REI Marketing Tips

Thanks to everyone for their patience, as I FINALLY had time to get the free short sale training from California’s #1 Short Sale Lawyer posted to my blog. I will warn you in advance, Ron and I went for nearly THREE hours of non-stop hard-hitting short sale information.

Set aside some time this week to watch this training. There’s no cost, and after you watch it, please post a comment below and I’ll make sure that either Ron or myself answer it.

Happy Investing!

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I spent a few days this past weekend at Preston Ely’s FreedomSoft event.  It was a lot of fun, great networking, and I got to meet a bunch of great people.  Actually before FreedomSoft even began, we had a small Mastermind at our home in Encinitas.  We had Darrel from here in San Diego, who is absolutely KILLING IT with short sales right now.  We also had Ed from IL, and Tim and his wife Suzanne from TX.  Also joining us was Minx from NYC, one of my coaching students who started with me last year.  Here’s a picture of us:

San Diego Mastermind 2010

We all shared a lot and learned a ton from each other, and came away with specific action plans to grow our business in 2010 to new heights.

The purpose of this blog post however, is to give you some insight into what is the best way to convert a lead into an appointment, and then into a deal.

I have a new realtor on my team, and I recently got a lead from one of my websites.  I had the realtor qualify the deal over the phone, and set up the appointment.  I had put him through some training, and I explained to him that you should ALWAYS email the client the paperwork in advance of the face to face meeting.  I do this because:

1. Short sale packets can be extremely large and overwhelming for someone to sit down and sign all at once, right away.  Letting the homeowner review the documents in advance can help you close the deal on the first in home visit.
2. I tell the homeowner that they should review all of the documents in advance of my arrival.  That way I can clarify any questions they have either before, on the phone, or once I arrive.  If I send the documents in advance, it removes the “I want to think about it” objection (more on how this isn’t even a legitimate objection in California)
3. The homeowner needs to gather all of their documents such as paystubs, bank statements, tax returns, etc.  By giving this to them as a “homework” assignment a few days before the meeting, they have an opportunity to gather all of this information in time, so you can submit a complete, accurate short sale packet the first time.
4. Even if the homeowner DOESN’T review the information, when I arrive for the appointment, I am in much more control of the situation, because I’ll just assume that they reviewed everything and printed it all out.  In fact, if the homeowner hasn’t looked at anything, it allows me to close the deal that much more easily because of the homeowner’s feeling of obligation to the time and effort we spent preparing the documents to send to them.

So here’s what happened: my realtor said that he spoke with the homeowner, but he DID NOT send him the short sale documents in advance.  I told him that when he shows up for the meeting with a huge stack of paperwork, it could be very intimidating for the homeowner to sign everything.

So my agent heads out there with paperwork in hand, but the homeowner has never seen it in advance.

So guess what happens?

The agent arrives, the homeowner says “I want to think about it” and he doesn’t pick up the paperwork.  My agent just wasted time driving to an appointment and then leaving with no deal in hand!  What a waste of everyone’s time.

I think that this convinced him to believe me and he’ll now start sending the short sale packet to the homeowner in advance!

My advice to you, moving forward, would be to send the package to the homeowner in advance.  Here’s a little script you can use when on the phone.

“Well Mr. Homeowner I look forward to meeting you on Thursday at 4pm at 123 main st in San Diego.  Now what I’m going to do it to send you a list of all of the documents that you’ll need to collect.  Things like paystubs, bank statements, etc.  Don’t worry about writing it down now, I’ll email you a list.  I’ll also email you all of our agreements.  I would like for you to print them out, and review them BEFORE I arrive.  If you have any questions, I’ll be able to answer them in advance, on the phone, or I can answer them for you this Thursday at 4pm.  This way, our meeting time will be much faster, and you’ll have had a chance to review everything before our meeting.  Doesn’t that sound like a good idea and the best use of our time, Mr. Homeowner?”

Now going back to my realtor, who didn’t send the package in advance, here is one sales strategy that you can employ, and how I would have handled that situation.  Here in CA the homeowner is given a 5 day right of refusal.  This means that up to 5 days after signing the deal, they can change their mind and back out.  So had I have been on the appointment, I would have closed the deal by telling the homeowner:

“Mr.  Homeowner, I know you want to think about this.  In fact, so do I, and so does the state of California.  You see, by law, you get a “5 day right of refusal.  That means that even after you sign all of these documents today, you have 5 days to changes your mind, and cancel.  We both know the foreclosure clock is ticking, and I’m out here anyway.  So to make best use of our time, and the time that is ticking with your home headed towards foreclosure, let’s get all of these agreements executed today.  That way, if you decide in the next days you want to cancel, no problem.  Otherwise, we’ll have to come back, and we’ll lose all of that time.  I’m sure you’ll agree that sounds like the best plan to help stop this foreclosure as soon as possible.”

Well there you have it.  But I would like to hear back from you.  Please tell me what state you’re in, and what you do: send the paperwork in advance, or show up with it and try and close the deal right then and there.  I’d love to hear what you’re doing and what’s working for you.

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Wednesday I had the pleasure of having lunch with California’s top short sale attorney.

He was kind enough to let me pick his brain on certain nuances that come up in California.  More importantly though, he gave me some great insight on what is going on around the country, not just in California.

I took a few pages of written notes, and even more mental notes, but here are a couple of big take-aways that I wanted to share with you:

1.  Deals you find by yourself are best, but better if you take care of agent out of the goodness of your heart.
We discussed at length doing deals where the property is already listed, and we both agree that trying to convince many agents that our “creative” way of doing short sales can often be a frustrating experience, and a waste of time.  That’s not to say that it can’t be done, but we both agreed that if you have good marketing, and can get to the seller directly, you’re in a much better position.  One idea he shared with me was to allow a realtor (one that you have a good relationship with, or one that you’ve been trying to court into getting all of his listings and buying them) is to let them represent you on the transaction.  The banks are used to paying a commission anyway, so why not throw someone a “bone” and put some money in there pocket.  This idea was taken a step further by even suggesting to the homeowner that they might want representation, and providing them with an agent (referred by you of course) to put a smile on the face of a couple of agents…which could lead to a lot more deals for you!

2.  Keep your paperwork consistent
We had a standard practice in our business of using one contract for deals where the property was NOT listed, and another one for listed properties to keep the agents happy (by seeing a familiar contract).  He pointed out to me that I’m making things more confusing for our acquisition specialists by making them have and complete 2 different sets of contracts.  “Standardize” he said, and make the contracts work for all transactions, realtors involved or not.  Made sense, and we made that change in our business today.  (NOTE: some of you might be thinking “you sure are a bonehead Justin” and while that might be true, I’m far from perfect, and learn new things in this business every day.  I have no problem admitting if I’ve made a mistake or not doing something the best/smartest way possible).

3.  Pay your “A” listing realtor well
If you’re going after listed properties, pay the “A” realtor well.  They’re getting paid on the discounted price, so why not pay them 4% instead of the “standard” 3%.  This will show the “A” listing agent that you’re serious about putting money in their pocket, and make them more motivated to work with you in the future.  If you pay 4% realtors will be excited about working with you, and the “word” will get out that you’re a serious investor who takes care of agents

Those 3 ideas were just the TIP OF THE ICEBERG…

We discussed a TON of other things, and we finished lunch with a LOT more to discuss.  Fortunately for you, I’ve arranged for a special training with this attorney.  It’s not until March 31st, but go ahead and block out that time in your calendar NOW.  We’ll be covering lots of great information, and of course I’ll remind you closer to the date.  For now, put Wednesday, March 31st at 6pm PST/9pm EST in your calendar.

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