Artilce Courtesy of: Inman News
By: Berince Ross
Trying to dodge the flames? Keep these strategies in your pocket
Have you ever encountered a “dragon” in one of your deals? They come in many different varieties — the persnickety business manager or CPA, the testy attorney, the nit-picking inspector, the appraiser who doesn’t know the area, the helicopter parent or the “white knight” agent who insists on making decisions for their client.
If you find yourself facing a dragon, here’s how to tame it and keep from getting burned.
1. The persnickety business manager or CPA
For those agents who work the luxury market, one of the most disheartening things their multi-million dollar client can say is: “Here’s my business manager’s phone number — he’ll be writing an offer for us on this house.”
Taming strategies: If you’re dealing with a CPA or business manager, just know these people love the numbers. While your luxury client only cares about whether they like the house, the dragon wants the data. Keep this dragon happy by feeding it plenty of details from the following sources:
- Property reports from NARRPR.com.
- Automated valuations: Along with your personal comparative market analysis (CMA), include the valuations from Homesnap, realtor.com, Zillow or from your local multiple listing service (MLS) if available. These tools are free.
- Numbers people are usually interested in absorption rates (i.e. months of inventory on the market). When there are five or fewer months of inventory, you are in a seller’s market with increasing prices. Six or seven months is generally a flat or transitioning market. Eight months or more is buyer’s market with declining prices. This data is normally available through your local MLS.
- To really make the numbers dragon happy, use Weiss Analytics, which allows you to add comparable sales to their algorithm. If the dragon disagrees with your price, enter the dragon’s price estimate and the algorithm will incorporate it into its valuation.
2. The testy attorney
Dealing with attorneys is challenging. Some are extremely knowledgeable about real estate law and you’re thankful to have them in your deal as an ally. Then there are those who think they know more than everyone and are out to prove it. Others will insist on rewriting your contract or that you use a contract they have drafted to write your offer. The worst of the lot are those who dissect every minuscule detail in order to drive up their fees.
- Today’s affluent clientele expect you to have expert knowledge of the latest luxury industry data and trends READ MORE
To avoid having to fight this dragon, provide him or her with copies of the key transaction documents at the beginning of the process. This includes the purchase agreement, the agency disclosure, mandatory inspection disclosures, plus any other documents typically used in your state or local area. If the dragon has issues, it’s best to surface them up front as opposed to fighting him or her during a multiple-offer situation.
- If your market is experiencing multiple offers, explain that properties are often going over asking price. Provide comparable sales if necessary. Then ask: “If we end up in a multiple-offer situation, how would you like me to negotiate it on your behalf?” If the attorney doesn’t get the urgency in the situation, be prepared for your buyers to miss out on a house or two before they decide to do something about the situation.
- When this dragon starts breathing flames and you know the dragon is wrong, contact the legal hotline hosted by your state association of Realtors for advice. Next, share what you discovered. Even the most difficult attorney will usually listen to the expert attorneys who handle these calls.
- For title issues, most title companies have an attorney or a title advisory officer who can help you sort through the issues and speak to the dragon if necessary.
-Other resources include your office manager, broker and/or company attorney.
- Don’t try to win. Instead, always remind your clients and their attorney that it’s their house, it’s their mortgage and it’s their decision. My role is to be a conduit of information to help you and your clients make the best decision possible.
3. The helicopter parent
The helicopter parent has always tried to control their child’s life and they’re not about to quit when their child is buying a house. In fact, they may not even want their child to leave the nest. If the parent is a detail-oriented person, use the strategies above to calm the flames. If not, here’s what else you can do.
- It’s important to determine whether your clients and their parent(s) have a strong, supportive relationship or whether that relationship is contentious. In either event, always keep emphasizing your role as a conduit of information — it’s up to them to work out the decision.
- Assuming that the parent and child have a good relationship, you can make the parent feel as if you and their child are in sync by mirroring and matching the child’s body language. For example, if the child crosses their arms, cross your arms. If the child says, “What a beautiful view,” respond by saying, “It is a beautiful view, isn’t it?” You’re much less likely to receive pushback from the helicopter parent if they perceive that you and their child are in alignment with each other.
4. The nit-picking inspector
While most inspectors are reasonable, every so often you will draw one who cites not only actual issues, but fails to differentiate between needed repairs vs. what is preventative. Worse yet is the inspector who claims there is an issue when there is no issue. Normally, you will not meet this dragon face-to-face, so you won’t be able to tame it. You can, however, put out the flames.
- To minimize any burn damage, educate your buyer prior to the inspection about what is normally covered on inspections vs. what is preventative and not covered.
-Also explain that it is OK to ask for more on the inspection report as a strategy to obtain as many concessions as possible. Warn them, however, making too many demands can cost them the deal.
- Explain the benefits of taking a credit for the repairs, i.e., that you can choose your own contractors and be sure the job is done to your satisfaction.
- If the size of the transaction merits it, purchase a one-year home warranty for your buyers. Check with the title officer/escrow closing the transaction to determine if the cost of the warranty can be deducted prior to your commission being disbursed. This means less hassle at tax time and less income to report on your 1099.
5. The white knight agent
“White knights” are agents who decide they are the decision-makers in the deal, not the clients. You can spot these dragons when they say things such as, “I would never let my clients take an offer that low!”
- Taming this dragon requires finesse, because you may find yourself negotiating with this individual in the future. Many of the strategies above can be adapted to fit the white knight. When this dragon starts making statements that are wrong, bring in your manager, call the legal hotline and/or get opinions from people who are experts.
- If the dragon tells you that your price is too low, request permission from your buyers to tell the listing agent the following: “My buyers have asked me to have the offer presented without any commentary from you (the listing agent) or me — they really want straight feedback about the buyer’s response. Is that OK with you?”
- The next time you bump into a dragon in your deal, be the one who calms the flames and gets the deal done.
Bernice Ross, President and CEO of BrokerageUP (brokerageup.com) and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles. Learn about her broker/manager recruiting program, new agent sales training, and her membership program that includes podcasts, videos, and the Office-Meeting-in-a-Box program at BrokerageUp.com.