Working with Lender Contact Objections, Seller Licensing, Navigating the Top-Down Decision-Maker Approach

Hey, welcome to this week’s Weekly Q & A. It’s been pretty quiet over the past couple of weeks, but we’re coming into the time of year when things really rev up through the end of the year.

Let’s get into it with a member video question:

“We don’t have any [notes] now,” but clearly, I know that they have some. How do you handle that objection? 

A lot of times, this is going to be because you’re in a different department or somewhere else, and the person you’re talking with isn’t privy to the stack of files on somebody else’s desk. 

One way to handle this would be to say, “I understand that someone else in your organization is responsible for this kind of thing,” and ask them directly by saying, “Well, I’m looking at these reports, and it says that you’ve got X millions of dollars. Is there somebody else there who is responsible for handling that?” 

You just want to keep asking questions. What you don’t want to do is invalidate them by telling them that something that they’re saying isn’t true or that they’re wrong, or that they’re somehow off-base. Instead, what we have to do is just keep asking questions. “Oh, really. So when I look in the report, and it says that you have this, is there somebody else who’s responsible for that?”

That’s the way that I would think about it. 

To be a seller representative for a bank for commercial real estate notes and REOs, do you have to be a licensed real estate agent or broker, or will having an agreement with the bank suffice?

First, I’m not an attorney, and I’m not offering any kind of legal advice.

Here’s a blog article where we’ve laid out licensing requirements across the country. In terms of selling notes, the only real state that we’re aware of where there’s definite language that speaks to that is California, and it seems to speak to private seller notes. 

None of the folks I know who are in this business, who are doing a lot of trading, have any licensing at all except maybe in different states where you have to have a license to own and service loans. But in terms of brokering, no. When we talk about commercial real estate, again, it depends on where you are and how that stuff is trading.

I have had licenses in a lot of different places. Sometimes you can borrow a license; sometimes, you can structure that differently. But if you’re going to go and get something listed and start marketing it, that’s different than when you get together in agreement, and it doesn’t become some public listing that you’re dealing with.

Again, I’m not an attorney. These laws vary from state to state. You need to understand what’s happening in the state that you are in. 

This next question’s text may not have come through correctly so I’m going to do my best to give it a stab. I think what is being asked here is:

What if I call somebody and I just say, “Hey, your boss told me to talk to you,” even if they haven’t.

One of the things that I talk about in Approach is when you do a top-down approach, you call the senior level, let’s say Sharon’s the CEO, you call and talk to Sharon. “Hey, Sharon, who there is responsible for disposing of your non-performers?” And so they say, it’s Bob. So then I call Bob and I say, “Hey Bob, I was just talking to Sharon, and she says that you and I should talk.” That’s a really compelling intro when you’re talking to the person who’s just in there getting it done.

You’re basically saying I’ve already talked to a decision-maker, and they told me that you’re the frontline person that I’m supposed to be talking to so that you can sell this stuff. That is a really, really compelling approach for that person when they hear that “my boss is telling me that I need to do this.” 

Now I think what you’re asking is, what if I just say that. Well, you could try that. For me, that comes down to a matter of integrity.

I like to keep my business integrity all the time so that I never feel like I’m outside of that because when I get outside of that, then that feels not good and maybe even dangerous to me. And you don’t want to be in fear of being found out and that kind of thing.

So I’m not sure that I would advocate that. If you’re comfortable with that and you want to take that approach, I would say that’s up to you. But what I would prefer to do is think about another way to approach this in the same way without telling a fib.

This business is about building and setting relationships so that we can do business again and again and again with repeat non-emotional sellers of distressed assets. If I want to have it where monthly or quarterly, I’m hearing from these folks all the time, do I want to begin that with a lie? I don’t think so. So that’s what I would say about that. 

I hope that’s helpful. And let’s all remember to treat people out there the way we would want to be treated. And if that’s outside of that zone, then you should probably give that some thought.