Real Estate Talk Podcast with Jesus Castanon | RETalkPodcast
The Ultimate Real Estate Unveiling! Raw, Real & Revealing insights from industry experts
Dive headfirst into real estate's most electrifying depths with industry legends - Jesus Castanon, Josh Cadillac, and Richard L. Barbara. Why legends? With billion-dollar deals, groundbreaking innovations, and wisdom that's transformed the landscape, they've not just witnessed the game; they've been the game-changers. And if that's not enough, they're joined by a parade of industry-expert guests, spilling secrets and dishing advice that you won't hear anywhere else.
Expect RAW, REAL strategies that shook the market, REVEALING insights, and timely takes on today's market, coupled with actionable advice.
This isn't your typical real estate chitchat. This is RETalkPodcast - where the titans and top minds of the industry unite. Dive in, and prepare to have your real estate perceptions rocked!
Real Estate Talk Podcast with Jesus Castanon | RETalkPodcast
Unveiling the Mysteries of Real Estate Contracts: Tips, Traps, and Insights | RETalkPodcast | Episode 10
Are you ready to uncover the mysteries of real estate contracts? Prepare to navigate the complex landscape with us as we dissect different aspects, reveal common pitfalls, and arm you with the knowledge to handle your real estate transactions with confidence. From the wild world of South Florida real estate to the intricate dealings of deposits and down payments, we touch base on several indispensable topics.
We delve into the importance of having your paperwork in order and a dedicated team to avoid losing clients or deposits. Following instructions on the MLS and ensuring contracts are filled out correctly can set you up for success. In addition, we share insights on the important art of reading and understanding contracts. We also throw light on a unique company that offers a rather interesting product as a form of protest against contracts.
From the role of attorneys in real estate deals to the complexities of pre-occupancy agreements, we explore it all. We also highlight the significance of a good CRM system in tracking real estate contracts and deadlines. So, join us as we unravel the intricacies of real estate contracts and share valuable insights to help you sail through the process with ease. And remember, as the Warren Buffet saying goes, "Only when the tide goes out do you discover who's been swimming naked." So, let's help you always have your swimsuit on!
Real Estate Talk Podcast with Jesus Castanon - @retalkpodcast: The Ultimate Real Estate Unveiling! Raw, Real & Revealing insights from industry experts
Dive headfirst into real estate's most electrifying depths with industry legends - Jesus Castanon, Josh Cadillac, and Richard L. Barbara. Why legends? With billion-dollar deals, groundbreaking innovations, and wisdom that's transformed the landscape, they've not just witnessed the game; they've been the game-changers. And if that's not enough, they're joined by a parade of industry-expert guests, spilling secrets and dishing advice that you won't hear anywhere else.
Expect RAW, REAL strategies that shook the market, REVEALING insights, and timely takes on today's market, coupled with actionable advice.
This isn't your typical real estate chitchat. This is RETalkPodcast - where the titans and top minds of the industry unite. Dive in, and prepare to have your real estate perceptions rocked!
Meet The Legends:
Jesus Castanon: Visionary CEO of Real Estate EMPIRE Group, transforming property transactions into success stories.
Josh Cadillac: Renowned real estate coach, national speaker, and author; revolutionizing the art of 'closing for life.'
Richard L. Barbara, Esq.: Florida's legal luminary, pioneering change and setting the gold standard in real estate advocacy.
All right, guys, this is a Susca Tanyong from the real estate podcast. I can't get used to saying that shit. Real talk podcast. Real real real estate talk podcast. The logo made a lot of sense when I came up with it, like I was like, yeah, it looks good, so I'll put the estate and I won't really write it. I'll write it in so I could you know. But saying it just sucks a little bit. But so, yeah, I'm Jesus Castanon and or got Tanyong, I want to say it in Spanish and you are sir Josh Cadillac. All right, all right, great. So look, today.
Speaker 1:The thing is, guys, if this seems a little bit weird right now, it's because we went through this already once and then we realized we weren't recording, so I'm going to have to do it the same shit over again right now. So, but all right, long story short, we are going to give a class today on contracts. Not just go line by line and read the contract for it. No, we're going to kind of summarize the paragraphs in it. We're going to give you most common mistakes, you know, and why would you even listen to? You know, a couple of lads like us on contracts, right? Well, first and foremost, I have been doing this right here, this contract thing, and negotiating, and not only that, but getting myself in the messes that my realtors create, sure, okay. So I call myself the complaint department.
Speaker 1:So when this shit hits the fan, hey, everybody's fighting attorneys. Why are you? Keep on looking at the camera, you're making me nervous. Are we recording? Sure, all right. So you know, anytime the world is falling apart, everybody's fighting attorneys. Or you know, there's something forgotten on the contract, deposits are at risk and everything like that is usually when I step in.
Speaker 1:So what that does is man. It creates like a fifth sense. You know, per se, that you just understand this and you understand the mechanics of it. You know there's been a lot of cases where, for example, I don't know paragraph six, you know, is the one causing the problem, or maybe it's another, maybe it's an addendum that's missing, maybe it's, you know, you forgot to put the washer and dryer, I don't know, things that we're going to go over today, right. So you know, between kind of like on myself, we have thousands of transactions, but the cool thing is that kind of like an actual instructor. So you know he has the street cred because he's been out there and he's doing the deals and he's very successful in real estate. But he's actually not only a certified I guess national instructor for the National Association. A realtors travels the country teaching classes, but he's also has a real estate course approved. Tell us a little bit about that course there.
Speaker 2:Yeah Well, actually, before I do that, why don't you tell us about the gentleman, because I thought that was really interesting. The gentleman, that whose class you went to, that still to this day is on.
Speaker 1:And then I'll take that after you. That's right. I mentioned in the previous three minutes that we didn't record. So, yeah, the you know, it's one of these things that I have a horrible memory. I don't know if it's self-inducer, it was a birth defect or anything, but I have a horrible memory. So it's. I'm not one of those guys like, oh, I remember one, because I don't remember Right, so there's no remember ones. But when I first started in this business, I went to a seminar and it changed the way I did business, so much so that I actually remember the guy's name. The guy's Neil Littman, all right, still around. I actually had an attorney represent me in a in a in a real estate related situation there, and and one of his partners was, was was Neil Littman and I was like, oh man, that guy's still around. You know, actually I forgot, I wanted, I wanted to meet him and tell him that.
Speaker 2:You could take him a coffee man. I should, I should, I should, I should.
Speaker 1:I would make a big deal and say but I, you know I really should, because it really did. I remembered the day, I remembered the way it changed everything. So I'm hoping that we're today doing what we're doing today. We're kind of like the Neil Littmans of of, you know, of the real estate contract for you guys. So we're going to go over it, you know, in in two perspectives, really three perspectives Again.
Speaker 1:You're, you have the street cred, like I mentioned earlier. You know I'm looking at it like in the hardcore emergency situations negotiating for realtors. You know I train almost all my realtors. I get brand new. So we got to train them on the contract. And then, you know they're a little bit more prone to I wouldn't say mistakes. But you know things happen, little minor things happen. So you got to keep on top of the stuff. So we're a lot more alert to it. You know. You know you're, you know you're an actual instructor that understands. You know how to go line by line on stuff. So it's going to be, you know I hope it's going to be something really cool for you guys to to. You know it'll change the way you do contracts, so sure.
Speaker 2:No, I think that's important because, as I said the first time around, unless you're going to commit yourself to do rents for the entirety of your career, you are going to have to go through this document, whether it's this contract or one of the other form contracts that exist, you're going to have to have this contract be a big part of your business.
Speaker 2:So most people spend quite a bit of their time early on in their business being very much intimidated by this. It's the reason why I, while I've been teaching a three hour course for for quite a while on this, I wrote my own four hour course that just got approved. Actually, today I showed you the message that we not only look at it from a standpoint of like, let's go line by line, as it turns out to take, and do it line by line. With a room full of realtors, it takes about three hours just to answer all their questions and get through it. I would figure it would be a lot more than three, but I think it's a great figure to be a lot more than three, but yeah, you go fast.
Speaker 2:Yeah, you would have to, but I, mine is a four hour because I want to spend another hour on kind of that idea of, okay, now I understand what it does, but how do I work with it. Because there's a difference between you know it is a tool and me showing you, hey, this is what this tool looks like when it's, when it's being operated properly. It's like me explaining to you maybe, how, like, a drill works and then watching someone that's really good using it to take and do something. Now you go from having just an idea of what it does to having a good picture in your mind, that's, seeing how it works. Yeah, and there is that difference between just knowing how it works and seeing it used well, right, and so I think that a lot of times, the difference between agents that are new and agents that have been in the business and been successful is that they know how to make this not just work but how to make it work for them.
Speaker 1:Absolutely. You know from the way we we we did a podcast earlier. That's really. You know getting offers accepted. But in a large part of getting offer accepted is to fill out the contract Right.
Speaker 1:I had one of my realtors just tell me it was a today or yesterday. She's like man. I had like five offers, by the way, the market's still hot COVID-19, covid-20. I don't give a shit, it's busy right now. She's telling me she's competing with like five or six different offers. You know the way she presents specifically. The realtor called her and said listen, my seller's an attorney saw your offer compared to everybody else's and the way you presented it and you know what. We just had to go with yours and there was better, there was better offers. But they felt, again, being an attorney, he just felt this person has their shit together so well. Everything is so buttoned up that I'm going to go with this guy and, by the way, that is exactly the way I recommend my sellers.
Speaker 1:When I have a seller and we have multiple offers, I am going and I am going to see how organized this contract is set up. Are they missing stuff? Are they missing dates? Are they missing sections on the contract? How is it submitted? Because that's the person I'm going to be married to for the next 60 days, or 45 days, or 30 days. So I want to know that that person there is on the same page than I am. I don't want to have to be giving a class to the person, I don't want to be teaching them, you know.
Speaker 1:Hey, fill this out Now. Will I do that sometimes? Will I do that when I have to? Will I do that when I really like the person Absolutely? But, man, if we could just be on the same page from the beginning. And one of those things that Neil Lippman says hey, always go as is. There's no reason why. And the way we do things here, it's everything's as is, with the right to inspect, right. So it's a more comprehensive. Hey, I'm going to put in an offer it's as is. You got a certain amount of days to inspect. Within those certain days, you want the property or you don't want the property, that's it. But hey, after you pass that, it's as is, and that's a real comprehensive way to go with it. You know.
Speaker 2:I think what you said there is actually really good. We're talking about it being a marriage because it's really like an arranged marriage. I don't know if anybody's ever watched something from like medieval times where, like a king is trying to get married and he asked for them to like send a picture or something like that because he wants to mitigate his risk. Because, like, when you get an offer in, you know you're going to be stuck with this person and so whatever you can do to let them know, hey, look, this arranged marriage is probably going to work out. If you can write this because I've gotten contracts sent to me and just look at the contract, I'm like the agent that sent this is a jerk. Well, this is not.
Speaker 1:this is not a person I want to be with, and in this particular case of this realtor that you know just got this offer accepted a couple of days ago. There was also instructions on the MLS to include certain attachments. So it's not only that they did she fill out the contract correctly, but she followed instructions correctly, added things correctly, had a desktop underwriter approval submitted, had everything, and when she submitted this, that other side was so impressed that it was hey, slam dunk, I want to go with this person. Guys, this is just stuff that happened. It might have even been today, but again back to my memory, right, it was today or yesterday, but this is stuff that happens to me on a regular basis.
Speaker 1:Realtors, you know our realtors here and again. I promise myself I'm never going to make this podcast a commercial on the company. All right, but it is what it is. You know we, we got our shit together here. So, wherever you are, if you don't have your shit together, go somewhere where you have your shit together, where the company is going to back you guys up and make sure that those contracts are filled out correctly. Not only is it going to save you, is it going to get you offers accepted, but it's going to save you a ton of heartache, a ton of issues with you know, losing clients, deposit Guys, it is, it is. I can't remember the last time we lost a client's deposit. And again, you know, we have a lot of transactions and everything, but we keep such a clear like it's so close connection with the realtors and making sure that they don't screw this up that that's why I'm constantly busy with you know, avoiding issues in reality. Right.
Speaker 2:And I think the goal with this is not has never really been to just sit there and say, hey, come work here. It's to give agents out there who maybe don't know what it looks like to see it done right. An example of hey, when, when, when the help is there on the top, this is what it looks like, so that agents can go out there themselves and shop. They can go out there and look for places to work and say, hey, look, this is how we do it here and this has been successful. Look for this. Yeah, this is what you should expect, because agents don't know. All they know is what they see in HGTV.
Speaker 1:Look, and there's one saying that that that really resonates with with the way the, the, the contracts. You know your relationship with the contracts right, so you guys could really understand it. You could spend a year filling out the contract I mean half complete and get away with it, sure. But guys, here's this, here's the saying right here. Is there a sound effect for this thing? Something special coming in, or what? Everything is fine If everything is fine, no, the second, the shit hits the fan. The second the seller doesn't want to close, or buyer doesn't want to close, and everybody starts staring at that contract. It goes back to another saying, the Warren Buffett, saying uh, when the tide comes in, you find out who's who's swimming naked, or something like that. The tide goes out, yeah.
Speaker 1:When the tide goes out, you find out that, yeah, when the tide goes out, you find out who's swimming naked, right? So when the tide goes out with the contracts, when, when, all of a sudden, oh, one of the sides does not want to comply, everybody is going to be staring at your contract. Okay, now, do you want to be there naked or do you want to be there with a swimsuit? Right? That's really what a contract is, everything. So you could literally spend five years in this business filling out the contract like shit and no problem, right? Until that, one day, it only takes once, just once. And that's the thing. You know.
Speaker 1:Listen, I've been very honest with with our, with our listeners. Let's say you know that, um, I've run out of wrong ways to do this business. So it's not like I just showed up here and, oh, my God, you know, I figured it out from day one. No, dude, I've made every mistake. I could go paragraph by paragraph and tell you each mistake I've made on each one of those paragraphs.
Speaker 1:So you know, but it was many years ago, and, um, and then after that, you're going through all the mistakes that your realtors make and fixing it and the whole situation, and you know, so it's uh, the best way to do things from the beginning is there's no, by the way, there's no better feeling than all right, everybody's at war and your contract is perfect. Oh yeah, there's nothing they can get Like, sorry, come get me, absolutely. Come, get me Great feeling. How awesome do you look in front of your clients and in front of your realtors in our case that you know the shit's hitting the fan and all of a sudden, everybody's trying to attack it and our contract is perfect, because they went through our classes and they went through our training and they went through our filtering process before they submit an offer.
Speaker 1:So, believe me, guys, you got to know this. You know, if you're still stuck in quarantine, no better time to sit down there and read this contract with it, make friends with it, become one. What's that? Uh, that, bruce Lee, you know, uh, come like water or something like that, I don't know, I'm fucking up. All the same, stay with.
Speaker 2:Well, I'll, I will say that it's uh, it's, it's super important to get this and get it right, and I mean, that's really what this boils down to. I will. I will say this in all honesty there's that moment when the call comes in and somebody gives you a problem about your contract, where your stomach sinks and you're like oh, my God did I do it and it's like six years ago and you're going through the file and you pull it out and you see that everything is the way that it's supposed to be.
Speaker 1:Yes, no better feeling.
Speaker 2:No, the best feeling honestly is for me is when I take and I scan it back in and I send it to the other side and say please note page 11, subsection a, letter G what you marked an initial might as well, just taking a picture of a middle finger and scan it to them. I mean it really is, or scan your ass or something. I really feel like that's what's going on there and it feels very cathartic.
Speaker 1:So yeah, I remember early, early in uh, in my uh career, I mean, I had a major issue with somebody and everything like that. I remember they sent me some threatening letter and I call my attorney. I'm like, let me ask you a question, man, and I you know this might sound a little bit weird, but what have I? Wiped my ass with this document and mailed it back, like what are we looking at here?
Speaker 2:Well, dude, yeah.
Speaker 1:Well it was, it was uh, it was a federal, uh, it was something federal and everything like that. I'm like, yeah, but what, what is it? Okay, so federal? So then what, what?
Speaker 2:what's jail time Right? What are we? What are we looking at here?
Speaker 1:How, how bad do I want to wipe my ass with this letter and send it back to this guy, you know what I mean.
Speaker 2:So well, actually, I found there is a solution for those out there that really want to take a mess with someone. There is a company that will send them all different types of animal poo.
Speaker 1:Oh yeah, yeah, yeah, gorilla poo, yeah, elephant poo, and that's legal.
Speaker 2:Yeah, yeah, yeah, for some reason, that was, and supposedly it's completely discreet. But yeah, I know, use that information at your own risk, All right.
Speaker 1:So let's get to the fun part here, Cadillac, Um, we're we're going to actually try to make a contract class Fun. Is that what we're trying to do here?
Speaker 2:Well, I think a lot of sound effects are going to be needed for this. We'll try to share our pain and suffering and places where we've screwed this up before maybe so hopefully you don't have to all right.
Speaker 1:So paragraph one, which is basically parties, buyer and seller, property description, Well, I mean the big one with property description.
Speaker 2:That that I've heard and this is something recently is that you need to make sure the entire the script legal description is there, yeah, and so if it's not, you need to actually add an addendum, and I hadn't been doing that for a long time, but you know that's, that's a big deal. Yeah, it needs to be there.
Speaker 1:It needs to be there because the way I best heard describe the, the, the legal description is the fingerprints. Yeah, right, so the address is kind of like a picture of the person, maybe from far away or whatever. But there's another 127 southwest 150th St In a bunch of different places in in, in the, in the state and and uh, yeah, you have zip codes and everything but legal description is literally the fingerprints of the property. There's no way to you know in any way. Mistake it with any other the DNA.
Speaker 2:Yeah, it's a DNA Right. You can borrow your right. Dna, so and so it's just taking one more place. You know what you don't want is the person that's on the other side to be an attorney that's got nothing better to do and is deciding to try to take and pick apart this stuff. So if you want to just take and you know the ultimate fig leaf, if it doesn't fit in there, you just take an attach, an addendum, and say in that area, right there, see addendum, and you put that information there.
Speaker 1:Yeah. So, by the way, the for everybody who wants to sit, I mean, the right way to do it would be to sit at home and kind of go over it. This is the aziz residential contract for sale and purchase, also known as the far bar, as oh yeah, known as a far bar. Is this the most recent version, revised on 6 19,. Do you remember what was five pages? Yeah, I do remember when it was five pages. What are we right now?
Speaker 2:Yeah, one, two, twelve, yeah it says at the bottom there yeah, one of 12. There we go, five pages, and the first three pages are the only pages you had to fill out on the old one. And you could actually you could actually get on it. I probably shouldn't say this. You could get a, sell it a sign, page three, and then just take and put it the same page three and multiple offers for them, because you had sellers that were out of the country. I'm not supposed to say that.
Speaker 1:Yeah, I know, we never did that, I know.
Speaker 2:I had emails authorizing it. Yeah, I mean, that was the wild. Look at florida. It's south florida, man, it's the wild west. Yeah, that's well, and there was time.
Speaker 1:There was times where I mean there was, there was times where you, you, I don't, I don't think there was a way. I'm not admitting to me doing this, but I'm saying, but it, hypothetically speaking, if I were to have done that, there was a time that you almost had to do it because, uh, there was 20 offers on a property, on everything, on everything 20 offers.
Speaker 1:That was the wild, wild west 2006,. You know, uh, mortgage fraud was was. I mean, we were leading the uh here in Miami, we were leading the country and mortgage fraud, you gotta be got something. You would submit a contract for you new schoolers here. So you would submit a contract, you would get an offer accepted. You would send it to a country wide back then, which country wide is you know they close it down with. They should have.
Speaker 1:Yeah um, so you would submit the. If you would submit the contract today, if you would get the contract accepted today, you would send it to the mortgage company, you could close it tomorrow. Yeah, so appraisal was done. I'll print, I mean huge air quotes there. Appraisal was done, um, and underwriting, and everything was done in overnight and you would close it the next day. And that was normal 24, 48 hour closings, 100 percent financing, no documentation. So, yeah, you had to get and you had to get creative to get anything done because there was a thousand offers on each property. So, but again, don't do that and I never did it. Um, so what else? Uh, uh, okay, so, personal property, uh, what's included and what's excluded?
Speaker 2:correct, so, yeah, if you notice in there, the big one is washers and dryers. Yeah, aren't included. Yeah.
Speaker 1:I can't tell you guys. Let me tell you how I learned this lesson probably through about 20 000 dollars worth of washers and dryers that I had to pay for the clients because I forgot to put one. And all of a sudden I show up to the, to the walkthrough, and it's not there. And all right. I mean I'm 20 years old, about to get, you know, a contract, a closing. What am I gonna do not pay for a 300 dollar, you know, washer or dry, or 500 dollars, and miss out on a six, seven thousand dollar commission? So, yeah, I paid for a lot of washers and dryers. So after a while I learned to put make sure that everything is included or excluded.
Speaker 2:Yeah, pain, pain is a great educator.
Speaker 2:It is even even financial pain. It definitely reminds us stuff. Actually, my story of pain and suffering, near pain and suffering although, well, you know how I feel about my customers I don't, I don't advertise. All of my business comes from past customers, so I lose a customer, I take it very personally, yeah, and this is actually one of it's, one of the only customers I've ever lost. I was subsection was the little section there on e and it's personal property, and the particular property was a house that was a major over improvement in the area. So this house is like a million dollar house somewhere else, but it's it's like 400 000s, but the guy is asking in the area and this is circa 2010 2009. There's nothing. There's no offers coming in Anywhere in the world was still ending. Yeah, I mean, we were, we were still, the inventory was still expanding and there was, there was no Org's every where.
Speaker 2:It was crazy. I think there was 33, 33 000 single family homes available in dade counties brutal.
Speaker 2:So I got this guy in house on the market and it was. It was on the market for like 325, 340, 000, something like that. And we get an offer and it must have been 340 because we've got the offer for like 335 and everything looks good with it. I, I'm looking at on my phone. I sent it to the seller and I said, hey, take a look at this. You know I'll come by, we'll do the paperwork and we'll get it moving. I was really excited. So I get over there and the seller says so you look at the offer, everything looks okay. I said yeah, yeah, no, I mean, I looked at on my phone and you know I had the paperwork but I was rushing to get there. So he said, yeah, I'm not including my bedroom set. I said, what not when this guy says his bedroom said he had like a 30 000 Bedroom set there's like fake fabric.
Speaker 1:Yeah, yeah, huge problem.
Speaker 2:When I looked in section e, the agent had actually typed In a font that looked almost identical to the paragraph that the bedroom set would be included. I couldn't believe. I mean it was like really dirty pool. And after that, man, before I ever send a contract to anyone I check every little bit of it, because that is the worst feeling in the world To have your customer catch something that you was the real estate professional room flat out missed. So that one still makes me cringe at night.
Speaker 1:Yeah, that font, the font. The font will get you. I remember I had a man. I had a huge war with another real estate company one time. It was in, it was in one of the cities here and I'm not gonna get too detailed, but it was him and I became really good friends after. It's like really good friends we. We loved each other after. But, man, there was a point where we were at war. We were at war, we were, we were in the same community and we each had a ton of listings. I had like a hundred and something listings. It was a big community, it was like almost like a city. I had, yeah, almost to almost 200 listings. He had around the same.
Speaker 1:But he was in there kind of beforehand, so he shut down the association from allowing me to put signage. So later on I found out all the dirty games that he was playing and then again you know so. So there was a time where he wouldn't let me put a sign. So what I did was I got the same font phone number, right. So I got my phone number in the same exact font that he had his phone number. So I went in at night. I had one of my guys go in there and stick my phone number On top of his phone number for the sign that says homes for sale and the whole situation I love it Right and uh and dude, it was weeks, weeks.
Speaker 1:Why am I not getting any phone calls?
Speaker 2:Because, the number that it was us Dude. We ended up becoming family.
Speaker 1:It was war, it was throwing a wind, uh, rocks, um, uh, there was one night them and uh, we wake up in the morning and we get there and there was like a rock with a paper, uh uh tied onto it. Um, you know, like, like it was like um rubber band around through it, through the window, and it was a whole scary uh note on what he's gonna do. It was a whole scary uh note on what he's gonna do. It hurts like that. Uh, it was bad man. You know, one day hit the hit. Um, he calls me and I'm like where are you? You know where are you. And then, uh, I meet him. I get in the car and you know we were supposed to start fighting there. I look at him, he looks at me. We both start fucking laughing. Go have a drink and we're like best friends.
Speaker 1:We ended up working together. It was great. So there's actually a more rated r story to that. But uh, yeah, I can't do it in the park.
Speaker 2:South Florida real estate right there, this is actually central florida real estate. Okay, there you go.
Speaker 1:Um, so all right. So yeah, just include everything as far as seller and buyer this paragraph one just make sure you have go on the public record and make sure the seller is the seller. You know, a lot of times when you have the husband and wife Might, maybe the husband is the only one that's untitled, but you should add the seller the wife also buyer.
Speaker 1:It's you know, it's you got to be. You got to be careful and ask your mortgage company who you want to add on there. Who's gonna be on the mortgage. You could add them later on title.
Speaker 2:You can add them on title but in order for them to be in the closing and on the documents at the closing, I don't have them maybe later on has to be on the contract or an identity.
Speaker 2:It has to be part of the contract, whether it's on this contract or an addendum. You can do a buyer and have a buyer later. Be it, can the buyer can be an So-and-so or an LLC to be named later. Yeah, so, bill Smith, or an LLC to be named later, because a lot of times investors don't know if you know, and or assigns, and all that kind of stuff absolutely so, but one way or the other you have to have it in there.
Speaker 2:And if you're going to do that later on, we need to talk about the assignment, because if you're gonna have an end or assigns, a situation when maybe maybe Bill Smith is the investor and he wants to take the property in an LLC, but it is an own any yet so he hasn't formed the LLC and so it says, when an LLC to be named later or and or assigns, there has to be later on in the contract room made for him to assign it. Otherwise you're gonna need an addendum and you're gonna need to sell it, a sign off on it for him to take and do that later on, yeah. So I mean, that's just something to be aware of. And I think one thing just to make sure that we hit it hard is On D you want to want white right washer and dryer. Sure, if the washer and dryer are staying, yeah, if you expect them to stay as the buyer's agent, you need to put them in there.
Speaker 1:That's right. So purchase price Ask, grow, okay. So one thing that I get and again kind of like here's where your world, in my world, kind of like um, are a little bit different, right. So what I see on a regular, my mind immediately goes to what I know realtors that are starting off in the business Like one of the biggest confusions, for whatever reason, it's deposit versus down payment.
Speaker 1:Mm-hmm right deposit versus down payment. So you guys got to understand that a deposit is earnest money deposit. It's there to hold the contract. It's there to secure the contract, saying alright, if anything happens, that's the security for the contract there's. If you know, that's basically what they go after if you've reached the contract or anything. The Down payment is what you use to give the bank right. So let's say you're going on just easy numbers a hundred thousand dollar property and it's a 90% LTV, which is a 10% down payment. So down payment is the what you're gonna give the bank. Bank, I'm gonna give you ten thousand dollars. You're gonna give me a ninety thousand dollar loan, right, so that's the down payment.
Speaker 1:Now where it gets really confusing to these new realtors is when you get the deposit and then you transfer it over and then it becomes the down payment. Yep, right, that's where the or part of the down payment, or part of the. That's where their head blows up, yeah, so that's like smoke coming out of their ears. Well, wait, wait a second. What's the difference? You know? So that's the stuff that I see on a regular basis and I need everybody to understand that for all you new realtors and it's again it's a very common thing, it's. It's the deposit is there to hold the property.
Speaker 1:So, hey, uh, seller, I'm gonna put a ten thousand dollar deposit On this property for you to to accept my offer for the next 45 days, right? So this means that if I screw up in any kind of way, right, that's your remedy, because at the end of the day, that's what lawsuits are for. It's damages, right, what damages? So it's to cover, really, your damages. So if I'm a seller and I can't sell for 45 days, and I'm, or 60 days and I've turned down other offers, and I still have to pay mortgage, I still have to pay electricity, I still have to pay all of these things. You've slowed my life down for two months, right, and I've had to pay $5,000 and and then maybe I paid the mover and whatever the case. That's where I go after your deposit, right? And then that's how I pay my damages. If I'm the seller, okay, down payment is just has something to do with the bank. Okay, something to do with the bank. So the bank is saying, all right, well, yeah, I'll give you the loan on this house.
Speaker 2:You got to give me 10 of it and I'll give you the other 90 percent right, and 100 it really is your deposit, is your what you're saying to the seller for the seller to take you seriously and say, hey, look, if I screw up, this is what I'm putting at risk because you're taking on a risk going forward with me. Here's the risk that I and here's my mirroring, mirroring risk You're taking your risk on me saying you're going to accept this contract and take it off the market. I have a mirroring risk because I am putting this much money down, saying I will perform or I risk this money. And so, as far as the positive goes up, the positive is just simply the, the, the reciprocal of the LTV. If it's 80 LTV, okay, well, where's the other 20 percent coming from? That's your deposit, right?
Speaker 1:LTV again for for your new guys. Um it loan to value. Okay, so loan to value if it's. If you're putting 20 down, your LTV is 80 percent Okay. So, um, what else in a?
Speaker 2:hundred thousand dollar house, a bank is going to lend you 80,000. 80,000 on another 80% LTV, correct, um. The other one I think that's kind of a big one I like to talk about is that the financing Expresses a dollar amount or a percentage. Um, I always recommend to express it as a percentage.
Speaker 1:Yeah, listen, I can't agree more, and that's one of the things that you know. Back to this is basically the neil lintman podcast. I'm I'm gonna have to send it to him. Um, this is one of the things that I know that changed. Uh, when I went to a seminar, everything from from from then on, I didn't use dates anymore, I used days. So I never put closing date on. You know, may 15th, for example, I'll put honor before 30 days, honor before 20 days. By the way, I figured out what's wrong was different with the lighting. The shades are open. Yeah, so I would never put. My brain works the. Um, I never put date a date, I put days and and and there's a real, real good explanation why. So let's say, I'm putting in an offer today, today's, what the? The fifth six, right?
Speaker 1:today is the sixth seventh, seventh, the seventh, all right so, and I'm gonna put a date of so this may seventh. I'm gonna put a date of june 7th, but let's say so. I'm gonna put in an offer. I'm gonna put june 7th, but let's say I spent two weeks back and forth offer counteroffer, alpha counteroffer, we're fighting over a washer, and two weeks passed by. Now, all of a sudden, I got to change everything again. But if my whole, everything is based on percentages, okay, and the price went up, price went down, but everything's based on percentages, we're fine, it's a percentage of the price, correct. And if it's days, so the, the, the way to make the contract. And again, guys, this, if you know, this is like this is stuff that's going to change the way you do business. Right, if you just put days and you put percentages, the contract becomes flexible, flexibility, absolutely. It almost expands and and and and. What's the what's the opposite of expanding contracts? Expands and contracts with the negotiation, you know so it moves with it huge tip.
Speaker 1:It moves with it. Huge tip if you guys are using dates, stop.
Speaker 2:Yeah, well, I mean, the simple answer is this you know, we put an offer in for 200 000 and we say that financing is going to be 160 000, which is again 80 loan of value. Well, the thing is, if I put 160 000 and the seller counter is at 205, that's it. I'm wrong that 160 000 is no longer 80 l tv and I've already committed to it. Yeah, I've committed my buyer to it in the agreement. If I have 80 l tv, that automatically when that price changes and we agree to the 205 I'm getting. I'm not. My contract is committing me to get 80 percent of 205 000. Yeah, which is exactly where I want it to be, because if I could wind up getting a loan for 160 000 but I couldn't get a loan for whatever 80 percent of 100 205 000 is, my customer is still committed to close If, even if they don't have the money to make that up, and that's a problem.
Speaker 1:Yeah, yeah, absolutely so. Again, it's a huge tip, huge tip. From now on, you want to make your life a million times easier and do less work and and a lot of contract. To be flexible, go with percentages on everything and go with days on everything. Don't pick dates.
Speaker 2:Pick dates are dates are too specific and and things are going to change on you despite the fact that that a lot of times the software wants to force you to put a date in there, it makes more sense to use days, absolutely yeah so time for acceptance.
Speaker 1:Uh, you want to want to include anything else on the escrow? Okay, where you hold escrow. You want to talk about where you hold escrow.
Speaker 2:Yeah, I mean I had that happen with me way back when again in the wild west days.
Speaker 2:So we're still in paragraph two, by the way, sir of a million things going on and you know offers coming in left and right. Um, you want to make sure that that date reflects who's actually holding the escrow money. That's not the title company, right, it could be the title company. The title company could be the one holding escrow, but maybe not. So I had a deal one time and again getting a million offers at the time and the, the buyer, like ghosted on us.
Speaker 2:So I went to look and find out where the deposit was and the section of the contract was blank. I go through my emails, I have no emails from them and I can't get the other agent to answer my phone. So now I'm calling the broker and the. I haven't heard from that guy and you know, oh, I'm sorry, the broker, I couldn't even get the broker to get on the phone, like, what do you do? How much? What do you do? And so you need to make sure that that information is there and it reflects not who the title company is going to be, they, they reflect who is the person holding the money. You know, even even when the, when somebody's having a bet in a movie, right, they got joe. Hey, joe's gonna hold the money. This is where you put joe's info where he lives. Yeah, right.
Speaker 1:Yeah, yeah, yeah let's gotta go on.
Speaker 1:Yeah, absolutely so. Yeah, that'll that'll, that'll save a whole lot of issues. Um, all right, so well, let's go. Paragraph three Offer an acceptance. So the time that they have to reply, so you're gonna submit an offer.
Speaker 1:So this paragraph three, again, what we're trying to do is kind of we can't go line by line and we can't cover every single Thing will be here for four hours, right? So we're trying to like summarize the little things, that little tips that will help you on each one of these paragraphs, we are going to give a full Four hour zoom class. That's what we're planning on doing in the next couple of weeks. We're going to go just real nitty gritty. We'll probably add richard. Actually I was texting a second ago, I was trying to try to get richard on to see speak on a couple of these paragraphs, but richard the our attorney. So, um, but, uh, but yeah, we're trying to give tips on this, on this time for acceptance, if you guys have somebody that Uh, likes three different properties, right?
Speaker 1:So what you're not allowed to do is not, you're not allowed to put three different offers On three different properties, because the idea is that if you get them accepted, okay then, what then then then what are you gonna do? It's, it's, it's. You shouldn't be in three contracts at the same time with the same escrow. It's just not legal, right? But there is a little bit of a trick to do it in a way where it's legal and if the other person did it pick it up, that's their problem, not yours. Where it's on the time for acceptance. So if you want to say, let's say I wanted to put you know, I needed to put two offers in because, mark, it's hot, this guy needs to move in, he likes both of them, he doesn't know which one to pick and their only real thing to do is say, all right, well, let's put in an offer on both and see, see what comes back?
Speaker 1:see what comes back right. So what you do is you put the time for acceptance on one of them, Okay, as today five o'clock or tomorrow, or something that you know. Guys, nobody looks at this, you know, and that's where the difference of knowing the contract and not knowing the contract means means something you know. So if you're on the seller side, you got to pick that type of bullshit up. You got to pick it up as a trick. Nothing better than calling the guy to listen. What's up with this? Answering right away stuff you know, yeah, you know.
Speaker 2:And now all of a sudden.
Speaker 1:Now you know what the hell's going on. And they're. They're not pulling the wool over your eyes, right? So?
Speaker 2:But that's one. Look, that's one of the good ones actually to take and do To let the other side know yeah, hey, you just ran into somebody that knows, that's right. I like, I say like, which would like I do with an electrician. I'm a general contractor as well, right, that's, I do with an electrician. And the electrician doesn't necessarily know that I know electrical stuff. And so he comes in he's like, oh well, yeah, you see the flux capacitor over there. It's a little bit off in his skew and uh.
Speaker 2:So I nobody rather than just taking call them out, I'll ask him one or two questions that let him right that all like, all of a sudden, you can hear the toilet flush in the background. Yeah, you know like, and his bill just came down to grant right off the bat. And so it's. I'm a big believer in and I and you're very good at this, at preserving relationships and do he in such a way that maybe you let the other side know hey, I'm not going to call you out and embarrass you.
Speaker 2:Yeah but I'm going to let you know that you can't play this right with me, and I think this is one of those ones where, hey, you know what's up with the 15 minutes for acceptance here it's very similar.
Speaker 1:So I had one of my best friends growing up was uh, jackson, he's actually, he actually passed away but he's, uh, he's real black. I'm talking about, like you know, there's black and there's real black. See, uh, leo, he won't say he's black, but he's, he's very light skinned. This guy was black but he was Cuban, right. So you know, everywhere it was funny, everywhere he would go, they would, you know, the people would start talking, you know shit about him, in Spanish, where, where I am, and and then he All of a sudden he'll. Because you know there's, there's cuban guys, that'll look, you know they're black guys, that'll look, you know, like, they're cuban, like you know.
Speaker 2:But we're on this Chapman for the years.
Speaker 1:Yeah, and he would always catch people talking and then I had a same, except I could play basketball. So another teammate of mine was, uh, was Mike, um, blonde, but I'm talking about like white hair, almost light blue eyes, so he had the same thing going on. So I grew up with a lot of that. You know joking, you know a lot of that happening to my friends. So so, yeah, it's, it's, uh, this is the same same thing here, man, you know. So you, you want to know. And yeah, if somebody tries to pull something on you, you want to let them know. Hey, man, what's up? Like you just said, right now, the electrician, or hey, I speak Spanish, you know that type of stuff, so it's a cool thing.
Speaker 1:So, again, using that date to If you want to be in a contract, just to kind of see what's going on, but you don't want to be tied into the contract, meaning you want. So I want to throw it out there Because I want those wheels to start moving. That's the way I use that, right, I use that paragraph a lot, so I want to send it out there. They got to reply by today at five. I know they're not going to look at it and I know they're not going to reply by today at five, but they don't, since they don't know that. I know that they don't know that they're going to keep on working and I might get an offer, counter offer, three days later and you're not committed to anything and I haven't been committed to anything. Now, when they reply back and they counter, then all of a sudden I'm back in the ballpark, right, but that I that would allow me to. All. Right, let's put this one on ice, let's get this one working while I move on to the next one.
Speaker 1:You know, because, again, if you have clients that that need To need to find something right away, man, miami's a weird place. I'm sure New York's like that. I'm sure these bigger cities are like that. You know, it's like a place where you know I look and I don't let's. I have friends from New York and everything. I don't give a fuck what they say. If you make it in Miami, you can make it anywhere. It's a weird crazy. Listen, New York's not number one fraud capital of the world For like five years straight.
Speaker 1:That's because the realtors can't do contracts. Listen, this is a weird place. So you, you know you got to take off the gloves sometimes if you want to be out here. You got. You know you want to swim with the sharks, you can't. You know you got to have them gloves on. So those are the little things, you know. What's the issue here? Realtors don't answer, you know you send them an offer. You can't even get them on the fucking phone. So what do I do? So I'm like, all right, Well, let me just get this thing going. But you know, this person doesn't even answer the phone, Absolutely.
Speaker 1:So that's how you start using, and you and you start using the law and the rules and the contract to your benefit. And that's how knowing the contract so well Just makes you money, because not all of a sudden you're able to do that. Instead of sitting there waiting for that person, you're putting it on ice and you're moving on. Maybe they accept another one. By that time they call you back, say, brother, I couldn't even get you on the phone and I already got around with another offer, you know, instead of you having to chase that person.
Speaker 2:So those are the little things you know well, I mean, the other cool thing is and I don't know if you know this, but you probably do but Automatically all the times in this are close of business 5 pm, so you don't even have to put in there. You used to have to put it, maybe you don't have to you don't have to, right?
Speaker 2:So all you have to do. And so, even if they call you on it oh man, I'm sorry, you know, I just was going through there quickly and it just it just defaulted to today's date or something like that. So you know, it gives you a fig leaf to take and see, you know, like you're not being really that difficult.
Speaker 1:The old, the previous version had a time, so that's a lot of things that change in the car. I can't even keep track of it anymore. You know I always tell people look I have. You know Janelle, who's been with me for 15 years. She's been doing my contracts for about for about 15 years. So what I got to do every once in a while is doing what we're doing right now is go look like right now. You know.
Speaker 2:Oh, you say five o'clock doesn't say it anymore.
Speaker 1:You got to go up the date. You got it. Now I negotiate them every single day. I'm in a mess with them every single day, so you learn, and that's what I mean. You don't have to learn, you don't have to know every single thing there. You know you should go back and and refresh yourself, but you got to know what it means and you got to know what it, what it does, more than anything else.
Speaker 2:Absolutely says because that right, there is one of the things that I like to talk about a lot when I teach this is the idea of Of not being obvious with things you know. Sometimes there's there's ways to take and do things where you want to be very precise and there's times we want to leave information out, because not having the information there actually helps you some. You just remind them you have a good one.
Speaker 1:Um, go ahead, it's kind of, that's what we're here, it's absolutely it's. On the financing part right when you said you know you, you don't, you just said what was it?
Speaker 2:you just said right now that you don't want to be obvious Sometimes you don't want to be obvious.
Speaker 1:What I see a lot of a big mistake that I make, that I see people make all the time is, um, writing Contracts contingent on appraisal. Yeah, oh, my god guys, if, if, what you're trying to do, if somebody's asking 500,000 dollars for the property, all right, but you know it's worth, for you know, because you've done all the comparables in the world, that it's not worth, that. It's worth 450. Okay, and you write Contract is contingent on appraisal. You're letting them know that you're playing the game that you're gonna put in an offer To see if the appraisal comes down so you could retrade them on the price You're. You're showing them your cards.
Speaker 1:Sooner than you have sooner than you have, right, the contract is already. I shouldn't call you stupid. I'm teaching people here, right? That shouldn't I. Should you were talking to me, okay, okay and I own it.
Speaker 2:I'm good so.
Speaker 1:All right. So, um, you know you're, you're you. It's the contract's always contingent on appraisal because the contract is contingent on financing. If, or let me rephrase that if your contract is already contingent on financing, it's already contingent on appraisal. Sure, so, because appraisal is part of the financing. So you don't have to put that if it doesn't appraise, then you don't qualify.
Speaker 2:If it doesn't appraise at the ltv that you have In your section two, you get out, that's it, and you get your deposit back and no harm, no foul. Putting that the contract is contingent upon appraisal doesn't mean that the seller has to go down to the appraised amount. It doesn't mean that, which means that you're doing nothing except restating stuff in the contract and you're raving a red flag.
Speaker 1:Hey, um, I already know it's not gonna appraise. So if somebody has five offers, okay, and you're the only one that says not. So not contingent on appraisal.
Speaker 2:Who offers contingent? Appraisal offers contingent on appraisal.
Speaker 1:You're the only one that says offers contingent on appraisal. You think they're gonna accept yours if you're already telling them it's not gonna appraise. Everybody else is the same way. Everybody else is contingent on appraisal Everybody because it's contingent on financing. So you're just saying, hey, I'm already going to tell you right now that the property is not going to appraise. They're not going to pick you, they're gonna pick somebody else. It's already gonna be contingent on appraisal. The appraisal is gonna come in lower, they're gonna renegotiate and they're gonna get it sold at some point right at the correct price. So you just gave yourself away. You excluded yourself from a running, from actually being able to get this contract accepted.
Speaker 1:Here's another thing, right. So if your client Is, you know I had, I had, um. So the only clients that I really work with right now I'm not trying to act big time or anything. I just I'm really busy with my realtors. So I I'm not active in real estate anymore, but I do have friends. I do have, you know, business partners. I do have family. I do have People, have been my clients for many, many years.
Speaker 1:So I, every once in a while just just three days ago, I had a, a friend client, whatever is putting on a pretty you know two million dollar property and and, uh, you know he's he's putting a pretty pretty aggressive Offer on the on the property. So he's like, man, I really want to get this deal. I'm like, all right, so go cash you. Because, yeah, but I don't want to pay cash for it. I'm like, don't pay cash for it, but put cash. Yeah, I mean, first of all, I know you could get the financing right for sure. You're just no plan on no planet. It there's. There's no way on any planet that you will not be able to get finance. I mean, I know he's very financially strong, so why we're gonna put financing.
Speaker 2:You're just. You're just eliminating the contingency, but it doesn't mean that the offer has to go correct.
Speaker 1:It just means and let me let me say that again, by putting cash just means that you are functioning, it doesn't mean that you're forced to do it. Cash you could still go financing, but now you don't have a financing contingency. If you don't close, you're you're gonna lose the deposit unless you you uh didn't close because of inspection or anything else. So what you're just doing is eliminating that. So if you have a client, that's pretty damn for sure I mean they're for 100% for sure gonna close and you're competing with other people just put cash, absolutely it all. It means against. It doesn't mean that you're making a promise or you're putting on there that he's gonna actually pick At. First of all, there's no such thing as paint. Let's be honest. There's no such thing as paying cash. You're not showing up there with cash. Yeah, bullshit already.
Speaker 2:Yeah, like you're not showing up with a box of suitcase yeah, suitcase cash just not gonna happen.
Speaker 1:So you are you're saying is I have eliminated all financing contingency. I am functioning here, going forward. I am functioning, I am going what they call it going hard. Absolutely right, absolutely right. I am going to continue on as if this was a cash transaction. So it's only going to leave me the inspection period title it could. The property is not going to have any title defects or anything like that. But if I don't close because of financing, I'm going to lose my deposit. That's really all you're saying realistically.
Speaker 2:I mean An analogy for this is kind of like there's a bunch of guys and there's one gal and she's trying to pick who she's going to go out with. That's right, right, and they're all fairly good-looking guys. She finds them all attractive and she finds out one has got a really good sense of humor, right. Well, all of a sudden, who's got a leg up? And she finds out the other guy is rich and Also has a great sense of humor. All of a sudden, you got a lot funnier, right?
Speaker 2:This is this is the same thing, guys. Your contingencies are things where, when you have them in, it's literally making you less attractive. There's weaknesses and as you take them out, all of a sudden you get better looking. Whether that's the, whether that's the I don't know this the the same as taking two shots of scotch making you better looking, I don't know, but it makes your offer better looking to the seller and, at the end of the day, we don't need to be the best offer in the world. We just need to be the best offer among the ones they have to choose from, and that is not specifically Necessarily the amounts of money that are in there. There are other terms and even, as we talked about earlier, the presentation of the offer Can take and give you a leg up. So I think what I'm saying.
Speaker 1:I'm also an optical illusion. That was like wearing a stripe, a horizontal, vertical stripe shirt. It makes you look a little bit skinny, that's what it is. You're just looking like you're stronger, but you're just as strong as everybody else.
Speaker 2:Yeah, and I mean I really think what it is? Is you taking every advantage you can of all the little thing Because, like, maybe I mean I have had a take and put offers in that I know are not good offers, yeah, but because of the situation of my customer, it's the best they can do, sure, and so. So sometimes what winds up being the difference maker isn't even the contract, it's the, the personal letter. I have them right to go with the contract and the phone call I make to the other agent and say, hey, look, I know this, this offer makes me look like I'm a jerk because I've got all these, these things, all these contingencies and it's all in my favor. But understand, this is them maxed out. They love this house, this is their dream home. You know, help me get there, man, I will. I will do the heavy lifting and make sure this deal gets done. That's right and so.
Speaker 1:So, yeah, that's, that's. Uh, I don't anything, we're there yet, but well that's kind of the inside and outside the contract.
Speaker 2:Yeah, because part of that is that is what's included in here and part of that is Outside of the contract.
Speaker 1:Yeah, look and, in general, this is this is, um, you know, talking about dates. If you guys want to avoid, the biggest issues that I see are realtors for getting their dates. Okay, what does that mean? So you have 10 days to inspect. You got 20 or 30 days for the financing contingency. You got I don't know X amount of days for this, for that, the biggest issue that I see. Oh, so another one that you know second, deposit on such and such day. You know, first, deposit on such and such day.
Speaker 1:I see a lot of screw-ups too. Sure, because it's upon acceptance. And when do they bring it in? So you know, so I we end up doing a lot of addendum, so there's a lot of things that I have to talk about there, right? So, first and foremost, if you ever make a mistake on a contract, fix it. Don't leave it there, okay, if you're still in contract, meaning, like I say, you forgot to put the second deposit in or you put it in five days late, don't stay like that, say, hey guys, I screwed up, didn't put the deposit in on time. Here's an addendum Fixing the date that I put it in.
Speaker 1:Okay, what? Because what what happens is again, if everything's right, everything's right. But what you don't want to have is that opening there. Now again, if they have like what's the different backup offers and you know they want you out, then you don't play around. I guess you just write it out, explain it to the client and then you're good. But, um, yeah, if you, if there's anything wrong with the dates or there's anything mistakes that you catch through the beginning process, in particular of the contract, you could fix it. You can fix it and you should fix it. Don't leave openings in there Again. Guys, that other side is your friend right now, but they will quickly become your enemy the first time you screw up and then they're going to use every, they're going to go Through with this with a fine-tooth comb and then they're going to get you. So, as far as dates are concerned, if you want to avoid 80 probably of the mistakes and the reasons why people lose their clients deposits because of the dates, if you forget that.
Speaker 1:So, for example, you have a 10 day inspection period and you're not done with your inspections, you can't just say, okay, well, later on I'll do it. No, on day 10. You say I need an extension for the financing. Sorry for the, for the, for the Um inspection period, or we have to cancel the deal, right well, by you already sending it out. So a lot of people think that you have to get it signed back to be protected. So long as you send it out, okay, and they say, hey, I need this, you can't force them to sell it. You can't force them to sign it. So now, if they don't, you send them a release and cancellation. See, I requested it, you didn't give it to me and you send them a release and cancellation.
Speaker 1:So but the whole point is this if there's a 10 day inspection period, you can't do the shit on day 11. Absolutely, you can't do it on day 11. Because if you're getting somebody like with experience on the seller side, they'll be like no, I'm not gonna. No, it's day 11, dude, we're done with that, absolutely. And then, all of a sudden, now you're only dealing with the financing contingency, now you're gonna have to go give them a fake denial letter because you wanna get out. And all of a sudden, if that guy's good which I would I'll be like no, no, I wanna see everything. I want proof. No, I'm going after your deposit unless you show me exact evidence on why I wanna you're a mortgage broker on the record telling me why you didn't close.
Speaker 1:I want him writing me a letter saying exactly why they did not close.
Speaker 2:And I want it on stationary, I want it on letterhead. I want it signed, absolutely no, I just had, I just had that happen.
Speaker 1:That's right, you told me a little story about that.
Speaker 2:Just had that happen the other day. I mean for me and this is how I've kind of there's so many dates that can be a problem and for me, the way that I've integrated in my business to make sure that I never miss a date is I have it in my CRM, my CRM, you know. I have the date that I sign. I automatically have three days out that customer set for follow-up and I have in the notes hey, make sure the deposit is in. Now I will tell you this I had one where the seller was trying to cancel it because the buyer hadn't got the deposit in. But the buyer had wired the money from overseas in plenty of time but through the machinations of whatever's involved, from yeah, I just wanna use it today.
Speaker 1:I gotta use this today.
Speaker 2:Through all the aggravation of getting it from there to here. It went up taking like three weeks for the money. It was supposed to be there in three days and so luckily, the title company that I use has an attorney there and the attorney is going back and forth with the other side's attorney who's like why isn't the money here? Well, we're canceling. Well, wait a second. You know in good faith they've done, and so you know there can be this sort of thing, but you need to have proof. I had documented proof that he had sent it on time and all of this stuff.
Speaker 2:So I think that 100% is a place where your CRM has a perfect memory because I don't, and I think there's actually a good place to put in a quick shout out to Pilar, cause she actually asked us that's right A question about CRM.
Speaker 1:Was Pilar's Instagram or did she write us through Instagram? Oh, you have it, there it's.
Speaker 2:Pilar I don't have the rest of the name there and she'd asked what CRM we use and what we recommend.
Speaker 1:Yeah, well, you use a one page.
Speaker 2:CRM. One page CRM.
Speaker 1:Real simple one. We use a super complex one too, which is conversion. It's complex cause it does a lot of marketing stuff and everything. If you want to use a hardcore CRM to remind you of stuff, Pilar, definitely the one page CRM is a real simple Like it says. The name says it's one page.
Speaker 2:Well, I think that the important takeaway that I, whenever I talk about CRMs and teach them, is the best CRM that there is is the one that you'll use, whatever one, and so if you'll use the complicated one and you'll do all the stuff that it does, use it 100%. I know me. The problem I have with me is me, and so, like if it's not simple, I won't use it.
Speaker 1:Yes, it's like the example that I've given a couple of times throughout the different podcasts it's the treadmill. Doesn't matter how bad ass the treadmill is, if your fat ass is not gonna get on it, Am I supposed to body shame people?
Speaker 1:Go ahead, body shame me, I'm fat too I can speak about my own people, our people, our people. So if your fat ass is not getting on that treadmill, it doesn't matter how good that treadmill is, it doesn't really matter, it really doesn't. So same thing as a CRM. How good is CRM? Only as good as you make it, only as good as you make it. Now there is different functions. So we use the conversion CRM, which is a lot of the marketing stuff when it sends out drip campaigns and it's an actual website and it has a matrix in it so the clients can send properties. It has an app that you can send properties to and everything but his. The one-page CRM, the one that kind of like uses, is just remind me of stuff every single day, so I don't forget anything.
Speaker 1:So never forget customers and, by the way, the iPhone if you guys have a Samsung, I'm sorry it probably doesn't have this, but the iPhone has. You could just speak into it and say hey, siri, remind me tomorrow at 9 am to call such and such person, and it'll say yes, jesus, no problem, and it'll do it. So there's no reason why you should forget things nowadays. Even listen. I have the iPhones. I have assistants even reminding me. I have a going to a wrap reference there. Biggie used to say I got lawyers watching lawyers, so I don't go broke.
Speaker 2:So I got assistants watching assistants so I don't forget shit. So I know where to show up, right? Actually, if I could, I want to do one more, if you don't mind. Yeah, just shout out to Flip with Rick. Thanks, bud, appreciate it. Hopefully this helps. Yeah for sure, good stuff, yeah, closing date. Closing date Actually for time for acceptance. I tend to try to think about if it's not a high pressure sale, like if it's a condo and I know there's not a lot of activity on it. If it's a Friday, I'm going to give them to Monday Me, like I'll think about it.
Speaker 1:If we're not playing games right now.
Speaker 2:If we're not playing games like I try to think about where I am in the week. You know, if it's the end of the day on Thursday, I'm sending it in. All right, I'll give them. Monday I'll give them a Monday maybe Saturday, you know like I'll think about it. So just you know, understand these are real dates and times. If you're not trying to take and do multiple deals, you know it's something to be aware of.
Speaker 1:Yeah, same thing as inspection period too. Like you don't always have to do 10 days. If I got the contract accepted on a Monday, I'll give them to Sunday. Yeah, you know what I mean. I want things moving forward. Why give them till Wednesday? Yeah, you know what I'm saying. If I'm on the seller side, why give them till Wednesday? If you're on a Monday, even if you're on a Wednesday, and so you're not going to be able to do it on Wednesday, thursday, friday, saturday or Sunday, you know what.
Speaker 1:I'm saying so you want to know, you always want to know, where you are for those dates, even for second deposits and stuff like that. Just try to figure that out. So just don't write dates just to write dates.
Speaker 2:So I think the best date for second deposits is never personal. That's been my policy. Why you?
Speaker 1:want to just just just just do a one deposit, one deposit. Really.
Speaker 2:Look, you know the reality of it is. The contract lets you out during your inspection period. When we look at it, it's for any reason you want.
Speaker 1:See, I do a different kind of like.
Speaker 2:Talk to me.
Speaker 1:No, no, it's just good. I like to put on the buyer side, I like to put a deposit Because you know and now, as I'm thinking a lot, we work a lot of buyers too, so you're mostly sellers, you're looking at it on the seller side, so I get it what you're saying, but on my buyer side, I want my realtors easing the people into the contract, right? So if it's a $10,000 deposit, which is your saying look.
Speaker 1:Yeah, you're saying, look, give me five right now. We got 10 days to inspect the property. Once you've gone through every single thing and you like every single thing on this right, and you've already the inspector looked at it, you're good. Now I'm going to tell you on day 10, I'm going to be like hey, hey, are you okay with the property the way it is right now? You're okay with the condition because, moving forward, a, you're done with the inspection period and B, you're going to have to give the second deposit Now. So I usually put the first deposit upon acceptance, okay, and the second deposit one day after the inspection period. Gotcha.
Speaker 2:So it eases the person in. No it makes them feel a lot safer. It makes sense. I mean, if you're, if you're especially between, like first time buyers- that's all just going to say.
Speaker 1:Our specialty is first time home buyers and, man, you know what they're scared. You know as much as I train my realtors to walk them through the process and understand everything. You know people are still scared to put $10,000. And I don't listen. And I'm going to tell you another thing I don't fucking blame them. What I'm seeing a lot of right now is sellers just being dicks and just saying I don't care if I'm right or wrong, I'm going to go after your deposit Because they understand the process that they're going to spend a year in escrow dispute, even though they give them the cancellation letter, even like that. So yeah, man, you know, even to protect them, you don't you want to have a little as little out there as possible protecting your buyer to have because of these unscrupulous that I said unscrupulous.
Speaker 2:Unscrupulous.
Speaker 1:There we go, you're not unscrupulous, lacking and scruples.
Speaker 2:Exactly, absolutely no, that's a good. I mean, it's a good psychological assessment of your buyers. And I mean again mad respect, because you do get a lot of new agents closing, a lot of first time buyers, yeah.
Speaker 1:I'll have a brand new agent closing a first deal with a brand new buyer that's buying their first house. So you know we have systems in place to make sure that everybody's safe, that everybody feels good or that everybody's you know, you know, we got. We got a again.
Speaker 1:We got assistance watching assistants to make sure that we're not clients, don't lose deposits, man. It's just, that's a testament to training there. It is a testament to training. It's a testament to systems. If you, if we train an agent and then we just say, okay, agent, you're trained, all right man, how about it hey?
Speaker 1:let me know, hey, let me know when you're close. Let me the checker right Now. Man, we got to. We got to walk them through the whole process their first, five, six, 10,.
Speaker 1:Again, I'm not making a commercial from them and just saying if, look and, by the way, the hopes of this podcast is that people from other states are listening to me, so you can't even come here anyway. But you know, the idea is, wherever you are, you got to make sure that first, second, third, fourth, fifth contract, until you feel 100% safe, somebody has to look at it. Should I got agents that have been with me for five years and it'll still send it and be like hey, what do you think about that? Hey, I'm going to put this offer and still run things by us because if and let me tell you why because if you've been in this business for five years, you didn't go through 2008. You didn't go through 2001. You have only seen, maybe, this version of the contract. You haven't seen the other stuff. You've only. Your Rolodex of mistakes is one 1,000th of what mine could be.
Speaker 2:It's like if you've been a stockbroker for the last 10 years, you've never seen a downfall. Yeah, yeah, yeah.
Speaker 1:So it's. You know. Not only that, but if you're a realtor, you're only seeing your stuff. So here at the office we're seeing everybody's stuff for years and years and years is the volume. And so, yeah, we want our realtors to go through our filter at the beginning as many times as possible until they feel safe. And wherever company you're at hopefully it's not one of those shit 100% companies that don't really care and good luck. And I see a lot of brand new agents go to these 100% companies. That's killer, it's insane, it's madness. I don't even know how the association allows that, because you can't offer people training for 100% and you're throwing them onto the street.
Speaker 2:It's genuinely a bad. It's just a bad business. I meant it actually from the standpoint when I said it was. It was testament to training, because the kind of customer that needs the most reassurance is the first time buyer, and the fact that you're able to train your agents well enough first time transactions for those agents to go make those first time buyers feel good enough to trust this agent to do this work is a testament to the type of training that you do, and it's things like what you're talking about right now with a second deposit. That would never have occurred to me in a million years, probably because the reason why I don't have second deposits is completely selfish. It's one more date that I could potentially miss and screw up my own transaction.
Speaker 1:And you work mostly on the seller side. So you're seeing it as that like, hey, dude, I don't wanna play games, man, just give me the whole deposit right now. You know what I'm saying.
Speaker 2:And realistically. I said the same thing to my buyer I want my offer to be as strong as possible. Let's come in hard with everything right now. No games? No, you know. And so again, it's one of those things you know trying to look as good to the gal in the bar.
Speaker 1:All right. So closing date All I really care about closing day, guys, is just put it in days, not dates. Don't put an actual date. You don't wanna do that. You don't wanna be stuck to an actual date. This contract needs to be flexible. It needs to be what's the expand and contract, with whatever changes you're going to make.
Speaker 2:So 30 days from effective date.
Speaker 1:That's the line Honor before 30 days. Yeah, okay, honor before is a good thing to write All right extensions and closing dates, okay, something with extensions. And a little fact that I want you guys to know is that anything that is written by hand supersedes anything written on the contract. So if you're gonna write, if you're gonna scratch out and write something over it that automatically supersedes anything on the contract, let me see if Richard that text Richard during the podcast. See if he's available. Let me see if he's. I wanna get an attorney's point of view here.
Speaker 2:And the cool thing about the closing date is, if there is a, if there's anything that causes an extension because of lending, there's a or for the CFPB that there's an automatic extension built in there but you have to go to war to take and deal with it.
Speaker 1:Look, now that I'm that I'm, you know, trying to get Richard on the phone I want you guys to understand something, especially you guys that have been in the business for a very long time. Right, the reason why I want Richard's is because I just wanna get an attorney's point of view, but not necessarily and I say this to the face all the time not necessarily because the attorneys are right. Okay, my job for the last 20 years has basically been again, cleaning up over my realtors mess, right, and a lot of times arguing with these attorneys and going back and forth with these attorneys. And one thing that I know, one thing that I've learned that just because you're an attorney doesn't mean you know shit. It just doesn't. There's, you know, and again, I'll go to war with any one of these attorneys.
Speaker 1:And, as far as knowledge is concerned, because I'm in the nitty gritty, I actually got in a fight with Richard one time over a contract dispute situation. And I'm arguing with my own attorney, all right, and I'm like hey, dude, listen. And it really sums it up. I'm like listen, because I basically went straight from high school to work in real estate. So I'm like listen, motherfucker, remember this. I was deep into this contract stuff and closing deals while you were still doing keg stands in college. Okay, so let's not get things twisted. Let's make sure we understand what's going on here. I know my shit way more. Now listen, 15 years have passed since he's, since. We've had that conversation.
Speaker 2:We can't get away with that one anymore, Right can't get away with that one.
Speaker 1:Now, he really knows this. You know stuff, but you don't know what other attorney, what attorney you're talking to on the other side. You don't know what they know. By the way, you don't know if they're a divorce attorney that just so happens to be doing real estate. Yeah, attorney is not.
Speaker 1:You could tell who the real estate guys are by the fact that they don't like to kill deals. But you look, attorneys are ones. Attorneys are deal killers. Attorneys are deal killers 100% and they're a big problem in this business, not the ones that are real estate guys. You could tell the ones that are real estate guys cause they're here to make a deal happen. How do we make this deal happen?
Speaker 1:The ones that are the deal killers are the ones that just have to scratch out the contract just because, right, you could send them a perfect far bar agreement. That, by the way, far bar if everybody this is a little factoid, but do a little sound effect there for far bar Love that the far bar means the, the, the, the, the Florida association of realtors and the bar, florida bar, florida bar got together and made this contract. So that means that attorneys with realtors got together and made a contract that is fair to both sides. So there's no such thing as a better contract than this. Any other contract. You go to office depot, you go to office max or you go on on what's that attorney's website that you go?
Speaker 2:Oh, legal zoom.
Speaker 1:Legal zoom and all that kind of stuff. They're usually the one side, yeah.
Speaker 2:They're skewed.
Speaker 1:They're usually skewed to one side or the other, you know. So what this was is the most fair contract possible. So when you see that, you send this to an attorney and they scratch shit out line 95,.
Speaker 2:I don't like to use the word diligent, right, yeah, that's it, it's because they have to justify.
Speaker 1:The client shows up and says hey, can you review this contract? And they're charging them 300 bucks an hour. Right, they have to justify. They can't say, okay, it's perfect, all right, great, nice job.
Speaker 1:This is a perfect contract. You know, If they were, if they're real estate attorneys, they'll tell you hey look, man, this, just so you know what this contract is. This is the contract with the Florida association of realtors. The Florida bar got together, made this contract. That's fair for everybody. That's very neutral. So, you know, we could add some stuff and everything like that, but no, we shouldn't scratch it out, because everything is there for a reason. That's what a real attorney should do. But then you get these, these smartasses that they've been doing. You know they've been ambulance chasing I'm going to make a piss a lot of attorneys on this one. They've been ambulance chasing for, you know, 10 years and all of a sudden they want to do a couple of real estate transactions. They want to tell us what to do. Guys, give yourself a little bit more respect. Yes, I know they're attorneys, Okay, but they might not be a real estate attorney. It doesn't mean they know everything. Defend yourself Well, 100%.
Speaker 2:Don't get bullied by attorneys. Let me piss off the rest. Let me piss off the rest of the attorneys that you missed, because you may have missed some in that. Thanks, I kind of think-. If they have a Samsung, even worse. There you go. Oh, that's double women. I kind of have the same conversation that I do about home inspectors. What is the home inspector's motivation? Right, the home inspector wants to make sure that he doesn't miss anything in this house that could potentially break, because if he does, it comes back on him, the attorneys. Attorneys tend to be very risk averse individuals because if they miss some liability and agreement and it comes back, that, that's the thing that their customer gets hurt on. It's on them. So their position is always can I find anything that has any liability?
Speaker 1:whatsoever. You know what I always told my clients here. Have you ever seen an inspection on a brand new home? Same shit as a 50 year old home. They have everything's wrong with it, absolutely. I've never seen guys. In thousands I would say tens of thousands of transactions that I've been involved in one way or another, I have never once seen a perfect inspection.
Speaker 2:The home inspector comes back. Wow, it says nothing hey, everything's right.
Speaker 1:This is crazy. Every plug is working, every light is working. It'll never happen, and you gotta explain that to your client. Guys, listen, something's going to come back. Something is going to come back.
Speaker 2:I literally just wrote a chapter in the new course that's coming out now yesterday on dealing with the deal killers. It was on home inspections and it was on very much that exact same thing. You have to have this great conversation If your customer I think right now with the contract, it's the right time to talk about it. If your customer wants the attorney to review this, say, hey, look, that's fine they should, but understand, the attorney's position is this you know you need to set them up so that they at least have that rolling around in their brain as a counterpoint to everything the attorney says is gospel and it has to be this way.
Speaker 1:Yeah, absolutely. Listen. Honestly, when clients have an attorney, it takes a lot of pressure off me because now, all of a sudden, I'm not responsible for anything. They're responsible for it, right, the attorney's always looking at everything, okay, but let's just be honest here. They're going to find something on this. Sure, it's their job to find something.
Speaker 2:It's impossible Justify their fate.
Speaker 1:Just so you understand what this contract is. All right, it was made to be neutral. Everything is here for a reason. By you changing this, you're rewriting the way real estate as a whole functions in the state of Florida. This is the contract that everybody has agreed to use.
Speaker 2:Now your smart as attorney is going to change that and really, I mean, the attorney really needs to look at only the blanks, only the things that we filled in, to see if those terms matter. They're looking at the other stuff Again. They're just trying to justify their fate. Where we kind of left off was this idea of extension, and there's two things in there. One is there's an automatic extension If you have financing and because of disclosures and all the things that are required for the lender, if those things are delaying the funds being available, you have a built-in extension up to 10 days, right. The other one is force majeure, which force majeure is not, as I mentioned.
Speaker 1:We're in the middle of a force majeure right now.
Speaker 2:Yeah, it's not a famous French fast food restaurant. It is a situation that is an act of God. It is something beyond anyone's control that causes a problem that makes closing potentially, or makes completion of the agreement, not possible, despite the best effort of all parties. So I have a situation with this. Right now I have a customer that's in Europe. There are no flights from Europe coming back. He needs to close. The thing is that the lead time for him to get a appointment to get a notarization at the embassy is weeks. It's a super backlog. So the odds of him being able to close the transaction that way are an issue. So we're looking at e-notarization, which is a newer thing that was just approved by the state Not to all go A couple days ago, type of stuff.
Speaker 2:No, it was approved, I think October, november of last year, maybe a little bit shorter, that's right.
Speaker 1:that's right, that's right. We talked about it back then too, and so I was wondering if it was like an emergency COVID thing. But I remember, yeah, it was something that they made. It they changed because, again, we're living in a digital world. Why wouldn't it be? And my title company is sorting it up.
Speaker 2:But I mean the way they're gonna do it is like that they have to show the. He has to go on Zoom and show his driver's license, then send a copy, then they have to turn the camera so they can see him. So I mean they're working the bugs out and my title company, the one that's actually doing the closing, they're working through. They've taken a bunch of seminars to try to understand how to do this. They're talking to the lender, they're talking all these parties. But again, if this closing couldn't happen because he couldn't get access to a notary, he couldn't come in the contract would automatically extend because once again, the act of God outside of the buyer's control. He's not in breach through any fault of his own.
Speaker 1:Yeah, yeah. So okay, occupancy and possession. You wanna talk about that.
Speaker 2:There's not a ton there.
Speaker 1:I mean basically it's saying that so is it an occupancy if there's a post-occupancy or a pre-occupancy agreement.
Speaker 2:So Well, post-occupancy is tough. I mean post-occupancy really have to be careful, and pre-occupancy even more so.
Speaker 1:Pre-occupancy is easy If you could avoid, and let's talk about that for the brand new realtors. So you're selling a house, it's empty, it's vacant, the buyer wants to move in before he closes. Okay, that's a pre-occupancy, meaning that? So they're gonna move in all their stuff and everything? Now the shit, how can that go wrong? There's a bunch of them, but what if he can't close? And now you got somebody inside that house that has nowhere to go, and even with a lease, even with a lease Even with a lease, you gotta go through eviction process.
Speaker 1:You can't go through eviction.
Speaker 2:You have to go through an ejectment.
Speaker 1:I did not know that.
Speaker 2:This is a yeah. No, I went in property management company. That's right. That's right. I run into this Actually I was just listening to an attorney talk about it Because I mean you could go through the eviction process, but if they can contest that they have a right to be there because of the contract that they have in the home, you have to go through the ejectment process. So like maybe there's maybe there's a dispute over the escrow money and you know the buyer wants to close.
Speaker 1:So you gotta clear up the terms of the contract before you give. That's why it's called an ejectment.
Speaker 2:So instead of being a one to two month process, which I mean an eviction is six, eight weeks, right You're looking at a year to two years. Shut the front door.
Speaker 1:Yes, sir, Shut the front door yes sir Fudge.
Speaker 2:Yeah fudge muffins. Yeah no, it's no joke. And so the exposure to your customer is huge, whereas a post occupancy it's not nearly as bad, as long as you get a lease signed at closing, which I always do Because the seller has already given away their rights to the property. The closing has occurred, the seller no longer has right to be there other than this lease.
Speaker 1:So you're saying so go back to this ejectment that I just learned about now. So it makes sense, because now you're not throwing, now you're, you're getting that person out of there has nothing to do with the actual lease, has to do with the terms of the sale and purchase contract, and you gotta make 100% sure that that does not that the breach wasn't really the seller that has forced them into that situation and that's why he's in there. So whoa.
Speaker 2:Yes, as my dog says Roof.
Speaker 1:Roof.
Speaker 2:Roof Wow, big time. So it's one to be aware of Interesting.
Speaker 1:Also.
Speaker 2:So you guys, always learn something, man, absolutely and never stop and I learned some stuff that, like I had never heard that on second deposits. I had never heard that as a reason to do it, and it's a good reason. I like it.
Speaker 1:All right. Assignability All right. So let's talk about the assignability. Let's talk about there is a breed of human that is called an investor. Those folks, yeah, you will know who the real investor is, just cause of the amount, the lack of bullshit. Okay, but then you'll have the person that read or went through a seminar in.
Speaker 2:Zero Down. Buy With no Money Down.
Speaker 1:Wisconsin right, and you know it's. It's Buy With Zero Down, buy the property with no money and then flip it and all that shit.
Speaker 2:Offer 60% of market value.
Speaker 1:Yeah, and play all of those games, none of which work All right. So when I see that, okay, and I see one of my realtors calls me cause hey, what's up with this? I'm like, put me on the phone with the guy. I go, dude, what's going on, what's up with this? So tell me the truth. Did you read a book and they told you to do this shit? What's going on? And I just cut right through it because it's, it's. I see it a lot when I see Andorra signs. I don't know where the hell they're teaching this, but that's what happens. They're trying to put the property on the contract. They're trying to get a buyer, they're trying to get it on the contract for 200.
Speaker 1:Trying to flip the contract complex. I'm not going to call it impossible.
Speaker 2:No, it's not. There are wholesalers. That that's what they do, yeah, and sometimes they'll flip the contract. Sometimes they'll buy the house and reflip the house to you, right, I mean they, they are the ones that are good at Red flag, though Careful Because very few people could actually pull it off. Yeah, well, they're eating at the trough twice. Basically, yeah, they're making a profit and then they're selling it to you and you're expecting to make a profit. Yeah, and so it's. I mean, I bought. I bought a couple of properties from wholesalers.
Speaker 1:So how does it exactly work then? So tell me exactly how it works. Okay, so you're, you're, you're, you're, you're, you're have the contract. Do you know how? I mean, have you gone through it enough, where you know, yeah, yeah, okay, so they, they, they, they get it on their contract for 200,000 and they telling you, hey, cadillac, I'm going to sell it to you for 240, but they never close on it, correct?
Speaker 2:Okay, so that title, what happens at title, at title, they get, they get their piece and how it's basically a simultaneous closing, it closes simultaneously. Or they'll just assign the contract and they get the difference. So they'll be on the HUD and they'll get paid is the way that I've seen it done.
Speaker 1:They'll be on the hood, but like what mechanics are used for that again, Because their contract is for 200.
Speaker 2:They're assigning it to me at 240.
Speaker 1:Right, so you would have just literally. So then the 200 would disappear and you would have to basically just wire in 40.
Speaker 2:Yeah, here's the deal I pay them the 240, they pay them the 200 and deal done. I mean, usually the numbers are a little closer to like. They buy it for 200.
Speaker 1:No, right, right, right, right and 212. Yeah, 212, very very very.
Speaker 2:yeah, they're making a little bit, but in order to do that, they're putting 100 offers in to get one property.
Speaker 1:And, by the way, all you gotta do is get your fucking real estate license and they would make exactly the same thing with a lot less of a hassle. Sure, that's the thing. So when I see that, listen, nope, listen, hey, listen, wholesalers, I really don't have a problem with you. Guys, god bless, you continue to do what you're doing Hustle, hustle, the good hustle Big time. But get your real estate license and you could just put a commission on there and do the same exact thing with no problem whatsoever, without having to do this whole simultaneous thing and having this whole convoluted title company. You gotta have a title company that's willing to play ball with that too, because that opens up a lot of stuff, guys. That opens up title and who's who and who has ownership and who sold it and where did you buy it kind of messes up the chain of title, kind of maybe no.
Speaker 2:I mean, if the title company knows what they're doing, it won't and realistically it's very doable because you know again, it's the chain of title. You know, it went from this guy to this guy to this guy. And I mean, realistically, what the guy is doing is he's actually selling his position in the contract.
Speaker 1:But the bank that's lending you the money, unless you're buying cash, kind of like right. So if the bank is lending you the money, it's gonna have to see money going 40, whatever $12,000 going to a third party. I mean, everything has to be disclosed on the HUD to be legal.
Speaker 2:You know, I have no idea how it would work with financing, because I've always bought with cash or maybe hard money and hard money. Doesn't care what I do, Doesn't care what you do. Yeah, they have 50% LTV you know go ahead default, I'll pick the property, yeah yeah, we should.
Speaker 1:we should actually when we have, aren't we gonna have something on flipping?
Speaker 2:Yeah, we have.
Speaker 1:We should have a wholesaler and we should have a flipper in here, absolutely.
Speaker 2:Be good, have Terrence on. You'll be great at that. But I think that the thing that is important to go over here is there's three options and two of the options if you're on the seller side, right. There's one option to me that is unacceptable, which is that the buyer can assign the contract and therefore be removed of all liability to perform. I don't care what they're doing. That's never a viable option in my universe. I have a contract with them. If they assign it to somebody, I don't.
Speaker 1:I don't care who you assign it to. I'm your responsible for it. Now you're both on the hook, yeah.
Speaker 2:And so that I'm actually happy you want to sign it to this guy.
Speaker 1:Yeah, yeah, he doesn't work, I got somebody else, I got you too, yeah yeah.
Speaker 2:So somebody's gonna take and close in this stupid deal 100%. The third option and this is the one that I normally mark in my offers is may not assign Again. It's just one more thing to be, to not be the person that forgot to wear deodorant at the bar. Yeah, it's one more thing.
Speaker 1:I always forget deodorant on one arm, which is weird. I've never forget it on both. Well, you have a good side and a bad side there. No, it's weird man Like I've never been like, oh, I forgot deodorant on both arms. It's always that one arm. It's the weirdest thing. Yeah, that is.
Speaker 2:I can't say that.
Speaker 1:I can like I don't know how it happens. Yeah, all right, there you go.
Speaker 2:That's a lot too Good stuff, hopefully at that side Today. Yeah, all right, so Financing, financing, the big one for me is really in section B I talked about it or paragraph eight, sorry, pirate, paragraph eight financing.
Speaker 2:So the big one for me is that agents don't write in here a rate. And the reason why it matters to me that they write on a rate is because what the language says after that, or whatever, the prevailing rate, is based on the credit worthiness of the buyer. Which means, let's say, the rates that my customers expect me to talk to mortgage broker about is three and a half right, and all of a sudden the lender looks at my buyer and they determine you know what? You can't get a loan at three and a half, but we do have a product at nine that you can get. My buyer has to close at nine if I don't have a rate in there, a rate cap Now. So like it's not a big deal, it's not gonna happen all that often. But you literally what you're saying is let's say the Federal Reserve raised rates five points, my buyer still got to close based upon that interest rate.
Speaker 1:Yeah well, technically their payment would go up almost double and their debt to income ratios would go out of whack. And then they don't qualify. It's possible, but that's another level of protection.
Speaker 2:It's a level of protection for them and it really doesn't cost you anything because you know what as a listing agent I don't care like, unless the rate you put in there is like 3.12%, and it's just 3.12% today and we're expecting it to go back up again. That might say, hey, look, put three and a half in there or something you know. Leave a little bit of cushion so we can. Actually I don't want you to have that out, but I mean for me, if I'm putting an offer in right now, I'm putting in there four and a half, something like that. I mean it's still. If my buyer winds up stuck at four and a half, it's not the end of the world, but at the end of the day I put a cap on their liability.
Speaker 1:there it's a little bit. Another thing you gotta put you gotta put if it's conventional, if it's FHA, if it's you don't want them changing from one thing to another. You know it's, you know, and a lot of things, that a lot of times that what I see is, you know, cash only on these listings, they want cash only, and a lot of times that's really because of ignorance. They don't realize that you really can close FHA on it. If you do things right, it's a pair of things and maybe you could even make some repairs to the property before you close, which is not illegal. It's not smart in some cases but it's doable as long as you know you. Maybe sometimes they're missing a kitchen or you could put you know so or do a 203K, and then you don't have to have any of those.
Speaker 1:But that's a little bit complicated 203K, by the way. It's like a rehab FHA kind of.
Speaker 2:There's two of them. There's a streamlined 203K and the 203K. The 203K that requires, you know, a general contractor to have multiple estimates, and I'm actually doing actually. There's another one, not an easy loan to get a compressor.
Speaker 2:No, the one that I'm doing actually is a conventional like a 203K. It's a I can't think of the name I have to. Maybe next time we do a podcast they'll have to come back and give them what it is. It's like a home source or something like that. But it is a rehabber loan, conventional for a single family home. Ladies doing it, she's getting like an extra 120,000 to renovate the house on the loan. It's pretty cool product because even when I told the other agent they're like there's no such thing as anything but the 203K for renovations and I was like, no, this product exists and it's a good one. So another option for folks that want to buy a house that maybe needs a little bit of love. I'm actually a fan of that because you know what you can fix the house up the way that you want it. I showed you the picture of my shower the other day. That's the. I would never do a shower like that for anybody else, but that's what I like.
Speaker 2:And so like if I was doing a model home or something, it wouldn't look like that. But because it's me, I spent a thousand bucks on tile for my little shower because you know I want it to look just like I want it to look. And so when you're renovating a house for yourself.
Speaker 1:The shower is important, buddy.
Speaker 2:Very important room in my house. So, that being said, I think that's really the big stuff for me. From the financing section that I see a lot of stuff on, those would be the big ones yeah.
Speaker 1:All right, so title Closing the last things.
Speaker 2:actually, there's the last two things, that line 123 and 124, which is page three. Still section eight, yeah, assumption of existing mortgage, which really, really, really placed. Your ever going to see that as a VA. Va still allows for a subject it does. That's always been a part of the ever seen one of those. Well, that's usually because it's going to be VA to VA, so it would be an armed forces person and we're not really a big armed forces town, we're not.
Speaker 2:That's why we don't see it as much, yeah, but I go with some like Pensacola or some place like that One of our lenders, Jay.
Speaker 1:We call him VAJ because he's actually an expert in it, but I wonder if he knows that. Yeah, I'm sure never seen, I've never even seen an assumption on residential.
Speaker 2:I've never seen an assumption that's because when you got in the business, if you'd seen it, if you were been in, like in the early 80s, assumption was the game was everything because rates were like a 20. Rates were so high.
Speaker 1:So I mean, if you had 20, literally right yeah 21 at one point.
Speaker 2:So if you were at 12, well, wait a second. The houses I'm going to buy it for 200. I can pick this mortgage they have at 80,000 at 12 and then just get a second mortgage for the difference.
Speaker 1:Yeah, so for you complainers out there, the ones that the serial complaints, they just love to complain about everything, right? Oh my God, this business is so difficult.
Speaker 2:And what am I going?
Speaker 1:to do. It's so hard and what am I going to do? And everything's a fucking obstacle. Just imagine functioning in real estate with the rates we're at like a three right now. Imagine a rates at 21. Imagine you're in this business at 21 with a 21% rate. Okay, stop fucking complaining Please.
Speaker 2:Absolutely, you know. And so the other one is purchase money, and that's something is a little bit slightly more common. It's more common, and especially if rates start to go back up again, that's something else that you will see. Yeah, I fully expect, a few years from now, for rates to be back up, and when I say back up, higher than they've been in a long time.
Speaker 1:Purchase money mortgage seller financing.
Speaker 2:Basically, the seller is operating as the bank and a lot of times that winds up being a second, where the seller is going to take a second to help them because maybe they can't get the deposit put together that they need or the down payment that they need.
Speaker 1:I did 111 purchase money mortgage deals in four months In 2009. Good stuff, yeah.
Speaker 2:So I was with the developer. Yeah, oh yeah, that'll do, and there was nothing else, nobody else was lending.
Speaker 1:So I'm like Lou, you want to sell this place. You got to sell your finance and I knew that there were liquid. Still have clients on mind to this day, still doing deals. Just close the deal for them.
Speaker 2:Seeing as you haven't said the name, can you say what kind of rate? Uh seven and a half.
Speaker 1:Seven and a half.
Speaker 2:So again he's got a 7.5% rate of return on his money.
Speaker 1:Yeah, it was a 7.5. I remember, if I remember correctly, he needed to get rid of the property. Anyway, he was built for it. They were lending money anyway. They were very, very liquid, they were very. They just wanted to get out of the property. So I'm like, well, you want it, you want to get rid of it, let's be the only ones. And yeah, it was 111 that we closed on. We sold it in 60 days, but it took us about 120 days total to to, to, to, from marketing to closing. So beautiful.
Speaker 2:Yeah, no, again, be the person that's doing something different than everybody else To me. Again. You know, in the market right now there's people that are scared and stuff man I am running toward buying. This is, this is where it's at, and here's another lesson there Understand financing.
Speaker 1:I would have never had those closings Because, as a matter of fact and that brought me another 100 that I closed for somebody else a couple miles away, that they were like, oh, I like what you're doing here and let's do it over there. So if I, if I didn't understand financing the way I did and, guys, listen, you got. One of my biggest accomplishments in this world would definitely have to be well, my CCIM right Mathematically. Because because the in ninth grade my teachers called my parents and said, dude, listen, let's just stop the math with this guy. And I didn't do listen, I don't know why I think things change now, because I don't think that's allowed now but I didn't do math 10th, 11th or 12th grade.
Speaker 1:I stopped in pre-algebra Like, listen, this fucking kid is just not getting it. And I just, I am that bad at math, that bad at math. But, man, I knew how important it was to learn financing and I can't tell you how much money, how much money that. I'm just giving you a window. That was a window of four months plus another six months. So within 10 months I had 200 closings. And, guys, that's just one example of understanding seller financing and setting it up, setting up the whole thing. I had all the documents drawn up with the attorneys and everything like that, and we got it done and I was having closings when nobody was having closing 2009,. I was the only mother of 100 closing deals.
Speaker 2:I think that the thing is and I find this to be more and more the case is being the first that can bring options to the table to the customer, and if you can come in with a creative idea and say, hey, look, why don't we do this? I know I do that with my customers a lot of them and, realistically, guys in residential real estate. That is so easy to do Because in general, the other agents aren't bringing any ideas to the table other than the rates are low. Let's get in the car and go look at properties and if you understand your product, if you understand what comes before and what comes after, there's so many smart things you can say. That's just so distant to yourself from every other agent that's out there that it's easy to not only.
Speaker 1:Kind of educate yourself, man.
Speaker 2:It's not only about having the customer, but it's about keeping customers and if they know they can't get it better than anywhere else I say it all the time. I knew a bunch of agents that would get upset when customers would go work with other agents and stuff like that. I was like I never kept the girlfriend by being like where are you going? You better not be going out.
Speaker 1:You going to see another guy, no.
Speaker 2:I try to be good. I'm good at what I do. I'm a good boyfriend. If you think you can do better someplace else, ok, but I'm good to you and I never really worried about it, right, that's the same kind of thing, and so once you start worrying, you're dead, absolutely 100% Disclosures, paragraph 10.
Speaker 1:Oh wait, did we skip some?
Speaker 2:We skipped. One, which is actually one of the big ones for me, is nine At the bottom of nine, which is title evidence in general, and it's talking about who's going to pay what closing costs. All right, there's three options there Most of the state, the seller picks and pays.
Speaker 1:Yeah, and it's funny you say that most of the state, because there is. I think it's up north that things change, the other way around.
Speaker 2:Well, down here, the buyer picks and pays. So Miami-Dade, broward, palm Beach is seller picks and pays. Yeah, it's weird how that happens. Well, it's, and the culture is like a custom. Yeah, it's custom, it's done by custom. So like if you left it blank, it's going to default to whatever the custom is for the area that you're in right Down here, because Miami-Dade and Broward are such a special part of the world, we literally the reason why there's three options is because there's the way most of the rest of the state does it, the way the other part of the state does it, and there's a third option, the crazy way we do it, and it's literally called the Miami-Dade Broward regional provision.
Speaker 2:So let me kind of make this as simple as I can. Seller picks and pays is pretty straightforward. The seller picks the title company and they pay for the title insurance. Buyer picks and pays. The exact opposite, pretty straightforward the buyer picks the title company, the buyer pays. Miami-dade regional provision the buyer picks the title company, but the seller is responsible to bring the abstract of title up to date or provide the title policy, the previous title policy. This saves money and time to the title company, or they pay for the extra money and time for the title to be brought up to date.
Speaker 2:Realistically, what this means to you is just because it says Miami-Dade and Broward regional provision doesn't mean you have to use that. If I am the seller, I might counter with the buyer picks and pays and they have to pay for everything. It saves my customer 350 bucks or whatever it's gonna be. If I'm the buyer side, maybe I pick the seller, she'll pick and pay. Maybe I wanna do that. You can do this stuff. The thing that's important is to understand the difference between them and what they mean for your customer and to be willing they can be negotiating points. That's basically what that boils down to that's pretty much it.
Speaker 1:Who picks pays.
Speaker 2:Who picks pays, except in Miami-Dade, and it's kinda split a little bit.
Speaker 1:All right, so disclosures.
Speaker 2:There's one that actually we could hit on too, that really quickly, if you don't mind. There's two. There's one that's huge and one that's a little one that we just talked about. I was talking to you earlier today about home warranty, and this is not something I do.
Speaker 2:Yeah, you were telling me that, but it's something I've been thinking a lot about, because home inspections are such a deal killer Again right in the book on the deal killers now for the state. If one of the options again one more option, your tool belt to kind of save your deal is, say to the buyer side, hey look, I understand that there's $5,000 worth of repairs that you're expecting on this because you think this is gonna break and this is gonna break and that's gonna break. How about this? How about I buy you a home warranty? It's gonna cost $5, $600, whatever it costs to cover the property for a year. So you know that if any of these things break, you're not gonna have an expense. Maybe I'll repair this and that or whatever. Use it as a tool to take and minimize the buyer's risk, because really what the issue is is most of the time when buyers buy a home, they are up to here as far as how much debt they've taken. They've got no more money. All their savings have been used for a down payment, and now they're tight and so they're worried. If that dishwasher breaks, I can't go buy a new dishwasher, I can't even afford really to have the repairman come, and so this is a way to take and minimize their risk and maybe get your deal done, just simply because you have another option available. That was the little one.
Speaker 2:The big one is this, and actually the place I talk about start this conversation is with this the contract, the standard contract, the one that we're talking about now, the 12 pages. I ask agents all the time what kind of real estate is this for? They say it's for all real estate. I said is it for all real estate? Really, just these 12 pages? What are they for? It's not for all real estate. It's for all real estate built after 1978, not part of a condo or homeowners association, not using VA or FHA financing.
Speaker 2:Because if I'm going to do any of those things, I need an addendum. That addendum has language that either we would have put it- Mirrors or supersedes what's in this. It changes this contract to effectively do that type of transaction. So if you see any language in this agreement that you think has to do with your condo or your HOA, you must be mistaken, because this agreement has nothing to do with condos and HOAs. It has to do with the sale of real property and in order to take and have it work with a condo or HOA, you have to use an addendum that speaks to those things. So this is the area where I have, honestly, I've taken advantage of a lot of agents in this section right here what's?
Speaker 2:the right feel buddy.
Speaker 1:It's okay.
Speaker 2:Don't feel bad, unless they I'll put it out this way If the agent tells me they're a new agent, I would never do this dirty trick to them. But if they're putting themselves forward as a real estate expert yeah, top producer, top producer, 100%. I put in the special assessment section that the seller will, the buyer will, pay all assessments after closing. And then in the condo addendum I make the seller responsible for all special assessments. And here's the reason why this section specifically excludes condos and HOAs. It literally says it's for public bodies, so like if the city came in and was doing a new drainage system and they're gonna assess your property. That's what this is for.
Speaker 2:If you put this in here, thinking that this has to do and I'm telling you I talked with the title company they're like this is the number one thing. They agents think this is for the special assessment in the condo. If you mark this, it has nothing to do with the special assessment in the condo At all. Your buyer will be responsible for it after closing. You will be sad and they will never work with you again. So, 100%, no matter what you mark here, no matter what, it has nothing to do with a special assessment for the condo. So that's my big one, love it.
Speaker 1:Great one, phenomenal one. All right property maintenance, that's easy, Just make they gotta make sure they gotta keep the property the same way from the day of contract until the day of closing. And I have had issues with that where something crazy happens to the house and then they have a walk-through inspection and then this is not here, or not really. This is not here, more like the condition of the property they moved out and the grass is high and they bust up the walls, but with stuff out they bust it up the walls.
Speaker 1:There's raccoons living in the house. Now, that type of stuff.
Speaker 2:And so usually what you'll do there is have a cure period. What I like to do always when it's something like this is because I always wanna be moving toward closing. I'd rather make the seller still responsible to fix whatever it is and escrow money at closing. I wanna take and get the closing done, because that's such a hurdle, especially when financing is involved. So I'll say, hey look, it's a $1,000 thing to fix, let's put 2,500 in escrow. The seller gets it back as soon as it's fixed. I had one the other day where we had a roof permit with a city I'm not gonna say what city. I'm a general contractor. I can't piss off cities. It's bad business.
Speaker 1:I'm gonna get this higher, Leo. No, no, you're close, but no Close close. We don't have any, I guess.
Speaker 2:So we've been trying to get this roof permit. They had a city with a reoccurrence inspection. One of the things that came up was an open roof permit. So we were working diligently to get this closed. We couldn't get it closed by the closing date. So the other side we decided we're gonna escrow money and take and get through it. And the other side sent me paperwork and in it it said if we couldn't get the permit closed within 14 days or something like that, I said there's no way I'm signing that. I'm dependent upon the city. So I said we gotta use diligent effort. It's what I'm taking us 45 days to get the stupid permit. That was all done. Everything was done perfectly. We had pictures of everything. The roof had to get put on because they missed four inspections in a row and there was a hurricane coming. So we had to close the roof up and so it was really the city's fault, right? But being aware again, miami Springs keep guessing.
Speaker 1:You're close. The first word is right. I'm thinking more lush, More lush. Yeah, that's right.
Speaker 2:And so, 100%, when you're doing this stuff, you need to take and make sure what kind of exposure you have. But using escrow as a tool, it's one of the tools that new agents don't know about Using escrow at the end to make sure you get through the closing A it gets you paid not a bad thing. And B it gets everybody where they're supposed to be. The buyer is now in the house. The seller is now out of the house. The seller is still financially responsible to fix the thing, otherwise they're gonna lose a bunch of money that the buyer's gonna want to make money on. You know it's cost $1,000 to fix it. You got 2,500 in escrow. Believe me, the seller wants to get it done and if not, the buyer's not so upset. He just got 2,500. He made 1,500 bucks for doing nothing. So just using that as a tool, 100% helpful. Oh, we're coming up on a big one man, number 12.
Speaker 1:Oh, property inspection and right to cancel. I mean, it's a big one, but at the end of the day, you got a certain amount of time to inspect the property. If you don't, and now if you leave it empty, they give you 15 days. I like to put I mentioned that earlier. I like to put the amount of days. So if it's a Monday, I like to give them to the end of Sunday. You know, maybe Monday I don't.
Speaker 1:I try. If I'm on the seller side, I try to. I'm on the buyer side, I try to get as much time as possible. If you leave it blank there, it's an easy way. You know, once you start writing stuff, you start bringing attention to it. If you leave it blank, it gives you 15 days, you know. And that, by the way, that's another trick that I'm doing. Yeah, there's a lot of times that this contract just falls back into a certain amount of time. I think financing has. It gives you 30 days or something like that. If you don't fill it out, it gives you 30 days to give a financing contingency. The deposit sorry, the, I said does it deposit to it too?
Speaker 2:There's well, there's an option Three days, if, if, if, if, if, if, if, left blank.
Speaker 1:Yeah, yeah, if left blank, three days are effect. So if you leave a lot of stuff empty, it kind of falls back on on the, on the template Inspection period. That's one way to do it. Just leave it alone. If you start writing stuff, you start bringing attention to it and again, guys always, always operate in the, in the understanding that the other side's not always going to know what the hell they're doing. So try to try to use these little tricks. If you know and I see this a lot I'm like they're asking for 15 days and they put 15 days instead of just leaving a blank. And then all of a sudden I oh like, oh shit, I forgot about that, not giving them 15, you know, so you don't just again, that's, that's the little tricks about just learning the contract, just play around with it 100%.
Speaker 2:I'm going to take it, I'm going to, I'm going to, I'm going to out one of the big lines, which is online. I think it's 251 is what it looks like to me. If buyer determines and buyer sold discretion that the property is not accepted with a buyer, the buyer may terminate the contract by delivering written notice. This means the buyer can get out for any reason If the wind blows too hard while they're out there, if it's Tuesday, whatever it is, and so, while it doesn't seem like it's that big a deal, I have again dirty tricks that Josh has played. Because agents don't know the contract, they call me up and they say, hey, my buyer is canceling because of the inspection report. Whoa, whoa, whoa. You got to send me a copy of the. You got to give me a chance to fix it. You know what they do. They send me the inspection report, they give me a chance to fix it. They want them closing on the property. I wasn't doing any of those right, because they don't know that their contract says, hey, they can get out for any reason at any time. So, guys, know what your rights are with your, with your, your agreement. I mean, I know it's a bit of a dirty trick For me.
Speaker 2:I never write a number in here unless my number is going to be lower than the 15. I want to call usually for me. I usually do seven. I want I want my number to be lower than the other guys because I want to give my offer the best opportunity. That's the seven days that that I have. That the seller really is twisting in the wind. They really don't know if they have a deal because I can get out, as I said, at my sole discretion. So I want to minimize that time for the seller if I can, because I know that I'm asking a lot.
Speaker 1:And if you're on the buyer side, you know it's all how you explain it. So, listen, you're going to put in this offer, we're going to feel it out, we're going to see what number we're, we're, we're coming in at. You're not obligated to continue on with the contract until somebody accepts it, until all terms are accepted. Once all terms are accepted, then you got 15 days, 10 days, whatever, to inspect the property. So you're going to go back and forth. If terms are good, you're going to continue forward. Then you got 10 or 15 days to see if there's anything wrong with the property and then, and only then, are we going to make really the decision to move forward. So it's kind of like a way to you know that's.
Speaker 1:Most people don't buy because they're scared of the process. So if you explain the process to them and I like to tell my buyers hey, listen, you're safe, safe. I could get you out of everything until this date, right? Yep, you got about like, forget about the day we signed the contract. After that we got X amount of days where you are safe. I'm going to get you out of this, no matter what your deposit's back, you're safe, et cetera, et cetera. After this, now, I guess, a little bit more complicated. Can I get your deposit back if you screw up?
Speaker 2:Maybe yeah maybe it goes through, probably half.
Speaker 1:Yeah, ok, but you know, and explaining the process and inspection period is one that I like to use as a listen this is almost like a thinking about it a little bit longer period, ok. So you know, people don't want to be forced into stuff, they don't want to be obligated, they don't want to feel trapped the second they feel trapped. They try to figure a way out, you know. But now I tell them also hey, after that it's financing, and after financing you're closing. Yep, you're done, you're closing and you're not, and you're not a reviver of dirt to your deposit. But again, it's not a surprise. So I've had issues with a client call me listen, man, I can't close. You know you're going to lose, I know I'm losing it, I know I screwed up, I know this and that you know it is what it is. But you know, sometimes things pop up and you know, and they don't want to close, but and even then I still get them half for the deposit back. But you know, it's understand that there's flexibility to this if you play it right.
Speaker 2:You call back to mind a story that was just brutal. When it happened I had a PTSD. Oh my goodness. Yeah, I definitely I had a. And there's an agent that I work with that I usually refer my buyers to because I don't have time to show him. So, even working with these folks good customer mind for years and they find he, the husband, is like super active in the whole thing and they find a house, Everything's good. They put the offer in. I think it's that house is like a 280. They do the appraisal. It comes in at 2 95. Things are great. Right the day before closing the guy's wife says I don't like the house, I'm not going to sign.
Speaker 1:Hmm.
Speaker 2:So the agent calls me up and he's freaking it because he really needed the commission on this one, and so I call her up. I spent an hour and a half on the phone with her. Can't get it assigned Title company. They get on the phone with her. Spend an hour on the phone with her. She's not going to do it. The guy had a $12,000 deposit that he lost. It is the only deposit in my life I've never, they're still married.
Speaker 2:I, you know, I'm guessing there's probably another more to the story. Yeah, and dealing with the deal kills. I'm writing it. I don't even know how you deal with it, other than to sit there and be like so you both like the house, right, like you both like the house, you sure you both like the house? Yeah, you know, like there's some deals that you're going to lose, that there's just really nothing you could have done, but it is what it is.
Speaker 2:One of the big things with the as is contract, that is that big difference between it and the regular, the far bar contract, is the fact that the seller is not responsible to close open permits. They have no responsibility to do that other than to provide assistance to the buyer, and that's actually in section C of the inspection period. In the far bar contract there's a certain dollar amount the seller is responsible for to take and close out permits. So when you see the language because I get offers all the time we're in the additional terms it says the seller, the buyer, will, um, the seller will close out all permits, I understand they're making a material change. This, and it's a big deal. If there are open permits, that can be very costly, and so if you just brush over that with your customer, you have to sit there and say to them hey guys, you don't have any open permits to you, yeah, and so yeah, that's what else let's see.
Speaker 1:Um, let's use the stuff that we're going to mean as far as escrow agent. I'm not really worried about that. I mean it is. It is what it is. You're going to hold an escrow, you're going to hold the property in a certain either company has an escrow or the attorney has an escrow default. It's really going to spell out, um, you know how the default is going to be handled. At the end of the day, what you need to know about default is that if you're at fault, what you're going to lose is the deposit. Right, that's basically it. That's, that's the remedy for for that.
Speaker 2:Um 14 is actually just a good one to know. Basically, it removes liability from an agent as long as the agent is telling the truth and reasonably could believe what they're reasonably believes what they're saying. So you want to know what the heck you're talking about and if you don't know, refer to a professional.
Speaker 1:Yeah, and, and I tell my agents all the time they come in scared because they get threatened by some agent or anything, did you do? Did you do anything wrong on purpose? Yeah, did you? You know were you at, were you, were you malicious, malicious, then, then, then it is what it is. I mean, if I had a, I've had a penny for each threat that I got from from a, from another realtor man I I I oh my gosh yes. No, they're, they're, they're they're.
Speaker 2:They're a nasty lot.
Speaker 1:Retired on an island somewhere, um force major. We already pretty much talked about that right, absolutely.
Speaker 2:Um, and I mean, a survey is just simply a drawing of the property. That that spells it. So you could run into issues.
Speaker 1:The nitty gritty shit on this contract is really on. First, the first few pages. First few pages, the rest of the stuff. I'm trying to think, trying to find something that sticks out.
Speaker 2:Well, no, you don't really get into trouble again.
Speaker 1:The addendums um 19 were just picking the addendums you got to. You got to know what addendums to use. You got to make sure.
Speaker 2:Absolutely. You know, and the the 100% thing that I always recommend is if there's an addendum for it, don't try to write it yourself. Use the freaking addendum, the section down here I don't know if you see section 20, if you turn the paper the other way, it looks like bars, like a prison cell, because if you're going to take and get yourself in trouble with the law, section 20 is where it's going to happen.
Speaker 2:Yeah, let me see if I can explain how this works. Let's say you write an addendum in here, you write something to the contract and you do a great job. I mean it's amazing, it's beautiful. And, of course, what's going to happen is there's going to be a dispute and you're going to wind up either having to take and do a mediation, but you're going to have to do a deposition at some point over this, and so the attorney is going to get you over there and he's going to say did you write these additional terms? And you're going to be like, yes, I did, and I did a great job. And the attorney is going to say you know what this is amazing. When I read this, I wept. It was so good. I knew I was going to kick her out of the house. It was, it was so good, I was moved. Let me just ask you one quick question when did you go to law school? And in the background you hear a toilet flush because you just grabbed your pants.
Speaker 2:When we write in a contract, we are technically practicing law According to the way Florida defines it. We're practicing law. Now. As realtors, we're always rubbing up against that right. When we're filling out blanks and contracts like this, we're doing what is within the scope of our contract. We are allowed to fill out a form, which is basically what we're doing when we're creating language that supersedes that doesn't supersede it. It goes outside of the scope of what our license allows us to do and it breaks into what is technically in Florida called practicing law.
Speaker 1:And pretty much everything you could have possibly thought of, that that that could be happening. There's an addendum for and the Florida bar, I mean sorry, the, the, the Florida association of realtor, is pretty good, like, I mean, we had this coronavirus and there was a coronavirus addendum in a couple of days, you know what I mean.
Speaker 1:So they're pretty much on top of it. Yeah, once you start writing stuff, you're just putting yourself out there and I get that a lot here. You know, again, I'm here in Miami and I got attorneys from every damn country in the in the world thinking they're attorneys here. And I also get you know I have a lot of realtors that are very meticulous. So now they're a roofer, now they're an inspector, now they're a. You know, I had one realtor in particular.
Speaker 1:I'm like dude, why are you even in a roof and why are you in a roof inspection? Why are you writing stuff on a roof about a roof inspection? Why are you trying to tell the title company what to do? Why pick the right title company, pick the right roofer, pick the right inspector, pick the right mortgage broker and you're fine. You are a facilitator. I tell my clients all the time listen, this is you know what. You know what I do here. I'm here to make this as smooth as possible. I'm here to make sure there's no surprises. I'm here to orchestrate all of these other professionals.
Speaker 2:The movie paces Absolutely.
Speaker 1:I'm going to ask the mortgage broker exactly how I want things done. I'm going to ask the roofer and now I've gone through and I've picked the right ones and they're going to all do it and I'm going to get this information, I'm going to translate it to you and we're going to have a smooth transaction with no surprises. But I'm not a roofer. I'm not, I'm not and I don't want to be a roofer. I'm in real estate. I'm not going to. If a roof inspection comes in, I'm not going to start explaining either. I had one realtor starting it up because the trust is and because they have this much, and I'm like what are you doing? What are you doing? Why are you getting yourself eaten more? Now, all of a sudden, your fingerprints are all over everything, your email, sending that note, because the roofer should have done this and the roofer should have done that. That's exactly what you don't want to do, guys. Stick to your realm, into what you do for a living.
Speaker 1:Stay in your lane, stay in your lane. Yeah, kind of like 100% right, if there's. If there's, if there's an addendum for it, you do it. If you have to start writing stuff, no, I'm not saying don't write stuff, because sometimes you just have to, but try not to Try to avoid it, man 100%.
Speaker 2:I mean even like when you have to do an extension of the contract or something like that. You want to take and keep your language as short and to the point Fire seller agree to extend the contract. Closing day two Closing day two, that's it. Done.
Speaker 1:Don't start getting fancy and I see all these realtors trying to get the fancy language and this and that.
Speaker 2:I try to write it.
Speaker 1:I try to write it as elementary as possible. I don't want any confusion.
Speaker 2:The more experience you have, the less like bullshit you want, the less respect you have for humankind's ability not to misconstrue it. Yeah.
Speaker 1:Just hey, buyer and seller want to do this, that's it. So what do I? You just buyer and seller want to do this, but you don't have to know. Just buyer and seller want to do this, that's it.
Speaker 2:They all agree to this.
Speaker 1:They agree to this One of the other language, English. No, no, fancy English, you know.
Speaker 2:Okay. So there's one other one I'm going to take, and it's kind of the dirty little secret of the contract that nobody talks about, which is at the bottom of page 11, there's a counter offering rejection section of the contract right underneath the additional terms. Oh, is the counter offering rejection?
Speaker 1:Yeah, you're right.
Speaker 2:If you are the buyer's agent and you fear that your offer was not presented to the other side, you can actually and your your code of ethics requires the seller's agent to do this ask them to get this marked and send it back to you, signed by the other side, letting them know they saw it and they're rejecting it or they're countering it.
Speaker 1:Yeah, You're basically saying listen, if you're going to bullshit me, I want it at least to be in writing.
Speaker 2:Yeah, I'm just saying it's a favor of putting it in writing.
Speaker 1:Yeah, and, by the way, property disclosures. One addendum, that, listen, every addendum has a reason, and I'm not saying to eliminate them, but if I had to pick one addendum or one document that's in addition to this contract, is the property disclosure statement that the seller has to fill out. Sure, you know, it goes back to that paragraph that you mentioned. I forgot which one it was. It says hey, listen, as long as you're not doing anything on purpose, as long as you're not being malicious, as long as you're doing to the best. And the actual document I just said right now Sales disclosure, the sales disclosure statement. It literally says to the best of your abilities, to the best of your knowledge, to the best. So you are. Yeah. So you're telling the seller hey, seller, fill this out to. You're not a roofer, you're not an inspector, you're not anything. Fill this out as best as you know how, okay. And you, as a realtor, are saying seller, you feel that I was the best, okay, hey, hey, buyer, this is to the best of their abilities. And now you're, are you giving that document? There? You're excluding yourself.
Speaker 1:This is a communication. Hey, this is all I know. This is all you know, this is all I know you sure that's it. How about this? No, that's it, I don't know anything of that. Okay, you're good, everybody's good, right?
Speaker 2:Okay, that's basically what you're saying 100% with the seller's disclosure I there's two things I say about the seller's disclosure. One handle it like a murder weapon in a homicide with rubber glove. You don't want your fingerprints on that anywhere, right, and then you don't. You need to be acting as a courier where that's concerned. You take it from one party and you hand it to the other party.
Speaker 1:Let me add more to let me. Let me, because I know what you meant. Okay, with the gloves, you don't fill that shit out for them.
Speaker 2:No way.
Speaker 1:Your handwriting is not on there.
Speaker 2:No way.
Speaker 1:Okay, you're going to wear gloves. In today's world, wear gloves, a mask, sunglasses and that new protector thing that I see that's like a welder's mask and at least one wrap of saran wrap around your entire body.
Speaker 2:All right.
Speaker 1:You, you, well, you don't, and everything is fine as long as everything is fine when the shit hits the fan and all of a sudden, it's your handwriting on the property disclosure statement saying that there was nothing wrong with the wall that just fell and killed the kid.
Speaker 2:Right, cause this, and the seller's going to say, oh, but I told the agent that. And now, what do you do? Oh, what, it's their handwriting on the seller's disclosure. Here's the thing If our response, their responsibility, is to disclose our responsibilities, to disclose what they disclose to us. So almost the out of the way, though, and so the best thing for us is, if they disclose to us in the standard, the form of a form, and we take and hand that form to the other side, we have literally given the other side 100% of everything they've disclosed to us, because here's everything they've disclosed to us.
Speaker 1:Right. So look like, for example um, you know, there's the, the, uh, the, the, the, the, the, 1978, and there's this and there's that, there's the. All those addendums, right Okay, all those addendums are good, and I'm not. I'm not saying don't use them, but I'm just saying, if you forget all of them but you have the property disclosure statement, you're good, Okay, because that's the one that really like, that's like the. How many pages is that? Like five pages.
Speaker 2:I haven't seen a property that's like five, six, five, six pages, right, it just says every single thing, every single thing.
Speaker 1:Is this wrong with the property? Is that wrong? Do you know of this? Do you know of that? So, yeah, I highly recommend that every contract, if you're, if you're on the seller side, you're you're disclosing On the buyer side, you're requesting the property disclosure statement, you always want to see that.
Speaker 1:You always, always, always want to see it. You want to cover your ass, guys, listen, there's one thing that I'm proud of and I and I tell everybody that I'm trying to recruit into the company. I'm like man. If there's anything I'm proud of is that I have no fret complaints. I have not.
Speaker 1:I mean, my company is clean and it's not a coincidence. You don't just wake up and be like, all right, I got 20 years of just cleanliness, of no issues, of no anything. You know, do I have issues with other realtors? Absolutely. Do I have issues with realtors that try not to pay one of my agents? Absolutely, but I get them paid.
Speaker 1:So I'm always in something, but it's not with a client and it's not within it. It's usually realtor to realtor. You know. So, if you want, and what only thing that really matters in this business is just not affecting clients. You know we could fight with each other realtors to realtors and commissions and this and that and lawsuits flying everywhere and arbitrations and mediation but you don't want to lose a client's deposit, you don't want to have an issue with it, with a, with a condition of a property, and if you do things right and if you cover yourself and if you fill this contract out correctly and if you educate yourself correctly and if you add the addendums correctly, and the shit hits the fan. Because if you're in this business long enough, it's going to hit the fan. Now you're either going to be the one that's like let them try to find something you know and they're not going to cause. I am covered, I covered my buyer, I covered my seller, whatever it's, it becomes a pleasant situation.
Speaker 2:Absolutely. There's one last thing and I want to hit on it because it's it's not normally a deal the commission section down here who the cooperating agent is and all that kind of stuff. If the property is listed in the MLS, you theoretically don't have to fill that section. I like to still write it down anyway. I hear you, and the other thing that I like to do is to take and get a copy of the MLS printout that shows the commission amount on there. That's a great little advice, right there.
Speaker 2:Because what's to stop them from going there and changing?
Speaker 1:And I'm all about. Oh, let me. Well, let me tell you something. I've had it happen and there's a record of it and you ask the association and they go back and they get it and they have to dig it out, for you.
Speaker 2:They have to dig it out for you and they get it.
Speaker 1:But yeah, you're a hundred percent right.
Speaker 2:And as if I put that if I put that in there, they know that now I have the documentation. Make sure we understand that Okay.
Speaker 1:So what I've had happen a lot of times is that you get to closing and then all of a sudden they're getting they're getting paid three and a half percent and my agent getting paid two and a half percent, and then you're like wait a second, I don't remember that. Then you go to the MLS and there were at least smart enough to change it on the MLS, but they were stupid enough to do it because then I go to the MLS and I and the MLS has a track record of everything, of, of of what any changes were made, and then you compare it with the day it went into contract and then they got into pain. Yeah, but instead of having to go through that, you avoid it. If you're making it very clear from the beginning, you either write it down or yeah, I mean print out the MLS. Well, you have them actually initial it make it part of the contract.
Speaker 2:I just look as long as it's, it's almost in the email. I can always go back. Hey, here's the email I sent where I sent the offer. That's right. Here's the MLS printout, Great tip. Now here's the other thing. While it's not critical that you have that written in for the buyer side, if you're dealing with a fizzbo, if you're dealing with any prep that's not on the MLS you must.
Speaker 1:Why did they erase that? Though they're sure in shit that they do to the contract, that I don't, I don't get it. Why would they erase that section where you actually write the commission? They used to have it before you know, I don't again.
Speaker 2:You get the Florida bar and the possibly P, though you get the Florida bar and the Florida association of realtors together. God only knows what they were drinking or smoking. Who knows? All I know is, this is what they've given us and this is how we work with it.
Speaker 1:It's just just trying to think of a logical reason.
Speaker 2:Oh, one more thing, if you don't mind, and not about the contract, but just a free opportunity for anybody that is listening. On the 26th I think I told you earlier I'm doing a free class on the results of COVID, on.
Speaker 1:That's right. Yeah, super class yeah.
Speaker 2:For the board of realtors from Miami. It's free. You guys can just go on there. It's on zoom. It's going to be a zoom meeting. The 29th 26, the 21 o'clock.
Speaker 1:How do they find it?
Speaker 2:Go to Miami RE their website and it's one of the classes that's listed there. It's the 26th of May, it's about an hour and a half and it's a bit different than I try to make my classes interactive as possible. I spend a lot of time usually telling people what I see in the market and in this one I try to get. I try to ask more questions and get them to tell me what they see going on in the market and show them how a great real estate conversation is built about what now is a current event COVID but tomorrow could be interest rates or whatever else, so that you're not just having the cookie cutter conversation.
Speaker 1:It's kind of funny, because COVID has to do with interest rates too, because they've dropped 100% 100%.
Speaker 2:It's crazy.
Speaker 1:So, all right, man, so we're going to be. Another thing is we're going to be having in the next couple of weeks, let's say that we're going to be having a zoom. That's going to be a real detailed where. It's going to be Richard, you and myself. It's actually going to be you and we're going to be chiming in. You're the actual teacher. You know what I mean. So, but I'm going to be bringing in my experience, richard, which has been our attorney for 15 plus years now he's going to be giving his point of view. You know, we want the enemy's point of view. So those attorneys and yeah, so it'll be a really cool zoom class. We're going to be announcing it soon and again, but I think today was a real comprehensive.
Speaker 1:Look. I know for a fact that we threw some real important stuff there. Sure that, if I would have known first year of my business. And again, well, actually I did. I did that contract class, like I mentioned, with Neil Littman. I'm actually going to send this podcast to him. But listen, guys, classes like this are they just change your career. There's a couple of tips here and a couple of tips there. That'll really, you know, I'm not saying that this is going to change your life or anything, but I am saying that there's a couple of the tips here that if you follow, it's going to make a big difference in your career. So we'll be having a lot more of these and, all right, you know a lot more about the contract. Thank you, guys. Kind of like anything else.
Speaker 2:No, I think that the only difference between this and what we're going to do for four hours is going to be. We're going to really kind of go line by line and explain what the different things are.
Speaker 1:I don't think we can do it in four hours. We've been two hours of this and we're skimming.
Speaker 2:Or skimming. I understand we're skimming, but I mean a lot of the sessions. You think you can do it in four hours. I know I can do it in three, so I can do it in three. The four hour, the fourth hour, is really more of tips on how to get it signed, tips on how to fill it. We kind of did some of that today. I mean, like for me there's there's one addendum that I use for condos, that if the if it's left blank, the seller is responsible for to pay all the closing, all the special assessments at closing. So I'll take an, I'll mark that the buyer's response for all the special assessments in this and then I'll use that addendum and leave it blank, and I use ambiguity it's blank. If it's left blank and the other side misses it, their seller has to come to closing and pay the full special assessment. Sometimes it's 18, 20, $30,000. Man, the seller, the other side, is so upset when that happens. And hey, here's the paperwork.
Speaker 1:Your real estate professional should have found a better real estate professional and guys, that's what this business is all about. Not not doing it, cause you just listen, man, you're going for your side, that's it. If you're protecting your, you're protecting your client. You know. You want to be fair, you want to use the agreements. That's fair to everybody else. But guess what they have to read. We're not babysitters, we're not, we're not in. I had a situation with a realtor that they all know. It was something about a, it was something about an assessment, something about it, and they were pissed off at my realtor because the client signed it. He's like no, you made. The guy literally said they're all. The realtor said you made my client. He was my seller. My realtor was on the seller side and the realtor said you made my client sign this. I'm like dude. So he's coming to me. My realtor's telling me dude. He's telling me. I'm like how the fuck are you? How did?
Speaker 2:how did you take a gun?
Speaker 1:I mean no, but he, you, you, you haven't even talked to his buyer. Yeah, I had to go through him. I mean, that's the stuff that we see in this business. So you know, get know the stuff. This is a great intro. I think the class that we're going to do is going to go way more in depth. Then you're going to have to read it 20 times, Then you're going to have to practice it, Then you're going to have to study it. But this could be a your gun or it could be somebody else's gun.
Speaker 2:Yeah, I think, I think, really it's. It's about removing the mystery for an agent because the reality of it, most agents won't read all 12 pages. It's look, it's not easy to get through. But here's the thing I was always terrified when I was new that somebody's going to ask me about something on page nine. I, I, I know page nine is there because I make them initial it, but other than that I really haven't spent a lot of time. Me and page nine are not exactly buddies. And so after the class, after the, after the, the longer class, you've literally gone through each thing. And so somebody asked you about it what's rate on gas? Okay, well, rate on gas is, and you can at least have the conversation. And again, it removes, it, allows you to be a much more confident agent, and that's really what I always shoot for is for agents to have confidence in what they're saying.
Speaker 1:And, by the way, you could be the agent with six months experience that has gone through this over and over again, that has sat down with your office manager and says, hey, what are the most common mistakes? That you've listened to a podcast like this and you've really gotten these tips. Time in the business. I get this all the time. I get. Agents come in here and they go I want X split because I've been in the business three years. Okay, well, what have you done in three years? Well, I don't care how long you've had your license. You know what I'm saying. It's, it's, it's, it's how many. It's like a pilot's license, right? So I'm a pilot. It doesn't matter how long I've been a pilot, how many hours I have.
Speaker 1:So, I have 500 hours, right, semi experience pilot. There's guys that have 10,000 hours. They might they might be a pilot half of the time that I am and they have 10,000 hours of experience. They've been through more storms, they've been through worse weather, they've, you know, they've traveled to crazy places where the GPS doesn't work and that that's what it is. So you know it's. It's it's really understanding. It's how quickly can you rack up this information? Does it matter if I'm flying, if I'm flying? No, I could have been with a flight instructor and be like hey, where are you going? You're going to South America. I want to go with you. I'll be your assistant for free, yeah, and I'm flying there and I'm following the charts and I'm doing everything. So you could rack up a year. In a year you could rack up 10 years of experience if you really wanted to.
Speaker 2:My father used to say all the time when, when something would go really right, like you know all the pieces of, he'd be like 30 years of experience. And then somebody else would try to say the same thing and he's be like no, you have one year of experience, 30 times over. You keep doing the same dumb stuff he's been doing for the last 30 years.
Speaker 1:And that's it, man. If you get this, you could become in one year like for real learning. Ask every agent hey, tell me about the contractor, what mistakes have you made? What should I make? And go through it and go through it and ask and ask questions and go through it. Be a come a student of the game. If you become a student of the game again in one year you could become somebody that you'll never have an issue with the contract ever. You'll never miss an addendum. You'll never miss a date.
Speaker 1:Somebody tries to get cute and change something. Cadillac tries to do that trick with the, with the, with the assessments and everything. Like you're going to catch and be like absolutely not. I mean, you're going to have, you're going to have. Listen, I had a. I had a contract that came in where I was on the seller side and the agent I could tell was brand new, filled out the contract horribly and where she put, instead of putting the, the down payment, where she put the down payment money, she put it as deposit. So she put like $60,000 deposit on like $200,000 townhouse or something like that.
Speaker 1:I could have been a real bad guy there. I could have been a real bad guy there and I could have really. I called her and I go listen, I don't no, no, no, yeah, I said listen. I don't want you to come to my company because I don't want you to think this is a recruiting call. Okay, I really want you to. You know, maybe one day remember me as the guy who did everything possible to help you out. I could really screw you right now. Yep, okay, I think you look really bad right now. I need you to whatever company you're with, on anyone, on who they are. I need you to get the fuck out of there now. Find the company that's going to train you, take this career, because if, right now, if I were to do this and you were to screw up, you lost $60,000 of your client's deposit on a $200 and something $1,000 townhouse. Okay, so take this serious, you know? And but hey guys, I'm a nice guy when it comes to brand new agent, cause I'm dealing with them on a regular basis.
Speaker 1:There's bad guys out there, that'll.
Speaker 2:Oh, we're like whoa wait a second. No, they don't close.
Speaker 1:I'm still getting paid my commission cause I'm going to take this deposit, I'm going to pay the, I'm going to pay myself the commission, I'm going to give the seller the rest and we're going to get. We're going to sell the house again. I'm going to get paid twice on the same house?
Speaker 2:No, 100%. You want to take end, especially for people out there. If you've been, if you've been in the business a while, you know you cut the new agents slack just by the nature of the business. The way things are here, where you spend time with your agents, is not how it is out there. Yeah, and most agents really they're just thrown into the, thrown to the wolves. Maybe they get an MLS class and smack in the backside and said go get them and um, so I would never. I mean I would never if I knew it was a new agent, I would never do anything. That was I literally stopped.
Speaker 1:Okay, guys but I do remember being a new agent and getting screwed over by the old school realtors and really getting like man. These guys are really ramming it up.
Speaker 2:You know it's it's, it's, it's tricky, it is, it is, and so you know, I encourage you agents to pay it forward. Do the right thing, do the nice thing. Don't be bullies. Don't be bullies, but at the same time, if you're dealing with, you know a professional on the other side, represent your side, always represent your side, your customers, who you're, who you're looking out for yeah.
Speaker 1:All right, guys. Thank you very much. Anything else, we're good. All right, thanks, guys. Thanks.
