We all can identify those in our industry who are in real estate with great intention and determination but seems to lack the behavioral make-up or intestinal fortitude to become successful. Equally, we see those who ‘got it’ and immediately see why they’re doing well in this demanding field. So, why is there such a difference between these folks? If every agent is given equal opportunity and is exposed to the exact same training and education, why such a huge schism between the haves and the have nots? I’ve read several articles here on AG about the lack of business training for real estate agents and I couldn’t agree more! However, if we look a bit deeper to the actual propensity of individuals to behave according to their predictive behavior, we may see all the training and education in the World likely will not help. Case in point, I was interviewing a new agent. She was extremely well read and attractive. On the surface, she appeared to be perfect for the job. However, within the first 15 minutes, I knew she was in the wrong business. When I began our conversation with her lead generation schedule and how she’d need to time block a certain number of hours each day to contact folks about buying and selling, I thought she was going to pass out right there. The fear at the prospect of doing something that is at the core of our industry like calling on people for business turned her face as red as a Tomato and I think she actually broke out in Hives! It was clear after that initial interview, I didn’t need to help this person in real estate…I needed to help them out of real estate.
There are several well known models available such as the DISC or the Myers-Briggs Type Indicator that can give you a very good sense of the behavioral patterns that make up certain individuals and how these individuals will ultimately behave in such an environment like commission sales. I’m not hard and fast set on either the DISC or Myers-Briggs Type Indicator but I lean towards the DISC when I’m coaching a new agent simply because it’s what I’m more familiar with. I’d also say I’m not at all convinced either of these profiling models is 100% accurate nor do they always represent an individual with an adaptive personality…a mandatory skill set to have if you are required to work with Buyers and Sellers who exemplify multiple personalities…sometimes on a regular basis! (Insert laughter here). That said, a profile test is still a good barometer in ascertaining a dominant behavioral pattern. So when administering such a test, you must understand observable behavior can be grouped into four major personality styles, Assertiveness, Sociability, Tranquility, and Dependence. These four styles tend to exhibit specific characteristics common to that particular style. And since all individuals possess all four, what differs is the level to which each individual possess’.
Understanding and Determining your Profile
I mentioned I use the DISC to understand and determine those I coach as does many companies, HR professionals, consultants and trainers. I’ve highlighted the main behavioral markers for each letter in the DISC and listed them below. Can you see which aspect fits you best? The assessments classify the four aspects of behavior by testing a person’s preferences in word associations…DISC is an acronym for:
- Dominance – relating to control, power and assertiveness
- Influence – relating to social situations and communication
- Steadiness – relating to patience, persistence, and thoughtfulness
- Conscientiousness – relating to structure and organization
These four dimensions can be grouped in a grid with D and I sharing the top row and representing extroverted aspects of the personality, and C and S below representing introverted aspects. D and C then share the left column and represent task-focused aspects, and I and S share the right column and represent social aspects. In this matrix, the vertical dimension represents a factor of “Assertive” or “Passive”, while the horizontal represents “Open” vs. “Guarded”.
- Dominance: People who score high in the intensity of the “D” styles factor are very active in dealing with problems and challenges, while low “D” scores are people who want to do more research before committing to a decision. High “D” people are described as demanding, forceful, egocentric, strong willed, driving, determined, ambitious, aggressive, and pioneering. Low D scores describe those who are conservative, low keyed, cooperative, calculating, undemanding, cautious, mild, agreeable, modest and peaceful.
- Influence: People with high “I” scores influence others through talking and activity and tend to be emotional. They are described as convincing, magnetic, political, enthusiastic, persuasive, warm, demonstrative, trusting, and optimistic. Those with low “I” scores influence more by data and facts, and not with feelings. They are described as reflective, factual, calculating, skeptical, logical, suspicious, matter of fact, pessimistic, and critical.
- Steadiness: People with high “S” styles scores want a steady pace, security, and do not like sudden change. High “S” individuals are calm, relaxed, patient, possessive, predictable, deliberate, stable, consistent, and tend to be unemotional and poker faced. Low “S” intensity scores are those who like change and variety. People with low “S” scores are described as restless, demonstrative, impatient, eager, or even impulsive.
- Conscientious: People with high “C” styles adhere to rules, regulations, and structure. They like to do quality work and do it right the first time. High “C” people are careful, cautious, exacting, neat, systematic, diplomatic, accurate, and tactful. Those with low “C” scores challenge the rules and want independence and are described as self-willed, stubborn, opinionated, unsystematic, arbitrary, and unconcerned with details.
As you might have determined, “D” and “I” personalities tend to do very well in this business…both of which were clearly missing in the person I mentioned interviewing earlier in this post. Now, an “S” may have a tendency to make a great assistant due to their steady work ethic and desire for little change and a “C” would be a good fit for Designated Broker because of their demand for adherence to rules, regulations and structure. It should also be known your core behavioral style never changes but your adaptive style allows you to adopt and adapt to your environment to suit the situation. As you can imagine, a High “D” person may have a very hard time with adapting to a style to fit any environment other than one they control due to their demanding, forceful, egocentric, strong willed, driving, determined, ambitious, aggressive, and pioneering behavior…These are also the folks who tend to be the most successful, not only in real estate, but in whatever they do!
So, if you’ve never had a profile test done, give it a try and see what kind of behavioral style you have…you might be surprised!?
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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