Nov. 15, 2007 Edition

Be a Myth Buster

Debunking the myth that real estate business slows down in December By David Hicks David Hicks There is a myth in our business that "December is not a good time to buy houses." As a result, many franchisees take time off in December, decrease their advertising, give employees time off and even let calls go to voicemail. I recently asked Eddie Gant of Advantage House Buyers in Houston about this myth. Eddie has been a franchisee for almost eight years and has bought more than 429 houses, including 78 this year. I called him because he typically doubles his advertising in December. When I asked why, he responded, "Because for eight years it has been my best month. And my second best month is January." Eddie remembered hearing the myth in his first year as a franchisee. He thought about following the conventional wisdom and taking some time off that December. But then, almost by accident, he had a great December. "The next year we were again tempted to take off, but decided we would see if the first year was an accident, or a trend," Gant said. "Now that I understand the reality, why would I want to take off my best month of the year?" So is the idea that December is a bad time to buy houses fact or myth? To explore those possibilities, I talked to Rena Graver, Director of Research and Development. Rena is the best myth buster we have at HomeVestors, and her research showed a startling fact: December produces our highest closing percentage of the year. In fact, in 2006 our December closing percentage was 48 percent higher than the average for the year. In 2005 it was over 55 percent higher than the average. Yet we buy fewer houses in December. How could that be if our closing average is higher? "Many franchisees believe the myth, so they advertise less in December," Rena explained. "We do get fewer leads per dollar spent, but the leads we get are much better than any other time of the year. "The people who call in December are desperate," she added. "Also, most of the other investors believe the myth, so they take December off too. That means the people who need to sell have fewer choices." Gant said he buys more vacant houses in December. "I think a lot of people have a house they inherited, or it's vacant for some other reason. Or maybe they just need cash for Christmas," he said. So why do so many of our franchisees take off time in December and lower their advertising investment? For more on this, check out the blog entry The Hot Dog Story. Still there are quite a few franchisees like Gant that actually increase their advertising, and December is a great month for them. So if you also want to be a myth buster and enjoy a great December, here are some things you can do: Send additional direct mail. Call your RMM. Increase Dig Lead mailings. This is a great time to mail every house you have identified as vacant or in need of repair. Time mailings so they do not hit on a holiday weekend and set appointments for a higher percentage of your lead calls. Make sure every call is handled LIVE. Stagger time off for your employees. Remember, the houses you buy in December are your income in January and February. Begin now, and you can not only finish strong in 2007, but have a great start on your income in 2008! . . . David Hicks is vice president of operations at HomeVestors.

Last Chance To Vote On Ugliest House

Thousands have voted in the nationwide online competition Today is the last day that the public can vote in the "The Ugliest House of the Year" contest. Make sure all your employees, friends, customers and vendors have cast their online vote. The winner will be announced during the HVA Annual Convention on Dec. 6 at the Hilton Hotel Walt Disney World. "Voters came out in full force to pick their favorite ugly house," said John Hayes, HVA president and CEO. "In this business we not only see the ugly in houses, but the beauty in their potential. Thanks to all who participated in this year's contest. We look for even bigger and uglier things in 2008." The top ten finalists include properties in Cincinnati, Dallas, Detroit, Fort Worth, Montgomery, AL, Philadelphia, Phoenix, Salisbury, MD, Sarasota, FL, and San Antonio. One house that didn't make the entry cutoff date for the "Ugliest House of the Year" contest, but may set new standards for ugly was recently purchased by Brownie Lott of Lott's Alamo City Properties in San Antonio. "The photos say it all. It was one of the worst houses I've ever seen," said Lott. Brownie Lott found a house that looked like this on the outside... ...and this on the inside... ...and turned it into this. The owners were still living there. A mother and her grown son, not to mention three cats, weren't paying the mortgage and finally a family member called Lott and asked if HomeVestors would purchase the house. Lott went through an eviction process to remove the residents and called 1-800-GOT-JUNK? to help clean the property. "1-800-GOT-JUNK? even said it was one of the worst houses they'd ever seen," Lott added. "The mother would eat in bead and would just throw paper bags and drink cups out the window when she was done. There were cigarette butts all over the carpet and floors. No one bothered to use an ashtray." After a lot of work the house has been completely cleaned out and is now on the market for sale.