Download Why Deals Fall Apart

Why Deals Fall Apart
Adorna O. Carroll
ABR/M, SRS, CRB, GRI, SFR, SRES, PMN, ePRO
DynamicDirections.com
[email protected]
Deals Fall Apart Because Someone
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Didn’t do their job correctly
Didn’t do their job completely
Didn’t know/disclose some pertinent facts
Didn’t understand what options were available
Didn’t understand the process to get the job done
Didn’t follow someone else’s professional advice
Let something fall through the cracks
Let their ego get in the way of good judgment
Couldn’t work well with the other professionals
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Seller
Listing Agent
Buyer
Buyer’s Agent
Home Inspector
Loan Originator
Appraiser
Underwriter
Attorney
The Usual Suspects
Seller
• Financial situation not
fully disclosed
• Condition of property
is misrepresented
• Doesn’t understand
the process
• Doesn’t agree with
market value/price
• Ignores professional
advice
• Hires professionals
that don’t have the
necessary level of skills
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Home on market prematurely
Over-improving for area
Pricing based on Seller net
Being emotionally involved
Not disclosing problems
Not knowing current issues or
market conditions
7. Hiring agent based on non-business factors
7 Costly Mistakes when Selling
M. Anthony Carr
Listing Agent
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Improper Pricing of Property
Lack of due diligence
Did not explain the process
Does not have the proper skills
Is inflexible or lacks creative solutions
Has difficulty working with other professionals
Does not have a good team of peripheral
professionals
• Lets details slip through the cracks
• Hasn’t prepared client that coop fees, inclusions
and desired terms are merely a suggestion
Off-Site Considerations & Other Time Bombs!
• Noise
– Air Traffic; Rifle Range;
Highway, railroad, etc
• Property Stigmas
– Psych Impacts, Sexual Predators
• Assorted Issues
– Prison, Dump, Land Fill, Cell
Tower, High Tension Wires,
Abandoned Property, Meth
Labs, Crack House
Solutions for the Listing Side
• Invest time in a Seller Counseling Session detailing
what you can/can’t do by your license law and COE;
will/won’t do by office policy and about the process
• Research the real financial viability prior to listing
• Disclose potential for short sales and fee issues
• Disclose material defects/red flags
• Price the property correctly
• Remain flexible and open
• Discuss current market conditions
• Invest in advanced skill training
Buyer
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Isn’t finally pre-approved prior to shopping
Has manipulative family with purse strings
Over-reacts during home inspection
Underestimates costs of repairs
Doesn’t understand the process
Doesn’t heed professional advice
Selects peripheral professionals that don’t have the
proper skills – lender, inspector, attorney
Buyer’s Agent
• Improper Pricing
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Lack of due diligence
Didn’t explain the process
Doesn’t have the proper skills
Is difficult to work with
Doesn’t have a good team of
peripheral professionals
• Lets details slip through cracks
• Doesn’t know how to get paid
Solutions for the Buying Side
• Invest time in a Buyer Counseling Session detailing
what you can/can’t do by your license law and COE;
will/won’t do by office policy and about the process
• Get loan approval for the buyer prior to showing
• Secure authorization from your client so the LO can
speak candidly with you
• Disclose potential for short sales and fee issues to
buyer so they are prepared for issues that can arise
• Help client realize that inspections are necessary
• Prepare a CMA
• Remain flexible and open
• Invest in advanced skill training
Home Inspector
• Did not explain the process or
difference between
maintenance items versus
defective issues
• Behaves like the appraiser or
is a drama queen
• Does not have the proper skills
• Is difficult to work with
• Lets details slip through the
cracks
Solutions for the Inspection Phase
• The inspection phase can be a renegotiation
• The home inspector is NOT the specialist only the
person to identify issues that require study
• Help buyers realize that not everything is an issue
• Help seller realize that all requests should
researched and considered
• Explain the true meaning of “As Is”
• Never talk any client out of having inspections
• Secure paid receipts from contractors for all repairs
Loan Originator
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Only does ‘vanilla’ loans
Can’t get creative solutions
Didn’t explain the process
Blames the agent for issues
Lacks knowledgeable team
• Is difficult to work with
• Doesn’t understand role of
buyer agents
• Allows details to slip
through the cracks
• Suggests bank fraud
Appraiser
• Isn’t from the area and doesn’t
know the dynamics of market
or neighborhoods
• Does not have the proper skills
• Doesn’t have an accurate
database for comps
• Only sold comps are
foreclosure sales
• Is difficult to work with
• Lets details slip through cracks
Underwriter
• Believes they can second guess the appraiser
• Can get careless when overburdened with files
• Doesn’t necessarily feel compelled to meet
contractual dates or time pressures
Solutions for the Lending Phase
• Help clients realize that everyone needs
to function like a team
• Success in contingent on the skills of
the professionals involved
• Prepare clients what options exist if a
property doesn’t appraise and why
extensions may be required
• Be prepared to do the other agent’s job
to get the job done
• Invest in achieving extensive knowledge
of the loan, appraisal and underwriting
process
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Isn’t a real estate attorney
Paralegal is a problem
Doesn’t do win/win negotiating
Can’t collaborate on creative
solutions or problem solving
Did not explain the process
Is difficult to work with
Doesn’t acknowledge your
professional role
Does not have a good team of
peripheral professionals
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Attorney
Solutions when working with the Attorney
• Cultivate relationships with the
lawyers and their paralegals in
your market area
• Insure that all terms and
performance dates are in force
• Partner with the lawyer in
advocating for terms your client
can accept
Moral of the Story
• Really know how to do your job
and the job of everyone
participating in the transaction
• Anticipate what can go wrong
and prepare your clients in
advance
• Look for creative solutions and
involve all parties in solution
based problem solving
• Stay Calm
• Learn to negotiate well