Winning in life and in business
Most people have this notion that being able to recite a fact is the way to win business and influence people. An agent saying “I closed 70 transactions last year” sounds impressive, right? Is it still an impressive fact that those 70 sides were mostly four land deals that (after closing with that agent) were subdivided and they’re counting them as seventy lots, thus transactions, despite only four simple settlement statements with their name on them? Or is it more impressive if an agent’s seventy transactions were luxury home listings handled primarily by the lone agent rather than completely handed off after a signed listing agreement, and that 55 of those listings were repeat clients?
The other problem with “facts” is that they often do not appeal to emotion. “I am number one” is far less effective than saying “I have been inside every single home in this neighborhood, can tell you about previous homeowners, and although my sign is in more yards here than any other agent, I am most proud that I have lived here and practiced real estate here since before the S&L crisis in the 80s that we survived.” Both are facts, but one is a story and takes much more intelligence and mental fortitude to communicate.
In the words of Seth Godin:
Politicians, non-profits and most of all, amateur marketers believe that all they need to do to win the day is to recite a fact. You’re playing Monopoly and you say, “I’ll trade you Illinois for Connecticut.” The other person refuses, which is absurd. I mean, Illinois costs WAY more than Connecticut. It’s a fact. There’s no room for discussion here. You are right and they are wrong.
But they still have the property you want, and you lose. Because all you had was a fact.
On the other hand, the story wins the day every time. When the youngest son, losing the game, offers to trade his mom Baltic for Boardwalk, she says yes in a heartbeat. Because it feels right, not because it is right.
Your position on just about everything, including, yes, your salary, your stock options, your credit card debt and your mortgage are almost certainly based on the story you tell yourself, not some universal fact from the universal fact database.
Not just you, everyone. Work with that.
Telling your story
How are you telling your story? Or are you stuck on facts?
Are you negotiating by telling the buyer’s agent that they’ll get what they get and their client should be less picky, or are you telling them that the stone pathway in the back yard will not be removed because the homeowner watched her terminally ill husband place each step by hand for her even though he was sick, and that she doesn’t have the heart to destroy the memory even though she knows a future homeowner may decide to remove the steps?
On your website about page, are you touting the cliché moniker “number one agent” everywhere and bullet pointing where you have worked as if sharing a stagnant resume with certifications that consumers could care less about? Wouldn’t it be better to tell a story? Two designers stand out for their about pages, Gummisig and Andrew Reifman both who say more than “I do design stuff and have had these clients, the end.” I feel connected to their story, I relate to their background and interests, and I feel an obligation to refer to them because they are so much more than designers, they are people.
Realtors can capture this too, without pictures of puppies and Glamour Shots but about themselves minus dry bragging.
- Being number one pales in comparison to telling people you once met a client, listed their home, sold their home, and closed in 72 hours.
- Being the top agent (of some arbitrary mark) is inferior to the fact that your entire real estate practice is done on an iPad and not because you’re a geeky Jobs fanboy but because your 1983 Mac lasted until 1997 and you trust the Apple brand like people trust your service.
- Having integrity is a tagline overused and is far less impressive than sharing that you take the entire month of June off to work in the orphanage your wife founded in Kenya and you pay air fare for any of your clients that want to join you to volunteer and build schools and water wells in the mountains.
- Saying “we mean business” is meaningless, why not share that you and your team pledge to return all calls that go to voicemail within 30 minutes, no matter what time they call? Why not note that your team alone comprises of 44% of the entire city’s transactions in a year?
- Citing the fact that you run an eco-brokerage, why not tell the story of the house in Houston you visited that was made entirely of recycled/collected materials that were so well put together you had no idea it wasn’t standard building materials and you were so inspired you read every book and news article you could on the topic and ten years later have devoted your life to helping people reduce their footprint in ways that don’t make them feel like they live in cold, stark boxes.
Facts are good support for stories and stories are great support for facts, but facts alone do not appeal to most, and business clichés can actually work against you rather than for you. Win business and influence people around you by appealing to their emotion, their logic, or their humanity, but above all, tell a story which invokes emotion because emotions are far more memorable than a passing statistic. Storytelling is the oldest art, but is achievable by anyone- we all have a story to tell.
How are you telling your story on your website, when you meet people, and when you negotiate?
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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