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					                          REVISED EDITION

Breakthrough to Mastery

An Agent’s Guide to
Bulletproofing Transactions

Making It All the Way
to the Closing
An Agent’s Guide to Bulletproofing Transactions   2


 Main Ideas
 1.    Perspective
 2.    Inspections and Repairs
 3.    Appraisals
 4.    Loan Approval and Funding
 5.    Other Contingences
 6.    Co-oping and Communication
 7.    Deadlines
 8.    Bulletproofing Strategies
An Agent’s Guide to Bulletproofing Transactions                          3


 Perspective
 The Issue

 “Owners feel like they are selling too low, and buyers
 feel like they are paying too much.”
                                                       Martin Bouma
                                                  Ann Arbor, Michigan




                                                             Pages 7-8
An Agent’s Guide to Bulletproofing Transactions             4


 Perspective                  (continued)

 The Challenge

 In this market, a “yes” on a contract is not as solid as
 a “yes” in another market.




                                                   Page 8
An Agent’s Guide to Bulletproofing Transactions            5


 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
An Agent’s Guide to Bulletproofing Transactions            6


 Perspective (continued)
 Six Major Issues—Contract to Close
        1. Inspections and Repairs
        2. Appraisals
        3. Loan Approval and Funding
        4. Contingencies
        5. Co-op Agent
        6. Deadlines




                                                  Pages 10-11
An Agent’s Guide to Bulletproofing Transactions                            7


 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 Hamilton
                                                  Santa Rosa, California




                                                                Page 12
An Agent’s Guide to Bulletproofing Transactions                           8


 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
An Agent’s Guide to Bulletproofing Transactions                  9


 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
An Agent’s Guide to Bulletproofing Transactions              10


 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
An Agent’s Guide to Bulletproofing Transactions                11


 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
An Agent’s Guide to Bulletproofing Transactions                12


 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
An Agent’s Guide to Bulletproofing Transactions                      13


 Inspection and Repair (continued)
 Negotiating Inspection and Repair Issues

                            What are your best practices for
                            resolving inspection issues?




                                                           Page 21
An Agent’s Guide to Bulletproofing Transactions             14


 Appraisals

 What can a real estate agent do to make sure the
 buyer gets an adequate loan to make the purchase?




                                                  Page 22
An Agent’s Guide to Bulletproofing Transactions                 15


 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
An Agent’s Guide to Bulletproofing Transactions            16


 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
An Agent’s Guide to Bulletproofing Transactions                     17


 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
An Agent’s Guide to Bulletproofing Transactions             18


 Loan Approval and Funding
 Regardless of which side you represent, make sure
 the buyer uses a reputable and trustworthy lender.




                                                  Page 27
An Agent’s Guide to Bulletproofing Transactions             19


 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
An Agent’s Guide to Bulletproofing Transactions                20


 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
An Agent’s Guide to Bulletproofing Transactions                          21


 Loan Approval and Funding (continued)
            Seven Don’ts of Mortgage Funding
 1.   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.

                                                               Page 29
An Agent’s Guide to Bulletproofing Transactions           22


 Loan Approval and Funding (continued)
 Other Funding Issues
        »     Parallel Applications
        »     Documentation Problems
        »     Lender Doesn’t Approve
        »     Buyer Credit Issues




                                                  Pages 29-30
An Agent’s Guide to Bulletproofing Transactions                    23


 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
An Agent’s Guide to Bulletproofing Transactions           24


 Other Contingencies
    Sale of Buyer’s House
    Additional Approvals
    Clouded Title




                                                  Pages 34-35
An Agent’s Guide to Bulletproofing Transactions                    25


 Other Contingencies (continued)
 Avoiding Contingencies
                            What other contingencies have you
                            encountered?
                            What solutions worked?




                                                         Page 36
An Agent’s Guide to Bulletproofing Transactions             26


 Co-oping and Communication
 Key Players
        »     Escrow officer
        »     Lender
        »     Appraiser
        »     Real estate lawyers
        »     Title company
        »     Other real estate agent
        »     Buyers
        »     Sellers


                                                  Page 37
An Agent’s Guide to Bulletproofing Transactions               27


 Co-oping and Communication (continued)
 Buyer’s Financial Situation
        »     Follow the Seven Don’ts of Mortgage
              Funding




                                                    Page 37
An Agent’s Guide to Bulletproofing Transactions                           28


 Co-oping and Communication (continued)
 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 Moerler
                                                  Westlake Village, CA



                                                                  Page 37-38
An Agent’s Guide to Bulletproofing Transactions                   29


 Co-oping and Communication (continued)
 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



                                                        Page 39
An Agent’s Guide to Bulletproofing Transactions                      30


 Co-oping and Communication (continued)
 Bulletproofing with Communication

                            What questions should you ask to
                            avoid problems in the contract-to-
                            close process?




                                                           Page 40
An Agent’s Guide to Bulletproofing Transactions             31


 Deadlines
 Avoid Missing Deadlines
        »     Negotiate closing date
        »     Negotiate occupancy date
        »     Confirm inspection and repair appointments
        »     Follow a contract-to-close checklist




                                                    Pages 41-42
An Agent’s Guide to Bulletproofing Transactions                    32


 Deadlines (continued)

  Meeting Deadlines

                             How do you keep yourself organized
                             and on track with respect to
                             deadlines?




                                                         Page 43
An Agent’s Guide to Bulletproofing Transactions           33


 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
An Agent’s Guide to Bulletproofing Transactions                                          34


 Bulletproofing Strategies (continued)
 Reluctant Buyer

        “Have a plan in place to deal with what you
           know is going to happen.”
                                                                          Dave Jenks
                                                  Keller Williams Realty International




                                                                             Page 45
An Agent’s Guide to Bulletproofing Transactions             35


 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
An Agent’s Guide to Bulletproofing Transactions                 36


 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
An Agent’s Guide to Bulletproofing Transactions                                   37


 Bulletproofing Strategies (continued)
 Antidote for Buyer’s Remorse

 “You have to constantly resell buyers on their
 decision.”
                                                       Martin Bouma
                                                  Ann Arbor, Michigan




                                                                        Page 49
An Agent’s Guide to Bulletproofing Transactions             38


 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
An Agent’s Guide to Bulletproofing Transactions             39


 Bulletproofing Strategies (continued)
 Close as Soon as Possible

  Reduce the time buyers and sellers have to
  second-guess their decision.




                                                  Page 50
An Agent’s Guide to Bulletproofing Transactions             40


 Bulletproofing Strategies (continued)
 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
An Agent’s Guide to Bulletproofing Transactions                   41


 Bulletproofing Strategies (continued)
 Handling Buyer’s Remorse

                            What works when your buyers
                            change their minds about buying a
                            house?




                                                        Page 52
An Agent’s Guide to Bulletproofing Transactions             42


 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
An Agent’s Guide to Bulletproofing Transactions             43


 Productivity Boosters
    Help Buyers Understand the Process
    Don’t Forget Closing Details
    Communicate with Your Customers




                                                  Page 54
An Agent’s Guide to Bulletproofing Transactions                 44


 My Action Plan
    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!

                                                  Pages 58-60
    An Agent’s Guide to Bulletproofing Transactions   45


        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
An Agent’s Guide to Bulletproofing Transactions   46




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