By Brian Copeland
Anyone who knows my business knows I pride myself on strong counseling of all my clients prior to any signed documents. It’s the secret sauce of my business.
This week, I messed up…bad! During the hustle and bustle of NAR Midyear, I had a remote buyer counseling session. I was so busy that I condensed the normal hour-plus session to a smooth 25 minutes. One of the biggest parts of the session is discussing pre-qualification and lending process. Since the buyer had checked, “Yes, we are prequalified with undisclosed mortgage lender,” I took it at face value.
Last week the buyer came to town. We spent two days together. We were ready to go to contract. Buyer says, “Oh by the way, my lender can’t do loans in Tennessee.” They call a lender I often use. They can’t even think about buying a home.
While my initial response was to internally be annoyed at the buyer, after about two minutes of mental processing, I realized I had used a short cut in one of my core business values. I realized this was solely my fault. I am the professional. It is my job to prepare and pave a path of success for all my clients.
I wonder how many YPNers understand the magnitude of a strong counseling session? I wonder if the hustle and bustle of our business makes us all take shortcuts? As I had this reminder, I hope you can be reminded from my lesson and perhaps take a few other ideas with you.
1. Always give your buyers and sellers multiple options for the pre-counseling medium. Roughly, 50 percent of my sessions are conducted via webinar. I’ve never had an issue with the buyer or seller’s ability to get on the webinar, and they actually like the option. You can use
GoToMeeting.com or WebEx.com for a smooth platform.
2. Have an up-to-date visual presentation. I break my counseling into three sections: “About Me,” “The Buying Process,” and “Questions/Answers.” Great visuals and charts optimizes your potential clients’ learning experience. Excel, Powerpoint or Keynote coupled with a good screen capture is really all you need.
3. Know your latest statistics. I’m constantly pulling numbers of foreclosures, numbers of successful short sales, list to sales price ratios by zip code, etc. to make sure my buyer knows that I’m up to date on my market. As mentioned in point #2, translating those statistics into strong visuals is key.
4. Use the counseling as a weeding-out session. Honestly, you don’t want to work with every buyer. There are warning signs in every dialog with a buyer that should tip you off that this consumer is (1) not a serious buyer, (2) not a faithful buyer or (3) may take more of your time that is profitable. Know your hourly rate. You can figure this out by taking your hours worked and dividing them into the total commission dollars you earned. Once you have that figure (let’s use $200 for our example), take the price point of the client’s potential closing and figure your earnings. Let’s say you will earn $3,600 on the clients’ sale or purchase: $3,600 divided by $200 equals 18. If you spend 18 hours with/on this client, you have earned your money. Anything less is profit. Anything more is loss. Then, when you factor in the gain you could have made if you had a serious, well-qualified buyer or seller, the loss can be even more significant.
Now, remember, sometimes clients are so fun/enjoyable/worthy/low maintenance to work with, we’d all do it for next to nothing; however, you have to remember you are in business. On my little mess up this week, I lost $3,630, plus the unknown earnings that could’ve arisen had I used my hour differently in those two days.
Brian Copeland is a real estate practitioner in Nashville, Tenn. You can follow Brian on Twitter: @NashvilleBrian