Why Deals Fall Apart

1. Why Deals Fall Apart Adorna O. Carroll ABR/M, SRS, CRB, GRI, SFR, SRES, PMN, ePRO DynamicDirections.com Adorna@Adorna.com

2. Deals Fall Apart Because Someone • Didn’t do their job correctly • Didn’t do their job completely • Didn’t know/disclose some pertinent facts • Didn’t understand what options were available • Didn’t understand the process to get the job done • Didn’t follow someone else’s professional advice • Let something fall through the cracks • Let their ego get in the way of good judgment • Couldn’t work well with the other professionals

3. The Usual Suspects • Seller • Listing Agent • Buyer • Buyer’s Agent • Home Inspector • Loan Originator • Appraiser • Underwriter • Attorney

4. Financial situation not fully disclosed • Condition of property is misrepresented • Doesn’t understand the process • Doesn’t agree with market value/price • Ignores professional advice • Hires professionals that don’t have the necessary level of skills Seller

5. Home on market prematurely Over-improving for area Pricing based on Seller net Being emotionally involved Not disclosing problems Not knowing current issues or market conditions Hiring agent based on non--business factors 7 Costly Mistakes when Selling M. Anthony Carr

6. Listing Agent • Improper Pricing of Property • Lack of due diligence • Did not explain the process • Does not have the proper skills • Is inflexible or lacks creative solutions • Has difficulty working with other professionals • Does not have a good team of peripheral professionals • Lets details slip through the cracks • Hasn’t prepared client that coop fees, inclusions and desired terms are merely a suggestion

7. Off-Site Considerations & Other Time Bombs! • Noise • Air Traffic; Rifle Range; Highway, railroad, etc • Property Stigmas • Psych Impacts, Sexual Predators • Assorted Issues • Prison, Dump, Land Fill, Cell Tower, High Tension Wires, Abandoned Property, Meth Labs, Crack House

8. Solutions for the Listing Side • Invest time in a Seller Counseling Session detailing what you can/can’t do by your license law and COE; will/won’t do by office policy and about the process • Research the real financial viability prior to listing • Disclose potential for short sales and fee issues • Disclose material defects/red flags • Price the property correctly • Remain flexible and open • Discuss current market conditions • Invest in advanced skill training

9. Buyer • Isn’t finally pre-approved prior to shopping • Has manipulative family with purse strings • Over-reacts during home inspection • Underestimates costs of repairs • Doesn’t understand the process • Doesn’t heed professional advice • Selects peripheral professionals that don’t have the proper skills – lender, inspector, attorney

10. Buyer’s Agent • Improper Pricing • Lack of due diligence • Didn’t explain the process • Doesn’t have the proper skills • Is difficult to work with • Doesn’t have a good team of peripheral professionals • Lets details slip through cracks • Doesn’t know how to get paid

11. Solutions for the Buying Side • Invest time in a Buyer Counseling Session detailing what you can/can’t do by your license law and COE; will/won’t do by office policy and about the process • Get loan approval for the buyer prior to showing • Secure authorization from your client so the LO can speak candidly with you • Disclose potential for short sales and fee issues to buyer so they are prepared for issues that can arise • Help client realize that inspections are necessary • Prepare a CMA • Remain flexible and open • Invest in advanced skill training

12. Home Inspector • Did not explain the process or difference between maintenance items versus defective issues • Behaves like the appraiser or is a drama queen • Does not have the proper skills • Is difficult to work with • Lets details slip through the cracks

13. Solutions for the Inspection Phase • The inspection phase can be a renegotiation • The home inspector is NOT the specialist only the person to identify issues that require study • Help buyers realize that not everything is an issue • Help seller realize that all requests should researched and considered • Explain the true meaning of “As Is” • Never talk any client out of having inspections • Secure paid receipts from contractors for all repairs

14. Loan Originator • Only does ‘vanilla’ loans • Can’t get creative solutions • Didn’t explain the process • Blames the agent for issues • Lacks knowledgeable team • Is difficult to work with • Doesn’t understand role of buyer agents • Allows details to slip through the cracks • Suggests bank fraud

15. Appraiser • Isn’t from the area and doesn’t know the dynamics of market or neighborhoods • Does not have the proper skills • Doesn’t have an accurate database for comps • Only sold comps are foreclosure sales • Is difficult to work with • Lets details slip through cracks

16. Underwriter • Believes they can second guess the appraiser • Can get careless when overburdened with files • Doesn’t necessarily feel compelled to meet contractual dates or time pressures

17. Solutions for the Lending Phase • Help clients realize that everyone needs to function like a team • Success in contingent on the skills of the professionals involved • Prepare clients what options exist if a property doesn’t appraise and why extensions may be required • Be prepared to do the other agent’s job to get the job done • Invest in achieving extensive knowledge of the loan, appraisal and underwriting process

18. Attorney • Isn’t a real estate attorney • Paralegal is a problem • Doesn’t do win/win negotiating • Can’t collaborate on creative solutions or problem solving • Did not explain the process • Is difficult to work with • Doesn’t acknowledge your professional role • Does not have a good team of peripheral professionals • cracks

19. Solutions when working with the Attorney • Cultivate relationships with the lawyers and their paralegals in your market area • Insure that all terms and performance dates are in force • Partner with the lawyer in advocating for terms your client can accept

20. Moral of the Story • Really know how to do your job and the job of everyone participating in the transaction • Anticipate what can go wrong and prepare your clients in advance • Look for creative solutions and involve all parties in solution based problem solving • Stay Calm • Learn to negotiate well