If a real estate agent has closed at least two real estate transactions, it’s likely they know what a bad deal looks like, because we’ve all had them. The secret to success is recognizing and avoiding those bad deals. Knowing when to hold ‘em and when to fold ‘em applies as much to real estate as it applies to playing poker! To that end, this blog, “Six Tips to Reduce Risk and Increase Sales,” lists ideas that will help you avoid problems before they start. Use these tips to know when to walk away—and when to run!
1. Avoid those properties and situations that are beyond your expertise. Buyers and sellers employ the services of an agent for their knowledge and wisdom, not just because they have a license. A real estate market is comprised of many different types of properties, and just because a person is licensed to sell real estate does not mean they have a working knowledge of all types of properties or can work effectively with all types of buyers. If you don’t know, don’t go!
2. Inspections are a good thing. Inspections are good for sellers, buyers, and agents in that they identify those stumbling blocks and problems that can be “deal-wreckers” later. In my opinion a home inspection for the seller eliminates just as much risk as does a pre-approval for a buyer. Pre-inspecting a home and correcting any deficiencies up front drastically increase the value of that property for most buyers, who are looking for the most value (and not the lowest price, as many are prone to believe). In the vast majority of cases, the money spent on inspections is made up for by a quicker sale for more money, and the reason is simple: More Value!
3. Ask Sellers These Risk-Reducing Questions:
- Are you ok with your mortgage? Nothing could be much worse than finding out after the property has been listed and a contract has been accepted that the property is in the final stages of foreclosure…but it happens. This simple question can make your hold ‘em or fold ‘em decision much easier!
- Can you tell me why you’re selling? The answer to this question sets the tone for the transaction. The answer could be, “We just want to test the market” or “If we can get our price, we’ll sell,” or it could be “My wife has taken a new job, and we have only 60 days to sell and move.” These answers give the agent the option of holding or folding based on the possibility of selling the property.
4. Ask Buyers These Questions:
- Have you been pre-approved for a mortgage in the past 30 days? Working with a buyer that has not been pre-approved for a loan or who does not have sufficient funds to pay cash is RISK at its highest, yet it happens all the time. Reduce the risk—ASK.
- What could I do to help you the most? This question may be the only question an agent needs to ask. Some people have credit issues, marital problems, health issues, or a wicked timeline. This question has the power to bring all of these concerns to the surface early in the relationship when they can be addressed instead of later when they can wreck the deal!
5. Be careful when using clip art or images you find online. Just because a photo is offered on a website as “free” does not necessarily mean it’s not copyrighted. The photos on this blog are either purchased from the owner (we purchase most of ours from www.fotolia.com) or we take them ourselves. The cost of purchasing photos does not compare to the cost of infringing on a copyright.
6. Seek legal advice when listing and selling distressed properties. Distressed properties, and especially short sales, present a different set of legal issues than do general brokerage properties. In the CRS Distressed Property courses, we recommend that all buyers and sellers obtain legal advice from a competent attorney prior to accepting or offering a contract of sale. Reduce the Risk and Enjoy the Ride!
For many people, including me, wearing a seat belt can be uncomfortable, but it can save a person’s life by reducing risk. In real estate we have an abundance of risk reduction mechanisms; many of them cost money and a little extra time, but all of them have their place in the deal. I was once a part of a very top-notch team of salespeople, and we kept a list of all the things that caused deals we had to fall through. The list included over a hundred different things…and the fact of the matter was that every single one could have been prevented. You Can Reduce The Risk! A career is not made by how many properties a person lists for sale or how many sales contracts a person writes; it’s made by how many deals went to closing. Reduce the Risk and Make More MOOLAH!
Happy Hanukkah, Merry Christmas, Happy New Year, and every other good wish that this Season brings is our wish for you and the people you love!