How to
One of Our Own Needs Help
Some of you may know Charles Richey. He is a wonderful person — one of the most giving-freely-of-his-time folks I know.
Charles is in a Las Vegas hospital in ICU after being diagnosed with Guillain-Barre Syndrome, a rare nervous system disorder that results from nerve damage caused by the body’s own immune system.
The good news is that the prognosis is good. The bad news is Charles and his wife Jacqui, being real estate agents, have no health insurance.
You can read the details here, where a donation link has been set up.
I know times are tight for a lot of folks, but really, every single dollar counts. If there is any way, please consider donating. But at least keep Charles and Jacqui in your thoughts and prayers.
For the record, the badge button above will send you to the fund raisers blog post. It contains no follow links. They are not trying to gain links from this, they are trying to help. You can grab the code for your site or blog here.
Spread the word. Pay it forward.
Coaching
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.
Coaching
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.
Coaching
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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Barry Cunningham
June 24, 2008 at 5:50 pm
@ Jay..you wrote “For the record, the badge button above will send you to the fund raisers blog post. It contains no follow links. They are not trying to gain links from this, they are trying to help”………why??? are others who are trying to raise money for some other cause gaining links?
Eric Blackwell
June 24, 2008 at 6:13 pm
Barry–
With all due respect, we are trying to help a guy and his wife out here while he is facing some serious health issues. Jay was just pointing out that this was in NO WAY a scam.
Charles is a friend of mine and was part of our Greatest Real Estate Agent in the World SEO contest team. We already have several vendors helping the family out with what is expected to be a long recovery, but hopefully complete.
The members of TeamEric are collectively chipping in, each in our own way. I (for one) appreciate Jay’s help in getting the word out about a REALTOR dealing with a common problem that folks in our industry face…health insurance.
On a personal note any help you can offer will be appreciated greatly by me…
Best;
Eric
Jay Thompson
June 24, 2008 at 6:13 pm
@Barry It’s been known to happen…. if someone hosts images and buttons and encourages others to post them, and the links aren’t no followed, then yes, they gain links with every person that installs the button/image. It’s not as obvious as say offering a widget or two for others to post, but the effect is exactly the same.
I’m not saying that is why someone would host images or buttons for others. It’s quite possible they are doing it for the better good.
I put the nofollow statement in the post not to point anyone out. I thought it needed to be noted as I know some are leery of installing things like this, and the fact that in this case the links are no followed might prompt more to post it. Awareness is key in something like this. With every posting of the button or the news, the potential to get in front of someone in a position to donate is increased.
Barry Cunningham
June 24, 2008 at 7:12 pm
Thanks Jay
Robert D. Ashby
June 24, 2008 at 9:03 pm
I will keep them in my prayers and hope others are doing the same.
Ken Smith
June 24, 2008 at 9:53 pm
Just want to point out that any donation no matter how small will help. Charles currently can’t even hold a phone to his ear, forget working. His Wife naturally is at his side and not producing any income either. They need some help and every little bit will help. Some friends have stepped up big with donations as high as $500 and others that don’t even know Charles have chipped in $5-20 just because helping one of our own is a good cause.
Glenn fm Naples
June 25, 2008 at 10:26 am
Jay – thanks for doing the post on behalf of Charles. It is truly wonderful that so many people are jumping in to help a truly good person.
I have know Charles for several years and he is always willing to help someone out and is extremely active in an animal rescue organization in the Las Vegas area.
He really has a good heart and I am glad to see many people coming in and supporting him at this time.
Again Jay, thanks from Charles’ friends.
Lani Anglin-Rosales
June 25, 2008 at 11:32 am
The RE Blogging Community was there in my family’s time of need and I know that we’ll perform again this time. Jay, thank you for bringing this to everyone’s attention. Eric wrote a very nice article on BHB today, noting his friendship with Charles and considers your donation a personal favor.
Even $10 helps but we ask people to donate more- it will take a LOT to cover this medical bill, please consider skipping a dinner or two out this week and sending $100- we’ll all do the same if it ever comes to be YOUR time of need.
Ken Smith
June 25, 2008 at 11:39 am
Lani a friend of Charles’ and mine suggested that we could even find some stuff from around our homes that we don’t want or need and put it up on ebay. Thought it was a good idea as everyone has something sitting around that is just collecting dust.