Sticks and stones.
I’ve been seeing a lot of negative comments on websites lately. Maybe it’s because I’ve been doing a bit more research and reading than I had this summer. They range from constructive negative disagreement to wildly overplayed personal attacks. I am not against negative things in life. I actually find them quite useful. I do not find that personal attacks are a good thing, but I have seen them used with the end result being positive. It’s rare, but I’ve seen it.
Last week, I spoke about “inviting the debate” on The Stigliano Chronicles and after reading Kelley Koehler’s “Anger, Revenge, and Social Media” I had to wonder if I wasn’t setting up many people for trouble. Trouble? Strong opinions bring strong disagreements. Strong disagreements can quickly turn against you. Are you prepared?
Prepare for battle
I don’t think it’s necessary to build fortress walls around your blog, complete with moat, but I do think that a little preparation will make your life easier when it comes time to debate an issue and not let it get out of hand.
State your case – Be sure of what you believe, but don’t be so headstrong to think that you’re all that matters. You know what they say about opinions. State your case with conviction, but remain open to suggestion. Perhaps there’s an angle that you haven’t seen the issue from yet. I see debate/argument as an opportunity to learn. Sometimes I walk away more sure of my side than I was before. Sometimes I walk away with thoughts swirling through my head and a potentially new opinion. Stating your case clearly will only help others understand where you’re coming from. Having to go back and say “what I meant was…” can be a sign that you weren’t really sure what you were saying in the first place.
Listen – Easy enough. You invited the conversation, so stand by your invitation and welcome people with differing opinions, thoughts, and ideas. Shutting everyone out will only make you seem like you’re only debating to hear yourself talk.
Step back – Some people’s opinions will offend you, shock you, or feel like a confrontation. Maybe they are. Letting the conversation get away from you won’t help. Staying calm and level headed is a sign of intelligence, openness, and ability to have a conversation. Coming back immediately with an attack will only destroy your position. Much like writing that angry email to your boss, once in awhile you need to save it as a draft to come back to it later. Don’t say something you’ll regret later.
Know your stuff – Since the days of AOL chat rooms and Compuserve, the internet has attracted debate. Whether it’s the anonymous nature of the internet, the ability to pull facts and figures in an instant, or just some new psychological thought pattern that we have yet to really understand; the internet is the world’s kitchen table. Post an opinion online and you’re bound to get a rebuttal. Back when “flame wars” were all the rage, I saw many an internet user reduced to school-yard insults in order to save face in a debate. Knowing your facts is always the best way to go. If someone brings up a fact you didn’t know – confirm it, read up on it, and use it to continue the discussion. Don’t dismiss it unless it’s complete hogwash.
“Agree to disagree” – I’m not a huge fan of this phrase. I have used it, but I prefer not to. To agree to disagree is just a way of saying, let’s stop talking about this, I’m bored. I don’t always disagree with someone, but I would rather turn an opinion back on the opposing view and ask questions until I at least understand where they’re coming from. I can continue to disagree, but at least I can see where they got that opinion.
Feeding frenzy – Often when a conversation goes south online, the pack joins in. Sharks, wolves, killer bees – however you want to view it, the pack mentality exists and thrives on the internet. If you’re involved in a heated debate, more people are likely to join and take sides. It’s easy to take offense as people join the opposing opinion’s side. Don’t let it get under your skin. Anytime you start behaving like a teenage kid in a flame war, your opinions become much easier to dismiss.
Try it, you might just like it
Hopefully, this will encourage you to take a stand, state an opinion, or disagree with someone on a blog. Don’t do it for argument’s sake, but when used to start a discussion, you’ll find that those people often come back to see what you’re up to and learn, discuss, and debate with you. I’d love to see us as an industry open up to debate a little more (not to say it doesn’t exist, but I see many bloggers who play it safe). I feel that some agents shy away from discussions when they feel it may get heated or might come off in the wrong way. “Safe” blogging isn’t for me, it might be for you, but I’m willing to bet you might like a good heated discussion when you really believe in what you’re writing.
photo courtesy of Stoned59
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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