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The Commission Question: What to Do When Asked to Lower Your Commission

Sep 9, 2019 by

Regardless of how long you’ve been in the industry, you’ve probably had at least one client ask you about your commission. How do you handle this question in a way that protects your income and grows your clientele? Here are some thoughts to consider when asked to lower your commission.

Mulling Over The Commission Question
When potential clients ask you to lower your commission, you need to remember that it’s just that: an ask, not a command. They want to find out if a lower commission is in the realm of possibility.

It’s your job to begin an open dialogue with any potential client who raises the issue.

Find Out Why They’re Asking
It’s important for you to determine the client’s motivation for asking. The client may know someone else who got a deal, money may be tight, or they just might not have a full understanding of what real estate professionals do.

Listen to Them Carefully
Clients want to know that they can put their faith in you and you’re not just looking to make some easy cash. When you ask your clients why they want you to cut your commission, make sure you genuinely listen to their answer with empathy.

Restate Their Concerns
When handling the commission question, John Grimes, a REALTOR® with Better Homes and Gardens Real Estate Metro Brokers, scales back the situation: “I paraphrase their statement to make sure that they understand I’m hearing them. That often calms people down. People are desperate to be heard and understood.”

Acknowledging your clients’ concerns aloud will make them feel as though you understand where they’re coming from.

Address the Issue
If your clients’ problem is financial, help them understand how much money they’ll potentially spend and earn at the close of the transaction. They may feel better about the commission when they realize what they stand to gain.

When the issue is that your clients don’t fully comprehend what agents do, you must walk them through the process. Your clients may think that your job begins and ends with listing their home on a multiple listing service (MLS) and putting a sign in their yard. You need to explain the value you bring to the table.

Demonstrate Your Worth
Be sure to up your merit with evidence.

Show them proof of your recent sales, including what your houses sold for compared to the asking price and how long they were on the market.

Providing your clients with testimonials from those you’ve previously worked with is another excellent way to help convince them of your worth.

The commission question doesn’t have to be a point of contention. If you pay attention to your clients’ concerns and explain your business clearly, it can be an opportunity to impress them.

For more information, check out the full article on the Quicken Loans Zing Blog.

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Part-Time or Full-Time? The Classic Question

Mar 15, 2019 by

One of the most prevailing questions I get from people who are just starting out in real estate is, “Should I go part-time or full-time?” I get it. Jumping into a commission-only profession is scary for most folks. Questions start filling your mind like, “How do I feed my family?”, “What happens if I fail?” They usually come way before the, “What have I got to lose?” question. Mostly because your mind is really good at filling in that answer!

If at all possible, my choice for you would be to go full-time. Why? Because full-time agents succeed at real estate much more quickly than part-time agents do. The quick answer to that is because they are able to put in the time! However, some people may not be in the financial position to jump in without the safety net of other income. They have to start part-time because they need to have another job to help them survive financially while they get their real estate careers up and running. Depending on what that other job is, there are inherent challenges with that arrangement. If you are working Monday through Friday, nine to five, how much time can you put into part-time real estate? The weekends? The evenings? If you’re married, have children or both, that’s no easy road.

It’s not impossible, just tough. But if you use smart time management skills and tools, and have some flexibility with your “real job,” you can make it work. If that is the road you choose to take though, my advice is to just focus on listings.

Frankly, I believe all agents should focus on listings almost exclusively. Full-time agents have the luxury of time to be able to break up their drive for listing inventory by working (or as I like to call it, playing) with buyers. Part-time agents don’t have this luxury. In fact, they shouldn’t be working with buyers at all. Why? Because with buyers, you physically need to be with them in the car and showing properties. But if you were working with sellers who had committed to you and hired you to market their house, you could do a lot of marketing at night. Also, while you were working your nine-to-five job Monday through Friday, other agents in the MLS could be showing your property. So, you could be earning money in your real estate job while doing your other job! How’s that for awesome?

If you’re ready to push all your chips to the center of the table and make your mark as a real estate professional sooner and have the financial resources to do that, then jump in. Go full-time. Find a brokerage with the right training, tools, mentorship program and support to help you shorten the learning curve and expedite your first payday. Connect with an agent who can help show you the ropes as you get started, then stay focused on building your listing inventory first.

You’ve got this. I’m here to help, with a passionate community of Power Agents® that can be there for you as well. Learn more at www.ThePowerProgram.com/NewAgentSuccess.

Darryl Davis, bestselling author of “How to Become a Power Agent in Real Estate and owner of Darryl Davis Seminars, has trained and coached over 100,000 real estate professionals around the globe for more than 27 years. He is the founder of the Next Level® real estate training system, The Power Program®, which has helped agents double their production over their previous year. For more information, and the new agent tools that can help take you to your Next Level®, please contact darryl@darrylspeaks.com or visit www.ThePowerProgram.com/NewAgentSuccess.

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To Friend or Not to Friend! That is the Question!

Nov 1, 2015 by

Brian Stevens

Mortgage Shots

October 28, 2014

Thoughts on today.

Facebook Unfriending Spree

 

Question; have you been the recipient of a Facebook “unfriender” lately.   Or perhaps you’ve gotten sick of looking at posts or hearing from people that, frankly, bore you too death.   I was, at one point, an unabashed facebook friend collector.  Those days, like the housing crisis, are over; right?  The thing is a new app is sweeping facebook users called “duster” and it allows Facebook users to clear out some of their collection.  So is this a good idea.

Personally, I go back and forth on the idea.  For starters, I find much of what my FB friends say boring, partisan, and occasionally offensive; all good reasons to “dust” them.  However, I’ve occasionally found things useful from those I’d probably like to disregard.  So from a personal standpoint I’d say go for it, from a professional standpoint, I’d say give it more consideration.

Now if you’re in sales and your job description is to communicate, the equation is simple more + people = better.  However this doesn’t address some of my personal or private issues of “hearing stuff I’d rather ignore.”  So here’s what you do.

One, create a business page.  This one’s simple and can be accomplished in a matter of minutes.  Then you send out an invite to your existing FB database inviting them to your business page.  At that point, run duster and clear out your personal page.

Screen Shot 2015-10-28 at 11.22.24 AMThe second solution is even easier.  Every FB friends profile page has a “close” tab that you can hit that will keep their posts on your timeline.   You can also mark them as an acquaintance which will keep their posts on the sharp end of the pitchfork.   So as posts appear, check it out, and see they pass the stink test.

Remember, FB has more users that all your other social sites combined.  So as a loan officer, if you like it or not, is really not the question.   How you manage your account is probably a better question.

Too loose too tight.  Morals or Mortgage Products.  

HUD Secretary Julian Castro recently spoke at a realtor.com townhall and said “Millenials need a clear path to homeownership.”  That clears it up.  Thanks Mr. Obvious.  He then goes on to say (I’m paraphrasing) “lending was too loose now it’s too tight.”  Thanks again.  It’s worth pointing out that this is coming from the head of an agency that has underwriting guidelines that lend to people with sub-600 scores and stretches income ratios for some low to moderate income households.

I just noticed  mortgage master inc. is offering a 95% CLTV second, while other mortgage companies seem to be following suite.Screen Shot 2015-10-28 at 11.35.22 AM  Now if you believe that homeowners should have some “skin” in the game, 95% CLTV is scapeing the kee’s of that philosophy while leaving a bit of skin, while HUD’s $ 100-Down Program, DPAP’s, VA, & USDA, do no such thing.  Again in some instances with lower credit requirements & exceptions for stretched DTI’s.  Really an interesting dichotomy when you consider HUD’s Castro says “lending is too tight” while pushing loans that would make past years subprime lenders blush.  Yet that’s the world we live in.

Know before you owe? or NO before you owe!!

That is the question.  Agencies have pushed and the industry has followed the march intended to give consumers the opportunity to understand their mortgage prior to completion.  I’ve maintained and results have confirmed that consumers really don’t give a crap about reading more disclosures and articles on disclosures on top of their mountain of paperwork and disclosures that are thrown at them during the mortgage process.

I understand the philosophy but unless you have ready and willing participants nobody’s going to read this stuff.   It’s not that they shouldn’t it’s just that they won’t and no matter how much more paper you throw at the situation they’re not gonna read it.  Screen Shot 2015-10-28 at 2.28.35 PM With that said, the Mortgage Bankers Association came out with forms for Lenders, Real Estate Agents, and Consumers, so they can understand TRID.  Oh to be a fly on the wall of those analytics.  I think the over/under on clicks is probably about 500 on each field.  If I were a betting man I’d bet the over on lenders and fell kinda-ok and bet the under on Real Estate Agents and Consumers and feel real good about it.  It’s not that the information is bad, quite the contrary, it’s the simple fact that consumers just don’t care.   Until Millennials come of age and get off Mom and Dad’s couch and buy their own homes, the process will remain a “belly to belly” business.

One last thought on this, the marketing site “Listing Booster” has linked the CFPB’s website “know before you owe” to all of its marketing pieces.  Considering the company produces over 100,000 consumer facing marketing pieces each month, that makes them the biggest distributor of linkable impressions of any marketing company in the country.  With that said, I doubt many consumers will click the link or read the information if they do.

A Job Well Done!

Speaking of the MBA, they announced their new leaders for its Independent Mortgage Bankers Network.  They are Eric Gates, CRMS, CMPS, President of Apex Home Loans, Inc., and William Lowman, President of American Pacific Mortgage Corporation.  The Community Banks and Credit Unions Network will be chaired by Fowler Williams, CMB, President and Director of Crescent Mortgage Company, a wholly owned subsidiary of CresCom Bank.

Now if you’re wondering what they’re task will be.  Pete Mills of the MBA said it’s to ensure “key segments of the industry are reflected in MBA’s advocacy and education efforts.  The networks also provide a valuable forum for community-based lenders to share information on emerging industry trends and challenges in meeting the needs of American Home buyers.”  Sounds good; kinda leaves the door wide open though.  We’ll see.  Either way, congratulations.

National Real Estate Post

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Refinancing To A Fixed Rate Mortgage – A Question Of Safety

Jun 21, 2013 by

Refinancing To A Fixed Rate Mortgage – A Question Of Safety

There are many loan options open to those who want to refinance their current home loans. You may find yourself faced with the option of an ARM (adjustable rate mortgage) or a fixed rate loan. Which type you will choose depends on your personal sitation and the expectations you have for your refinanced mortgage.

A fixed interest rate mortgage is just what it sounds like. This type of home loan has a set, unchanging interest rate for the entire term of the loan. Should you refinance your loan over a term of thirty years, the interest rates will not fluctuate over that thirty years unless you once again refinance. Other fixed rate mortgages may run for only a set number of years (perhaps one to ten years). After this, they become adjustable rate mortgages.

A fixed rate mortgage differs from an ARM in that the adjustable rate mortgage has an interest rate which fluctuates, depending on the state of the current market and financial trends. This means that the monthly payments on an ARM loans are subject to change. When the prevailing interest rate increases, so does the monthly payment on your ARM.

Borrowers seeking stability in their loan are most likely to benefit from a fixed interest rate mortgage. Those with good credit ratings will always be offered reasonable interest rates and terms on their loans. Those who have a stable, long-term career and want to be able to budget over the long term will choose a fixed rate loan over an ARM. The ARM might have a lower initial rate, but that rate is subject to change depending on the current market.

A fixed rate mortgage loan is among the safest type of loan you can take. From the very beginning, you know that you will be paying an amount which does not change over the term of the loan. This allows for more accurate budgeting, and no sudden suprises. Among the problems that one might encounter with a fixed interest rate mortgage loan is the deffence between various interest rate. The fixed rate mortgage will always carry a higher interest rate than a similar adjustable rate loan. Bad credit histories prevent lenders from offering lower rates, and will increase the interest rates of loans available to you. This fact causes many to choose an adjustable rate mortgage over the fixed rate loan.

It is also wise to keep in mind that interest rates do sometimes drop dramatically. When this happens, people with a fixed rate loan can find themselves paying a much higher rate than others with adjustable rate mortgages. This is the biggest risk of a fixed interest rate mortgage loan. Other than this one risk, fixed interest rate refinancing has few risks, and provides long term stability to borrowers who use it.

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