Stepping down sounds so dramatic. As if I’m abdicating the throne, giving up my gold medal after being caught with a needle full of steroids, or I just got caught in a compromising photograph and I need to hang up my tiara as Miss USA. None of these can be further from the truth (mainly because I am not royalty, an Olympian, or female). No, there is a lot less drama and fanfare associated with my change.
Although there will be no tears and no death-grip hugs to say goodbye, I do feel slightly sad. It’s one of those things in life, where you can literally feel yourself turning that last page so you can shut the cover of the large, leather bound (and slightly dusty) book that sits in your lap. It’s time to put this volume back on the shelf and start a new book. You’re relieved that you finished the book, but a bit wistful about the enjoyment you had reading late into the night as you worked your way through page by page, reading each page out loud to the audience that has gathered before you to sit by the fire and share their thoughts on the story. The library is large and you have many choices to make about what’s next, but you know that special book is there and you’ll dive in just like you did last time.
The back cover slams shut with a resounding thud and you sit with your thoughts on the past for a few moments in the silence. It’s over and it’s time to move on.
The Stigliano Chronicles are finished. No more. Gone. Done. Dead. Over. That giant book in my lap is the body of writing I’ve done up to this point at AgentGenius and it sits neatly in my lap, waiting to be put on the shelves of the library that is the internet for someone to read and enjoy later. I find that the chair I sit on isn’t comfortable anymore either. It’s been worn in over the last year and a half or so and although still a wonderful chair, I feel like I need a new one. Something bigger, better, and ready to take my weight for the next few years. So I stand up, step down, and leave that behind too.
There’s always a place to sit.
I’ve found a new place to sit in the cavernous library that is AgentGenius. My new chair looks like it may just be able to handle me for a few years. The fireside is warm as always and the people meandering in and out to listen to tales read from the giant books that line the walls are ever changing. Some are new faces, some are old friends; but the cycle remains constant. There will always be someone to chat with, share ideas with, and discuss story lines with. They just won’t be done over The Stigliano Chronicles anymore. That book is closed and we must begin a new one.
The Stigliano Chronicles was based on my experiences as a new agent and although I will always keep the mind of a new agent, I will no longer hold onto that moniker. The torch has been passed in that sense and I welcome Michael Bertoldi to the AgentGenius family of writers. I hope he likes my old seat (sorry about the coffee stain). He’s brought a new book to read and discuss with you all and based on the interactions I’ve had with him, he’ll have a great story to tell (I think it might be one of those “choose your path” books that I loved when I was younger).
In the meantime, I will continue to scour the shelves and look for new stories to bring to my fireside chair and share with you. I hope you’ll find me in my new seat and continue to enjoy the stories I share and discuss with you. It’s time for this new agent to speak as an agent who’s still new. There’s a difference, which is why I’ve stepped down, only to step up again. See you next week, feel free to wear your pajamas so you’ll be comfortable.
photo courtesy of cygnus921
Disputing a property’s value in a short sale: turn a no into a go
During a short sale, there may be various obstacles, with misaligned property values ranking near the top, but it doesn’t have to be a dealbreaker!
It’s about getting your way
Were you on the debate team in high school? Were you really effective at convincing your parent or guardian to let you do things that you shouldn’t have been doing? How are your objection-handling skills? Can you flip a no into a go?
When working on short sales, there is one aspect of the process that may require those excellent negotiation or debate skills: disputing the property value. In a short sale, the short sale lender sends an appraiser or broker to the property and this individual conducts a Broker Price Opinion or an appraisal, using special forms provided by the short sale lender.
After this individual completes the Broker Price Opinion or the appraisal, he or she will return it to the short sale lender. Shortly thereafter, the short sale lender will be ready to talk about the purchase price. Will the lender accept the offer on the table or is the lender looking for more? If the lender is seeking an offer for a lot more than the one on the table, mentally prepare for the fact that you will need to conduct a value dispute.
Value Dispute Process
While each of the different short sale lenders (including Fannie Mae) has their own policies and procedures for value dispute, all these procedures have some things in common. Follow the steps below in order to conduct an effective value dispute.
- Inquire about forms. Ask your short sale lender if there are specific forms that you need to complete in order to conduct a value dispute. Obtain those forms if necessary.
- Gather information. Your goal is to convince the lender to accept the buyer’s offer, so you need to demonstrate that your offer is in line with the value of the property. Collect data that proves this point, such as reports from the MLS, Trulia, Zillow, or your local title company.
- Take photos. If there are parts of the property that are substandard and possibly were not revealed to the lender by the individual conducting the BPO, take photos of those items. Perhaps the kitchen has no flooring, or there is a 40-year old roof. Take photos to demonstrate these defects.
- Obtain bids. For any defects on the property, obtain a minimum of two bids from licensed contractors. For example, obtain two bids from roofers or structural engineers if necessary
- Write a report. Think back to high school English class if necessary. Write a short essay that references your information, photos, and bids, and explains how these items support your buyer’s value. This is not something that you whip up in five minutes. Spend time preparing a compelling appeal.
It is entirely possible that some lenders will not be particularly open-minded when it comes to valuation dispute. However, more times than not, an effective value dispute leads to short sale approval.
Short sale standoffs: how to avoid getting hit
The short sale process can feel a lot like a wild west standoff, but there are ways to come out victorious, so let’s talk about those methods:
What is a short sale standoff?
If you are a short sale listing agent, a short sale processor, or a short sale negotiator then you probably already know about the short sale standoff. That’s when you are processing a short sale with more than one lien holder and neither will agree to the terms offered by the other. Or… better yet, each one will not move any further in the short sale process until they see the short sale approval letter from the other lien holder.
Scenario #1 – You are processing a short sale with two different mortgage-servicing companies. Bank 1 employees tell you that they will proceed with the short sale, and they will offer Bank 2 a certain amount to release their lien. You call Bank 2 and tell them the good news. Unfortunately, the folks at Bank 2 want more money. If Bank 1 and Bank 2 do not agree, then you are in a standoff.
Scenario #2 – You are processing a short sale with two different mortgage-servicing companies. Bank 1 employees tell you that they cannot generate your approval letter until you present them with the approval letter from Bank 2. Bank 2 employees tell you the exact same thing. Clearly, in this situation, you are in a standoff.
How to Avoid the Standoff
If you are in the middle of a standoff, then you are likely very frustrated. You’ve gotten pretty far in the short sale process and you are likely receiving lots of pressure from all of the parties to the transaction. And, the lenders are not helping much by creating the standoff.
Here are some ideas for how to get out of the situation:
- Go back to the first lien holder and ask them if they are willing to give the second lien holder more money.
- Go to the second lien holder and tell them that the first lien holder has insisted on a maximum amount and see if they will budge.
- If no one will budge, find out why. Is this a Fannie Mae or Freddie Mac loan? If so, they have a maximum that they allow the second. And, if you alert the second of that information, they may become more compliant.
- Worst case: someone will have to pay the difference. Depending on the laws in your state, it could be the buyer, the seller, or the agents (yuck). No matter what, make sure that this contribution is disclosed to all parties and appears on the short sale settlement statement at closing.
- In Scenario #2, someone’s got to give in. Try explaining to both sides where you are and see if one will agree to generate their approval letter. If not, follow the tips provided in this Agent Genius article and take your complaint to the streets.
One thing about short sales is that the problems that arise can be difficult to resolve merely because of the number of parties involved—and all from remote locations. Imagine how much easier this would be if all parties sat at the same table and broke bread? If we all sat at the same table, then we wouldn’t need armor in order to avoid the flying bullets from the short sale standoff.
Short sale approval letters don’t arrive in the blink of an eye
Short sale approval letters may look like they’ve been obtained simply by experts, but it takes time and doesn’t just happen with luck.
Short sale approval: getting prepared, making it happen
People always ask me how it is that I obtain short sale approval letters with such ease. The truth is, that while I have more short sale processing and negotiating experience than most agents and brokers, I don’t just blink my eyes like Jeannie and make those short sale approval letters appear. I often sweat it, just like everyone else.
Despite the fact that I do not have magical powers, I do have something else on my side—education. One of the most important things than can lead to short sale success for any and all agents is education.
Experience dictates that agents that learn about the short sale process
have increased short sale closings.
Short sale education opportunities abound
There are many ways to become educated about the short sale process and make getting short sale approval letters look easy to obtain. These include:
- Classes at your local board of Realtors®
- Free short sale webinars and workshops
- The short sale or foreclosure specialist designations
As the distressed property arena grows and changes, it is important to always stay abreast of policy changes that may impact how you do your job and how you process any short sale that lands on your plate.
The most important thing to do is to read, read, read. Follow short sale specialists and those who blog about short sales on AGBeat, Google+, facebook, and twitter. Set up a Google Alert for the term ‘short sale’ and you will receive Google’s top short sale picks daily in your email inbox. Visit mortgagor websites to read up on their specific policies and procedures.
Don’t take on too much
And, when you get a call from a prospective short sale seller, make sure that you don’t bit off more than you can chew. Agents in most of America right now are clamoring for listings since we are in the midst of a listing shortage. But, if you are going to take on a short sale, be sure that it is a deal that you can close. And, if you have your doubts, why not partner up with a local agent that can mentor your and assist you in getting the job done? After all, half a commission check is better than none!
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