First a disclaimer: Although this article is all about ActiveRain, I in no way am attempting to advertise for them directly. I encourage all agents (myself included) to research what works for them. This post is just about what I’ve learned as I experimented with ActiveRain. Although the post will remain ActiveRain specific, that in no way is meant to downplay what I’ve learned here at AgentGenius (or the help my ability to write here has given me) or the many relationships I’ve formed through all of you and your help over the past months. I’d also like to add that my graphics skills are lame, so I apologize to ActiveRain for my butcher work. Now that that’s out of the way…
It was a cold dark November…
Since I live in Texas it was actually neither, but a rather nice day when I was at an open house Twittering away when a fellow local agent (Kristin Moran) and I got to talking about ActiveRain. I had heard of it, but knew little of what it was all about. Instead of explaining it in depth and trying to sell me on it, Kristin sent me a link to join. I signed up as a test of a new (for me) product that I hoped might prove useful. I had already begun blogging here, but I knew it was time to step fully into the world of blogging for real estate purposes, so I dove in.
I wasn’t particularly pleased with my work at first, but overtime, I think I started to get better and see what I liked and didn’t like in my writing. What I did find at ActiveRain was a community full of agents who loved to watch others succeed and always willing to lend a hand (sounds a lot like AgentGenius). Its really helped me grow as an agent and some great other benefits have come from it as well.
Education – a living encyclopedia.
I’m a big fan of learning as much as I can. I don’t pretend to know everything about real estate. I don’t. I don’t think I ever will, especially since its ever evolving. ActiveRain allows me to keep up with trends, laws, marketing, ways to grow my business, products, technology, and everything in between. Since its international in scope, you also get to learn the nuances of things from state to state and even in different countries – although these won’t help in your everyday practice, knowing how it works elsewhere is always helpful. Because real estate is ever changing and new ideas and situations come up constantly, ActiveRain allows you to see changes through the eyes of the people practicing real estate every day – better than those courses you took to get your license.
Cutting your blogging teeth.
I got lucky. Before I was even a blogger I had the opportunity to blog here at AgentGenius. It helped me tremendously and I will always remember Benn and Lani for that. When I got into ActiveRain last November, I still wasn’t sure what to blog about for non-AgentGenius purposes and the first few posts were dreafully hard to write. The more I did it though, the easier it got. And as you’ll see from the next paragraph, the community itself will help inspire you to write more and to write better. They say practice makes perfect and I truly believe that someone who thinks they can’t be a great blogger can turn into a one – if they work at it. You’ll come into your own as a blogger, you just have to start blogging first and stick with it, even when it seems like you’re just talking to yourself.
I absolutely hate those stupid motivational posters on office walls. I despise them. They make me sick to my stomach with their smarmy goodness. Blech. I do however believe in affirmations on some level. Especially if you’re new to real estate. Its a hard business to dive into as its not like most other businesses you’ve probably been in. You need someone to tell you you’re doing alright (if you are). There are so many ways to run your business and ActiveRain has a member who agrees with your theories. As you build you “audience” you’ll come to know who will affirm what you’re thinking and give you that nudge to keep going or even to congratulate you on your latest bit of good news. The first few months are deadly hard on the brain, but these little confirmations that you’re on the right path will do wonders for you.
Much like here at AgentGenius, ActiveRain fosters a sense of community outside of the business aspects of the platform. AgentGenius has celebrated, mourned, and been a shoulder to lean on for many people since I’ve been here. I’ve seen the same sort of spirit at ActiveRain. I think the online world of real estate has really been good at going outside of the business and supporting agents through all sorts of points in their lives. I’m proud to be a part of anything that brings people together like that.
Build your referral network.
Living in a town with a large military presence, I see a lot of people from other states moving in and a lot of locals moving out. Because of this, having a referral network is pretty crucial to me. As I’ve gotten to know people in ActiveRain, I have learned there are some agents out there that I would trust implicitly with my clients. We’ve built friendships and I know that I like their work ethics and ways of doing business. I know there are a few out there that believe in me too and would refer their clients to me. Nothing like being able to help your clients no matter where they go.
SEO, Google, and all those things we all crave.
There are obvious benefits to being a blogger on ActiveRain. You’ll find the search engine ranking for your blogs push you quite high up in Google. I blogged about a local community once early on and within two hours, I was #3 in Google when you searched the neighborhood’s name. We all love to be pushed ahead in the search engines and ActiveRain certainly delivers. I did an open house in that same neighborhood a month or so later and a couple came in. He mentioned music and we got to talked about my former career as a rockstar – he stopped me and simply said, “I know all about you.” They had been reading my blog through ActiveRain because of my posts about that neighborhood (a place they were interested in). That’s a powerful ice breaker. Imagine all the people that might find you as you blog about a variety of topics.
You might actually have a bit of fun.
ActiveRain isn’t all business all the time. ‘Nuff said.
ActiveRain can give you the first steps as a new agent.
Where you take it once you’re comfortable is all up to you. ActiveRain has recently moved into the pay per month arena, although you can still sign up for a free basic account (that allows you to post “members only” posts – you won’t get the SEO advantages and consumers won’t see your posts). Even if you just use the free account and use it to perfect your blogging skills and maybe learn a few things, I think you can benefit from that alone. If you opt for the paid account, you are allowed to post “public” posts (seen by everyone – agents and consumers alike) as well as benefit from the power of ActiveRain’s SEO power. Its a great way to build a readership for your thoughts in the early days when you’re a virtual unknown. Whatever you choose to do, the world is waiting to hear what you think – I couldn’t imagine that people would care what I had to say, but they’re out there – watching, waiting, and reading. Let them see who you are and you will be rewarded.
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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