The No Word
I have been saying no to a lot of clients recently. No is a word that I have disliked since childhood and I don’t like saying the “no” word to friends and clients today. I believe no was the first word that I came to understand as a child. The word was always followed by “YOU CAN’T DO THAT!” and “I AM NOT GOING TO TELL YOU AGAIN!” Growing up, teachers and coaches reinforced my distaste for the “no” word. While pointing her ruler in my direction my fourth grade teacher, Mrs. Bishop, would say ”No, that is not correct Kenneth, “i” comes before “e” except after “c” and from Coach Gray…. “NOOOOOO… YOU IDIOT, YOU RUN TO YOUR LEFT NOT YOUR RIGHT!”
Yes is a word with unlimited possibilities. Yes is more fun and exciting. It moves us forward. In sales, life evolves around people saying yes. Yes is a word that you want to give and receive from customers. When clients say yes, things happen so why have I been saying no to so many clients recently?
Angela called to tell me the good news that she and Bob were getting married in the fall. Since Bob had a larger home than the small two-bedroom I helped Angie buy five years ago, she thought she should sell her place and move into his. After a quick check on property values in the neighborhood, I told Angie she would do better renting the property than selling at this time. Her low interest rate mortgage and property tax base would allow her a small positive cash flow and some tax breaks for the next two years until the market absorbs the excess inventory. Her profit from a sale two years hence would still be tax exempt. If Bob would have proposed two years ago my advice would have been different.
Darren called to tell me he was thinking about selling his house in Folsom and buying another in El Dorado Hills. His family was larger with the arrival of the twins and he wanted a 3-car garage. I was visualizing saying yes to a nice listing in Folsom and a sale in El Dorado Hills but the reality was different. Although Darren’s house had appreciated substantially over the last few years, so had everything else. Darren’s salary had increased 15 percent since 2003 while the price of homes in El Dorado Hills had increased 50 percent. Despite sufficient equity in Darren’s existing home for a downpayment, the family’s income wasn’t sufficient to qualify for a new loan at higher interest rates and property taxes. My advice was to stay-put until Kimberly went back to work.
Jerry called to get my advice about refinancing his existing mortgage. Jerry and Paige used to own their house free and clear but mortgaged it a year ago to help their kids in a jam. Despite their perfect credit, some lender had stuck them in a high interest subprime loan. I ran the numbers and although a new loan would save them $400 a month, it would take 5 years to recapture their refinancing and prepayment penalty fees. There was also an equity issue since the value on his home had declined since the last appraisal. Sorry Jerry, you and the misses are stuck until your equity increases or interest rates decline.
Jim wanted to buy a foreclosed home in Reno could I help? No, my license is only good for California. Beverly wanted to sell her home in Cameron Park. Sorry Bev, your home isn’t worth what you paid for it back in 2005. Charles called to say that he wanted to buy a bank repo as an investment using a 100 percent stated income loan. Sorry Charlie, lenders are now requiring down payments on investment properties. Tim called to say he wanted to refinance his interest only loan so it would amortize itself. Sorry Tim, it isn’t worth the cost, increasing your monthly payment to include the principal reduction will have the same effect.
Saying no to clients doesn’t open any escrows or pay the rent. A yes response is easier and financially rewarding. We all want folks to say yes when we ask for something. Saying no is tougher. Too many lenders in the past few years were saying yes to borrowers when they should have been saying no. If more of us in the real estate and lending business had done a better job of saying no to clients in the past, we might be saying yes more often today.
Yes is a word with unlimited possibilities. Yes is more fun and exciting. It moves us forward. In sales, life evolves around people saying yes. Yes is a word that you want to give and receive from customers. When clients say yes, things happen so why have I been saying no to so many clients recently?
Angela called to tell me the good news that she and Bob were getting married in the fall. Since Bob had a larger home than the small two-bedroom I helped Angie buy five years ago, she thought she should sell her place and move into his. After a quick check on property values in the neighborhood, I told Angie she would do better renting the property than selling at this time. Her low interest rate mortgage and property tax base would allow her a small positive cash flow and some tax breaks for the next two years until the market absorbs the excess inventory. Her profit from a sale two years hence would still be tax exempt. If Bob would have proposed two years ago my advice would have been different.
Darren called to tell me he was thinking about selling his house in Folsom and buying another in El Dorado Hills. His family was larger with the arrival of the twins and he wanted a 3-car garage. I was visualizing saying yes to a nice listing in Folsom and a sale in El Dorado Hills but the reality was different. Although Darren’s house had appreciated substantially over the last few years, so had everything else. Darren’s salary had increased 15 percent since 2003 while the price of homes in El Dorado Hills had increased 50 percent. Despite sufficient equity in Darren’s existing home for a downpayment, the family’s income wasn’t sufficient to qualify for a new loan at higher interest rates and property taxes. My advice was to stay-put until Kimberly went back to work.
Jerry called to get my advice about refinancing his existing mortgage. Jerry and Paige used to own their house free and clear but mortgaged it a year ago to help their kids in a jam. Despite their perfect credit, some lender had stuck them in a high interest subprime loan. I ran the numbers and although a new loan would save them $400 a month, it would take 5 years to recapture their refinancing and prepayment penalty fees. There was also an equity issue since the value on his home had declined since the last appraisal. Sorry Jerry, you and the misses are stuck until your equity increases or interest rates decline.
Jim wanted to buy a foreclosed home in Reno could I help? No, my license is only good for California. Beverly wanted to sell her home in Cameron Park. Sorry Bev, your home isn’t worth what you paid for it back in 2005. Charles called to say that he wanted to buy a bank repo as an investment using a 100 percent stated income loan. Sorry Charlie, lenders are now requiring down payments on investment properties. Tim called to say he wanted to refinance his interest only loan so it would amortize itself. Sorry Tim, it isn’t worth the cost, increasing your monthly payment to include the principal reduction will have the same effect.
Saying no to clients doesn’t open any escrows or pay the rent. A yes response is easier and financially rewarding. We all want folks to say yes when we ask for something. Saying no is tougher. Too many lenders in the past few years were saying yes to borrowers when they should have been saying no. If more of us in the real estate and lending business had done a better job of saying no to clients in the past, we might be saying yes more often today.
posted by Ken Calhoon at 7:38 AM
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