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Offers of Success

My inbox is full of offers for education about ways to make more money as a real estate agent. Apparently, when the chips are down and the market slows, everyone becomes an expert or a coach, promising “their” previous experience will surely lead to my ultimate success. I only have one question – what are they doing in today’s market? If their program is so vitally important to my success, why aren’t they out using it for their success?

You know the offers I am talking about; it is not my intent to discredit any training or coaching program. There are many great education and coaching opportunities available which truly are a benefit. I am personally involved in coaching programs.

In the past I have signed up for more info, using my “junk” email account to listen to the ideas and success stories and usually find out what is being sold is the agent who signs up for such programs. It’s amazing the insight you can gain anonymously.

Know the Law

The newest pitch for REALTORS® is doing Loan Modifications. You know you can make as much as $3500.00 doing loan modifications? Per loan! It doesn’t matter if you succeed; you get paid up front, so says some of the ads. Hold on a minute! Did you also know it is illegal in some states to be paid upfront? In some states, you have to have additional licensing to modify loans.

I’m not here to be anyone’s moral compass or ethical guide. You either have it or you don’t! I do have a question, though, why would I throw up a website as a “loan modification” expert, unless I had experience actually helping people get their loans modified. There is probably a legitimate way of helping homeowners who don’t know how to begin the process, but why do these companies who offer training on loan modifications choose REALTORS®?

Jack of all Trades

The message I get from some of the programs offered is, we are desperate to do anything for money and I abhor that message. This is a tough market, no doubt. I just don’t believe we are to be experts in everything. It reminds me of the saying, “Jack of all trades, master of none”.

I would love to hear your thoughts.

Paula is team leader for The "Home to Indy" Team in Indianapolis . She is passionate about education and client care and believes an empowered client is better prepared to make good decisions for themselves. You'll find her online at Agent Genius,Twitter and sharing her insights about her local real estate market at Home To Indy.

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10 Comments

10 Comments

  1. Danilo Bogdanovic

    January 22, 2009 at 12:13 pm

    I agree with the phrase “Jack of all trades, master of none”. One can’t be an “expert” in a lot of things because, to be an expert, you have to fully dive into the subject and practice and be involved in it all the time.

    It’s impossible to do that in multiple areas – there are only 24 hours in a day and you have to sleep and do non-work related stuff as well.

    Know what you know and know what you don’t know. Leave what you don’t know to the real experts even if it means referring it out or paying them to do it for you.

  2. Elaine Reese

    January 22, 2009 at 1:58 pm

    Regarding the credibility of some of the training experts, there was a couple here that had both their licenses revoked. They are now in another state giving training seminars on being a “successful” agent.

    Caveat emptor! 🙂

  3. Mark Eckenrode

    January 22, 2009 at 6:13 pm

    sort of along the lines Elaine mentioned, one way to gauge “expert” status is by credentials.

    now, one place you’ll find a gob of “experts” is on Twitter and social media sites. oi! there are so many folks with “social media expert/guru” there it begs the question… by whose/what standards?

  4. Vicki Moore

    January 22, 2009 at 7:53 pm

    I guess they figure if they get one sucker who pays a hundred bucks for their junk they’re further ahead than they were when they started.

  5. Ken Brand

    January 22, 2009 at 9:26 pm

    Hugh MacLeod of GapingVoid.com fame sez, “The market for hope is infinite.” In markets such as today’s, there are well and ill intentioned people who are desperate for hope. A way to make it and make it fast. It’s sad for all involved, the trainer, the trainee and the client/victim/customer.

    Like you, Im in this tribe; stick to what you do best, burn your boats, make a stand, dig in, fight, scratch, work, work, work, push, pull, attract, serve, help, aid, abet, support, learn, share, create, promote, etc.

    Cheers.

  6. Darren Kittleson

    January 23, 2009 at 10:10 am

    Great post! It saddens me to see agents put so much energy in some of these newfound ways to “make money”. I often think if they’d put that much energy in simply touching their database, reconnecting with past clients/customer or friends they’d find that money will follow.

    I haven’t seen it yet, but I’m sure the “residual income” dialogue will start again with hooks for agents to start selling other products vs. simply focusing on their core compentencies…being great in a real estate transaction.

  7. Missy Caulk

    January 24, 2009 at 9:22 pm

    I see it too Paula, so many in my junk mail folder it is overwhelming. delete

    I am finally jumping into short sales because it is the going to be this way for awhile.

  8. Paula Henry

    January 24, 2009 at 9:38 pm

    Danilo – You just can’t be a master of all things! Even if you don’t have a life 🙂

    Elaine – You would think the Boards of REALTORS would check someone’s credentials from a previous state. Sad!

    Mark – I never even knew what a social media expert was until Twitter came about.

    Vicki – Yep, another hundred, another sucker:)

    Ken – Everyone wants the “fast” way without paying the dues of education and experience.

    Darrell -Focusing on core competencies is what makes us the expert. You are so right about expending the same amount of energy on touching our database.

    Missy – I started studying short sales back in ’05, when the Phoenix market started to shift – It was the best education I could have given myself and my clients. Good Luck!

  9. Mack

    January 26, 2009 at 1:26 pm

    It seems as though the only thing missing from the expert emails is the return address in Nigeria to send the wiring instructions for my checking account.

  10. Paula Henry

    January 26, 2009 at 2:37 pm

    HI Mack – With most of these, you might as well send the money to Nigeria – you would receive the same value:)

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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!

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magic eight ball

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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
  5. 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.

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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:

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short sales standoff

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.

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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.

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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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