How to
37 Steps Toward Becoming a 1.5 Real Estate Agent
originally published May 19, 2008
Open minded, but not distracted
In this 2.0 versus 1.0 world of disruption, confusion, chaos, I want to lead my business forward. Even though I am a great agent, I must continue to find new ways of demonstrating my greatness to consumers both on and offline. I do not want to become caught up in a stereotype, nor do I want to become the far left, or far right fringe. I want to appeal to as many opportunities as possible, I want stand out in a sea of repetition, and most importantly I want to do it effectively, and efficiently- I am by all accounts “The 1.5 Agent.”
In my practice I will
- I will continue to educate myself on the Practice of Real Estate
- I will continue to provide the most effective means of buying and selling real estate
- I will continue to market in ways I have found to be most effective
- I will continue to challenge my own knowledge in technology and new media
- I will never forget my consumers and make them my priority
- I will study and learn new methods of communication
- I will continue to make communication my top priority
- I will employ new methods of communication while continuing older ones that work
- I will find new methods of delivering value content to my consumer
- I will build and develop more sincere ways of communicating my value and skills
- I will never be afraid to admit failure
- I will always share my successes
- I will continue to reach out to my community in social ways
- I will never allow technology to distract me from my consumer
- I will always vet new products for my consumers
- I will only use vendors that add value to my service offering
- I will always listen and be willing to try new ideas
- I will always be willing to share ideas
- I will ask my consumer what they think and feel
- I will listen to my consumer as a means to better my practice
- I will test the user experience often, and am willing to make changes that better serve
- I will not abandon standards and practices that have stood the test of time
- I will listen to the masses as means to look inward
- I will make the investments necessary to improve consumer experience
- I will improve my professional image
- I will not alienate my profession with destructive commentary
- I will speak up for the consumer in ways that are constructive and ethical
- I will continue to give thought before I speak
- I will actively involve myself in the conversation consumers wish to have
- I will find new ways of meeting the consumer
- I will mentor peers and recognize when it is I who needs to be mentored
- I will not be afraid to stand up to peer pressure
- I will be honest about my limitations
- I will be a champion of ethical standards
- I will continue to be pro-active in my community as well as my online communities
- I will do my personal best to elevate my piece of the real estate profession
- I will never build my success upon the failure of another’s business or reputation
My list is ever growing, expanding, adapting, and adjusting, I am the 1.5 Agent. I want to be the best agent, not the agent disruption says I should be. I am in a constant state of evaluation- I will repair only what is broken, strengthen what is weak, revitalize what is worn, and will always be openminded to change and the desires of my consumer- they are what matter most.
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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ines
May 19, 2008 at 11:12 am
here I stand with right hand raised, reading every point saying “I do” – it’s all about balance, is it not?
Benn Rosales
May 19, 2008 at 11:15 am
right up the middle.
Paula Henry
May 19, 2008 at 11:16 am
Benn – Excellent – this should be the Realtors Creed! Dugg!
Matthew Rathbun
May 19, 2008 at 11:32 am
This is the first “share it” I’ve done in months. I want to Benn, when I grow up… nah screw it; I don’t want to grow up.
The truly successful are going to learn from the previous generation’s successes and not discount the personal interaction that is required.
ines
May 19, 2008 at 11:44 am
So now looking at the graphic I have to add: Jeans with a nice shirt and shoes, maybe designer shades and you are good to go!
Missy Caulk
May 19, 2008 at 1:53 pm
Ben, I got on Digg IT.
Very good, I am digging it. I do believe we drop the things NOT working and those that are we add to it. I was just having a discussion with my daughter who is 18 today on what web 1.0 and 2.0 were.
Bill Lublin
May 20, 2008 at 4:29 am
Benn;
I loved this post, it only needs an apple pie to add a little fiber , and some ice cream (to satisfy my personal need for ice cream).
Its interesting that your post, and Johnathan Dalton’s circle back from the 2.0 electronic experience to recognize that we are in a human oriented, service business in which we help people realize the “American Dream” either by owning their own home, or by accumulating security and weath through the acquisition of real estate. (This is why the post needed only Apple pie, and not a flag – I brought my own).
Kristal Kraft
May 20, 2008 at 8:38 am
This is excellent stuff. How about making it into a wall poster so we can read it all the time?
It has been dug…
kk
Ken Smith
May 20, 2008 at 9:52 am
Mac does such a good job with their commercials….oh yeah and the post was great! So many good points, but one I wish every blogger followed first and foremost is:
“I will not alienate my profession with destructive commentary”
Brad Nix
May 22, 2008 at 10:39 am
Another top notch post Benn! Dugg it.
Sarah Fields
September 4, 2008 at 2:53 pm
So good, Benn! This is the first time I have run into the 1.5 concept..where have I been? This is a nice compromise. I think agents will appreciate such a reasonable level of required growth..Finally a spot right in the middle to help eliminate some of the same ‘ole excuses.
Karen Goodman
August 9, 2009 at 11:31 am
So many agents fall into the camp of either avoiding new technology ways of doing business or adopting every new thing. I think that the web 2.0 community needs to take to heart your statements:
– will repair only what is broken
– I will never allow technology to distract me from my consumer
– I will only use vendors that add value to my service offering
New isn’t always better. Finding the gems among all of the services available on the net that makes you better at your job is the key.
Paula Henry
August 9, 2009 at 11:48 am
Almost a year and a half later, this post is still relevant! Even with all the new technology, blending 1.0 and 2.0 is the key to success in this business.
Jeffrey Douglass
August 9, 2009 at 11:51 am
Benn, perhaps I missed your point, but why 1.5 instead of 2.0?
Your 37 points would and can apply to 2.0 REALTORS – in fact I think they would apply to successful agents.
Benn Rosales
August 9, 2009 at 11:59 am
Jeffrey, when originally posted just about everything you read was “you have to go 2.0” which scared a lot of folks, encouraged some to say to drop traditional methods of practice, and pretty much lead many down a one way course to dropping everything they’ve ever known to practice some sort of new real estate.
Our position then was no you do not have to abandon traditional to become modern and that it was more of a 1.5. Many of the most successful agents today only use radio and television as a means of reaching the public, and they’re still producing, but what is different is maybe they’ve polished the message and the look of their advertising, but needless to say, most were telling them to drop advertising traditionally all together or they would die on the vine.
The point of the post was to plot the goal, not dive in blindly because hype says you should.
Jeffrey Douglass
August 9, 2009 at 1:28 pm
Benn,
Thank you very much for taking the time to reply to my comment and explain the idea behind the 1.5 Real Estate Agent.
I hear what you are saying, and understand there are those out there that advocate total change – not wise nor necessary to be successful in the future. However, I feel rather strongly that this paradigm shift our industry is in, will leave many behind that don’t change rather quickly.
I believe the 2.0 Agent is all about openness and sharing. How you get to that point, and what technology is used is not as important as moving from the old ways of the gatekeeper, to being transparent and providing open and honest content.
Face it, the industry is bloated with real estate agents and companies. As our markets adjust and stabilize, many of those Companies and Agents may find they have no desire to continue in the business – some are waiting for the return of the 1.0 days. Those days have passed forever.
Doomed are those agents that forget what works, decide that real estate is not a relationship based business, or develop a effective web presence. Education, experience,
trying to educate the consumer for the good of all is what the 2.0 agent is all about.
@mattdollinger wrote a very important post the other day – are you a real estate salesperson or an advisor. I think there is some pretty sound advice about where we need to be focusing our attention as an industry.
https://theyoufactor.com/2009/08/05/advising-the-face-of-real-estate-today/
I posted a reply to his article and would love to see more discussion around being an advisor vs. a salesperson.
Thanks Benn for this very thought provoking post, and you taking the time to reply to my question.
Cal Carter
August 9, 2009 at 7:30 pm
Nice post Benn!
I’m with Ines – “I do”!
Joe Loomer
August 10, 2009 at 8:40 am
Awesome Benn – agree with Paula and Krystal – put it on the wall !
Navy Chief, Navy Pride
Atlanta Real Estate
September 1, 2009 at 12:36 am
Solid!