Monthly Archives: July 2016

Will It Work?

Nahum Waxman, author of Cooking Dumb, Eating Dumb gets asked, “Will the recipe work?” His answer is deeper and clearer than a yes or no. Nathan says in essence,  It is they who must work, and think. They must apply intelligence to ideas.

The moment you sit down with a blank real estate contract and a client with hopes, you apply your intelligence, your insight, your creativity to crafting a plan. Whether the plan works depends on whether you think, work, apply your insight.

You can do it.

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She’s 78 And Selling 262 Homes in WI

Born in 1938, at the height of the Great Depression Fannie Mae has aged well. Like your grandma, Fannie Mae is kind, easy to get along with, and unlike Grandma Lucy, she has about  262 homes in  Wisconsin for sale. Fannie is smart. She didn’t set out to be a titanic real estate owner, she got there the new fashioned way…people she guaranteed would never, actually did, walk out on their home mortgages. (NOTE: No judgment (on the public) here. Public policy, corporate greed, lender malfeasance, illegal real estate practices, forced people into decisions they would never have made.) And just like that Fannie’s phat with homes for everyone. And by phat, I mean she’s EXCELLENT!

Want to be a home home owner or  a hero to someone? State at Homepath.com . Fannie is internet savvy. She built a fast, accurate, easy to use on-line process for finding homes and making offers. It’s so easy, us Realtors® can use it. Full disclosure, my first time through I challenged the system because, well because I do that. And I learned for you…don’t do that. Don’t challenge the system . Roll with it. Fannie isn’t demanding you jump through hoops; more like fill in the boxes. Follow these steps and you’re on the path home:

  1. Fill out your State Offer to Purchase Form
    1. Skip the inspection contingency and financing contingency…Fannie has her own
  2. Fill out the Fannie Mae Addendum…basically this form says we agree everything we  have for conditions in our State Offer to Purchase form attached is over ridden by this Addendum. That’s cool. The Addendum is easier on the Buyer than the WI Offer to Purchase which has a seller advantage slant.
  3. Fill out any other (there may be one other) Fannie Mae form
  4. Have your buyer sign in ink. If Fannie is accepting digital signatures today I’m not aware. Do it old school…sign in ink. Black ink. Use your best penmanship…Fannie want’s Catholic school quality cursive.
  5. Find the home you’ve written the offer for on Homepath.com and click on Make An Offer
  6. You  are now just entering digits and short summaries of contingencies…that’s easy!
  7. Last you upload your documents:  Affidavit of owner occupancy (investors are not permitted for the first 20 days), pre-approval letter, Offer to Purchase, Fannie Addendum)
  8. Submit your Offer and wait mere hours for a response…Fannie doesn’t work on weekends, but she’s efficient.

Go and be bold. Be fearless. Be Humble. Fannie is fair but firm…play by her rules and you’ll be happy. She guarantees it.

 

 

Your opinion is relevant… when it matches mine

When presented with evidence how likely are we to defend our belief before considering the evidence? Evidence challenging our beliefs based on hopes and wishes  may trigger fearful reactions; rejections of the messenger, defense building, rallying our friends to come to console our ego for example.  Where does that get us? Can you think of a time when you went into a discussion as a trusted person of integrity, a valuable resource and left  feeling rejected with your intent questioned?

As  Realtors®, especially when we’re the first one on the job, our expert status is directly related to the degree our opinions match the opinions of the person we serve. For example: (Q) What’s my house worth? (A) Based on these three recent sales in the neighborhood, this, that, and the other thing, my opinion $275,000. (Response) What? There’s a house for sale for $350,000 and it’s not as nice as mine.   Example Two: (Q) What should we do to get our house ready to sell? (A) Based on research homes which are up to date in colors, hardware, fixtures, paint, flooring, kitchens, baths, are more attractive to more buyers. (Response) What? I think it’s better to let people pick what they want. 

What do smart Realtors® know that the rest of us should know about these conversations? They know that they avoid them by not falling into the trap of being the “expert”. The client is intelligent. The client is reasonable and logical. Given the opportunity to discuss the alternatives and the process, and uncover the evidence, all of us are  more likely to reach the same conclusion unless prohibited by an overwhelming factor which can’t be overcome…and those rarely exist.

How do we move to alignment and away from debate? One easy change we can all make, leave our pride, ego, and expert hat at home. Go to the meeting more eager to learn than to instruct. Be more willing to be enlightened than to enlighten. And then when you’re there, sit on their side of the conversation…physically and mentally.

  1. For discussing value, establish an agreement on a method. I believe the method that will matter in the end is the appraisal method. But if the owner does not, my Excel spreadsheet is useless. I also  believe my Excel method will be more trusted when I am open to including methods the owner embraces. There’s room for more ways than my way.
  2. Where we sit matters.  The person sitting at the head of a table is NOT the person in charge. Even if that seat is offered, it’s not the right seat to be in-partnership. Sit in the middle.
  3. Ask for their thoughts on criteria. My subjective opinions are as defenseless as anybody’s.  Value adjustments are objectively subjective. Use their numbers so you all can see if there’s any real difference in the end.
  4. Listen. Let people talk. I know this, my opinion is more welcome when I’ve been given permission to share it. I am more likely to be welcome to comment when the other person has been heard….(that’s my challenge in any conversation and awareness is the beginning of change. :))
  5. Remember, the decision to do business is a bilateral agreement. It’s OK if I’m not a match. As long as I gave the owner the opportunity to express their opinion and weigh those opinions against the facts I am able to make a reasonable decision about offering my commitment to a plan of action. “No, we are not a match.” is an option for all of us.

It’s a kind gesture to say, “You’re the expert. We trust you.” It’s flattering to be considered an expert and to be trusted. And to be a trusted expert,  open the door to cooperation, dialogue, ideas, perspective, and opinions.

That’s my opinion. I’d like to hear what you think.

 

 

 

 

 

Choose To Fight or To Understand

Memorable outcomes of my fights to be right serve a purpose when I look at them and ask, “What did you learn?” It’s so easy to rush to battle, and so admirable to watch people who first seek to understand and then to be understood (Melanie Trump said that…no she didn’t, Steven Covey did in 7 Habits of Highly Effective People).

The art of understanding is in listening. When I’ve been most respectful I am shown the the feelings rooted in fear which may be a contributor to an attitude of battle. Respect is served with space and patience. In my rushing to results days, impatience bowls through the space and rumbles over respect. I know what patience looks like and accomplishes.  I’ve seen admirable patience in my sons, young people who let go, seniors who know what life is about, and other well adjusted people who probably have faith in the power of Karma.

I was just told that a person believes I’m not trying hard enough. She may be right. Trying hard is not a path I will walk.  I’m being patient. I’m being gentle. I’m listening and understanding. It’s freedom to be at peace with the world. I choose to not fight today. Let’s see if the universe accepts patience. I believe it does.

Rejecting the Broker Offer of Compensation…Why do we do THIS?

You’re the Agent of the Buyer. You have a Buyer Agency Contract with your client to pay you 3.0% of the Purchase Price at closing as your Buyer Agent Broker Fee. You draft an Offer to Purchase on a property listed by a Broker member of the Multiple Listing Service you belong to. The Offer of Compensation made by the listing  broker to your broker is 3.0%.   Why does your buyer client’s Offer include a provision that states their broker (you) reject the Offer of compensation from the listing broker, and require the Seller to pay your 3.0% buyer agency fee at closing?  These are the mythical reasons we still  do what we’ve been doing for years:

  1. If I don’t accept the broker’s offer of compensation the broker can not take me to arbitration and recover the commission on the grounds that I did not procure the buyer. Not true since January 2005 when Article 17, Standard of Practice 17-4 was amended. If you didn’t procure the buyer you’re not safe from arbitration. You might have the money in your account but you are at risk.
  2. The listing broker might reduce the commission without my permission. This can’t happen. Article 3, Standard of Practice 3-2. Once the Offer is submitted, the fee to the cooperating broker is set as disclosed. You can agree to receive less, but a unilateral reduction is violation of the code of ethics…you can collect in arbitration.
  3. I will get my check at closing instead of waiting fro the listing broker to send it to my broker a week after closing. Back in the day that was true. Today the title company issues the check to the selling broker and a check to the listing broker.
  4. That’s the way we always do it. and That’s the way my broker told me to write the Offer.  Yes. That’s probably why,  but it’s not reasonable.

Are you interested in an idea as to why we might not want to include that language

  1. When the Buyer Broker fee is paid by the Seller as part of the Offer, the fee is as open to negotiation as the price, closing date, included items, and everything else that might make a difference to the Seller’s bottom line.

If you have another opinion based on a fact, I’d like to hear your thoughts.

 

 

Why do we do that? Cuz, we always do.

Because that’s the way I was taught. Yup. That’s a common answer to a question that may get thought more than it get’s asked out loud. And that’s too bad. Change begins with asking, “Why?” Growth is stunted when we accept, “Cuz we always do”. Why do include the Appraisal Contingency in Offers?  Don’t tell me to protect the buyer. That’s not a reason we use the contingency. We use the contingency because it’s there.   And it’s been there since 2011. Carved in ink stone, that relic will protect  a person from an imaginary threat to the point of keeping them from ever getting a chance to appraise the property…cuz they came in second.

What’s wrong with that Appraisal Contingency? It’s old and  stuck in its way. It’s inflexible. It’s a seller unfriendly curmudgeon. It’s not a contingency, it’s an ESCAPE CLAUSE. Read it from the perspective of a seller… a seller who lives in a seller’s market. You can see the problem instantly…should the appraisal, which is a subjective process, show a value of even a dollar less than the purchase price the buyer CAN terminate the Offer. Will they? Probably not, but 30 days from acceptance the seller is in no good place to negotiate and without an agreement to modify the contract to something fair, the buyer is in a position to negotiate price, closing date, concessions of any kind.  Smart sellers and will pass your offer over if they have a smart buyer who knows they don’t need an overkill contingency to be safe.

Savvy Realtors are proactively thinking up better conditions to create a win-win for the buyer and seller who have an offer with an appraisal contingency. This is a version you’re welcome to copy:  Appraisal Contingency:  In the event that said appraisal shows a value less than the purchase price, buyer shall deliver to seller a copy of the appraisal and a signed amendment to the Offer to change the purchase price to appraised value amount. Said amendment shall include no other conditions and shall allow Seller one (1) day to accept. Buyer shall not deliver the Notice to terminate provided for in this contingency prior to seller’s deadline for acceptance of the price change amendment.

If you grew up thinking your’s is not to question why, your’s is to either do or die, there’s good news—you’re not gonna die…ASK WHY and find a better way.  Next contingency that has outlived it’s use is the “Buyer direct Broker to reject the listing broker’s offer of compensation. Seller to pay buyer broker  ____% at closing for buyer agency fees…” This monument to old times has no good reason linger longer…you know why, right?