revised edition making it all the way to the closing breakthrough to mastery an agent’s guide to...
TRANSCRIPT
REVISED EDITION
Making It All the Way to the Closing
Breakthrough to Mastery
An Agent’s Guide toBulletproofing Transactions
2An Agent’s Guide to Bulletproofing Transactions
Main Ideas
1. Perspective2. Inspections and Repairs 3. Appraisals4. Loan Approval and Funding5. Other Contingences6. Co-oping and Communication7. Deadlines8. Bulletproofing Strategies
3An Agent’s Guide to Bulletproofing Transactions
Perspective
The Issue
“Owners feel like they are selling too low, and buyers feel like they are paying too much.”
Martin BoumaAnn Arbor, Michigan
Pages 7-8
4An Agent’s Guide to Bulletproofing Transactions
Perspective (continued)
The Challenge
In this market, a “yes” on a contract is not as solid as a “yes” in another market.
Page 8
5An Agent’s Guide to Bulletproofing Transactions
Perspective (continued)
The Solution» Be aware of the most common problems.» Have good solutions and scripts.» Avoid problems by addressing common
concerns before they arise.» Maintain good and frequent communication
with all parties.
Page 9
6An Agent’s Guide to Bulletproofing Transactions
Perspective (continued)
Six Major Issues—Contract to Close1. Inspections and Repairs
2. Appraisals
3. Loan Approval and Funding
4. Contingencies
5. Co-op Agent
6. Deadlines
Pages 10-11
7An Agent’s Guide to Bulletproofing Transactions
Inspection and Repair
“I’m finding that we’re getting big laundry lists from people wanting everything done to the house, and if you don’t do just about all of it, they’ll walk.”
Sharon HamiltonSanta Rosa, California
Page 12
8An Agent’s Guide to Bulletproofing Transactions
Inspection and Repair (continued)
Conversations with Customers
Sellers» Prepare sellers for what to expect in your market.» Acknowledge their feelings and concerns.» Ask if sellers are willing to risk losing the buyer.» Suggest a pre-inspection to prevent unexpected
repairs.
Pages 13-14
9An Agent’s Guide to Bulletproofing Transactions
Inspection and Repair (continued)
Conversations with Customers
Buyers» Recommend inspectors you trust.» Educate buyers about where you are in the process
and what comes next.» Remind buyers that inspectors document everything
they see.» Help buyers focus on the big picture and important
issues.
Page 15
10An Agent’s Guide to Bulletproofing Transactions
Inspection and Repair (continued)
Attend Inspections
Your Goals » Answers all your customer’s questions.» Know what’s on your customer’s mind.» Keep small issues small.» Provide vendor referrals (if needed).» Guide buyers through the next steps.
Don’t let the inspection become a reason to back out of the contract!
Page 17
11An Agent’s Guide to Bulletproofing Transactions
Inspection and Repair (continued)
Negotiation» Find out how much repairs will cost.» Enlist the other agent as your ally.» Adopt a positive mindset: “Let’s make a deal!”
“Let me help with the cost of that repair.”
“I’ll pick up one-third of that.”
Page 18
12An Agent’s Guide to Bulletproofing Transactions
Inspection and Repair (continued)
Home Warranty » Home warranties alleviate buyers’ worries.» In the future, when a repair is needed, new
owners call the warranty company rather than you.
Page 19
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Inspection and Repair (continued)
Negotiating Inspection and Repair Issues
What are your best practices for resolving inspection issues?
Page 21
14An Agent’s Guide to Bulletproofing Transactions
Appraisals
What can a real estate agent do to make sure the buyer gets an adequate loan to make the purchase?
Page 22
15An Agent’s Guide to Bulletproofing Transactions
Appraisals (continued)
Low Appraisals – Sellers» Do a thorough CMA.» List the house at an appropriate price.» Have an appraisal done if there are no
comps.
Pages 22-23
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Appraisals (continued)
Low Appraisals – Buyers
Funding Options » Additional down payment from the buyer» Financial gift from parents/family» Second mortgage» Seller-assisted options
Pages 23-24
17An Agent’s Guide to Bulletproofing Transactions
Appraisals (continued)
Dealing with Appraisals
What appraisal problems have you encountered or heard about in your area?
How can the problems be avoided?
Page 26
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Loan Approval and Funding
Regardless of which side you represent, make sure the buyer uses a reputable and trustworthy lender.
Page 27
19An Agent’s Guide to Bulletproofing Transactions
Loan Approval and Funding (continued)
Buyer Side » Make sure your buyers are preapproved for
a mortgage loan before showing them houses.
» Offer names of two or more reputable lenders.
» Submit a parallel application for backup funding when you don’t know or trust the buyer’s lender.
» Advise your buyers on keeping their finances in good shape.
Pages 27-28
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Loan Approval and Funding (continued)
Prequalified vs. Preapproved » Prequalified—the buyer may receive a loan
for a certain amount based on minimal information provided to lender.
» Preapproved—the buyer provides detailed financial information to the lender and the lender pronounces that the buyer is most likely to receive the loan.
Page 28
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Loan Approval and Funding (continued)
Page 29
Seven Don’ts of Mortgage Funding1. Don’t change your employment status.
2. Don’t make any major purchases.
3. Don’t increase your credit card debt or miss any payments.
4. Don’t change bank accounts or make undisclosed large deposits.
5. Don’t apply for a credit card, cosign a loan, or make a credit inquiry.
6. Don’t spend money you have set aside for closing—not any, not ever.
7. Don’t delay in providing all paperwork asked for by the mortgage company.
22An Agent’s Guide to Bulletproofing Transactions
Loan Approval and Funding (continued)
Other Funding Issues » Parallel Applications» Documentation Problems» Lender Doesn’t Approve» Buyer Credit Issues
Pages 29-30
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Loan Approval and Funding (continued)
Anticipating and Avoiding Funding Problems
What financing problems have you encountered?
What do you do to avoid funding problems?
Page 33
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Other Contingencies
Sale of Buyer’s House Additional Approvals Clouded Title
Pages 34-35
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Other Contingencies (continued)
Avoiding ContingenciesWhat other contingencies have you encountered?
What solutions worked?
Page 36
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Co-oping and Communication
Page 37
Key Players » Escrow officer» Lender» Appraiser» Real estate lawyers» Title company» Other real estate agent» Buyers» Sellers
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Page 37
Buyer’s Financial Situation » Follow the Seven Don’ts of Mortgage
Funding
Co-oping and Communication (continued)
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Seller’s Financial Situation
Gather information:1. When the property was purchased
2. Amount of the loan
3. How much the seller owes the lender
4. Whether there is a second mortgage“Never assume the seller’s agent has asked all the right questions of the seller.”
Terry MoerlerWestlake Village, CA
Page 37-38
Co-oping and Communication (continued)
29An Agent’s Guide to Bulletproofing Transactions
Co-oping and Communication (continued)
Page 39
Escrow Officer» Stay in communication as soon as contract is
signed
Surveys and Vendors » Avoid misunderstandings and differing
expectations» Ask questions and get things in writing» Communicate clearly and often
30An Agent’s Guide to Bulletproofing Transactions
Bulletproofing with Communication
What questions should you ask to avoid problems in the contract-to-close process?
Page 40
Co-oping and Communication (continued)
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Deadlines
Pages 41-42
Avoid Missing Deadlines » Negotiate closing date» Negotiate occupancy date» Confirm inspection and repair appointments » Follow a contract-to-close checklist
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Deadlines (continued)
Page 43
Meeting Deadlines
How do you keep yourself organized and on track with respect to deadlines?
33An Agent’s Guide to Bulletproofing Transactions
Bulletproofing Strategies
Proactive Prevention» Outcome framing—what do you want to
achieve?» Set expectations—what do we realistically
need to consider?» Prepare alternatives—what will we do if … ?» Reassure—we’re on track and doing fine.
Pages 44-45
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Bulletproofing Strategies (continued)
Reluctant Buyer
“Have a plan in place to deal with what you know is going to happen.”
Dave JenksKeller Williams Realty International
Page 45
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Bulletproofing Strategies (continued)
Buyer’s Remorse Triggers News reports that make them absolutely sure they
have made the worst decision of their life. Friends who tell them they are nuts for buying a
home now. Well-meaning family members or friends who say,
“You paid THAT MUCH for your house?”
Page 46
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Bulletproofing Strategies (continued)
What You Do» Mark the moment of
victory.Write down how thoroughly you considered everything in the market and why this house is THE ONE.
Pages 46-49
37An Agent’s Guide to Bulletproofing Transactions
Bulletproofing Strategies (continued)
Antidote for Buyer’s Remorse
“You have to constantly resell buyers on their decision.”
Martin BoumaAnn Arbor, Michigan
Page 49
38An Agent’s Guide to Bulletproofing Transactions
Bulletproofing Strategies (continued)
Seller’s Remorse» Do a CMA.» Remind sellers of their motivation to move.» Remind sellers about their destination.» Discuss the risks of starting over.
Pages 49-50
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Close as Soon as Possible
Reduce the time buyers and sellers have to second-guess their decision.
Page 50
Bulletproofing Strategies (continued)
40An Agent’s Guide to Bulletproofing Transactions
Early Response—Stay on Track
1. Constant communication
2. Inspecting expectations
3. Problem solving
4. Contract-to-Close tracking
Don’t make any assumptions!
Page 51
Bulletproofing Strategies (continued)
41An Agent’s Guide to Bulletproofing Transactions
Handling Buyer’s Remorse
What works when your buyers change their minds about buying a house?
Page 52
Bulletproofing Strategies (continued)
42An Agent’s Guide to Bulletproofing Transactions
The Bottom Line Communicate often with all key people. Spend plenty of time with your customers. Handle or closely oversee the contract-to-close
process. Anticipate problems and take preventive action to
avoid them. Understand the mindset of buyers and sellers. Look for creative solutions. Never give up!
Page 53
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Productivity Boosters
Page 54
Help Buyers Understand the Process Don’t Forget Closing Details Communicate with Your Customers
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My Action Plan
Pages 58-60
Don’t put away this guide without developing a plan to put what you have learned into action!
Refer to the Action Plan on pages 58-60 of the guide to assess your strengths and areas for improvement.
Write down steps you will take to improve your skills—complete it, share it, and commit to it!
45An Agent’s Guide to Bulletproofing Transactions
Take the other courses in the Breakthrough to Mastery Guide series!
Gaining Mind over Market Upshifting Your Lead Generation Seller Pricing Strategies Seller Staging Strategies Lead Capture and Conversion Internet Lead Capture and Conversion Creating Urgency to Buy Expense Management Effective People Leverage Short Sales, Foreclosures, and REOs Financing Solutions
46An Agent’s Guide to Bulletproofing Transactions
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