Your ability to negotiate will determine your success or failure in this business. Remember, there are 4 different negotiations you need to successfully do before you can collect a paycheck, and the one we’re going to talk about here is with the bank (or the loss mitigator). The first thing you need to understand is that the banks train their loss mitigators. Banks train their loss mitigators on many different negotiating techniques (some of which include lying… yes, lying). So how are you to counter that? You’re just trying to get a successful short sale deal negotiated at a fair price that can make you some money and save the homeowner from foreclosure and a deficiency! So how can you counter this? Here is how you do it. First off, do not negotiate over the phone. Try to do all your negotiating via fax. Now that being said, the reality of it all is that the negotiator is probably going to call you. Ok, so how do you handle that? Well, you need to have to front yourself as the “negotiator” on the deal. Do not tell them you’re the buyer. If they try to corner you (which they will), just tell them that you need to talk with the buyer and see if they will agree to the banks terms. That will give you some time to “think” about what is happening and what you want to do. Here’s an example. You’ve offered the bank $155,496 for a property. They do the BPO and counter you (verbally) at $194,000. What do you do? Get all the loss mitigator’s contact information (if you don’t already have it) and tell them you’ll pass on the information and fax them the counter offer. DO NOT NEGOTIATE OVER THE PHONE!!! Tell them that you do not have authority to do so, and that you’ll get back to them. Simple enough. When you DO send your counter offer, just come up $1000 or so. After this, then bank may drop their price significantly, or they may hold firm at their $194,000 price. Realize that if you did the BPO correctly, and found out what the agent submitted it at, you’ll know where the loss mitigator is going with the price. For example, if the BPO came in at $160,000, then you know the loss mitigator will come down to that price and that they’re just trying to get you to come up. If, however, the BPO came in at $199,000, then you know the loss mitigator will hang closer to the $194,000 number. Make sense? Realize that most of the time when you’re doing a short sale on a pre foreclosure, the loss mitigator is going to lie about where the BPO came in at. It’s just what they do. That’s why you need to do your best to find out what number the agent submitted it at. With your own techniques to counter the loss mitigators, you will get more deals done, and greatly increase your profit on those deals. For example, as I developed better negotiating techniques, I saw an increase in profit (per deal) by $10,000 to $20,000… PER DEAL!

The technique of being the “negotiator” will put you on a more level playing field with the loss mitigator and most adversarial tendencies should be avoided with this one technique. Of course there are many techniques to use in your negotiating, more of which we’ll cover in more blog posts.

Now go get some deals!!!

Marty Schulting

In this post, I’m going to discuss how to streamline the process of the initial meeting with the homeowner facing foreclosure. Your obvious purpose in this meeting is to get all the paperwork signed that will allow you to do the short sale. You want to avoid meeting with the homeowner multiple times because it can be a huge waste of time for you. Ok, let’s go over a few of the steps, and how you prepare yourself for this meeting.

First off, you should never never never never NEVER schedule a meeting with a homeowner until they’re ready to move forward. One of the most frustrating things in this business is spending 2-4 hours of your day going out to meet with a homeowner, only to have them “think about it” and you walking away from the meeting empty handed. There is nothing the homeowner needs to discuss with you in person that can’t be discussed over the phone. If you think the homeowner might be flaky, and you want to meet with them anyway, you will probably be wasting your time. My personal technique is to have the “flaky” homeowner come to the office, and before I had an office, I’d have them meet with me at a Starbucks. That way it will not disturb my day as much, and I can keep working while they “come to me.” I’ll discuss the inbound call and how to tell if the homeowner is “flaky” in another post.

Ok, so assuming the homeowner in foreclosure is on board with you doing the short sale, what now. Well, you can either meet at their house or have them come to your office (which might be a bank, a Starbucks, a UPS store, or something else if you don’t have an office yet for your pre foreclosure short sale business (which is ok). I prefer the homeowner to come to the office. After the paperwork package is complete and I’ve started my negiating with the bank, THEN I’ll go out to the property. You can get enough info from the homeowner to know where to start your offer without viewing the property (again, I’ll discuss this in more detail in another post). So bottom line, have them come to the office for the initial meeting.

Notary. Many people get hung up on the notary, since there are docs that will need to be notarized. Let’s make this as easy as possible. Here are your options. 1. Meet at a bank, UPS store, or other place with a notary on staff. 2. Have a traveling notary meet you where you’re meeting the homeowner. 3. Build trust with a notary who will allow you to bring the docs to them and they will notarize them for you at a later date (some notaries interpret the rules this way). 4. Pay for someone unrelated to the business to get their notary stamp. It’s a quick and cheap class to become a notary, and is VERY worth having someone you know or someone in your office become one. Bottom line. Do not get all hung up on the notary thing. Be creative to make this process easy for you.

Paperwork Packages. Have the package memorized. Know exactly what you’re going to say and in what order you’re going to go through the paperwork. Have a checklist. Do not get all hung up on this, just go over it by yourself a few times so you know what to say and it will relieve the stress.

To Summarize:

- Only meet with homeowners who are ready to get started

- Meet at a location convenient to you, if able

- Be creative with the Notary

These few simple steps will make your life of meeting with the homeowner in foreclosure a bit more streamlined. There is a lot more to talk about, which I’ll cover in more detail in later posts.

Take care,

Marty Schulting