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Here’s the Thing – We All Want Credibility

Friday at the NAR Convention in Orlando , Ines Hededus-Garcia , Ginger Wilcox , Teresa Boardman ( Benn Rosales was scheduled to attend but will be unable to do so for family reasons) and I will be speaking to several hundred Realtors about how to drive business with blogs. … In my mind, this is great news in that we really will be speaking to a new audience but it also means almost no one will know our inside jokes and/or terminology.

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Thanks, NAR - "It’s a great time to buy or sell a home!"

Image courtesy of The Big Picture


Staying Power

I was looking for an excuse to highlight the above ad, and its staying power. This post is just that excuse.

Friday at the NAR Convention in Orlando, Ines Hededus-Garcia, Ginger Wilcox, Teresa Boardman  and I will be speaking to several hundred Realtors about how to drive business with blogs. This panel will be different from many others for at least one reason – the audience.

As Dustin Luther, the moderator of the panel said in an email –

For better or worse (and I think better!), we’re not going to be speaking to the usual RE.net crowd here. When I did a social media presentation last year, I recognized all of three people in the audience (out of a room for 500 that was so crowded they were turning people away!). In my mind, this is great news in that we really will be speaking to a new audience but it also means almost no one will know our inside jokes and/or terminology. Don’t be surprised if I ask you to explain some piece of terminology in more detail!

Demonstrating Credibility

When faced with the image above, blogs give us the opportunity to demonstrate the credibility and the market comprehension that our clients and potential clients want (and should be able to reasonably expect). They also give us – the individual Realtors and brokers – the means by which to distinguish ourselves from the messages that our Association has been putting forth on “our” behalf. The internet never forgets.

Blog for credibility and business will follow. This concept is neither rocket surgery nor brain science, and the execution of said concept eludes many in this profession – both at the “boots on the ground” and the “30,000 foot” levels, respectively.

Use the blog to demonstrate one’s expertise, knowledge, personality and yes, even opinions. (I recognize that this is old-hat for most of the authors here)

Here’s an example. I was contacted last night via IM by an American currently living overseas (eventually I’ll write about the conversation in detail, but without his permission, I’m keeping this necessarily vague). He’s been reading my blog (I had no idea) for a year; he’s moving back in six months and trusts me.

Consistent Advice

My advice has remained constant since I started blogging and since I started being asked for advice – understand the landscape and your audience, and be patient, persistent and candid.

Real estate blogs can absolutely drive business, but just like a drip campaign or farming a neighborhood, they cannot guarantee success in and of themselves. It’s the execution of that plan by the author that provides the guarantee.

In all honesty, I’m looking forward to listening and learning from my fellow panelists more than than I am to speaking.

Dad, Husband, Charlottesville Realtor, real estate Blogger, occasional speaker – Inman Connects, NAR Conferences – based in Charlottesville, Virginia. A native Virginian, I graduated from VMI in 1998, am a third generation Realtor (since 2001) and have been “publishing” as a real estate blogger since January 2005. I’ve chosen to get involved in Realtor Associations on the local, state & national levels, having served on the NAR’s RPR & MLS groups.

Find me in Charlottesville, Crozet and Twitter.

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8 Comments

8 Comments

  1. Missy Caulk

    November 4, 2008 at 7:10 pm

    I’m sure the room will be over-crowded. Have fun, wish I could get in but I’m only doing the EXPO.

  2. monika

    November 4, 2008 at 7:26 pm

    I’ll be there and I’m sure just like the panel I attended in DC…most in the audience will not be the usual re.net crowd. See you in Orlando.

  3. Dustin

    November 5, 2008 at 1:41 am

    I’m definitely getting excited… Thanks Jim for helping to make this panel happen!

  4. teresa boardman

    November 5, 2008 at 4:10 am

    Thanks for the post Jim. I am so excited to be on the panel and to meet some more of the people who live in my computer, and to see you again. 🙂

  5. Paula Henry

    November 5, 2008 at 7:47 am

    Have fun in Orlando everyone – this sounds like a great event! I wonder, though – if Realtors are not already blogging, what percent do you expect will start? I hear repetitively that many here on AG who do some form of local blog training, have very few who actually start and stay the course.

  6. Bob Wilson

    November 5, 2008 at 9:02 am

    The credibility issue is a big one. I have seen local agents here blog about the market and have been wrong for two years.

    My favorite is one that kept citing their guru broker, who called the bottom. Turned out it was only the bottom for their brokerage, which recently shut it down.

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Residential

Short sales: the top 3 title insurance troubles

Short sales are not without challenges, but knowing the answers to the most common obstacles and questions can aide in a less stressful transaction.

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The importance of title insurance

When my husband and I purchased our first home, I was very young and very green. At the closing, our agent passed us our title insurance policy and said, “Put this in a safe place, and do not EVER throw it away.” At the time, I had absolutely no clue about title insurance, why it was important, and how it could save you from a world of trouble.

Decades later, working short sales, it’s the title reports and those dreaded liens that seem to be what gets us into all sorts of trouble. In fact, most of the reader questions that I received this past week related to title woes.

Three common short sale questions

Question: When I run the Statement of Information for my seller, it comes up with a child support lien and a mechanic’s lien. My seller says that he is aware of those liens, but has no money to make good on those debts. What should I do?

Answer: In short sales, the first lien holder will authorize funds from the proceeds to pay off a variety of expenses associated with the sale. These include commission, settlement fees, title insurance fees, and other mortgage liens. However, it is extremely uncommon for the short sale lender to offer to pay off a seller’s personal debts. Before you spend months and months processing the short sale, I’d strategize to ascertain whether you will be able to help the seller make good on these debts prior to closing. Otherwise, you should probably run like the wind.

Question: I am dealing with the IRS on a tax lien that needs to be released prior to short sale closing, and the IRS won’t budge. What should I do?

Answer: First off, it’s always a good idea to get non-institutional liens released early. At the time that you take a short sale listing, work with the title company to run a Statement of Information on the property owners. That way, if something comes up (like an IRS lien), you have plenty of time to work it out.

Generally, the IRS and the state tax authorities have mechanisms in place to remove these liens from title at no charge, since there is no equity coming from the sale. A tax attorney can guide you through the process. However, ask your title officer or title representative if they can work with you on this problem. The good news is that some title companies can help agents and you can avoid working with the IRS.

Question: I have a second lien on title with Chase Bank. Yet, when I contact Chase Bank, they tell me that the loan has been charged off and I need to contact the company where they transferred the loan. However, they do not have a record of where it was transferred. I’m between a rock and a hard place. What do I do?

Answer: This kind of chaos happens all the time with short sales, and it is very frustrating. Generally, if you contact the executive offices at the bank where the loan was held originally (in this case, Chase Bank), they can have their research department obtain information about where to call.

Another option might be to ask the lender for a “zero demand”. If they charged off the loan and show a balance of zero, then maybe they will send a zero demand and not further short sale negotiation would be necessary for this lien. Hey… without a second lien on title, maybe this won’t even be a short sale any longer!

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Coaching

How to avoid short sale buyer frustrations

Minimizing the frustrations that come with a short sale is often seen as a mythical possibility, but with these simple tips, any short sale transaction can go more smoothly.

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Short sale frustration all around

Representing a buyer in a short sale can often be very frustrating. Primarily, that’s because of the unknowns associated with the short sale transaction. For one, nobody knows how long it’s going to take to obtain short sale approval. Actually, you don’t even know if you will get short sale approval. Not only that, but you also have to wait a fairly long time to learn the approved terms of the purchase. It’s frustrating to wait and wait, and then learn that the direction of the short sale is not the direction that the buyer is interested in taking.

Good communication is the key to short sale success. It’s vital for short sale listing agents to make communication with the buyer’s agent a regular and systematic part of the week. No matter how insignificant the short sale task, it is important to communicate with the buyer and the buyer’s agent and let them know that there are baby steps towards short sale approval.

One significant step towards short sale approval often comes after the bank’s valuation (BPO) when the bank makes a counter offer. Depending upon the short sale lender, this counter offer can come via email (in an email message), via telephone, or through an online platform such as Equator.

And then there are the counter offers…

Buyer’s agents and buyers often request to see the counter in writing. However, depending upon the short sale lender, this is often just not possible. Bank negotiators have contacted the short sale agent via phone, reviewed the settlement statement, and alerted the short sale agent as to what they will approve and what minimum net they might take accept in order to move forward with the short sale.

Since these counter offers usually do not come in writing, it’s important for the buyer’s agent to set the buyer expectations accordingly. Make buyers aware that there is lots of ‘verbal’ back and forth during the process. Many times it is only the short sale approval letter, the document that allows them to close, which comes in writing.

If buyers are willing to wait and keep the faith and understand that this process is a little more challenging and unique then most, they may find that they are getting a great deal on a wonderful property—often in better condition than the abandoned REO down the street.

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Coaching

Short sale: are there situations when agents can’t earn a commission?

Short sale: are there actually situations where an agent would not get paid? There are some complicated situations when it comes to short sales, and we address one here today.

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short sale agent
A short sale listing agent recently reached out to me to ask whether an agent principal can earn commission in a short sale transaction. This agent, Agent Alice*, was told that there are certain situations where licensees cannot earn a commission when buying a short sale.

The question:

Agent Alice received an offer on her listing from Agent Alex. Agent Alex is both the buyer and the principal. Agent Alice wanted to know whether the bank would pay a commission to Agent Alex at closing, since he is both the buyer and a principal.

The answer:

All of the major lenders including Fannie Mae and Freddie Mac employ some sort of arm’s length affidavit in which the buyers, the sellers, and the agents acknowledge (often in front of a Notary Public) that none has a business or familial relationship with another party outside of the transaction. Between this affidavit and investor guidelines for short sale commission, it is uncommon for the short sale lender to permit a commission to be earned by an agent principal.

Agent Alice then asked me whether Alex’s Broker, Broker Bob, could represent Agent Alex and earn a commission. While I do not work for the short sale lenders and cannot predict each short sale lender’s response, I’d say that it would be best to avoid this scenario, since the two have a business relationship outside of the transaction.

My two cents:

When I recently posed these scenarios to a group of agents, many shared creative ways to obtain a commission for Agent Alex. Remember that any creative solution whereby Agent Alex earns commission must also show his commission on the HUD-1 that is approved by the short sale lender prior to closing. As such, it is highly unlikely that there is a legitimate workaround for this problem.

The solution:

The easiest and safest way for Agent Alex to purchase Agent Alice’s listing is to seek representation outside of his brokerage. Not only will this assure that the buyer’s agent earns a commission, but it will also assure that all parties comply with the requirements of most lender short sale addenda.

 

*The names of the agents and the brokers in this post are pure fiction. Any relation to real listing or buyer’s agents is merely coincidental.

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