*This Principal’s Perspective on Urgency

One of KJF Partners’ Core Values is:

“We are driven by our personal commitment to create value for our investors, tenants, teammates and brokers.”

To serve our broker partners, we send occasional emails that focus on things that I have learned through my brokerage history or that I notice from my current role on the principal side of the business.

Brokerage is a very challenging business and reducing transactional risk by eliminating wasted time will help you close more deals. A very common saying in our business is “Time Kills Deals.” My personal experience is that “Time will eventually kill every deal.” As a broker, every day that you can eliminate from your processes will increase your probability of success. Focus on saving vital days during every step of your deal progression: initial call to proposal commitment to listing presentation; listing presentation to listing agreement execution; listing execution to marketing release; buyer interest to LOI; LOI to concluding initial negotiations; agreement of terms to signing the purchase & sale agreement; due diligence timing, due diligence delivery, negotiations during due diligence; estoppels…. It takes many steps to close your escrows, and with each step the process, your clients may unknowingly delay the deal, robbing you of countless days that can be critical, (or deal killing).

URGENCY, (in this case we’ll define it as: eliminating wasted time by pushing things aggressively forward), is your ally. The following are some actions that may help you eliminate wasted time:

  • Get an agreed upon follow-up completion date for every single step and clearly define what completion is.
  • Recommend short, specific time frames from the parties you are dealing with and give them a reason why it’s in their own self-interest to move more quickly.
  • Push yourself to do things thoroughly, (the first time), and quickly. I listed about 14 separate steps above, and I know that in most deals you can easily eliminate one day for each step, (probably more). That’s a minimum of 14 days of risk that you can very easily remove from your deal process.
  • Consistently and purposefully follow-up with all parties. Deal making is not a casual endeavor.
  • When outside vendors, attorneys, and consultants are involved, push dates and urgency. It’s not acceptable to wait for your client’s attorney to take two weeks to address a PSA. Push the timing without alienating the party. Continue to remind your client that it’s in her/his best interest to move through the deal process efficiently.
  • Have due diligence ready for delivery as soon as the PSA is executed. I’ve seen sellers waste weeks of transaction time assembling due diligence items.
  • Be very specific about your PSA timelines. Eliminate every wasted day and ensure there are no unclear events related to time. Wherever possible, create, or have escrow create for you, a trigger dates worksheet, and circulate to all parties. Update this worksheet as necessary to keep the parties on the timeline, use hard dates whenever possible for all transactional steps. For example: do not allow your due diligence timing to be written as “XX days from receipt of all due diligence items.” This type of structure can result in a clock that never actually starts. While that may be what a buyer likes, it will reduce your deal closing success dramatically.
  • Make it your responsibility to keep all parties aware of their respective deal trigger dates and keep them on task to complete.
  • Keep in close contact with escrow to ensure they have received all that they need to close the deal on time. Don’t assume escrow will keep the parties on the trigger dates timeline.
  • Approach every step with URGENCY. Time is your enemy.

There are many strategies for eliminating time from your deal and the above are just a few. For many years we have been experiencing a market with escalating values. From a transactional standpoint, while time was always important, values were pushing upward so, a little lag in timing did not necessarily create the same economic issues as you will experience today. The market is changing and adjusting your attitude toward wasted time will help you continue to succeed. So, do it now, do it faster, and close more deals.

Happy Hunting!

Joe

Joe Faris

KJF Partners, Inc.

Cell Phone: 949-275-5038

Email: jfaris@kjfpartners.com

Website: www.kjfpartners.com

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