Hanging around the hydrant.
In recent weeks, I’ve had quite a few conversations with agents about their lead generation techniques. Some of those conversations can be seen in comments on posts here at AgentGenius, some were personal phone calls I made to ask agents their thoughts, and some were just comments I overheard and made note of. The more I listened, the more I heard. The more I heard, the less I learned. That might sound a little odd to you as I am a big fan of learning from others and taking what I can from each person and adapting it to my use, but it’s true. My opinions on lead generation just took a giant step backward.
Don’t worry, I’m happy.
To make things sound even more nonsensical, I’m thrilled that I learned less and less the more I asked and listened. What? That doesn’t make any sense…or does it? Here’s the problem with any lead generation discussion: although there are a handful of basic methods, we all use them differently and to differing degrees of success. Ask every agent in your office what their top three sources are – ask them how they do it and how they use each one in combination with each other. Expect a lot of different answers.
My experiences with lead generation have been varied. I have to admit, it’s an area that I’m still learning and still working on every day. Trying to get a better understanding of how to speak with prospective clients – in a way that keeps my ideas as a real estate agent focused on my goals and how to get prospective clients interested enough to make that next step. Having said that, I don’t think I’m terrible at it, just that I could be better.
Talkin’ ’bout my (lead) generation.
With several different ways to generate leads, I wanted to talk about a few and give my opinions, thoughts, and experience with each. I don’t profess to be the expert on any of them and I’m sure some of the AgentGenius regulars will be able to add much more to the discussion and perhaps help give you some ideas about how you want to generate your leads.
Tried and True, Face to Face: Call it belly to belly if you’d like (I dislike the phrase myself), but this is probably the one thing you’ll hear over and over again. Being in front of people is where it all happens. If they don’t know you, they’re not going to buy and sell with you. Everyone has differing opinions of how to make this happen; networking meetings, open houses, community activities, church, your kid’s school – all different theories on the same basic idea. Get out there and get your hands dirty. I have to admit, this is not my strongest suit. I prefer more one on one interaction, so my networking tends to be on the small scale at any given moment. I know a guy who sits in a dumpy diner drinking coffee half the day and watches the rack of free real estate guides – if someone grabs one, he starts a conversation with them. I know another guy who sits in a bar half the day and drinks and mingles with strangers, only to give them his card. He’s sold a lot of houses in one particular bar. The opportunities to open up conversation with others about real estate are there, you just need to learn to see them and go for them without coming across as a pushy salesman.
Pay to Play, Lead Referral Companies: Sadly, these have become a fact of life for agents. They’re not going to go away. With websites competing for the eyes of the internet savvy buyer, inevitably some of those buyers will request info from a service who will be happy to sell you the lead. We can argue about how fair or unfair this is, but it won’t change a thing. Most of these companies have two camps – those who swear by the company and those who tell their friends what a rip-off they were. When I entered the business, I heard absolute horror stories about HouseValues (I have had no personal experience with them), yet I know someone who swears by the leads they’ve generated for him. I have personal experience with Market Leader’s Growth Leader (I was given the product for free last year in order to test drive and blog about it) and Real Estate Client Referrals (I am a paid customer) and although varied, my experience with both companies has been overall good. I’ve sold houses thanks to both of them and one of those homes was my biggest client to date. The key with any lead generation company is to know whether the leads are 100% yours (if they’re not, I wouldn’t bother) and to be sure there’s a financial sense to what you’re doing. Don’t throw your money at just any old solution. Get trial periods, ask other agents, talk to people – word spreads fast in the RE.net about what’s good or bad.
Follow My Footsteps, Systems: The only system I’ve tried is Brian Buffini’s 100 Days To Greatness. The idea is to generate business in your first 100 days of being an agent and get your database filled and your prospecting via referral business booming. What I found was an overpriced blue box of common sense. Brian’s teachings were dead on in most cases, but most of it was things you could have come up with on your own, but didn’t. Although I learned a lot, I wouldn’t consider myself a Buffinite as I don’t practice some of the basics taught here (the “Mayor Campaign” just sounds like cold calling with live people to me). I think any of the big systems has something to offer, but most of it can be learned elsewhere if you’re a self-starter type (and it could save you a few bucks too).
Playtime or Worktime, Social Media: I think we’ll be seeing a stronger backlash against social media in the coming year. Social media (as a concept) made some mistakes in the beginning and I think it’s going to help drive a firestorm of “is it of any value?” The mistakes? Being new and uncharted waters is never easy. Many agents dove in and started reporting successes. Some of the claims by agents seemed over exaggerated and baseless. In a struggling market, the hidden ROI on social media allowed some agents to use it as “sunshine and roses” prophecy. Social media is not (and in my my opinion, will not be) the golden ticket to real estate riches. In fact, I don’t think anything is. Like all methodologies, it can be a cornerstone of your business, but it is not the silver bullet. Because “social media” became such a buzz word, especially within real estate, the vultures saw opportunity. Classes on Twitter taught by people who had seven tweets, a board sponsored educational event by a man, who when googled, had his first result come up with a particular name for the male reproductive organs that involved size – in particular his (of note, that class was canceled mysteriously after I helped call attention to it), and gurus mass-email marketing their get rich quick schemes and e-books on how to generate a billion followers in an hour. Unfortunately, these are all real incidents witnessed by me. These don’t make me comfortable with social media and in some cases, these voices drowned out those that actually had something to say. It became so bad that words like expert, guru, and mentor became bad words to describe someone. I’m sure many of us would agree that someone like Jeff Turner is all these things and more, but no one would want to tag him with these monikers for fear of the stigma associated with them. My only advice on social media? Make it social – use it to expand your SOI and you can build results.
Lead Generation Leadership
Look to your fellow agents and find out not only what they like to use for lead generation, but compare it to their personality and yours. Do you know an aggressive agent who can convince a buyer to buy a shack and make them think it’s a mansion? If that’s not your style, you probably don’t want to use their techniques. Know someone who sits by the phone all day and waits for it to ring, yet somehow their phone is always ringing? Find out why it’s ringing so often. There are as many different ways to be a lead generating machine as there are stars in the Texas sky. Some of them are similar, but with a tiny twist can become something altogether new and refreshing. My list is in no way complete, just a few that I’ve had experience with and had the chance to speak with others about. What are your favorites? What do you think will be developed in the future as new tools become available (remember, there was a time when drip email marketing would have been unheard of)? What might be unconventional today, but commonplace tomorrow?
The companies above have given me no compensation for their mention in this post. As noted in each one, I have some experience, whether paid or free with them. None of the companies even know I’m using their names (until they happen to read this post). AgentGenius is not responsible for my personal views on these companies and if anyone has some sort of problem with what I say about the companies, please take it up with me – not them.
photo courtesy of mush2274
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.
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.
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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