Welcome to our monthly feature, Close-ing Time – in partnership with TheClose.com.
In this episode, Chris Linsell from TheClose.com discusses what should buyer agents do right now to navigate through these challenging times. Chris emphasizes how important it is to educate your buyers for the situation in the market at the moment. Chris also talks about the challenges of the high velocity markets like now and how appraisals cannot keep up. Last, Chris gives tips on what buyers can negotiate with the sellers apart from the price.
If you’d prefer to watch this interview, click here to view on YouTube!
Chris Linsell can be reached at chris@theclose.com.
Transcript
D.J. Paris 0:00
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Welcome to keeping it real, the largest podcast made by real estate agents and for real estate agents. My name is DJ Paris. I am your guide and host through the show, and today is our monthly series called closing time with Chris Lynn sell from the closed.com. Now this is a partnership between keeping it real and the clothes and let me tell you about the clothes if you are new to our show, or haven’t ever visited their website before. The clothes.com is the kind of real estate website designed to give agents teams and brokerages actionable strategic insight from industry professionals. They cover real estate marketing, lead generation technology and team building strategies. From the perspective of working agents and brokers who want to take their business to the next level, please visit the closed.com That’s th e c l o s e.com And subscribe to their newsletter so that you can get notified each time they publish an article and with us, as always is crystallin Sal, he is a staff writer and real estate coach for the close. Chris is the closest resident expert on real estate topics ranging from marketing lead gen transactional best practices, and everything in between. He’s a licensed agent in the state of Michigan. And Chris has been part of hundreds of real estate transactions from modest rural starter homes to massive waterside compounds. When he isn’t writing, you’ll find Chris fly fishing and trout season Chris told me is just around the corner. So he’s very excited. Almost there. And Chris also performs on the stage of his love his community theaters pro local productions. And Chris Welcome once again to keeping it real. Rick, so excited to have such a renaissance man on the show. Thanks, DJ, glad to be with you. I’m really glad to be back, chatting about all things real estate. Yeah, that’s, that’s great. We’re excited. Chris and I were talking just before we got on, and we were sort of saying, like, Okay, what should we cover? You know, what are we hearing out there in the field, Chris does a lot of coaching. He’s not only a producer himself, but he is very tied into the industry through his coaching and also through the clothes.com. And I was telling Chris, that I’m seeing on a lot of the forums that I participate with, with with agents that there’s a lot of talk about, okay, there’s, you know, working with buyers is obviously can be challenging during this time, because of course, we’re at a low interest rate environment, so you have more buyers, a bigger pool of buyers to choose from, and now, buyers can enter the market in you know, with more purchasing power than they had before, which is an awesome thing, if there’s adequate inventory. And we’re seeing in most areas, at least here in Chicago Chris’s in Michigan, but we’re seeing in most markets that I’m aware of that there is a shortage of inventory. So of course, there’s just huge competition, and a lot of the top producers I am talking to from all over the country are saying, oh my gosh, it’s so hard to work with buyers now because everything just gets outbid. pretty much instantly our own managing broker just yesterday, put a home on the market. And within 15 minutes, he had at least one showing, I think he had a second showing even scheduled within 15 minutes. So that’s how insane it is. And I know it’s being very it’s very frustrating for agents who work with buyers. And Chris would just love to give your thoughts about what should buyer agents be doing right now to help you know, navigate through these these challenging times.
Chris Linsell 4:02
Yeah, well, you know, there’s there’s a handful of things for sure. But I mean, before we get into that, let’s just call a spade a spade here and you touched on it a little bit and I think it’s worth even further emphasizing
D.J. Paris 4:14
there is a national inventory shortage relative to demand that has has really become
Chris Linsell 4:25
it’s really become a wave maker when it comes to how real estate transactions are being conducted in the United States. You know, I’m hearing from folks all over the country you know, in my own backyard all the way to the to the most extreme markets across the United States that there are simply not enough homes to purchase and it’s creating some some unique behavior amongst buyers and sellers and it’s creating some some some hiccups in the in the traditional transactional process so Oh, you know, there’s a bunch of things that you can do as a real estate buyer’s agent to prepare your buyer. But the very first thing that you need to do is just be completely transparent about the current market conditions, because your buyer is going to hear from other places that it’s a seller’s market, that there is a, there’s a shortage of inventory. If they’re not hearing that from you, you start your relationship, as somebody who is uninformed in your buyers eyes, and you don’t want that, you know, you are a position of authority for these folks. So, you know, we don’t want to be doom and gloom, we don’t want to be negative about their, their outlook and their prospects, it is our job to be a shepherd through this process. And that means keeping a positive attitude, even when you might go home and say, you know, this is never going to work, but to them, you know, that’s, that’s going to be your, that’s gonna be your first your first priority is, is engage and educate, let them know, these are the market conditions, this is what we’re seeing in our local market. And be realistic about this, this is going to give them a feeling like they’re on the team, it’s going to set expectations. Well, so they know, you know, if I if they know they have to be in a timely manner and pick up the phone, when you call, then they’re more likely to do that. And they’re going to feel like they can be a part of the bigger strategy, which is honestly the first step towards success.
D.J. Paris 6:36
Yeah, I was thinking as you were talking like, and again, I it’s easy for me to pontificate on it since I’m not actually out there boots on the ground, doing it like all of our listeners, and like you are, but I was thinking, if I were working with buyers right now, and just thinking about somebody who just bought, I just closed out a home not too long ago, and I know just how stressful it was, from my perspective, and I’m in the industry, and how difficult it was, I would be if I was working with buyers, I would, as Chris was saying, I’d have before I ever went and saw property, I’d have a State of the Union sort of address, saying, Guys, you know, hey, just to set the proper as Chris said, expectation, I want you to know just how how, you know, sort of, you know, sort of busy the market is right now with buyers, and how there is a shortage of available homes for sale. So what that means is when we go see a property, you might not have as much time as you as you may be had the last time you purchased a property to make a decision. And, you know, you really you know, and I would even say we really need to make decisions and, and maybe even say, you know, there’s a timeline that I recommend for currently where we’re at in the market, and then I would re emphasize that the moment they’re ready to make an offer, because that’s when they’re most excited. They’re, you know, they want this property. And now they might they’re about they’re possibly about to be very let down. So that’s where I would re emphasize, hey, remember what I said at the beginning, I want to you know, just let you know, we’re going to submit this, I’m going to stay on top of it. But there may be a lot of other offers. So just be prepared, you know. And, and I think you’re right, I think it’s all about expectation and just managing the stress of your buyers. Yep. Yeah, totally, totally. So, you know, in these in these scenarios, I often will start by thinking about what are the what are the potential pitfalls, where are the where are the problems between here and the closing table that my buyers potentially going to face. And I use those those pitfalls, those traps as the points that I need to pre educate my clients on so that we can have a strategy and I don’t say they can have a strategy. So we can have a strategy because they have to be collectively bought in to the team strategy. If you’re if you’re trying to work one strategy and they’re trying to work another, you know, you’re never gonna get to the, to the end of the line as efficiently as you could if you’re working as a team. So, so I kind of look at the look at the the timeline between first starting off and at the closing table. The first pitfall that that a buyer could could face is how aggressive the timing has to be. In this market, when you have a super competitive market when it comes to buyers. When a new property hits the market, you have to be ready to jump when it comes to just putting your feet on the ground in the property just just getting a showing because more than likely we’re gonna see offers pretty quick on this home and if you’re not willing to write an offer sight unseen and you want to be able to see it, which is a totally reasonable excellent exponet expectation. You got to be ready to get in there. So you know one one strategy I suggest for agents on this is give your clients like a text message code that you use, like, like you know, start the text message and sometimes you Look at your phone. And you can only see like the first line of a text message
Chris Linsell 10:05
established like the the code like priority, probably the word priority is the one that I use here. If I need my clients to pick up and read this entire text right away, I started with all caps priority pay, there’s a there’s a house that just hit the market. You know, I know it’s a Wednesday at 11am. But if you can come see this this afternoon after work, this is your best chance at getting them an opportunity at it. Otherwise, you know, they’re not reading on that timing. You know, it’s likely like you said, there’s gonna be some heartbreak because they didn’t even get to see what could have been their dream home.
D.J. Paris 10:41
That’s such a good suggestion. So So Chris suggesting create, and I also think there’s kind of a fun element to that as well. There’s some there’s something that’s kind of just sort of fun about it. And so Chris is saying, come up with a code word, and say, Hey, if you ever see a text for me with the word priority, or red alerts, or what well red alert sounds kind of negative, but whatever you want to choose, and you can almost even come up with a fun word with your clients say this is a priority. And then I would also explain to them that here’s what happens when a home gets listed on the MLS. You know, say there’s so we all know there’s there’s a lot of buyers, you know, they’ve you’ve already educated your buyer about the state of buyers out there, and say a lot of them are going to be instantly emailed the moments this goes on the MLS. Most MLS does have this functionality, because brokers are putting all their buyer clients on, you know, these automated searches, which you know, that based on different variables are going to just instantly pump out those emails directly to the client. So you can say it’s not only that all the realtors know about this property that’s on the market that just went on, but probably lots of buyers as well. Or maybe those buyers have Zillow alerts set up on their own, and they’re gonna get notified, you know, within that same timeframe. So it’s it’s so important, like, as Chris was saying, to have a priority communication channel between you and your client. And, and you could get really creative like that, you know, choosing a codeword or even do it in a different way. But that’s really, really important. So it’s speed the lead is usually we think about speed to lead with, you know, hey, if a buyer contacts you or a seller contacts you making sure you reach them back. Of course, you have to do that too. But now speed delete is about scheduling showings and getting people in to see properties because if you wait a day or two, it might be too late.
Chris Linsell 12:29
Yep. And actually, that kind of brings me to my next point, which is don’t rely on Zillow. And I’m not I’m not down. I’m not I’m not trashing Zillow here. I actually think Zillow provides a ton of value if it’s used correctly. But don’t let your clients and quite frankly agents don’t you be reliant on Zillow for updates here, because here’s the truth. Here’s the truth. Zillow is they syndicate their listings via your MLS, and there are some MLS is that have a rapid response syndication, which means you know, Zillow has been updated every 15 minutes or every 30 Or every 60 minutes, there are some MLS is whose syndication is closer to 24 hours. And there are plenty of reasons why that syndication process may slow down that that seem completely unrelated to market conditions. So if you’ve got a buyer who said don’t worry about sending me listings, I’ve got alert set up on Zillow, you may be literally a day behind the rest of the market. So don’t let your clients rely on those sorts of sources. As an MLS member, you can get literally instantaneous alerts via their in house system. So get get plugged into that and don’t rely on these third party systems. You want to get as close to the source as possible here.
D.J. Paris 13:54
Yeah. And sometimes the API feeds that Zillow pulls from from all of the MLS is are broken or down or inaccurate. And and, you know, believe me, Zillow does not ever want to publish anything inaccurate, but it happens. And it just, you know, it happens due to, you know, a failure on any of any of the different ends. But yeah, it’s a really great point. So just, you know, make sure your clients know that you have to have some sort of priority communication structure, so that it’s different than, hey, every day, you’re going to get an email from the MLS with the new listings, and that’s our daily email. But if you get a text message from me with a red alert or whatever on it, please, please see, you know, prioritize that. So I think that’s a great and also agents, you should be thinking about, you know, how do I notify my clients in real time? You know, am I only test sending a text message? Am I also coupling that with an email, and maybe even a voicemail? You know, what am I doing? You know, because it’s really your job to make sure the client knows and you should ask the client you Hey, what’s the fastest way I can reach you? Is it a text message? Is it a phone call? So you want to make sure you know, because right now speed is just so, so important.
Chris Linsell 15:09
Yeah, yeah. So, okay, so that actually leads to my next point, like, I think, think through those pitfalls. The second pitfall, for me is speed to offer or speed to paperwork depends on how exactly you want to think about this. But right now, just by virtue of competition, as markets heat up, as it becomes a deeper seller’s market and more competition amongst buyers, that means that offers become more competitive. And by extension, their more competitive offers happen more quickly, and tend to be more aggressive. Now, there’s lots of reasons are lots of ways you can be aggressive with an offer. But in today’s market in April 2021, you may have literally hours or even minutes, if you want to be the first one in with an offer on a high value property. Three years ago, if you were looking at at April 2018, you could have days or even a week, and still be the first person in with an offer. And that’s just not the case right now. So buyer’s agents should be preparing their clients to say, when you find something that you like, it’s time to write on it, the time that you got to sleep on that your decision, you can still have that time, but you need to have that time as a function of, say, your inspection contingency window, rather than the time prior to making your first offer. Because those who cannot pull the trigger on their first offer, often are not going to be the ones that are going to get the property under contract in the first place.
D.J. Paris 16:59
I just did an interview with a realtor who said one of her secrets. And she said it’s so funny to even call this a secret, because she’s like, it’s not a secret. But I am shocked at how many agents don’t do this. And she said, whenever I’m working with a buyer, she says I bring a contract with me, every single showing I go to Yeah, and it’s already prefilled. It’s she’s like I already have it all done. And if I’m going to see 10 places, I have 10 different contracts already failed. And I guess she must still use paper. But obviously, if you’re using an electronic signature service, like DocuSign, dot loop, etc. You know, you can even even possibly do it faster that way. But But yeah, it’s just having the expectation and telling the client, as Chris was saying that, you know, we really do want to make a decision pretty quickly based on the market conditions. And if you are going there have everything with you so that they can sign it if you need a wet signature, or for dotloop make sure your phone is fully charged. And you’re in fact I would even we use dot loop at our company, you can actually create a loop in advance, you could create a loop for every one of your showings if you wanted to, and then have everything pre loaded and only probably take you 10 minutes to do that. And then you know, you could you could pull it up and do it 100% And you know for for agents that are looking for a power up here. I suggest because dot loop both dot loop, and DocuSign are technology tools that are very easily handed off to virtual assistants, you’ve got, say a day with 10 showings in it. And maybe you’ve got a virtual assistant working with you send the send a task of creating a loop for each of those showings or contracts for each of those showings, send it over to your virtual assistant, this sort of work that they are literally trained to do quickly and efficiently. What might take you 90 minutes to do a whole swap of things and get them all organized and collate in the right place. It’s going to take your virtual assistant 15 minutes to do. And then you can spend your time focusing on your clients rather than on the paperwork. But that actually is the the other part of this for me too is I take I make a specific point when I’ve got a situation where buyers need to be thoughtful about being aggressive. The first thing that I say to them when I see them the day of the showing is today could be the day or write an offer. Are you guys excited? I love that. But in their mind, I don’t say Well, today is going to be a great day to learn about what’s important to you in your home buying process. That day is gone. That day was yesterday that day was you were supposed to have that date in your living room when I sent you that checklist that you’re supposed to fill out what are the things that are important. Today is the day we write an offer. And I put that right in their minds. The first thing that I say to them and I try to remind know on a regular basis, guys, we could be, we could be one door away from finding your dream house and writing the offer. And you know, believe it or not, that’s sort of like, you know pseudo psychology, you know subconscious approach that works that gets people pumped up about the process. And often the cold feet that hold people back from making that aggressive move, those feet can be warmed up with just a little bit of psychological encouragement. If you want to learn more about that phenomenon, I believe it’s called priming. So if you Google psychological priming, where it’s exactly what Chris is talking about, we’re priming the pump, so to speak, letting the buyer know, Oh, that’s right. Today might be the day I put an offer in. And and it’s, it’s, again, it’s an exciting thing for most people. And it does, it gets them in the right mindset that they could actually make a decision to put an offer in today. And Chris is basically saying that is possible and kind of expected as well. But he’s not exclusively saying expected. He’s just suggesting that. And I’ll just throw in this, this real quick tip only because we wouldn’t probably think to say this, and I’m sure every one of our listeners does not need this tip. But just in case, never, ever, ever, if you’re if you’re dealing with somebody who’s who’s financing a property, never ever, ever go out without that, that you know, that letter, you know, the pre approval letter, it just you this is not the time in the market to just say, well, we’ll get the pre approval letter after we find the property getting that done both well before you ever take somebody out, because the time is that you’re going to just lose the deal.
100% right now, especially financing, you know, there are so many markets where where mortgage offers are, are in such a disadvantage, because cash is king right now. And so if you are working with a buyer who is borrowing money, which to be totally clear, this is not a dirty word mortgage is not a dirty word here, the vast majority of I mean, the overwhelming majority of home purchasers are utilizing, like a mortgage instrument to to make their purchase. There’s nothing absolutely nothing wrong with that. But if you are working with somebody who is who is borrowing money, you are doing your clients a disservice by not making sure that they are 110% prepared to pull the trigger on an offer because there is there’s just no way.
Chris Linsell 22:31
I mean, I know I know, listing agents right now, who would who would give the offer to their clients because they are obligated to do so. Right? But would do it with this message. This person isn’t pre approved. This isn’t a serious offer. I have to give this to you legally, but you should not consider this. Yeah. So offers are actually kind of the next pitfall that buyers need to think about. Now, everyone gets nervous about offers right now, because we’re hearing these crazy stories write about properties, you know, selling for 5060 $70,000 over asking price, or if you’re in major metro markets with really high price points. I mean, there are there are stories right now of of in New York and Los Angeles, and, and Phoenix and Miami have properties going for seven figures over asking price. And you know that nobody can buy things with mortgages, you have to use cash and all these crazy things. So this is something we talk about with our buyers right now is that the prices that we’re seeing are very aggressive. And this all comes from this idea of market velocity. Now if you don’t know what market velocity is, it’s pretty this is pretty easy. It’s just the speed of the market. It’s That’s how fast properties are changing their price. And so as an example, the prices in April 2021, they’re higher than they were in April 2020. We’ve had we have market velocity and we’re seeing the growth of those prices speed up a little bit. So velocity is gaining. As we’re getting higher velocity. It’s harder for other elements of our transaction to keep up and this is why this is a potential pitfall I’m talking about appraisals I’m talking about. About just straight up being pre approved for enough to be to cover the purchase price of the home that you’re interested in. There is this trail of of people behind your offer that all have to kind of line up and if you need to as a buyer’s agent right now be informing your clients to say look, chances are you’re gonna need to be aggressive with price here. There are going to be places where this you know we’re gonna have to jump through some hoops but if we can get aggressive if you can spend what you’re comfortable with and be aggressive, we still have a good shot at getting this property.
D.J. Paris 25:04
And I think this is where the pre approval letter is so important because what that also Prime’s, the buyer to think, okay, I can afford up to a certain amount. And if you’re working with a good lender, they’ll have those conversations. And then when you’re showing a property, I know psychologically, I never want to pay more than what the list price says, for anything in my life, whether it’s, you know, toothpaste, or obviously a home, it just doesn’t feel psychologically satisfying. You know, we nobody walks into a car dealership and says, I’m gonna pay, I want to pay that sticker price, we always want to wheel and deal and get a little bit of a discount or a little bit of a, and that’s just maybe maybe you’ll get that now, but but there’s a good chance that there’s so much competition that you might not. So as Chris was saying, part of that sort of expectation conversation is saying, now we’re going to be looking at properties. But just so you know, these homes are typically trading right now at a percentage above list, if that’s the case in your market, and you need to have that conversation. So when you see 300,000, it’s maybe really 320 or so. So just be prepared. But don’t worry, your pre approval letter says we’re good. But you know, because I know that psychologically, I would feel a little goofy about pay, you know, putting an offer for more, just because I saw what the price was. And now we’re you know, we’re exceeding that.
Chris Linsell 26:21
Yeah, that’s true. No, I think I think it’s worth pointing out here. Because this, you know, this might not be common knowledge for everybody just want to just do a quick level set on one of the one of the issues that comes with a market like this, which is appraisal gaps. So an appraisal gap. If this isn’t a term that you’re familiar with, don’t worry, we’re all we’re all we’re all learning this together here. And appraisal gap is when the purchase price that agree it is agreed on by the buyer and the seller is higher than what the bank’s appraiser says the home is worth. And the reason that this is a problem is the bank is using the appraisal value to determine whether or not the property is worth what the price is. And the reason that’s important is the bank doesn’t want to lend money for a property lend more money for a property than what it is perceived to be worth. And one of the challenges with a market with high velocity like we’re experiencing right now is that prices are going up so fast that appraisals can’t really keep up with that because appraisals are based on historical data there are based on there are some current market conditions that are used in determining an appraised value. But they have to determine an appraised value primarily using historical values. And so if you are looking at comps that are six 912 months old, the market may have accelerated beyond those prices already, which is going to create this gap and, and your clients are then left with a dilemma. Let’s say the appraisal gap is $50,000. A bank will then say look, we’ll lend on the appraised value. But that $50,000 gap that’s going to be up to you to cover. And unfortunately, this kills a lot of deals because most buyers don’t have that sort of spare liquid assets laying around that they can cover. Maybe if it was like $5,000 That’s one thing. But regularly, we’re talking about gaps in this sort of market that are 1520 $25,000 Plus,
D.J. Paris 28:47
yeah, this is a major, I see this this question come up a lot. In some of the forums that I’m in where people are saying, oh my gosh, I’m now really nervous that this isn’t going to appraise out meaning the appraised value isn’t going to come within a reasonable ballpark of our contracted price. And then the deal, as Chris says, can fall apart. So I think this is where working with a good lender, who can have that educational conversation with your clients before going out. And buying and putting offers in is really, really helpful. And also understanding maybe even speaking to the buyers and saying Do you have a cash reserve in the event that this does not appraise out, because as Chris is saying, your data that you as the agent has access to is the MLS and you can see historical data. And if you’re using maybe the last handful of months, then maybe that’s a reasonable or maybe it isn’t reasonable, I don’t know. But but that’s really all the data you have. And that’s where communication is also really important with the other agent, the listing agent and making sure that that you’re sort of aware of what’s going on because what we’re seeing is some of these large offers that are way above list price, that a lot of them tend to be cash only offers because they don’t have to worry about appraisals and they see some sort of future benefit for overpaying or what what we might think is overpaying today, especially in investment properties, it’s we’re seeing almost exclusively those scenarios happening across the country. So you’re getting a lot of cash buyers who are just willing to outbid you, because they don’t really have to worry so much about the about the appraisal or really at all, but they know you do. So it’s also a tactic for them to win properties.
Chris Linsell 30:31
Yeah, so let me let me also kind of add in here, the appraisal gap in other markets, like in a non seller’s market, like we’re facing right now, is actually can be an advantage for the buyer and not for the seller. And the reason here is, you know, the seller has a vested interest in the property closing to they they want, they want to get their money, they want to move on to the next their next home, what are their next spot, whatever it is. And so an appraisal gap is a problem for the seller as much as it is for the buyer in a balanced market, it’s sure of a problem and a buyers market. So one thing that buyers and buyer’s agents should keep in mind right now is an appraisal gap isn’t necessarily the end of your transaction, it often is right now. But what you can do here buyer’s agents is you can evaluate the market. And you can say, collectively, on behalf of your buyer, you can say, Look, we have we have two parties that want to make this purchase, we have offered a certain amount the bank has determined and that’s the key here, you say the bank, not us. It’s some other it’s some other third party that has determined that this price won’t work. What can we do to negotiate this contract, so that our price can come down in order to meet the needs of the bank. But you can still feel like you’re being fairly compensated for your property. And I’m actually working on some some content, at least in the development stages for the close right now about how you can negotiate contracts beyond just the price. And this is a great place where you can where you can do that. Because if you know that the price can’t go above a certain level, there are other things that you can do to negotiate like, for instance, let’s say you’re a buyer, and you got that appraisal gap. And you say, Well, I can’t go any higher than this. But what if we closed on May first. And you could have six weeks of free occupancy in the home. After we close, you know, the typical, if you’re in a major metro market, six weeks of occupancy could be you know, on a dependent on the property, this could be 1000s of dollars worth of rent, if you were elsewhere. This is if you are a buyer who has some flexibility in their timeline moving forward, like let’s say you’ve got a lease that is you know, you may still have some time on the lease anyway.
D.J. Paris 33:13
You can say yeah, that’s fine, let’s let’s offer him some extended some extended occupancy, let’s offer a really advantageous
Chris Linsell 33:24
inspections window, you know, like, actually, I guess, if you’re doing the appraisal, you’ve already been doing inspections, but let’s offer some other things that as a part of this, this negotiation like
D.J. Paris 33:39
non refundable, earnest money deposit, or some sort of
Chris Linsell 33:45
some sort of bargaining for you know, like, like new appliances or in their next home or something that something like that, like there are, there are handfuls of ways that you can kind of juice forward, your your negotiating position. And that appraisal gap could be the start of that conversation. So even though it’s frustrating and is often the real kind of nail on the coffin when it comes to the buyers position. It doesn’t have to be it can be something you negotiate through.
D.J. Paris 34:20
Yeah, boy, you just said so many great things there. And I think the and I’m very excited to see that article eventually, when that’s completed about some creative ways to negotiate other than price, because there are ways to do it. Chris just gave, you know a couple that I would have never thought of like I’m going to upgrade your appliances in your new place. I mean, that is a really creative idea. And especially if they’re, you know, if they’re moving they’re likely buying another place. You know, you could say you know what, I can come take a look at your new place, we can take a look to see what it would cost to upgrade your appliances and we can do that for you. And by the way, you can stay in the old place for a bit longer and also remembering us Usually you don’t end up paying your first mortgage payment for four weeks anyway. So, you know, yes, we’d all love to live somewhere for a month, essentially rent free, but might as well give that to the seller, if that becomes a negotiation. And in fact, for them, it might help them in giving them more flexibility to move. So those are just a couple of ideas, there’s a lots of other ways you can do that, too. And I guess the the key is to be to be very, very flexible and creative. And that’s, you know, as an agent, that’s what you need to be able to do to bring to your, to your buyers to sort of, you know, give you any sort of advantage you can, because the moment one of those cash offers comes in, you know, that’s that’s going to be tough to beat. That’s just a tough thing that to be. And the other thing too is I’m curious, Chris, and that this is a non financial negotiation, it’s not even a negotiation tactic, it’s just back to prior to just submitting an offer is I’ve heard of agents who asked their clients to write a little cover letter about how much they loved the home, what they liked about it, and and just submit that along with the cover letter, it’s probably the only one they’re going to get, if they get multiple offers. Maybe you can even help write it for your client with their permission, and have them sign it and say, Hey, I just want to let you know, this is how much my clients love this property, submit it with the offer, as long as it’s authentic, and genuine and heartfelt. That a lot of times that you know, we make decisions sometimes based on on emotions over over logic, and they might even take an offer that they feel the home’s going to go to someone who really appreciates it more than somebody they don’t know. Yeah, that the the buyer Love Letter strategy is one that is is out there. And it is, honestly, it’s pretty effective when you’re dealing with single family. Single Family transactions, like consumer to consumer, where I will say that buyers need to, you know, temper their expectations with here is honestly and I don’t mean to paint all investors or income property owners with the same brush here. But if you are buying your property from somebody who doesn’t have an emotional investment in the home itself, like say somebody who is selling, you know, a home that they just use as an income property for writing, those love letters are necessary. Because these folks, honestly I’m sure, I mean, again, don’t want to paint them all with the same brush here. But they couldn’t care less whether or not you can envision your kids running in the front yard, they only care about whether or not the the ink at the bottom of the page is red or black. So you know, be just kind of temper some expectations on that. And actually, that kind of leads to the last thing, the last pitfall that I always
Unknown Speaker 37:56
caution buyers to and want to get a strategy towards, which is we need to be ready with our end game. Should everything go forward, man.
D.J. Paris 38:07
And here’s here’s what I mean by that, let’s say you put in the offer, you make it through the negotiation process, you get it under contract, great, you make it through inspections, maybe there’s a couple of small things here. One thing that the seller is going to fix other than that looking good, fantastic make us through appraisal, hallelujah, we made it after that. The last big hurdle is to just get to the closing table to get you know, the allow the title company to do their research and to get all the documents in order. And then to get to that closing table.
Chris Linsell 38:35
I am like shocked and appalled at how many transactions sit in limbo between post appraisal and the closing table and how many transactions I hear about that
D.J. Paris 38:49
don’t that don’t get completed, even after they’ve done the hard work. And it is by virtue of clients just being honestly just being difficult to deal with.
Chris Linsell 39:03
So if you are a buyer client right now you have no legs to stand on. Don’t be persnickety about when you go when you close on the property. Don’t be Don’t you know, don’t put up a big fight about whether it’s a virtual closing or around the table closing.
D.J. Paris 39:19
Don’t you have no horse in the race here?
Chris Linsell 39:22
You want to get the keys in your hand here so buyers this is this is I’m telling you buyer’s agents right now the message you need to tell communicate to your clients is I’ve got it from here. All you have to do is sit back I’ll tell you when to be where other than that, just let me handle it because the buyer at this point is experiencing a lot of emotion they are experiencing. They’re about to go through one of the biggest moments of their life financially and otherwise, honestly, these are not the kind of people in the kind of state of mind that you want planning the party You are the professional party planner here, you handle all the details. Don’t let the client talk to the title company, you talk to the title company, don’t like the client schedule, the final walkthrough with the sellers agent, you schedule the final walkthrough, you’ve got to be the captain of the ship to get it across the finish line. Otherwise, you end up like that ship in the Suez Canal, you just jammed in there, nobody’s doing anything.
D.J. Paris 40:26
Well, thankfully that that ship I believe has been completely dislodged. But we you know, if we were following the news, we know how that really is to just to go off Chris’s example, there really was a major problem for trade and commerce. And it was just a transportation and logistics for the entire world really sort of, in some ways kind of came to a standstill for a few days, that’s the same thing that can happen. And not only it’s worse than that, right? Because you can lose a deal. Or you could just piss off the seller enough to now all of a sudden, the seller is like, you know what, I have five other offers. And you know what I’ll I’ll I’ll start the process over again, just to make my life a little easier, because I have so much opportunity. So Chris is right, you really have to be careful that your clients, you know, the same negotiation strategies they might have used at the last minute, when buying a property, it’s not that you can’t do some of that you just have to be really cognizant of how far you can push the seller because you just don’t want to push the seller too far right now. They just they have too much power.
Chris Linsell 41:27
Totally, totally. And it’s it’s just, honestly, I mean, just kind of, like, in all seriousness, our fiduciary responsibility is to the well being of our clients, and the well being of your clients, includes getting you across the finish line here, you’re not negotiating for an extra 50 bucks in rent, you’re negotiating for the sale or the purchase of the home here. So be thoughtful about, you know, setting those priorities. And for goodness sake, like you’d be the captain here, let your clients let your clients know that this is what you are a professional in,
D.J. Paris 42:07
this is what you’re trained to do here. I mean, I wouldn’t let
Chris Linsell 42:12
you know, if I’m a doctor, I’m not gonna let a passionate family member operate on their son or daughters, because they really care about it here. I’m gonna let the the person who’s actually been trained to do it here, use the same mentality here.
D.J. Paris 42:26
Yeah, you need to really establish yourself as the, as the knowledge source and, and if you handle everything for your client, they will, they will, they’re less likely to seek out their own information. Not that they shouldn’t. But as as the only means of getting across that finish line. You want to be so professional and so knowledgeable that you are like, here are the steps. Here’s what we’re where we’re at, here’s what happens next, here’s what emotions might come up, here’s what pitfalls might come up. And then they can breathe a sigh of relief, which, because they’re already stressed out, it’s a purchase there. It’s a major financial purchase for almost everybody for a primary residence, right, this is a big deal. Even if it’s the fifth time they’ve bought a home, it’s still a huge, huge deal. So even though they may have been through it before, those emotions come bubbling up. And you know, people typically only move every, what, seven years or so maybe, maybe longer. So the reality of it is is we all forget what it’s like every time we do it as a buyer and and also as a seller, so you need to be that expectation setter. So Chris, this was awesome. What a what a great JAM PACKED episode. We are such such big fans of Chris. You know, we always promote the clothes.com which of course, we will always continue to do. But Chris i Is there any way else that people can follow your thoughts? Because you have just a lot of opinions. They’re always well thought out, well researched, well informed. What’s the best way I know you are on Twitter? And also Instagram. Do you want to promote any of those as well? Yeah, totally. Like, I’m really glad you asked. I want you to go to YouTube. And check out the clothes has a great YouTube channel. We do have other people who’ve contribute to it occasionally. But for the most part, it’s just good ol me if you like watching this podcast and seeing my beautiful bearded face, you can get a ton of that over on YouTube. You can find it super easy. Just search the clothes real estate. And you’ll get it there. We just dropped the video today actually all about real estate scams, the most persistent and pernicious real estate scams and what you can do to protect your clients from them. So I had a lot of fun making this video. This is a really interesting topic. We have a ton of stuff on there, including long form walkthroughs of technology products, reviews of CRMs all sorts of stuff. So check it out. Over on YouTube, the clothes.com We’re everywhere baby. You gotta start following us there too. Yeah, I just I just hit the subscribe button. So if you go to YouTube, you just do a search for the clothes you’ll see Your channel, it’s their logo is a red background with a white seed that’s that’s slightly italicized. And Chris has got tons of great videos here. And so everyone needs to subscribe. You can also get to the YouTube channel from the clothes.com. But yeah, subscribe and walk, watch some of these great videos and pay attention to Chris. And then Chris, is there anywhere else where people should follow you? Yeah, you can find me on Twitter. I’m there, Lindsey. Well, Chris, but you can just search my name Chris law and sell on there, you can find me on LinkedIn. Those are the places that I’m probably most active. But also, you know, I love engaging with our Facebook audience. On the closes Facebook group, we have a group called the close real estate agents mastermind group, it’s free to join, we’ve got 1000s of people in there now, conversations are really lively. They’re ranging from all different topics, including, like, operational, get it done today sort of things all the way up to like, kind of bigger conversations about the real estate industry in general. So if you’re looking for an outlet on Facebook, I love being active in there too. And yeah, you know, you there’s just unlimited potential to hear my thoughts on thing. Well, we’re grateful to have one of those channels to dedicate to your voice because it’s an important voice. It’s a knowledgeable voice, and, and I know our audience appreciates it. So we’re gonna, we’re gonna say goodbye to Chris. But we will see him again next month. Well, so say thank you to all of our listeners and viewers we have so much appreciate your dedication to our show. We love the feedback we get from you. And we are just eternally grateful for you sharing the message of this podcast with other agents. So please tell a friend, think of one other agent and send them a link to our show or just have them pull up a podcast app and do a search for keeping it real. Either way, they can find us pretty easy and turn, turn them on to the show, help them become successful. We’ll continue to help you become successful. So Chris, thank you so much, and we’ll see you next time. Thanks, DJ can’t wait.
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