Ahhh, springtime. The buds are blooming, the trees are greening and the Milwaukee Brewers have taken the field — all absolute proof that spring is indeed here.
I bring up your beloved Brewers because baseball can serve as a nice analogy for my topic about closings — the critical time between getting that acceptable offer and finishing up the deal. In baseball, finishing up the deal means getting batters around all the bases safely. In real estate, it’s about agents getting buyers and sellers around the closing obstacles safely.
Just think how demoralizing it is for a team to get a player all the way to third base with no outs and then things go sour. First an infield pop-up. A ground out. Then the all-too-common strike out. Three outs. All that work to get to third and then — nothing.
The same thing happens every day in real estate. An agent moves a client closer and closer to a close and then something goes wrong — a loan falls through, an inspection yields an ugly surprise, a seller gets cold feet — and strike three, you’re out. Back to the dugout to regroup. Not a fun place to be.
The good news is there are several things you can do to make it around the bases and enjoy scoring a successful close. Here are a few tips you can start using today:
Have a system: Ever since I entered the real estate consulting business nearly 20 years ago I’ve been a huge proponent of systems. They take the guesswork (and a good chunk of the hard work) out of real estate, and they’ve been the cornerstone of what I offer agents and brokers. I’m not the only one who’s come to realize systems play a key role in getting to a successful close. One agent I know who’s a big fan of systems is Sara Dreyer, a REALTOR® with RE/MAX Realty 100 in Milwaukee. “I think it’s key to have a system for tracking dates and deadlines in the offer,” Dreyer says. “We use Top Producer software and set up very detailed closing plans that we use on every transaction to be sure nothing gets missed.”
If a system sounds too tiring, you might at least consider a closing checklist. That’s something Jo Ferraro, a REALTOR® with Century 21 Affiliated and president at The Jo Ferraro Team in Madison, recommends. “If you don’t have a checklist that outlines what’s to be done from accepted offer to close, create one,” Ferraro says. “It’ll help you provide more consistent service to all your customers, lenders, title insurance folks, attorneys, inspectors, lenders, closing officers and yourself.” The gist here, of course, is that you make yourself as organized and efficient as possible through every step of the process. Do that and you’ll enjoy faster and more hassle-free closings.
Communicate (and communicate even more) so everyone knows what you’re doing and what they’re doing: Moving to another sports analogy, think about the Packers: What do the players do before a play? They huddle and communicate so everyone knows what they’re doing after the ball is snapped. If one player doesn’t get the message, it can mean at best, a botched play and at worst, a turnover that leads to an opponent scoring. “Keep every single party to the transaction informed with what you’ll be handling and what they’ll be handling,” Dreyer says. She adds that in her office they use a letter that can be e-mailed to her clients summarizing the dates and deadlines in the offer and lets them know what her office will be handling and what they need to handle, with deadlines. Then Dreyer follows up at intervals to be sure that everyone has completed their tasks. Think of yourself as the pitcher.
Nothing happens without you. Make sure you’re in control and that you know what’s going on at every turn. Don’t leave anything to chance.
Be proactive: You’ve heard the old adage that an ounce of prevention is worth a pound of cure. That saying couldn’t come in handier for REALTORS® seeking a smooth close. “Follow up frequently to be sure everything is on track and is being addressed,” Dreyer says. I couldn’t agree more. She also says it’s not a time to believe that no news is good news. Dreyer practices what she preaches and asks lenders for a weekly update on loans progress. And she tracks when the appraiser calls. If she doesn’t hear from an appraiser, she’ll call the lender to learn when it was ordered. “It’s better to do that than to find out that the appraisal is going to be late and then you don’t make the loan commitment deadline,” Dreyer says. The other side of this coin is procrastination. It can be a deal killer like no other. Stay on top of the details with a can-do attitude at all times.
Know your lenders: While we’re on the topic of lenders, Dreyer and others say it’s especially important these days (after the mortgage crisis) to be proactive with lenders. Whether or not a buyer can get a loan of course depends on the strength of that particular buyer. But Dreyer says it’s vitally important that when you get a preapproval letter with an offer that you call and talk with the lender personally about the customer’s qualifications.
“REALTORS® shouldn’t just rely on the written letter,” Dreyer says. “The most agents can do, assuming they feel confident enough in the strength of the preapproval to begin with, is to continue to follow up with the lender to be sure to head off any potential issues or delays.”
Ferraro agrees. She says REALTORS® should take time to talk to buyers’ lenders to ensure they’re well qualified, completely informed and educated with the loan process and their loan program specifics. “Setting expectations for the lender and providing timely information and deadlines will help facilitate a smoother process for everyone,” Ferraro says.
Read, review, repeat: You’ve heard it many times before: shampoo, rinse, repeat. Well, when it comes to closings, that saying becomes read, review, repeat. Sure, it’s not that exciting but it has to be done. Dreyer advises agents to review all closing documents including title policy and closing statements to correct errors or uncover any issues before they get to the closing table. Are all the names spelled correctly? Is the purchase price correct? Are all buyer credits and seller charges correct? Are there any exceptions on the title that need explanations? All vital questions to consider and to keep everything on track.
Think solutions, not blame: Invariably something (and often more than just one thing) will go wrong along the road to a closing. Sometimes it’s big, sometimes small, but you can count on it. When things get off the path, often our first reaction is to find out who goofed and stick them with the blame. If you’re driving down the highway on the way to an important meeting and your car stops, you might think, “Aghhh, this car maker is the worst.” But it could be you forgot to fill up with gas. But no matter why the car stopped, the only thing that’s going to get you back on the road is to think, “solution.” Trust me, blame doesn’t help matters. Remember, keep your goal in mind: to get the sale closed.
“If a closing challenge crops up — and hopefully you saw it coming with all your follow up and tracking – but if not, be sure to tell all parties as soon as possible and instead of finger-pointing, work to find a solution,” Dreyer says.
Education, education, education: To get to an effective closing, replace the old real estate moniker of location, location, location with education, education, education. Ferraro calls education “the single most important element” in ensuring an offer gets to closing. “Educate not only yourself, but also your customers and clients — and not only about the house they’re considering, but the entire process,” Ferraro says. Take inspections for example. She says to educate your buyers on the inspection process, the possible outcomes and potential solutions upfront. “When and if needed, this step of educating buyers is very beneficial to be able to remind and move buyers and sellers forward and past obstacles,” she says.
One reason Ferraro says she’s so adamant about education is that it helps set expectations. “If you explain each phase and the possible roadblocks and solutions to each step, it helps ease the stresses along the way such as financing obstacles, inspection, appraisal issues etcetera,” she says. “If you communicate honestly, clearly and educate upfront, it can save tons of time and frustrating situations down the road. Take the extra time upfront, do your homework, give your professional advice and be the best home-buying guide you can be to help your customers and yourself enjoy the success and satisfaction of a smooth closing.”
And if you can do that — actually have your clients enjoy the process – you’re on the sure and successful path around all the bases of real estate.
Bob Corcoran is a nationally recognized speaker and author who is founder and president of Corcoran Consulting Inc., a consulting and coaching company that specializes in performance coaching and the implementation of sound business systems into the residential or commercial broker or agent’s existing practice.