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6 lessons from failed transactions that will save your next deal

(BUSINESS) Failed transactions can be a tremendous source of learning for any level of real estate professional.

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The late Maya Angelou was known to have said, “I’ve learned that you can tell a lot about a person by the way (s)he handles these three things: a rainy day, lost luggage, and tangled Christmas tree lights.”

And while I believe that this humorous quote is quite true, you can also learn a lot about a real estate professional when the going gets tough. That is, when a real estate transaction begins to face challenges or when there are signs that the transaction itself is going to fall through, you can learn a lot about an agent by his or her behavior in the face of adversity.

Having assisted agents in closing thousands of transactions, here are the six largest lessons that I’ve learned about real estate from these failed transactions.

  1. Never oversell your services. Don’t promise the moon if you cannot even deliver the stars. That is, don’t offer up marketing programs that you cannot deliver. Don’t promise your client that the property will be on page one of Google if it will not. And, never promise that you can save a client from foreclosure or negotiate a sale for top dollar. It’s not generally a good idea to guarantee that you can sell a property—especially at a price that does not align with current market value. When you cannot deliver on your promises, clients get angry. This anger will result in bad reviews, no referrals, and possibly even a cancellation of contract.
  2. Don’t be pushy. If a client is on the fence about making an offer or listing the property for sale, never be too pushy. It is generally a good idea to document pros and cons in order to help a client make a more informed decision. However, if you push clients to list their home as a short sale when they are still considering a loan modification or when you push buyers to make an offer on a property they don’t really like, your behavior will come back to bite you in the butt. Help clients make informed decisions in their own best interest—not yours.
  3. Always read the preliminary title report. If you are listing a property for sale or if you represent a buyer on a purchase, one of the first things that you must do is review the title report. If there are a significant number of unpaid liens, the seller will need to pay those off at closing. Often, this can be difficult or there may not be enough funds to close and cover the seller’s obligations. So, don’t put your buyers into a situation like this and don’t take a listing if you are not going to be able to get it closed.
  4. Always check proof of funds. If the buyer is an investor buying on behalf of a corporation, limited liability company, trust, or partnership, make sure that the buyer has the authority to sign on behalf of the entity prior to moving forward. Obtain proof of funds monthly if you have an ongoing relationship with the buyer in order to confirm that the entity has the necessary buying power.
  5. Have the lender update the pre-qualification letter monthly. Since lending guidelines are constantly in a state of flux, it’s a good idea to ask your buyer’s lender to provide you with a new pre-qualification or pre-approval letter monthly. With the fluctuation of interest rates and the risk of a buyer purchasing a big-ticket item on credit, you’ll always want to be certain that the buyer will qualify for a loan before moving forward and making an offer.
  6. Don’t waste time on anyone with irrational expectations. Perhaps you are working with an investor buyer that wants to purchase a home to flip for 50 cents on the dollar. Or… perhaps you are working with a seller that wants to sell his home for $300k over market value. It doesn’t matter how hard you try; this individual may be a waste of time. Consider how many money-making opportunities you’ve lost while spending time showing countless properties and making lowball offers. Instead, focus on lead generation and money-making activities for individuals and transactions that will actually close.

You can avoid panic mode in your next real estate transaction if you heed this advice. The greatest benefit from a failed transaction is what you actually learn and how you can apply it. You don’t want the same stinking stuff to happen to you over and over again. With that advice in mind, I wonder why it is that the Christmas lights are always tangled.

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Melissa is an in-demand business success speaker and author, as well as a real estate broker with thousands of short sale transactions under her belt. She leverages her experience as a short sale insider to motivate thousands of business professionals to plan their careers better, execute more effectively on their plan, and earn more because of it.

Op/Ed

A negotiation strategy successful people always use

(OP/ED) Successful people didn’t wake up one day in a leadership role, they used this negotiation strategy every day to win.

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One of my earliest lessons in the art of negotiation went down at home, as the youngest child trying to get the one up on my older brother. It was the mid 90s, Pepsi was rewarding loyal customers with Pepsi Points hidden in their 24-packs. I don’t think either of us knew what the hell we would even do with the Pepsi Points, but we both knew we wanted them. So for hours we negotiated.

There was yelling. There was name calling. Finally, my dad came in with a pair of garden scissors and proceeded to cut the Pepsi Points voucher in half. We were speechless. Our dreams of amassing a wealth of Pepsi Points turned into a lose-lose scenario.

Sadly, our negotiation experiences today end up following a similar pattern. Long, energy draining negotiations end in lose-lose scenarios. My own pattern of negotiations gone wrong only began to change when I became a community mediator in college. I learned from leaders in business, law, and social work negotiation skills that have helped me in both my professional and personal life.

A good starting point to any negotiation scenario is understanding negotiation motivators. Some of the obvious motivators are money and resources. These obvious motivators are at the tip of the iceberg. In negotiations, these motivators are often written or verbally communicated. However, there can be a handful of other motivators hiding beneath the surface. These motivators represent the hidden, yet powerful underside of the iceberg.

Here are some common hidden motivators to keep in mind: respect, accountability, safety, and power.

Seeking clarity involves slowing down the negotiations and proactively checking in with the other party to ensure you’re understanding points of agreement or disagreement correctly.

Often, this looks like simply taking time in the negotiations to summarize progress. For instance, negotiating with the head of another department about the use of meeting rooms. A summarizing statement on when and why each party needs the meeting rooms can be critical in correcting assumptions earlier on rather than later. It also helps ensure objectivity.

I’ll be totally honest and admit to times when I’ve been tempted to turn negotiations personal. In my head I’ve said things like, “Sally wants the meeting rooms all to herself” or “accounting is always trying to hold me back.”

Seeking clarity by summarizing key points helps keep us grounded in reality, and ensures that we are working towards each side’s true needs rather than the needs we assume in our heads.

We hear this term in sales pitches, business seminars and relationship workshops. But how can we create win-wins the midst of negotiations that are often stressful and complex? Well, let’s break down the win for both sides.

First, we create the win for ourselves by coming into our negotiation meetings with a clear picture of what our goals are both long and short-term.

In negotiating a purchase, I may want monetary savings now, but in the long term I’m willing to pay more if a product can meet my long term goals of reliability and convenience.

Ensuring a winning scenario for those on the other side of the negotiation table involves creating buy-in. This doesn’t mean stating your solutions and getting the other party to begrudgingly agree. It’s about asking open-ended questions and giving the other side a chance to craft their ideal solution. Sometimes, simply asking the other party what their ideal solution looks like can give you a head start in reaching a mutually beneficial scenario.

The most important step in creating a win-win scenario is to embrace creativity. Click To Tweet

We do this by focusing not just on WHAT the needs are, but HOW those needs are met. Think outside the box. For instance, what are some non-traditional ways of structuring payments? What are some non-traditional employee benefits? What are some non-traditional services you can add to a contract?

Negotiating is one of life’s necessities. Unless you live in your own self-sustaining plastic bubble, eventually you’ll need to practice the art of effective negotiation.

Don’t be like my Pepsi Point obsessed eight-year-old self, slipping into a lose-lose scenario due to lousy negotiation skills.

Practice seeing the other side of the iceberg, seeking clarity, and embracing creativity. These three negotiation skills can quickly turn a lose-lose scenario into a mutually beneficial one for both parties.

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Op/Ed

The music you’re listening to may dictate your productivity levels

(EDITORIAL) Whether it’s a podcast, news, or music, most people are listening to *something* while at work – so what makes you the most productive?

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For some, productivity requires a state of concentration that can only be achieved in silence. But workplaces are seldom so quiet, and truth be told, most of us prefer to have some background music playing while we work. Some people swear they can’t work or study without it.

Personally, I find music helpful for encouraging productivity and creativity. It distracts the part of my brain that would normally be chattering away – the voice in my head worrying, wondering, and daydreaming. I find that music neutralizes this inner voice, freeing up my brain to focus on the task at hand.

More and more research backs up what many of us experience – a state of enhanced calm, focus, and creativity when we listen to music while working. Deep Patel at Entrepreneur.com has a list of the best types of music to serve as the soundtrack to your workday.

Typically, music without lyrics is best for working or studying, since lyrics tend to catch our attention. Research has so consistently shown classical music to boost productivity that the phenomenon has it’s own name – the Mozart effect.

But other forms of wordless music can work as well. Patel recommends cinematic music for making the daily grind feel as “grandiose” as a Hollywood epic. Meanwhile, video game music has been specially designed to help gamers concentrate on game challenges; likewise, it can help keep your office atmosphere energized. Soothing nature sounds, such as flowing water or rainfall, can also help promote a calm but focused state.

Music with lyrics is okay too, as long as it doesn’t turn your office into a karaoke bar. Cognitive behavioral therapist Dr. Emma Gray worked with Spotify to identify the characteristics of music that can actually change our brain waves. She found that music between 50 and 80 beats per minute can trigger the brain an “alpha” state that is associated with relaxation and with being struck with inspiration.

Really, any music will do, as long as you like it. Research from the music therapy department at the University of Miami found that workers who listened to their preferred artists and genres had better ideas and finished their tasks more quickly.

What styles of music help you focus during your workday? I myself enjoy the collection of “lo-fi” or “chill-hop” playlists on YouTube. This music has a consistent beat that is engaging without being distracting, and the accompanying video generally features an adorable cartoon character to keep you company.

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Op/Ed

Is anyone NOT a social media influencer today?

(EDITORIAL) Is there a human alive today that doesn’t feel the pressure to be some sort of influencer, be it for personal or business reasons? I’m not sure.

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Is it just me, or does it seem like everybody and their brother (or dog) is now some sort of influencer? Don’t get me wrong, I am all about sharing ideas with others and, with that, blogging also brings a degree of creativity which I am also an advocate for.

My concern is, with all of the influencer noise out there, how do we know what we can trust?

Additionally, what criteria is needed to have a brand see you as an influencer?

I have always been curious on this subject, but it didn’t hit me over the head until I watched both Fyre Festival documentaries and thought, “okay, this influencer culture is IN-TENSE.” While watching, I thought about the people who purchased tickets to this event: had they built up a trust with the influencers spreading the word of this “experience” or were they intoxicated by the viral video of a once-in-a-lifetime-party on the beach?

A few days after watching these documentaries, a thread on Twitter caught my eye (okay, actually the gif of Catherine O’Hara on Schitt’s Creek caught my eye, but, whatever):

It was all about a New York-based influencer who built a strong following and decided that – at 23 – she was the ideal person to hold a seminar to teach people “how to live their best lives” (or some hokum like that).

Long story short, she got people to buy tickets but was in over her head and had to cancel appearances and seemingly screwed some people over and it’s the oldest story in the book.

I had never heard of this gal before and, after creeping on her social media for a little bit, I couldn’t figure out why she would be someone others would seek advice from.
This brought more curiosity to mind and begged the question of: exactly how involved is it to become an influencer? Given the vast amount of influencers who have popped up in a relatively short amount of time, I gathered it can’t be that difficult.

I’m a blogger, but never once considered myself a person of influence. However, I wanted to know what it would take for a brand to see me as such.

Without getting into the details, it didn’t take a lot and I now have a variety of products to test and review on my blog. My point is, I was surprised that my requests for sample were taken to so easily, and while I’m grateful for the opportunity and plan to write honest and in-depth reviews, I worry about others not being honest, and misleading impressionable followers.

With all of this in mind, my plea is this – follow whomever you want, like whatever posts you want, but please do your own research. Don’t be swayed by a well-filtered photo of a pretty girl sipping tummy-shrinking tea.

There is so much noise on the Internet that it is easy to get caught up in the mess of the storm, but take the time to do your own digging and spend your money and time wisely, especially when it comes to your profession.

Thank you for coming to my Taylor Talk.

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