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

2 An Agent’s Guide to Bulletproofing Transactions Main Ideas 1.Perspective 2.Inspections and Repairs 3.Appraisals 4.Loan Approval and Funding 5.Other Contingences 6.Co-oping and Communication 7.Deadlines 8.Bulletproofing Strategies

3 An 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 Bouma Ann Arbor, Michigan Pages 7-8

4 An 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

5 An 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

6 An Agent’s Guide to Bulletproofing Transactions Perspective (continued) Six Major Issues—Contract to Close 1. Inspections and Repairs 2. Appraisals 3. Loan Approval and Funding 4. Contingencies 5. Co-op Agent 6. Deadlines Pages 10-11

7 An 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 Hamilton Santa Rosa, California Page 12

8 An 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

9 An 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

10 An 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

11 An 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

12 An 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

13 An 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

14 An 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

15 An 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

16 An 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

17 An 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

18 An 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

19 An 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

20 An 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

21 An Agent’s Guide to Bulletproofing Transactions Loan Approval and Funding (continued) Page 29 Seven Don’ts of Mortgage Funding 1. 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.

22 An 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

23 An 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

24 An Agent’s Guide to Bulletproofing Transactions Other Contingencies  Sale of Buyer’s House  Additional Approvals  Clouded Title Pages 34-35

25 An Agent’s Guide to Bulletproofing Transactions Other Contingencies (continued) Avoiding Contingencies What other contingencies have you encountered? What solutions worked? Page 36

26 An 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

27 An 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)

28 An 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 Moerler Westlake Village, CA Page Co-oping and Communication (continued)

29 An 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

30 An 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)

31 An Agent’s Guide to Bulletproofing Transactions Deadlines Pages Avoid Missing Deadlines » Negotiate closing date » Negotiate occupancy date » Confirm inspection and repair appointments » Follow a contract-to-close checklist

32 An 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?

33 An 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

34 An 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 Jenks Keller Williams Realty International Page 45

35 An 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

36 An Agent’s Guide to Bulletproofing Transactions 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

37 An Agent’s Guide to Bulletproofing Transactions Bulletproofing Strategies (continued) Antidote for Buyer’s Remorse “You have to constantly resell buyers on their decision.” Martin Bouma Ann Arbor, Michigan Page 49

38 An 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

39 An 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)

40 An 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)

41 An 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)

42 An 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

43 An Agent’s Guide to Bulletproofing Transactions Productivity Boosters Page 54  Help Buyers Understand the Process  Don’t Forget Closing Details  Communicate with Your Customers

44 An Agent’s Guide to Bulletproofing Transactions My Action Plan Pages  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 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!

45 An 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

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