How to
Strike While the Iron is HOT
Strike while the iron is hot
We spend a ton of money or a ton of time on our online presence through our web-sites or blogs. (You’ve got mail!) You get a lead or a request for information…now what?
Your heart starts to beat faster, YEA a contact. You think… I’ll call them after I do this that and the other. No, “Time is of the essence” in contacting the person or responding to their request. We have a goal on my team to contact them before their hand leaves the mouse. They are online, looking, looking, looking, searching, searching, searching.
Make the call
A friendly, helpful voice calls, offering help or assistance. You make a potential friend. This is a warm lead, if you wait a day or two or three, it is now a cold lead. Our first phone call or email is not pushy; we are just trying to find that commonality to see if we can start to build trust.
Capturing a lead is nothing if you don’t strike when the iron is hot or in this case when they are in the process of searching for homes. Statistics prove that the first person they speak to is the one that ends up being their Realtor.
Don’t be afraid
Some people are afraid to pick up the phone. Don’t be, this is the easiest way to convert them from a contact to a prospect to a potential client. I honestly can say that 90% of everyone that you contact immediately is not mean or rude but glad you called. Perhaps they are just starting to look, or not moving for a year but many times they are just waiting to find the right person to help them in their home search.
Hire someone
If calling is just not your thing, then hire someone. Many people have great telephone skills and have a natural ability to connect with people. If you honestly say I just can’t do this, I don’t like to make those phone calls, then find a person to help you out with it.I spoke to a woman from Reno last week that makes all the initial calls for her team leader and once she knows their needs, assigns them to the buyer agent that would make the best fit for a successful relationship.
Just don’t let that potential client go unattended.
***Photo from Jared and Corin on Flickr***
Coaching
Disputing a property’s value in a short sale: turn a no into a go
During a short sale, there may be various obstacles, with misaligned property values ranking near the top, but it doesn’t have to be a dealbreaker!
It’s about getting your way
Were you on the debate team in high school? Were you really effective at convincing your parent or guardian to let you do things that you shouldn’t have been doing? How are your objection-handling skills? Can you flip a no into a go?
When working on short sales, there is one aspect of the process that may require those excellent negotiation or debate skills: disputing the property value. In a short sale, the short sale lender sends an appraiser or broker to the property and this individual conducts a Broker Price Opinion or an appraisal, using special forms provided by the short sale lender.
After this individual completes the Broker Price Opinion or the appraisal, he or she will return it to the short sale lender. Shortly thereafter, the short sale lender will be ready to talk about the purchase price. Will the lender accept the offer on the table or is the lender looking for more? If the lender is seeking an offer for a lot more than the one on the table, mentally prepare for the fact that you will need to conduct a value dispute.
Value Dispute Process
While each of the different short sale lenders (including Fannie Mae) has their own policies and procedures for value dispute, all these procedures have some things in common. Follow the steps below in order to conduct an effective value dispute.
- Inquire about forms. Ask your short sale lender if there are specific forms that you need to complete in order to conduct a value dispute. Obtain those forms if necessary.
- Gather information. Your goal is to convince the lender to accept the buyer’s offer, so you need to demonstrate that your offer is in line with the value of the property. Collect data that proves this point, such as reports from the MLS, Trulia, Zillow, or your local title company.
- Take photos. If there are parts of the property that are substandard and possibly were not revealed to the lender by the individual conducting the BPO, take photos of those items. Perhaps the kitchen has no flooring, or there is a 40-year old roof. Take photos to demonstrate these defects.
- Obtain bids. For any defects on the property, obtain a minimum of two bids from licensed contractors. For example, obtain two bids from roofers or structural engineers if necessary
- Write a report. Think back to high school English class if necessary. Write a short essay that references your information, photos, and bids, and explains how these items support your buyer’s value. This is not something that you whip up in five minutes. Spend time preparing a compelling appeal.
It is entirely possible that some lenders will not be particularly open-minded when it comes to valuation dispute. However, more times than not, an effective value dispute leads to short sale approval.
Coaching
Short sale standoffs: how to avoid getting hit
The short sale process can feel a lot like a wild west standoff, but there are ways to come out victorious, so let’s talk about those methods:
What is a short sale standoff?
If you are a short sale listing agent, a short sale processor, or a short sale negotiator then you probably already know about the short sale standoff. That’s when you are processing a short sale with more than one lien holder and neither will agree to the terms offered by the other. Or… better yet, each one will not move any further in the short sale process until they see the short sale approval letter from the other lien holder.
Scenario #1 – You are processing a short sale with two different mortgage-servicing companies. Bank 1 employees tell you that they will proceed with the short sale, and they will offer Bank 2 a certain amount to release their lien. You call Bank 2 and tell them the good news. Unfortunately, the folks at Bank 2 want more money. If Bank 1 and Bank 2 do not agree, then you are in a standoff.
Scenario #2 – You are processing a short sale with two different mortgage-servicing companies. Bank 1 employees tell you that they cannot generate your approval letter until you present them with the approval letter from Bank 2. Bank 2 employees tell you the exact same thing. Clearly, in this situation, you are in a standoff.
How to Avoid the Standoff
If you are in the middle of a standoff, then you are likely very frustrated. You’ve gotten pretty far in the short sale process and you are likely receiving lots of pressure from all of the parties to the transaction. And, the lenders are not helping much by creating the standoff.
Here are some ideas for how to get out of the situation:
- Go back to the first lien holder and ask them if they are willing to give the second lien holder more money.
- Go to the second lien holder and tell them that the first lien holder has insisted on a maximum amount and see if they will budge.
- If no one will budge, find out why. Is this a Fannie Mae or Freddie Mac loan? If so, they have a maximum that they allow the second. And, if you alert the second of that information, they may become more compliant.
- Worst case: someone will have to pay the difference. Depending on the laws in your state, it could be the buyer, the seller, or the agents (yuck). No matter what, make sure that this contribution is disclosed to all parties and appears on the short sale settlement statement at closing.
- In Scenario #2, someone’s got to give in. Try explaining to both sides where you are and see if one will agree to generate their approval letter. If not, follow the tips provided in this Agent Genius article and take your complaint to the streets.
One thing about short sales is that the problems that arise can be difficult to resolve merely because of the number of parties involved—and all from remote locations. Imagine how much easier this would be if all parties sat at the same table and broke bread? If we all sat at the same table, then we wouldn’t need armor in order to avoid the flying bullets from the short sale standoff.
Coaching
Short sale approval letters don’t arrive in the blink of an eye
Short sale approval letters may look like they’ve been obtained simply by experts, but it takes time and doesn’t just happen with luck.
Short sale approval: getting prepared, making it happen
People always ask me how it is that I obtain short sale approval letters with such ease. The truth is, that while I have more short sale processing and negotiating experience than most agents and brokers, I don’t just blink my eyes like Jeannie and make those short sale approval letters appear. I often sweat it, just like everyone else.
Despite the fact that I do not have magical powers, I do have something else on my side—education. One of the most important things than can lead to short sale success for any and all agents is education.
Experience dictates that agents that learn about the short sale process
have increased short sale closings.
Short sale education opportunities abound
There are many ways to become educated about the short sale process and make getting short sale approval letters look easy to obtain. These include:
- Classes at your local board of Realtors®
- Free short sale webinars and workshops
- The short sale or foreclosure specialist designations
As the distressed property arena grows and changes, it is important to always stay abreast of policy changes that may impact how you do your job and how you process any short sale that lands on your plate.
The most important thing to do is to read, read, read. Follow short sale specialists and those who blog about short sales on AGBeat, Google+, facebook, and twitter. Set up a Google Alert for the term ‘short sale’ and you will receive Google’s top short sale picks daily in your email inbox. Visit mortgagor websites to read up on their specific policies and procedures.
Don’t take on too much
And, when you get a call from a prospective short sale seller, make sure that you don’t bit off more than you can chew. Agents in most of America right now are clamoring for listings since we are in the midst of a listing shortage. But, if you are going to take on a short sale, be sure that it is a deal that you can close. And, if you have your doubts, why not partner up with a local agent that can mentor your and assist you in getting the job done? After all, half a commission check is better than none!
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Chris Shouse
November 11, 2008 at 10:35 pm
You are right Missy and I have probably been guilty of losing leads because I was not wanting to bug people who I thought maybe was starting on line because they wanted no pressure but @mizzle during her presentation at Blogworld turned me around and I have had a really good response from sending an email very quickly!
Kat DeLong
November 12, 2008 at 9:34 am
Missy: Right on the money! People nowadays are on the Internet, and IF one Realtor does not respond, QUICKLY, they’ll move on before you can blink.
Sally Butler
November 12, 2008 at 9:35 am
I think it is the natural reticence to not intrude into others’ privacy; however, I must agree that most people are willing to take a few seconds to talk/listen to you. Having a great script is one of the great ways to capture that potential client.
Josef Katz
November 12, 2008 at 9:46 am
Completely agree. Leads need nurturing as soon as you get them. Everyone in a sales role should ask themselves did I do everything I can to sell or build a relationship with that lead?
Andy Piper
November 12, 2008 at 2:56 pm
I find that clients will submit on several sites, and continue to use several sites even after they have made a connection with us – thats just the way it is.
Establish a good rapport up front and you have the best chance at working with them.
Cathy Tishhouse
November 12, 2008 at 3:27 pm
Missy: I have heard you say this before and it is always encouraging as I am definitely one who is shy about calling. I think it is because I usually don’t want to be called by anyone and I assume everyone feels the same. However, I do spend a significant amount of money and time on my websites and why waste it – I definitly want the leads.
Pam Graham
November 12, 2008 at 3:48 pm
Yes this is me in a nutshell. Fear is a terrible thing when you let it get the best of you!
Kate Elim
November 12, 2008 at 8:35 pm
Missy…I now require a phone number when people contact me through my Web site. It is precisely so that I can call and get additional information in order to help them better and faster.
I hope others will heed your advice.
Kate
Missy Caulk
November 12, 2008 at 8:55 pm
Pam, hire someone or find someone to network with that will do it.
Chris, I have heard Mariana speak and she rocks!
Cathy, we all spend so much money to get the leads and then don’t follow up, doesn’t make sense to me, just saying.
Josef, so true, it is all about building a relationship.
Sally, honestly we rarely encounter rude people.
Kat, that is why it is important to connect with them and start the relationship building.
Andy, went into the office the other day and saw on James board a prospect that is searching his site and mine. He just shook his head when I said, “oh do you know____?”
Elizabeth Nieves
November 12, 2008 at 9:51 pm
Missy,
This is absolutely fabulous advice, as usual. There is no time like the present. Waiting only gives the prospect time to find someone else. I think about how I feel when my mind is focused on a certain thing. I want help and answers at that moment…not three days later. If I don’t receive the help I need from one person, I move on to another. GREAT REMINDER!
Blessings!
Elizabeth
Emily Johnston
November 12, 2008 at 10:08 pm
I cannot agree more with what is being said! I am a new agent. At first I used our different leads by only emailing because I was shy about calling and kind of unsure of what to say. But after not getting much response from emailing, I decided to make a few phone calls. That worked.
I have yet to make a sale, but have many more opportunities to do so now, just because I am calling. Sometimes I think in this world of technology we forget that people want a person, not an inbox full of messages! Great article!!!
Paula Henry
November 12, 2008 at 11:35 pm
Missy – I can’t tell you the number of people we have called and they said, we were the only ones to call them. I know I lose some out of sheer busyness, but when they are online, they usually welcome the assistance.
Missy Caulk
November 13, 2008 at 6:58 am
Paula, we find the same thing and many say, “thanks for calling, you’re the only one who called the rest sent emails”. Now if they they are just looking don’t contact, we don’t just let them explore in their own time and pace.
Emily, if you nurture the ones you spoke to in a friendly, non pushy way they will remember you and it is all about the start of a relationship.
Elizabeth, very true we want an answer when we are looking now, not in 24 hours when we are onto other things or already found the answer out.
Vicki Moore
November 14, 2008 at 3:23 pm
Great advise. It took me a while to get over the fear of calling too. Now I just start dialing before I have time to change my mind. When someone’s rude I look at it the same way I do when someone’s rude on the road: Oh well, they must be having a bad day. NEXT.