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For every ugly house, there’s an ugly buyer – Writer Debut



Some Realtors…

…think they are too good for a listing. They may feel it does not fit their clientele, or it doesn’t reinforce their brand. Believe it or not, some agents try very hard to live up to their reputation of being purveyors of properties and arbiters of taste. Well, that ain’t me.

Case in point.

After landing a listing, out of curiosity, I asked what made them pick me over the other agents. I thought they were going to say it was because I was a top producer with a UC Berkeley degree under my belt, or because I could speak Chinese to the sellers who spoke little English, or at least because I looked amazing in a suit. But no! They said, “You were the only agent who didn’t run away”

Truth be told, their house was never going to be featured on Million Dollar Listing.  That’s putting it kindly. It was a small dilapidated 2bd 1ba straight of the 1960’s. The sellers clearly didn’t want  to leave that decade. The house was painted turquoise paint with sea green trim, had awnings that screamed “retirement home” , and inside was cobalt blue carpeting and floral wallpaper.

But worse of all, next door was a dubious night club, that attracted ruffians all hours of the day & night.  No wonder some agents wouldn’t touch this with a 10 ft pole. Not only was it going to be a really hard sale and very little earnings, but you didn’t know if you were going to  get mugged at the open house (I made a mental note: pick up a can of mace on the way home).  Nevertheless, I took the house on to assist out these nice folks. My rationale: “For every ugly house, there’s an ugly buyer.”

Low and behold, in less than two weeks, an offer appeared! Two lesbians snapped up the property. Now, I’m not saying lesbians are ugly (I actually never met them in person, so I can’t tell you for sure), but I am saying that it’s a good thing I didn’t think the property/sellers were beneath me. Why? They immediately bought their next house from me, and also referred their son to me. All cash deals! Who knew! I’ll take an ugly house or ugly buyer any day!

Please welcome Herman Chan to the Agent Genius family! We are excited for Herman to join the folds- his energy is contagious and his writing and video will have you laughing as he analyzes the real estate industry. You can find Herman at his video blog Habitat for Hermanity or on Twitter. Please welcome Herman in comments (and razz him for being another writer with a hoity toity Berkeley degree)!

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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  1. Bob Phillips

    July 5, 2010 at 3:47 pm

    While your story is a good one, I can’t help but think that you’ve overstepped your boundaries in your unnecessary description of your clients.

    I think it would have been sufficient to simply say that someone actually bought the place, without resorting to labeling them as “ugly” buyers, or unnecessarily divulging their sexual persuasion.

    • Shanna Lafontaine

      July 6, 2010 at 3:41 pm

      I have to agree. Did your clients give you the OK to publicly talk about them and show a picture? I love the story, but maybe the delivery was a little rough?


        July 6, 2010 at 9:02 pm

        thanks for the input y’all! shanna, the photo is a random stockphoto, not really my clients’ house. (were that the case though, that would be in poor taste!) bob, you’re right, i should have asked them to sign a disclosure statement about their sexual persuasion as well as show me proof of their gay membership card. i know i never leave home without mine! 😉

  2. Vicki

    July 5, 2010 at 4:23 pm

    Hi Herman –

    I’ve always heard “there is a butt for every saddle”, but “for every ugly house, there’s an ugly buyer” is much more fun.

    Nice first post – it made me go to your website and watch your videos. (They are wonderful!) I’m now one of your loyal fans. 🙂



      July 6, 2010 at 4:02 pm

      thank you vicki! maybe i will try to use “there is a butt for every saddle” in a future webisode 🙂

  3. Fred Romano

    July 5, 2010 at 8:39 pm

    Just checked out your website – loved your vids! Good to see an outgoing queen work it like you obviously do – You go! Gays and real estate go together like peanut butter and jelly, like bagels and cream cheese, like …. well you get my point. You gotta new fan here!


      July 6, 2010 at 4:05 pm

      hola fred! you know that is a very interesting observation about gays and realtors. there does seem to be a high incidence of us in the biz , eh?

  4. Property Marbella

    July 6, 2010 at 1:08 am

    Welcome Herman to the Agent Genius. You are right in “for every ugly house, there’s an ugly buyer”. But what you think is ugly, is maybe beautiful for other. Everybody have different taste. Otherwise had the world look exactly the same everywhere.


      July 6, 2010 at 4:08 pm

      property marbella, how true, beauty is indeed in the eye of the beholder…(it’s just that some ppl have cataracts! ) on serious note, yes diversity can be beautiful, not just in homes but in ppl.

  5. Benn Rosales

    July 6, 2010 at 11:29 am

    It’s a test of character to take on challenging opportunities, and take risk, and the listing was a calculated risk. Living in Austin, we’ve gotten used to diamond in the rough mentality and are often surprised at what folks find as valuable here. It’s often a mcmansion a few short months later or restored and called a bungalow… 🙂

    In the future, don’t hold back, tell us what you really think! 😉

  6. Joe Loomer

    July 6, 2010 at 3:33 pm

    Welcome aboard, Herman!

    Navy Chief, Navy Pride

  7. Jonathan Benya

    July 6, 2010 at 3:50 pm

    welcome aboard Herman! great to see another take on the wild real estate market!


      July 6, 2010 at 4:14 pm

      it certainly can be a jungle out there! but all we can do is try to make each day a safari! 🙂

  8. Joe

    July 6, 2010 at 11:44 pm

    …and I’m thinking, “For every ugly buyer, there is an ugly house!” [grins]

    I tell my wife to never say no to a sale. Perhaps some sales we put less effort into, but never say no. We’ve had many clients who were ‘borderline’ to do business with, but we decided to stick with them and as a consequence have benefited from great business relationships. In fact, one of them is our friend (let’s hope they do not read AgentGenius,eh).


      July 7, 2010 at 12:49 am

      on the same page as you, Joe! At the end of the day, “A deal is a deal” right?

  9. Fred Griffin

    July 8, 2010 at 12:03 pm

    Great article, Herman… welcome to AG. See you on Twitter and elsewhere!


      July 8, 2010 at 7:15 pm

      thanks for all the support everyone! i’m happy to be part of this niche community

  10. Greg Zeck

    March 14, 2011 at 1:14 pm

    Your language, rough and rude as it is, is a necessary and inevitable corrective to the tippy-toeing most realtors (and insurance agents) do. God forbid a little truth in housing.

    • herman chan

      March 14, 2011 at 1:48 pm

      thanks greg. sometimes the truth hurts, but we (and clients) are better for it in the end 🙂

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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!



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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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:



short sales standoff

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.



short sales

short sale approval

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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