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ActiveRain experiences growing pains, users consider leaving

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ActiveRain’s Recent Troubles

Rain, Rain, Go Away...

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.

Disclosure: CMP.ly/4

CC Licensed photo courtesy of muha via Flickr.com.

Matt is a former PA-based rockstar turned real estate agent with RE/MAX Access in San Antonio, TX. He was asked to join AgentGenius to provide a look at the successes and trials of being a newer agent. His consumer-based outlook on the real estate business has helped him see things from both sides. He is married to a wonderful woman from England who makes him use the word "rubbish."

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50 Comments

50 Comments

  1. Benn Rosales

    April 30, 2010 at 12:47 pm

    Technical issues are very painful for any company, hell, we lost 1/2 a week recently as we worked to rescue over 3,000 articles and 40k comments, so there is no way I’ll be beating up on ActiveRain on this issue, but I do understand user frustration. We expect 100% connectivity and we’re spoiled to be honest, and I think that’s unfortunate in most cases. It’s a lot of work keeping perfect timing and rhythm for any web administrator, it’s both an art and a science. I know Bob and the gang are as frustrated as their users and will make it up to them, they always have.

    Having said all of that, part of the appeal of ActiveRain for most is the maintenance free appeal of it all, and if suddenly maintenance is the issue, maybe it’s time to start taking their own (Realtors) advise – buy versus rent. You’re far less likely to have the issues of a large platform with a simple wordpress product of your own.

    • Matt Stigliano

      May 5, 2010 at 10:12 am

      Benn – You couldn’t be more right about the maintenance free appeal vs. maintenance being the issue comment. When we pay for services (once again, I don’t pay for ActiveRain’s services), we expect more out of them. When I mess something up in WordPress while noodling about, I have only myself to blame, but if my server goes down and I can’t access it, I have my hosting company to blame. I expect uptime to run on the high end, not the low end, so in the case of ActiveRain, it becomes an issue of uptime vs. downtime and value for the dollar. Liked your post about all this. Thanks!

  2. Kirsten Lindquist

    April 30, 2010 at 12:47 pm

    Can you provide latest on efforts to repair site? How much longer will AR be down?
    You seem able to communicate with these guys…what are they telling you?

    • Matt Stigliano

      May 5, 2010 at 10:14 am

      Kirsten – Looks like things are coming back online. On last check, advertisements still seemed down and notifications of comments weren’t working (although comments themselves were being posted). I don’t really know where they’re at for right now, but I’ve been watching carefully to see what changes seem to be coming online.

  3. Jo Soss

    April 30, 2010 at 1:34 pm

    Very nice thoughts on the whole frustrating issue. Activerain was a business saver for me so I have been loyal and have stayed the course. However, I did take the advice of others before me that had left the network and started my own blogs on the WordPress platform. I knew I wanted to have more control. Where did I learn to do it – yep, Activerain. So even though I have been very frustrated I will stay. I use it more today for networking and learning. Most of my client contact is now controlled by me.

    • Matt Stigliano

      May 5, 2010 at 10:17 am

      Jo and Jon (below) – Interesting the use of the word “loyalty” in many comments I’ve been reading here and elsewhere. I’ve even used the word myself. Just wondering (out loud) what makes one loyal to the vendors they use. Sometimes it’s a good feeling, great value, the staff, the product itself…there are many reasons for one to be loyal to a product or service. I wonder what the core reason would be for ActiveRain users?

  4. jon

    April 30, 2010 at 1:35 pm

    It is no longer fun, but heck with fun. It now cost us, loyal AR followers, business. This would push so many of those, who used only AR, to start thinking about having their own presence, which has not been the case

  5. Jonathan Benya

    April 30, 2010 at 2:06 pm

    I admit, I’ve used AR for quite some time now, but never as my primary blogging resource. I don’t want to bash AR, it’s done a lot for me over the years, but it’s foolhardy to think that only using AR is sufficient and self hosted blogging is the smarter choice in the long run, IMHO

  6. Gwen Banta

    April 30, 2010 at 3:12 pm

    To put it simply, Matt – it has become a pain in the a__ and I do not have enough time to struggle with it constantly. I’m sorry to say it, but Heal or Deal, AR!

  7. Erica Ramus

    April 30, 2010 at 3:17 pm

    I have been on AR since 2007 and used it as my only platform–until recently. I now have 2 wordpress blogs and will be migrating my blogs there from now on.

    I love AR and admit I have hung in there because of my fanatacism. But the frustration is real. The other night I just shut the computer down because I couldn’t read the blog roll. It’s a crapshoot most days — up or down?

  8. Erica Ramus

    April 30, 2010 at 3:31 pm

    I believe the AR Gods are trying! I believe that. Really.

    But it is frustrating. I just tried for 15 minutes and cannot log in. 502 proxy error.

    This is why many are turning to other sources for blogging. AR is a good starting place. But it will turn away some who are out of patience.

  9. Carolyn Gjerde

    April 30, 2010 at 4:00 pm

    In some ways it is a good problem to have (more traffic than you can keep up with) but not if it keeps happening on a regular basis. I’ve had an AR blog for a long time but have not considered posting there recently because of frustrations with logging on and for the same fears expressed earlier – that you can’t rely that the site will be up when someone tries to access that post.

  10. Fred Romano

    April 30, 2010 at 5:28 pm

    Why would anyone blog on AR when its so easy to setup your own website? I think I have a profile on there, but I have never used it for anything. Seems like a waste to me.

    • Matt Stigliano

      May 5, 2010 at 10:22 am

      Fred – Although it is easy to set up your own website, I have seen people who struggle to open their email…it’s really not as easy for some. Not to say that all ActiveRain users only go there because they can’t work on their own, but a lot of people are intimidated by technology and the thought of how much time it will cost them to do it themselves. I don’t think you’ll ever see an end to solutions like ActiveRain for agents. I don’t think that’s a bad thing either. I’d hate to see the internet filled with poorly executed real estate websites (think of websites in the internet’s infancy and how garish they were).

  11. Dunes

    April 30, 2010 at 6:31 pm

    Just a Non-Agent thought….I have read through the Blogs at ActiveRain for a very long time now and I have posted links often to Blogs there at Trulia..I’ve posted links to a number of your Blogs from there in response to someone asking about a Topic…….

    For over a month now it’s …loading…wait…loading….wait…proxy error..try again..loading…wait..loading…
    I know about the hours set aside for server stuff so I’m not speaking of during those hours..

    I think if Agents are in anyway thinking of Consumers using ActiveRain they are going to find they share my feelings and reaction…ActiveRain? Forget about it!

    Agents may have patience but the public/Consumers…..Think of your reaction when you hear the words…Please hold we’ll be right with you.

    • Matt Stigliano

      May 5, 2010 at 10:25 am

      Dunes – That’s one of the critical points I was trying to make. If it’s frustrating for agents, think of how annoying it is to a consumer. And consumers are not as forgiving with websites as we are when we own them (or provide content for them). A consumer has an itchy mouse finger and will go back to Google at a moment’s notice if they don’t find what they’re looking for. Finding any kind of error will lead to those sites being dismissed quickly…”oh, here’s a link to what I was searching for…wait, it’s on ActiveRain…that was that site I keep getting errors on.”

  12. LesleyLambert

    April 30, 2010 at 6:55 pm

    Hoo boy have I had a week of frustration with AR! I started my blogging with AR and created my main domain as an outside blog before I was comfortable with wordpress. I now have several blog sites, but for rather menial reasons my main domain stayed with AR’s outside blog service. That domain is printed on EVERYTHING and posted EVERWHERE I go (including comments like this one).

    I have had clients calling me to tell me that my blog is down and I have been unable to write posts when I want to. I have had tons of strange spam showing up and the whole time I am thinking “I gotta migrate this thing”, but I never have the time.

    Insert this week. My blog has been down. I got peeved two days ago and went on a rant on Facebook and Twitter. I will give @activebob props for reaching out to mollify me. While I am done ranting and pot stirring, I am OUT of there as soon as I can log in to retrieve my posts and move them to a self controlled blog.

    Never again.

    I may still blog on AR after this, but I doubt it.

    • Matt Stigliano

      May 5, 2010 at 10:27 am

      Lesley – You do have to hand it to Bob. When you get to speak with him on a one on one basis, he can really make you feel comfortable and calm again. For that reason, I think he’s a good choice for his role as community manager. I’m not sure I think the same for ActiveRain’s response to the masses. One on one, you could get answers…as a whole, there weren’t enough I think.

  13. Jody

    April 30, 2010 at 7:17 pm

    I think AR is great and I plan on staying even with all the errors and wasted time. These issues only taught me to use my wordpress blog more and backup the posts on AR but I don’t plan on abandoning ship and I hope that many others don’t either. Where would we go to get all that wealth of information if everyone left.

    So long as AR is not your main blogging platform then you should be able to ride these waves….

    Just my 2 cents!

    • Matt Stigliano

      May 5, 2010 at 10:32 am

      Jody – Although I do agree that there is value in the mass of information at ActiveRain, I’d like to play devil’s advocate for a moment and talk about how much garbage there is too. Just like anywhere, not everything is 100% quality content to everyone. Much like the National Association of Realtors® biggest issue, getting that many people to agree and behave to any defined standard of quality is impossible, because everyone has a different opinion of what “quality” is. As I mentioned in my post at ActiveRain, the referral system has been useless to me (the built in one, not the personal referrals from knowing members of ActiveRain). In San Antonio it has proved to be mostly what I would consider spam from someone building a lead generation company. In my view, that’s not what the referral network was set up for. To me, it’s garbage, to others it may just very well be a goldmine.

  14. James Malanowski

    May 1, 2010 at 1:38 am

    If I paid for AR’s service I would be PISSED. This has been going on for months, not a recent issue. What, do they run their network on a couple of old ‘486 computers? I frequent a lot of sites and never have I seen these errors so regularly. Seems to me there’s a configuration problem that they can’t figure out and don’t want to admit to.

    I enjoy the network, but have never recommended anyone use their platform as their main website. Own your content and pay a hosting company that specializes in hosting. Everyone that relies on AR for their main blog site could be losing thousands of dollars as we speak. Sucks for them. An expensive lesson.

    If AR wants to save face they had better give out a couple of months of free service to those that pay for it at the very least.

    • Matt Stigliano

      May 5, 2010 at 10:36 am

      James – If I was a paying member, I’d be very curious to see how this blog post turned out. I probably would have been a little less diplomatic. I agree with you that this has been going on for quite some time now and I certainly don’t see it as recent, although recently it has been a lot worse. I’ve actually commented on it before and wrote about it before over at ActiveRain. It will interesting to see how they proceed over the next few weeks in terms of trying to reconcile with their members – I have a feeling they will do a lot to rebuild their status.

  15. Andy

    May 1, 2010 at 8:16 am

    I was never a real big fan of Active Rain (I have no clue why they think it’s good idea to have some posts public and some accessible only by members), but I did find some some authors there who were genuine, smart and weren’t simply the standard industry cheerleading types. Quite frankly, since I stopped getting the daily email update, I rarely have time to think to visit the site. And I’m sorry, I shouldn’t have to re-register to continue to get their email update.

    As for my blog, it’s at wordpress.com. I never even considered having it hosted at Active Rain. And I’m pretty happy that right now.

    • Matt Stigliano

      May 5, 2010 at 10:41 am

      Andy – I think the idea of private members-only vs. public posts (and we won’t even go into how members-only isn’t all that private anyway) stems from the cheerleading section of real estate. It’s been my experience that there is a segment of the industry that would prefer we keep our complaints to ourselves and refuse to air their dirty laundry in public. While there is a limit to what you should post (in my opinion…for example, I don’t think it’s a good idea to title your next post “How stupid are these clients? I hate them and their dog too.”), I am of the opinion that if we don’t talk honestly and openly about the good and the bad of real estate, we are dooming ourselves as we will be seen by the public as little more than spin-masters who control every piece of press about us.

  16. Maureen McCabe

    May 1, 2010 at 9:33 am

    I have a poll up about whether people will return. I may regret it as the ActiveRain haters will probably be more likely to vote… I’ve been there since 2006. It was not my first blog. I did not learn to blog there. I have my own WP.org blog.

    The server errors are frustrating. Having searches lead to local content that does not open is making me crazy… but I will go back…

    • Matt Stigliano

      May 5, 2010 at 10:44 am

      Maureen – I have a feeling two camps are forming; the “hey what the heck is going on here” camp and the “I’m loyal, so stop your complaining” camp. That bothers me a bit, much like I mentioned above in my comment to Andy, as I feel that open, honest discussion of issues like this lead to bigger and better things. Be curious to see what your eventual results are.

  17. Lesley Lambert

    May 1, 2010 at 9:36 am

    Forgot to add that I DO pay for my outside blog and James, you hit the nail on the head. I am pissed.

  18. Daniel J Hunter

    May 1, 2010 at 9:51 am

    Lenn wrote a great post addressing this, on AR. I tried to reply over 20 times, #Fail every time. I will remain loyal, as I have learned so much there to up my game. But I am going to ‘risk the division of go ogle juice’ by making my wordpress & blogger blogs active again.

    I got talked into keeping all my go ogle juice at AR to share in the combined goo gle juice. But guess it comes down to the old adage, Do not keep all your eggs in One basket.

    ActiveBob claims 2,000,000 visitors/month. Sounds like about 2,000,000 people that at best are frustrated, at worst will not come back due to frustration over the last month. That is not good.

  19. Denise Hamlin

    May 1, 2010 at 11:13 am

    Nice, objective post you’ve written here Matt. Like your comment about not putting all your eggs in one basket. My sentiments exactly.

    I’ve been blogging on ActiveRain for about nine months now and also have an outside blog there. Not happy with the way things are going right now and I’m not sure what I’ll do when it’s over. Yesterday after multiple attempts to access the site I finally got to see a post that Bob had posted with claims that they were “hours away” from solving their problems. Apparently an exaggeration, because this morning I haven’t managed to log into the site yet….

    I’m an ActiveRain fan and think it’s much more than just a blogging platform – when it’s working – The problem is it hasn’t been working for about 3 of the 9 months I’ve been a member! (And I’m a paying member too making it all the more irritating). I have a WordPress blog, otherwise you’re right, I’d be pulling my hair out now…

    Will I stay or will I go? Don’t know yet. I’m running out of patience, I do know that.

  20. Craig @ Wordpress Blog Setup

    May 2, 2010 at 2:52 am

    Yea, totally unacceptable… Whoever is in charge of tech should be FIRED. This amount of time is totally unacceptable. 🙂

  21. Haris

    May 2, 2010 at 2:49 pm

    AR should communicate better with the public on daily, hourly basis.
    We can be patient. Lack of communication is always lack of business.

    • Matt Stigliano

      May 5, 2010 at 10:46 am

      Haris – Most comments I have seen were related to the lack of information. Most of the people I talked with were forgiving about the tech issues, but not as forgiving when it came to lack of communication.

  22. Lyn Sims

    May 2, 2010 at 4:39 pm

    What $ amounts are you loosing for your frustration to be this high? Most use it as a free system & they are doing an upgrade that unfortunately had some mishaps. What computer upgrade goes perfectly well on your end? Bringing that up, I tried a WordPress blog as a ‘backup’ so to speak & I wanted to blow my brains out after 2 weeks. I just think it shows a bad attitude all the way around towards the system. Why not leave now so I don’t have to hear all the whining?

    • Matt Stigliano

      May 5, 2010 at 10:58 am

      Lyn – Computer upgrades almost always go wrong. The key is to fix them swiftly. I’ve been somewhat frustrated by all of this, but because I focus more of my attention on my own site, it hasn’t been that bad for me. The people who rely solely on ActiveRain are probably ready to kill at this point (if it was my only platform, I know I would be at my wit’s end). I’m not sure where your comments about “bad attitude” and “whining” come from – I guess we won’t see eye to eye on that based on your comment. I felt it was a necessary item to report on here at AgentGenius and did just that. Reading back through the post, I thought it was actually quite a hopeful post. I didn’t trash ActiveRain, because I didn’t feel they needed to be trashed. They do however, need to see their members’ opinions (and they do listen).

  23. garyandlana

    May 2, 2010 at 6:43 pm

    thanks for information , keep writing thanks for sharing 🙂

    • Matt Stigliano

      May 5, 2010 at 10:59 am

      Gary and Lana – I hope you weren’t expect 10 points for that comment.

  24. Ruthmarie Hicks

    May 4, 2010 at 10:06 am

    I have a wordpress blog – so I can still use that. If I didn’t – I’d be furious. In response to the question about what dollar value are we losing – um….quite a bit. I’m grandfathered, but many are PAYING to be on AR. I own a couple of neighborhoods and pay for that. Also, I am DEFINITELY losing business. This is the time of year when buyers are out in force and my AR blog along with my WordPress blog put me in several slots on page one of google for several subdivisions. The phone isn’t ringing like it was last year – yet buyer activity as well as seller activity in these neighborhoods is UP…so is my presence..Soooo my business should be UP as well. But its down more than I’d like to see. Clients lost = $$$$ lost.

  25. Dunes

    May 5, 2010 at 1:30 pm

    Thank-you for your reply Matt..

    I do think for members of ActiveRain all of the points (Loved the title example could just as well been..All Agents are crooks except those who post they ain’t on my blog)

    I do not pretend to speak for any consumer beyond myself but I do view it this way.(Even thought ActiveRain seems to be running for the moment)…I’m not a RE PRO (just a $20 TruliaPRO) so google links and Blog control and most exposure and yadda yadda are all French to me and on no interest…I look for info and there are many many RE sites to find info on, some of which I personally consider better but ActiveRain did always provide some interesting info if one waded through the “It’s the lenders, Gov., Appraisers, your, God’s fault and not ours or I’m so honest it would make you sick Blogs” I linked many at Trulia to ActiveRain Blogs.

    Running or not the combination of “private member only chats (That doesn’t raise suspicions lol) server errors and the plethora of yadda yadda Backslapping Blogs has for me at least moved ActiveRain down to the Hades part of my “check it out list” I will not be linking anyone at Trulia to ANY ActiveRain Blogs again, (Not after 20-30 emails in 2 days of WTF your link is crud, I can’t get anything but wait…loading wait….error Will Robinson error..Perhaps ActiveRain or Agents do not mind but I do…..

    Thanks for this opportunity to share my opinion and as always best to you and much respect for your honesty about your Professional and Personal experiences…Ya make Agents look good and remind us all you are just people like us who take pride in your work and cope with life just like us….

    Respects
    Dunes the $20 TruliaPRO

  26. Toby Boyce

    May 15, 2010 at 11:23 am

    The best part about my migration from Active Rain? I didn’t even know about this until another AG post sent me over to check it out.

    I will never challenge ActiveRain for what they did. They gave me a chance to “cut my teeth” in real estate with some very influential people in the world of re.net. I just got back from NAR Midyear serving on a national committee that in a large part was achieved due to connections I had from when I joined Active Rain in 2006.

    I’m never going to be against the idea of generating new content. I just want to own it.

    Found it interesting when I was talking to the AR rep in the NAR Expo and when he wanted me to be a rainmaker and I told him I was grandfathered in. He said “you were lucky one”. I looked at him and in a very relaxed voice said “no sir, you are the lucky one. The hard work of people like me built the site that is paying for you to be here.”

    I don’t think he appreciated it.

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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!

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magic eight ball

magic eight ball

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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
  5. 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.

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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:

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short sales standoff

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.

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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.

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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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