-Frank Act, a consumer protection rule that identifies mortgage
qualification criteria, will require lenders to confirm at least eight criteria through third-party
documentation, including other debts, child support and alimony payments, and income.
Because of these stricter qualifying standards, prospective homeowners may find it difficult to
get approved for a loan.
And don't be surprised if the guidelines start changing before January 10th.
"Some lenders may adopt tighter credit guidelines later this year in anticipation of new DoddFrank rules set to take effect in January 2014," says Mayfield.
So, to avoid the extra paperwork and tighter application requirements, homeowners should
refinance now - before their lenders implement these changes.
Improving House Prices
The median existing single-family home price rose a whopping 12.9 percent in the 12-month
period from May 2012 to May 2013, according to the National Association of Realtors. And
while the real estate market is improving, it may not be good news if you're planning a fall
refinance.
"For the first time in years home values are increasing," Vlamis says.  And while higher home
values give refinancers more equity in their homes, Vlamis also cautions that an improving real
estate market also means that interest rates are likely to rise even higher - so you have to act soon
to reap the benefits.
What's more, Mayfield says it can take longer for a loan refinance application to be approved
than a mortgage on a new home purchase. And with the housing market improving, refinance
applicants may be waiting in a long line to get their paperwork processed.
"Borrowers should be aware that lenders typically give priority to purchase loan applications
over refinances," says Mayfield. In fact, borrowers who want to refinance in the fall may have to
wait longer for their transactions to close as the purchase market continues to pick up, she warns.

Prospecting Plan for Expireds

Use this plan as a basis for prospecting for expireds. Add other successful strategies you have tried as you learn more about what is most effective in your market.

Locate Expireds
You should spend 30 minutes each morning, as early as possible, printing out a list of expired listings from the MLS.

• Focus on expired properties in your market area or that you feel have a strong market appeal because of price or features.
• Keep track of how long properties that you consider particularly salable have been on the market. If you learn that a listing is about to expire, offer a referral fee to the listing salesperson to let you negotiate a new listing with the seller prior to expiration. This gives you the inside track.

What other lead sources for expireds have you found helpful?

Develop a Tracking System
You often will need several weeks of contact before you can convert an expired to a listing. Once they've had a bad experience with another real estate practitioner, expireds may not be immediately receptive to a real estate practitioner. You will need to demonstrate to them why you’re different than their prior salesperson.

Your tracking system should include:

• Name, address, and phone number of expired
• Information on the property from the MLS, including previous list price, and, if possible, days on the market.
• Date that the listing expired and previous salesperson.
• Date, time, medium of every contact, and response with an expired, in chronological order—for example, phone call at 9 a.m. on 9/14, offered free comparable market analysis. If you do mailings or e-mails to expireds, be sure to include those contacts in your tracking system.

Other tracking information you’ve found valuable:

Develop a Solicitation Schedule
Although expireds are usually sold on working with a real estate salesperson, a bad experience with their previous real estate associate may make them distrustful of your promises. Keep this in mind, and focus your solicitation on providing consultative services that emphasize your past successes.

Week One
On the day the listing expires
Mail, or better yet drop off, a marketing package. If possible, do something to make your marketing package stand out from the many others an expired is likely to receive. Options include, sending it in a colorful or oversized envelope, adding a special delivery or personal/confidential stamp, or hanging it on the door in a plastic bag preprinted with you name and a drawing of a house.

Later that week
Mailings: Send a follow-up letter or postcard if you don’t get an appointment. Again, provide a supportive message, such as “Sometimes, even a great home doesn’t sell right away.” Also include a statistic noting what percentage of your listings sell in 90 days or less.

What other techniques have you used for making initial contact?

Week Two
Recheck the MLS to be sure that the home was not re-listed. Also drive by the house and look for a sign. Be alert to the possibility that a frustrated expired might become a FSBO.

Mail another marketing letter, emphasizing your success rate in selling listings in 90 days or less. Include information on any recent sales near the expired’s home, to subtly reinforce the going price range for the area.

Other techniques for maintaining contact:

Week Three

Recheck the MLS to be sure that the home has not re-listed.

Phone calls: Follow up to ensure that expired has received your service package. Use this opportunity to ask if you can come over and see the house so that you can keep your buyer clients informed of everything available in the neighborhood. Low-traffic times at open houses are a good time to make expired follow-up calls, suggests author Danielle Kennedy.

Buyer interest: If you have an appropriate customer, call expireds and ask if they would be willing for you to show the house to a buyer.

Other techniques for getting your foot in the door:

Week Four
Recheck the MLS to be sure that the home has not re-listed. Drive by and check for a yard sign.

Listing presentation: If you’ve gotten an appointment and the mood is right, present a prepared listing agreement during your visit for signature. As an alternative, promise the expireds that you will complete a marketing plan of the property within 48 hours for their review. Present the plan, then ask for the listing.

Final letter: If you’ve been unable to get an appointment, send a final letter asking expireds if their interest in selling their property has waned. Enclose a personal marketing brochure and suggest that they keep it for future reference if they later decide to list again.

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Social Media Training June 25 at RE/MAX Kings Realty in Riverside

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Free Social Media Class at Coldwell Banker First Premier Realty

Until mortgage rates hit 10.5%, buying will still be cheaper than renting

The recent rise in mortgage rates has made buying a house a little more expensive: the increase in the 30-year fixed rate over the past month from 3.4% to 3.9% (Freddie Mac) raised the monthly payment on a $200,000 mortgage by $56, or 6%. However, because mortgage rates are still near long-term lows, and because prices fell so much after the housing bubble burst and remain low relative to rents even after recent price increases, buying is still much cheaper than renting. That means that the recent jump in rates doesn't change the rent-versus-buy math much.

Rates are likely to keep rising, but how far must rates rise before buying a home starts to look expensive relative to renting? To answer this, we updated our Rent vs. Buy analysis with the latest asking prices and rents from March, April, and May 2013. Following our standard approach, we calculated the cost of buying and renting for identical sets of properties, including maintenance, insurance, taxes, closing costs, down payment, sales proceeds, and, of course, the monthly mortgage payment on a 30-year fixed-rate loan with 20% down and monthly rent. We assume people will stay in their homes for 7 years, deduct their mortgage interest and property tax payments at the 25% tax bracket, and get modest home price appreciation (see the detailed methodology and example here). Here's what we found:

Buying remains cheaper than renting so long as mortgage rates are below 10.5%. At 3.9%, the current 30-year fixed rate according to Freddie Mac, buying is 41% cheaper than renting nationally. With a 5% mortgage rate, buying is still 34% cheaper than renting nationally. Mortgage rates would have to rise a huge amount – to 10.5% – to tip the math in favor of renting, which isn't impossible. Rates were that high throughout the 1980's, but have been consistently below 10.5% since May 1990.

Each local market, of course, has its own mortgage rate "tipping point" when renting becomes cheaper than buying a home. At 3.9%, buying is cheaper than renting in all of the 100 largest metros, which means the tipping point is above 3.9% everywhere. The tipping point is lowest in San Jose, which would tip in favor of renting if rates reach 5.2%. It's between 5% and 6% in San Francisco and Honolulu, and between 6% and 7% in New York and Orange County, CA.

Metros with the Lowest Mortgage-Rate Tipping Point
#	U.S. Metro	Mortgage rate below which buying is cheaper than renting
1	San Jose, CA	5.2%
2	San Francisco, CA	5.4%
3	Honolulu, HI	5.8%
4	New York, NY-NJ	6.8%
5	Orange County, CA	6.8%
6	Los Angeles, CA	7.5%
7	San Diego, CA	7.5%
8	Ventura County, CA	8.0%
9	Sacramento, CA	8.0%

Of course, the tipping point also depends on how long you plan to stay in your next home (we assume 7 years) and whether you itemize your deductions (we assume you do). For instance, if you don't itemize, or if the mortgage interest and property tax deductions were eliminated entirely, buying would still be 29% cheaper than renting at a mortgage rate of 3.9%, and the tipping point when renting becomes cheaper than buying would be 7.5%.

But just because buying is cheaper than renting, it doesn't mean you can buy. Lots of people who want to buy don't have the down payment or can't get a mortgage. Even people who can swing it financially might not be able to buy right away, before rates rise further, because they might not find the home they want quickly with inventory still so tight.

So if the recent increase in mortgage rates doesn't change the rent-versus-buy equation substantially, why does it matter? The main effect is to reduce the demand for refinancing. Unlike home buying, refinancing is a relatively straightforward financial decision: although refinancing has upfront costs, refinancing doesn't require finding a home, thinking hard about your lifestyle, or moving. Since rates have been low for so long, many people who were able to refinance, already have. As a result, the demand for refinancing is now dropping.

For people who haven't yet refinanced – and for people looking to buy – rising rates do make housing more expensive. Rates are now on the rise and are likely to keep rising, thanks to the strengthening economy and the Fed eventually trying less hard to keep rates low. But it will take big rate increases to turn off prospective home buyers. At today's prices and rents, rates would have to rise to levels we haven't seen in 20 years before renting is cheaper than buying a home on average across the country.

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