FUNDAMENTALS ELEVATOR SPEECH by fjwuxn

VIEWS: 51 PAGES: 6

									             PerFect Your
         elevator
                                                                                                                                      Madison
                                                                                                                                      CommerCial real estate serviCes™
             speech                                                                                                                   madison title agency, llc   •   madison exchange, llc    •   leaseprobe, llc   •   madison specs, llc

            To network successfully, you need a                                                                                                                       when you think real estate, think madison.              volume #1       issue #5

            strong, memorable, but brief response to
            the question, “So, what do you do?” That’s


                                                                                                                                                                                     Focus on the
            your elevator speech. Take the time to
            write a really good elevator speech. Then
            memorize it and practice saying it aloud


                                                                                                                                                                                     Fundamentals
            until you can deliver it in your sleep. Here
            are a few tips:




     1
             start with a hook. That’s an attention                                                                                                                                       he credit crunch is having a ripple effect throughout
             grabber that tells people what you do from                                                                                                                                   the real estate industry and beyond. Whether you’re
             the client’s perspective. Ideally, it should be a                                                                                                                        a loan officer, a mortgage broker, a real estate agent, a
             mildly startling (and, therefore, memorable)


                                                                 3
                                                                     stress your qualifications. Think
                                                                                                                                                                                      real estate attorney, a title agent or a builder, chances
             statement with a clever twist. For example,
                                                                     about your skills, education and experience.                                                                     are your phone isn’t ringing quite as often as it once
             don’t say I’m an accountant. Instead say,
                                                                     Pick the top two. Remember, concrete facts                                                                       did. Between now and the next boom market, many
             I help business owners beat the IRS at its
             own game.
                                                                     are more powerful than general statements.                                                                       professionals will leave real estate for other industries.
                                                                                                                                                                                      For those determined to stay, it’s a good time to focus on


    2                                                            4
             Define        your       target       market            explain why you are the venDor
                                                                                                                                                                                      the fundamentals.
             anD       explain       why      they     neeD          of choice. Do you go the extra mile? Do
                                                                     you have superior technology? Better contacts?
             your services. Are you an attorney
             who works primarily with home owners                    Whatever it is, drive the point home.                                                                            1. Concentrate on
                                                                                                                                                                                         Customer Needs.
                                                                 5
             facing foreclosure? Try something like
             this, “Home owners facing foreclosure are               ask for something. Ask for a business
                                                                     card, a meeting, a referral—anything that                                                                        The best business practice in the long term is to give
             often blindsided by a system they don’t
             understand. We help them understand                     gives you an opportunity to follow up. That’s                                                                    every prospect the most valuable advice you can based
             their options, navigate the system and come             the whole point of networking after all.                                                                         on your experience and industry knowledge—even if


                                                                 6
             out on the other side with a concrete plan to                                                                                                                            that means not getting their business today. It’s hard to
                                                                     keep it short. Your whole speech should
             rebuild their credit and position themselves                                                                                                                             take the long-term view when you’re wondering where
             to buy a new home.”                                     be over and done in two minutes or less.
                                                                                                                                                                                      your next project is coming from, but this is how you
                                                                                                                                                                                      build a reputation for quality service and integrity.

                                                                                                                                                                                      2. Network
                                                                                                                                                                                      Business is built on relationships. When there are fewer
                                                                                                                       PRSRT-STD
                                                                                                                      US POSTAGE                                                      projects coming your way, make use of the free time to
                                                                                                                       PAID
                                                                                                                      Permit No. 41
                                                                                                                                                                                      get out and meet people. Attend professional seminars,
1125 Ocean avenue - LakewOOd, nJ 08701
 866.500.madisOn - Fax: 866.501.madisOn                                                                               Lakewood, NJ                                                    professional association events and trade shows, get
        www. madisOncres.cOm
                                                                                                                                                                                      more involved in community activities, volunteer at a

                                                                                                                                                                                                                                                cont. pg #2
                                                                                                                         transactions you’ve closed in the last six months.
                                                                                                                                                                                         Step outside your

     Focus
                                                                                                                         Where did most of your business come from? You
                                                                                                                         want to invest your time and marketing dollars
                                                                                                                         in the most effective way, i.e., where you get the              comfort zone and
                                                                                                                         most for your money But, don’t get stuck in a rut.
                                                                                                                         Over time, business shifts and marketing venues               shake things up a bit.


     on the
                                                                                                                         that were once very effective may not bring in the
                                                                                                                         business anymore. So, your business plan should
                                                                                                                         include exploration into new lead sources. But, start
                                                                                                                         small and measure results.

                                                                                                                                                                                   6. Reinvent Yourself.
     Fundamentals
                                                                                                                         • develop business strategies For
                                                                                                                         various scenarios. What will you do if your               Add related services to your repertoire. When business
                                                                                                                         business drops by 25% or 50%? How can you maintain
                                                                                                                                                                                   was booming, did clients ask for services that were
                                                                                                                         an adequate revenue stream? What will you do if
                                                                                                                                                                                   outside the normal scope of your business? If you got
                                                                                                                         there’s a sudden burst of business? What resources
                                                                                                                         can you use to handle unexpected overflow? Come           repeated requests for specific services, now is the time
                                                                                                                         up with some ideas for each scenario and write            to find out what it would take to make those services
                                                                                                                         them down. These situations are less harrowing if         available. If it requires a little training or another
                                                                                                                         you have thought them through in advance.                 license, why not take the plunge? Sometimes, all it
    cont. from pg #1
                                                                                                                                                                                   requires is a change in your view of yourself.
                                                                                                                         4. Stay Informed.
    local school or hospital, join online communities and    keep it simple, but you should cover these basics:                                                                    For example:
    reach out to clients you haven’t heard from in awhile                                                                No one has a crystal ball. We all just try to make the
                                                                                                                                                                                   • Large developers who now offer home
    or prospects who didn’t do business with you. And,       • Figure out how much it cost you to                        best decisions we can with the information we have.
                                                                                                                         So, arm yourself with information. Read trade and          renovations / repair services
    don’t be afraid to talk to your competitors. Maybe you   complete a transaction. If you haven’t been
                                                                                                                         financial publications and take advantage of free         • Landscape designers who now offer
    can find a way to work together on a few deals. After    tracking your cost per transaction in the past, take
    all, part of a deal is better than no deal at all.                                                                   online news sources.                                       driveway repairs / re-paving
                                                             your total expenses from last year and divide by the
                                                                                                                                                                                   • Real estate agents who now team up with interior
                                                             number of transactions you completed. That gives
    To make the most of your networking efforts, be sure
                                                             you an average cost per transaction. You can then           5. Build / Refine Internal                                 decorators to create a consulting service for
    to prepare a good elevator speech (see page 12).
                                                             fine-tune that number by calculating the cost per type      Procedures (training, work                                 would-be home sellers
                                                                                                                                                                                   • Real estate attorneys who now handle tax appeals,
    3. Create a Business Plan.                               of transaction and breaking out the cost per trans-
                                                             action by type of expenses (marketing, staff costs,
                                                                                                                         flow, compliance etc.).                                    tax foreclosures or negotiate with lenders on
    Most small businesses do not have formal business        facility/utility costs etc.). Then, do the same thing for   Have more time on your hands these days? Don’t waste       behalf of financially distressed property owners
    plans. Although this critical omission may seem          the transactions you’ve completed so far this year.         this opportunity to address internal issues that often    • Mortgage brokers and loan officers who now
    insignificant during boom markets, it can be the                                                                     get overlooked when you’re busy. Review work flow          offer credit counseling to consumers and small
    difference between survival and failure in leaner        With these figures in hand you have a solid basis for       and quality control systems to make them as efficient
                                                                                                                                                                                    business owners.
    times. So, if you don’t already have a business plan,    comparison between last year and this year, as well         as possible. Review legal guidelines and make sure you
                                                                                                                                                                                   The whole idea is to take what you know and give it
    sit down and create one.                                 as a mechanism for determining where and how                are in compliance. Finally, use this time to train your
                                                                                                                                                                                   a new twist—and maybe, add another skill or two.
                                                             to cut costs.                                               staff—review the basics and add some new skills. Is
    A little online research will uncover many examples                                                                  everyone making the most of your software programs?       Don’t just hunker down and wait for the proverbial
    of business plans and instructions on how to develop     • measure results and direct your                           Probably not. Spend some time on a refresher course.      storm to pass, step outside your comfort zone and
    them. You can make your business plan elaborate or       resources         accorDingly. Examine the                  It will pay off in increased efficiency.                  shake things up a bit.



2                                                                                                                                                                                                                                             3
    Madison SPECS, LLC
                                                                                                                           ing because it involved a basis step-up calculation and

    Madison sPecs reports                                                                                                  other particularly complex tax issues. The final result
                                                                                                                           was a savings for the client of more than $500,000.




    strong First
                                                                                                                           • Shopping mall in the Poconos—this assignment illus-
                                                                                                                           trates the value of persistence. We first met this client
                                                                                                                           in October of 2006, and we kept talking until we got




    year results
                                                                                                                           the job—in May of 2007. As a result of our cost segre-
                                                                                                                           gation study, the client realized $1 million in savings.

                                                                                                                           • Office complex in Brunswick—one of the buildings
                                                                                                                           had been sold separately, so we had to calculate a
                                                                                                                           look-back figure pulling that building out of the mix.
    Madison SPECS (Specialized Property Engineering                                                                        And, the client had invested heavily in renovations.
    and Cost Segregation), the newest member of the                                                                        So, there were lots of issues involved that made this
    Madison Commercial Real Estate Services™ family                                                                         a particularly interesting assignment. This study
    of companies, completed its first year of opera-                                                                              generated a savings of $600,000.
    tion in August. A beaming CEO, Eli Loe-
    benberg, reports, “The first year in this                                                                                          • Office tower in Philadelphia—working
    business is usually a loss year, but we’ve                                                                                          on one of the largest buildings in the city,
    done as well in our first year as others                                                                                            we saved our client more than $1 million
    have done in their fifth year.”                                                                                                     on this assignment.


    ceo credits                                                                                                                “The first year in this business is usually a loss year, but we’ve
                                                                                                                               done as well in our first year as others have done in their fifth year.”
    madison network
    So, what’s the secret of their success? According to
                                                                                                                           In its first year Madison SPECS generated savings
    Loebenberg, “I have to give kudos to the Madison
    organization and their business network. It was
                                                                First year highlights                                      for its clients totaling more than $22 million.
    Madison’s business relationships that really got us off     Here are just a few of the projects that made SPECS’
    the ground. When you have good contacts, a strong
    team of seasoned professionals and a little luck on
                                                                first year a memorable one:                                looking ahead
    your side, you can succeed in any market.                   • Apartment complex in Brooklyn—this assignment            Having made a strong start, Loebenberg is setting
                                                                stands out because 1) we were recommended by a             the bar even higher for year two. He plans to double
    “In fact, I think the down turn in the real estate market   competitor, and 2) the entire project from the initial     the company’s capacity by May of 2008. He expects
    in general may have worked to our advantage. When           phone conversation to the final report had to be           demand for this service to remain strong regardless
    business slows down, investors tap every financial          completed in two weeks. We got it done and generated       of fluctuations in the real estate market. “People are
    advantage available to them. And, cost segregation          savings of more than $160,000 for the client.              always going to need tax planning. And the fact that
    offers significant tax benefits—particularly when                                                                      people aren’t buying new properties doesn’t matter,
    you’re holding properties, rather than buying them          • Converted warehouse in Brooklyn—this was an              because we can do a look-back and pick up lost
    for quick resale.”                                          assignment that really got our accountants’ juices flow-   opportunities from previous years,” says Loebenberg.



4                                                                                                                                                                                                         5
    Madison Title Agency, LLC



    A closer
                                                               Under N.J.S.A. 17:46C-10.1 as amended in 2004, NJ         Bear in mind however, that when the sender gives
                                                               title producers are required to make disbursements        you a Fed reference number, it means only that the
                                                               from “collected funds.” But, the statute defines          funds have been sent. It does not mean they have
                                                               collected funds as funds deposited by:                    been sent to the right account. Always verify that


    look At                                                    • Cash
                                                                                                                         the Fed wire funds have been deposited to your
                                                                                                                         account before making any disbursements.




    good
                                                               • Electronic wire transfer
                                                               • Certified check                                         Automated Clearing House
                                                               • Cashier’s check
                                                                                                                         Transactions
                                                               • Teller’s check




    Funds
                                                               • Bank check                                              The generic term electronic fund transfer most
                                                               • A check drawn on a licensed attorney’s trust account    often refers to an ACH transfer. An ACH transfer is
                                                               • A check drawn on a trust or escrow account of a         a bank-to-bank transaction using a batching system
                                                                licensed NJ title producer.                              supported by a network of financial institutions. The
                                                                                                                         largest of these networks is NACHA, a non-profit
                                                               Cash is always a sure thing. But, let’s face it, very     trade organization that represents more than 11,000
    In recent weeks title underwriters have barraged           few people make hard cash deposits for real estate        financial institutions as well as regional payment
    agents with bulletins on the issue of “good funds.”        settlements. And, the other items on the list war-        associations. The most common uses of ACH transfers
    Driving this growing concern is the number of lend-        rant closer examination.                                  are automated bill payments, automatic payroll
    ers who have announced recently that they are no                                                                     deposits and ATM or debit card transactions.
    longer funding loans—an announcement that often            Electronic Wire Transfer
    signals a bankruptcy proceeding in the offing. The                                                                   In terms of real estate closings, there are two crucial
                                                               Electronic transactions are increasingly common in
    key message in all the bulletins is the same: do not                                                                 distinctions between Fed wire and ACH transfers:
                                                               all segments of our economy. But for the purpose of
    disburse funds from your escrow account without
                                                               closing on real estate transactions, you need to under-
    verifying that these are collected funds that cannot                                                                 • Funds transferred through an ACH are not
                                                               stand the distinction between funds transferred using       immediately available, and
    be withdrawn, i.,e., good funds.
                                                               the Fed wire system and funds transferred through an
    Don’t be lulled into a false sense of security just        automated clearing house (ACH) system.                    • An ACH transfer can be recalled by the originator for
    because you live in a state with a “good funds” law.                                                                   up to 90 days (60 days for a non-business customer).
    In this environment, even strict adherence to your         Fed Wire
    state’s good funds law can leave you vulnerable.                                                                     What’s more, the same information you give out in order
                                                               Funds transferred by Fed wire go through the Federal
    What’s more, the practice of disbursing funds based                                                                  to receive an ACH transfer can be used with equal ease
                                                               Reserve. This method is a real-time, irrevocable
    on the receipt of funds from “reliable” sources, rath-                                                               to transfer funds out of your accounts fraudulently.
                                                               transfer through which funds are available for
    er than waiting for those funds to be collected can
    lead to disastrous consequences.
                                                               withdrawal within minutes. Fed wire transfer is the       FedACH
                                                               preferred method of transferring funds for large
                                                               transactions and, therefore, is the preferred method      Finally, to make matters more confusing there
    Although these laws vary from state to state, the New
                                                               of funding for real estate settlements. Although the      is also a FedACH. As you may have guessed this
    Jersey statute is fairly typical and serves as a practi-
    cal example of how the legal definition of good funds      recipient can refuse or return funds received by Fed      is an ACH system sponsored by Federal Reserve
    may not be sufficient protection in today’s market.        wire, the sender cannot rescind the transfer.             Financial Services. What distinguishes the FedACH
                                                                                                                                                                       cont. pg #8




8
6                                                                                                                                                                                    7
                                                            Although any of these drafts can be revoked by
                                                                                                                     Additional Security Measures                             MAdison Brings
                                                            the customer, it is difficult to do so. For example,

                                                                                                                                                                              customized
                                                            if the customer returns to the bank and says that        To protect themselves, some lenders have begun
                                                            he lost the bank check, the bank will place a stop       to re-verify the underwriting immediately before


                                                                                                                                                                              training
                                                            on it. However, the bank will require the customer       funding a mortgage. Any discrepancies found in
                                                            to purchase an indemnity bond to cover the               the process can result in the lender’s refusal to
                                                                                                                     fund the loan. Assuming no problems are found,
                                                            amount should the check ever be found and paid
                                                            erroneously—a practice that protects the bank and
                                                                                                                     this practice may easily delay closing for a few days.   to Your door
                                                                                                                     As a settlement agent you need to be aware of this
                                                            reduces the possibility of fraud. But, if you have
                                                                                                                     practice and ensure that loan funds have cleared
                                                            any misgivings at all about accepting payment, you                                                                The Title Training Institute, the educational arm
                                                                                                                     before you make disbursements, or you may find
                                                            should call the bank that issued the check to verify                                                              of Madison Commercial Real Estate Services™,
                                                                                                                     yourself caught in the shortfall.
                                                            its legitimacy.                                                                                                   provides free, customized training in the areas of:

                                                                                                                     Here are a few additional practices that will add to
    cont. from pg #7
                                                            Certified Check                                          your financial security in these uncertain markets:      • TiTle, seTTlemenT and escrow issues

                                                            A certified check is a check that is written against
    from other ACH systems is that it can handle inter-                                                              • dual signatures— require two signatures                • §1031 exchanges, and
                                                            a customer account with a certification from the
    national fund transfers, whereas other ACH systems                                                                 on the release of funds over a certain limit
                                                            bank that the customer’s signature is genuine and
    are restricted to domestic transactions. Otherwise it                                                                                                                     • cosT segregaTion sTudies.
                                                            there are sufficient funds in the account to cover       • Fax conFirmation— immediately before
    has the same limitations as other ACH systems. Do
                                                            the check at the time it is certified. Many banks no       you disburse funds against “collected funds”
    not confuse a FedACH with a Fed Wire—the two                                                                                                                              Your staff can earn CLE and CPE credits in the
                                                            longer provide certified checks, preferring instead to     require a fax confirmation from your bank that
    are definitely not equal.                                                                                                                                                 comfort of your office from a program we create
                                                            issue cashier’s checks, which are more secure.             the funds are available
                                                                                                                                                                              specifically to match your goals. The presentations,
                                                                                                                                                                              which are geared primarily for accountants and
    Cashiers Check/Bank                                                                                              • ach blocks— Block ACH withdrawals from
                                                            Checks Drawn on Trust /                                    your escrow / trust accounts.
                                                                                                                                                                              attorneys, typically run about one hour, but can
    Check/Treasurer’s Check                                                                                                                                                   run longer depending on the content and format
                                                            Escrow Accounts
    These terms are interchangeable and refer to a draft                                                             Conclusion                                               you want. And, of course, we always allow plenty
                                                                                                                                                                              of time for questions and answers.
    drawn by a bank on itself. The bank agrees to honor     In 2004 New Jersey amended the statute to include
                                                                                                                     Given the current climate in the mortgage market,
    this check when properly presented for payment.         trust and escrow accounts held by licensed attorneys                                                              We have had particularly positive response to
                                                                                                                     prudence is not enough; true vigilance is required to
    The bank, rather than the individual customer, signs    and title producers to the list of “collected funds.”    protect settlement agents from disbursing funds in       our lunch & learn and dinner seminars. Our
    the check. This means that the check is as sound as     The question you need to ask yourself is this: Has       good faith only to find that the supporting deposits     summer series, which included dinner seminars
    the institution on which it is drawn.                   the attorney or title producer in question been          have been withdrawn.                                     in Manhattan, Brooklyn and at our corporate
                                                                                                                                                                              offices in Lakewood, NJ, were well attended. The
                                                            as prudent about making disbursements against
    In most cases, the funds are available the next                                                                                                                           small group format lends itself to open discussion
                                                            collected funds as you are? If you’re willing to bet
    business day. Although cashier’s checks have                                                                                                                              and active question & answer sessions that make
    traditionally been treated as “collected funds” upon    your livelihood on it, then go ahead and make                                                                     the training session interesting and informative.
    deposit, in today’s economic climate the more           disbursements. But, the best and safest practice by                                                               To take advantage of this opportunity, please
    prudent approach is to wait for these funds to clear    far is to wait until these funds have been collected                                                              call Esther Silberberg at 732.333.2327.
    before you make disbursements against them.             and irrevocably credited to your account.




8                                                                                                                                                                                                                                    9
     LeaseProbe, LLC
                                                                                thoroughness and accuracy of the lease abstracts          As a final step, LeaseProbe put all the corrected lease
                                                                                would determine the accuracy and, ultimately, the         abstracts through its standard quality control process—



                       All Lease
                                                                                value of the new lease management system.                 re-verifying the data on each and every abstract.


                                                                                To produce the lease abstracts, the company initially     Results:

                       Abstracts
                                                                                hired a firm (not LeaseProbe) that outsourced the         LeaseProbe completed the review in three weeks.
                                                                                work to a non-English-speaking country. When the          The client was able to adhere to its original training
                                                                                retailer’s staff started to enter the data from these     and implementation schedule, thus avoiding the


                       Are not
                                                                                abstracts, they soon realized the abstracts were          costs of delay.
                                                                                riddled with errors.
                                                                                                                                          And, what’s more important in the long term,
                                                                                Challenge:                                                LeaseProbe found that 37% of the data on the


                       creAted                                                  Without accurate data, the company would have
                                                                                had to delay implementation of the new software
                                                                                                                                          original abstracts was incorrect. By correcting this
                                                                                                                                          data, LeaseProbe safeguarded the usefulness of
                                                                                                                                          the lease management software and the retailer’s


                       equAl
                                                                                program. And, the clock was ticking. With                 investment in the software. In addition, with
                                                                                training sessions already scheduled at a dozen or so      accurate, easily managed lease data at its fingertips,
                                                                                locations for more than a hundred employees plus          the retailer protected itself from potential losses in
                                                                                trainers from the software manufacturer, the direct       the millions.
                       Lease management is just as important for                cost of delayed implementation would be thousands
                       companies that lease a lot of space as it is for the     of dollars. The indirect cost of potential missed
                       landlords who rent the space. An inability to keep       options or missed financial opportunities cannot be
                       track of multiple leases can cause a tenant to miss      quantified, but nonetheless represents a genuine risk.
                       financial opportunities or even force the tenant to
                       vacate a desirable site. The potential loss can easily   Solution:
                       reach millions of dollars.
                                                                                With training sessions scheduled to start within five
                       Recently, these concerns led a large clothing retailer   weeks, the company hired LeaseProbe to re-do all
                       with more than 850 stores nationwide to seek a lease     850 abstracts, verify the data and correct the mis-
                       management solution. In the process they learned         takes. What’s more, they requested that LeaseProbe
                       that all lease abstracts are not created equal.          mark any changes on the abstracts produced by the
                                                                                first vendor.
                       Situation:
                                                                                LeaseProbe immediately collected and organized
                       The company purchased a lease management
                                                                                the lease files. Our team leaders reviewed the other
                       software program. The cost of the program,
                                                                                vendor’s abstract format so we could work with it
                       installation, training and initial data entry ran an
                                                                                efficiently and mark up their abstracts electronically.
                       estimated $200,000. Part of the underlying costs
                       and one of the most critical steps in the process        Then we set to work abstracting the leases, verifying
                       was the creation of lease abstracts to serve as the      accurate information and correcting errors on the
                       raw data source for the new software program. The        original abstracts.




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