2016 seller counseling session ce.ppt · results through the efforts of the seller/landlord. • if...
TRANSCRIPT
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The Seller Counseling Session
Rhonda Ivey‐LentiniABR, SRS, GRI, SFR, ePRO, AHWD, PSA
MRP, SFR, HAFA, GREEN, SRES, RENE
Dynamic Directions.com
The old ‘listing appointment’ sells price … a counseling session sells your value
• Selection based on the right professional and service package rather than who guessed the number they wanted to hear
• Detailed discussion of legal issues
• Explanation of the fee components
• Competitive analysis of the property
• Staging to position the ‘product’
• Contractual to validate the relationship
The “Free Market Analysis’ and ‘listing for the sake of a listing’ are gone
Counseling not Listing
Purpose of the Appointment• Set a mutually agreeable expectation level
• Overview what I can/can’t do by law; will/won’t do by office policy; must do according to COE
• Thoroughly review the selling process
• ‘Sell’ you – not the price
• Determine the financial feasibility
• Determine if you and the seller can work together
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Components of Presentation
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• About you, your professional credentials
• Your company; it’s mission, vision, values
• Your legal responsibilities
• How I behave when the Buyer is my client, my customer, client of agents in /out of the firm
• The ‘Can’t Do’ list
• Address the physical /financial viability of sale
• Review how, when and why you are paid
• Disclose co‐op fees – amounts, types of agents
• Conversion of Buyer Inquiries
• Upfront Seller Authorizations
Components of Presentation
• Review Marketing Plan, Internet Strategy, Services
• Viability ‐ Open Houses
• Communication method
• How showings occur
• Appointments; Feedback
• Price Adjustments
• Incoming Offers; Confidentiality of offers; Disclosure of Multiple Offers; shopping offers
• Ability for contractual buyer agents to supplement MLS fee offered or reject
• Typical offer contingencies
• Negotiation process
• Acceptance Phase
• Inspection Process
• Recommendation of additional professionals
• Repair phase
• Pre, Post and Closing 2
Presentation is Everything!
• Everyone is busy but a structured presentation will be the best conversation you and the seller have
• It serves as a risk reducing tool
• The counseling session must appeal to the generation you are working with
• Whether you deliver in person or virtually, your ePresentation should have a flexible delivery format – Manual presentations, packets and handouts
– Laptop and tablet presentations
– Conference calls
– Website presentations, info, checklists
– Electronic versions that can be emailed
One size no longer fits all
“Allow me the opportunity to fulfill my legal responsibility”
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Provide your CredentialsNever assume that just because they contacted you that you don’t have to earn their business
• Provide a professional resume packet
• Include an explanation of all of your designations and certificate credentials
• Provide an overview of your ability to get the job done
• Provide a written hand‐out of your full counseling session as a demonstration of how you do business and what’s in it for them
• Consider this as your “leave‐behind”
Review the Can’t Do ListCreate the understanding of what you can’t do by state and federal laws
• We can’t make your decisions for you or take responsibility for your bad decisions
• Betray any client’s confidential info • Follow instructions that are inconsistent with my license law or Code of Ethics
• Violate State, Federal or Fair Housing Laws• Sell property for more than it’s worth • Hide material facts or defects• Discuss best schools, neighborhoods, etc• Collect undisclosed rebates or kickbacks• Pretend I have skills that I don’t
Explain your Legal Duties• Review your fiduciary or statutory duties
• Create an understanding of your elevated professional responsibilities and liabilities
• Review all legal disclosures and paperwork
• Discuss how you behave when
– Buyer is your client
– Buyer is your customer
– A client of an agent in your firm
– Buyer is a client/customer of an agent from another firm
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Disclosures and Forms
State mandated or optional, providing extensive info sets you apart
• Property Condition Form • Lead Paint Disclosure • Property inclusion/exclusion form• Mandated environmental forms• MLS profile information sheets• Listing Agreement
All of this should be on your website
• Open, Ex Agency, Exclusive Right
• Full Service; Limited Service; Entry Only• Conceptual agreement for Dual and/or Designated Agency
• Legal elements mandated by state law
• Protections/stipulations by Office Policy• Electronic/faxed signature permissions• Photo use permissions ( internet display)• Termination Parameters • Lien Rights is available• Mutual Promises• Seller pre‐authorizations • Compensation detailed• Co‐broke amounts detailed
Listing Agreement
Assessing Value Prior to VisitOn line tools will become more sophisticated but are currently not intuitive ‐ that is your advantage
• Discuss Economic Conditions
• Know Zillow’s CMA on the property
• One or Two+ Step – Generational
• Determine the financial viability
• Do town hall research first
• Know in advance, subject to condition, – what property value should be
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Physical & Fiscal Viability
Although price cures “ugly” a candid conversation with sellers must details that price is dependent up on condition and competition
• Simple repairs could improve salability and/or price
• Tweak your price range based on this last factor
• Assess the fiscal viability – Short Sale or potential Short Sale
– Pre‐Foreclosure
– Is it a Foreclosure
Determine if you want the listing
Professional Service FeesNot a commission – it’s a professional service fee
• Referral Fees
• Retainers
• Variable/Dual rates
• Transaction fees
• Fee to represent seller side
• Coop Fees – amounts for each type of cooperating agent
• Short Sale Compensation Issues
NAR COE Article 3 ‐ SOP 1*Cooperation – not necessarily compensation
• Realtors®, acting as exclusive agents of sellers, establish the terms and conditions of offers to cooperate
• Unless expressly indicated in offers to cooperate, cooperating brokers may not assume that the offer of cooperation includes an offer of compensation.
• Terms of compensation, if any, shall be ascertained by cooperating brokers before beginning efforts to accept the offer of cooperation. (Amended 1/99)
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NAR COE Article 1 – SOP 12*How $$$ are split
When entering into listing contracts, REALTORS® must advise sellers/landlords of:
1. REALTOR®’s company policies regarding cooperation and the amount(s) of any compensation that will be offered to subagents, buyer/tenant agents, and/or brokers acting in legally recognized non‐agency capacities;
2. the fact that buyer/tenant agents or brokers, even if compensated by listing brokers, or by sellers/landlords may represent the interests of buyers/tenants; and
3. any potential for listing brokers to act as disclosed dual agents, e.g. buyer/tenant agents. (Adopted 1/93,Renumbered 1/98, Amended 1/03)
Article 3 – SOP 4*Dual & Variable Rate Fee Disclosure
• Realtors®, acting as listing brokers, have an affirmative obligation to disclose the existence of dual or variable rate commission arrangements
• In response to inquiries from cooperating brokers, must disclose the differential that would result in a cooperative transaction or in a sale/lease that results through the efforts of the seller/landlord.
• If the cooperating broker is a buyer/tenant representative, they must disclose such information to their client before client makes an offer to purchase or lease. (Amended 1/02)
• Seller agrees on fee for listing firm
• Types of co‐op agents and amounts they will be offered in the MLS
• Understands that if the compensation offered is not sufficient to neutralize a buyer’s contract with their agent that an additional amount can inserted in contract as a seller concession
• No MLS rule, license law or COE that requires amounts to be equal
• In short sales, MLS offers must be guaranteed and may be rejected
Buyer Pays – Seller Structures
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Article 16 – SOP 16Modifying an Offer of Compensation
Realtors®, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation. (Amended 1/04)
Sample Compensation Clauses
• A contractual buyer agent can accept, reject or supplement MLS offer of compensation
• ABC Realty rejects XYZ Realty ‘s offer of compensation in the MLS
• “Seller and/or any third party to settlement and transfer of this property agrees to pay buyer (“an additional” if MLS not rejected)
• X% of the sale price to settle their contractual agreement with their buyer agent at closing
• Neutral statement protecting confidentiality addressing why the seller is selling
• Permission to disclose or not disclose the existence of multiple offers to competing agents
– Choices offered, rather than choice made for seller
• Authorization to disclose terms, price and conditions of an offer(s) best obtained when an offer or offers are received
Additional Seller AuthorizationsDiscussed & Documented
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NAR COE Article 1 – SOP 15*Seller authorization to disclose existence of Multiple Offers; type of agent involved
• Realtors®, in response to inquiries from
buyers or cooperating brokers shall,
with sellers’ approval, disclose the existence
of offers on the property.
• Where disclosure is authorized, Realtors® shall
also disclose whether offers were obtained by the
listing licensee, another licensee in the listing firm,
or by a cooperating broker. (Adopted 1/03, Amended 1/06)
Marketing PlanIdentify how and what you do to manually and electronically to expose the property to the widest audience of potential buyers:
• Manual venues for exposure– Just Listed/Sold Postcards– Public/Company/Broker Open Houses– Print Media; yard signs
• Electronic venues for exposure– Personal and company websites– IDX/VOW– Variety of Search Engines and RE sites– Single Listing Websites
Fielding Consumer InquiriesConverting consumer inquiries from Ad Callers, Sign Callers, Internet, Walk‐Ins, Open Houses requires understanding your office policy
• What if the buyer is contractually represented?
– What if the buyer is NOT contractually represented?
What ‘Question’ must be asked?
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NAR COE Article 16 – SOP 9*
• REALTORS®, prior to entering into a representation agreement, have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service. (Amended 1/04)
“Are you currently, contractually represented
by a buyer agent”?
Buyer is contractually represented by another Firm
Can YOU W O S A I
Give them property information
Show them your Firm’s Listings
Book an appt for them
Confirm appt directly with them
Follow up with them directly
Write their offer on Firm’s listing
Negotiate with them on their offer
Buyer is contractually represented by another Firm
Can YOU W O S A I
Give them property information Y Y Y Y Y
Show them your Firm’s Listing N Y N N N
Book an appt for them Y Y Y Y Y
Confirm appt directly with them D D N N N
Follow up with them directly N N N N N
Write their offer on Firm’s listing N N N N N
Negotiate with them on their offer N N N N N
Quiz Answers
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Showings and MoreThis is great discussion surrounding the necessity of mutual understanding to avoid conflicts later
• Setting Appointments – e and manual
• Confirming Appointments – e and manual
• Property Showing Formats– Lockbox, Office Keys or List Agent
– Pets; Tenants issues
• Getting Feedback? Should the seller expect it?
Offer Presentation ProcessAll offer(s) are presented without delay until closing
• Regardless of what form it is written on• Even if they are verbal• With/ without pre‐quals/pre‐approval • Regardless of conditions are in the offer• Presence of Buyer’s Agent is permitted• What if there are multiple offers?• Is it really to the seller’s advantage to stop offers from being presented?
• Multiple offer scenarios • Counteroffers process
NAR COE Article 1 – SOP 7*All Offers Submitted
• When acting as listing brokers, Realtors® shall continue to submit to the seller all offers and counter‐offers until closing unless the seller has waived this obligation in writing.
• Realtors® not obligated to continue to market the property after an offer has been accepted
• Realtors® shall recommend that sellers obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre‐existing purchase contract or lease. (Amended 1/93)
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Acceptance ProcessAcceptance phase can have stipulations to satisfy seller’s comfort level
• Financial viability of the buyer– Verification of assets for cash buyers
– Pre‐qual, pre‐approval or commitment letter
• No seller has to sell –
• No response date has to be met
• All offers are presented until closing
• Seller may accept an additional offer if they are willing to accept financial responsibility
Buyer Contingencies• Mortgage • Seller financing• Sale of existing home• Gift Funds• Inspections• Attorney Review• Option on Property• Subject to viewing
Seller Contingencies• “As Is”• Probate Court• Bank – Short Sale• 3rd Party Relo Approval• Subject to a Purchase/Exch• Attorney Review• Hold‐over or Lease Back• Right of 1st Refusal
Contingencies
Home Inspection• Listing agent may not interfere with the inspection process
• Buyer’s choice of inspector & level of inspection
• Authorized persons or Licensed Contractors may be required
• Seller can verify & validate issues
• Repair Phase usually done after Buyer’s commitment, prior to closing
• Disclosures if deal falls apart– If material fact discovered, it must be forever disclosed
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Tour the Property and Wrap Up
After reviewing the process and interviewing the seller determine if you are a good match
• Insure they are motivated and realistic
• Document the details
• Secure psychological commitment
• Proceed with the CMA and paperwork necessary to secure the listing
• Find out where they’re going and secure a buyer contract to represent them in their subsequent purchase or refer them out
• What can you do with the information that you learned?
• Can you use it to your benefit?
• Are you obligated to share the information you learned with your current or new buyer client?
What if you don’t get the listing?
More Seller Representation
The skillsets, dialogue, professional liability and methods have completely changed – for more detailed information and elevated concepts
• SRS – Seller Representative Specialist
• http://www.SRSCouncil.com
• On line coursework
• Live classroom formats
• Extensive member services and support
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Adorna Carroll, DSAABR, SRS, CRB, GRI. SRES, SFR PMN, ePRO
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