ActiveRain’s Recent Troubles
Recently ActiveRain has been plagued by server trouble. Anyone who uses or visits the site should know the verbiage of the “bad gateway” and “proxy error” messages by heart. It’s been annoying, frustrating, and down right excruciating. There is nothing worse then heading over there and not being able to get on the site – even worse, to get on the site, then two or three links in, find out that it’s not working.
I’ve been on ActiveRain since somewhere around November 2008 and despite the fact that I have had my own doubts and dislikes about their system, overall I’d give them a good grade. I used the site to “cut my blogging teeth” so to speak and think that it’s a good way for agents who aren’t blogging yet to get their feet wet. In light of the recent troubles though, I had some thoughts that I wanted to get off my chest.
Fix me please.
While the server issues have been going on, the folks from ActiveRain have been saying “it’s coming soon” and “we’re almost there” (not direct quotes). ActiveRain has quite a hardcore following, so most members have shrugged and hung in there. In the past few weeks though, I’ve heard a lot more personal stories of how agents aren’t so sure they can hang in there any longer. Why? When a site goes down a lot and you’re trying to run a business, where do you send people to?
Is it wise to tell a client to check out your “outside blog” or your ActiveRain profile if you can’t guarantee the site will be up and running when they visit? How does that reflect on you when the get the “proxy error?” I know if I was a consumer my opinion of my agent would go down quite a lot if I went to their blog on a daily basis and couldn’t get it working. What about links? Have you ever linked to your ActiveRain blog somewhere out there on the internet? I know I reference my ActiveRain posts quite a bit on my site (self-hosted WordPress site) through related links and links within posts. So when Google is crawling through my site and sees those links, it follows them, only to find a dead end. Good way to make Google unhappy with you. And of course, there’s my readers…perhaps they want a little more info than what I provided in my RErockstar.com article and see a link to my ActiveRain blog…click, dead end. Once again, bad for business.
I should note, I do not pay for my ActiveRain service. When they switched to the pay system, I was grandfathered in and kept as a free member (a Rainmaker as they call it). I also receive a free “outside blog” thanks to my status as an ActiveRain Ambassador.
That’s great, now what?
First off, I think ActiveRain will get everything sorted and get back to doing what they do. I know they’re working hard based on conversations with them and I wish them the best at getting things up and running and stable. Like many businesses, ActiveRain has experienced some growing pains (this isn’t the first time) and although I wish they had handled them quicker, I hope they’ll learn a lot from this last round of server upgrades to know how and when to do it in the future.
How should you handle it? What should you do? My first bit of advice is simple – make backups. ActiveRain provides a system to export your blog posts and I recommend you do it frequently if you post there often. Keep a backup just in case you decide to call it quits. This applies to any site that isn’t in your direct control that you post to frequently (it applies to your own self-run site as well, but you should be backing that up regularly anyway). If you never use the backup to port the posts to another site, at least you’ll have a continuous history of your writings that you can reference when you need to.
I sound like my mom, but don’t put all your eggs in one basket. I blog in several places for a reason. If ActiveRain were my only outlet, I would be pulling my hair out right now. By keeping multiple blogs you can always find a workaround if one of them goes down. Might take a lot of work, but imagine what it would be like if one of your paid sites went bankrupt and disappeared tomorrow. Would you still have web presence? Or would you be found crying and shaking in a corner repeating “I lost it all” over and over again?
Don’t fear self-hosted solutions such as WordPress. Spend a few minutes searching through AgentGenius and you’ll find all sorts of how-to and step-by-step help on maintaining your own blogs. It’s not nearly as hard as you think it is. Yes, it does take more time and it will take longer to get Google recognition (it doesn’t take nearly as long as you might think), but the reward is great. Even when I found myself blogging everyday at ActiveRain, my WordPress site got more traffic. It continues to grow each and everyday and has far exceeded my expectations for a website from the new guy in town.
Know when to cut and run or show your loyalty to a company. I have clung to some companies as they went under and have jumped ship while others were sinking. I have also been highly rewarded for sticking by a growing company during tough times. It’s never an easy decision and each case needs to be viewed separately, but sometimes it’s best to suffer a bit and root for the little guy.
CC Licensed photo courtesy of muha via Flickr.com.
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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