Remember, your agent, while he wants to do his best for you, is fundamentally incentivized to make sure the business gets closed, any business. Most agents have learned that part of their job is managing their client to help them complete the business. I recommend that you never tell your agent anything you wouldn't want him to convey to the other side of the negotiation. While your agent would never intentionally tell the other side confidential or costly information, very often your agent will inadvertently give away a crucial piece of data, either by directly saying something foolish, or indirectly through body language or tone of voice. The key is to share information with your agent on a need-to-know basis. If you don't tell, neither can he! Here are the five questions your real estate agent will probably ask you that you should never answer, along with your scripted response to handle each question.
One: Your purchaser's agent asks you, "How do you feel about the residence?" "I'm not really sure yet how I feel about this residence. The most important thing for me as a person who invests is to make sure the numbers work out so I am making a smart business decision when I choose to buy. I won't ever fall in love with a property like other people you work with might. For me, it's just a matter of will I make a conservative profit if I buy the residence or not."
Two: Your listing agent asks you, "Why is it you wanted to sell your property?" "I'm not totally convinced yet that I do want to sell it. I would like to see what you can get me for the residence in a reasonable period of time looking for the right purchaser. I guess I'm lucky because I don't have to sell the residence, so if we don't find someone who is willing to pay what we are asking for it, then we can either keep it on the market longer, or maybe I'll just take it off the market."
Three: Your buyer's agent asks you, "What's the most you'd be willing to pay for the residence?" "That's a great question. I'm not really sure what would make sense as an investment property. Rather than give you an amount to work with as the most I'll pay, I'd rather you take this offer we just wrote up to them and do your best to get them to agree with it. I think it's a real reasonable offer, and if for some reason they feel they need it to be different, you do the best you can do to get the lowest counteroffer you can. Then I'll make a decision of whether it's even worth spending more time on it or not. If they accept our offer like I am hoping, then we'll close on the property right away because it's a fair deal all around."
Four: Your listing agent asks you, "What's the lowest offer you would accept?" "That's a great question. Rather than even thinking about that right now, what I'd prefer you do is to use all your skill and talent to get me the very best offers you can, and I'll talk with my partner and see if we're willing to accept one of them or if the purchaser will have to do better before we'll consider accepting."
Five: Your listing agent asks you, "What concessions are you willing to give to a purchaser to make the residence sell faster?" "I'm not sure I'd be willing to make any concessions. Quite frankly, I don't think I'll need to, considering how fairly we've priced the residence. If you find a serious purchaser who asks you about this, get her specific request down in writing, and also get very clear on what she is willing to give me in return for these concessions, and I'll certainly be willing to consider it."
It's very important that you shift every front-end "originating" lender or mortgage broker you work with to be scrambling to earn your business. It's also key to convert them in the process to being your champion within their organization so that your loan sails through the approval and underwriting process much easier. This means befriending them, but it also means cultivating within them a deep commitment to seeing that you get your loan. Notice how these three questions each layer in another key shift or commitment action on the part of the mortgage lender or broker you are dealing with.
Question One: "As you know, I'm in the process of interviewing several lenders to see which of them I want to select for me to give my business to. If you were a person who invests like me, why do you think your company is the one you would choose to work with out of all the hundreds of lenders in town and through the Internet? What lending programs and services do you have that would make you a dream for me to work with?"
Question Two: "If I do end up working with you, I'd want to be one of your preferred clients who does business with you again and again. Would you mind sharing with me what extra incentives or perks you give to your preferred lending clients? What are the preferred rates you give them or the lowered fee scale you give them to keep your preferred clients coming back to you again and again?"
Question Three: "One last question for you, [Insert their name] . If I do choose you to work with, are you going to be willing to commit to do what it takes on your side to be my champion within your organization to make sure I get a great deal on my financing package? It's really important to me that I establish a partnership with my lender so I feel comfortable and have fun working with them over time. You are? Great. Well, as someone who's really savvy as to how your company works with its approval and underwriting process, I'm going to rely on your help to make sure that my preliminary documents are presented in just the right way so that my loan sails through. Can I count on your help and experience to help me do things the right way? I thought I could. Let's take a moment and brainstorm out the pieces of your company's approval process so that together we can make sure we make it easy for them to pass the loan through. After all, your time is valuable too, so let's make sure we get it right the first time. Are you up for it?"
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01222010
1. Investing In Commercial Real Estate
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