Marketing Focus: Where do you spend your time?

Yesterday morning I was at my networking group meeting. This is not the normal Letip or BNI group it is more than that for me. It is called the Christian Business Roundtable. We are group of men that share the same Faith gathering to sharpen each other and hold each other accountable in business and in life. It was my second meeting and my very first formal meeting. Each meeting it is practice of the group to have a Best Practices portion where we can share and expand each others business arsenal if you will. Today the Question was:

You just sold your business to a conglomerate and have agreed to remain for a few months as a consultant. You will receive 100K bonus if you can increase sale by 20% in the next six months but you have been allotted only a limited increase in your marketing budget and no media advertising budget.

You have gotten together with an Advisory Board to give you straight talk about ideas to drive traffic. Start getting the advice now!

• What “out of the box” marketing steps can be taken in: Special Promotions, Network Marketing, Newsworthy Press Release, Low cost Direct Mail etc.
• What steps will drive more traffic to your product or service?

As I left that meeting I had so many ideas to work on for my business but the one that stuck out was based on affiliate marketing. When market others services our reward internally is great. In addition external reward via increase in our business is nearly always the result. However, I do not want to rest on my own understanding. I realized that Facebook and Twitter have given me a large audience of business professionals. These professionals that I have come to know are always thinking outside of the box to drive more traffic. So I figured I would ask my advisory board.

What steps would you take to increase your revenue by 20% in six months? Share them hear with all of our readers and watch the explosive power of two or more.

Don’t take my word for it:

“Two are better than one, because they have a good return for their work: If one falls down, the other can help him up. But pity the man who falls and has no one to help him up!” Ecclesiastes 4:9-10

***** This information is not my own. It was borrowed from the Christian Business Roundtable that I am involved with. The post here is meant to be thought provoking and to generate a massive brainstorm session amongst a group of professionals. We all can always use a jump start of fresh ideas.*****

Buyer’s Market? Think Twice and Consider the Facts!

The last few years of the market have caused many buyers to get in the mind frame that it is a buyer’s market. That the market needs them and that they are in control. I have had many buyers that do not want to acknowledge the shifts in the market. Traditionally, we would say it is a buyer’s market if there is greater than a 6 month supply in inventory. This is definitely specific to the area that you live in but here in the Sacramento area we are short of six months inventory. What does this mean? It means that we are in a seller’s market people.

Few Things to Consider:

1. Sale to List Price Ratio – This represents the average list price of a home compared to the final sale price. In a buyer’s market we would generally see the sale price well below or below the list price. This would signify saturation of inventory and sellers that have to adjust the expectation based on interest and demand. Currently in certain price points in Sacramento, especially those under 300K we are seeing the final sale price above list price. Why? Banks are listing the properties at prices that are extremely attractive and many buyers are battling for the home. Some homes have as many as 20 offers on the property. This creates an emotional bidding war and the home goes to the highest bidder (with the best financing or apparent financing). The price is then pushed up and the Sale to list price is effected.
2. Days on the Market – Just like Sale to List Price the average time on the market is a good indicator of who is controlling the market. The majority of the sales are selling with less than 90 days on the market. In a buyer’s market the sale time is extended and we see up to 180+ days on the market. The homes that are coming on the market are selling and there would be no reason they would not. Interest Rates are low and with the Tax Credit one would be foolish not to consider buying.
3. Months of Inventory – Late 2007 and early in 2008 we had as much as 11 months of inventory on the market. This is not the case right now. With less than six months of inventory on the market the seller’s are in control. With their ridiculous per diem charges for extended escrows to their choices of southern California Title and Escrow companies. The seller is setting the terms and the standard and with multiple bids they can sort through and pick the cream of the crop. That being said there are a ton of homes that are owned by the banks that they are not releasing to the market. There is enough inventory in the wings, in my humble opinion, to turn the market right back to months of inventory. The banks are holding it back so that they do not drive prices down by over saturation.

Questions I hear from Buyers:

1. The property is listed for 140K. Do you think that I can offer 135K and ask for 5% seller credit? – No! That property will at least go for 140K and many times more. The things that you must take into consideration are the days on the market, whether or not it is seller owned, bank owned or a short sale. This will make a difference and this will change the strategy. Short Sales tend to have less interest because of the time they take but they also have little flexibility in price and credit. Traditional sellers have a number they want and it comes down to a meeting of the minds and the banks are the game that I described above.
2. Can I write offers on several properties and take the one that gets accepted? – This is where I defer to the Real Estate agent. Agents are effective because they build a reputation with other agents. The better the reputation the better the odds that your offer would be accepted. If you are writing offers on properties that you really do not want you are wasting a lot of people’s time.
3. I am approved for 150K and I really like this property. It is listed at 155K do you think I can qualify? In today’s market climate I suggest that if you are qualified for 150K that you start your search in the 130K – 140K range so that you have room to be consider if you are asked for Highest and best. If you are pushing your approval amount you are putting yourself at risk. With the Volatility of the rates I would ask your Loan Officer to make sure that they have padded the rate on the approval to cover any swings. If your approval is a best case rate and your offer is accepted and rates have gone up you may not qualify or feel comfortable with the new cost.

In conclusion, if you are in the market to buy you must understand the climate that you are in and have reasonable expectations. My most recent closing searched for one year for the right home and my most recent contract wrote 40 offers before one was accepted. That does not sound like a buyer’s market to me. The good news is that you are going to buy at a Low Price with a Low Rate or so we hope!

* Much of the information provided is specific to certain price points and in certain geographic locations. Always consult your Real Estate Professional to determine your market conditions as they may vary.  Traditional Sellers may have a different experience and short sales have their own behaviors which we will examine in posts to come with a very Special guest. A local Short Sale Specialist. If the banks begin to dump the inventory that they are holding back we could see another swing. Stay Tuned.

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