REVISED EDITION Making It All the Way to the Closing Breakthrough to Mastery An Agent’s Guide to...

REVISED EDITION

Making It All the Way to the Closing

Breakthrough to Mastery

An Agent’s Guide toBulletproofing Transactions

2An Agent’s Guide to Bulletproofing Transactions

Main Ideas

1. Perspective2. Inspections and Repairs 3. Appraisals4. Loan Approval and Funding5. Other Contingences6. Co-oping and Communication7. Deadlines8. Bulletproofing Strategies

3An Agent’s Guide to Bulletproofing Transactions

Perspective

The Issue

“Owners feel like they are selling too low, and buyers feel like they are paying too much.”

Martin BoumaAnn Arbor, Michigan

Pages 7-8

4An Agent’s Guide to Bulletproofing Transactions

Perspective (continued)

The Challenge

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

Page 8

5An Agent’s Guide to Bulletproofing Transactions

Perspective (continued)

The Solution» Be aware of the most common problems.» Have good solutions and scripts.» Avoid problems by addressing common

concerns before they arise.» Maintain good and frequent communication

with all parties.

Page 9

6An Agent’s Guide to Bulletproofing Transactions

Perspective (continued)

Six Major Issues—Contract to Close1. Inspections and Repairs

2. Appraisals

3. Loan Approval and Funding

4. Contingencies

5. Co-op Agent

6. Deadlines

Pages 10-11

7An Agent’s Guide to Bulletproofing Transactions

Inspection and Repair

“I’m finding that we’re getting big laundry lists from people wanting everything done to the house, and if you don’t do just about all of it, they’ll walk.”

Sharon HamiltonSanta Rosa, California

Page 12

8An Agent’s Guide to Bulletproofing Transactions

Inspection and Repair (continued)

Conversations with Customers

Sellers» Prepare sellers for what to expect in your market.» Acknowledge their feelings and concerns.» Ask if sellers are willing to risk losing the buyer.» Suggest a pre-inspection to prevent unexpected

repairs.

Pages 13-14

9An Agent’s Guide to Bulletproofing Transactions

Inspection and Repair (continued)

Conversations with Customers

Buyers» Recommend inspectors you trust.» Educate buyers about where you are in the process

and what comes next.» Remind buyers that inspectors document everything

they see.» Help buyers focus on the big picture and important

issues.

Page 15

10An Agent’s Guide to Bulletproofing Transactions

Inspection and Repair (continued)

Attend Inspections

Your Goals » Answers all your customer’s questions.» Know what’s on your customer’s mind.» Keep small issues small.» Provide vendor referrals (if needed).» Guide buyers through the next steps.

Don’t let the inspection become a reason to back out of the contract!

Page 17

11An Agent’s Guide to Bulletproofing Transactions

Inspection and Repair (continued)

Negotiation» Find out how much repairs will cost.» Enlist the other agent as your ally.» Adopt a positive mindset: “Let’s make a deal!”

“Let me help with the cost of that repair.”

“I’ll pick up one-third of that.”

Page 18

12An Agent’s Guide to Bulletproofing Transactions

Inspection and Repair (continued)

Home Warranty » Home warranties alleviate buyers’ worries.» In the future, when a repair is needed, new

owners call the warranty company rather than you.

Page 19

13An Agent’s Guide to Bulletproofing Transactions

Inspection and Repair (continued)

Negotiating Inspection and Repair Issues

What are your best practices for resolving inspection issues?

Page 21

14An Agent’s Guide to Bulletproofing Transactions

Appraisals

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

Page 22

15An Agent’s Guide to Bulletproofing Transactions

Appraisals (continued)

Low Appraisals – Sellers» Do a thorough CMA.» List the house at an appropriate price.» Have an appraisal done if there are no

comps.

Pages 22-23

16An Agent’s Guide to Bulletproofing Transactions

Appraisals (continued)

Low Appraisals – Buyers

Funding Options » Additional down payment from the buyer» Financial gift from parents/family» Second mortgage» Seller-assisted options

Pages 23-24

17An Agent’s Guide to Bulletproofing Transactions

Appraisals (continued)

Dealing with Appraisals

What appraisal problems have you encountered or heard about in your area?

How can the problems be avoided?

Page 26

18An Agent’s Guide to Bulletproofing Transactions

Loan Approval and Funding

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

Page 27

19An Agent’s Guide to Bulletproofing Transactions

Loan Approval and Funding (continued)

Buyer Side » Make sure your buyers are preapproved for

a mortgage loan before showing them houses.

» Offer names of two or more reputable lenders.

» Submit a parallel application for backup funding when you don’t know or trust the buyer’s lender.

» Advise your buyers on keeping their finances in good shape.

Pages 27-28

20An Agent’s Guide to Bulletproofing Transactions

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

21An Agent’s Guide to Bulletproofing Transactions

Loan Approval and Funding (continued)

Page 29

Seven Don’ts of Mortgage Funding1. Don’t change your employment status.

2. Don’t make any major purchases.

3. Don’t increase your credit card debt or miss any payments.

4. Don’t change bank accounts or make undisclosed large deposits.

5. Don’t apply for a credit card, cosign a loan, or make a credit inquiry.

6. Don’t spend money you have set aside for closing—not any, not ever.

7. Don’t delay in providing all paperwork asked for by the mortgage company.

22An Agent’s Guide to Bulletproofing Transactions

Loan Approval and Funding (continued)

Other Funding Issues » Parallel Applications» Documentation Problems» Lender Doesn’t Approve» Buyer Credit Issues

Pages 29-30

23An Agent’s Guide to Bulletproofing Transactions

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

24An Agent’s Guide to Bulletproofing Transactions

Other Contingencies

Sale of Buyer’s House Additional Approvals Clouded Title

Pages 34-35

25An Agent’s Guide to Bulletproofing Transactions

Other Contingencies (continued)

Avoiding ContingenciesWhat other contingencies have you encountered?

What solutions worked?

Page 36

26An Agent’s Guide to Bulletproofing Transactions

Co-oping and Communication

Page 37

Key Players » Escrow officer» Lender» Appraiser» Real estate lawyers» Title company» Other real estate agent» Buyers» Sellers

27An Agent’s Guide to Bulletproofing Transactions

Page 37

Buyer’s Financial Situation » Follow the Seven Don’ts of Mortgage

Funding

Co-oping and Communication (continued)

28An Agent’s Guide to Bulletproofing Transactions

Seller’s Financial Situation

Gather information:1. When the property was purchased

2. Amount of the loan

3. How much the seller owes the lender

4. Whether there is a second mortgage“Never assume the seller’s agent has asked all the right questions of the seller.”

Terry MoerlerWestlake Village, CA

Page 37-38

Co-oping and Communication (continued)

29An Agent’s Guide to Bulletproofing Transactions

Co-oping and Communication (continued)

Page 39

Escrow Officer» Stay in communication as soon as contract is

signed

Surveys and Vendors » Avoid misunderstandings and differing

expectations» Ask questions and get things in writing» Communicate clearly and often

30An Agent’s Guide to Bulletproofing Transactions

Bulletproofing with Communication

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

Page 40

Co-oping and Communication (continued)

31An Agent’s Guide to Bulletproofing Transactions

Deadlines

Pages 41-42

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

32An Agent’s Guide to Bulletproofing Transactions

Deadlines (continued)

Page 43

Meeting Deadlines

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

33An Agent’s Guide to Bulletproofing Transactions

Bulletproofing Strategies

Proactive Prevention» Outcome framing—what do you want to

achieve?» Set expectations—what do we realistically

need to consider?» Prepare alternatives—what will we do if … ?» Reassure—we’re on track and doing fine.

Pages 44-45

34An Agent’s Guide to Bulletproofing Transactions

Bulletproofing Strategies (continued)

Reluctant Buyer

“Have a plan in place to deal with what you know is going to happen.”

Dave JenksKeller Williams Realty International

Page 45

35An Agent’s Guide to Bulletproofing Transactions

Bulletproofing Strategies (continued)

Buyer’s Remorse Triggers News reports that make them absolutely sure they

have made the worst decision of their life. Friends who tell them they are nuts for buying a

home now. Well-meaning family members or friends who say,

“You paid THAT MUCH for your house?”

Page 46

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Bulletproofing Strategies (continued)

What You Do» Mark the moment of

victory.Write down how thoroughly you considered everything in the market and why this house is THE ONE.

Pages 46-49

37An Agent’s Guide to Bulletproofing Transactions

Bulletproofing Strategies (continued)

Antidote for Buyer’s Remorse

“You have to constantly resell buyers on their decision.”

Martin BoumaAnn Arbor, Michigan

Page 49

38An Agent’s Guide to Bulletproofing Transactions

Bulletproofing Strategies (continued)

Seller’s Remorse» Do a CMA.» Remind sellers of their motivation to move.» Remind sellers about their destination.» Discuss the risks of starting over.

Pages 49-50

39An Agent’s Guide to Bulletproofing Transactions

Close as Soon as Possible

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

Page 50

Bulletproofing Strategies (continued)

40An Agent’s Guide to Bulletproofing Transactions

Early Response—Stay on Track

1. Constant communication

2. Inspecting expectations

3. Problem solving

4. Contract-to-Close tracking

Don’t make any assumptions!

Page 51

Bulletproofing Strategies (continued)

41An Agent’s Guide to Bulletproofing Transactions

Handling Buyer’s Remorse

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

Page 52

Bulletproofing Strategies (continued)

42An Agent’s Guide to Bulletproofing Transactions

The Bottom Line Communicate often with all key people. Spend plenty of time with your customers. Handle or closely oversee the contract-to-close

process. Anticipate problems and take preventive action to

avoid them. Understand the mindset of buyers and sellers. Look for creative solutions. Never give up!

Page 53

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Productivity Boosters

Page 54

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

44An Agent’s Guide to Bulletproofing Transactions

My Action Plan

Pages 58-60

Don’t put away this guide without developing a plan to put what you have learned into action!

Refer to the Action Plan on pages 58-60 of the guide to assess your strengths and areas for improvement.

Write down steps you will take to improve your skills—complete it, share it, and commit to it!

45An Agent’s Guide to Bulletproofing Transactions

Take the other courses in the Breakthrough to Mastery Guide series!

Gaining Mind over Market Upshifting Your Lead Generation Seller Pricing Strategies Seller Staging Strategies Lead Capture and Conversion Internet Lead Capture and Conversion Creating Urgency to Buy Expense Management Effective People Leverage  Short Sales, Foreclosures, and REOs Financing Solutions

46An Agent’s Guide to Bulletproofing Transactions

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