1. Are you current on your mortgage and if not how many months behind are you? 0-2 months is a good answer, 5+ is pushing it and 8 months is bad. I asked this for several reasons. The first is to establish an end point or date so I can determine if there is enough time to do one. The quickest a lien holder can physically remove you from your home in California is about 5 months. If you are 12-months behind the chance of me finishing a short sale before it's foreclosed on is slim. Another reason I ask if your current is because you need to have missed a payment or 2 before the bank will even look at accepting a short payoff (not advice, just a dirty secret). 2. How many loans are against the property? 1 is good, 2 or more is bad 3. Is this your primary residence? Yes = Good Tax implications in regards to your deficiency and recourse that your bank may or may not have if it's foreclosed on instead of a short sale. As an agent, I want it to be your primary residence because it gives you and me more negotiating "options" with your bank. 4. Have you refinanced your home at ANY point after buying it? Yes = bad I ask for tax reasons, loan recourse laws and overall attitude of the bank. 5. Are you able to supply your bank with the following - 2-years tax returns, 2-months bank statements, last 2 pay stubs, a letter about your hardship or why you cannot afford this house anymore, a 1 page monthly budget showing you cannot afford home. Yes = good 6. Are you current on your other bills? Depends on your other answers if it's good or bad. 7. What banks are your loans with? We just look up what banks are agreeing to short sales or not, some are better than others. 8. Where are you going to live next? So I can get a sense of your reality, if you don't know where you are going to look next I have some helpful tips to make sure you don't run into any problems finding a new home. 9. How much money do you have including retirement accounts? $0 = good , 10. What has changed between now and when you first got the loan? Nothing = bad So I'm sure you are asking yourself why wouldn't you just wait for the bank to come and get the home instead of jumping through all these hoops? Simple, without going into to much detail the damage that a foreclosure does to your credit, taxes, legal obligations, future real estate transactions, your neighbors and neighborhood are significantly less than a short sale. A short sale "allows" you to deal with all these issues head-on and have an active roll in cleaning up the so called "mess". *disclaimer- This is not advice, but real estate satire. I only give advice on issues I am licensed to give advice on. Please visit brentdewitt.com for more articles like this. Brent 949-436-SELL
Whenever I go to a new sales seminar I always go with my guard up and my credit card close. You would think as a salesman I would really be into finding out all the new ways of manipulating my clients and friends to further my sales career. But, as it turns out the reason I go is to get an emotional lift and mingle with my friends. Not that these seminars are not inspirational and informative. It's that there is always a big pitch at the end when the headliner announces that they are cutting the price in half today only if you signup for their monthly program to learn how to sell their "way" before you leave.
Everything a good salesperson needs to know can be learned in 2-minutes, completely for free. I was fortunate enough to be blessed with this knowledge in the form off a story my father told me when I was 14.
Bruce Lee was a very successful teacher and businessman before becoming a movie star. He had over 10 studios where he taught his way of fighting. If you came at him with a clinched right fist, he had a specific defensive move to counter it. If you wanted to go on the offensive he would teach you how to throw a specific kick or punch. After many successful years of teaching and developing his way of fighting he abruptly closed all of his studios. Nobody knows what triggered his sudden change of heart. But, when he reopened his studios he had a new way and a new gold medallion.
On the back of this new medallion was an inscription that read "having no way, as way, is way". In Bruce's life and training he had always been taught by masters in his craft, each one having a "way" of fighting. The thing that Bruce realized after he came up with his own "way" of fighting is that there cannot be a "way" of fighting. Every fight is so different it all depends on the variables. Is there 2 or 3 people in the fight? Are weapons allowed? Can I run away? and so on...
You might be asking yourself what the heck does this have to do with sales? Well, if you compare the way sales trainers try to get you to sell their "way", talk their "way" send out notes their "way" you can quickly see the similarities. If you adopt "having no way, as way, is way" as your selling technique then you will develop a style that is appropriate for any situation and the confidence of knowing you have a way...which is "no way".
Just like Bruce didn't stop learning and teaching "ways" of fighting you should not stop learning and teaching new sales skills either. Just remember that just because you learned how to punch threw a 2-inch piece of wood with your fist while someone is holding it doesn't mean that you know how to punch someone in the face while they are moving. But, if you are ever trapped in a box made of wood you are prepared.
I call this "having no way, as way" style of selling "question based selling". On so many different levels this "way" (actually, no way) of selling has been the difference between success and failure for me. Going into appointments with a strategy or a plan rarely turn out the way you intended, much like a fight. The key is gathering as much information as you can, asking as many questions as possible and then giving answers or suggestions based on that information. When you try to steer a conversation or have a plan going into an appointment you are usually very transparent and come across contrived. If you just listen and ask questions the appropriate response will be apparent it you did it right.
Next time you have the opportunity to be in a sales appointment remember to ask a ton of questions and have no agenda, but be prepared. Or like Bruce would say "have no way".
brentdewitt.com to read more on Real Estate kung-fu.
More on Bruce Lee - Jeet Kune Do (Chinese: 截拳道 Cantonese: Jitkyùndou lit. "Way of the Intercepting Fist," also "Jeet Kun Do","JKD," or "Jeet Kune Do") is a hybrid fighting system and life philosophy founded by Bruce Lee in 1967 with direct, non classical, and straight forward movements. Jeet Kune Do is primarily an open hand system. The system works on the use of different 'tools' for different situations. These situations are broken down into ranges (Kicking, Punching, Trapping, & Grappling), with techniques flowing smoothly between them. Also, it is referred to as a "style without style". Unlike more traditional martial arts, Jeet Kune Do is not fixed or patterned, and is a philosophy with guiding thoughts.
I answer the question "What would you show me if I had $15,000 to put down and could afford $2,800 per month". I focus my answer on a house in Mission Viejo around the $400,000 range. Watch all my video's on my site at brentdewitt.com
I answer the question "What would you show me if I had $15,000 to put down and could afford $2,800 per month". I focus my answer on a house in Mission Viejo around the $400,000 range. Watch all my video's on my site at brentdewitt.com
So you what to be a Realtor. OK, that's great..welcome aboard. You will need to know a few things first before you get started on your journey. There are so many aspects of the real estate industry it's hard to choose a starting point. My dad would say "if you had to pretend to knew where to start, where would that be?' Using this thought process I would say start with..."setting your expectations".
Suzzie Sellnothing: Hey Joe, I just got my real estate license.
Joe Everyone: Wow..your gonna be RICH!
This is not far from reality in the sense that the majority opinion of Realtors is that we make tons of money. This is the first "expectation" you need to set. Let me break down a common paycheck for a Realtor.
If the sell price is $500,000.
If the commission is 3%.
$500,000 x 3% = $15,000.
Wow, not a bad days work...right. This is the number everybody focuses on. However, this is the gross commission and you will get nothing close to this.
Here's the break down
$500,000 - Sale Price
x3% - Commission
=$15,000 - Gross Commission (this is what everyone thinks we make)
-8% - Franchise fee (century 21) - Right to use the name
=$13,800 -50% - Broker/Office split - (Office, phone, fax, manager, resources, etc.)
=$6,900 -$300 - Errors and Omission Insurance (in case you lie)
-$25 - Office bill
=$6,575 - is what your actual check will look like.
That's less than 43% of the gross and you still haven't covered all your expenses like...
Licensing per year - Federal ($200) & State ($200)
Mandatory Associations - MLS ($400)
Special Lock box key ($200)
Stamps - Consider mailing only 500 pieces per month at 44cents a pop ($2,640yr)
Health Insurance - If you die or get sick the money stops.
Car Payment - ($400 month) This will be higher because you are expected to drive a nicer than average car. Cell Phone - A must ($150 month)
Computer and other tools ($1000yr)
Internet Ads (free)
Newspaper Ads ($600mo) this is what a paper with a once a week, 20,000 circulation, 4x6 ad costs.
401k - ($200mo)
Just these ad up to $20,840 per year or an average of $1700 per month. Now the average agent sells roughly 6 homes a year or 1 every other month. If you sell a $500,000 home every other month you will make an adjusted $1,587 per month. When using a 40-hr work week you will make $9.91 per hour.
I hope that the difference between what people think we make and what we really make doesn't scare you out of our industry. I only point out this huge difference to set your expectations and hopefully convince you not to cut your commission because it's really not that much.
D.R.E. Licence #1244403 since 1998. Specializing in Single Family Homes in South Orange County. Expert in "Pool Homes" and the "Get Rich Slow in Real Estate Investing" philosophy.
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