“Orchestrate your Outcome”

Change makes some people crazy and others wealthy. Change can be traumatic or exciting. When change is an option, people will often put off making a clear choice as long as possible. When change has a date, it will often be challenged and asked for more time. We have begun to see all of this with TRID. We really need to look at this and choose. The choices are pretty clear. Do we all get better and surround ourselves with the better professionals in our area that embrace the change and adapt themselves to improve their level of execution to provide a higher level of service to the customer; or do we make the excuse that these changes are too hard to deal with and as an industry it is acceptable to make people add fifteen or thirty days to the transaction times because we choose not to do the work to get better?

I have spent the last year sharing the outlook, the options, and the plan to successfully deal with TRID and still close transactions in thirty days or less if everyone wants to get it done. The option is yours. Get better and surround yourself with better people and become elite, or join the masses and just kick the can down the road and blame the “stupid law” or “dumb rules” for not getting your deals done. The choice is yours and you have the plan all out there in front of you.

The key to success is to know how to pull all the pieces together. The one way I like to describe the process is orchestration. The components of a transaction are like all the instruments and musicians in the orchestra. If you ever gone to see an orchestra perform, you know at the very beginning, all of the individual musicians are randomly playing their instruments with no clear direction and without any form of continuity. It all just sounds like noise.

Then a person walks in from the side of the stage and moves toward the podium. The room goes quiet as the conductor takes a spot at the front of the stage facing the musicians and taps his baton and raises his hands. The group raises their instruments ready to go. As the conductor begins his movements the once noisy group of scattered sounds now becomes music. From side to side and faster and slower movements of his hands, the conductor coaxes, instructs, demands, and exudes performance from each and every member of the group. Not everyone playing the same note at the same time. Not everyone playing all the time, just a blending of individual talents set to a score, prepared in advance, and practiced and gone over time and time again. As individuals, and as a group, everyone knows their place, their part, and has practiced to be the best they can be for the part they play!

At the very conclusion of the performance, the conductor signals to conclude, and the crowd erupts in applause. It is the conductor that turns to face the crowd and accept the accolades on behalf of the entire group. It is the conductor that accepts the appreciation of the patrons for a job well done. It is the conductor who is recognized as the virtuoso. It is because it is the conductor that wrote the score. It was the conductor that understood each instrument and musician for their needed contribution to the entire piece and trained and practiced each member to be able to do their part when their part was needed. It was the conductor that had the plan to turn the noise into music.

You have an opportunity to become the conductor. I have prepared you for the event. I have written out the score. I have shared with you all the tools you need and the people you need to include and to train. I have shared with you each player’s part and role; along with the timeline you can follow to be sure you close your transactions in 28 days or less from the time of full application. The entire score is written and ready for you to go. Use the webinars, e-books, podcasts, scripts, tools and techniques I have share with you over the past year so you can become that conductor in your market for the smooth and hassle free twenty eight day or less transaction and bring together your team of skilled, trained, and exceptional professionals with you to perform!

You choose between being like the rest and truly being the best. You decide if you are going to become the expert you need to be, and surround yourself with those who also have made the choice to just be better. TRID is here and it is going to cause a huge divide between those than can and will get deals done quickly as the flow of beautiful music; or join the group of noise that just drones on forever? Your choice, orchestrate or abdicate?

Questions or comments: Mike@IMTcoaching.com or visit us online at http://imtcoaching.com

Action Plan #16 – The Final Post – Changes

So here we are; week sixteen of a step by step process to be prepared and have your clients, referral partners, and your team fully prepared for the TRID changes and how to still close transactions in thirty days or less. While others travel the country telling everyone just to add fifteen or thirty days to their contracts, I wanted my people to offer a plan by which the people and the process go better so that the customers didn’t have to suffer through a longer transaction process. Three webinars, an ebook, a joint webinar with Realtor®, trainer, and coach, Terri Murphy, a podcast, and these sixteen sessions will set you apart from the competition. All you have to do is implement the plan and share the solution!

While the main changes are the LE replacing the GFE & TIL, the biggest issue will remain providing the CD (which replaces the old HUD-1 on most transactions) three business days prior to closing. Once you understand that we need everything to come together five days prior to closing so the CD can be issued, you have the makings of a plan. So follow the plan, share the solutions, and become the expert in your market. Once you do, business will come looking for you!

This week we end the discussion with changes. While it is impossible to forecast everything that will take place during the purchase process, most things are foreseeable. In fact, most things should have been planned for. However, changes are going to happen and when they do; we need to be sure everyone is communicating this information back to the loan originator. Some changes are never going to be an issue. Some changes will always be an issue; while other changes might or might not be an issue. The important point is that whatever it is, no matter how small, it is important to share this information quickly with the loan originator so that they can determine course of action.

As we have talked about before, repairs are the most likely change we will encounter. Handling repairs can no longer be an item left for a simple closing table adjustment. In some cases, it won’t be allowed. In many cases it could cause for a new set of disclosures and an additional three day wait. In rare cases, it may kill the deal entirely! So be sure that everyone gets on the same page with the lender about repairs and how they must be handled.

We also have product or program changes, rate and closing cost changes, insurance and tax changes, all of which could cause a re-disclosure and a new three day wait! So let’s all get out in front of the process. Let’s identify all the players and set forth the timeline of events. If along the line there is a change of any kind, it is important that the lender be made aware of these changes and make any adjustments quickly so that all the parties know if there is going to be a delay!

Everyone wants to close on time. Nobody wants to delay a closing. Delays can cost thousands of dollars in addition to a great deal of stress and unfortunately, Drama! Nobody wants or needs real estate drama. Follow these steps and you will be closing on time!

  • Set the proper expectations with all parties early!
  • Provide a transaction timeline and be sure everyone is clear about their responsibilities toward the transaction timeline.
  • If any changes or delays occur, communicate with the lender immediately.
  • Bad news is like a dead fish, it doesn’t get better with time!
  • If you don’t know the answer, go get help!
  • Monitor the transaction timeline and be sure to communicate effectively if someone or something misses the timeline.

TRID is here and you can either provide a higher quality of service and prosper, or complain about it and be bitter. The choice is yours!

Questions or comments: Mike@IMTcoaching.com or visit us online at http://imtcoaching.com

Action Plan #15 – The Walk Through

Before we get into our point for the week, let me just make a comment about all the talk about another extension or grace period for TRID enforcement; “Go get some cheese to go with all that whining!” You were supposed to have been ready in AUGUST! Then you got an extension to OCTOBER! If you spent half the time doing the work that you did complaining and fear mongering, you would have been ready back in MAY like most of my clients were that had followed the plan we laid out last FEBRUARY!!!

For all of you that have been connected and have paid close attention and done the work; CONGRATULATIONS! You are now ready to compete at a completely different level than your competition. In fact, I am not even sure you can call it competition? So while the conversation continues to be about avoiding or delaying the work needed to comply with these regulations, some people have done the work and have been ready to go for quite some time. That is what having a plan is all about. While others are trying to figure out how to avoid or delay doing the work needing to get done, you have done the work and are ready to close transactions!

We said back in February that we could all see billions of dollars in business changing hands, along with thousands of relationships of referral partners who were not going to settle for 45 or 60 day closings. So while we did the work, a vast majority of our industry is either unprepared or uninformed. You are neither!

That brings us to this week’s action plan step which is the final walk through. While not likely to be an issue in most cases, properties with needed repairs or items that were supposed to stay with the property that are now gone or damaged, may cause challenges. Remember, any significant changes to the transaction may not be as simple as just a closing credit for a set number of dollars. Changes to the transaction could significantly impact the deal to the point of re-disclosure causing a delay! In this volatile rate environment, delays could cause rate lock extensions which cost money! What if there is no money to pay for the extension? What if a higher rate delays the transaction for re-disclosure or worse, what if the borrower no longer qualifies?

What was once fairly simple can become quite a challenge if left unattended or unaddressed. So please, let’s take the time in advance to spot issues early and get them addressed. Waiting until the final walk through to see if issues are corrected or to just assume you can change your mind and everything will be okay, but it might not. As we have spoken about in earlier posts and in the series of webinars, everyone has to do a better job upfront communicating and resolving issues in a timely manner. Listing agents need to prepare their clients and the property. Buyer’s agents need to negotiate repairs and timelines. Sellers need to understand that they can’t just change their minds and resolve the issue with a last minute credit because it might change the transaction enough to delay or prevent the closing!

Go back and look at earlier posts. We have set forward a real plan to deal with TRID in a professional manner that will still allow for properties to change hands in thirty days or less if everyone does their job and follows a plan for success!

Questions or comments: mike@IMTcoaching.com or visit us online at http://imtcoaching.com

Action Plan #14 – Insurance

Many of you are thinking to yourselves what the heck insurance has to do with preparing a successful TRID strategy. When you get down to it, much more then you think! Simply not having the correct numbers can derail your closing timetable. Remembering that we need to disclose numbers three business days prior to closing under the new regulations. Not having the correct information could certainly cause an issue.

More significantly however, is that sometimes the client gets the WRONG kinds of coverage, the wrong dollar values, or missing vital coverages completely! The other problem can be, what if they get insurance that is very expensive and the monthly payments are far higher then you estimated and now your borrower no longer qualifies for the loan? Before you laugh this one off as a joke, it HAS happened! Sometimes between changes in taxes and insurance changes, the borrower could get pushed out of qualifying for the loan! Oh yes, what if we find out that the property requires flood insurance? Just because the old owner didn’t have flood insurance, or the property was once not in a designated flood plain; that doesn’t mean it isn’t now!

So how do we prepare ourselves and our clients to avoid issues that could delay or derail their transactions? The steps are pretty simple.

#1) At the very beginning of your time with the client you need to set expectations and timelines. You have to prepare them for what actions need to be taken and when they must be done! You must explain insurance carefully. Homeowner’s insurance, flood insurance, and mortgage insurance all can play a part in the budget and in the monthly payments. Since the total monthly payment is what we use to determine critical ratios. Getting this number right is significant; so don’t be casual or cavalier about these numbers.

#2) It is your job to explain how these numbers are determined and what may or may not be within their control. Sometimes just changing the deductible a few hundred dollars can change their monthly payment significantly! Also, you need to caution your clients against being over-insured. Share with them that you will be providing them with a copy of their appraisal which will contain key information regarding the property as well as what the total costs to insure will be.

#3) When you get the appraisal back and review it, you can walk your people through the appraisal and then share with them the instructions on what coverages they will need and the lender requirements for their policy. At the same time it would have been good to do a flood certification to be sure FEMA hasn’t changed a line on a map and now caused a challenge.

#4) Now that your client is clear about what they need to satisfy their insurance obligations, you must give them a BUDGET! If you estimated $50 per month for insurance, then they have a budget of $600 for their policy. If you are not clear about the budget, you could have real issues at the closing table! You may have to re-disclose and delay the closing! A delay in the closing could cause a loan lock to expire! A higher rate may cause a delay or even prevent the borrower from qualifying for a loan at all!

Clearly it isn’t likely any of these things will happen. But why take a chance? You know insurance is required. You know the challenges are possible. Take away the possibility of an issue by setting the proper expectations and creating a path to success that avoids the drama of bad information, higher payments, delayed closings, and unhappy clients. As a true professional, it is up to you to guide your client to a successful and hassle free transaction!

Questions or comments: Mike@IMTcoaching.com or visit us online at http://imtcoaching.com