Coaching
Getting To Know You
Pot Of Gold
Gail Robinson gave me a nice segue for my follow-up post to Tracking Important Dates. How do I get those dates? I ask! They say yes by answering or no by not responding. No hurt feelings here. (I’m not asking for a Social or how much she weighs.) When they do answer, they’ve given me a pot of gold worth of insight into who they are, their likes and lifestyle. Things that I’d never know unless I asked.
Sugar and Everything Nice
Now that you know what to do with the information once you get it, let’s talk about how to beat it out of them – with politeness and thanks, of course. It’s all in the way you phrase it. So I say something like this:
client appreciation program - Get more Business Plans
You’ll see that the second and third pages are forms for them to fill out. I personalize this for everyone. If they don’t have kids, they don’t get that section. If I’ve already gotten some bits of info, then I remove that too. You get the idea.
I typically email these so they can fill it out by tabbing through. If it’s a client who’s not a heavy emailer, then I print and mail it with a stamped return envelope.
The Tab Skinny
Tab what? It’s a Word document. Start with setting up your Toolbar. Click View, scroll down to Toolbars, scroll down to Forms then click. You’ll see the new toolbar pop up.
To allow them to type in information, click on ab. For checkboxes – you got it! – click on the box with the checkmark. The all-important-don’t-forget last step is to click on the Lock. If you don’t lock it, it won’t work!
What’s totally awesome is showing up with something they love – whether it’s their birthday, anniversary, house warming party, whatever! I went to a signing – there’s no debate for me about going to them – with a bottle of good (read expensive) Tequila, Margarita mix and all the fixins. My clients were completely shocked – how in the world did I know they like Tequila? They told me! It was months previous, but they told me. I went to a house warming party and I knew those clients love to travel. How did I know that? I asked! I brought a coffee table book with beautiful pictures of Africa. How did I know which book to get? I’m linked to them on Facebook. 🙂
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!
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.
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:
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.
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.
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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Ricardo Bueno
June 5, 2008 at 11:07 pm
Now that’s getting personal! Smooth Vicki…very smooth. I used to send out surveys and got an “ok” response rate. Now I stick to follow up calls and note cards.
Matthew Rathbun
June 6, 2008 at 8:48 am
Every time you write, I become an even bigger fan! Well done.
Benn Rosales
June 6, 2008 at 9:09 am
Vicki, this is absolutely outstanding. We all talk a lot about relationships and knowing your clients but this is just brilliant. Just the idea of your taking the time with each client as you’ve shown here raises you as an agent to an untouchable level. Mastery of sincere longterm relationships is no easy task, but you make it so easy here with just being thoughtful.
Danilo Bogdanovic
June 6, 2008 at 10:18 am
This is a tricky subject for some agents because they feel like they’re prying. But your approach is non-intrusive and sincere and a great option for those who aren’t doing something like this already (or even those who want to tweak what they already have).
Great post and suggestion!
Don Reedy
June 6, 2008 at 11:17 am
Vicki,
This is an example of how a great agent does great work. All of us know you can’t “do a goal”, but you can “do tasks” that make that goal a reality. In this one short, magnificent post, you DID it. Congrats!
Jayson
June 6, 2008 at 11:22 am
That’s incredible – I’d be pretty impressed if my agent showed up at the door with something I mentioned in a survey months earlier. It takes the relationship to a whole new level and would definitely warrant a few referrals. Thanks Vicki
Tyler, The Wealth Creation Guy
June 6, 2008 at 6:01 pm
Good stuff Vicki. I like including a stamped envelope. I bet that increases your responses quite a bit!
Keep up the great work!
Ricardo Bueno
June 6, 2008 at 6:39 pm
@Danilo: it’s interesting that you point out that some agents would feel they’re prying… Isn’t part of the process (during meetings and paperwork) to ask “some” questions in an effort to steer away of those “dry and dead” moments?
It should be natural to get converse with people and say “hey…how’s it goin’?”
Vicki Moore
June 6, 2008 at 10:14 pm
Glad you all like it. I hope if you’re not doing it or something similar you’ll give it a try. It’s super fun to get someone a gift you know they’re going to like. It’s a great way to bond, showing someone how much you care about them.
Paula Henry
June 7, 2008 at 8:29 pm
Classic and Smart! It is truly the little things we remember that make our clients feel special and keep their referrals coming in.
Vicki Moore
June 9, 2008 at 4:02 pm
Thanks Paula!