Presenting a Short Sale to a Homeowner

Well the economy has changed and seventy-five percent of the homes are upside down (term of art which simply means that the mortgage is higher than the market value of the home) and our locators run into homes that we can not purchase unless the banks will take a loss. So how do you get a homeowner to agree to take a short sale on a home?

One of our locators has had the opportunity to perform two short sales during the month of July both were signed by the homeowners. This article will focus on the basics of a short sale from the locators view and the packaging of the short sale to the homeowner.

What is a short sale?

A short sale (sometimes known as a pre-sale by the banks) is a loss mitigation technique for the banks that allows them to move the property without having to foreclose upon the property. Yes the bank will lose some money and may need to get permission from the insurer on the loan to allow a short sale, but the bank is looking at it as less money lost than would be if they were forced to foreclose and then sell on the open market.

In our first example the homeowner had listed her property on the market for $299,000.00 and had lowered to $270,000 130 days later. The listing had expired by the time it came into the system.

We first placed it in our system on July 20, 2006. Administration thought that the house had equity. Last sale of the house was in 1992 for the sum of $128,000.00 dollars. The same owner continued to own the property. It was placed in a route first visit was on July 22, 2006 at 10:30 in the morning. Locator met the homeowner and scheduled a presentation for Monday July 24, 2006 at 10:00 a.m.. Based upon the note of the locator more research was completed on the property ( an index and rehab budget). It was the position of administration that the property had a value of $265,000 fixed and that if it could be purchased for 156-165,000 it would be a good deal. The locator visited the home on the 24th and wrote the following note:

Visited 7/24/06; 10:15AM. Presented HO with Fresh Start Program. Secured release; faxed to Admin. HO indicated that she will be 4 months arrears @ end of July. Monthly mortgage is $1700. Principal due is $209K before fees. HO indicated that the furnace is defective and will need replacement. Current system is steam by oil. Oil tank is in the basement and appears in good shape. Basement is unfinished, stone foundation with cement floor. Basement was wet; not flooded. Difficult to photo because there were no lights that worked. Water is probably due to the failing/rotted bulkhead door. There is no inner door leading out to the bulkhead. Clutter everywhere. HO indicates that the roof was redone 5 years ago. No leaks were observed except around the primary entrance. Some damage due to a problem with the gutter backing up. Entire yard is knee deep in grass. House is surrounded by overgrown shrubs. Interior is primarily open living. Windows – sill rot. One bathroom – needs rehab. Kitchen – cabs are in good shape; gas stove; no overhead range. Don’t recall seeing a dishwasher. Wood floor is in good shape on main floor. Basically, two bedrooms with an oversize utility room that could be made into a third. All carpeted and will need replacement. Ceilings and walls in good shape. Addition is a huge room that needs new floor as well as paint. Deck appears to be in good shape. Above ground pool – liner intact, cover is destroyed. Not sure about the pump and filter. HO did indicate that the septic needed replacement. fireplace on the main floor is used regularly. Not impressed with the wood stove in the “Great Room”. Roof line between the Main house and the addition has a visible seem. Poor construction. Property has potential as a good starter home I suspect. Certainly a stretch to call this a “3 bedroom”. No clean way to set up a 2nd bathroom or a laundry room without major rehab. Could be wrong.
Based upon the note we now knew that we needed to purchase this property for under what is owed. We needed to do a short sale. On July 27, 2006 the documents were placed up on the site for a short sale at a pourchase price of $155,000 plus 10,000 in a bill of sale for the fixtures in the house.
The locators presentation was scheduled for the following evening at the homeowners brothers house. The locator spent at a minimuim of one hour preparing for the meeting and took portions of the short sale memorandum, the index to complete a package for the homeowner to review while he discussed the pricing f the property.

From our conversations with the locator he started with the purchase price of the home in excellent condition being $265,000.00 dollars. Once the homeowner agreed that was the purchase price he went through the list of things that needed to be fixed. (deferred maintenance) Septic system and the cost of replacement. Heating system and the cost of replacement, paint of the interior and exterior. Windows etc. The homeowner agreed that the cost of the rehabilitation of the property should reduce the selling price to a minimum of $225,000.00 dollars. With that and a brokers fee the homeowner would walk out with little to no equity.

The locator then explained our short sale procedure and what it would net the homeowner if we were able to get the bank to agree to the process. Here the homeowner would receive $10,000.00 dollars for her dishwasher, washer and dryers and other personal property in the home. Consequently, the homeowner signed the deal because it was netting her more money than a regular straight sale.

Presentation Paranoia

“The human brain starts working the moment you are born and never stops until you stand up to speak in public.” (Sir George Jessel)

Have you had this feeling before? Rest assured you are not alone. You might be one of the many who would rate your fear of public speaking alongside or ahead of death! Your fear may translate itself to “FEAR”Forget Everything And Run!!

Having the ability to present yourself and your message to an audience, whether internal or external, is a necessary skill for a good manager and leader. By following some simple steps you can improve your skills in this area, reduce your fear and build your confidence. As you have more success in making presentations you may well find yourself actually looking forward to doing more of them. Clients, colleagues and other staff will be more responsive and supportive. You will realise the principles apply to groups of 2 – 200 and above, and whether sitting across a desk or in a conference hall.

Why do you want to improve your skills in this area? It might be to reduce the feelings of the nerves – or even panic. Maybe to reduce the risk of making yourself look a fool in front of the audience? Or you may want to be able to present yourself and your message with more confidence and conviction to win people over. Perhaps you want to be able to look forward to making presentations? Whatever your reasons, the principles we will cover here will help you.

The biggest challenge for most people when asked to make a presentation is the way their imaginations start to operate. All sorts of thoughts begin to swirl around – and how many are to do with things going wrong, fluffing the words, audience reactions etc. etc. and compared with it going successfully and being enjoyable? One way to change this initial response is to follow the basic ideas covered below. Also, accept that it is not a bad thing to have some nerves. They trigger a chemical reaction which, harnessed properly, will help to make your presentation a success.

The secret is to remember that when you see good presenters, you are only seeing the tip of the iceberg. A great deal has gone on beneath the surface to enable them to be the person you see. For those who have a real fear of presenting, they make the problem worse. They go into denial of the presentation, use this to keep putting off doing the things beneath the surface with all sorts of excuses and reasons – so that when they come to the actual presentation it does not go well. Then they can say, “Told you so! See, I’m no good at presentations!” The art of self-fulfilling prophecy continues.

To prevent the paranoia – make time to do the fundamentals! Plan and prepare. Also, have a realistic level of expectation. Too many people, when having to make a presentation, spend too much time focusing on themselves. There is a balance to be met – and the secret for a good presentation is to keep the focus on the audience, and your subject and objective. Get the first two right and the third will take care of itself!

To get your planning underway, ask yourself some simple questions:

WHAT: Consider the purpose of the presentation, to inform, influence, inspire, generate action? Be more specific, what are my objectives from this? What are the key things you want the audience to take away with them – or to do?

WHO: Put your focus on the people you will be presenting to. How many will they be? What are their objectives? What is their level of knowledge? Will they be a “willing” audience or were they sent? When you have the answers to these points, you have some idea of what level to pitch your presentation.

WHERE: Is the presentation going to be made in a meeting room, someone’s office, a large venue? What will be the layout? How flexible is it? (You can always ask to have it set-up to suit you, though a boardroom table is hard to adjust!) What equipment is available? What do you need to take?

WHEN: What time of day are you presenting? Are there other presenters before and after you? What impact will these two answers have on your approach to the presentation?

HOW: How long have you got? Remember, longer is not necessarily better! Also, although this may seem odd if you are nervous about presentations, it is harder to plan and prepare a brief, effective presentation than to organise a longer one. (Churchill, amongst others, is quoted as saying something along the lines of, “It takes me 10 minutes to prepare for a 2 hour speech – and 2 hours to prepare for a 10 minute one.”)

Put the answers to these together and you are in a position to begin the preparation of the presentation itself. Some things to consider are:

  • Pull together the broad content – what is it you want to say? Think about the headlines for each part. (You can find your own way to do this, though creativity helps with approaches such as mindmapping or just Post-it notes! These are better than just pages of notes.)
  • Gather information – get facts, opinions, research and anything else which might help.
  • Check back with your objectives – and the audience’s. Make sure there is a match.
  • Organise all of this into a sensible sequence. Have a beginning, middle and end, preferably building up the emphasis of your message.
  • Develop a story – make sure that there is a flow to the overall presentation. Look to build in hooks for key points or messages. People often recall stories and anecdotes more than dry facts.
  • Check the plan against the time you will have. (You will speak at around 100-120 words a minute when your nerves are under control. A 15 minute presentation is around 1,700 words or so, which is only 4-5 pages of A4.) Also remember, you are speaking so choose your language with this in mind, especially when making notes.
  • What do you need to support your story or message? Visual aids, props, notes, other material which might be suitable. Remember, these things are there to support you not to take over. If using Powerpoint, avoid “death by…” and use slides sparingly – and keep them clear and easy to read!

When you are comfortable that you have the overall structure, content and support material organised you will feel more comfortable. Check it flows sensibly, covers the main points, meets the objectives and you may even start to look forward to the presentation. PLEASE now work at one vital part – your opening!

The old saying, “You never get a second chance to make a good first impression” is so true. The audience are judging you on many levels as you start and this will influence how they will respond. Add to the fact that you are fighting your own nerves and probably think you have enough to worry about!! By concentrating on getting the opening right, you can achieve several aims in one.

It is important to create your own opening, it can become your “anchor” to help you manage yourself. Practice introducing yourself, stating your reason for being there, what you want to achieve and how you want the audience to be. (eg, when can they ask questions.) If you can deliver this part almost without thinking, you can keep your attention on the audience and their responses. If you are worried about what to say, you will be so internally focused you will not be able to pay attention to them. Whether you use humour, stories or challenging facts to start – or anything else – is a matter of choice. However, be careful with humour. You never know who may be offended – or how you and others will react if the joke or story falls flat.

Another important thing is to handle your nerves. First of all, realise that it is OK to have them! The trick is to learn to use them to your advantage and to not let them take you over. There are some simple things you can do and by practising them you will find that they have applications in all sorts of areas of life.

Visualisation (or “imaginisation”) – put yourself in the presentation and see it going well, you in control of the room and the audience. Experience yourself handling questions, making your points, generally enjoying it. Feel how good it will be at the end of the presentation when you realise that you have achieved your objectives. See the positive.

Breathing – this is one of the most effective ways of handling the adrenaline buzz that comes with heightened nervousness. Take a deep, slow breath – feel your diaphragm moving out as you do this. Hold the breath for several seconds – then let it go, slowly. (Press your hand just under your ribs and feel the lower lungs empty and help them on the way.) Hold the breath again before repeating the in-breath. (Some use a count of 7-4-7-4 for this.) Do this for 3 full cycles and you will notice your heart rate slowing and begin to feel the oxygen levels rise in your blood. Careful of more than this, you may start to hyperventilate!

When you move to start your presentation, take a deep breath as above, step to where you will deliver from, look around the audience as you breathe out and establish eye contact. Now you are ready to begin.

The other element to prepare is your ending. Many nervous presenters are fine with the middle, content part of their sessions. They let themselves down with the front and back – and often lose the potential impact because of this. Work out how you want to summarise and then close things off. If all else fails, use the basic rule, tell ‘em what you’re going to tell ‘em, tell ‘em and tell ‘em what you told ‘em.

“Begin at the beginning and go on until you come to the end, then stop.” Lewis Carroll

This is just a start to cover some of the basics. When you are comfortable with these, there are many more areas you can work on. There are ways you can help yourself if you need to develop your presentation and speaking skills apart from training organisations such as ours. The Professional Speakers’ Association, www.professionalspeakers.org has local “chapters around the UK. You can also find a local branch of Toastmasters International, who will offer encouragement and training – although in a different style.

How To Spot & Use Power To Win More Negotiations

One party was in the majority, which meant they had control of the house. The other party performed a drastic act to challenge the power of the majority party. Thus began the challenge to power in the negotiation.

Power in a negotiation is the degree that one negotiator has it and the opposing negotiator agrees with him. It’s perceptional. It’s also the degree one negotiator will go to expose and use her power to advance her position. Since power ebbs and flows in a negotiation, some negotiators have it, don’t use it, and they lose it.

The following will allow you to identify when you’re in a power position in a negotiation and how to offset the opposing negotiator’s power.

Mental perspective of power:

Since power is perceptional it can be difficult to identify. If one negotiator is better at bluffing per what he’ll accept or reject, he can convey power while in reality, he’s in a much less powerful position than his exploits might indicate. To understand that negotiator’s potential power moves, understand the mindset he possesses and to what degree he’s willing to act powerful. Thus, knowing his mindset will give you insight into the amount of push-back you have to apply before he’ll back down. Having such insight and testing him will also give you insight into how he might perceive the power you wheel.

Timing your use of power:

When assessing when to use power, consider where you are in the negotiation. If you’re in the beginning, you might be more cautious about making a power move than if you were near the end and had to advance your position quickly. On the other hand, based on your strategy, you might make a power move early to set the tone and send a signal of the type of negotiation style you were going to engage in.

Thus, the timing of when you’ll display power and to what degree you’ll do so depends on what has occurred prior to your implementation of a power play, where you expect to be after you make it, and what emotional state you’ll leave the other negotiator in.

Per making a power move more powerful, if appropriate, don’t give any warning or advance notice prior to implementing it. The more of a surprise (I didn’t see that coming) you make such a move the greater will be its impact. After you execute a power move, measure its effectiveness to determine the degree you have more or less power.

Observe body language:

By observing the body language of the opposing negotiator when you make a power move, you’ll gain insight into his mindset, how impactful your power play was and how he might attempt to recover.

If you observe him taking deep breaths (that took the air out of me), rubbing his eye(s) (I didn’t see that coming), scratching at his forehead (I’ve got to think about this), leaning away from you/the table (I need to get away from this), all such gestures will telegraph the impact that your power display had on him. You’ll also be able to note the ups and downs of his mood.

As you can see, there are many aspects to consider when determining how, when, and why to use and display power in a negotiation. The better you become at detecting when you versus the other negotiator is in a power position, even if it’s when either of you are bluffing, the greater insight you’ll have per when to use power and to what degree to apply it. Such insight will lead you to more successful negotiation outcomes… and everything will be right with the world.

Remember, you’re always negotiating!