So how’s your profitability doing? If it’s not where you’d like it to be,
maybe it’s time for a good old fashioned BarBQ!

More than ever, both real estate agents AND real estate companies
need to protect their profit…

Every dollar counts…and profitability has always been a product of two
factors, not one!

First of all, you must make every effort to increase revenue by taking
saleable listings, working with qualified buyers and ultimately putting
those commission checks in the bank!

Secondly, you must consider your business costs. CUT THE FAT AND
NOT THE STATS, by eliminating wasteful costs of doing business while
protecting those costs that are helping you create business!

So just what does this have to do with a BARBQ? Well, when analyzing
your business costs, you might have some “Sacred Cows” that have
gotta go.

And NO, we are not talking about real cows! A “sacred cow”, so to
speak, is something you protect for all the wrong reasons! In real
estate, it could be something or someone that is no longer profitable
and possibly never was!

Here’s some things to think about:

First of all let’s talk about People: Are you keeping someone on your
team or in your office that you KNOW is not the right person in the
right seat on the bus? I hate to tell you, but that person is a SACRED
COW! And remember, just because they’re a family member does
not automatically make them the right person for the job.

Next, how about your marketing efforts? Is print advertising still a

major part of your plan regardless of its ability to generate business?
I had a very successful agent share this business philosophy: He
doesn’t spend any money on any marketing just to APPEASE a Seller.

He’s replaced 90% of print advertising with technology exposure,
keeping his Seller’s happy AND reducing his costs. Now I’m not
saying that all print advertising is ineffective. I am saying that
you shouldn’t be doing any type of advertising JUST BECAUSE it’s
always been done this way in the past! IF you have a method for
TRACKING your marketing, including print advertising, it may still be
an effective lead generation opportunity. Use of an IVR, 1-800 and/
or text tracking program/system could be the answer.

How about your products? Does it make sense to continue spending
money, for example, on an age old website that is not creating any
business? Regardless of what you’ve already spent, throwing good
money after bad has never been an effective business strategy.
Many new products are in the marketplace… do some research and
consider replacing that Sacred Cow!

And systems…do you have something in place that has lost its’
effectiveness? What about an old data base management program?
Is staying the same easier in your mind than the work it would take
to make a change? Keep in mind that an updated system may come
with better programs that would improve your contact with past
clients and your referral base. That could lead to more sales and
more income!

And this leads us to the last, but certainly not the least of the Sacred
Cows….

A mind set that causes you to focus on the cost of something vs. its’
potential to create profit. If you feel you’re a candidate for this one,
are you willing to give up this “penny wise but pound foolish” way of
thinking? Remember, If you all do what you’ve always done, you’ll
always get what you’ve always gotten! (If you’re questioning the
grammar implications of this one, you’re missing the point!)

Remember, in today’s real estate world, more than ever, every dollar
counts. If you don’t do something about those Sacred Cows, sooner
or later they’ll eat up your field of green!

I’m Pam Ermen, Visit my website at www.therealtynet.com if you like
more information on the Principles of Profit in Real Estate.

© 2010, Pamela Ermen, Real Estate Guidance, Inc., All Rights Reserved

Forget the Crystal Ball! Be the First to Know What’s Coming!

When it comes to real estate, we’ve all heard there is no crystal ball….OR IS THERE?

More than ever, being informed, and learning to interpret your market’s specific economic factors will
keep you one step ahead of your marketplace AND your competition.

Understanding the principles of “Supply and Demand” is a great place to start.

In Real Estate, we normally define these 2 simple factors as:

#1: Active Listings, which represents SUPPLY
#2: Sales, which represents DEMAND

The information is pretty basic…however, it’s the patterns of that information that will provide you with
insight into where your market may be going!

Let’s compare a Buyer’s and Seller’s market using this information:

In a perfect Seller’s market, or a marketplace where the Seller’s are basically in the driver’s seat, the
number of listings (or market competition) would be decreasing, while the number of sales (or buyers
purchasing homes) would be increasing.

Whereas…

In a perfect Buyer’s market, or a marketplace where the Buyers are basically in the driver’s seat, the
number of listings (homes to choose from) would be increasing, while the number of sales (buyer’s
purchasing homes representing competition) would be decreasing.

It’s imperative that you understand these definitions, because it is the changing of these factors that will
be the FIRST indicator of a market in transition.

Let’s use an example. You are currently in a Buyer’s market.

From faithfully tracking this information, you find this month that the number of active listings YTD has
decreased when compared to active listings through the same time last year! Could this be significant?
The arrow flipped from listings increasing (more homes to choose from) to listings decreasing, (less
homes to choose from).

What if you continued to track these factors and over the next several months, active listings YTD
continue to decrease, and lo and behold, for the first time in many months…perhaps many years…
the number of sales are increasing. This is a reliable indicator that more Buyers are entering the
marketplace.

Is it possible, that you are witnessing the earliest indicators of a transition from a Buyer’s market into a
Seller’s market?

Wow, would knowing this information provide you with a valuable tool on:

Your listing presentations?
When counseling Buyer’s on market patterns? And, especially…
When working your investor buyers and sellers?

Could you tailor your research to track an area as large as a city or narrow your market research to an
area as precise as a neighborhood? Absolutely!

Yes, there are factors in today’s market that could unexpectedly shift changing supply and demand
patterns, such as the introduction of pinned up foreclosure inventory held by many banks. That being
said, it would be prudent on your part to know what may be coming your way on that battlefront. For
example, dramatic unemployment increases in your marketplace could be a reliable indicator that the
supply of listing inventory will grow in the foreseeable future.

You can bet on this, by the time a shift in your marketplace has hit the media, there will be MONTHS
of data that would have provided YOU with the earliest indicator of what was coming! So forget the
Crystal Ball, you don’t need one to get ahead of your market and your competition. All you need to do is
learn the basic principles of supply and demand and APPLY them!

I’m Pamela Ermen…please visit www.realestateguidance.com for more information on how to increase your sales by
learning to interpret Economic Factors in YOUR marketplace.

© 2010, Pamela Ermen, Real Estate Guidance, Inc., All Rights Reserved

So what’s the basis of YOUR business day….cleaning up messes OR accumulating mass?

I’m sure we all can reminisce about our younger years and those regular occasions when our Parents
would tell us to “Clean Up Your Mess!” On those occasions when I actually did it right, the praise I
received for a job well done reinforced a mentality that was much more far reaching than I knew.

So fast forward to our lives today, throw in a real estate career, and you have the makings for a reality
TV show filled with great stories of how well we clean up our messes! And each time we solve the
problem at hand, we’re often rewarded with a “feel good” moment that reinforces the fact that our
time was well spent.

And what a perfect market for it! Today’s pricing and appraisal challenges…increasingly
stringent qualifying criteria that’s leaving more than a few quality loans at the risk of being
approved….the “other” agent who may not hold up their end of the bargain by carrying their load of
the work…all add up to a well defined “to do” list of messes to fix! And, I’m sure you could add a few of
your own favorites to this list. But what’s the outcome of this revolving door of challenges?

“Fixing messes” CAN absorb our full reserve of time, energy and drive on a daily basis.

Those messes start to control us, instead of us controlling the messes. So just what does the idea
of “accumulating mass” have to do with all of this? Well, when we spend our time fixing the next item
on our list, (and you can bet there will always another one waiting in the wings) we are robbed of the
time we need to accumulate “mass”.

Mass, in the general sense, is defined as:
• “the property of something that is great in multitude”
• ”a large number or amount”
• “muscular strength”

In real estate, our messes can distract us from “amassing abundance”…possibly in the form of new
clients, saleable listings, quality buyers, and ultimately more income to fund your goal and your dreams!

Here are 3 great strategies that can help you take care of the messes AND spend the time necessary to
keep your mass moving in the right direction:

#1: Leaders Learn to Delegate.
Have you ever heard, “If you want something done, give it to the busiest person you know?” That
statement rarely speaks of an individual overloaded with messes. Just the opposite, the best in the
business know the difference between “doing something” and making sure it get’s done”. If your
daily “TO DO” list is taller than you, it’s time to turn some messes over to someone else.

#2: Remove “Hero” From Your Resume:
Once again, Agents at the top know to surround themselves with people who are smarter than them…in
certain areas! Getting a quality job done at the lowest cost per hour is just smart business. Using your
high dollar productivity time to accomplish administrative level work is not the mentality of a smart
buisness person. Let others take the credit for a job well done when it’s appropriate, and you’ll still
come out on top. Remember, they’re an extension of you…if they look good, you look good.

#3: Discover the Difference Between Urgent and Important and Urgent and Not Important!
If you’ve ever read Steve Covey’s “7 Basic Habits of Highly Effective Salespeople”, you know that one
of the main principles of time management is realizing that not every problem deserves your attention.
Have you ever heard out about a “mess” much later than you would have liked, only to find out that
it’s been resolved by the time it finally registered on your radar screen? Amazing how that works! Your
time is valuable. Don’t let people use it up just because they don’t want to use theirs.

So what’s the answer? Most day to day issues in real estate must be addressed or the chances of that
sale not closing dramatically increase. The question is not so much whether you’ll address the messes,
but instead, WHO is the most appropriate person to do so. Just remember, the surest way to eliminate
messes is to NOT focus on mass. Eliminate new business, and sooner or later, you won’t have ANY
messes to worry about!

Here’s an answer from Broker Pam Ermen…The truth is, IT IS DIFFICULT to outrun the interest rate if you choose to define your entire home buying decision by whether home prices will continue to fall Here’s a great rule of thumb…a 1% increase in the interest rate is equal to a 10% loss in buying power! As stated by REALTOR.org, price is normally the major concern when selling a home, while cost is often the main concern when purchasing one. So, if you’re deciding whether to buy now, you should take into account what your monthly payment will be, considering not only the price of the home but also the interest rate of your mortgage. Waiting for prices to bottom out while rates are increasing can wind up costing more over the life of the mortgage. Fannie Mae, Freddie Mac, the NATIONAL ASSOCIATION OF REALTORS®, PMI, and the National Mortgage Bankers Association are all that projecting interest rates will increase over the next several quarters. Consider talking to a Regional Home Mortgage Loan Officer to help you determine what an interest rate increase might cost you if you continue to sit on the fence!