Social media theory
Although the infographic below outlines theory that has been in practice for several years now and the concept of online trust building is not new, it is still a theory that eludes many real estate insiders. Eight common components of building online trust are as follows:
Applying these 8 steps to real estate
Most of the tone of the above infographic is reactive and somewhat defensive, starting right off with admitting mistakes, but what if you haven’t made any (yet)? Let’s break down these steps as they pertain to real estate.
Realtors can tell truths by making expertise clear and not making any false or misleading claims on their blog or website. Agents should not say they are the “#1 agent,” rather more specifically “Highest volume sold in 2010” so as to be specific and add trust. Avoid subjective terms like “#1 agent” that could leave consumers feeling lied to down the road.
Often, Realtors are held accountable for misdeeds of the entire industry which is when being honest in communications is a good idea. When it is found that a massive investigation penalizes local Realtors for involvement in a mortgage scheme, that is an opportunity to publicly note that illegal behavior is not tolerated at your brokerage and here are some steps you’ve taken to insure your team is on the up and up.
Old fashioned real estate involves writing down social security numbers and incomes and handing it to an agent which was not very scary because a consumer could see exactly where it is going. Now that most transactions are electronic, agents should make very clear to clients where their information is going and who has access to it. This can be done by phone or email if your client is filling out an application through the lender, or in a blog post created for new clients. Don’t assume they feel safe or already know.
Consumers should know when they are registering their email on your site that you will not sell their email and that they will (or will not) be getting email notifications from you. Always offer unsubscribe options (it’s the law).
Real estate is a world of negotiations and promises and a broken promise be it a simple failed return call or a brand promise, trust can be irreparably damaged by broken promises. To avoid breaking promises online, make clear your process and intentions on your site. Put your listing presentation online and make your pricing clear. Then stick with it. This sound simple, but promises by Realtors are broken all the time and could very easily be avoided.
Constance Freedman of the National Association of Realtors’ Second Century Ventures technology fund noted that 65% of all calls to Realtors go to voicemail and 80% of failed calls end up with competitors which amounts to major losses.
According to Trulia, “Agents who have instant access to their leads and respond to inquiries within the first five minutes have a greater likelihood of connecting with leads on the first call. Research has shown that the odds of contacting an online lead if called within the first 5 minutes versus 30 minutes drops 100 times, and the odds of qualifying an online lead if called within the first 5 minutes versus 30 minutes drops 21 times. Using Instant Leads and responding to online leads immediately can allow agents to catch the consumer at the peak of interest—while they’re still searching online and near a phone.”
It goes without saying that Realtors should be extremely responsive, but not just in the lead generation phase, but throughout the process. Use all tools available to help make this happen.
Integrity isn’t an option in real estate like it is in maybe other industries like entertainment. Every Realtor’s word online (and off) could potentially be documented and used in a lawsuit, so it is best for agents to always act as if in front of a judge. There isn’t much grey area in real estate, but when contracts are treated as such, integrity not only of that particular agent, but of the transaction, those involved and possibly the sector as a whole are impacted.
Years ago, when the transparency debate was hot, it was believed that an agent’s personal financial forms should be shared online, as it was a very extreme time. Now, transparency is expected in moderation as the web has gone mainstream, and your financial details are that of your own private home. Transparency in real estate pertains to practices and consistency and not offering better rates to some people and not others, it’s about being public with what you offer and what your process looks like, and if you’re really brave, what your stats are. Some agents choose to publish this on their own websites, others dodge it, but transparency these days mostly pertains to keeping professional promises and being clear with your offering up front.
In a world where repeat business is many agents’ bread and butter, establishing history is important. Doing so online involves soliciting testimonials from past (or current) clients and posting them on your website, or asking for LinkedIn recommendations. Building history online involves featuring sellers or buyers on your blogs and telling their story (to the extent that you legally can), and showing that you’ve done more than one transaction. Speaking at conferences is fabulous, but those credits are not the same as having done a side in real estate, so remember to focus on the client, their needs and making them comfortable via past transactions on display.
If you’re a dishonest person in real life, chances are that it will convey online, but if you’re focused on integrity and results, your natural desire to share that with others will come across in every tweet that you share as you provide value over fluff, and it will shine in your recommendations on Linked-In. Be honest, provide as much information as possible, and always keep consumers as the center of your web efforts rather than focusing on your ego (and your next conference) as the center of those same web efforts.
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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