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How to find your “T Spot”—Building Your Business By Building Trust

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My 20 year old daughter has already told me she will be mortified if I use a vaguely suggestive title to draw people to this post. The bottom line is that we are all in the marketing business, and I write to reach the broadest section of AR Nation that I can, so, perhaps,  prudes need not read further.

Of course the “T Spot” refers to engendering trust from those you work for, and with. Once trust is established, everything gets easier. In Massachusetts, where I practice real estate law, attorneys are responsible for the mortgage loan closing. The typical Borrower comes into my office ready to distrust, and dislike, me and my firm. There is no question that we are only involved to take advantage of them in some way or other.

To combat this generalized notion, I try to prepare for the closing. I look at the Form 1003 to see if there is some common ground between me and the Borrower. “Oh, you are a nurse; you know, my sister-in-law is a nurse”. “Oh, you have kids in college; so do I. Can you believe how much college costs?” I need some door opener to convince the Borrower that I have the same kinds of hopes, dreams and concerns that they have. I need to make myself into a human, not a robot who is going to make it difficult for them to own their new home.

It is hard to say when the moment of trust will occur. Sometimes, I can go deep into the closing before I feel the pendulum swing, and the Borrower starts to loosen up and enjoy the process. Sometimes, it never happens, and I can chalk one up to experience.

The point of this post is to articulate how important it is for all of us to gain our client’s or customer’s trust. We do this by being friendly and congenial. We do this by working at our trade, so we really do have most of the answers. We also do this by having enough humility to tell the customer that we don’t know the answer but we will try to find it and get back.

Post-Closing Checklists–The work is not done until it is done

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As a Massachusetts real estate attorney, my role in the closing is different from attorneys in almost every other state. Not only do I conduct the closing, and attempt to explain matters to the parties involved while I am doing same, my firm also researches the title, writes the title commitment, coordinates closing documents from the Lender, and, general, runs the “show”.

There is a lot for Massachusetts conveyancing attorneys to do, but, if I must be honest, I love every minute of it, even the messy closings where things just continue to wobble off the track. When the transaction is completed, and I send the documents off to the local registry of deeds, and give the keys (and garage door openers) to the Buyers, my work is far from done. I wanted to share with you some of the things that need to be done, post-closing, which are integral parts of my firm’s marketing efforts.

     1. Be in immediate touch with the mortgage originator.  In Massachusetts, the mortgage originator decides who gets the closing business. It took me a while to embrace this concept, but I now have it completely under control. So, I need to have a”relationship of trust” with my mortgage originators or they will seek other closing agents. I urge the mortgage originator to attend the closing. I give him or her scores of good reasons why it would be helpful for them to attend. They rarely follow my advice. Since they are so important to the contuance of my closing agent business, i have instituted a “no-exceptions” rule with regard to mortgage originators. After each closing, the attorney in my office MUST contact the mortgage person and tell him or her “how the closing went”

 Loan closings, like many other thngs in life, generally fall into three categories, good, great or bad. There follows my rationale for appropirate information disclosures to the mortgage originator:

         a. A good closing. Well, things went fine. Nothing much to report. All parties seemed reasonably satisfied. You are in “no danger” if you contact the Borrower, the Realtor or other referral cource. The deal got done, and the parties moved on.

           b. A great closing. The chemistry was there. The parties all got along. The Buyer complimented the Lender for efficiency and honesty. If my voice was no so dreaful, I would join everyone in singing “KUMBAYA”. This is good information for the mortgage originator. He or she knows that if a call is made to the Borrower, or the Realtor, that there will be much positive reinforcement. Many accolades will be exchanged. The seeds for the next deal will be sown. All parties are happy.

           c. A bad closing. These happen, and there is sometimes no way to prevent them. The Lender is late in getting closing figures to my firm. My paralegal makes a costly mistake on the HUD-1 Settlement Statement. The walk-through goes badly and infects the entire closing process. You do the best you can, sometimes even write the Borrower a check to ease some of the pain of the event, and move on. The first person you call is the mortgage originator. You tell him or her what happened, you try to explain why. Most importantly, you inform the mortgage person what you, or your firm, has done to make things a little better. At least, when the mortgage person gets the irate call, he or she is forewarned. Many times, just having the information improves his or her position. The originator can say “I understand that Topkins & Bevans wrote you a check for $250 as an attempt to make thngs better. Was that helpful?” Sometimes, this type of approach can turn a disaster into a marketing triumph. Sometimes not. The important thing is that your referral source is not “blind-sided”. He or she knows the facts.

     2. Make sure you follow through on promises made to closing participants at the Closing. if you said you were going to send them an Estate Planning Questionnaire, send it. If you promised to look into a special taxing provisions for owner-occupants in Somerville, look into it and get back. It is amazing how grateful people will be when they realize that you are a follow through person, who keeps his or her word.

As I said above, I am extremely fortunate that I live in a state where the attorney still runs the closing. I relish each and every chance to complete a closing. After all, it is a very important event in the lives of each participant, and I have done my part to make it happen.

The Liquidated Damage Provision in the Sales Agreement–Often misunderstood, more often a trap for the unwary

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One of my pet peeves as a Massachusetts real estate attorney is the printed language in most standard purchase and sale agreements regarding liquidated damages. To paraphrase the legalese contained in the printed form “if the Buyer defaults, the Seller may keep Buyer’s deposit as liquidated damages unless the Seller within thirty days of such default decides to avail himself,or herself, of other options”

These “other options” would definitely include suit for specific performance of the contract, which in a falling market, could mean a financial disaster for the Buyer. In effect, if the Seller sold the property to another Buyer, the defaulting Buyer would be responsible for damages measured by the price in his or her contract versus the actual sales price realized by the Seller.

The alarming thing about this provision is that in my forty plus years of practicing real estate law, I have never had an attorney for the Seller refuse my request to eliminate the second option.  So,if for some reason, you Buyer’s Agents are forced to “fly solo” because your client will not retain an attorney, I urge you to, at the very least, make sure that you request a change from the printed form.

The changed version reads, that “if the Buyer defaults, the Seller may retain Buyer’s deposit, and such retention shall constitute Seller’s sole remedy against the Buyer” That remedy is a horse of a different color and,of course, much more favorable to the Buyer.

Those of you who are starting to serve as Buyer’s Agents should also be aware that many Sellers are inserting provisions in the purchase and sale agreements to the effect that “since there is no way to truly measure the damages suffered by the Seller, if the Buyer defaults,both parties agree that the retention of the entire deposit constitutes an acceptable remedy for both side.”

I strenuously resist this provision when representing Buyers, unless their deposit is very small. The only Massachusetts Supreme Judicial Court decision which actually address this issue held that five (5%) was a reasonable sum for liquidated damages. Many deposits are in excess of five (5%) per cent. I would rather leave the provision quoted above out of my agreement, and argue that five (5%) per cent is, indeed, plenty of compensation for a Seller, especially if the default occurs in a relatively short period of time. I have a lot more wood to cut if I have agreed the retention of the deposit, no matter of what amount, is a “fair measure” of damages.

It is never pleasant when circumsatances dictate that a Buyer must “walk away”. In circumstances where we are representing Buyers, it is important not to turn this cruel turn of fate into a financial disaster for the Buyer, which usually cannot be easily remedied.

Confidence and Humility–Get the blend right and the world will beat a path to your door

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In Massachusetts, where I practice, we have been very fortunate in having excellent professional sports teams, with enlightened management. Only the Bruins, our representative in the National Hockey League, has not won a championship in the 21st century. The Patriots have won three times, and the Red Sox twice.

Still, there are times of frustration for New Englanders as fans, and last night’s Patriot’s 34-35 loss to Indianapolis surely ranks as one of the most difficult pills for me to swallow as a sports fan. What made it worse for me was the rather blase manner in which Bill Belichick tossed off a bad decision late in the game, and never just said “I made a mistake”.

That smug attitude in defeat got me to thinking about what I would have done in a similar situation. I have been practicing real estate law in Mssachuseets for more than forty years, and I have made many mistakes along the way. There was a time when I would make excuses for my mistakes, or, worse yet, blame others for problems I created myself.

Just about the time I started getting things done on time rather than making excuses why I had not, I realized that most clients would accept an honest apology, especially when it is coupled with an action plan to fix the problem. In fact, i have had some of my best triumphs after I started out in the worst of positions.

Americans are great “forgivers”. They are ready to give people a second chance almost all the time. Keep that in mind when you are practicing your profession. Lying, or making lame excuses, is not the course of action for a person of integrity. Admit what you did wrong, and try to fix it. If you demonstrate humility now and again, you will endear yourself to those people who sought you out because of your confidence and talent.

There is a balance there, and we should seek it every day. Coach Belichick should have just said he made a mistake. We all do, and with his track record, he is entitled to a few. So are all of us.