7

Why Go Short Sale If the Seller Makes* Zero Money?

Okay, if a seller doesn’t make money but 13 other people do* (see note at bottom) on a short sale, where’s the benefit to the seller?

Short sales happen when a lender agrees to accept less than the amount owed against the home because there is not enough equity to sell and pay all costs of sale.

Not all lenders will negotiate a short sale, and that is why a real estate agent or a lawyer can be a tremendous help by contacting the lender’s loss mitigation department to find out.

A seller can’t just wake up one morning and decide they’re going to sell their home at a loss by asking for a short sale. Typically, lenders won’t even consider a short sale if payments are current. Lenders will be more agreeable to negotiation if your payments are in arrears. Plus, if the seller has cash assets, the lender might try to tap those accounts. Doing a short sale is not for the faint of heart.

The only reason to do a short sale is if the seller’s credit is at risk.

How is the seller’s credit affected?

According to David Steep, division manager at Vitek Mortgage, sellers will take a bigger hit on their credit report by going through foreclosure or giving the lender a deed-in-lieu of foreclosure.

The affect of a short sale on a seller’s credit report is much less damaging. The ding on credit will show up as a pre-foreclosure in redemption status, Steep says.

Also, a seller who wants to buy another home after foreclosure will end up waiting about 36 months before a lender will offer any kind of interest rate that makes sense.

The good news for short sale sellers is the wait is much shorter before buying another home: about 18 months at a good interest rate.

If you’re going after seller’s trying to decide whether to let a home go through foreclosure versus attempting a short sale, salvaging their credit is the main advantage to doing a short sale.

*Note: In a recent post Ruby Zuniga commented: “I believe that this [preforeclosures aren’t selling] is going on everywhere. I’m in the Los Angeles, San Bernardino and Riverside County Area. I have a listing in the S.B County and a listing in the L.A county. The Homes pre-foreclosures are not moving? Why? Agents don’t want to waste their time. They will rather take buyers to a Normal Home where their commission is guaranteed.”

Is this the case? I mean, if an agent helps his client buy a preforeclosure home, won’t he get a commission? Why isn’t it guaranteed? Granted, the agents may take a hit on the commission because the lender will insist on a fee reduction, but the bottom line is the agents and their brokers get paid for selling the property. I’m very curious.

1

How to Stop the Buyer from Grinding Away at You

Imagine this:

Let’s say that you have sold your client’s house, and the buyers agent asks you if his clients could move some of their furniture into the garage three days before closing. Although you wouldn’t want to let them move into the house before closing, you see an advantage in letting them use the garage. It will get them emotionally involved and far less likely to create problems for you at closing. So you’re almost eager to make the concession, but…

Before you do anything, remember this: no matter how small the concession someone is asking you for, always ask for something in return.

Say to them, “Let me check with the family and see how they feel about that, but let me ask you this: If we do that for you, what will you do for us?”

Roger Dawson calls asking for something in return the Trade-Off Gambit.

One of three things is going to happen when you ask for something in return:

1. You might just get something.

2. By asking for something in return, you elevate the value of the concession. When you’re negotiating, why give anything away? Always make the big deal out of it. You may need that later.

3. It stops the grinding away process. This is the key reason why you should always use the Trade-Off Gambit. If they know that every time they ask you for something, you’re going to ask for something in return, then it stops them constantly coming back for more.

In addition to using the Trade-Off Gambit, as I said in a previous In The Zone article, “lean on the Higher Authority to deflect pressure from yourself. Continue to position
yourself as on the other person’s side and any negative emotion will be directed away from you.”

1

The Art of Persuasion: 10 Essential Tricks Every Agent Should Know

Amazing, isn’t it?

 How when you listen to one of the selling masters you say to yourself “Why didn’t I think of that? It seems so obvious…so easy.”

The masters always seem to come up with the perfect phrase…a few
words…sometimes even just one word…that grabs you by the lapels and drags you into their presentation.

The perfect words make you want to buy whatever they’re selling before they’ve even mentioned a product.

It’s the Art of Persuasion. Right?

But let me assure you right now that it’s less of an art and more of a
science.

The Art of Persuasion is something you can learn. And the good news is the fundamental building block to any good persuasive presentation is simply building rapport.

As the motivational trainer Peter Lowe says, “The three keys to
persuasion are: Establish rapport, Establish rapport, Establish rapport.”

And to build that rapport, you need to cultivate behaviors that will make people trust you and make them feel it’s in their best interest to
follow your lead.

Here, are some ideas, big and small, for making yourself more persuasive:

1. Before a presentation, ask yourself “What do I really want?” Ask
soul-searching questions to understand your true motivation: family,
money, fame, power. You’re looking for what makes you tick, what
drives you.

2. Develop the knack for making the other person feel like the center of the universe.

3. Be quick to compliment.

4. Train yourself to remember other people’s names. One of the best ways: when you shake hands with a new person, note the color of his or her eyes. That forces you to make eye contact and, after a while, will also send a signal to your brain to store that person’s name in your long-term memory. Also use the name soon afterwards, and you’ll have a lock on it.

5. Empower others. Follow the maxims of legendary 3M leader William McKnight: “Listen to anybody with an idea. Encourage experimental doodling. If you put fences around people, you get sheep; give people the room they need.”

6. Try to arouse positive emotion.

7. Take a clue from your audience–whether it’s a single seller or a family of buyers. Really make an effort to communicate in a manner that matches your message to the receiver.

8. Hone your sense of humor.

9. Practice being a better questioner. Follow up by asking, “How does that make you feel?” or “Have you ever experienced anything else like that?” or “How could that be handled differently in the future?” or “I wonder what lessons we can take from that?”

And finally…

10. Keep your perspective. Remember: Even though you’re passionate about your point of view, lighten up. Tomorrow’s another day-and another opportunity to persuade.

5

The Most Common Cause for Preforeclosure Failure

The 2007 List Issue printed by REALTOR magazine had this to say about pre-foreclosures:

If keeping the home isn’t an option, alternatives include Sale. The lender will usually agree to a specific amount of time to find a purchaser and pay off the total amount owed. The borrower will be expected to obtain the services of a real estate professional to market the property aggressively.

This is pre-foreclosure sale, short payoff or short sale.

If the property’s sales value isn’t enough to pay the loan in full, the lender might accept less than the full amount owed to cut its losses. This option can also include a period of time to allow the borrower’s real estate professional to find a qualified buyer. A pre-foreclosure sale could provide additional funds to pay other lien holders and a few moving costs, which in turn helps out a struggling human being.

But short selling appointments have to be handled very carefully. Once you’ve made contact, be mindful of these next steps. And keep in mind, as Thomas Lucier warns, don’t contact pre-foreclosures in person.

“When on a listing appointment the agent first suspects a preforeclosure scenario, and quite possibly an indicated short sale scenario… it is essential to provide the homeowner accurate information and quickly displace and reign in the seller’s unrealistic expectations with cold hard facts,” says David Petrovick.

The agent’s task is to tell the seller what it needs to hear, not necessarily what it wants to hear.  This is Honesty.

At this critical moment, however, as psychology has it, the seller will hear what it wants to hear, and remember what it wants to remember. Most sellers are in denial up to even the 11th hour. So, Petrovick points out, great care and attention must be paid to detail, both in the collection of information from the seller, and in providing information to the seller. Only this way can you avoid making mistakes like overfixing the home or misinterpreting the value of the home or giving the seller’s false hope.

Otherwise you could fail.

Though some may be put off by the predatory stereotype of the coldhearted foreclosure vulture, the reality is far from heartless.

Bankrate.com, quoting Thomas Lucier, says it best:

“Bad things happen to good people. A lot of times, things happen to people that are completely out of their control. I’ve seen it happen, especially with medical bills or companies like Enron that run off with their pension.”

0

Survive the Slump, Google + Short Selling

Ralph Roberts reports that in order to survive the slump compete on quality service, reputation and know how–not price.

Stefan Swanepoel gives us a short history of the housing bubble, the effects of bubble trouble and asks the question: what lessons have or will you learn from this current market?

The National Association of Realtors expects home prices to recover in 2008 with existing-home sales picking up late this year and new-home sales rising early next year.

Here’s proof that everyone will eventually be able to search for listings by brand using Google. Joel Burlesom explains the findings he stumbled upon.

And if you haven’t heard, there is a new exist strategy for struggling homeowners–short selling. It may be difficult to convince a lender to go this route, but here are 7-steps on how to do a short sale if you want to give it a shot.

0

Negotiating Successfully in a Buyer’s Market

After 40 years as a student of real estate negotiations, Bob Russ has learned that success in a slowing real estate market requires paying greater attention to negotiation skills and summarizes how to unlock the door to successful negotiations in six keys.

One of the programmers responsible for building the original versions of the browser you now know as “Internet Explorer,” Eric Sink, says “Negotiating from a position of real need is a bad, bad situation.” A buyer’s market could throw you in a position of bad need. So be cautious.

In a Harvard Business School Working Knowledge article, James K. Sebenius describes a better way to negotiate by using a tool called “backward mapping.” Preparation is the theme here.

Marcie Geffner gives us six tips and suggestions to turn negotiation into agreement. Priceless tips on how to move to that coveted “Yes.”

And broker Elizabeth Weintraub shares her ideas on how to write a successful purchase offer in a buyer’s market and then explains what a real estate counter offeris and why sellers and home-buyers bicker back and forth.

7

Should You Start a Real Estate Blog?

According to the blog tracking site Technorati, everyday an estimated 1750,000 blogs go online. That’s almost 2 blogs created every second of every day.

The question is: should you jump on the bandwagon?

Peter Alexander at Entrepreneur.com things you should…if for no other reason than to take advantage of an effective marketing tool. Peter points out that in a recent survey  by research firm MarketingSherpa, blogs were voted the No. 4 tool for generating sales leads.

So, starting a blog doesn’t sound like a bad idea, does it? Okay, well, what exactly should you blog about?

The Technology Evangelist recommends “real estate agents should blog about things like market reports, updates on local developments, real estate finance and opinions on other local real estate news.”

But it’s got to be stuff that would set you apart from other agents in your market. Then the leads might roll in…

By proving your expertise on a blog, you’ll get more phone calls from highly qualified buyers and sellers. You’ll get more referrals from agents who get to know and trust you through your blog. Furthermore, you might even get media mentions from local reports who know they can turn to you for a quote when writing on a subject you’ve carved out as your own.

Yet, before starting a blog, you have to figure out what it will be known for.

For example, our Real Estate Marketing Blog is founded on providing real estate agents tips, ideas and strategies on the four profit-pillars of real estate: prospecting, negotiating, listing and selling. These are the only areas an agent makes money in real estate and it’s why you should read this blog. It’s our cornerstone content.

What is cornerstone content?

Chris Garrett asks “Is there anything that you could point to that your blog really owns?”

“It could be a single post, a series of posts, an over-arching ‘message’. This is cornerstone content. Over the course of time, the post, series or “message” is added to and referred to repeatedly over time, increasing the original value and relevance and also keeping content fresh. And while the main benefit is branding and educational value, there are other benefits as well.”

Brian Clark, the Copyblogger, says,

“And when approached in a strategic fashion, this content can rank very well in the search engines. The key is creating compelling content that’s worth linking to, and then finding a way to get the word out.”

But as you might imagine, writing good content is hard and time-consuming.

However, the web usability guru, Jakob Neilson, writes a compelling argument on why you should make the effort. In a nutshell, you should write content rich articles to avoid commodity status. Otherwise, you’ll get lost in the garbage and your effort will be wasted. So if you are going to do it, then it’s worth the time to do it right.  In depth content is value added content that demonstrates authority, gets people to trust you and link to you and helps you rank in the search engines.

So tell me: if you don’t have a blog, are you considering starting one now? If so, when? If not, why not?  Looking forward to hearing from you!

Subscribe to the Real Estate Marketing Blog today!

0

Avoid an Expired Home–and Damaged Reputation–with These 4 Textbook Steps

“The number one complaint I hear from expired listings is the lack of communication from the agent who listed the property.”

This was a comment we received back in 2005 from an agent who specialized in expired listings. It intrigued us.

Interested in learning more, as we’ve mentioned before, back in early 2006 we ran a survey on expired listings.

One of the questions we asked 406 real estate agents was “How many listings have expired in your career?” The average answer was six. With an agent being in the business for an average 11 years, we concluded that a typical client had a listing expire approximately every other year.

It is interesting to note that the average number of homes expired didn’t present a huge impact on an agent’s income. In fact, it would be safe to say that from a purely financial stand point, losing an expired doesn’t mean you are going to eat from the horse’s trough.

However, there’s something else about an expired. Something more damaging. Once your home expires, it will take a ton of time, money, and effort to repair the damage to your reputation.

Following you’ll find four key steps to help you avoid an expired home so you can earn a commission and keep your reputation in one piece.

1. CONSTANT communication

Staying in touch with the seller is the most popular method to keeping a home from expiring. According to Greg Herder, protecting your reputation from expired homes is all about setting expectations. Some agents insist it is important to express concerns and show what they’ve been doing to market the home. Furthermore, educating the seller up front as to price and condition is also important.

But stay in front of the seller with updates and feedback. Stay in contact with the seller, do not be afraid to call them, even if it’s just to say there has been no activity on their home that week. This also improves their confidence in you.

2. SCHEDULE price reductions

Here is a solid piece of advice: learn to write in the original listing that if the house doesn’t have a contract within the first 30 days then the price needs to be adjusted. Make sure you tell your sellers that a price reduction can trigger multiple offers. There might be buyers waiting in the wings for the home to hit a certain price.

Sacramento Broker Elizabeth Weitraub says that figuring price reductions requires you know when the time is right to reduce the price.

If the seller won’t reduce the price, and it is overpriced, then don’t take the listing to begin with. A key fundamental to real estate is to know the market and price accordingly. And yes, be tough with the seller on price up front.

3. TOUGH with seller on price

I think it is paramount to avoid the temptation to allow the seller to have control and set the price…but equally important is that an agent should never prostitute themselves by reducing their commission and having the notion that they can just stick a sign on the lawn and POOF, a sale.

Certainly we heard that an agent must not sweet talk the seller at every opportunity (they must exercise Howard Briton’s Tough Love scripts), so it’s apparent that everyone should start with the unblemished truth about the property, the price and the market.

And that starts with tough communication.

4. INNOVATE with technology and marketing

Jim Crawford tells us that houses sitting on the market are no surprise to other agents. They know the listing agent is asleep at the wheel. They’re missing even the basics of marketing a home.

Once you’ve got the marketing down, use innovative technology to maintain constant communication between you and your client. If you do this, your time, stress and pitfalls in the business will be cut in half, enabling you to list and sell even more.

More importantly, Michael J. Russer says you need an automated mechanism that allows you to communicate with your client the various methods that you are using to sell their home. In other words, you want them to see you working hard to sell their home.

However, if this can be accomplished without you really working any harder (in fact cutting out traditional manual tasks, like fishing for feedback from stodgy, “it’s all about me” agents or even removing the gut-wrenching difficult task of telling the seller, who doesn’t want to hear from you to begin with, that their “crusty, shag carpet has to go”) then you are in a better position.

And what would be sublime is if you could do it for free.

Any other interesting steps I’ve missed? Drop them in the comments.

0

The Ultimate Guide to Mastering the Art of Sales

Closed deals and commissions…who wants more?

The number of excellent resources that have come out since the beginning of the 21st Century on sales advice steadily grows. Plus there are some timeless classics that are still very relevant today.

With that in mind, I think it makes sense to compile the very best in one handy location and share it.

But instead of giving you a list of links, I’ve broken the process down into seven stages, plus a General category.

That way you can go to resources that provide help in that particular stage right away.

I’d recommend if you are new to sales to systematically work through the each stage. But it’s your choice.

So, here’s your ultimate “how to” guide to mastering the art of closing the deal:

General Advice

Do You Create or Control the Sale? | Allbusiness

Unlock the Game| Ari Galper

Question Based Selling | Thomas Frieze

Brian Tracy International | Brian Tracy

Stage 1: Trust

What Is Trust? | Wikipedia

Four Beliefs that Kill Trust | Management Consulting News

Is Your Sales Trust Factor Higher Than Your Competitors’? | Terrakon

Trust: The Social Virtues and The Creation of Prosperity | Francis Fukuyama

Stage 2: Find Need

Where and When to Begin Marketing | Jay Conrad Levinson

Find Your Niche in a Small Market | About.com

Proven Strategies for Increasing Profits | Brian Tracy

Stage 3: Build Value

Make Someone Happy: Your Customer | Lillian Vernon

The Human Equation: Building Profits by Putting People First | strategy + business (You must register to read this article, but registration is free.)

Stage 4: Create Desire

To Make a Sale You Must Creat Desire | Adams-Hall Publishing

Selling Dreams: How to Make Any Product Irresistable | Kip Longinotti-Buitoni and
Gian Luigi Longinotti-Buitoni

Stage 5: Overcoming Objections

Overcoming Objections in Sales Part 1 | National Federation of Independent Business

Overcoming Objections in Sales Part 2 | National Federation of Independent Business

No Doesn’t Always Mean No | Tom Hopkins

Stage 6: Closing

Closing the Sale | Tom Hopkins

24 Techniques for Closing the Sale | Brian Tracy

Zig Ziglar’s Secrets to Closing the Sale | Zig Ziglar

Stage 7: Follow Up

The Importance of Sales Follow Ups | Allbusiness

If I missed your link and sales resource let me know and I’ll take a look.

1

12.5 Tips to Building Better Rapport on the Cell Phone

An 18th Century politician once said “The art of building rapport is making people feeling ‘connected’ to you.”

Fast forward to the 21st Century.  

Geoffrey Gitomer, author of the Little Red Book of Selling, says “You don’t need more prospects – you need more friends.”

And since we are a nation locked in it our cells with over 203 million America’s owning a cell phone, that’s why it’s important as ever to learn how to make friends on the phone.

But it’s also easier than ever, especially when you use NLP techniques like pacing, mirroring, voice tone and just plain old, everyday good manners.

Here are 12.5 tips to turn strangers on the phone into friends fast.

1. They need to be receptive. It is a good habit to always ask upfront if the person has time to talk. After the greetings, simply say, “Do you have time to talk?” Saying this makes you courteous and unobtrusive on the person’s space. When we do not have the time to talk, the only thoughts we have in our mind are wondering “How long will it be until this damn person shuts up because I’m driving in bad traffic!”

2. Let the caller know you are on a mobile phone so they can anticipate broken signals and other potential interruptions. When you are struggling with a bad signal, tell the caller you will get back to them when it is stronger.

2. Make up for no body language. Vary your voice expressions an extra 30%. If you are happy for the person about something, put an extra 30% of energy in your voice when saying “That is awesome. Congratulations.” If you are sad, then lose 30% of energy in your voice. The change of energy communicated through your voice will build a connection with your prospect.

3. Watch your voice level. Even though you’ll want to vary your voice expressions, be aware: people tend to talk louder on cell phones. And if your signal is bad, talking louder isn’t going to make it better.

4. Drop the tonality of your voice a degree. An enthusiastic, high-pitched voice will key everyone off that you are in for a sale. Lower your voice and ask to speak to the person like you were a police detective and you’ll get receptive prospects.

5. Be real. Expose yourself. During the short conversation, offer something personal: a minor flaw, the struggles you went through when you were trying to sell your house, what it was like to look for house while you were pregnant (if you were a woman, of course). This provides charm to your character.

6. Repeat their name. Our names are a sweet tune of music to our ears. It is a fast way to build a relationship.

7. Gain insight by listening. Prospect mood, hometown, and personality will all be revealed in just a few minutes on the phone. Listen for an accent.

8. Be sensitive for the mood of the prospect.If he is hot or gruff, just say “I can tell you’re busy. Why don’t be pick a more convenient time for me to call?”

9. Sell the appointment with a personal touch. If you know the prospect is a football fan, you might say, “I know I can help you sell your home. With a twenty minute appointment I can show you how I can help in fifteen minutes and with the remaining five minutes we can discuss who the Rams should draft.”

10. Get a person to talk about themselves. People love to talk about themselves, which allows you to discover important information about themselves.

11. Be aware of time. In the Northwest people expect you to get to the point immediately. In the Midwest, you might have ten minutes to build rapport. The key is to make a friend before you make a presentation.

12. Mirror speech. Words, phrases and images people use give us important information about the inner worlds they inhabit. By pacing this aspect of their speech, you are telling them that you understand them and they can trust you. When you’re talking with other people, it’s a good idea to incorporate as many of their words, phrases, and their images into your conversation as comfortably as you can. Don’t mimic other people’s accent or speak a jargon you don’t have mastery of. You should be sensitive of their level of vocabulary and imagery and try to reflect it as closely as you comfortably can. Avoid in your own speech any jargon that the other person doesn’t understand.

12.5.  This bears repeating: establish rapport before you begin your appointment pitch. The best way to win the appointment is to win the prospect.

Do you consider yourself a master of rapport…especially on the cell phone? If so, please share any tricks or tips!