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Project Management is the art of the possible, it’s the art of making things happen in exactly the right order and exactly the right time and it’s a lot of work. It’s a critical skill for any real estate professional, because the job of selling real estate is showing up with your clients and being prepared. Real estate is a simple idea with a lot of complexities – someone wants a house, someone wants a parcel of land for commercial development, or someone wants office space.
However, all of these transactions involve large sums of money, with means involving a financial institution to work out the mortgage and payment structure. Every one of these transactions involves setting up proper notice with city and county governments, and for parcels adjacent to Federal lands, there are also federal permits and regulations required.
This means that, for a real estate professional, there’s a lot of hoops that have to be jumped through, above and beyond what’s needed to actually close the sale. Or, in the words of one real estate professional we talked to. "Selling the property’s almost the easy part. The hard part is all the paperwork at the end that needs to be taken care of."
Fortunately, attending a project management training and preparation helps considerably in reducing the paperwork nightmare aspects of working in the real estate profession. If you’re part of a larger real estate office, there’s almost a clerk who prepares a list of all the paperwork that has to be filled out for every sale and transaction. Even if you’re a sole resource seller, there are web sites and check lists you can go to for all the information needed for each type of transaction. Even so, some simple and straightforward steps will help considerably in smoothing this process out.
First, when interviewing the seller of the property, have them fill out the legal paperwork stating that there are no outstanding liens or claims against the property. Get this notarized, and then run a secondary check with your local county or state titles office.
Next, when talking to prospective buyers, pay attention to their credit scores. This acts as a filter for the kinds of prospective buyers for a property. Once you have that information in place, and you’re showing the property to them, mentally walk through the process, and work backwards from the closing date, to find out what paperwork and what information you’ll need when to make the transaction flow smoothly.
For example, for buyers with poor credit history, you’ll want to work more closely with the bank underwriting the mortgage, and with the prospective buyers to make sure that the transaction can occur for the listed price. Your buyers will want to know loan details, percentage rates, fixed point adjustments, closing costs and fees, and you’ll need to have a menu of options to present to them as the sales agent. As each transaction is, within certain bounds, unique, you will have to do this part from scratch every time you get a prospect interested in a property. This can result in a lot of extra work if you don’t plan it carefully - again, working for a larger firm, there will likely be someone there who has the job of making sure all these details are attended to, but as the sales agent, you’ll need to learn the details to talk to the prospect.
Next, you’ll want to discuss the financial implications of real estate ownership with your prospective buyers. Explain to them how mortgages work, and try to look at the process from their perspective. Planning on your part makes the rather daunting prospects of all the paperwork, and the mountain of mortgage debt, a lot simpler and easier to take on their part, and this will directly reflect on your sales commission and conversion rate.
For example, walk them through any non-standard clauses in their mortgage (or, take the time to walk them through, clause by clause, through the lender’s documentation). Signing a contract for a $100,000 home or business parcel is no place for ignorance. In particular, point out clauses such as penalties for early payments, dates at which introductory interest rates shift to market based ones, and point out the cost/benefit aspects of a larger down payment for a shorter term loan. Explain the Rule of 72 to them as well – anything they can do to drop their long term mortgage rate will help them in the long run.
The Rule of 72 is this: Divide 72 by the number of percentage points on the mortgage rate. That’s the number of years it will be before the cumulative interest payments equal the amount of money taken out for the initial loan. For example, if the home loan is at 9%, 72/9 means that after 8 years, the total interest payments made have equaled the cost of the original house!
As always, planning and forethought can help you in any kind of business, but in the Real Estate business, with all the paperwork, regulations, and large sums of money flowing around it, project management style thinking really pays off in extra sales, reduced stress, and time saved!
Look here for More project management training articles or for an extensive directory on related sites on: project management training.
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