Trent:
[inaudible 00:00:01].
Speaker 2:
[inaudible 00:00:05].
Trent:
Yep, it's recording.
Speaker 2:
Okay, so today we're talking about a Listing Presentation 101. The overview of what's the presentation as a whole. The process usually goes, you set the appointment. After you set that appointment, you're prepared with data and information to back up the claims that you will make while talking to a seller. You want to learn about the seller's situation. That's probably the most important piece to a listing presentation. You want to find out what their timeline is for selling the house, what their motivation is in terms of are they having to move for a job, do they want a bigger house, they want to downsize? All that information is key when you're talking with the seller. Ideally, you find that out before you meet with them, but if it happens to be done while you're meeting with them, take some extra time to sit there, talk and listen. More importantly, listen to what they have to say.
Speaker 2:
And it's why should the seller work with you? If they're selling their house, there's a good chance that there may be competition in getting that listing. So you want to make yourself the best opportunity for them to sell their house for the most money, according to their situation. Then you're going to present your information, what price you recommend, why you recommend that price and have a conversation about the terms, conditions, timeline, all that fun stuff. Always be prepared. We'll get into that a little bit later, but it's always good to be prepared before you go to the listing presentation. And then do your job and get the property sold.
Speaker 2:
So preparing for the listing presentation ahead of time is key. Putting together a CMA through RMLS, will help you back up your claims with data. Specifically having properties with similar square footage, same or similar number of bedrooms and bathrooms, and a recent timeframe for when those comparables have either gone pending, or sold, or got listed on the market will help support your claims better. Ideally, having homes that are sold within the last six months, if there are enough comparables, will better support your claims. If there are not enough comparables in the most recent six months, taking it back to 12 months or expanding the footprint for your comparables in the area.
4:
Question on the ... Do you like to be high or how do you tend to lean on your CMAs?
Speaker 2:
So I always give a recommendation, like a price range. Sometimes I won't even put a specific price in there. So on this one, on the screen, it says 359. Sometimes I'll leave that blank and then just do a recommended price range to get a better sense of what their situation is. If they don't need to sell it in the next two weeks we'll say, and they have time to sit on it. We can start higher, see what happens, see what kind of activity, and then we can adjust from there. If they are in a rush, I like to come in right below what I feel is the fair market value. That way we can hopefully get a bid in, if not a couple and have a competition between buyers.
Speaker 2:
As I talked about gathering information and listening to the sellers, it is probably the most important thing about a listing presentation. As I said, if you don't know their motivation and their timeframe beforehand, it's important to sit down and just listen for however long it takes for them to convey what their plans are in terms of selling their house. And always keep in mind that you're there to help the sellers accomplish whatever goals they have, and stick to that timeframe that they have set for themselves. I listened to a podcast the other day, and one of the guys that were being interviewed said that there have been times where he's gone an hour just talking with the sellers and never talked about price or selling their house if he didn't feel that it was the right time to approach that subject.
Speaker 2:
And now we're talking about why the seller should work with you. What's going to set yourself apart from other agents that may potentially interview to get this listing? What marketing strategies will you use on the property? High-quality video, photos, using drone footage. Over here on the right side of the screen, that's a picture from my Summerfield listing that just closed. It's right on the golf course, so we took the drone up in the air on a nice sunny day. And you can see the gorgeous golf course in the Summerfield neighborhood or community.
4:
Do you do 3D photos?
Speaker 2:
I personally have never done it, but I know a lot of people do. I'm not a big fan of doing a 3D tour, but some people are, so that's definitely an option to keep in your tool belt. It definitely sets yourself apart too if you do photos, video and 3D photos. That's just another way for people online to look at a property. Especially, because I think it's 94, 96% of people nowadays, see the house that they end up purchasing first online. So they're not driving around usually. The internet has made it easier for people to see more houses in a shorter amount of time, so having a good online [crosstalk 00:05:40].
4:
Do you think that our 3D cameras are good enough for the sales market?
Speaker 2:
No.
4:
No?
Speaker 2:
No. Usually, when you're doing 3D photos, it's like a Matter port tour, and those things are expensive.
4:
Oh, ours are pretty much exactly like a Matter port.
Speaker 2:
Then maybe we can do it for our listings.
4:
I don't know. I'm just asking.
Trent:
We can do Matter port tours.
4:
Okay.
Speaker 2:
Matter port is probably the top of the line, in terms of 3D tours.
Trent:
Yeah. But it takes about three or four hours to do.
Speaker 2:
Yeah.
Aj:
Do we, do we have a Matter port camera?
Trent:
No, you can use the 3D camera.
Aj:
Oh, you can use the 3D camera, but you just have to do the-
Trent:
You have to use the Matter port app, and you can use the 3D camera.
4:
So just... This is great while we're talking about this is because that seems like it might be something available that could set us apart from another agent if that's something that you want to offer to do. Sounds like we have the tools to do it ourselves and we can... I think it does cost a little bit for hosting, but we could probably figure that out. So what other marketing strategies do you use to set yourself apart?
Speaker 2:
It depends on the area. But for example, this Summerfield listing, it's a 55 and over community. A lot of the people are getting the local newspaper that goes around in the Summerfield neighborhood and a lot of homes that are for sale in that neighborhood are being listed in there. They also do the first Sunday every month where all the homes on the market are held for an open house from a certain window. I think it was from 1:30 to 4:30. So I was doing those, getting a lot of traction to those open houses.
4:
How'd you find out about that? Or like how did you dig down and understand that market?
Speaker 2:
I actually picked up a newspaper and saw there were a lot of listings and one of the... One of the ladies that sell a lot of homes at Summerfield was all over that newspaper. And then the first Sunday there was an agent that puts them all together.
Speaker 2:
She coordinates the whole thing and she actually reached out to me. So that was the first time I ever heard of it. And then just did it every first Sunday that I had that listing.
4:
Nice. Are you thinking of doing some circle prospecting after that?
Speaker 2:
I've already reached out to get a mailer list going in Summerfield since my car was all over Summerfield with my face all over it. So people were seeing it. But then the other thing that sets yourself apart is your experience. I mean even if you're a brand new agent, if you have the experience, at least researching the market and understanding the current market for that local area, it's going to make you sound better and you're going to be more knowledgeable when it comes to listing the property correctly and taking the correct marketing strategies for that community.
Speaker 2:
If it... I mean, even non-55 and over communities, you can still throw it in the newspaper, throw it on Craigslist. Just get it out to people around the area. Cause I mean in Summerfield, for example. A lot of those people weren't looking to buy for themselves, but they have friends that want to live closer, in a 55 over the community. And so they were looking for friends or friends of friends or family members, all that good stuff.
4:
Cool.
Speaker 2:
And then the last one is providing value to your clients. What are you going to do to help your clients get the most money for the best terms and conditions possible?
Speaker 2:
It goes back to the experience of the marketing strategies and understanding how to negotiate a real estate transaction. And then you're going to make your claim after you've expressed why someone should work with you. This is when you can start talking about price, their timeline and what they want to see out of the sale of that sale of their home. Then once again, you can use that CMA to back up your claims and it's important to have market knowledge. You know, if you aren't staying up to date on the current market conditions, you're going to sound outdated and you don't know what you're talking about.
Speaker 2:
And then going back to always being prepared. I never go to a listing presentation without hard copies of the listed contract in case they're ready to sign right then and there like cause Summerfield listing. I had him in my car, which I was just going to go talk with them and get a feel for the house and I ended up signing the contract right then and there. So, I always go prepared. And then again, if the seller needs to think about it after you've done all your talking with them and they're like, "Oh yeah, that sounds good, but we're going to think about it." Just keep asking questions on what's keeping them on the fence, why aren't they committing today? And you can get a better feel for how to get that paperwork signed.
Speaker 2:
And the last thing is to do your thing and get it sold. Do whatever you can hold it open, marketed all over the place, talk to people door, knock around the neighborhoods, send out mailers, do whatever you got to do to get sold. Any questions?
Trent:
How often do people say they need to think about it?
Speaker 2:
I would say that's one of the most common objections that you're going to get. It's a big decision to sell your house in the first place and meeting someone. If you haven't had very many conversations with them before you go talk with them, it can be a little nerve-wracking. Just throwing your house to this realtor that walked into your house to list it. So like I said, just always ask those followup questions. Try to get a better sense for you know what's holding them back from listing it right then and there. And you don't have to listen to the day they sign that. You can set it out a couple of weeks, set it for coming soon. Whatever you got to do, but asking the follow-up questions [crosstalk 00:11:33].
4:
Cool. Good work.
Speaker 2:
Yeah.
Trent:
Can I see something real quick? Oh did we- Are we pausing? All right, I'm going to resume the recording here. And let's talk about... Let's talk about what happened on Haven. [crosstalk 00:12:05]
Speaker 2:
Where do you want to start?
4:
Yeah, where do we want to start? Yeah, so we're closing this investment deal. Why don't you just do a brief rundown of it? And this is for educational purposes for everyone, we're not putting any blame here. But- Tanner are you still there?
tanner:
Yeah, I'm listening.
4:
All right, cool. Yeah, why don't we run down? Give a rundown Trent.
Trent:
Okay. So the synopsis or summary of this transaction was a fourplex, pretty beat up. Originally the seller wanted to sell it cash. And so we submit an offer cash offer for... I don't even remember what the original offer price was. Went through the inspections, worked them down a little bit in the repair addendum cause there were more issues- [inaudible 00:13:07]. There were more issues than what was originally shown on the internet. And we worked pressed down a little bit more. And then we decided to get a hard money loan instead of the original cash offer. So we went through all that, got the loan looking good. And then at the last minute, the insurance company came back with an egregious amount of annual insurance payment. So we had to figure that out. We got a different quote for a lot less. I got that handled and then came to find out that there were no leases for any of the units and no records showing the monthly lease amount or security deposit amount. And that one fell on me cause I-
4:
That fell on all of us. I mean, I think before you even go look at the property... I mean sometimes brokers are unwilling to send the trailing 12 months is what it's called the T12. Which is like the information of all the leases. What rents they've received, what maintenance they've done and it kind of gets all of that costs. Usually, before you even go look at the property, you're able to review that. That's usually the first thing that comes over right after contracts. So we should make it a note to ask for that stuff. Normally we do, it just slipped kind of all of our minds. I think everyone was giddy that we are getting a great deal on something. I mean I think we through the $45,000 number for repairs out there thinking we'd get a little bit, but we'd already negotiated them down from their lowered asking price.
4:
So I think everyone was kind of like, ah, this is going to be sweet and I'm like let's move forward. So definitely on investment deals, want to make sure we get the trailing 12 costs as soon as possible and identify any issues with leases and that sort of stuff.
Speaker 2:
So what's all included in training 12 costs?
4:
Typically, when if we're selling an investment property on trailing 12 costs, we do the last 12 months income statement. So that would be the rental income and then any and all associated expenses. So you want to see the management fee coming out the... You want to see how they get down and calculate it in the water. The net operating income. So on duplexes and fourplex's if it's not professionally managed and coming up with a trailing 12 can be difficult for a seller. Like if they're just running it out QuickBooks or they've got an Excel sheet, they're not keeping track of all their costs at the end of the year and they're like trying to find their receipts and figure out what they need to write off for taxes. like that is very difficult.
4:
Once you start getting up into the 8, 20, 50 units complexes like they have a report that runs real quick. And that's also how the property is evaluated. So that's kind of like one of those levers that you can make... You can get a better price or your property is when your expenses are low. So when its cap rate is calculated off to the NOI, that's the net operating income. And so that's your gross revenue, lest your expenses and then that gives you your net operating income.
Speaker 2:
Is debt service included in those expenses?
4:
Debt services are not usually.
Speaker 2:
NOI over purchase price?
4:
NOI over purchase price.
4:
Yeah, that's usually [inaudible] dot com slash blog.
tanner:
I have a quick question. AJ, are you, are you able to ask for that T12 before you're in contract or are they not obligated to give that to you?
Aj:
You can definitely ask for it and definitely suggest asking for it. Most sellers won't send that over. They don't want the information. Then usually they want... They'll, they want it in the contract. A lot of the commercial firms will put together like a presentation that has a proforma on it and some sort of idea of what the T12 is. But they may not have the... They probably most likely won’t have the actual T12 on them. And sometimes like on a T12 they'll back out. Like if the owner did self-managing though bill even put in like a management costs. Or if something is erroneous they'll back it out of that T12 and do the [crosstalk 00:18:04]. So it's important that you when you're looking at a deal, compare whatever marketing materials they have to like what the actions are. I know if you do that [inaudible 00:18:14]. And that may be a little bit more in commercial than residential, but good practice in residential to give up and stop doing that sort of stuff.
Aj:
Cool.
tanner:
So the takeaway is asking the T12's early in the deal?
Aj:
And make sure we... Make sure you confirm all of... I think more so than just the T12 is to make sure we confirm all of the marketing material. Because the... As I said, the sellers have like smaller duplexes, fourplex's may not know or have what those T12's are. But confirming in writing what all of the marketing material that was presented.
4:
And the purpose of that is because that's one perception though.
Aj:
Exactly, exactly. Then you can use that as leverage to get a lower price.
4:
So sweet. Once we got the rental rate stated, we were getting discrepancies also, so it was a fun twist to this thing.
Aj:
We're not, we're not in a position to ask for more money. But during the due diligence we could have presented that, "Hey, you guys advertise that the rents were this and now they're this we... The deal doesn't see as good to us now, so we should get a reduction in price."
Aj:
Yeah, so...
tanner:
Are there currently people living there or is it vacant?
Aj:
No, it's, it's a hundred percent occupied.
Speaker 2:
[inaudible 00:19:53]
Speaker 2:
We probably should have increased the rent a long time ago.
Aj:
All right. So yeah, I just wanted to go over that quickly cause that's a good learning point. So thanks, guys.
