Start Marketing for Sale the Day You Open Escrow (LA 1077)
Start Marketing for Sale the Day You Open Escrow (LA 1077)
Transcript:
Steven Butala: Steve and Jill here.
Jill DeWit: Hi.
Steven Butala: Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit: And I’m Jill DeWit, broadcasting from sunny Southern California.
Steven Butala: Today, Jill and I talk about how you should start marketing for the sale of your property the day you open escrow. How did this come up?
Jill DeWit: Isn’t this great? Oh, I have a lot to say.
Steven Butala: I know how this came up. You want me to describe it or should you?
Jill DeWit: Uh-oh, this can’t be good. No, how you just said it, the way you just said that it sounds like somebody’s going to get in trouble.
Steven Butala: Jill and I are in the process of massively expanding our staff.
Jill DeWit: This is how it’s supposed to go-
Steven Butala: Actually, doubling our staff-
Jill DeWit: Not how it always goes, let me just back up with that. So go, go ahead. Thank you.
Steven Butala: Doubling and then eventually probably the next 30 days tripling our acquisition and sales staff for our land product. It’s not the only business that we have, but it is the most profitable one and requires the least amount of cash. So it’s the one we love the most, obviously. That’s the one we have a show about.
Jill DeWit: Exactly.
Steven Butala: And so like always there’s a ramp-up period and training period. And so we’re noticing that we’re not sending a clear message about what this whole episode is, which is you can’t start marketing too early.
Jill DeWit: Right.
Steven Butala: And you always have to change how you’re approaching marketing and making it better. So that’s really what this show is all about. Some people … When people join us in our group as members, and a lot of times employees, they’ve learned a lot of stuff about real estate. However they got to us, there’s all this stuff that they’ve learned in real estate, and a lot of it we have to undo.
Steven Butala: And so in the world of real estate out there, there’s this concept of buy it as cheap as you can, and I mean as cheap as you can … and close the deal. Get it all ready for marketing. Get it out there for as much as you possibly can, the price as high as you can, and then wait. And that’s what we’ve all learned through our parents selling their house and the real estate agents that we know. This is the universal way largely because no one has taught them anything else.
Jill DeWit: That’s beautiful. And you’re right.
Steven Butala: And so all that’s wrong what I said-
Jill DeWit: I know, that’s the whole thing.
Steven Butala: If you’re listening to this show, just wait. We will get to the right way. That might’ve worked in 1979, I’m sure it did.
Jill DeWit: I have something funny to say about that. So what this is is people right now, I think they’re so focused on getting the property and buying the property, having it and they go, “Okay, today’s Tuesday, now I own it. Now what do I do?” Okay, wait a minute.
Steven Butala: That’s a perfect way to say what I said.
Jill DeWit: But wait, I got to take it a step further. It’s just like when you’re pregnant, let me tell you. Well, if you have a kid-
Steven Butala: Oh my God, this is great.
Jill DeWit: This is hilarious. If you’ve ever been pregnant or your partner’s been pregnant, you know exactly what I’m talking about. What do we all do with kid number one? We get all the What to Expect When You’re Expecting books. We read up on all the pregnancy, we know what’s coming next month. We know how our body’s changing.
Steven Butala: We build a crib.
Jill DeWit: We’re learning all that. And then what we forget to do is look ahead, and then what happens is you’re in the hospital and you go, “The baby’s here, now what do I do? I didn’t study how to change a diaper. I didn’t study this. I didn’t study that.” I didn’t do that, because I did this. I did this.
Steven Butala: I did this too.
Jill DeWit: Everything up to … I was a pro on pregnancy. I had that down. Then the day the baby comes I’m like, “Shoot, now what do I do? I didn’t plan for this.” I wasn’t thinking ahead for like, “Oh yeah, I guess I need to stock up on that. I guess I need to stock up on this,” right?
Steven Butala: No, I did. Jill and I met later in life. I’m sure you all know that.
Jill DeWit: Did you plan ahead, because I didn’t. Oh, I didn’t.
Steven Butala: Who are you talking to?
Jill DeWit: Seriously, I didn’t read the books.
Steven Butala: I was ready for everything.
Jill DeWit: I read all the pregnancy books. I didn’t read the year one, year two, year three-
Steven Butala: Did you build a crib?
Jill DeWit: Heck no.
Steven Butala: You didn’t build a crib?
Jill DeWit: Well no, wait. We had a crib, yes. We had a crib, of course. No, it’s not like I did that. That’s hilarious. Yes, I had that. I had a car seat-
Steven Butala: Actually, you know what? I did the opposite.
Jill DeWit: I didn’t think about the baby.
Steven Butala: Maybe it’s a gender thing.
Jill DeWit: I didn’t think about the stuff right after.
Steven Butala: I thought all about that, and nothing about pregnancy. All I read about pregnancy was she might get crazy, and that’s actually true.
Jill DeWit: All right. Thank you, move on.
Steven Butala: My job was to do all the stuff you didn’t do.
Jill DeWit: Thank you.
Steven Butala: That’s why there’s two people involved.
Jill DeWit: That’s true.
Steven Butala: Before we get into the topic, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.
Jill DeWit: So who is this Steven? Is this really a Steven?
Steven Butala: Yeah, it’s not me.
Jill DeWit: Oh, okay. All right. It says, “Steven asks,” I want to make sure. Is that you?
Steven Butala: It’s not me.
Jill DeWit: Okay. I’m going to throw one of my own questions in there, actually. That would be kind of funny. Steven asks-
Steven Butala: You should.
Jill DeWit: So the title company I’ve been using in a particular rural county has said that they cannot provide title insurance on a property if I do not do the initial closing with them. I was planning on just getting an affidavit sent to the previous owner after self-closing with them on the first transaction, as described on our Thursday meetings so I can provide the title insurance on the higher priced resale. Okay, so let me-
Steven Butala: Jill is going to give you background here in a second.
Jill DeWit: Bogus or common practice for a title company to take that stand, question mark.
Steven Butala: Give them give some background, please.
Jill DeWit: So this is a … And you can tell me if I’m reading this correctly. We’ve done this too. Sometimes you have to hurry up and get title insurance for whatever reason, or hurry up, excuse me, and close a transaction for whatever reason.
Steven Butala: Well, maybe it’s really, really cheap and you don’t want the seller to change their mind.
Jill DeWit: That’s one of them. So usually it might be it’s really, really cheap and you want to close it really fast. One being, we just had one that’s about to go back to the county, you want to close it fast. One being maybe somebody is moving, leaving the country, or they’re sick or who knows what. They just need the cash that fast. They have said-
Steven Butala: There’s a lot of reasons you need to close a deal in three days instead of three weeks or a month.
Jill DeWit: It’s end of the year. I’ve had a, “This is an end of the year. If you can close it for me by December 31 you could have it at this. I got to get it off my books.” Things like that come up. So you close it really fast and then you go get title insurance. Well what if, like this situation the person’s like, “You know what? I’m just going to buy it, own it, now I’m going to go get title insurance when I sell it and just do it at that time,” which can and should be an option.
Jill DeWit: Usually if it’s really fast, I mean I haven’t had title companies … You tell me your experience. If I’m doing it within a brief window that it’s not that big of a deal, the seller is still right there. We only did all this a week ago kind of thing. So it’s not that hard to go back and get the title insurance and explain what’s going on. What were you going to add?
Steven Butala: Title companies, if you’ve ever walked into a title escrow company, visualize this with me. There’s a lot of people sitting there. In a rural market, maybe there’s not a lot. There’s probably eight, maybe three, maybe two people there. They’re usually close to the County Seat. Everybody knows everybody in that little town. And so there’s a lot of reasons why they’re not going to let you do something that you want to do. And so it’s not just on this topic, but anything. Dual escrow, anything out of the ordinary. Maybe the fact that you’re from a different state just makes them mad.
Steven Butala: The Recorder talked to the Treasurer, the Treasurer talked to the Assessor. “Can you believe those people bought that 20 acre property out there for $2,000? They should’ve bought it for $20K. We’re not closing their deal.” That’s really what’s going on here. So get used to the fact that you’re not going to get what you want the first time, every time, from the title company that you want to get it from. And you’re going to have to Jill-ify it.
Jill DeWit: Call around.
Steven Butala: You’re going to have to Jill-ify the thing. You’re going to call around. You’re going to make friends with them and you got to keep them on the phone and get them on the phone and ask them a lot of questions about why. This is what Jill does. Her whole career, Jill will kill them with kindness and talking until she gets what she wants.
Jill DeWit: Thanks. But to answer-
Steven Butala: Jill knows firsthand-
Jill DeWit: Your question Steven, is there a law or rule or something like that, that it has to be that way? No, it doesn’t have to be that way. So if this is the only game in town and you’re stuck with this, they’re the only ones that would do the deal or whatever it is, I would say, “What’s it going to take then? Fine. We’ll go back and pretend you did the initial thing. The seller’s still here, we’ll have you sign it, but I’m turning around and I’m closing, I’m reselling it right here. So I want to have a … I’m going to give you a two for one here. What can we work out?” So I’ll spend more money on the front end close, but I want a binder or carry open, a hold open policy for the back end close, because you’re doing the same work twice. All you’re doing is inserting. You’re doing the title work here, inserting my name. That’s the only difference. So that’s possible.
Steven Butala: What I would say to this title company before you go to another one and try to restart the whole thing, I would speak their language. I would say, “Look, what’s it going to take? I have an affidavit. Do you have an affidavit that we can sign that says that my seller just signed it a week ago? Okay, because that’s how we usually do it. We did it over here this way, we do it over here this way. The person is really totally willing to sign it. In fact, if we have to go nuts and undo this deal with a quick claim deed and you close it through escrow because the whole thing’s done already, I’m okay with that. But let’s just work together and get it done.” Don’t just say no.
Jill DeWit: Right, good answer. Good answer.
Steven Butala: You got to work these deals. That’s another thing. I don’t want to go over on time on this episode, but Jill and I on this show talk about this stuff at 35,000 feet. We give the basic information just to basically see if you’re interested. Hopefully we entertain you a little bit. This business requires dedication. It requires a lot of work and a lot of creativity and free thinking. And if you have those things, you’re going to do … I mean, you’re going to retire on this like we have and we are. So this is a perfect example. You have to make this work. You’ve got to get it done, and it’s worth it.
Jill DeWit: I think it’s the same as with … I think every business owner would say you have to have that attitude. I don’t care what your business is. You need to come at it with a, “What’s it going to take to get this done? What do you need from me?”
Steven Butala: If it’s not working you got to change it that day.
Jill DeWit: That’s it.
Steven Butala: You could do a whole episode on that.
Jill DeWit: Totally.
Steven Butala: Today’s topic, start marketing for the sale of the property the day you open escrow. This is the meat of the show.
Steven Butala: Okay, hold on before you get it started. I love this pregnancy thing. I mean, who in their right mind would take a baby to term, have the baby-
Jill DeWit: It happens-
Steven Butala: Hold on a second, let me finish this … Take a baby all the way to term and then start thinking about what’s going to happen? And I’m not talking about you. I mean, you don’t bring the baby home and say, “Where’s it going to sleep?”
Jill DeWit: No, that’s true.
Steven Butala: “What’s it going to eat? Let’s take a look at how you actually feed a baby.” You do all that stuff the whole nine months that it’s going on and hopefully if you’re lucky enough to do it together-
Jill DeWit: Not everybody does that.
Steven Butala: Well, I know they don’t. And not everybody-
Jill DeWit: I didn’t have any of the books.
Steven Butala: Not everybody buys and sells real estate either successfully, and not everybody markets it. I just love your analogy-
Jill DeWit: Okay, thank you.
Steven Butala: That’s my point. It’s a total compliment.
Jill DeWit: Thank you.
Steven Butala: There’s some stuff in life that it’s just common sense. Before you get to that point, you’re doing all kinds of stuff before to get there. And so for whatever reason like I said earlier right in the opening, buying a piece of real estate as an investor, it’s not registering to the whole world that you got to market this thing way before you actually buy it.
Jill DeWit: Thank you.
Steven Butala: That’s all.
Jill DeWit: Okay, thank you.
Steven Butala: It’s not a personal thing at all-
Jill DeWit: Okay, thank you. I’m just saying there’s people out there that really don’t think about it. Come on, they get pregnant thinking it’s going to bring them closer together, not thinking about that means we’re now for 18 years or more-
Steven Butala: Those people don’t listen to this show. And our kids couldn’t have turned out better. So-
Jill DeWit: Thank you.
Steven Butala: However it happened, it works.
Jill DeWit: Thank you. Can we get to the topic now?
Steven Butala: Sure.
Jill DeWit: All right. So here’s where this comes from. Again as we’re ramping up and I’m explaining this to someone new on our team, I’m thinking we should revisit this for everybody who’s listening. When you open escrow, you have equitable title in this property and there’s lots of things that you can do with it. Some people argue whether you have even just a purchase agreement, which I believe to be true, but escrow is like a little further insurance policy, if you will. Are you on the same page with me?
Steven Butala: I wouldn’t use that term. You have equitable title.
Jill DeWit: Okay, we’re going to leave it at that.
Steven Butala: I think equitable title’s exactly the way to describe it. Equitable title means you have an interest in the real estate now.
Jill DeWit: Correct.
Steven Butala: You’re not just a potential buyer. You signed a purchase agreement, you opened escrow, you have an equitable title interest, and you can assign that-
Jill DeWit: Thank you-
Steven Butala: To somebody else, so Jill’s right.
Jill DeWit: Thank you. So what you should be doing is instead of waiting and waiting for it to close, “I know I’m going to own it on the 10th. On the 10th I’m going to look up and I’m going to market it and get my pictures done and everything like that.” That’s not how it should go. What really should go is you should have a schedule, and I was thinking about it like this, I’m going to explain just the basics and you can ask me any questions. T minus seven should be this, T minus six should be this, T minus five should be this, T minus four … and those days are up until closing date. And just to give you an example, T minus seven would be something like we need to email a blast to all of our buyers’ list with this property included and all the property that we own. And people love the off market deal. You can say off market deal because it really is. They’ll love that.
Steven Butala: You can say in escrow.
Jill DeWit: Exactly. And all you really need to tell with your regular buyers’ lists is what we do-
Steven Butala: You’re nailing this, Jill.
Jill DeWit: It’s basically like-
Steven Butala: This is exactly what needs to happen-
Jill DeWit: There’s a spreadsheet which has State, County, APN, Sales Price. That’s really all they need to know. At least for us it is because our buyers by the way … We’re wholesalers so our buyers, other investors, they know how to look it up. They know what this is. T minus six, all right, now I need to start to create my posting and get the verbiage down how I’m going to post it and start building the outline.
Jill DeWit: T minus five, I got to order the, or have done and in my possession now actually, all the images. If I’m going to do a drone video, I should have that already done. T minus four, now I’m starting to put it out there. I’m putting it on my website and plastering on social media. You’re getting the point. T minus three, two, one. And then in a perfect world how it should go is close day should equal sold day.
Steven Butala: I’d kiss you on the lips.
Jill DeWit: Thank you, you can. Thank you.
Steven Butala: Soon as the camera turns off.
Jill DeWit: Oh, okay. But that’s what this is and this is what we mean by start marketing for sale the day you open escrow. You don’t have to wait. Don’t wait. I don’t want you to wait. If you’re new, I understand. That’s-
Steven Butala: Yeah, if you’re brand new I get it.
Jill DeWit: It’s a lot to do and you’re still-
Steven Butala: If you haven’t had 10 deals yet you’re still trying to figure this out.
Jill DeWit: Right. You’ve got six more that you’re buying and that kind of thing. But this is the goal-
Steven Butala: Yeah, that’s the goal-
Jill DeWit: I want you to be here, and that’s what you should be striving for.
Steven Butala: Here’s the other thing, because I’m on the acquisition side of this and Jill’s generally on the sales side in general. We cross lines, especially recently with the training and stuff like that because we both know how to do it ourselves, but we’re just better together. But you’re buying this property. You made a decision to buy this property because of something like this sentence: “Oh my gosh, this is a crazy, insane, incredible transaction. I’m probably going to make $40 grand on this thing. I’m going to close it right now.” So in the past I’ve been guilty of, now I’m done. I found a great deal. I know it’s worth $40,000 bucks, or I know I’m going to make X. I probably even have a person in mind because I’ve been doing this so long, who’s actually going to buy the property. And so you just stop.
Steven Butala: You say some version of this to yourself: “This is such a good deal, it’s going to sell itself. So I’m just going to post it on Craigslist and it’s going to be fine.” And so you’re really selling yourself short. Marketing is everything, and sales is everything in this business, in every business. If you’re in a situation right now where you don’t need to market anything or sell anything, congratulations. You found a fantastic business or a business plan or a business model. It’s not going to last. You really have to market and sell every property in a system, in a machine, if not for any other reason, not just to sell that property, for any other reason than this: you need to attract a tremendous amount of buyers for a buyer list.
Steven Butala: So five years down the line or two years down the line, or eight years down the line, and we have 28,000 people in our email distribution list for a lot of reasons. So it’s really easy for us to sell properties really fast. That should be your goal. If you have a great deal, it’s not … shouldn’t be just between you and the guy who buys it. Your whole constituency and everybody involved in your whole world should know about it. And they should say, “Man, I missed it. Let me know when the next one comes up. I really want to take a look at it.”
Jill DeWit: I love when that happens.
Steven Butala: That’s what this is about. It’s not about selling that actual property, and so the longer you can keep it in play like that, which starts with escrow, the better. Real estate agents always keep the listing sign even after it’s sold. They keep it there in front of that property as long as they can. It’s just like that.
Jill DeWit: You’re right. Our whole business model is not about resetting the market, by the way, about … This is the funniest thing. When people-
Steven Butala: This is tomorrow’s topic.
Jill DeWit: Is it really?
Steven Butala: Yeah.
Jill DeWit: Oh my gosh.
Steven Butala: About how, this is tomorrow … I don’t want to cut you off, but you know what? Talk about tomorrow’s topic.
Jill DeWit: Okay, just real quick-
Steven Butala: It’s about the values.
Jill DeWit: It cracks me up how many people think that this is a good thing to be able to say, “I reset the market for price per acre or price for square foot.” I don’t want that. I want to reset the market for, “I sold it in five minutes. I sold it three days before it was done.” That’s what I want. I want to say, “I called the title company real quick and took my name off and put the seller’s name in and did this kind of thing, because he wanted it that bad and that fast.” Something like that.
Steven Butala: This is the perfect … Do you have more?
Jill DeWit: Well then I was going to talk real quick about what I just wrote down. I was going to share what I just wrote down with everybody, because as I’m growing right now, we’re building out a new CRM, and I realized I don’t have a column right now. I’m going to put one in there for what you just described. We all have a wow moment when we’re buying a property and that needs to be conveyed in the sales. I’m going to add a little comment about when I’m looking at properties or you’re looking at properties, our wow moment, why we’re buying this property.
Steven Butala: Yeah. Maybe it’s the price, could be access.
Jill DeWit: But there’s something. Or like, “Look at this. Look how the proximity to X, Y, Z,” something like that needs to be celebrated and shared. So that’s all I had to say.
Steven Butala: Join us next time for an episode called How Real Estate Valuation Kills Companies.
Jill DeWit: And we answer your questions posted on our online community found at landinvestors.com. It is free.
Steven Butala: You are not alone in your real estate ambition. Valuation on the acquisition side, correct valuation on the acquisition side and correct and realistic valuation on the sales side, are imperative to succeed as a real estate investor.
Jill DeWit: True.
Steven Butala: You don’t want to see something that’s not there and you don’t want to maximize. You don’t want to sit there and say, “This property is worth $50,000 bucks. I’m going to offer him $5. They’re going to take $25.” These are literal numbers that we’ve experienced … and feel great about that. That’s ridiculous. You want to give them a reasonable offer and still make a bunch of money on the sales side and still be under that $50,000 bucks. That’s the whole premise of that. I have a lot to say-
Jill DeWit: [crosstalk 00:20:20] the $50,000?
Steven Butala: The whole thing about tomorrow is … the whole industry all the way down from bajillion dollar, billion dollar equity investors in commercial real estate, to somebody who’s brand new and buying a piece of rural vacant land, they all come into that and say this to themselves: “I have to buy it as cheap as I possibly can and I hope I screw somebody over on that side. And then when I sell it, I have to sell it as high as I can … hope I screw somebody over.”
Jill DeWit: I agree. You don’t want to roll like that.
Steven Butala: That’s why I talk about valuations. You’re going to be-
Jill DeWit: You won’t be around long.
Steven Butala: Exactly.
Jill DeWit: All right.
Steven Butala: You’re not a happy person.
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Both: We are Steve and Jill.
Steven Butala: Information-
Jill DeWit: And inspiration-
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