Greetings agents today were talking about short sales what they are and how to do them as they could very potentially be a more significant part of what we do is Agents depending on how the economy Carries On with as it relates to this this pandemic and we’re seeing in the news more forbearances I should quickly to find what a forbearance is a forbearance is when someone is struggling to make a mortgage payment and contacts the lender in the lender puts together a plan and a plan is usually a either a payment deferral so you the borrower might go several months without making a payment or often it’s a reduced payment and there’s an agreement where let’s see the power goes a year and their mortgage payments cut in half and then at the end of that year they continued back to what they were doing before and the Deferred portion of the painting gets added on to the principal mortgage amount but so we’re seeing that there’s a huge increase in forbearances okay and there’s with a massive unemployment of course there’s the potential for more foreclosures naturally I hope that this doesn’t happen I hope that we have a quick turnaround and things get better and if if people are unable to make mortgage payments or the residential real estate market declines then you’re going to see more short sales and foreclosures in general and there’s so much to be said about foreclosures and what makes what makes a property bank-owned like a bank-owned REO asset what a trustee sale is the courthouse auction the notice of default the notice of trustee sale all these time lines that go into foreclosure but I’ll save that for another podcast episode for now let’s focus exclusively on short sales because the short-sale opportunity precedes all of the foreclosure opportunities are foreclosure situations that I was referring to so as agents we you know we really Incorporated short sales as a as a mainstream facet of what we do in the rest in the recession in 2008 because prior to that and I actually was doing short sales prior to that I I think I did my first short sale in 2005 it was I mean if I said short sell to and ask for company they had no idea what I was talking about and and just to give you some history on it so markets marketing I did and this was your 2006 is when I really ran with this campaign and I continued it for some time but the leads I purchased were they came in Excel format and they were people that were 6090 and 120 days late on a mortgage payment and you had a phone number and so what I would do is I would call these people and I would talk to him talk to them about their scenario ask them how much their home is worth and their mortgage balance it was already clear that they were in trouble financially or they were unable to make their payment because that’s how they ended up on the lead lists these were people that were making a payment and and what I offered was a solution the solution was let me help you get out of being under this house that is is that you owe on the mortgage then to home is worth because at this time when short sales weren’t such a well-known concept you’d have to write a check if you want to sell your home so mean the last last eight years we watch the home. I used to go on this unprecedented rally and the implication is everyone has Equity because you probably put a down payment when you bought the property and then you had appreciation when you owned it so the seller sank how much do I get when this closes When I close escrow how much is it Escrow Company going to give me as my net proceeds they’re thinking about taking their equity and using it to buy another property or cashing out or whatever and so the conversation isn’t how much will it cost me to sell the conversation is how much do I get if I sell which makes sense of values have been going up and we’ve been in this business booming real estate market but in a big picture perspective that’s not realistic in the long run I mean that’s that’s not always how it is because there are closing costs you don’t always have Equity to absorb the closing costs does closing costs are cost to liquidate the I set which is there their property and that’s just being deducted from a huge chunk of equity so there’s a bunch of equity left over and those are the seller proceeds but what happens if real estate just stayed the same what it what if it was an appreciating and let’s say it didn’t go down either but you bought the property and if you bought it with a small down payment like an FHA which is 3 and a half percent down and it costs 4% to sell that property then you’re writing a check for the for the difference you go to ask for your the closing as a seller and you don’t say hey how much do I get out of this that’s was going to say you need to write a check for this amount to cover the cost of selling your home that’s not rare for people that have been home owners for decades terminate they understand how this goes when it’s we were we’ve been kind of spoiled us unique situation of just when do Ghibli low mortgage rates and other factors that have contributed to just two huge rally in the real estate market anyway so when I would contact these people often they owed a lot more than their home was this was worth so they were trapped because you’re you’re kind of stuck in a point where you’re getting foreclosed on foreclosures moved swifter back then by the way the process has been could become very drawn-out over the years but what what you could do as a solution and this is what I did is is let’s say someone over 250,000 more than their home was worth well you put their home on the market at fair market value and so you’re going to get an offer at $150 and less than what’s owed on the mortgage because that’s fair market value and you contact the lender and I’ll I’ll go to this slowly so I can explain because these are the steps that you eat that you’ll do in this the steps her are the same now as they were then for the most part and in terms of what you do to facilitate a short sale as the agent I would contact the lender or lenders if there is more than one and I would send them an authorization form now when you take a listing of someone that is is upside down which is another term is the underwater as well but that’s the kind of industry jargon term for people that that owe more than home is worth when you take a listing and you know that’s that’s going to be an obstacle you’ll want to ask that that seller for their most recent mortgage statements and then you’re going to have an authorization form an end car actually has an authorization form you can use to convey information on behalf of your client and thus I was going to put it in their information and the loan number in the lender and their social & it and you’re going to be listed as someone that is authorized to speak about private financial matters with the lender on the seller’s behalf because if you call a seller’s lender uses questions they’re going to say hey you’re a stranger we can’t share this private information with you so you going to take the listing and get that sellers authorization form the soldado relation form at to speak on your behalf and a mortgage statement you are going to contact the mortgage company or the servicer servicers just a company that collects payments just doesn’t make it simple you’ll see mortgage servicer often that’s the company that manages the mortgage for the mortgage holder so offended the mortgage company that that lent the money isn’t the same company that deals with collecting the payment and sending the bill and all the headaches of managing the payments and payment collection because that a term is used to so often now and it’s in again somewheres companies do service their own loans but either way the servicers the first point of contact and you’re going to contact them and send them over the borrowers authorization form that get a permit to speak on their behalf and let them know that you anticipate a short sale and you ask for a document checklist I or a short sale package sometimes they call that because they might the lender might have a bundle of documents that need to be filled out by the seller and request another form other documents that you need to furnish Okay so so you you’ve you’ve cut your listing agreement you’ve collected the authorization form you’ve made contact with the lender you put the property on the market and then you’re going to get an offer fair market value which is much lower than what is owed on the mortgage or mortgages then what you do is you contact an escrow company and you let them know that you need a closing statement an estimated closing statement these used to be called an estimated HUD is a I just be closing statement but the HUD How do you spell closing statement but the HUD was substituted actually replaced replaced with just there’s a a standard form now that is simply called a closing statement people still use the term hard but it’s dated anyway so you you have an estimated closing statement and escrow is going to fill it in with does Scheels price on the purchase contract that you received the commission the closing cost permitted taxes the payoff now here’s the interesting part about this estimate closing statement is that you’re putting all this information just like you would in a normal escrow but here’s the catch because the the seller owes more than the homes worth if you put all the figures in exactly as they stand you’re going to show the amount due to the seller being a negative number it could be in this case a hundred fifty thousand is it the seller owes 150 Grand more than their homes worth and they try to sell it well as Christmas a look if you want me to pay off the mortgages in this escrow which must be done to close escrow then you need to write a check for the difference and and so that defeats the purpose of a short sale because if someone can write a check on people sell at a loss all the time especially in situations where you have high purchase price properties and a lot of times our cash purchases and someone might have paid 5 million for a property and then a few years later have to sell and highest offer they can get his 4.7 and now they’re not getting their whole fighting back at closing only getting 4.7 of it now of course if you pay cash it you know you’re just getting less back of of your money your Papa Was a storage vehicle for your for your money for your cash and you’re getting a little bit less back of course taking that that haircut isn’t pleasant but it doesn’t sting as as you know that I guess we’re still just a little bit more when you can write a check and that is much more likely to happen if you have a mortgage because if you have to pay the mortgage off and you’re getting a lower lower purchase price than you paid there’s there’s more likelihood that to pay everything off you know all the debt to probably tax is everything at closing with a low purchase price lower than what you paid you may have to bring cash to closing so that could happen very easily in a scenario where what’s an FHA buyer let’s go back to that because there were tons of FHA Loans. Three and a half percent and then they’re there was other types of conventional financing with just a 5% down loan and then and then and then I mean there’s people that put 10 or 20% down and if a market changes significantly then and and and values drop that 10 or 20% and then Dare To Break Even point and they have to pay their closing costs out-of-pocket so anyway back to the original example of someone that owes $140 and more than their home is currently worth so if you go to ask girl and you have them fill everything out with the payoffs the current playoffs with the mortgage One Mortgage just to make it simple and then I’ll explain what you do if there’s more than one mortgage but let’s pretend in this scenario I’m talking about there’s only one mortgage and and that mortgage is far more than the Holmes worth escrows estimated closing statement will show the seller having to bring all that cash at closing to pay off that mortgage or else they can’t close what you’re doing a short sale is you’re going to Escrow you’re putting in the amount of money coming in which is that offer any amount of money going out balancing matching so there’s a break even with the money coming in so that at the at the bottom of that ledger cuz it closing statements just a ledger money coming in money going out to Second basic accounting Ledger well you’re you’re changing the numbers your arbitrarily making up a payoff to balance those numbers so if you’re off by 150000 then ask room I shave off $150,000 of the mortgage so if what’s owed on the mortgage is 480000 s Chrome I put a payoff for the Morrie to 330000 hundred fifty thousand dollars less and I’m just using kind of some round numbers here so just bear with me on this it’ll make sense and escrows shaving that down again so that at the bottom of the Ledger where you typically see how much money that’s what we’ve been seeing in this huge rally we’re going has Equity it’s going to show this are getting zero rather than the seller having to pay and so you take that estimated closing statement and you take that reflects the reduced payoff the short payoff to the lender and you bundle that with all this other paperwork to the lender has requested an offering its financial hardship documents because if you have $1000000 sitting in it as some account somewhere and you ask the the lender to reduce your mortgage by six figures or whatever might be interesting to say no just write a check you have all this money so financial hardship is important factor in all this you have to show that you’re asking for a reduction because you can’t you can’t pay it you don’t have the money you’re stuck you’re stuck in this house because it would cost you a hundred fifty thousand at closing that escrowed have you bring to the table to facilitate the close of which you don’t have and in the meantime you can’t make the payments so you’re creating an incentive for the lender to negotiate with you and for the letter to say okay this person’s not paying us so we’re already this hearty is is is a losing proposition for us as a institution that loans money for interest and this person will never be able to pay us because they’re their there they have no money and the markets gone down so the clatter we have has has lost his value so there’s all these factors that incentivize the lender to just take a loss and move on and so you’re going to send that reduced payoff estimate closing statement and there and ask for copy of the ball of the real estate paperwork and the MLS and your son to the lender and they have a a loss mitigation or short sale department or some sort of foreclosure Department that reviews all this and and they’re not dumb because agents of course try to get in the system on this just happens they they they find someone that wants to short sell they called someone intelligent investor and investor makes a lowball offer and it will packaged up a lowball offer and will you know that the seller doesn’t care because the seller just wants to be out of this mess and not owe the $150,000 you know in addition to what the property is worth so sellers me to make sure I’m on board with whatever as long as you can just get this property out of my hair and I don’t have to pay anything and I can just walk away from it meant then they’re happy because at the end of the day the seller is not going to make anything they just don’t want to have to cough up money to make it closed and so these agents will get some best for come along and make a lowball offer the seller goes along with it they just want to move the property all the banks going to do a BPO broker price opinion they’re probably going to do an appraisal or what you know one of those two things or both they’re in a look at comparable starting to look at your MLS listing and see how many days could you had it never asked you questions like okay you have a bunch of comparables that are significantly higher than what you know what you accepted as an offer why would you accept such a low offer and and how many years did you have this property in the market and they’re going to look at what you’ve done is an agent to procure the highest offer to submit because why would the bank be in any hurry to take a loss they want to know what they’re getting the most of the highest offer the market can deliver under the circumstances now it’s real simple if you have as the agent have have not truly advertises property on an open market so that the best buyer can come forward and make the highest offer then then the the bank is just going to Simply rely on comparables from their BPO and or appraisal unless they look we’re willing to do with short payoff but based on you getting an offer that’s much higher and that offer what should be in line with what the comparable say which means we’d only have to take a $50,000 loss not $150,000 loss so go back out there mark of the property and find it by its going to pay a lot more and yes we’ll take a loss when you get a higher offer and that that happens a lot that’s kind of a common scenario and that’s why the hardest parts in negotiating short sales is is I give you a scenario of an agent that might have cut corners but there are a lot of agents that do get the highest offer that the market will will deliver these agents will be out Mark in the houses prion that you know the MLS of course I properties syndicated to countless other internet sites so the the properties getting all the publicity it needs to do to get a buyer and when the buyer comes along the fires going to make a fair market offer because if the properties listed low a proposed listen really low you’re going to go Financial offers right if you list of property way below market value you’re going to have a lot of offers and you can have multiple offers and you can do counter-offers and actually did the price of property up and a good Agent could probably did that property up to market value or even higher just because there is a exuberance that comes in a bidding war if you list a property too high which is pretty common cuz every seller wants to get top dollar for the probably going to sit there for a week so you can hear crickets and you might get foot traffic and no one’s interested and then after the first couple weeks no one’s you can show your property in more so even if you get the the list price wrong the markets pretty good about telling you where you should you should be listed at because you’re there in a good activity in interest or not and you can kind of adjust from there so you’ll get this offer that is at fair market value and the lender might say look we think you can go higher and they refuse to a short sale unless you can even higher offer and you have to tell the lender no look I’m I’m showing you I had this on the market for 60 days I finally got an offer after 2 months of marketing this thing like crazy it’s it’s the same as with the concert showing yeah please give me the short payoff and that’s theirs that’s where the negotiation comes in its send me a lot of evidence being extremely tenacious and I want to touch on tenacity actually because that’s the number one characteristic or trait that makes a good short sale negotiator better than than the other I always negotiate of my own short sales because I had a vested interest as the listing agent and making a deal work and and I was just coming up completely aggressive and tenacious about it calling as much as I took emailing faxing whatever whatever I need to do to push because as they say the squeaky wheel gets oiled and I was always polite but I mean if if there is a lender in Southern California I would just drive there and and to drop paperwork off I mean I would it whatever I could do to to be nagging the whoever the contact was in the short sale department and and I’m getting my case heard or getting my concerns addressed I did and that’s why I recommend for anyone to Goshen short sell you have to be a complete psycho about it cycling a good way not talking about I just want to clarify so what you want to do is keep negotiating get the short payoff a approval you finally get a letter that acceptable to Escrow that the lender issues that reduces the payoff because in any escrow where there’s a mortgage escrow is going to have to get a payoff demand from the lender and and if you’ve been successful in negotiating a short sale during to get a reduced payoff demand demand and adjust the estimate closing statement so the numbers balance and when they do you are clear to close your short sale transaction now the in that middle part where out you’re going back and forth with negotiating and waiting it’s it can take weeks or months and I mean I did a short sale that I think took almost two years that was the extreme case I’ve had ones I’ve gone you very quickly but the most time-consuming part of the process is going to be getting all that paperwork to the lender they’re going to lose it there to misplace it the person that you’re talking to is going to leave their job and you have to talk to someone else and then they’re going to ask for that you know that they have to request their BPO appraisal I mean it you know you submitted this paperwork off to lender and there’s a lot of waiting and then that’s when you’re to be tenacious and push and push and push because getting offers not that really the hard part it’s the negotiation that really makes or breaks a deal now when there are two lenders it gets a little trickier because the second lender the second letter being the second position if the first lender forecloses on a homeowner II lender gets nothing because they’re in second position they’re in there in a subordinate lien position just like I’ll remember for me real estate exam property taxes and government leans they are first priority it when a property is sold and if you could like a County property tax auction does the County property taxes if they sell through a tax foreclosure tax auction then it wipes away the the subsequently means like the mortgage that does not convey to them to the investor that buys the property from the county getting off track here but the point is a subsequent and secondary position they get nothing and so the first lender knows this and so they don’t really budge on negotiating until the second shows a huge concession now the tricky part we need to Goshen short sales is that the second lien holder might be old like what’s a $100,000 a second mortgage might be for a hundred grand and the first night before like five hundred grand and you might say will look if both need to shave a little bit off of what’s owed I can make this work the first letter will say no you need to go to the second letter and have them take $5,000 of the $100,000 owed and then when they do that will reduce to whatever is needed to make the deal closed and then you’re you’re charged with this really difficult task of making a second lien holder only accept 5000 of the hundred thousands owed again negotiation going back and forth going up the chain of command at these lenders compromise to make a deal work I mean there’s it really is all about trying to bring to parties together which is what we’re good at as agents and having them come to agreeable terms so you’ll get that second mortgage payoff and then you’ll use that to negotiate a sure path for the first and then give everything to ask girl make sure it balances out with escrow on their estimated closing statement and then continue the transaction to closing so that that’s kind of an overview of of a short sale what it is how it works with the process is you know it’s a final note you’re you’re under this this foreclosure timeline because if you’re doing a short sale the homeowner hasn’t been making payments on their mortgage and you have a a foreclosure looming the background so what you need to do is number one move fast but you should do that anyway right because the whole reason you’re doing this is to get paid I mean is your job you’re doing this on speculation hoping that you can pull it off and get a paycheck at the end so what why wouldn’t you be going as fast as you can and pushing as hard as you can so there’s already a huge incentive to move quickly also you have the Foreclosure that can also be delayed I mean I’ve had it where there’s problems are going to trust you still on on Monday and I’ve had on the preceding Thursday or Friday I’ve had the trust you still delayed and the property the Foreclosure auction delayed so that if I was you more time so you can you can use the fact that there’s an active negotiation to delay and get an extension on how much time before the property goes to trustee sale so anyways those hurt some final thoughts on it again I’m always happy to chat on these topics or answer questions publicly or do follow-up answers feel like going to contact me for any questions Hunter@balboateam.com www.balboateam.com I do hope you found this podcast episode informative thank you for listening
Today I want to talk about a topic that was relevant we first got licensed and it’s relevant now and it’s relevant every once in awhile in our career and I like to call as topic I got my license now what and that’s because we first got license and we went through the the rush and all the different obstacles that we had to get through to get a license then we finally got it and then everything stopped and we asked ourselves okay now what what’s the next step and that is actually analogous to other parts of our career or even now when the economy has kind of taken that a swift downturn due to the pandemic and everyone looking ahead on how we’re going to emerge from the stay orders and and rebuild our our pipelines and build more mental momentum and important topic to discuss because it’s not just relevant for new agents that are just beginning it’s relevant for any of us I mean they’re there are times when I’ll have a chance to really busy a bunch of escrows and then gets so busy managing the escrows that they completely Force forsake the the new business side of marketing and bring our new client to starting a new deals and they’re only focused on carrying out and completing the transactions they have an escrow and so you might be running around working very long days working very hard on your phone non-stop email excetera managing a bunch of escrows Thanos asked his clothes and then what so real estate agencies different in that regard because if you look at an insurance agent insurance agent we’ll have a client no write a policy for that client and then the insurance agent will get a commission on the premium and ideally that clients will renew their insurance policy in a year and the insurance agent will then get another commission when the premiums paid that second time and of course in the ideal scenario that would happen on an ongoing basis and that’s what they call residuals in the insurance industry industry real estate agents we we look for a larger payday, so obviously we’re getting a commission it’s much larger than if we’re just writing up a policy for auto insurance or life insurance or whatever but we also go back to square one when I lease transactions closed because once they close it’s up to us to keep marketing ask you no ask for referrals everything that goes into finding more clients because I’m buying and selling a home is is much less frequent experience for someone than auto insurance Life Insurance homeowner’s insurance you know whatever policy people are are getting you know now and then and of course buying a home can be a much larger paid a substantially larger tremendously larger of the properties expense so in that regard it’s up to us to to build and maintain momentum so what kind of go back and talk about how how all this began because there’s a really important concept that I want to be the subject of this podcast episode so what you think about agency from a historical perspective once upon a time there was no license required to sell real estate and there actually was no formal designation if you wanted to Brooke real estate you could just broke a real estate so let’s say you’d moved to some town but let’s just let’s go back in time let’s pretend like we’re in Los Angeles near 1900 or something like that I mean you have you have all these people moving out west and all sorts of a growth and development and you just like anyone can broker anything you meet someone that wants to sell a house or property land by lots of land and lots of stuff too and then they might tell you that they’ll pay you if you can find someone that will buy it or conversely you might meet someone that says hey I’m looking for land or a property in a certain area and you might think okay if I find the property for you will you pay me a commission or you might hear about some that’s interested then go look for that property and go up to a bunch of homeowners or land owners in a certain area and say look I I know someone that will buy this land at this price and if you’re willing to sell it to that purse I’d like to finders fee or commission and so the idea of broken real estate from just kind of a basic organic perspective I mean this is happened a long time and I know there are other places in the world where it’s still like this where there’s not a formal designation or license it’s just someone that knows people that own property finds people that are looking for property brings those two people together facilitates a transaction and is paid up finder’s fee or commission and that’s really it it’s that simple you’ve brokered real property you don’t own it you’re not buying it you’re acting as a middleman you’re bringing two parties together an owner and a buyer and you’re helping them complete the transaction and being paid a fee to to brokerage and you can apply at Sam analogy of brokerage to broke ring paintings and some Gallery I mean they don’t own those paintings their brokering it on behalf of the artists and they can find buyers for it and they’re paid a commission to facilitate the sale there are people that will concierge services for automobiles that broker vehicles from whoever owns the a car to a prospective buyer and they’re paid a fee to put that together that’s real estate and what an agent doing it gets more complicated after that when you’re talk about the best way to build a business and and created a database of people that are going to use you too broke for the transaction but I want to just point out that looking at real estates origin it’s that simple it’s it’s you as a person that is able to bring to parties together for the exchange of real property well of course things evolve as Society gets more complex and a more developed and from what I understand that this is a very accurate historical analysis of how real estate evolved but this is just stuff I know that I’ve seen or heard about over the years but but apparently after the the complete Wild West approach where there was no oversight or regulation of of real estate brokers and I don’t mean when I say broke I just mean a person as like an agent is synonymous with agent a person that’s brokering real estate let’s leave it the agent and broker title the formal title until later because that’s kind of just a made-up designation now but if you are a person it’s broker in real estate your real estate broker in this old fashion sense and I’m using it now now eventually a broker was told look if you want a broker real estate between two parties you need to register in this book will what does that mean I think you went down to the county ice I saw a record book of this once where you just go down and you do you sign your name that this is what you do so your phone record probably because if someone brought up your your character for some reason or who knows maybe for legal purposes or whatever maybe somehow your name is registered with a government agency that you broke a real estate now as you can imagine it evolve to be on there until we arrive at this way more complex arrangement we have now where are you a people I can broker real estate that have to have experience but those in those are called Brokers and then those people can hire less experienced people that act as an agent and agent you know can come on behalf of the broker just like old times you have an estate would have the agent of the estate that handled the Affairs but also an agent is someone that acts on behalf of of the of a party for a specific purpose and when a buyer or seller has an agent well their agent is again acting as a representative on their behalf so what once began as as a person out there that just knows enough people and is clever enough to broker the sale of real property between two parties now has become what we’re doing now where this state of California has a department that oversees real estate licensees you’re required out-of-state license you’re required to go through a certain amount of Education First and then even then when your license see you’re an agent of a broker at the more experienced licensee and sew in in all that there’s a lot to do to become a see your it’s not the old days we can just say hey I need to find people that will buy and sell real estate how can I do that and now is your primary focus if you couldn’t find people you can find on real property in people that want to buy it then you just gave up because there was no point there was nothing else but now we have so much to do that to become a licensee that if you decide hey I’m I’m interested I think I might be able to find someone that has property and the would sell it through me I think I feel find someone that would trust me to help them find a property to buy you know which is of course Brooklyn real estate before you even can really explore whether or not that’s a feasible plan you go online and you realize that you have all these steps all this stuff to do to get your real estate license Utah I mean if Simon just about the education you could choose which classes and then you’re scratching your head sinking okay I don’t like math so maybe I can do this class until that class cuz I can do for the six courses and which of these six or which two of these six courses do I dislike the most because those the ones all avoid and your kind of gaming that out then you have to go through the education don’t want to do it online but want to go into this classroom which school how much does it cost when can I do it I mean these are all new problems that you’re figuring out in your head your budgeting your time your budgeting your money to your license your focus is entirely on your education and what you’re doing then you go through the class your focus their your focus on the class you want to pass a test to pass the school test to get a certificate to apply for state test so you’re going through all this all this education hours and hours of Education finally you take the state test after all your quizzes and everything you have the school death certificate when you apply for the state test okay now where are you going to take your test if you’re in Orange County to go to Anaheim from San Diego to go downtown from LA to go. May you have all these different places you’re trying to figure that out you have to study for a test studying studying and getting up early so there’s at this point weeks if not months of just planning and preparing and focusing entirely on jumping through all these hoops with the school that’s giving the certificate and then the the state they’re Tina state test. And many more than once a business that tell me they go up there like drive that same course up to the exam 2 days prior to the test to see how much traffic there and get in over their door expect and what parking is going to be like because often these testing centers are like I’m fixing to buy test in downtown San Diego I mean if you’re going downtown do you need to plan ahead for parking because in most downtown areas like I don’t have type test up in Downtown LA as well and I mean you’re looking for The Peddler I mean it’s it’s a hassle right I think you get the point there’s a lot of Hoops to jump through and where’s your focus navigating those Hoops but navigate me to ask you what is a have to do with the old school old west old fashioned broke ring of real estate that I described you because that test that test that you take with the state the license to go to state in terms of whether or not you can broker real estate it’s meaningless I mean sure there’s the legal application of it where there’s law that you must have a license if you want to broker real estate Define that’s a formality you need to get the license but in terms of actually broken real estate in terms of doing something and getting paid for it the license has no value in that regard it does not in any way help you along and broken real estate it’s simply a formality it’s something that should occupy 1% of your focus and your pursuit of your Endeavor to broker real estate but because there’s there’s so much that goes into getting your license and it’s so easy to fall into the the system of choosing education in the school and taking it the state the school test in the state test and I mean everything that goes into that that easily can absorb 100% of of your attention and herein lies the problem so you you go through all those hoops and all those obstacles Nephi and in all that chaos all that planning and preparing it just comes to a screeching halt you have your license now what I mean it’s like you’ve just been running a Sprint and you come to a complete stop there’s just something that just feels weird about it and you the sad part is is when people get license and that’s all I can think about is getting her license they’re at they’re at this point where they they’ve they’ve taken all these steps to get to where they are but they’ve completely neglected all the steps needed to do what they want to do and that is broker real estate because again it’s license it should be something it should be saying that in the side of your mind that you need to do for a Regulatory Compliance but it you know but it’s it’s it’s an afterthought it’s something like Sky getting your your City License are getting some other license to do business ordering your business cards it send it needs to be done because it’s important to compliant but it’s it should not occupy the majority of your attention and one of the reasons that that happens I should mention is that it’s easy to hide behind the education part of it it’s easy to hide behind going in filling out applications and jumping through the Hoops to get your license it’s hard to hit the pavement it’s hard to begin your journey of brokering real estate and asking for business and really getting out there and going to the steps to build business building a business is not easy it’s very challenging and so people hide behind them the minutiae this is why I I how do I say I’m against but I’m not a fan of those structured boot camp classes in classroom stuff and end up in the traditional real estate brokerage model because I think that that what it does it just prolongs this this summer this education distraction it’s like those people that have like multiple degrees or they just keep going back to school again and again and again and I mean yeah they end up with a handful of degrees loads of debt and they never actually did anything and you know it’s hard to just get a degree it’s hard enough to go out in elbow your way into the crowd to get a job and then to you know try to get a good compensation and and you know climb a ladder or fight your way through and that’s not easy but it is easy to just sign up for more classes or go back to school because all these institutions are happy to take your money and lecture to you and give you a little certificate at the end so it’s kind of same effect with with real estate and these these classroom sessions that some Barber just have I mean I get it I mean it’s a great recruiting tool because they can just tell people that kind of are scratching their head at the at that moment if I just got my license what do I do next they feel like there’s some there’s something out there with open arms aching they can run into because you have somewhere that’s saying hey we have a two week or four week course with education and and you can just start doing that and then people feel like okay well look all I get to do a a course for 6 hours a day or whatever for two weeks or a month and I’ll have a mentor and they feel like I’m so busy here I am busy again I just got my license now I’m busy again with my with my learning you might you know in your mic my course my XYZ brokerage new agent training course the course is just another distraction because you don’t need any of that I mean you really don’t and and I mean it’s it’s easy and in your control to sign up for courses in definitely I mean can read books about stuff in definitely but you can’t just live in the world of theory must live location application is get out there and broker real estate that’s hard that’s not easy and an education you don’t you can just hiding in a classroom are safe environment so so you know in when you go to those courses again just one final note on those when you come at the end of them how much better off do you think you are because I know I know because I work with agents all the time that I’ve gone through that and if you sit down the classroom and you go through a bunch of car forms the real estate forms and you go through a presentation on how to write an offer and all that stuff I mean it’s like it’s like if you were in a classroom for 2 weeks reading about how to take apart an engine and stuff I mean sure you’re not you’re in a few pointers but is it worth it to spend hours and hours every day in reading a book I was like to say that the term you don’t learn to ride a bike in a in a classroom you learn to ride a bike by just getting on it and feeling it and write on a pedal and if you get stuck then you can ask you can you can make a specific query hey how do I do this or that but you do it through hands-on experience and I think ultimately no matter how many of these education gimmicks people go throughout their license they come back to the point of realizing that they need to just write an offer right now for someone who gets stuck right at first you know firsthand sit down with someone like myself I can guide you I’d always tell agents write up an offer use a template that I use at Temple if you want use the YouTube video created you know ask me questions on the phone or through email whatever you want right up right up as ugly as you want and then send it to me I mean I’ve been licenses 2002 18 years I’ve seen plenty of offers in a matter of seconds I can go through your offer and tell you how to correct it very easily and do stuff all day everyday so go ahead and write up an offer for your client let it be ugly I’m here to clean up for you that’s it just don’t set it off without me looking at it that’s how agents learn best and the Agents that are destined to broker real estate they’ve come to me right after being licensed that they say a hundred just give me some direction and I give them Direction and they run with it and they learn and they get really good 21:50 The focus has not education you want to learn of course but the focus is on eating as many people as you can keeping momentum in real estate because I heart box all the time and every year that I think about this two or more elements I’m doubling down on it and I can be through whatever means you want a postcard or offering free garage sale signs or being part of a group or talking to tons of people cuz you’re always out and around or going online and do a web-based marketing or coaching something or getting involved in some degree or an HOA or offering smoke information or going to there are so many ways that you can meet people it just the key is that we know you have to get out and you have to make sure that another you have to make sure another person out there knows who you are how you do that find find a means to me people that isn’t miserable and is Affordable doesn’t have to be paid to do it make sure those people that hot that know who you are that I met you make sure those people know that you sell real estate it’s not good enough that they’ve met you and I know I know her she’s nice there’s a third party list and all three of these parts have to be there or else the whole thing doesn’t work to recipe anymore the people know not just who you are not just that you sell realistic but that you want them as a client that you expect them as a client expect that when they need to sell or buy a home or even ask a question about real estate that they come to you and that expectation should be so prominent that they bring something up to you about interest they have in doing some surrealist activity counseling to IKEA for all of us think that that needed sometimes I talk to you I think it’s just literally Greek yeah it goes something goes wrong and he talked to someone else in the business so you know cuz they know where you’re going through but common if I hear about I should say, it doesn’t happen often but it does in one of the few things that goes wrong and in and lost opportunities this is a fairly consistent theme that is especially with her family and bases has to contact you about it but not through you it stinks but the interesting thing is it’s not necessary that these people didn’t choose you because they were actively trying to avoid you it’s that first Branch they could they didn’t know that you wanted them as a client permission giving them permission to work with you I know that sounds a permission to take your time and excuses on why not contact or relative didn’t use his agent and I’ll say something like and that there wasn’t that permission it wasn’t that invitation given that’s why the three ingredient if it’s the third that you know that the third rule of the three rules important today I feel like the guy locksman open and and that’s agent so now that you know about those three important rules to follow that moment when you’ve been licensed and you’re scratching your head and you’re saying now what mentors offered as people that tell you to go do some unpalatable marketing thing to knock on doors and that’s not very helpful broker should be a mentor I’d say not kiss you you’re looking for more of a partner than a mentor you need some of that will help you sift through mechanics and the Destroyer and that’s what any good broker really should be doing for the team of agents that Brokers should be making sure that your proper way to fast way helping you guiding you answering questions showing you the most efficient route helping and into a broker really can stand in as really take the role of a mentor to a degree now if you happy and that agent has a lot of business but need someone to work with their Byerly’s that would be an ideal scenario for a new licensee to work directly under that agent that is more of a true kind of apprentice arrangement in those are very rare and unique if you can find someone to go for it the problem is it doesn’t happen on a large scale licensing your thing released to the Wild and that’s when you’re scratching your head and you’re going to go and classroom telling you that learning about contracts for weeks is the best way to start so I would say no my thought is this going back to the original concept brokering real estate right so there are countless countless ways what is palpable to you what do you want to do what can you what have you budgeted cuz there’s no magic point I mean popular podcasts on on the habits of the the most successful agents because I see agents that do very well consistently and very knowledgeable when it comes to forms and fashion coordinator other person a team and assistant someone else to show up for all the other tasks find sell homes or land is just fine as people and I like to use MailChimp Contacts into MailChimp think of ways you can get more context to put in the middle G I mean take a step by step to big those are people that have built for a long time she sent out well over 10,000 postcards a month and of course I cost a lot of money make that needs tens of thousands and this was before the internet 2002 for the internet had really taken off where people to go online at me now it’s like I think so what baby boomer knows more than most send out postcard offering a free home value analysis to tens of thousands of people every month and she has thrown away well after your homie Quan number of dollars and Y minus X Williams have a nice profit so it’s worth it to send 30000 plus cards inexpensive Lee and the beautiful thing about the new web-based world we’re doing go on in and they know their home’s value in a second from five different Titanic companies Holmes worth instantaneously online you can add contacts you can send them content they would find valuable useful you could send someone HOA contact information model match with that sold for info like that neighbors always curious and don’t value that information or whatever it might be I mean there is completely unrelated equestrian activities maybe not because it doesn’t matter a group of people look like to do something and whatever you’re interested in as a member that you will like that they were getting to know her and the relationship of talking and they might bring up the real estate needs her and then it goes from there so show me inexpensive or free tools are easier Martinsville now than ever and stuff get directions to go with your marketing to I mean solution marketing depends so much on agents personality and their location and what they’re targeting and what their budget is for marketing cetera I had the conversation so many times fundamentals that are common with every agent and then agents can customize or tailor their marketing according to their own Target demographics and what they want to do just about marketing more specifically about marketing it’s about focusing on broken real estate to focusing on together and not focusing all this nonsense of picking the coolest logo or designing your business card above all infinite real estate education courses with Association or for the state or the license or any of that that’s that’s the magic ingredient that makes all that happened that’s that’s what’s important marketing I would say without without changing the conversation if you type in real estate Marketing in YouTube and search engine wherever there are there’s so much content there’s so much content all over the country you can find what campaigns are working in different places wealth of information people doing some trial-and-error Mount of information available right there online about what agents are doing because even if I was next for 3 years ago with that I mean I have websites with multiple websites and I think options for jelly speaking that is not a good marketing approach in my opinion because everything is about as credibility online am I better off just local HOA or School District information on doors because the person doesn’t find you even though relevant information to their specific niche no one human to answer as well as just browsing four hours on the internet about what’s working was not hearing you see what works and what doesn’t but that’s what you have to do to go and and find people to broker real estate to get that’s all that matters and that’s probably why there’s such a high because people aren’t even able to figure out if they can if they’re truly cut out for brokering Real Estate before they spend all this time and money just to get just just to get permission from the from the state to sell it so it’s kind of backwards That’s that’s why you want to just keep him here in a marketing campaign Marketing campaign so you don’t work then a different one and not everyone’s cut out to just keep getting thrown off the horse and coming back on so you don’t know if you’re cut out for me maybe you it wasn’t easy you don’t like it actually maybe whatever reason but you go through this course Magic Sing that massive amounts of marketing repeat the cycle again and again and building a list building a big network marketing to that list list that’s it everything else is secondary everything else is just a side note everything else is getting boarding your business cards or next that stuff you shouldn’t think about because that’s that’s just some small little red the podcast episode there if you’ve made it this far I want to thank you for listening on a thank you for your time starts with u give me questions please contact me Hunter@balboateam.com (100% Commission Real Estate Broker) or visit www.Balboateam.com.
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