Skip to main content

It's a New Year, Just Breathe

  
By all accounts, 2018 should be very interesting with news that home values continue to rise with demand for homes showing absolutely no slowing.  So, with this new year upon us, I wanted to write something that would be useful – something that would act as a good jumpstart for what lies ahead of us – and the more I thought about what that could be, my mind kept going back to a very fundamental truth I had been taught when I was going through my licensing class.  It’s nothing earth shattering, and many of you are going to chime in with a collective “well, duh”, but I’ll soldier on for the sake of filling up some space (and reaching those who either didn’t know it or don’t mind a gentle reminder).  

The question was floated out there: “Why doesn’t the seller of a property get to pick the escrow company?”  The obvious answer is, “Well, because that’s the law,” but the deeper answer is more interesting – and that answer is just one word: Leverage.  The instructor of my licensing class gave an example to expound on that one-word answer, and it goes like this:

Kyle, a software engineer, was buying a home that was being built.  Being the stereotypical, A-type engineer that he was, Kyle would stop by the building site on a fairly regularly (let’s call a spade a spade and just say “daily”) basis.  On one of his daily visits, he saw that there was a plumbing problem on the second floor of the house, and it was causing major problems with the drywall, ceiling, flooring, etc.  Upon seeing this, he speed-dialed his Loan Originator, Mindy, and proceeded to lose his mind.  After hearing Kyle out and giving him a chance to find a brown paper sack to breathe into to stop hyperventilating, she told him he had absolutely no reason to worry because they had chosen an escrow company that was not associated with the builder.  Between breaths into the paper bag, Kyle asked her to explain, and she said that the builder had good reason to make sure everything is fixed to his liking because Kyle had “leverage.”  

While Kyle could appreciate the dulcet tones of Mindy’s voice and the confidence with which she addressed his . . . freak out, he asked her to elaborate (as he almost choked himself by inhaling a receipt that was inside the paper sack).  She said, in very simple terms, that when it comes time to close, they (Kyle and Mindy) will have demonstrated that they did everything that was required of them by closing the loan on time.  However, the builder is not going to get paid from the escrow company until they can demonstrate that they have fixed everything on the punch list to Kyle’s satisfaction.  Kyle has leverage because the builder REALLY wants to get that check from the escrow company.  Had Kyle allowed the builder to direct him to their favored escrow company (as they had tried to do), he would not feel quite so confident that the builder had proper incentive to fix what the plumbing problem had caused – he would have had little or no leverage.  

Make 2018 a great year – all the ingredients are there for the mixing – and trust The Process.  It doesn’t assure perfection, but it certainly gives you confidence that it’ll all work out in the end.


Comments

Post a Comment

Popular posts from this blog

An Age-Old Concept Reaping Future Rewards

W hy are social media like Facebook and Instagram so darn popular among real estate and mortgage folks?   Hint: the top reason might be an endless supply of memes, cat videos, and the chance to be snarky, but the other reason runs a VERY CLOSE second.   Give up?   Answer:   They’re free – and they really help even the playing field by enabling a one-person shop look and market like an organization who employs an army of wordsmiths and graphic artists. This new century is glorious, right?   With that in mind, let me re-introduce you to a centuries-old concept that is equally glorious – and can help IMPROVE the playing field for you, regardless of the size of your team: karma.   On the subject of “free”, I’m not suggesting that you work for free, but when you freely give of yourself and your knowledge, you’ll see a greater payoff, I promise! Recently, an agent came to us with a question: she has a client who is looking to sell his condo.   It...
Post a Comment
Read more

The Power of Doubt

We find ourselves in that weird week between Christmas and New Year’s – that week that feels a bit like the Twilight Zone where no one’s sure what’s real and what isn’t.   Because of that, most people tend to focus on one of two things: eating as much as possible or setting goals for the upcoming year.   The former is squarely focused on the present – how much can I stuff into my gaping maw at this very moment before I pass out and/or puke – while the latter is focused on the future.    Last week, before the Twilight Zone kicked into full gear, I read a short article that resonated with me, and I think it’ll prick up your metaphorical ears, too.   The author of the article is a gentleman who professionally trains Olympic athletes, and he highlights the talents of a particular athlete from the Philippines who is training to be a marathon runner.   He points out that this runner is not a professional athlete, nor does she receive any type of financ...
Post a Comment
Read more

Get to the Point (Posted February 29, 2016)

As you may have already noticed, there’s some amateur art included in this week’s newsletter.   While it’s certainly better than a crayon drawing that might grace a refrigerator that’s supposed to be “mommy” but looks more like a B-movie creature, we all acknowledge there’s a reason the guy in our office who drew this . . . i s still working in our office rather than making a living elsewhere.   Be that as it may, there’s a point to the picture: is this how you’re allowing your client to choose their mortgage company?   In many cases, it’s probably not too far off.   Agreed, it’s wise to stay on the right side of the law and be sure you’re never accused of “steering”.   With that in mind, many agents tell their clients that it’s completely their decision as to what mortgage company they use (and it is, of course) and effectively step back from the entire conversation – using the illustration to the left, they’re putting the blindfold ...
Post a Comment
Read more