Buyer’s Agent vs. Listing Agent

If you want to make the shift from working with Buyers to working with Sellers, there are a few critical things you need to know.   This 2 minute video will help you make the shift…

 

 

July 11, 2013
Halftime Business Planning
Coyote Hills Golf Clubhouse
1440 E. Bastanchury Fullerton
8:30am-12:30pm
Agents Only.  (your admission is free with your realtor business card)

Helping Sellers MOVE in a Low Inventory Market

With inventory levels at record lows, more homeowners are reluctant to List their home because they don’t want to get into escrow and be unable to find their replacement property in time.   It’s almost impossible to get a contingent offer accepted and even if you do, the Seller only has 45 days to find the right home in a market that does not provide much of a selection.  It can take 6 months or more to find the right home when selection is so low.  How do you advise Homeowners dealing with this challenge?  Is now really a good time to Buy if you have to Sell?   Here are some options.

1.  Rent Backs give the Seller a 45 day escrow plus another 30 days to find their new home.  This may be a solution for some, but still leaves some uncertainty and a narrow window to find the right home.

2.  Know why it’s important to move now.  The risk is worth the reward.  The reason to move now is because interest rates make your next home affordable.   As the interest rate rises, that dream home will become unfordable, not because of the price, but because of the payment.

3.  Pick your neighborhood.   If your Client can identify a specific neighborhood they want to live in,  you can mail or door knock that are and find a Homeowner who also needs time and arrange a Single Party Show.

4.  Show your client homes.  It’s hard to overcome the potential challenges of a move if the Seller has not yet fallen in love with other possible homes.   Eliminate as much uncertainty as possible by showing homes they could see themselves living in.  Nobody really wants to Sell their home, they want to move!  Focus on the need to move and and the joy a new home will bring.

4.  Make a double move.  A homeowner will be in the strongest position in a low inventory market if they stop fighting the idea of a double move, sell their home, and move into a rental.  This gives the Homeowner time to wait for the right home to come on the market and buy non-contingent.   The hassle is worth the reward.    Relocation clients frequently move this way because it actually allows them to make a more careful decision about where they want to live.

– Tom PeltonJanuary 2013

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11 Stupid Things Smart Agents Are Currently Doing in Today’s Market

1. Listing agents:  Not getting the termite report at the time of the listing so any repairs needed can be negotiated out in a multiple offer situation, or included into the short sale net sheet submitted to the lender on a short sale.

2. Listing agents: Not getting up to date HOA statements from sellers at time of listing to ensure they aren’t behind.  If we know early about past due HOA dues, then agents can submit the short sale request to the banks with them included and padded to include future past due fees, or negotiate up front with the buyer.   Too many agents are waiting until the middle of escrow and then finding out when the bank approves the short sale that no one has agreed to pay the $30,000(?) in back HOA dues and legal fees.   While many banks won’t pay them, there are plenty that will if they are submitted with the short sale package in the net sheet at the beginning!

3.  Listing Agents:  Not knowing the appraisal will come in low ahead of time and dealing with this in the contract negotiation process.

4. Listing agents:   Not verifying the Buyer has sufficient ADDITIONAL funds to cover the difference before asking Buyer to remove Appraisal Contingency Requiring

Use this in the Counter Offer:

1)     “No Appraisal Contingency.  Buyer agrees to pay purchase price of $450,000 regardless of appraisal”

2)    Buyers to provide proof of funds to close in the amount to cover minimum down payment, closing costs, and possible additional down payment up to $35,000 upon acceptance.” 

5. Buyers agents:  Allowing their buyers to accept counter offer removing “appraisal contingency” knowing the buyers don’t have the money to pay above appraised value, and then telling the buyers “don’t worry, there are many other buyer contingencies where the buyer can cancel like inspections, disclosures, etc.”.   This backfires when the appraisal comes in low and the buyer can’t come up with the money but has removed the appraisal contingency and the inspections and disclosures yield very little or petty reasons to cancel.  They assume a judge won’t be smart enough to figure out that the buyers real motivation to cancel was the $30,000 appraisal shortage and the buyers lack of funds in their bank accounts to perform.  Then the buyers blame the agents and sue for us to get them their deposit back.  And they easily win!

Use this:

–Never let your buyers write a blank check agreeing to no appraisal contingency without putting some limit on the amount they will pay over the appraisal.  Ex.  Buyer only agrees to pay up to $20,000 over appraised value.  If appraised value requires more than $20,001 buyer reserves the right to cancel and receive deposit back in full.

6. Buyers and listing agents:  On STANDARD sales…Not allowing sellers any time to move after escrow closes.  Ex. COE+3   Just seeing this a lot and then world war 3 takes place at the end and the sellers don’t move and the buyers are jammed waiting.  With that said, on Short Sales the problem is reverse, when the agents give them time after the close and the seller decides that they don’t want to, or can’t move.  It’s best to require they move at COE unless everyone is very sure they will abide by the contract.

7.  Listing Agents:  Not checking on previous showings before accepting an offer in this market.  Listing agent encourages Seller to accept an offer.  Within a day or two, a better offer comes in and Seller cannot accept it.

8.  Buyers Agents:  Cancellation without a good faith reason.  If using the Loan Contingency you must show proof loan was actually declined.  If using the inspection contingency, Seller must have opportunity to fix any inspection issues.

9.  Listing Agents:  Failing to obtain signatures from both Buyer and Seller on a cancellation.  The escrow is cancelled, but if Buyer does not sign the cancellation, they may have recourse against the next Buyer.  (Disclosure of a previous cancelled escrow is required)  New escrow must be open subject to cancellation of previous escrow.   NOTE:  Buyer and Seller can reserve the right to fight over the deposit on a cancelled escrow.

Use this:

“Both Buyer and Seller acknowledge mutual cancellation of the Agreement and authorize Escrow Holder to continue to hold the deposit until receiving subsequent mutual instructions, judicial decision or arbitration award”

10.  Listing and Buyer Agents:  Discussing an extension of time without getting it in writing and signed by both parties.   Always get an extension of time BEFORE a deadline is missed.

11.  Listing and Buyer Agents:  Failing to use the “Notice to Perform” on any missed deadline… no matter how nicely the transaction is going.

12-1101… Comment below and add more stupid things to the list!

Tom Pelton – Aug. 2012

9 Ways to Prosper Regardless of How Much Money You Make

There are lots ways to make lots of money without trading your soul.   But it’s challenging.  You have to make a deliberate choice to apply spiritual principals to your work.   They’re optional.  It’s a matter of making the choice to take the high road, grow spiritually, and protect your character.  I’ve listed below some timeless spiritual principals that are consistently taught across all religious and non-religious faiths and disciplines. They will help you be happier and they might even help you make more money!

1. Help someone else achieve their goals
It’s a well established law of the universe…” you reap what you sow”. There is no better way to learn something than to teach someone else. There is no better way to accomplish your goals than to help someone else achieve theirs.

2. Give to others what you want to get
You may have heard, “Give and it will be given to you.” The surprise is that not only will you receive when you give, but often you receive exactly what you give… good or bad. People will reciprocate in kind… good or bad. The universe works that way. Some people call it Karma. Whatever you want to get, try giving it away first. It will always come back to you… but more!

3. Move toward people you tend to resist
Often the people you dislike hold the keys to unlock what limits you. In fact, your limitations exist because of your judgments toward specific kinds of people. When you judge others, you yourself are judged. You either become the same or react by going to an unhealthy extreme reaction.

4. Connect with people who are opposites
We all like people who are like us… especially, people who tell us what we want to hear. Your abilities and skills are limited, find people who see things differently, do things differently, and balance you out. You become a bigger person as you move outside your comfort zone.

5. Give up control
When you relinquish control, you allow natural forces to take over. Instead of fighting against these forces, you begin working with them. Let go of your attachment to the outcome, do your part and trust the results to God. It’s called faith.

6. Be grateful for things as they are
“Everything works together for good” Learn to love what is. Your resistance to reality often blocks you. When you become grateful, especially for the “bad” things, you’ll be amazed how quickly things change. Even if things don’t change, you become more joyful so you can create better things. Turn things over to God every day.

7. Recognize the seasons of life
“To everything there is a season.” There is a time to plant and a time to harvest. There are seasons to work and seasons of rest. Know the seasons and plan your life and business around them. Don’t just keep doing what you used to do because it worked before. Learn, grow, change.

8. Believe in what you want
You have deep beliefs about yourself, other people and life that were formed early in life. Those limiting beliefs cause you to create a life consistent with what you expect. “As a man thinketh in his heart, so is he.” To find out what these beliefs and expectations are… just look at what you’re getting in your life. Imagine the life you want and then ask yourself, “what would I have to believe about myself, others, and the world to achieve that?” Believe great things about yourself. Your false humility feeds the ego as much as another man’s arrogance. The world is not served by you playing small. Be great!

9. Bless the people who curse you
It sounds hard, but it’s worse if you don’t do it. Responding to critics puts you on negative message defending yourself. Let others defend you, let your honor and integrity protect you. Don’t waste energy on your critics and go to their level. Being passive is not enough, you must bless them to make sure you protect yourself from their negative energy.

These principals are counter-intuitive. You won’t learn them in business school. However, after spending 25 years teaching, counseling, and coaching people in spiritual growth, I find I can apply the same principals to business.
If you’re stuck and not reaching your goals wondering how to get to the next level. There may be spiritual issues behind your business challenges.

I find that setting huge business goals often force personal growth. Personal limitations have to be overcome to get to new levels of success. Big goals require you to become a bigger person. Committing yourself to goals bigger than you force you to rely on others. Even if you fail, there are lessons in the failure that cause you to grow.

Tom Pelton 2012

References in this article:
Galatians 6: 7-9
Luke 6:38
Luke 6:37
ICor 3:6-7
Romans 8:28
Ecclesiastes 3:1
Proverbs 23:7
Luke 6:28

Customer Focused = Success

In most industries, the successful companies thrive on the value they bring to their customer.    It’s widely known “you get what you pay for”  So people pay more for better quality or better service.   However, the real estate industry is often very different.   Brokers all expect the same commission regardless of the service they provide.  Customers genuinely appreciate the care, customer service, and hard work of the Agent, but when they see the dollar amount they are paying, it’s hard to understand how one person’s efforts can be of that much value.

Customers Pay for Value and Expect it
Unfortunately, the value many real estate companies bring the customer has eroded to the point it is in question.  Usually, if the value a business brings is in question, it is out of business!   If all Agents are essentially the same, homeowners hire the one that is cheapest.  But if a brand brings value, people are willing to pay for it.  For example, coffee beans as a commodity are cheap, but Starbucks adds value to the same beans and people are willing to pay a premium for it.

Broke Agent, Broke Broker… the Customer Loses.
In real estate, Brokers have had to sacrifice the value they would bring to customers so they can attract Agents with higher splits.  Agents benefit from the higher splits but don’t take on the value the Broker can no longer provide.   The transaction is then based on the assets of a broke agent and a broke company.  The customer loses.

The Customer usually chooses and agent without thinking about the Broker.  The Customer is completely unaware their Agent is merely a false front for a company that cannot provide any value… even though they might be paying a full commission!   After all, they don’t go looking for an agent thinking… “hmm, I want an agent on a higher split.”  Never!  They want a real estate agent and broker who can bring value to the sale of their home.

How do you measure success?
Customers would be shocked to learn that many real estate companies are not focused on listing and selling real estate at all!   Their value proposition, “We have more agents” is not of value to the customer.  “We sell more houses “ IS of value to a customer.   However, there are fast growing real estate companies in America who no longer measure their success by their ability to sell real estate, instead they announce their growth based on the number of agents they have.  Even their agents catch the fever and focus on recruiting other agents.  It’s easy to lose sight of the idea that success should be measured by the results you achieve for your customers.

High Quality or Cheap
Normally, if you’ve discovered a way to save money in your business, those savings get passed on to your customer.   Walmart is a company that found ways to cut cost.   Their value proposition is simple… “we’re cheaper.”  They don’t pretend to have any value proposition like “best quality” or “most reliable products” etc.   They’re cheaper and they pass the savings along to the customer.   However, if Walmart was a real estate company, their claim to fame would be “shop Walmart Real Estate…we have the most employees!”   They would charge the same prices as Nordstroms or Tiffany’s and customers would be unaware of the difference until it’s too late.   Customers at Nordstroms or Tiffany’s don’t expect to pay low, low prices, they want quality, they expect value and they are willing to pay for it.

 How do Agents choose a Broker
It’s common to hear, “I chose my Broker because I had friends there”  Or “I chose my broker because they are close to my house”  Or “I chose my broker because they pay the highest split”  The value the Broker brings to the Agent’s customer rarely comes up.

I’ll never forget talking to a team of 2 agents who were passionately loyal to their Broker.  One frequently said to the other “If I ever find a broker that can bring more value to our Customer, we’ll need to join that broker”  When they saw what Prudential has to offer the Customer, they had to join the company immediately!

Agent Centric – Customer Focused
Brokers should be focused on bringing value to the Customer.  What is needed is a “Agent-Centric” culture that supports and empowers Agents.  When Agents are successful that brings value to Customers.  Never never lose sight of the end result… we’re all about the best interest of the Customer.  It’s our commitment to THEIR success that is the secret to our success.  That is the secret to great real estate Brokerage.  Customers get great Agents fully supported by a successful company with the resources to perform on the promises we make.

Tom Pelton – April 2012

Trusted? Yes. Worthy of Trust? Well…

People trust you.  That’s a given.  Worthy of that trust?… that’s the question.

We define worthy of trust simply…we keep your promises and are committed to doing things the right way!

As an Agent, the people around you have an effect on how you do business.   No matter how honest and trustworthy you may be, an environment of small compromises can affect your standards.  An environment of finding ANY WAY to get things done replaces doing things the RIGHT WAY.

That’s why “Worth of Trust” is at the top of our company core values.  Prudential has a 150 year history of being worthy of trust.  It’s a proud heritage that beckons our Agents to a higher standard than the average agent.   Our environment of excellence keeps the standards high for everyone involved.

Some Agents may be in compliance with real estate board ethics and professional standards, they have a real estate license, they sell houses,  but they lack one thing… they are not worthy of trust.

In my experience, the  way people do ANYTHING tends to be a good indication of how they will do EVERYTHING.   You make choices every day to do what you to the highest standards or allow the environment around you to compromise the trust others have placed in you.

Don’t allow your work to comply with adequate standards.   Surround yourself with people committed to the highest standards.  Build a life and reputation… worthy of trust.

Put others interest first… before your own

Tell the truth… no matter what

Don’t exaggerate… it’s dishonest

Don’t hide the truth from people

Admit it when you’re wrong or make a mistake

Keep your word… even when it’s not in writing

Make wrong things right… regardless of the cost

– Tom Pelton  April 2012