Selling Your Customer on an Apartment or Condo

The leasing agent’s main jog is selling the customer on an apartment or condo.  It takes a certain flair, and not everyone has the ability.  Nonetheless, even tried and true salespersons can benefit from new ideas. 

Before even meeting the customer, marketing is a big factor.  This is not just the realm of the leasing agent, either.  Executives may also get into the act.  Or, the job may be assigned to a particular office worker who has shown promise. 

The first thing to do is be aware of new marketing ideas at all times.  There are many ways to do this.  There are magazines that focus on this area that you can subscribe to.  Even more important, there are internet articles about all sorts of articles.  You just need to find the directory of them to peruse them.  If you find a particularly helpful one, print or otherwise save it. 

You might be surprised to discover it, but people still like to get catalogs.  If you send out advertising in catalogs, you will get a surprising response.  All you need to do is provide your website information.  Soon you will be getting traffic to your site that originates from those catalogs. 

Sometimes you can make that sale if only you can help the customer imagine what their things will look like in the abode.  It starts out looking like a somewhat sterile environment.  Even if you have the model well made up, it is not their home without their things. 

You can remedy that in a couple of ways.  First, you can use a tool that shows floor plans on a magnetic surface.  You use magnetic furniture that they can arrange to show how their stuff will fit in.  Or, you can use the same concept in an electronic version you get from the internet.  You can even buy fake, cardboard furniture to set up in the rooms. 

You might offer some very special services when selling your customer on a place.  You can offer moving and packing services.  You can send a cleaning service to ready their former home for final inspection.  A greeting party can be arranged of all their neighbors on the day they arrive. 

This is quite a lot of trouble to go to for one resident, if you want to look at it that way.  If you choose to, though, you can consider it the appropriate beginning to a long and fruitful relationship.  Besides, it costs less than you might think.

Finally, you can offer gifts as a welcome to your new residents.  These can only serve to sweeten the deal.  A year’s subscription to NetFlix or some other service is appreciated by most new residents.  They can watch them when they have evenings in their homes.  Or, they can invite other residents to join them once the get to know their neighbors. 

Your leasing agents do a lot of things, both little and not so little in selling your customer on your property.  They are each vital in making up that all important impression that carries the customer from being a visitor to being a renter.

For more from Dave Lindahl, click here.

Critical Closing Criteria for Real Estate Investing
by Nancy Spivey

What the Experts Know … You Should, too!

There are literally dozens of essential details that need to be attended to for your real estate closing to go smoothly. Through experience we learn the little things that make a big difference, but experience can be an expensive teacher. You need not experience costly mistakes — just follow these simple tips to a smooth a closing!

Before the Closing

Loan Details/Appraisal There are a few items that you will want to touch base with the lender on prior to your closing. First, verify that the term, interest rate percentage (fixed or adjustable), points, fees and so forth on the loan are actually the same as they were when you originally talked with the lender. For example, you might say, “I just want to verify that my loan is a 30 year loan, with a 6.5% interest rate, which is fixed (not adjustable), the origination fee is 1% of the loan amount, and there is no prepayment penalty.” If there are any deviations from what you had originally discussed, resolve those issues. Ask the lender to be sure to provide you with a copy of the appraisal at the closing.

Property Insurance Contact your insurance agent letting him or her know that you are under contract to purchase a property and need to obtain property insurance. Lenders will not allow the closing to go through without insurance coverage on the property. Check with the attorney’s office a couple of days before the closing to ensure that they have received the insurance binder.

Title Insurance Title Insurance is insurance against loss resulting from defects or failure of title to a specifically described parcel of real property. There are two types of title insurance, lender’s title insurance and owner’s title insurance. If you are obtaining a loan on the property from a lender, they will require title insurance — lender’s title insurance that is. However, there is also owner’s title insurance. You will need to let the closing attorney know that you want owner’s title insurance so that you can be protected against any title defects that may arise.

Schedule Utilities Contact the power, gas, and water companies and set up accounts to turn on the utilities the day of your closing or on the date that you prefer the utilities be turned on in the property. Remember that sometimes it can take a week or more to set up accounts and get some of these companies to turn on service. Don’t have your plans delayed after you close, schedule ahead of time! If the closing ends up being rescheduled for a later date, you can always call back and change the date that the service is scheduled to begin.

Settlement Statement Call the closing attorney’s office and ask for a copy of the settlement statement to be faxed or emailed to you the day before the closing. Review the statement thoroughly making sure that all fees are correct and that both buyer and seller are paying the correct amount of closing costs. For more information on understanding the line items of the settlement statement, visit HUD’s website at http://www.hud.gov/offices/hsg/sfh/res/rsphud1inst.pdf . Call the attorney’s office with any questions and/or to report any inaccurate information. Ask for corrections as necessary and that a revised settlement statement be sent to you as soon as possible. Review the revised statement for accuracy.

Pertinent Items Call the seller to remind them to bring keys to the property and other necessary information, such as warranties, alarm codes, garage door openers, etc. to the closing. You would be amazed at how often these items are forgotten!

Walk Through Inspection Walk through the property the day before the closing to ensure that it is still in the same condition as it was in when you previously viewed it. Remember that items could have been removed, and theft or other damage could have occurred between the time you last viewed the property and the time that you are closing. Protect your investment and eliminate surprises that can cost you money and cause frustration in the future.

Verify Closing Schedule Before you get into your car and drive to the closing attorney’s office, call to verify that closing is actually going to occur at the scheduled time. Closings often run late and/or are delayed at the last minute for a number of reasons.

At the Closing

Review Documents/Ask Questions Closing attorney’s usually move pretty swiftly, handing you one long document with fine print after another to sign. They will typically briefly describe what the document is and then point to the signature line while looking at you with a smile on their face waiting for you to sign. Even though the pace may feel fast and you may feel rushed to sign the documents without thoroughly reviewing them, do not hesitate to stop and read all documentation and contracts, asking questions of the closing attorney as necessary. It is better that you take your time and ask all of the questions upfront rather than end up unhappy, confused and frustrated after the closing when it is too late to make changes. Mailing Address If you will not be living at the property you are purchasing, be sure that the mailing address on closing documents is YOUR MAILING ADDRESS and not the property address. Many times the mailing address on the closing documents will end up as the property address rather than your mailing address. If the mailing address is listed as the investment property address, all documents pertaining to closing such as the recorded warranty deed and title insurance will be mailed to the property and not to your mailing address. You don’t want these important documents getting lost nor your tenants or others reading them should they show up at the property! I once purchased an investment property from an estate where there were nine children and nine quit claim deeds. Unfortunately, all of the recorded deeds from the closing were lost since they were sent to property address and never returned. It is much easier to make sure that your mailing address is correct than it is to get the deeds and other pertinent information after it has been lost.

Obtain Pertinent Items for Property Ask the seller for the keys and other pertinent information that you need regarding the property. Be sure that a copy of the appraisal is included in your closing package.

After the Closing

Recorded Warranty Deed … Title Insurance Mark your calendar 45 days after the closing with a reminder to check with the closing attorney if you have not received your recorded warranty deed and title insurance policy in the mail. It is important to receive these items and file them away for safe keeping. Be sure that you remember to get them in a timely fashion. It will be easier to obtain them soon after the closing than it will be when you find you need them at some point down the line. Keep your files up to date and organized to protect your interest and your sanity in the future!

Taxes Find out when the property taxes are due on the property. Mark your calendar with due dates. There is a good chance that the previous owner will receive the tax bill due to the fact that the tax records may not have been updated by the time the tax bill is mailed out from the county/city. As the owner of the property, the tax bill is your responsibility even if you don’t receive the bill. If the tax bill is not paid, a tax lien may be placed on your property. It is best to be prepared and protect your assets now rather than having to deal with time consuming and costly issues later!

Make these tips work for you. Use this document as a checklist and action list. Write notes beside each section, date the sections and check them off when completed. Good luck with your closing!

Nancy Spivey, known as The Real Estate Investor’s Resource, is an active investor, speaker and coach. Through her training and coaching programs, she helps new and experienced investors create profitability, productivity and prosperity. Nancy serves on the board of directors for the Georgia Real Estate Investors Association, the largest investor association in the U.S.

For a free copy of the eBook, The Science of Getting Rich and a list of Resources from Nancy’s Private Rolodex, sign up for her free ezine,The REI Resource, which is loaded with free tips, resources and tools that will help you create profit, productivity and prosperity in real estate investing! http://www.transformit.net/ezine.html

Contact the Author
Nancy Spivey
Real Estate Investing
nspivey@transformit.net

Five Ways to Profit from Every Meeting with a Seller
by Peter Conti
You can make a profit from the deals you find, even when the deals aren’t a fit for your real estate business. Here are five tips to make sure you get paid for your time.

1. Sign Up the Deal!

This is the most obvious way to profit from every appointment you make.

2. Turn Your “Junk” Into Gold

Take the people you meet who just are not a fit for you and refer them to people in your network who can profit by the referral. This builds value into your referral network. For example: You meet with a seller who really would do better to refinance the house. You simply say, “I can see it’s not a fit for me to buy this house. Your best option really is for you to refinance the property. Here’s the number of a great mortgage broker I know [give him the number], and if I remember, I’ll ask her to give you a call next week to see if she can help out.” Then pass the seller’s name and phone number on to your mortgage broker. Over time this will encourage your mortgage broker contact to pass leads to you, such as buyers whose loan fell through. There is a motivated seller now!

3. Get Information on Local Market Conditions

Use the meeting to get information for the resale market and for the rental market. Find out:

What are rental and resale prices like?

How long are properties staying on the market?

What types of properties are most in demand and what types are least in demand?

What is the perceived market conditions according to the sellers?

4. Learn From the Appointment

This is the ultimate way to leverage yourself. What went well with the appointment? What will you do differently next time as a result of what you learned on this appointment? Make sure you take five minutes and debrief yourself in writing!

5. Future Deals

Follow-up, follow-up, and follow-up with all of these sellers.

An ex-auto mechanic turned real estate multi-millionaire, Peter Conti is one of the top real estate investors in the United States.

He has created over 15 real estate courses and six real estate best sellers, including Making Big Money Investing in Foreclosures Without Cash or Credit!, which soared to the top of the best seller lists at the Wall Street Journal and Business Week.

In addition, two of Peter’s books were selected among the Top 10 Real Estate Books of the Year by syndicated real estate columnist Robert Bruss.

In 2005, Conti added the Commercial Mentoring Program to his already successful list of Residential and Foreclosure programs. This Level Three Program earned the Educational Excellence Award from the American Real Estate Investors Association and attracted Wiley Publishing to ask Peter to write their Commercial Real Estate Investing for Dummies book.

Peter Conti says, “Anyone can create the level of success and life fulfillment I’ve created…once they know how. The secret is combining a burning desire to succeed with finding the right mentor.”

            12 Steps to the Closing Table and the Big Check

        By Kathy Kennebrook (The Marketing Magic Lady)

          Okay, so your property is under contract, you’ve pre-qualified your prospect; they are working with the lender and everything is moving right along, right? Not necessarily. There are several steps to a successful closing and we are going to cover those one by one. Now remember, once you have your dream team in place, you will have the people available who will handle all of the details for you. In the meantime, you still need to know what all the steps are so you know everything gets handled properly.

• 1. Make sure you get a big enough deposit from your buyer so they have some real dollars invested in the deal. Even if they are going for one hundred percent financing I still get as much as I can in order to secure the deal better. If your buyer puts down a larger deposit they are usually more committed to going through with the closing, so this is a requirement for me. I won’t even consider a deposit less than $1,000.00, but I always try for as much as I can get. The higher dollar the property is, the more deposit I require.

• 2. Make sure that the lender or the mortgage broker orders credit and an appraisal on the property immediately. Usually, I will not consider a buyer who has not already been pre-qualified, so usually the credit check has already been done. Many lenders will try to wait until they get the contracts and other paperwork in before ordering the appraisal. This is a no-no. If you wait on the appraisal, it can hold up your closing by two to three weeks. Plus, if this buyer doesn’t end up buying the property, the appraisal can be used for the next buyer. Most appraisals are good for six months and now you have an appraisal that has already been paid for.

• 3. Follow up with the loan processor to make sure the appraisal has been ordered and that the other parts of the closing are moving along. Many times your title agent or your Realtor or your sales person will do this for you, after all they want to get paid too. Make sure they have everything they need from the buyer regarding loan documentation.

• 4. Follow up and make sure that title work has also been started. You want to make sure that everything is done in a timely matter so that there are no holdups when you go to close. Every once in awhile you may discover some small glitch in the title work that needs to be addressed, such as a deed that wasn’t done correctly. There would need to be an additional quit claim deed done to correct the mistake. Make sure the title agent understands the contract paperwork and what entity the funds are to be paid to. You also want to make sure they do the 1099 correctly so the right entity gets taxed. You will also want to provide the title company with a copy of the existing title policy. This means that they will be able to come forward from the date of your policy which takes less time and this may make the title search cheaper. Make sure the title agent understands who is going to pay for what regarding closing costs.

• 5. Call the loan processor to make sure the property appraised for at least the amount of the contract. Make sure your buyer has ordered a termite inspection, a survey, a radon inspection or whatever else is required by the lender in order to close. Is there anything you can do to move things along? If you have a copy of a fairly recent survey, you can provide a copy. This will also save time and move you closer to the closing. Has your buyer’s deposit been credited? Have they gotten the paperwork they need to the lender including employment verification and rental history? These are all things you need to stay on top of.

• 6. If your buyers are using city or county funds to supplement their loan, there will need to be another inspection done by the city or county. This is a stipulation of their program. Make sure this gets done quickly in order to address any issues that could come up with the inspection. If your buyers are having a home inspection done, make sure it is done right away. Not getting it done in a timely manner can hold up your closing.

• 7. Does the lender have your information in order to be able to order a payoff on any underlying loans on the property? Have they received the payoff yet and have you reviewed it to make sure it is correct? Don’t just assume that just because they have been given figures that those figures are correct. Make sure they fax you a copy of the payoff for you to review. Double check the per diem amounts and make sure you aren’t being charged a prepayment penalty if there isn’t one due. Make sure the most recent payment has been credited against the amount due. These are problems I have had to deal with. If the loan is with a private lender, sometimes it takes even longer to get a payoff from them. Some of them don’t know how to prepare one, so they need the help of the title company or their real estate attorney for this. This is also the time you might be able to negotiate a discount with them. This works especially well if it was a seller held mortgage. We have gotten private lenders and sellers to negotiate discounts on loans on several occasions which just made our paycheck bigger.

• 8. Has the buyer’s loan been approved? If not find out what the problem is and how to fix it if it can be fixed. If the loan has been approved find out what the proposed closing date is going to be. Has your buyer ordered insurance yet? You need to check this out and it needs to be done as soon as possible. This is another area where you could have a glitch. Sometimes the age of the property or the location of the property becomes an issue. For example, here in Florida where I live, if there is a hurricane brewing, we end up in a “box” which is a period of time where you can’t buy insurance until a hurricane passes. This can hold up a closing for several days unless the insurance is already in place. A buyer must purchase a homeowners policy for one year and it must pre-paid at closing.

• 9. If you are selling a condo or a home with a home owners association, make sure the lender and the buyers have a copy of the home owner association rules and documents and that the buyers have set up their appointment for their meeting with the condo association or home owners association. If they are not approved by the condo association or homeowners association, the rest of the closing is a mute point. You need to make sure your buyer’s get through this process successfully.

• 10. So now we have a set closing date. Make sure you contact the closing agent to make sure you get a copy of the HUD or closing statement before the closing takes place and before you arrive at a closing. Very recently we had a closing that didn’t take place because once we got the HUD all the figures including the asking price and seller assisted closing costs had all been changed. The closing price listed on the HUD was several thousand lower than the contract had called for. I have never seen anything like it and the deal never closed. Check the numbers! If there is a Realtor fee involved make sure the percentages are correct. Check the pro rated amounts you are being charged for property taxes or association fees. When you close on a property during the year, say in June and property taxes are due in October; you have to reimburse the buyer for the property taxes from January until the closing date in June since they didn’t own the property during that time period. The same would go for any association fees there might be. You will have to reimburse the buyer for the period during the month that they did not own the property. Double check to make sure these figure are correct. In my contract, if we are assisting the buyer in any way with closing costs, the buyer can’t walk away from closing with more than five hundred dollars. So this is another figure we check. Any amount over the five hundred dollars is credited back to our side on the closing statement.

• 11. Call your buyer and make sure they have gotten a cashiers check for any monies they have to bring to closing and make sure they know where it is and what time the closing takes place. Make sure they bring a photo ID with them. The lender will require this. Believe me when I tell you that these are all lessons learned from experience.

• 12. Now, Show up at the closing and don’t forget to bring the keys or garage door openers. Take several deep breaths and try to relax. Once you get through the closing take another deep breath, call your spouse and go out to dinner to celebrate.

Here is another point for you to consider. In my business, it is rare that I go to closings anymore since all this is handled for me. If I do go to a closing, I usually don’t go at the same time as the buyers. I usually go right after they are done with all their paperwork. The paperwork on a closing for a buyer is fairly time consuming and needs to be explained to the buyer by the title agent. I don’t like sitting at closings for an hour or more until I need to sign my documents. If you have done your due diligence and followed all the steps in the closing process, there isn’t really anything that can go wrong at the last minute, so breath easy but expect the worst.

Then when you get through the closing, cash your check and go to dinner to celebrate!! For more information on automating your real estate business go to www.marketingmagiclady.com

One of the things that amazes me in the real estate business is how many investors leave hundreds or thousands of dollars on the table at closing due to errors in the closing documents. This is an area where many investors need to be educated.

It is a mistake to assume that the HUD or closing statement is correct or that the closing documents are correct. The person preparing the closing statement can make mistakes. In addition, the person preparing the closing statement and documents is using figures that they have acquired from other people who could also make mistakes, such as the insurance company, the Realtors, the lender, home inspection service, or the surveyor.

You need to take the time to read all the documents carefully before closing on any deal. I have personally seen errors on the HUD at almost every closing I have ever been part of. Many investors only look at the bottom line and think “yes that’s enough money” but they fail to look at the whole closing statement, and in doing so possibly leave thousands at the table. I just had a closing take place recently where there was a mistake of a thousand dollars on the HUD. They put one of the buyer’s expenses on my side of the closing statement. I don’t know about you, but I think a thousand dollars is a lot of money to leave behind. If you are looking at a closing statement and you aren’t sure why a figure is there, ASK the closing agent or attorney what it is and why it’s on the closing statement. It’s their job to make sure things are done correctly and all the figures are on the right side of the statements at a closing. Until I thoroughly learned the real estate business, I questioned every closing statement I looked at to make sure there were no mistakes.

There are some areas in particular that should be checked thoroughly. If there is a Realtor fee, make sure the percentages are correct and the payment amount to each Realtor is correct if more than one Realtor was involved in the deal.

Make sure you check the per diem interest to make sure this figure is calculated correctly. There are programs in your computer that can help you with these calculations. I recently had a deal where I was the lender and my borrower was paying me off with the sale of the property to a buyer. When I received my check for the payoff on my note, it was $750.00 too much. The per diem interest and pre-payment penalty had been calculated incorrectly. Had I not caught the error and written a check to my borrower, he would never have known there was an error. His mind was on nothing but the bottom line and he left at least $750.00 at the closing table. Compared to big checks, these may seem like small amounts, but multiply these amounts by how many closings you will do over a period of just a year and it adds up quickly! If it’s your money, you are entitled to it.

Make sure that the figures on the HUD from the insurance company, termite inspection, home inspection, survey or any other fee that should be carried to the HUD is correct. There have been many times when these figures were either incorrect or there were fees on the HUD that I had already paid out of pocket before the closing. If there are home owner association fees, make sure the pro-rated amounts on these are correct. If there is a home warranty to be paid for the buyer, make sure it shows up on the closing statement. These are all errors I have personally experienced on closing statements.

Check to make sure that the pro-rated property tax figures are correct on the HUD and appear on the correct side of the HUD. If you are due pro-rated taxes from your seller, make sure they show up as a credit on your side of the HUD. If you owe pro-rated taxes to a buyer, make sure these show up as a credit on the buyer’s side of the HUD. If there is a new loan amount or a payoff figure from a loan company make sure these figures are correct. Make sure that any pre-payment penalties have been properly credited or charged. If you are paying off a mortgage, also make sure you are not charged a pre-payment penalty when none is due. This is another error I recently encountered on a closing statement.

There are other areas where I have frequently found errors so make sure you check your documents carefully before the closing. It’s much easier to deal with problems at the closing table than have them show up later and have to be corrected. If you are assisting a buyer with closing costs, make sure they don’t charge you more money in closing costs than they are entitled to. If you are assisting a buyer with closing costs and you see a big pay day on their side of the HUD, you need to open your mouth and protest it. Most lenders will not allow a buyer to take any more than 500.00 away from the closing table, especially when it is your money. If there is money left over from seller assisted closing costs, it should be credited to the seller who assisted with closing costs. It shouldn’t result in a big payday for the buyer.

Make sure you also check loan documents carefully. Check the interest rate, the balloon date and amount, and the amount of the note. I had a note and mortgage just recently where I was funding the deal for the buyer and the payee of the note and mortgage was the seller instead of me. They also had the balloon date wrong on the note. It showed a ten year balloon instead of a one year balloon because someone accidentally added a zero.

If there is an interest only payment to be made each month, make sure this is clearly stated in the note and mortgage. Also make sure that terms for late fees are clearly stated if you are the person holding a note for your buyer. Make sure names and addresses are correct and spelled correctly. Make sure you get an amortization schedule whether you are the mortgagor or the mortgagee. This is the best way to track a loan.

All of these are important points to check before any closing occurs. Don’t assume the title agent or attorney will catch the errors. They do many closings each day and they usually are unable to catch every mistake. In addition, very often the title agent or attorney is transferring figures they got from other people such as the Realtor, the lender or the insurance agent so they my not be aware that these figures are incorrect. It’s your deal and your closing, make sure the documents are correct so you don’t leave thousands at the closing table or create title problems later that could have been solved at the time of the closing of the deal.

Make sure all the documents that are to be signed and notarized are done properly. Make sure social security numbers or Tax ID numbers are correct on the 1099 so you are taxed correctly. I just recently had a closing where they put my social security number on the 1099 instead of the corporation that was supposed to absorb the income from the sale of the property. These are all real errors that occur all the time. Make sure you protect your interests when closing on properties whether you are buying or selling or simply holding a note so you don’t leave thousands on the table at the closing.

For more information on all the tools you need to automate your real estate investing business, visit my website at www.marketingmagiclady.com.