As the market shifted, so did the focus of the attorneys who were referring me business. I had to find another way. I had to keep getting the business.
Transcript Follows
hey folks welcome back to the probate
agent my name is anthony nitz and i’m
glad you’re back glad you came back and
to continue this story where i left off
on our last episode was i was telling
you about how i was getting you know
ongoing probate referrals from about 25
attorneys and how you know there’s
really no other agents who were
consistently marketing to attorneys at
the time and then the market crashed in
2007 it changed everything so the big
question is this how our ordinary agents
just like us supposed to stand out in
the overly crowded real estate space
while living a great lifestyle without
having to go broke or radically change
what we’re already doing probate is the
answer and this series will show you how
i’m anthony nitz and welcome to the
probate agent so yes it was about the
end of 2007 and the crash had taken full
hold of the real estate market people
were shocked that their homes were no
longer flying off the shelf at
ridiculous prices and guys had happened
all in the blink of an eye and i
remember what i went into a listing
appointment i had to explain that
because of the state of the market and
because they wanted to sell quickly that
they had to price it ahead of the market
where was the market going it was going
down right so you know what that meant
was that they actually had to price it
below the comparable sales I explained
to them that if it was in fact worth
more than whatever we price it at below
comparable sales then the buyers would
increase their offers right just because
it demand now these folks outright
accused me of being a crook and just
trying to force them to underprice the
home for a quick sale just to make a
quick buck because after all I was just
a salesperson right
and you know that disturbed me it
disturbed me I had never ever operated
like that in my life and when people say
things like that it bothers you you know
but what can you what can you do you
know because in the end the the end
result for them was that you know they
hired another agent that other agent
told him some great story they priced it
at the current comparable sales price
and then they chased the market down and
ultimately about eight months later sold
their family’s home for almost a hundred
thousand dollars less than if they had
taken my recommendation okay how much
could that have affected the heirs how
much could have that have benefited the
heirs had they just sold it under market
value but you know stuff like that it
didn’t matter market shifts didn’t
really affect me because I was selling
property our probate properties after
all right people are dying every day so
I had sustainable and market proof
business right well not exactly because
you know for me I believed that it was
sustainable just because of that fact
like I said people are dying every day
but despite the number of homeowners who
were passing away every single day I
always hid something that caught me off
guard a couple things actually you see I
believe that because estate planning
probate sand wills and trusts you know
they were the mainstay of the attorneys
that I was working with that they would
not be affected either I believed that
they would all quietly sit by you know
with me and watch the market shift pass
us right on by and continue living the
high life
boy was I wrong it wasn’t until the end
of 2008 early 2009 that you know
I really started feeling the pinch I
noticed increasingly that the referrals
were definitely not flowing like normal
what could be happening but it really
wasn’t hard to figure out even though
people were dying and their heirs had to
manage the property they were finding
out in a lot of cases that the property
was worth less than what was owed there
was no equity to share amongst the heirs
there wasn’t even enough equity to pay
the executor to manage the property so
families were simply having a fire sale
selling all the stuff inside the house
the furniture the appliances knickknacks
you know pawning off any collectibles of
try to make the inherent a little and a
little inheritance
but there was no point whatsoever of
listing the property with me or anybody
for that matter and going through all
the hassle of doing a short sale as a
matter of fact at the time short sales
weren’t even hardly a thing yet the the
families would just let it foreclose and
be done you know just let it go
Wow a hassle what do they get out of it
you know in some cases they even rented
it out or lived in it and up to the very
day when the sheriff evicted and it was
getting crazy with that you know at that
time with the market and everything but
you know because attorneys get paid
based on a percentage of the entire
probate estate which includes the house
which is typically the highest price
ticket in the estate and people were not
even going through the probate process
the attorneys weren’t making sales
either the attorneys were being heavily
affected by the downturn in the market
in fact many of them with their
experience or expensive homes their cars
their lifestyles you know we’re also
finding themselves in the same situation
that most of other people in their
plight
they were scraping for pennies they were
getting foreclosure notices too it was
getting ugly but then a new opportunity
presented itself you see if you were
around then you would remember that at
the beginning of the crash the banks
they didn’t even know what to do they
were not prepared for this crash it was
supposed to go on forever right 20%
increase in values every here right so
you know foreclosures which were almost
non-existent in 2005-2006 suddenly
became a huge part of their portfolios
and short sales became a necessary evil
for them because otherwise they would
end up with tens of thousands of
properties on their hands and they’d be
responsible for the properties they
didn’t want to go to property management
or maintenance or anything like that so
the bank started doing something called
a loan modification this became or this
came about because the banks didn’t want
to own the property like I said but
there also started getting a lot of
pressure from the government because of
you know all the cries of predatory
lending which you know in my opinion I
thought was a bunch of garbage you know
I mean you know my take on it just
because of the way I operate I guess you
know if you sign the loan documents that
have horrible terms it’s no one’s fault
but your own okay but you know that’s
for a whole other episode all right in
any case because of this new thing
called loan modifications and the
difficulties that the attorneys had and
because there was no real regulation on
the loan modifications lots of attorneys
including all the ones that I was
working with jumped into loan
modifications headfirst they were
offering loan modification services for
substantial upfront fees and eventually
for even a percentage of the
modification that they made the
interesting thing of
a lot of occasions was that they had a
huge failure rate at best most of them
were just delaying the inevitable that’s
all they were doing and most of those
homeowners were still foreclosed on and
still lost their home even after paying
thousands to an attorney
but it’s just what it was that that was
that was the market some were getting
the loan modifications but not many
you know because because you know many
of these attorneys you know we’re
starting to recover financially or at
least stay afloat during this turmoil
offered by offering loan mods none of
them were focusing on probate you know
basically for the reasons I just
mentioned you know so they’re kind of
going on
okay back brought the fresh air or
making money at the end or hard harder
than they did on probate that’s for sure
but you know they had a they had a
sustainable business that they could you
have and feed their families right oh
you know and I thought to myself you
know that’s okay
you know no problem I’ll just swing it
into the foreclosure and short sale
market and since I already had
relationships with these attorneys they
should be totally happy referring me to
people that needed to sell our home via
a short sale right well surprise
surprise
I was wrong again you see there’s a
funny thing that happens to
relationships when it’s based on money
and what I mean is in the past I would
sell a probate house because of the way
I do it I sell it fast really fast and
the attorney would get paid all their
probate fees and they weren’t totally
happy with that and I was happy and
everybody else was happy but now there
was no real benefit for the attorneys to
refer their short sale clients to me if
they negotiated the short sale they were
only making about a thousand to three
thousand dollars which was much less
than they would on an average probate
case so in addition to that they were
only you know
about 50% probability at that time that
the short sale would even get approved
anyways if they were you know
getting involved in that about 50%
before it was even taken back by the
bank so their average customer value you
know was decreased significantly because
of it so suddenly these attorneys
started looking at me like I was the
greedy wolf who was just trying to make
a killing off of their hard work and
efforts and give nothing in return you
know by taking referrals from them at
first they started asking me for a
referral fees and honestly between you
me you know I was okay with that at the
time because it was the difference
between you know me and my family
starving as well or keeping my bills
paid but we all know that unless someone
has a broker’s license we can’t pay
referral fees legally right my broker
put a stop to it pretty darn quick so
suddenly those attorneys or dust in the
wind
they were just dust in the wind sure I
could have paid them out of my own
pocket and skirting the wall but I
wasn’t willing to risk my license for
that and then some of the remaining
attorney started asking for a fee per
lead they were selling short sale leads
in some cases up to $1,000 now there’s
nothing wrong with buying leads because
lots of agents do it but you know as
well as I do that there’s a night and
day difference between a referral and a
lead the referrals I got for the probate
sales were almost a certainty that I got
the listing unless of course they had a
nearby relative who was an agent that
they wanted to use right well leads on
the other hand in many cases they never
heard of me that attorney never told him
I was gonna call you no and because of
their situation they were very defensive
and they would barely give me the time
of day also because it was foreclosures
I again was looked at as the bad
guy just trying to steal people’s money
in the form of commissions it was really
a bit taxing and you know kind of made
me weary so you know in a couple short
years my entire probate business was
basically gone those attorneys were
basically tainted and grumpy because
they went went through all this you know
as well in fact about half of the
attorneys that I was working with after
a few years into this whole loan
modification wave they ended up getting
either disbarred or in a couple of cases
went to jail for predatory practices and
or you know fraud other things but you
know at that time I was glad not to be
associated with them but in the meantime
you know I still had to survive I had to
do something that kept me standing out
and profitable I knew that probate was
still a very viable option and I wasn’t
about to let it go because I knew just
like before the competition was easy to
beat I just had to figure out that next
step I knew that new attorneys who were
not tainted by the market crash or
coming into the marketplace and were
still a good option but honestly I
didn’t want to have to rely on them it
took me a little while to figure it out
but I did we’ll talk more about that on
the next episode thanks for listening
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