S.E.C. Real Estate Observer

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KISS. Not just a romantic or affectionate action. The K.I.S.S. Formula is one thing that we, in the real estate and especially the exchange business, should never forget. It means – Keep It Simple, Stupid!! The Keep It Simple speaks for itself and the Stupid is there to get your attention.

It is amazing how much knowledge that we acquire in our own particular business. When I first started in the real estate field, I had absolutely no idea of what took place. People talked about trust deeds, mortgages, legal description, meets and bounds, etc. I had no idea of just exactly what these things were.

When I received my license to sell real estate 20 years ago, these words gradually started to make sense to me. Through the years, with their continued use with the people I affiliate with, they became so common that I expected others to know their meaning.

This fact really hit home when, one day during a counseling session, my wife happened to be in the outer office. I was doing a fine job (so I thought) in learning all about the potential clients and what it was they wanted to accomplish. When they left, my wife looked at me and said, “Do you realize they didn’t even know what a trust deed was?” I stopped to think! Here, I had gone through a whole counseling session and I had been using words that meant nothing to these people! Trust deeds happened to be one of the simpler terms I had used. There were others that I know had worked into my conversation such as created paper, eat, third leg, and many others.

I stopped and thought, because unlike so many others, our spouses can cut through our “smoke screen” very quickly. She had been completely right!

We must all endeavor to do our best, especially when counseling, to keep the words so simple that our customers and clients will know exactly what we are talking about. Many, many transactions are never consummated, not because they are not good for the clients, but because they did not understand what it was we were attempting to do for them. Keep it simple!

Not only must we keep it simple in our dealing with customers and clients, but we must also learn to keep it simple when dealing with our fellow licensees. I have received countless offers at marketing sessions where the terms and conditions were written in such a complicated way that if I were unable to get together with the offering party, the offer meant absolutely nothing to me. I strongly suggest that when you write an exchange offer or a preliminary exchange proposal to another party, that you write the terms and conditions on a blank sheet of paper. Study them over and then see if they can’t be simplified.

For instance: “The party of the first part is to assume the existing loans on second party’s property and the second party is to assume all existing loans on the first party’s property. Second party will give the first party a $10,000.00 note and deed of trust back on the first party’s property payable at $100.00 or more per month including 9% interest, all due and payable 10 years from close of escrow. Each party to take title to the other party’s property.”

How much simpler it would be if the terms and conditions were written: “Second party to give first party a $10,000.00 note and carry back deed of trust payable $100.00 or more per month including 9% interest, all due in 10 years to equalize equities.” Let’s not get carried away with a lot of words. The simpler it is stated – the more easily it is understood!

Another way to keep it simple (and we see examples at every marketing session) is to keep the solution to a problem as simple as possible. We all like to brainstorm and I have noticed in the brainstorming session that the number of solutions can be absolutely astounding. Usually the more we brainstorm; the more complicated the solutions become. If a sale will solve the problem and the property is saleable, by all means, sell it! If the property won’t sell, we can perhaps get into some of the other solutions. Why complicate a transaction? One reason why I like a two-way exchange is that it is so simple. Many times when I have exchanges with several legs, or parties involved, I may make one two-way exchange after another as we progress rather than try to tie them all together in the same escrow. The more parties to a transaction, the more problems you will have, and the greater the possibility the transaction will fall through.

Keep it simple, STUPID!