Tuesday, January 2, 2018

2017 StepStone Goals in Review

It’s Dan’s favorite time of the year.. the decorations come down, the shopping stops, the hurried and distracted pace of the holidays fades away. January 2nd! Official Back to Work Day! 

We’ll get back to work by spending the next few weeks reviewing our 2017 goals and setting the new ones for 2018. By using the techniques we learned reading TRACTION by Gino Wickman over the last year we were able to make some great strides in our goals for StepStone Realty.  

First on our agenda was to provide additional training and educational opportunities for our agents. As a result, we produced four Agent Workshops that were offered in each of our major metros.  All four were a great success where agents & partners enjoyed making connections with agents from other cities, excellent networking, great classes and fun happy hours. Based on your comments, this year we’ll be doing 2 Two Day Workshops. Mark your calendars now for April 13 & 14 for the Austin event and August 10 & 11 for the Houston Workshop. You won’t want to miss them.

Another huge success for us this year was our capital raise. While it was a much longer process than we anticipated, we were able to raise funds for StepStone Realty by an offering on a crowdfunding website, MassVenture. We raised nearly $250,000 to help the brokerage grow to the next level but more importantly ALL OF THE FUNDS CAME FROM STEPSTONE AGENTS. We couldn’t be more thrilled to have the support of our agents and give them an opportunity to own a piece of Stepstone.

We also rolled out some additional opportunities for our StepStone agents to earn residual income. Our more experienced Agent/Investors can now participate in a Captain program where they act as ambassadors to our incoming agents and help brand new agents learn the ropes as well as be available for partnerships on investment deals.
Even the newest agents can participate in our Agent Rep program where agents who attend a special training are invited to represent StepStone Realty at various networking events. This is a great way to pick up prospective agent leads and earn recruiting residuals. Watch Facebook for the next Agent Rep class opportunities.

We are also happy to report that we have hired a part time staff member who will begin working with us in the next week to help support our agents. As our staff grows we look for more ways to compensate them and are glad to now offer health insurance to our full time employees.  

While we accomplished these goals we have a few that are still a work in progress and will likely continue to be on the list for 2018.

Our beloved MojoVest is due for an overhaul. Unfortunately, this project took a few steps backwards when we lost our developer. Ultimately, it was better to happen sooner than later, and we now vetting new developers and reviewing bids.

We are also in the process of interviewing marking companies to create a plan that includes polishing our marketing materials, overhauling the website, adding individual agent website options and developing a larger social media presence.

Finally, after some set up, we are now ready to launch an experimental lead generation program. Our hope is that we can take advantage of the skills of our most successful marketers to generate leads that other StepStone agents can then purchase on a per lead basis. StepStone Realty will bear the expense of generating the leads so that our agents can confidently spend their marketing dollars on already identified prospects.

I’ve learned a lot over the past 4 years about owning and running a brokerage. The biggest lesson is that the work is never done. As such, sometimes it can feel overwhelming to accomplish everything I want to for this company. However, each year I see the progress we’ve built on top of previous progress and I feel confident that with clear objectives shared by all in the company we can continue to grow, thrive and be the best brokerage home for real estate investor/agents.

I hope that you, too, will continue to build on your successes, not get discouraged, but instead use deliberate action to reach your goals! Make 2018 a year of action! I know I will!


Happy New Year!

Friday, December 1, 2017

First Steps for the Newbie

As StepStone grows and our reputation as an excellent brokerage for Licensed Real Estate Investors spreads we start to attract not only folks already in the REI world but those wanting to get into it. We’ve had many brand new agents come on board who see the advantage to having the skill sets of both traditional agents and creative investors to provide them the most likely chance of turning leads into deals and succeeding in the world of real estate.

However, as “greenhorns”, knowing exactly where to start can be daunting. On one hand there is so much information out there that it can be overwhelming and yet on the other hand there is no set curriculum or guide on exactly how to start that you can feel stuck. I’ve chatted with several of these agents over the last few weeks and as a result we are working on creating a Getting Started guide to help our newest agent/investors get off to a good start.

In the meantime, though, if you are one of these agent/investors, there are some active steps you can take to get started in the world of both retail and creative real estate. Make no mistake… breaking into this field takes time and commitment. Determination and willingness to put yourself out there is a requirement. If you are willing to take these first steps you are putting yourself on a path for success.

STEP ONE: EDUCATE YOURSELF

As many of you know, the pre-licensing education you received didn’t exactly prepare you for the day to day activities of a licensee. While StepStone provides various training opportunities through our recorded webinars, MasterMind meetings and Workshops, there are still many gaps to fill.

First, check out the class schedules at your local Board of Realtors office. Every board offers inexpensive classes, many of them with Continuing Education credit, including how to use the MLS systems and other technologies, marketing, understanding various loan products as well as more sophisticated topics such as understanding 1031 exchanges.

Second, check out the offerings from local title companies. A quick check of their websites will yield great How-To and explanatory videos as well as classes that will help you build your business and presentations on current market trends and other topics. Feeling hungry? Reach out to the business development team of your favorite title companies. They will likely treat you to lunch and add you to their email list so you will always be in the know of what offerings they have each month.

Third, if you haven’t already, check out BiggerPockets.com for a wealth of knowledge provided via blogs, podcasts and discussion groups.


STEP TWO: NETWORK

You’ve all heard it: Your Network is your Networth.  Getting to know others, and them getting to know you,  inside and outside your industry is paramount to your success in this business.  You might be surprised at how many deals and partnerships are formed between folks who met networking.

Feeling shy or out of your league? It can be hard when you first start but make a commitment to yourself to do it and be consistent and before long you will find it an enjoyable exercise. The more you go the more people you will recognize and will recognize you, the more connections you will make and the more comfortable you will become.

Not only will you make some valuable connections but the more people see your face the more credibility you will gain. I once had an agent tell me he attends 3-5 network events a week. As a result, he got in on a million dollar listing because they assumed he must be a mover and a shaker because he knew everyone and everyone knew him.

Not sure where to start? www.MeetUp.com. Also, watch our monthly newsletter to find out what meetings StepStone is a vendor for and you will be sure to see at least one friendly face in the crowd!

STEP THREE: TELL EVERYONE WHAT YOU DO

I’ve had some agents tell me that they hesitate to tell friends or family that they are a real estate investor because they haven’t done any deals yet. Don’t let that stop you! Even if you don’t have the skills or the knowledge to do a deal on your own yet you do have a team of agents and investors behind you that do have the ability and can help you. Working your “sphere of influence” is the cheapest and easiest way to get a deal.

How to do this? Post on Facebook! Let everyone know that you are an investor and agent. Walk your neighborhood and introduce yourself. Put flyers on their doors if they don’t answer. Go to neighborhood events like Neighborhood Night Out or Neighborhood Watch meetings. Download and join the Nextdoor app.

I’ve helped a family member do a short sale on their house, helped a friend get a new lease, helped another friend buy an owner finance house, helped an uncle sell two houses, bought a distressed house from a neighbor, helped my pastor buy and sell a house and another pastor’s son buy a house. I did not have to market for this business… I just had to make it known that I was an Agent and Investor.

No one will ask you to help them if they don’t know what you do! So, be loud and proud and let the business come to you!  

The New Year is upon us. It’s the perfect time to make the decision to take the bull by the horns and just do it. Now, go get ‘em!

Wednesday, November 1, 2017

Technical Talk: Accepting Back Up Offers


So, what does that MLS status PB really mean? This status indicates that the property is under contract aka PENDING but that the seller is open to receiving and considering BACKUPS. How does this process work?

If a property is under contract, the seller has the option to review and accept a Back Up Offer with the use of an ADDENDUM FOR “BACKUP” CONTRACT. There are two primary blanks to complete on the Back Up Addendum.  Section A will identify the First contract by inserting the executed date of that contract in this blank. Section B will identify the date the Back Up offer will terminate.

If a seller wishes to accept a Back Up Offer with this Addendum in place the Back Up Offer will be executed and earnest and option money shall be deposited. If the First offer terminates on or before the date set out in Section B of the Back Up Addendum then the Back Up offer moves to the primary position.

At the time that the Back Up Offer moves into the primary position the executed date shall be amended to the date the back up buyer receives notice that the first contract has terminated. I recommend the agents execute an amendment reflecting the new effective date so no conflicts arise later as to when the option or financing periods began and end.

The seller and listing agent should understand that by accepting a BACK UP offer, that contract is binding and they may not later change their mind about its acceptance.

Why would a seller want to accept a Back Up Offer? Leverage. When negotiating repairs and concessions during an option period with the First Contract the seller can feel more confident and perhaps negotiate more aggressively knowing they have a Back Up Offer they can move on to if they are unable to come to terms with the First Contract. If the Back Up Offer is better than the First Contract the seller will be unlikely to make any further concessions beyond what they already agreed.

Why would a buyer want to place a Back Up Offer? In a hot seller’s market, this is a way to ensure that the buyer gets first dibs if the First Contract falls through. The seller would never have the option to place the property back to Active on the MLS.  It will require some patience by the buyer but they do have some control over the timing with Section B of the Addendum indicating the date when the Back Up Addendum & Contract expires.


I have found that Back Up Offers are not very common but they can be a good tool for both buyer and seller if all parties understand how to use them.

Monday, October 2, 2017

The Devil is in the Details

As the broker of over 150 agents, it is I who gets to hear about it when things go sideways on a transaction. I recently had an interesting one… a buyer wanted to terminate a contract based on the third party financing addendum. The first thing I do when there is a conflict is review the contract. In this particular contract, the portion that indicated how many days the buyer had to give notice of non-approval was left blank. Easy! I thought! Their agent made an error by not filling in that blank so now they have no days to give notice and the seller is entitled to the earnest money. Right?

The buyer’s agent saw it in a very different light. Her argument was that since it was blank the buyer had INFINITY days to give notice of non-approval. Hmmmm. Unfortunately, in this case, there is no right or wrong answer. The buyer and the seller now have to agree to the terms of the earnest money release or no one gets it.  Both of the agents let their clients down. That contract should have never been executed without all the blanks filled in.

I know it’s easy to get in a rush to get a contract executed or you get the impression that a transaction is going to go perfectly smoothly so you don’t get hung up in the details. But, as I’ll tell you time and again, the Devil is in the Details. And it’s not only on contracts.

Last month one agent had a transaction fall apart because the buyer discovered right before closing that the square footage of the home he was planning on buying was actually almost 200 square feet smaller than advertised on the MLS.  After some research, it was found that there were several different square footages reported for this property: the builder floor plan said one thing, the tax record said another and yet a previous MLS listing reported yet another. Furthermore, the listing agent had represented the seller’s in their purchase 3 short years earlier so surely there was an appraisal floating around with the correct square footage reported. Yet, the listing agent cut corners and instead of researching to verify the square footage she COPIED an older listing from another agent that had the square footage incorrect. Needless to say, the deal died and all the parties of the contract are unhappy and likely headed to mediation.

You should never rely on the data provided by a previous listing agent. If there is a question about an item take your time to do the research. I’m sure it was a very uncomfortable situation for the listing agent to explain to her seller’s why the contract busted and could have been avoided if she had done more due diligence.

This scenario above is a good example of how the buyer’s agent took the time to discover the facts for his client and avoided an even bigger problem if they had closed on the house. We had that happen too…

We represented a buyer who purchased a residential lot to build his dream home upon. After closing, he discovered that the city would not issue building permits because the property was in a flood zone. The listing agent clearly advertised the property as a residential lot and with few restrictions. The seller did not disclose the flood zone even though it was later discovered that they knew about it. Clearly, the seller was deceptive and litigation is likely in this case. It is a good example to show that you should take the time to verify the facts of your listing every time!


While I know that even the most diligent agent can miss something occassionally, which is why we carry Errors & Omissions Insurance, being thoughtful with details and taking care to make sure your contracts are completely filled in can go a long way to avoid a major headache and potential lawsuit, later. Let these scenarios be a lesson to always be vigilant because the Devil really is in the Details.