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Are real estate agents ships that pass in the night?

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We always talk about how important it is to establish a rapport with clients, that it endears them to us and allows them to trust us. But they are only part of the business. Let’s not forget about us- the agents! It is equally important to make nice with fellow agents.

Since the advent of the fax machine in the 1980’s, agents have become more & more like ships that pass in the night. Literally whole escrows can transpire without either party ever meeting. For a business that touts itself as a business of relationships, we have the most distant relationships with each other.

At a recent open house, I was talking to an agent for a good 30 minutes. It was a slow afternoon, so we regaled tales of roller coaster escrows, gossiped about a top agent whose license was suspended and exchanged staging tips…ie, we bonded. It wasn’t until the end when we were about to part that we exchanged cards & she said “Wait- you’re Herman!? Didn’t we do a deal together 5 yrs ago?!” I gasped, “Clutch my pearls! I thought your voice sounded familiar!”

You see, we had never met in person. We talked a few times on the phone but mostly we emailed each other. And mind you, I didn’t find her the friendliest of agents at the time, which made the escrow harder. But, before I started to point the finger at her, I caught myself thinking maybe it was partially my fault. I realized it would not have been as hard if I had just made the effort to meet her. I mean, we were having a ball conversating at this open house. If we’d met in person at the start of the transaction, I doubt she would have treated me with such austerity. It is just harder to be curt with someone once you’ve met them (especially when that someone is a bubbly and dazzling as myself, but I digress).

As I waved good-bye to her, I knew in the future if I ever presented an offer on one of her listings, she would absolutely give me & my clients more attention over some stranger’s offer. I made a mental note, “Herman, no email or text can replace the power of a good old fashioned tete-a-tete.”

Do you make an effort to physically meet your fellow agent? Or do you think it’s better agents never meet during a deal?

Watch Real Estate Expert Herman Chan put the REAL back in REALTY. In his show Habitat for Hermanity, Herman skewers the real estate business and pokes fun at his fellow agents, all the while empowering buyers & sellers with behind-the-scene tips & secrets of the industry! Get a glimpse beyond the glitz & glam of real estate. It's a hot mess! Featured on HGTV, House Hunters & other media outlets, Herman is the undisputed Real Estate Maven whose helpful & hilarious commentary you just can't live without! In fact, his real estate TV show has just been optioned in Hollywood!

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14 Comments

14 Comments

  1. Liz Benitez

    February 8, 2011 at 12:00 pm

    I have not made the effort. The meetings usually happen at settlement. and in some cases not at all. I also deal with a lot of rentals and even then I usually don’t see the LA. just an office manager when an application is dropped off. I find though that even phone contact works to help familiarize some. Faxes, emails, texts it is so hard to get a feel for the person but over the phone it is easier.

    • Herman Chan

      February 8, 2011 at 6:55 pm

      you can indeed tell a lot about someone even by they way to talk on the phone! thanks liz

  2. Fred Romano

    February 8, 2011 at 12:46 pm

    So why do we have to make friends with agents? I mean we are almost always on the the opposing teams right? Representing our clients is what we are paid to do, no? So why should we be friends Herman?

    • Herman Chan

      February 8, 2011 at 6:57 pm

      we dont’ have to be bosom buddies! but if i think you are a cankerous person, the next time you bring an offer to my listing, and there is another agent with a more friendly (i’m not saying friends, just friendly) demeanor, i am not going to pick your clients offer, all things equal Fred

  3. Jonathan Benya

    February 9, 2011 at 7:19 pm

    Herman, There is nothing that trumps knowing the agents personally. I make an active effort to attend as many socials, mixers, classes, etc. where I can have the opportunity to network with my peers directly. Many times over I have seen one deal selected over another, strictly because of the strength of character from the agent writing it. It’s easy to miss this, but even in a digital age, personal attention to your fellow agents is a very important part of the process.

    • herman chan

      February 11, 2011 at 5:36 am

      i am guilty of not going to enough mixers classes etc. i’ve been on the conference circuit recently, and there has been tremendous networking opportunities. no (her)man is an island !

  4. Agent for Movoto

    February 10, 2011 at 6:59 pm

    Herman, you’re absolutely right. To some degree, everybody who works in a given industry is “opposing’ his/her peers – but it’s always better to shake someone’s hand than to send them an e-mail. Nothing can replace your network.

    • herman chan

      February 11, 2011 at 5:39 am

      another benefit to mtg in person, is you have an excuse to get dolled up. (i send emails in my fuzzy slippers and rollers in my hair at home)

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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

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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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.

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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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