Managing Communication with Sellers Brokers Buyers (LA 1321)
Managing Communication with Sellers Brokers Buyers (LA 1321)
Transcript:
Steven Butala:
Steve and Jill here.
Jill DeWit:
Good day.
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 managing communication with sellers, brokers, and buyers. This is show number 1321.
Jill DeWit:
Wow. That’s a lot.
Steven Butala:
That’s amazing.
Jill DeWit:
Wow. And yet we still have stuff that we haven’t covered.
Steven Butala:
We have a ton of stuff that we haven’t covered, actually.
Jill DeWit:
Jesus, man. How many more of these are we going to do? How many more are we going to do by the way?
Steven Butala:
When people stop listening, that’s when I’ll stop.
Jill DeWit:
We have not talked about that.
Steven Butala:
Our listenership continues to go up and it has gone up, with a couple of exceptions, since we started this. It doesn’t go down.
Jill DeWit:
Sure. Especially with COVID times and that going on, but there’s more listeners now because people can.
Steven Butala:
Viewers, not so much, for a lot of reasons. Listeners, they keep going up.
Jill DeWit:
Why not? What’s not great to look at here? Here, here.
Steven Butala:
Can we put a big black thing right across here and it’s just you? We would probably do great on YouTube.
Jill DeWit:
Thanks. Maybe that’s it. Wow. Hey, it’s Jill. Oh, who’s that guy?
Steven Butala:
Yep. Somebody said, “With you, Jack, Jill is a nine. Without you, she’s a 12.” Did you see that?
Jill DeWit:
No. Seriously?
Steven Butala:
Yeah.
Jill DeWit:
Who said that?
Steven Butala:
I don’t know. It was somebody on the …
Jill DeWit:
Oh my gosh.
Steven Butala:
It was somebody on the Thursday call.
Jill DeWit:
Well, thank you. Oh, you know what? I do remember that, actually. That was good. That was funny.
Steven Butala:
Before we get into it, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.
Jill DeWit:
Tao wrote, “Has anyone ever bought a road in an HOA?” I’m not sure why you would, but. “I recently came across a lot with a motivated seller. It turns out that a lot is actually a road in an upscale HOA. If I purchase, HOA would have to pay me. If I purchase, would the HOA have to pay me to use the road? I’m wondering what I need to check next.” What are you going to do, put a gate up at each end and say, “No, one’s getting through. It’s my road”?
Steven Butala:
It costs $1 to pass.
Jill DeWit:
Yeah.
Steven Butala:
Like a bully in a grade school yard. Where’s your lunch money so you can pass?
Jill DeWit:
Yeah. I decided this road is going to be a parking lot. What the heck? Apparently this is not an easy question.
Steven Butala:
It’s an easy question for me.
Jill DeWit:
Well, I know it is for me too. You and I know exactly how to handle this. Slash however, Tao does not know how to handle this. This is why it’s coming up. Tao, we are going to help you. Having a road or having a cemetery or having a functioning church-
Steven Butala:
This is the definition of extortion.
Jill DeWit:
… or having a park restroom in your portfolio will do you no good. There’s nothing you can do. You don’t want this. It’s assigned an APN for obvious reasons, but it’s nothing that you want.
Steven Butala:
Let’s take a step back. Let’s say you’re staring in Google Earth at a great piece of property. It’s 40 acres. It’s everything that we would ever want. It’s pretty inexpensive. It’s got road access. There’s stuff built up around it. And it’s 1971. It’s not 2020. You can have this thought, you know what? I’m going to put a subdivision in there. And I can actually accomplish this because the municipalities and the places where I get approval to do this kind of thing aren’t crawling with lunacy. They’re actually in a frame mind frame set where they’re pro development. So I go in. I get an architect, sit down with the architect, look at the 40 acres. Say, “You know what? We’re going to build a subdivision. We’re going to put this here, this here, this here. This is for condos. This is for the community pool. We’re building a master plan community. These are where the houses go.”
So we start cutting it all up. We submit it to the planning and zoning department and they approve it. And in there is all kinds of separate APN, assessor parcel numbers. For some reason, everywhere in the country, this happens. Common areas in this master plan subdivision get assigned an APN, sometimes roads. So what happens over time is either the HOA owns the roads or they own this, I call it leftover property. I don’t know why it ever got, truly … I’ve tried to get to the bottom of why this stuff got assigned an APN. And it just did. If it’s got an APN, it’s getting taxed. So tax bills go out to whoever owns this property. Most of the time, it’s the HOA. Do they pay it? Heck no.
They’re looking at it saying, “I’m not going to … Why would I pay the taxes on this property? It’s completely useless to us. We’re not paying.” So it goes back on the tax rolls and it goes back into tax sales. I still go to tax sales and I still see this property and it’s like free, but this road is probably $45, if that, maybe 25. It’s that cheap. So on one end, there’s this huge, especially if you’re new, it’s like, I am going to own a piece of property for 25 bucks. Nevermind the taxes on it are $20,000 a year. That’s how it got here in the first place on that list. Should you ever buy leftover property like this? Never. Can you extort people to put a gate like? No, you can’t.
There’s a precedent case in San Francisco where two ding-dongs, a man and a woman, bought exactly this. They bought a road in an HOA in a community in San Francisco where the average house price was like $48 million. It was the community. And showed up with a cement truck one day. I don’t need to finish the end of this story for you. You know who won that battle, and it wasn’t the guy who bought the $45 road. Avoid leftover HOA property, whether it’s a playground or a road, or a lot of times it’s a drainage pond. So it looks like it’s all, you know.
Jill DeWit:
Like, “Oh, they missed this. Why did they not build on this piece of dirt?” There’s a reason why they didn’t build on that piece of dirt.
Steven Butala:
And planning and zoning. Jill’s answer is always, it’s called planning and zoning. Once that stuff pops up in NeighborScoop, and you think that it’s possibly build-able, call planning and zoning, and hopefully they’re going to tell you. But this is, I get it Tao, and I’m in a good mood today, so I’m not going to tell you what I really think about this. Today’s topic …
Jill DeWit:
I’m glad you’re in a good mood today.
Steven Butala:
… managing communication with sellers, brokers and buyers. You are not alone in your real estate ambition. I wrote this topic and this seems like common sense to me, and it seems like fluff. In fact, the whole concept of communication makes me laugh a little bit.
Jill DeWit:
I just laughed. I laughed because you laughed.
Steven Butala:
It seems like it’s something like learning how to drink water.
Jill DeWit:
Like don’t you have to do this? Yeah.
Steven Butala:
But I’ll tell you what. I have one thing to say, Jill and then I’m going to turn this over to you because I know you have a lot to say. You are either going to be managed in your life or you are going to manage. And sellers are going to call you if you do everything right. Tons of buyers are going to call you if you’re doing everything right. And you’re going to have to deal with brokers and escrow agents and everybody else in your …
Jill DeWit:
Career.
Steven Butala:
In this career. And you really need to absorb this sentence for forever. Somebody said this to me a long time ago, like in junior high, and I never forgot it. You’re either going to manage these people or you’re not. And that goes with communication. So when these sellers call you, I don’t say yell at them right away, but get control of the situation. However you do it, like sweet Jill’s voice. However you do it, manage the situation and manage their communication and call them. Don’t just wait for them to call you. Just be very, very proactive. Get it into a CRM. We use Airtable. And get it onto a system where not too much time has passed by, especially with sellers. But you really have to manage your communication. You’re right. You pick out certain words in a sentence on choosing management. You’re probably choosing communication.
Jill DeWit:
That’s exactly what happened.
Steven Butala:
So interesting. So interesting.
Jill DeWit:
Yeah.
Steven Butala:
So take control of the communication situation with everybody in your life, even in your house and your children. How many times have you seen a two year old just run the whole house?
Jill DeWit:
Oh my gosh. Not our house, that’s for sure.
Steven Butala:
It’s never happened in our house.
Jill DeWit:
Well, they’ve tried. They have tried hard. She tried.
Steven Butala:
They still try. Not going to happen.
Jill DeWit:
Not happening. No, but you’re right. That’s it. So today’s inspirational spotlight-
Steven Butala:
It’s inspirational.
Jill DeWit:
… or fun fact is how you saw that sentence. I did not see managing as the main focus point in that sentence. I saw communication. And I’m like, all right. So did you cover what you wanted to cover?
Steven Butala:
Yeah.
Jill DeWit:
Okay. So, I appreciate that and you’re right. I like that. You either manage them or they’re going to manage you and you don’t want that. You don’t want them calling the shots. It’s your deal. You’re going to get it done. You’re going to tell. You know what’s really funny, to follow up on that one? The number one situation that I have to really get in there and manage people between our whole company is one person, and it’s escrow agents.
Steven Butala:
Yeah, title agents. I was going to say the same thing.
Jill DeWit:
They, for whatever reason, think they’re in charge of the whole thing. They think they’re picking the close date. They’re picking this, they’re picking that and everything. And last time I checked, they work for me, not the other way around. They’re not paying me, I’m paying them. So, that’s the one time that I have to really get in there. And there’s a nice way to do it, and everybody wins. So back to the communication part.
Steven Butala:
Back to the topic.
Jill DeWit:
Yes.
Steven Butala:
Back to Jill’s topic.
Jill DeWit:
So I read this topic and I saw communicating. How are you going to communicate with these guys? Because this is also very important too. You have 18 things going on. You’ve got sellers you’re working with, brokers, buyers, escrow agents, whatever it is. So how do you best communicate with them to get the desired effect, which is you want to get what you want, when you want it for the price you want. That’s the whole point of all this.
Steven Butala:
Good point, Jill.
Jill DeWit:
Thank you.
Steven Butala:
That’s the whole point. It’s to get a good deal done.
Jill DeWit:
When you want it done, and everybody on the same page. You don’t want him to be mad too. You want this all to be a pleasant experience for everyone. So one of the things that I deal with quickly is try to figure out how this person best communicate. Maybe it’s a broker that they love texting. I’ve found that a lot. Maybe it’s an escrow agent that they are all email, because they have so many things going on. It’s email, email, email, email. And maybe with the seller and the buyer, especially sellers, they seem to be, especially if they’re older, they’re phone people. This newfangled email thing. It’s funny. Forget it.
Steven Butala:
I notice that too. I don’t mean to interrupt you because you’re on a flow here. I really notice that you can almost pinpoint people’s age by their choice of communication.
Jill DeWit:
Yes. Exactly right. It’s funny, because my dad was not a texter at all, but he would text a few little things. And we had codes for everything. He would put CWA, call when available. That was it. That was all I would get.
Steven Butala:
That’s how he used texting?
Jill DeWit:
Isn’t that cute? That’s how he used texting. Never asked him what the question was or never say, “Hey, you coming over for dinner on Saturday,” or whatever it is. It was just CWA. That was all. I’m like, “Okay dad, I got you.” It was really funny.
Steven Butala:
He’s not that far off. That’s what texting originally was supposed to be about. Now we have full keyboards on our phones.
Jill DeWit:
Exactly.
Steven Butala:
That was probably flip phone time.
Jill DeWit:
Exactly. It was. Yeah, because it was as, because he passed, shucks, 11 years ago. Yeah, that’s funny. So, that’s number one. Learn how they communicate best and work with them that way because you will get the best result. If I keep leaving this escrow agent 18 voicemails, she’s not going to get to them. They’re stacked up so long, it’s not even funny. She’s an email pro. She reads it three times a day. I’ve learned her patterns. Just do that. Number two, when you’re communicating with buyers and sellers, brokers, agents, whatever it is, we have found within our company, and I’m lucky that we’re at the level now that we can do this. We divide them up. Like I work with sellers and maybe buyers a little bit, mostly on the sellers. That’s really the only person that I talk to anymore. I have other people that handle the inbound calls from buyers, and I have other people that handle all the escrow and getting the transactions done. So divide them up and stay out. Once you do that, stay the heck-
Steven Butala:
This is good stuff, Jill.
Jill DeWit:
… out of the other person’s turf.
Steven Butala:
Great stuff.
Jill DeWit:
Because all you’re going do is mess them up. Remember when you and I way back when, you would come on. I’m negotiating a deal. I’ve talked to this guy, I’ve got it done, locked in. He’s sending me back a purchase agreement. I come downstairs or I find out, or went into your office, whatever it was, and found out that-
Steven Butala:
It was both.
Jill DeWit:
Yeah, you had accidentally talked to him. You didn’t mean to it. You weren’t trying to do anything. Maybe he called again.
Steven Butala:
We just didn’t have our groove yet, and there was no such thing as Land Academy.
Jill DeWit:
And next thing I know you were buying it for more than I had negotiated. I’m like, “What the heck?” Because we hadn’t got that groove down. So we learned real quickly, and I want to save you too. We have a lot of husband/wives in our groups. We have a lot of brothers doing things together in groups. We have father/son. We have a lot of different partnerships, I know that, within our group. And if you haven’t had this happen yet, good. Let me save you. Divided it up and stay the heck out of the other person’s stuff. Just ask for a way that they let you know what’s going on. We do it in Airtable. I know with my team who talked to who, what their last communication was, what the next phone call is going to be and everything. I can go look at it. I don’t have to bug them too. And I’m not stepping on their toes.
I can’t even imagine my life now. We had a closing on Friday that was not going well because this escrow agent kept misspelling things and then she’d go back to fix it. So I asked my person, can you just write it for them? Ask them to copy and paste it. Then do another DocuSign real quick. And they were copying it. Then they were sending the wrong version of the DocuSign again and again and again. I was about to lose it. The worst thing that could happen would have been if I got on the phone and called that agent and told him what I really thought. My person had a good relationship with them and she knew how to nicely say, “Oops, you did it again.” And it was like three times, I’m not kidding, sent the wrong thing.
Steven Butala:
This is a good time to bring this up. The reason that that escrow agent got to close that deal, we already knew she was faulty, was because when we bought it, she did the deal. And we knew on a buy side, we knew there was going to be issues. I don’t know what was going on with her. So we had a choice. We could say, we could restart this on the sell side. It was just a few months later. Restart this on the sell side, or we can just take the hit, just manage this person how she needed to be managed.
Jill DeWit:
Exactly.
Steven Butala:
That’s what the name of the show is. Manage the communication with this person to get it done. You’re right, Jill.
Jill DeWit:
It wasn’t pretty, and we knew that going in with her, like you said. We knew when we bought it, there was going to be … What’s funny is I warned my person who works for me. I said, “Here’s some of the issues that we had and we bought it, but the reason we’re going with her is because A, it’s a little bit cheaper and B, it was faster.” It was about speed because she did it on the buy side.
Steven Butala:
And she did the deal, yeah.
Jill DeWit:
It would be really easy to do on the sell side. We could close in 10 days versus everyone else was telling us a month. So I’m like, all right. We’re just going to suck it up and do it. So we knew it going into it. It was really kind of funny, but that’s just my final point. Just to say it again. Don’t mess with somebody else’s deals. Don’t get involved. Don’t get on the phone. Don’t undermine the work that they’ve laid, the foundation that they’ve created.
Steven Butala:
My final point is I think a lot of these things that are involved in this business, people expect, especially new people, that they’re just going to happen and unfold. And I’m not a big fan of that. When you call an escrow agent, they need to respond. They need to be accountable. They need to pass your tests and they need to be managed throughout the situation. Early on in my career, I did a lot of residential deals as an investor. So I’d buy houses and sell them. This is way a long time ago, until I learned very quickly I didn’t want to do that anymore. I would shove all the paper … This is before the internet. I would shove all the paper. There was always a file and shove the file on their desk and say, “Call me when it’s done.” That’s no communication at all. That’s just slapping on somebody’s desk. And I was a kid. So it took months to get those deals done. They’re unmanaged. Please don’t be that person. I see commercial real estate agents that make seven digits a year do that even now.
Jill DeWit:
Yeah, they do.
Steven Butala:
They have no idea and no interest in learning about the mechanics of getting a deal done. They actually, in some cases, when there’s a lot of money in the deal, they hire a lawyer to basically step in as themselves and manage the title agent.
Jill DeWit:
I’m shocked by that. It happens more than I … I can’t believe how often it happens.
Steven Butala:
Actually, that’s the norm in this industry.
Jill DeWit:
I’m shocked that deals get done.
Steven Butala:
Me too.
Jill DeWit:
I know that there’s been deals that only got done because either me personally or my team pushed them through, solved everything and was one step ahead of the escrow agent even. And so heaven forbid that it was … This is mostly residential stuff that I’m talking about. And it was because there’s residentially. It was an agent on the other side, on the buy side. And I’m like, “How many deals do you have that fall out of escrow because you don’t pay attention?”
Steven Butala:
A material percentage.
Jill DeWit:
I’m like, “Wow.”
Steven Butala:
Well, you’re describing me. Way early in my career, even my land career before you. There was a time. This is funny. You’re going to laugh. I don’t know if I’ve ever told you this.
Jill DeWit:
Okay. Truth time.
Steven Butala:
Truth time. This is a million years ago, long before I actually got consistent deal flow and everything, where I had a meeting with three escrow agents in different parts of the state of Arizona, decided on one in Flagstaff. And I actually put her name on a mailer and said, “Call this person and get the deal done and send her the purchase agreements.” And it was an absolute disaster. She was basically acting as the transaction coordinator.
Jill DeWit:
As a receptionist. Yeah. Wow.
Steven Butala:
And she was playing the role of that, title agent and [inaudible 00:19:25].
Jill DeWit:
Wow. Yeah, how did that go over with her? Was she livid?
Steven Butala:
And it absolutely exploded in my face.
Jill DeWit:
What did you do? Just give the planet my phone number.
Steven Butala:
Exploded in my face.
Jill DeWit:
I didn’t know you did that.
Steven Butala:
And I didn’t learn about it until months and months later, because-
Jill DeWit:
Were there any deals that came out of her, or is she just like …
Steven Butala:
She threw me some bones. She was doing the deals herself.
Jill DeWit:
Oh.
Steven Butala:
And she was taking the hate and her husband got involved and they’re like … It was a joke.
Jill DeWit:
That’s kind of funny.
Steven Butala:
These lessons that I learned are all like, please don’t do any of this crazy stuff.
Jill DeWit:
I can see why you tried that.
Steven Butala:
There’s some value in Land Academy.
Jill DeWit:
That was good. That was a good idea.
Steven Butala:
I was avoid communication.
Jill DeWit:
But it was a good idea.
Steven Butala:
That’s what I do.
Jill DeWit:
Why not send out the offers? I kind of like this. And just hook them right up with the title, I love it, with the escrow agent.
Steven Butala:
Worst idea ever.
Jill DeWit:
I know.
Steven Butala:
Actually, you know what? It’s not the worst idea I’ve ever had. It doesn’t even rank in the top 10.
Jill DeWit:
How to make a bad name for yourself-
Steven Butala:
In one mailer.
Jill DeWit:
… in the escrow … I want to say talk.
Steven Butala:
Oh, are you kidding?
Jill DeWit:
Gee, I wonder if I don’t work with this guy. I wonder if there’s a list.
Steven Butala:
Yeah. I’m sure. I’m sure I got some kind of horrific reputation.
Jill DeWit:
That’s great.
Steven Butala:
This is just back at a time where there was so many deals. There were stacks and stacks and stacks of purchase agreements. So you know what I did? I went up there, and I got the stacks of purchase agreements that were all signed and it was like two or three banker’s boxes full of unopened purchase agreements.
Jill DeWit:
Yeah. That’s hilarious. I believe it.
Steven Butala:
It was Candy Land.
Jill DeWit:
Shoot. Is that the stuff that used to be all over the dining room table?
Steven Butala:
Yes, it was part of it.
Jill DeWit:
I remember that. Okay.
Steven Butala:
No, that was way before then.
Jill DeWit:
Okay. All right. Happy you could join us today. Five days a week, you can find us right here on the Land Academy Show.
Steven Butala:
Tomorrow the episode on the Land Academy Show is called urban land versus rural land. You are not alone in your real estate ambition.
Jill DeWit:
That’s right. No, those were tax bills now I think about it.
Steven Butala:
Yeah. This was like 1999. It was a long, long time ago.
Jill DeWit:
Yeah. When you’re in it, like in it, in it, and if you’re doing, like we have a lot of … We do fewer deals, but bigger deals by choice. But we have a lot of members that started small and they like small. They’re happy with small. It’s fun for them small. And they’ll do 50 a month, 100 a month. It’s no big deal. And when you’re going through those properties like that, you’ve done like an insane level. I don’t even want to go there. But that’s how you can say we’ve got close to 16,000 transactions because of the level that he did them for several years was mind boggling. But what happens is when the mail comes at tax time, it’s comical to go, “What the heck?” To see all the postcards. Some are postcards. Some are a little, it’s in an envelope, letting you know it’s tax time for the property. And usually you’ve already sold it, but there’s just a lag time. Yeah, it hasn’t catch up. And anyway, they can stack up fast.
Steven Butala:
Every single year because of, obviously everybody experiences a little bit of staff changing. Somebody opens those letters, a new person who works for us, and they end up saying, “You guys have some serious tax problems. Is my paycheck going to clear?”
Jill DeWit:
Yeah, they do.
Steven Butala:
You got 1600 final notice tax bills.
Jill DeWit:
Yeah. That’s funny. That’s true. Yeah. Yeah.
Steven Butala:
Like in the movies, it’s past due.
Jill DeWit:
Dude, I wonder what they do think.
Steven Butala:
That’s what they think.
Jill DeWit:
Yeah. No one’s ever come to me, but I could see someone going-
Steven Butala:
Oh, they’ve come to me.
Jill DeWit:
… I could see someone going, “What’s going on here? Is this a shady operation?”
Steven Butala:
Yeah.
Jill DeWit:
That’s hilarious. Like no, that’s very far behind. It’s the counties really, that just happens. Thank you for tuning in. I hope you find our content valuable and we do appreciate your support. If you haven’t already, please check out our YouTube channel and hit the subscribe button.
Steven Butala:
Your comments and suggestions, help us to create the type of content you’re here for. Hitting the like button on your favorite episodes helps to support our channel’s algorithm, engage your interest for future shows. It’s all about the data. We are Steve and Jill.
Jill DeWit:
We are Steve and Jill.
Steven Butala:
Information.
Jill DeWit:
And inspiration.
Steven Butala:
To buy undervalued property.
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