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The Secret of Sales

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I Didn’t want to be a Salesperson

I’ve been in sales most of my life. I never really wanted to be there, it just sort of happened when I got out of college and my Dad found me a temporary job at the real estate agency where he worked. When I worked there I was a relatively new salesperson, and after a terrible start (a topic for another blog), I had found my way a little. I had learned about closing questions and “asking for the order”, and “qualifying” buyers, and I thought I was starting to do pretty good. I was writing agreements of sale, and my buyers were making offers.

I Didn’t See It Coming

One day , after a pretty good morning, I went to meet my Dad at a local “Fine Dining” restaurant so he could buy me lunch. I came in, found the table where he was sitting and sat down. The waiter took our order, and I told my Dad, fairly bursting with pride, that I thought I finally had it down -things were going well and I was finally a real salesperson. He looked at me for a minute and then, smiling,  handed me the salt shaker saying, “Ok, if you’re a real salesperson, sell me the shaker.”

I was a little surprised and flustered. I always though (and still do) that my Dad was one of the best salespeople I had ever seen, and the idea of performing in front of him made me a little nervous. I said,”Dad, I’m a real estate guy, not that kind of salesperson. How am I going to sell you that thing?”

He smiled even a little broader and said to me ” Sir, let me show you the what a terrific package this shaker makes for the salt to be served on your restaurant’s tables. Please notice the clarity of the glass and the clear edges of each of the eight sides. The shaker is a single piece of glass, that looks attractive, but has a thick durable base to withstand the possibly careless handling of the shaker by your customers. And finally, please notice the star like shape of the holes at the top designed to allow the even flow of salt to the food, making the user’s experience manageable and pleasant. How many would you like to include in your order?” As he paused, he put the shaker down, as I gaped at him. ” And that is how you sell anything, by demonstrating features, detailing benefits, and finally, making the value exceed the price”

A Simple Lesson

A light went on in my little head as I absorbed my sales lesson. People search for features but they buy benefits, so our job is to demonstrate those benefits. And people will pay One dollar for 95 cents worth of anything all day long. With those two lessons, I generated my families income for a long, long time, and earned the money to eventually open my own firm . So do you do those things? Do you makesure that the benefits of your product are what the buyer needs? Do you demonstrate how the features generate those benefits? And finally, do you make the value exceed the cost? If you haven’t thought about the job in those terms, give it a try – you might find that these simple lessons can work for you as well.

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9 Comments

9 Comments

  1. Ryan Hukill

    October 29, 2008 at 10:41 am

    Great lesson and/or refresher for anyone in any arena of sales Bill. I enjoyed it!

  2. Mana Tulberg

    October 29, 2008 at 10:55 am

    Bill, Amazing story to share. I have to give your father’s approach to sale a try in a way that I am still “Me”.

  3. Kim Wood

    October 29, 2008 at 11:19 am

    Every time I read your posts, I hear you talking to me – I love that!

    It took me a long time to accept the fact I was a Salesperson actually. I think that’s kind of sad now, cause I’m proud of what I do! Although not sure I’d still define it as “SELLING” houses. Maybe selling Kim Wood though 🙂

  4. Bill Lublin

    October 29, 2008 at 12:59 pm

    @Ryan Thanks for the kind Words and Happy Birthday yet again! 😉

    @Mana – Being yourself is absolutely key, though you have to keep the cutomer in mind – I might suggest you read Kim Wood’s latest post about that

    @Kim – Its always about selling Kim Wood – Even for me 😉

  5. monika

    October 29, 2008 at 5:08 pm

    Bill,
    Jay’s dad did the same thing to him only it was with a pen.
    The lessons learned are priceless as you well know. Converting features to benefits is crucial in real estate.
    Excellent post!

  6. Steve Simon

    October 30, 2008 at 5:24 am

    The poor car salesperson sells features, not benefits. That was one of the easiest examples I could give my students when covering “Salemanship”:
    “This car has power door locks!
    or,
    “The power door locks provide additional security when exiting or entering the vehicle in a dark parking lot”

    “It has power door locks”
    or,
    “The children cannot open thelocks, unless you let them”

    “Power door locks on this Baby!”
    or,
    “Unlocking the car when both hands are full, couldn’t be easier!”
    Good post, a topic that should be more robustly covered in RE Courses…

  7. Julie Anne Barrington IL Realtor

    October 30, 2008 at 7:58 am

    Great post! Putting ourself in their shoes and seeing what the benefit would be. Just thinking positive from their eyes will help us to see what it is that will sell them the product.
    There is always room for growth. There is always more to learn.

    Julie Anne

  8. Andrew

    November 1, 2008 at 4:27 am

    I’m new to AG. Really enjoying it so far…

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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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