The Agent University

As a real estate agent, you have already talked with the seller about the importance of having their property ready for showings. You have elaborated on the need for everything to look meticulous, and the need for everything to be repaired. It is also important, however, to give sellers a crash course in “real estate etiquette” to ensure that the process always runs smoothly

Ready to Show at a Moment’s Notice

A seller should be made aware that a request to view a property can take place at any time. They should also be made aware that many last-minute viewings take place, and they should be ready to accommodate this event. Sellers that delay viewings often have a difficult time selling their homes.

If a seller continually makes excuses why a home cannot be shown when requested, they quickly become labeled as difficult sellers. These sellers then find that they cannot sell the home because the realtors are reluctant to request a showing. Sellers need to know that delaying a viewing, even at the last minute can affect the whole sale process.

Flexibility Matters

Real estate agents want to be on time for any showing. In this type of industry, time is money. There are occasions that occur that prevent the agent from arriving at the selected time with the buyer. It should be noted to the seller that a little flexibility is always better than losing the sale.

Most people like to view the property without the current owner present. Owners should remain away from the property during the showing and not return until after the real estate agent has left. Returning while the showing is taking place will make the potential buyer feel rushed.

Sellers Who Wish to Remain on Site During Showing

Sellers should never be present during the showing, it simply makes the buyer uncomfortable. Many sellers will insist, stating that they need to be there to show all of the features of the home. In reality, they just want to see the reaction of the buyer to the home and put in their opinion to push the sale.

If the seller must remain on the property, encourage them to venture outside while the buyer is viewing the interior, or stay in one place in the house without engaging in conversations with the buyer. One wrong phrase can ruin a sale.

Sellers Who Demand You Are Present For All Showings

As the representative of the seller, you do not necessarily have to be present for all showings. In most cases, the mere presence of the seller’s agent will discourage a sale. Buyers want to discuss the potential of the property openly with their agent, and most feel they cannot do so in front of their representative.

It is very important that the seller you represent knows this fact. You must also insist that if showings can only happen when you are present, they will miss many showings. Most will understand.

Pets

Pets must be under control at all times when a home is being shown. A cat wandering around the house or a dog that invokes fear will kill a sale. You need to make the seller understand that yes, their cat is adorable, but the potential buyer may not like cats.

Gaining Cooperation

The easiest way to gain cooperation from the seller is to use the “you know buyers” type of conversation. Make your requests seem more like a way to save the seller from frustration than a way to save yourself from frustration.

The easiest way to accomplish cooperation is to print up a “sellers” list. Give this list to your client and ask them to read it. Let them know you will call them the next day to follow up on this document to see if there are any questions.

FEATURED TRAINING

Finding your diamond in the rough is one thing, but what about financing it?

It is heartbreaking telling a client that their dream fixer-uppers doesn’t qualify for a mortgage.

Thankfully, you can steer buyers in the direction of the FHA 203(k) Renovation Loan Program.

This fantastic incentive gives buyers the loan they need to complete the home improvement projects needed to satisfy the bank’s requirements to fund the purchase. It’s a great way for agents to prevent their deals from slipping through the cracks.

Of course, you can only tell your buyers about this amazing program if you actually know about it yourself.

That’s the reason it’s in your best interests to sign up for The Agent University’s FHA 203(k) Loan and Renovation Program 203. Led by Patrick Butler, this fast-paced course will teach you everything you need to know to pitch this valuable program to your clients.

The course covers:

- Everything you need to know about the FHA 203(k) loan program
- How to determine which buyers can benefit
- Understanding the application process
- Learn how lenders think
- Integrating this program to boost your business

Course instructor Patrick Butler has been leading the industry of residential real estate for more than 23 years. Today, he is part of our dynamic team, specializing in successful short sale negotiation.

The Agent University’s FHA 203(k) Loan and Renovation Program 203 is available On Demand, so you can watch and your convenience from home or office. Don’t wait!

What would be the five easy fixes to find the REO diamond in the rough?

Five easy fixes to find the “REO diamond in the rough” can be found using the same principles Richard Gere used in “Pretty Woman” to polish and refine the beautiful, but “unfinished” escort (Julia Roberts) he hired to accompany him to business functions. The transformation was remarkable, accomplished mainly by cosmetics and clothing.

The facelift in appearance to Julia’s outer shell changed her entire image and people’s perception immediately from embarrassment to pride. Similarly in homes, cosmetic improvements can add substantial value to a home’s value through increased visual appeal (a.k.a. curb appeal). Let’s face it: We are in a “done for you” phase in our fast-paced society and unless you’re a rehabber, flipper or handyman, most people want to move in and get settled immediately without the hassles of project management and weekend “fix-it” honey do lists.

Frankly, there are many “diamonds in the rough” that merely need some love and affection (a.k.a focused attention) to regain their self-esteem in the marketplace, mainly of which being cosmetics, which can be accomplished through simple clean up and minor updating.

The top five easy fixes that can really bring out that “REO diamond in the rough” in my opinion are:

1. Paint

• Interior (neutralize and brighten)
• You may love chartreuse, but you must appeal to the masses, not personal favorites
• Use neutral colors that brighten things up and make the rooms look bigger
• Dark = smaller/cramped
• Light = bigger/roomy
• b. Exterior (deferred maintenance vs. curb appeal)
• Worn out paint is a “deferred maintenance” item that doesn’t necessarily “add value”
• Fresh paint can be crucial to the curb appeal and first impression of value from a prospective buyer
• This alone can add thousands to the mental “perceived value” to any would-be buyer

2. Yard clean up/landscaping

• Clear out debris/trash
• Update landscaping
• Add “cheery” flowers
• Mow lawn and get it “green”
• Fill in missing rocks if desert landscaping

3. Update fixtures/appliances

• Update Kitchen cabinet handles
• Update grungy dated stoves and dishwashers
• Update light fixtures
• Update bathroom / kitchen faucets

4. Flooring

• Update carpet (at minimum a fresh shampoo)
• Update tile – clean/degrease grout, replace or carpet over
• Wood – clean, replace or carpet over for fresh look

5. Front door

• Update front door
• Creating a good first impression is critical
• Weather-beaten doors speak negatively

There’s a host of minor other items you can do to enhance the appeal and some major items that may need to be taken care of that will perceptually annihilate the value of the home. For example, the roof. Replacing the roof does not necessarily add value, as it is a “deferred maintenance” item that when repaired merely brings you back to status quo on the value meter. However, argumentatively, if you have a shabby looking worn out roof staring buyers in the face, you may get dinged thousands more than the cost of the roof just from ruining that ever important first impression that immediately stigmatizes (or enhances) the value of the property in the minds of the prospective buyer (or tenant).

Costs vs. value resource

An excellent resource I have found answers the consistent question arising from Sellers and homeowners about what improvements or repairs should or should not be done to improve the value of their home when preparing to market or remodel their home is “Remodeling” magazine’s “Costs vs. Value Tool.”

It compares data with their annual report on the relationship between remodeling costs and resale value. You can compare national and regional averages for 33 to 35 popular remodeling projects and you can also download a .pdf with project data for any one of 80 United States cities.

Individual city data for the projects include:

• City job costs
• City resale value
• City cost recouped
• City/region comparison
• City/national comparison

It’s a nice tool to measure what you can expect to recoup on those repairs and improvements you are considering. By the way, according to Webster’s Dictionary, the term “diamond in the rough” was first used in 1785 and is defined as: “One having exceptionally good qualities or the potential for greatness but lacking polish and refinement.”

All that said, with the right improvements, repairs and enhancements that polish and refine your property, you will likely find you have brought that “diamond in the rough” into “Pretty Woman” status without spending an arm and leg to do it.

Interesting sidenote: The United Kingdom-based Phrase Finder/Phrase Dictionary has an interesting definition of the phrase, “diamond in the rough.” It states, “Someone who is basically good hearted, but lacking social graces and respect for the law. This term is often used to describe people on the edge of the criminal fraternity who, while they may not commit serious crimes themselves, probably know people who do.”

MARKETING STRATEGIES

Foreclosures. Short sales. Bankruptcies. Tax liens.

The money is always where the market is, and right now, the market is in distressed properties.

To keep your commissions going strong, go where the deals are and learn how to attract buyers like a moth to a flame.

Everyone likes a bargain, especially when it comes to real estate. If you really want to entice buyers and investors, make sure you are showcasing extremely good distressed property deals on your website, social media outlets and marketing material.

For example, broadcasting a fixer-upper as a diamond in the rough just waiting to be discovered is something that will attract virtually every buyer. Even if turns out not to be the deal they have been waiting for, you’ll at least have a fish on the line ready to be reeled in by another great deal.

To incorporate the biggest distressed property deals into your business, it can be as simple as doing a new blog post, adding a feature to your homepage or including details in your monthly newsletter. You should also be sure to post the best deals on your Facebook, Twitter and Google+ pages.

Remember, it doesn’t really matter if your audience snaps up that specific deal or not. Showcasing huge distressed property deals is all about lead generation – just getting those people to pick up the phone. Once you actually talk to these potential clients, that’s when you’ll be able to start the hunt for the property they’ll really go gaga for.

AGENT SPOTLIGHT

Carl and Michelle Kendall are a busy, successful real estate team for Keller Williams in the South Florida market.

Their bread and butter? Distressed properties.

“Bottom line, in our market, something is better than nothing,” they told us in a recent conversation. “We do countless BPOs [Broker Price Opinions] for banks so we have a strong market presence. Lead capturing, generating and advertising are our keys.”

How do Carl and Michelle pinpoint the perfect diamond in the rough?

“Market knowledge is crucial. Follow tax records for lis pendens and liens and communicate with other agents,” they said. “Do your homework and you’ll find your diamond in the rough.”

They know what they are talking about, too. With little more than five years of experience in the REO business, Carl and Michelle have sold distressed properties ranging from $1 to $4.2 million.

One of their short sales was approved in just a week and closed 30 days later. Another distressed sale – one with a $5 million price tag – stayed on the market a whopping nine days and closed in only two.

What is their amazing secret? It may surprise you (or if you’re succeeding yourself, it may not.)

“We work seven days a week, 12hours a day,” they said simply. “We follow up on every lead; no deal is too small or too big – that’s our motto. Do the basics. Do social media. Answer your phone, even after hours. If you can’t work for all of your buyers, refer them to other agents who will be happy to pay you a 25 to 30 percent commission.”

Keep up the good work. And thanks for sharing your valuable advice!

INDUSTRY TRENDS

It used to be hard to find those diamonds in the rough, but now, because of the mortgage crisis, diamonds in the rough can be found everywhere and represent tremendous opportunities both for you and your clients.

The government’s recent announcement regarding the bulk sale of foreclosures is one terrific opportunity that you can pass along to your investors.

Let them know that the U.S. Treasury Department and U.S. Department of Housing and Urban Development are looking for groups interested in buying up several foreclosures at once and then converting them into rental dwellings.

The goal of the project is both to sell off more distressed property inventory quickly – and keep it off the market for an extended period of time – while simultaneously creating more affordable housing opportunities for people who can’t currently afford to be homeowners.

Your investors will be able to turn a tidy profit with this initiative simply by collecting rental income and, down the road, selling the properties once permitted by the program, when the market is stronger and housing values have climbed.

If your investors aren’t able to handle a bulk foreclosure purchase on their own, don’t assume it’s a lost sale.

Instead, get proactive by helping your buyers find a loan pool where they can work with other investors to come up with the necessary capital for a bulk foreclosure deal. If you become that loan pool’s go-to agent, you will be looking at mega commissions once their transaction is completed.

Thriving, not just surviving, in this economy is all about taking initiative and being creative. The ability to take advantage of the circumstances as they are is what separates the nation’s wealthiest agents from those who are struggling to make ends meet.

Many real estate agents think that the most important part of their job is completed when they have a signed contract in their hands. They believe that once the contract is signed, there is nothing left for them to do until the closing takes place. This is simply not the case. Real estate agents must stay involved with the buyers and sellers until the closing is final. The reality is, until the deal on the house is closed there is no commission check.

Beyond the need to ensure that you receive payment for your time, real estate agents should remain involved in the process because it creates good-will and future customers. Buyers and sellers alike that feel they have been taken care of during the purchase process will gladly recommend your services to friends and family. A good deed now will positively affect your earnings in the future.

Some of the things that you can do to make the process run smoothly and reach closing are:

When working with the buyer:

• Work with the lender and see if there are ways to check the status of the mortgage by phone, fax or Internet. Making sure the loan is processing correctly will help you get to closing faster.
• If the sale is a VA or FHA sale, make sure you are familiar with all the regulations and requirements. These change on a yearly basis.
• Meet deadlines for inspections and loan applications.
• Communicate with seller or seller’s agent about progress on your side of the deal, inquire about any progress on their side.
• Provide a list to your client of available service providers such as home inspection companies, surveying companies or pest inspection companies. You should, however, stay away from recommending a specific company for liability reasons.
• Attend inspections with your client if possible. Some clients will freak-out if they hear that a repair needs to be made. Providing support at this time will help move the sale along.
• Give clients a list of utility companies that service the home. If you know that the buyer has children, provide a list of schools.
• Remind clients to secure insurance for the home. Many people forget this and closings are delayed until a policy is in place.
• If title searches are performed by private companies in your area, make sure this process has begun. Again, failure to do the proper title search on a property can delay closing.

When working with the seller:

•  If the date passes for the buyer to make a commitment on the home, call the other agent and inquire.
• Make sure the appraisal is done in sufficient time. Verify that the appraisal amount is compliant with the lenders requirements.
• Make sure you know when any inspections on the home take place. Call the agent of the buyer the following day to find out if there are any issues you need to address.
• You do not want to delay the closing due to repairs.
• Periodically check in with the buyers representative to make sure that everything is progressing as it should.
• Provide your client with a check list of things to do before they move as a courtesy. Include reminders on the list like forward mail and shut off utilities.

Every sale is going to be different and the requirements of the buyer or seller will also be different. It is important to stay involved to help the sale end successfully. Of course, there are always events that take place that may kill the deal, but these events should never be the result of inaction on the real estate agent.