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How To Cash-In On An Emerging Hot Market

One of the fastest ways to generate 'right now' business is to work with first time home buyers. Economic stimulus incentives and the coming summer season are both reasons why this segment of the market is getting hot.

In addition, this market is generally younger and has been less affected by losses in the stock market and dwindling retirement accounts.

Problem is, how do you get these clients when every other agent is sending them the same message? And, if you get their attention, how do you identify buyers who will consider moving in the next few months?

Today I want to share with you a strategy that you can use every time you prospect renters...this year and every year. It's a 3-step postcard mailing that educates renters and makes your message stand out in a unique way.

STEP 1: Identify the HOT areas for first time home buyers

In every local real estate market, there are areas where first time home buyers congregate.

It could be a demographic trend, such as younger people wanting to live closer to downtown, work or "night life" activities. Or, it could be specific priced areas, where buyers usually live before purchasing their first home.

With a little research you can even narrow it down to a specific apartment complex in your city.

Hop on your computer and start researching rental rates. Identify at least two main apartment complexes or areas that have the right first time home buyer "characteristics."

STEP 2: Narrow in on lease termination dates

I saw this used by one of our 3-Steps members.

His MLS system shows him when a lease originated, then he makes an assumption that most will be one-year leases. Knowing the lease termination date, he targets renters at the exact time they are considering staying or moving.

Did you catch that? His timing is very important...

Approximately eight weeks before a renter's lease ends, he sends his mailings. They may renew their lease, unless you can persuade them to at least request information about buying a home.

If you can't access lease origination dates on your MLS or another public source, don't let that slow you down.

Put yourself in your prospect's shoes to identify when they might move. Many move to start a family or they already have a growing family and need more space. So they'll be moving during summer months to not disrupt school schedules. Spring is generally a prime time to do a mailing like this.

STEP 3: Create a series of 3 letters or post cards to send out in a sequence

Now, what you want to do is send out an initial postcard 8 weeks before the lease termination date. Then send a second postcard a week later and the third postcard another week later.

Besides sending a targeted message at the perfect time, this strategy works because you are following up multiple times – response rates tend to more than triple with this strategy. You can even use "First Notice," "Second Notice," and "Final Notice" on the front side of a multi-sequence mailing to increase urgency.

Here's a simple example you could use for the first postcard. NOTE: The "heavy copy" formatting is intentional. The message identifies renters who are in the market to buy a home.

You can put this on a 5½" by 8½" postcard (8½ x 11 cut in half) in a bright color (light blue or yellow). Use Microsoft Word or Publisher and print in your office or at home since you'll be printing smaller quantities. can convert this message into a very personal letter to renters.

renters sample

Next, send the second postcard 7 weeks out from the termination of the lease.

Here's an example...

termination sample

The third and final postcard goes out 6 weeks before the end of the lease termination.

Here's an example...

second termination sample

Here are some other tips with this system:

  • Make an OFFER for valuable information a first time home buyer would want to know. Create your own free report by using your knowledge of real estate to give little-known details or common questions renters would ask. You could also offer a free first time home buyer seminar.

  • Put these in the mail for an early week delivery (usually by Friday to have the postcards arrive by Tuesday).

  • You can send these out in small quantities either by grouping specific people with lease termination dates close to one another, or by sending to an entire apartment complex if you feel the cost is justified.

  • If you want to send these messages out as letters instead of postcards, remember to make the letters as personal as possible. Hand address or direct imprint the address on the envelope, use a live postage stamp, and mail merge the renter's name on the letter.

Do you think this is a powerful way to generate business?

This strategy gets your message in front of the right prospect at the right time, and I've even given you the right message to use on your postcards. Even if your prospects take longer than eight weeks to buy, you've generated buyer leads you can follow up with all summer.

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Get On The Cutting Edge of Today's Market

Having a steady flow of clients is easy if you have a database of quality contacts with which you regularly communicate. Here's a great way to build your database by offering a valuable service to prospects and clients.

Agent Salome Janse Van Rensburg creates a flyer offering a “community update” service, informing subscribers on anything from interest rate changes to new tax laws. She could distribute this flyer to neighborhoods in her farm, pass them out at her open houses, or include it with her regular mailings. This is a versatile tool and there are some important details ...

  1. Attention Grabbing Headline: 'PUBLIC NOTICE.' This gets under a prospect's radar that filters out 'sales messages,'
  2. Offering something of value to target audience (updates include information buyers and sellers seek),
  3. Making it easy for people to respond (include both phone and email contact), and
  4. Letting a person choose how they want to receive updates (via email or sms message).

Here's what Salome said this strategy is doing for her:

“This was my idea to try and get more people on my database, so far it has worked for me! I have had people contacting me on a daily basis and giving me referrals of friends and family that would like to sell/buy a home.”

You can click on the image below to see the full flyer as a pdf:

public notice sample

QuickTip: Supplement Income Helping Seniors

“With real estate sales at a lull, I decided to supplement my income by seeking something related that would boost sales. I sought out a company that helps move Seniors from their homes to Retirement Centers and Care Facilities.

Now, I help to inform them about moving to these facilities, and while I'm there, I speak to them about selling their homes. Many times they do not have a Realtor®. This puts some extra income in my pocket, and has given me many leads resulting in listings and sales.”

Avoid Lightning Strikes With A Clue Report

“I had a Seller client who failed to record an insurance claim on the property disclosure. Their insurance company had paid the claim. However, when the buyers went to get home owners insurance they were denied on the property because they had to present evidence of the repairs being made from the insurance claim of a 'lightning strike.'

They knew nothing of it because it was not on the property disclosure. It turned out the claim was on a home computer and it was replaced by the sellers. They did not think it needed to be on the property disclosure because it was not the house. Sellers need to know ALL claims on their homeowners policy regardless of what they are required to disclose.

To avoid this situation, I'd suggest getting a CLUE report. A CLUE report will reveal if a claim has been made on the property. In this situation, the Sellers paid for a home inspection for the buyers and the property closed.”

Horror Story: Short Sale Turns Agent Into Counselor

“I had a transaction a couple months ago with a first time home buyer. We originally went in $15,000 less than the asking price and they countered back at the full plus $2,000 more because we were asking for 100% financing and seller credits. We countered back and they accepted.

Upon doing the walk through my client found out from the home inspector that the roof was going to last a couple years (his opinion) which I told the inspector he should not give his opinion since he is not an expert in that area. My client was stuck on how long the roof was going to last. On that same day of the inspection, one of the sellers came home and told my client that they would paint the house. This of course made my client happy.

Surprised by the offer to paint, I inquired with the other agent who said, 'NO WAY.' She then asked the sellers and they denied saying they would paint. Eventually we got them to paint but they said they would only touch up the inside only. Furious my client wanted to cancel.

We somehow got a price reduction for the roof since the sellers wanted to appease my client. We also got the sellers to paint the inside, which my client wasn't too happy since he said 'paint' means the whole house inside and out. To add icing to the cake, this turned out to be a short sale with the bank dodging our calls.

It did not end there, the sellers couldn't find a place to stay and wanted to rent back the house for 2 weeks. My client agreed only through out the weekend. It turns out they didn't leave till Tuesday which my client was about to call the police for trespassing. They finally got out but left all their big old furniture out in the curb for the city to pick up which wouldn't be for 3 weeks. A huge pile sitting near the driveway (an eyesore).

I was not only a Realtor, but a Counselor trying to calm my client down with his emotions after one thing and another. I spent every night trying to talk my client into NOT canceling but to try to work it out. From the roof it took me practically every day to keep the deal together. This experience was a roller coaster for my client AND for me as the agent.”

Issue #1148