Welcome to the August episode of Learn With A Lender with Joel Schaub of Guaranteed Rate!
In this episode Joel talks about what’s happening in the lending world right now and what can agents do. Joel talks about the mistakes agent are doing when submitting pre-approval letters as a negotiation tactic in this current market. Joel once more emphasized the importance of educating your clients. Finally, Joel talks about the importance of building trusted relationships with the lending partner and how they can help you grow your business.
If you’d prefer to watch this interview, click here to view on YouTube!
Joel can be reached at joel@rate.com and 773.654.2049.
Transcript
D.J. Paris 0:00
On this episode of Keeping it real is brought to you by Joel Schaub at guaranteed rate. As a realtor it’s important to partner with only the most trusted name in mortgage lending. Joel has 1000s of satisfied clients and gives $1,500 of his commission. Back to your buyers on every closing. He is known for his ability to close even complex deals start to finish in only 14 days to learn what 1000s of others already know. Make a note to call Joel at 773-654-2049 or email joel@rate.com Guaranteed Rate is an equal housing lender licensed in all 50 States Consumer Access Number 2611. And now on with the show.
Welcome to another episode of Keeping it real, the largest podcast made by real estate agents and for real estate agents. My name is EJ Parris, I’m your guide, and hosted through the show. And today once again is our monthly series learn with a lender with Joel shop from guaranteed rate. Now Joel is the vice president of lending at guaranteed rate. He’s been doing loans at a high level since 2003. And it’s gotten to that level because of what he does specifically for agents, which is he gives back part of his commission to the buyer on every transaction making the agent look like a hero. Last year alone, Joel gave back almost $300,000 in closing costs to buyers who worked with them and that puts Joe’s volume at the in the top 1/10 of 1% of all loan officers in the country. In fact, out of 400,000 loan officers Joel is ranked number 137. Last year, he closed 535 transactions that’s during a pandemic as highest amount ever for $195 million. Already this year, he’s closed, he’s almost already almost eclipsed that he’s at 408 transactions. We’re only in August, and he’s already done 166 million in loans. So this will be another record breaking year for Joel which is why we have him on the show. Because if you’re looking for a loan officer, we could not more highly recommend Joel he’s the very best we’ve ever worked with Joel can be reached at Joel at a rate.com That’s his email address again joel@rate.com. Or you can always call or send him a text message to his phone, which is 773-654-2049. Let’s say hello to the biggest Cubs fan. I know welcome Joel.
Joel Schaub 2:41
Thanks so much DJ and even with the Cubs trading off most of their players, where we keep the faith and we’re staying positive right?
D.J. Paris 2:50
That you know, it’s funny I am embarrassing ly ignorant to all things sports related in Chicago even though I live here and I know you are very tied into the Cubs, but I believe I heard they had traded was like nine players was that the big news last week,
Joel Schaub 3:06
it was needed. Okay, so I do a lot of mortgages for the executive. So the C level that are actually behind the scenes setting the team up for success and future years. And as sad as it is to see some of those big time fan favorites. Go to other teams, it certainly was needed. And just like in business, if something’s not working, you got to figure out what the steps are to make it work.
D.J. Paris 3:30
Yeah, and this is what it’s really glad you said that because this is a time where I think I’m starting to hear from our listeners and our agents here at even our own office where things are starting to feel a little bit more like they’re returning to normal. As I was leaving my my building today I live in a condo building, which of course you helped me finance. Mike my unit, I the developer walked by me who just they’re still working on things in the building. I hadn’t seen him in a few months, he reached out and shook my hand he goes he reached out to shake my hand and I said, Oh, yeah, that’s right. We can shake hands now. And maybe we still shouldn’t have even though we’re both vaccinated, but I was like, Oh, he goes, we got to start shaking hands again. So that was kind of exciting. But I think there is still, you know, I’m hearing some frustration from our own agents about offers, you know, what’s going on, this is still a low inventory environment. You know, we have a lot of cash that’s floating around out there that’s being you know, sent in as contracts and then you have traditional financing opportunities to, you know, what, what’s going on out there in the world of lending and how should agents be sort of talking about it with their clients.
Joel Schaub 4:43
The agents I’m working with right now are reporting that they’re staying busy. It’s just not the frenzy that we saw before. Okay. And the successful agents are finding ways to continue to stay busy and submitting offers that are designed to win and there is a lot of offers that lose was exactly like you said to want a cash buyer. Okay, how can we submit these offers as agents that the other side will see just as good as a cash offer. And that’s what I helped my agents do and go through and make sure that when you are submitting, you never know if you’re going to be competing against a cash offer, but you can let the seller side know these three things. Okay. The number one thing is finding that local lender that you’re really connected to. So if you’re an agent, no matter where you’re at, making sure that you have somebody that’s like your go to person that you can refer deals to, that actually cares, that knows what they’re doing and can get deals done. You’re right there stepping up above them just walking into their bank. Okay. Number two is actually making sure that the borrower submitted all of their documents upfront, okay. So that, you know, when you’re submitting an offer, that the letter of pre approval is better than just a piece of paper it’s written on, we know that the docs are in. And all we need to do is get a signed contract and an appraisal. So the number three thing is being very clear. You’re never going to win. If you have that appraisal issue, right? You need to be able to know whether or not your buyer has the ability to bridge the gap. Right? We talk about this a lot recently, right? DJ Gap coverage on an appraisal, right? You’ve seen agents talk about this?
D.J. Paris 6:27
Yeah, is it are you seeing as many of these appraisal issues where things aren’t appraising out due to the bidding wars, or is that started to calm down a bit,
Joel Schaub 6:40
we’re not seeing things that don’t appraise out. But what we’re seeing are agents that don’t know what their borrowers can actually do. And what I mean by this is, you cannot as an agent, assume that your buyer who hasn’t bought before or only bought once before, understands this market, okay? understands what it means if they do go 25 grand above list, and the property only appraises 10 grand above list, okay, it’s about setting expectations, and letting them know what the options are. And more importantly, having a lender that talks to them this way, so that they know, if this happens, these are the options so that your client isn’t set up for a disaster, you need to make sure that there’s a successful plan going forward so that you’re not just closing transactions, but you’re closing them so that they send you referrals so that they’re so happy with the service that you’ve provided, that they will go out and scream your name from the rooftops.
D.J. Paris 7:42
Yeah, that’s, that’s obviously the goal. And really, you know, I have always thought this job is is customer service, whether it’s you on the lending side or agents, you know, working with the the buyer or seller, if you provide great customer service, you get those people often that’ll shout from the rafters. That how great you are the rooftops. But we were talking before we started recording and I again, just shows you how little I know about the industry Joel mentioned a tactic that isn’t that, you know, we want to discuss that was maybe done in the past that maybe maybe not be as much in favor now, which was about pre approval letters as a really a negotiation tactic. When working with with buyers. Can you talk a little bit about that?
Joel Schaub 8:33
All right, agents, you definitely have done this. I know several agents that are listening that are still going to do this. And I’m going to tell you the wrong way to do it. Okay. Is it alright to be a little controversial? Is it all right? Yeah, I love that. Yeah. Okay. So a lot of times in as soon as I say this, you’ll say, Yeah, I think I’ve done that before. We have a buyer. And let’s say they’re approved up to $600,000. Okay, and the letter comes in, and we’re looking at homes at $600,000. And we see a property that’s listed for 550. And we’re going to come in way less than that. Now. We’re not seeing that much anymore DJ, but we’re still seeing agents that say, Well, I know it’s listed for 550. We’re going to offer 500. Okay, maybe in your market, that’ll work, but then they’re having the lender update the letter to say that the buyer is only worth you know, up to $500,000 and hoping that the seller side will lower their price, because the buyer can’t go any higher. That’s the wrong way to do it. That is the wrong way to submit an offer. Because you want to compete with strength in this market. You want to show the best buyer going forward that they’re approved for way more than the property’s worth. Now again, every situation could be different. But if you walk into a supermarket and you have $100 in your pocket, and you buy a loaf of bread for $3 The cashier does doesn’t say well, I know that you have $100 in your pocket. So we want you to pay more for that loaf of bread, right? But agents all the time they want to compete and tell the seller, well, we can only go up to this price. So will your seller come down to this price? It used to work used to work a lot. But in this market, I see that backfiring and I see the same agents doing that time and time again. And I see other smarter agents going forward and submitting offers and saying to the sellers, my buyer is approved for much more than this home is worth. However, this is the offer that we want to submit. So I
D.J. Paris 10:38
guess the message is to agents don’t be frightened, or don’t be frightened to, to submit this letter that’s going to show a much larger number that your clients capable of? Because yes, that technically does show a little bit of your hand. However, it’s really a strength, a strong hand, because you’re basically saying, Yes, we still want this property at this price. And we can negotiate. But here’s the good news is my buyer is legitimate, they have their their financing in order, and they are fully capable of making this thing closes. Is that my understanding that it really positions them as? Yes, of course they can, they could, you know, may adjust the negotiations a bit, but it also strengthens the buyers position, because they’re now seen as a real contender for the property.
Joel Schaub 11:27
You are absolutely correct. So Correct. Just flip this around now. So now we’re the listing agent. And now we’ve received an offer that’s less than we want, considerably less than we want. And we’re told we should take it off the market, because the buyer can only come up to this number. So now we’re taking less than we want. And we’re taking a buyer, that’s pretty much maxed out is what you’re telling me they couldn’t go any higher.
D.J. Paris 11:57
And that scares me as a seller. Absolutely. It
Joel Schaub 12:00
should scare you as a seller and as a seller’s agent, it’s not an easy conversation to have with the seller saying this is the offer that we want to take. So now let’s reverse this. Let’s take the buyer that does come in low. But now it’s a sure thing. Well, Mr. Seller, I know this isn’t the offer we want but look at how strong they are. They’re approved for more, they can close quickly. And they’re working with XYZ lender who we know personally to get the job done this, even though not at the offer that we want. This is a really good offer. So that helps us as a buyer’s agent, convince and help the seller sell the story to the sellers. And ultimately, they’re the ones that are going to make the decision.
D.J. Paris 12:46
Wow, you know, Joe, I have to stop for a moment because it’s I’m always I’m always so impressed. I’ve I always lavished praise on you as as as a loan officer, because I’ve worked with you personally know how great you are. But this is a really important thing you just said. And I’m so grateful that you come on our show once a month, because we’ve been doing this for gosh, how many years now and you start come up with great ideas. And this is a great idea. This has tremendous value. So talk with your lender, I guess I guess the message is find a trusted partner, talk to them about pre approval letters, find out what’s going on in your market and operate Don’t you know, talk to them about? What should we put on this pre approval letter? What’s the max number that we want, you know, to show a position of strength. And if you’re not with a lender who thinks that that would assist your buyer, then maybe it’s time to find another lending partner, because lenders really have these kind of this this knowledge that oftentimes realtors, you know, we’re stuck in realtor mode, we’re not really thinking often about financing. And these are amazing tactics and strategies. And it’s really, you’re actually by by showing the full amount that the client is capable of, you’re actually really showing strength in this market specifically. So yes, will you win every offer? No. You know, will it could you lose to cash offers? Sure. But at the very least you’re showing that you have all your ducks in a row and this person is absolutely, you know, ready to close? Should they accept the offer?
Joel Schaub 14:20
I wish I could take credit for this. This isn’t my idea. This is the other agents that are bringing me these scenarios, right. And so I challenge you if you’re an agent, I’ve seen this this is we’re doing hundreds of transactions annually, and I’m seeing what works and what doesn’t. So I challenge you if you have a buyer and you’re submitting multiple offers but not getting it approved, go back to the lender and say what are they actually approved up to? Can I get a letter that’s considerably higher. And then when you submit your next offer, you might be pleasantly surprised that the seller side sees your offer in a much better light even better than a cash offer. Because of how strong they are, and this goes in complete opposite of what a lot of agents have done in the past, for things that work in this market, showing strength is a really great way to have your buyers win deals. And again, it’s not about just closing this one transaction, how do we get to a point where we’re doing 50 and 60 transactions a month, it’s getting the referrals and doing such a good job on educating, teaching and helping them that they want to refer more business back to us. And that’s what I challenge you as agents to do is find the one thing that you’re really good at educating, you don’t need to be perfect at everything. But if you’re not leading with education, and helping, and you’re just selling, selling works when it’s busy, but when it starts to slow down, you need to have something to fall back on. So educating your clients and getting more referrals based on that is going to be the way that you continue to grow this.
D.J. Paris 15:59
Absolutely. And you know, I was just thinking about my car. So this is a sort of a quick colorare example of what Joel is talking about. So I have I have a car that you know, requires maintenance. I don’t know, once a year, I go in and get a tune up. And then I have them look at everything. And anytime something goes wrong with my car, I have a mechanic who I send for my tuneups, I send for anything that goes wrong. And I’m really grateful to have found this mechanic because they’re very well respected in here in the local Chicago community, where I live and where Joe lives to. But I always trust them. And I know that when I all I have to do if anything ever goes wrong with my car is I literally just drive it there, I drop it off, and I wait for the phone call. And whenever they tell me, I just go yep, I trust you guys. And I have gone my whole life without having that relationship up until a couple of years ago when I found these guys. So what I will tell everyone who is listening, who is an agent, is we know how valuable those relationships are, whether it’s an accountant and attorney, financial advisor, an insurance agent, you know, a lender, anyone in the service industry that you rely upon personally or for your business, we know how great is it to know, I can just send my car to the to the dealer or to the the auto body shop, they’re honest, I love these guys, they take good care of me, and they’re never going to do me wrong. And I don’t have to worry about it anymore. You should have that kind of relationship with with a lender. And Joel, I will tell you, Joel was was what you know. So full disclosure, Joel was my lender. And he absolutely the education piece of it is the difference that makes the difference for him. He legitimately will speak with your clients and make sure they understand everything. And most lenders sadly, or fortunately for Joel but sadly for the other lenders don’t spend that kind of time. So if you don’t have that kind of partnership, you need one, you need that kind of partnership. So you can just everyone that’s a buyer, you can just say I’ve got the guy and you send it and then you don’t have to worry about it as much as you might with other lenders. So if you are looking to work with with Joel and his team, and by the way, they are licensed guaranteed rate at all 50 states so they can accommodate you. And if they can’t, they’ll certainly let you know who else to speak with. But Joel, if someone’s looking to partner with you, whether they’re an agent looking for a great relationship, or maybe they’re just a buyer or a seller and investor who wants to work with you as well, what’s the best way they should reach out?
Joel Schaub 18:36
Yes, of course, DJ, they can definitely just email me. And they’d be surprised because each and every single week after I do this, I respond to half a dozen to 10 different emails of people saying, Hey, I just have a question for you. How did you do this? Or how did you grow your business to that level? Or what is your team structure look like? Etc. Joel JOE l@rate.com, that short for guaranteed rate so much easier emailed to remember. So just joel@rate.com and then 773-654-2049 is a direct line to me. But it’s not just me if I’m an agent, the number one thing that I would be doing is partnering with a mortgage professional, somebody that they got to know like and trust somebody that’s in their community, or somebody that is knowledgeable even if they’re not in their exact footprint, because it needs years of experience. It’s not just a relationship based on the fly by night. The lowest bank today are these flashy new products. You want to stick with something that’s tried and true. Somebody that’s been doing it a long time that makes you look good. And don’t forget somebody that’s willing to help. Okay, whether that’s co branding, material marketing For spending money now, mortgage guys all over are going to start yelling at me but it’s true lenders that send lenders I should say that you’re sending business to, should be helping, you should be finding RESPA compliant ways to spend money on your open houses, or any of the things you’re doing together. If you feel like you’re just giving to your mortgage professional, time to find somebody else, it should be somebody who’s giving back to you.
D.J. Paris 20:29
And, you know, we all probably receive marketing materials in the mail, whether we’re, you know, a homeowner or a renter or an agent, or a, you know, just a investor, we’re getting, we’re seeing some of these marketing materials. These are what lenders can assist with in a RESPA compliant way. So find a RESPA compliant lender that wants to help you grow. Joel and his team are perfect examples of that. And, you know, when you have this kind of relationship back to my car relationship, I never have to worry about my car anymore. And I haven’t had to worry about it first. And I know that sounds sort of silly, but think about all the parts of our lives, like my account, I Well, I hope I never get audited. But I don’t think I have to worry about my accountant because she’s good, or at least I believe she’s good. I believe my, my, you know, my autobody person is is is ethical and honest. And now I I can focus my energy on other things, get that kind of relationship in place with a lender that not only will educate your clients, but will also put some marketing dollars behind you. And Joel and his team would would obviously always be happy to chat with you about that as well. And he’s also just open to answering any and all questions, so please reach out to him go when I say he’s the best we’ve ever worked with guys. It’s not. I’m not saying that lightly. He is legitimately the best we’ve ever worked with. So please,
Joel Schaub 21:52
stop it. Stop. Oh my gosh, I’m gonna blush for all of you guys watching me here.
D.J. Paris 21:57
I always say you don’t need the business. But you’ll take the business. You’re very Joel is very successful here in Chicago, but he is open to speaking to agents from all over. So please reach out to him. If you’re looking to build that kind of relationship with a lender. I promise it will likely be the last relationship you’ll have to build. So joel@radio.com We’re huge fans always came came with it again today with a great tip. Couple of great tips. So thanks, Joel. And we will before we go please everybody before you sign off, just tell a friend think of one other real estate agent that could benefit from hearing from great conversations like the ones we have with Joel every single month and send them a link to our website, keeping it real pod.com They can stream every episode we’ve ever done, or just have them pull up a podcast app search for keeping it real and hit that subscribe button. Alright Joel, thank you so much, and we will see everyone on the next episode.
Joel Schaub 22:49
Thanks so much DJ
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