How to
I Can’t Hear You! (or How I Messed Up Big Time)
I’m not hearing anything. Not even you.
This has nothing to do with my ear infection that I mentioned last week. In fact, it doesn’t really have to do with my ears at all. Allow me to explain…
As you may know, I began my humble blogging beginnings right here on AgentGenius. I had been lurking and watching and started commenting when Benn and Lani approached me about writing about my experiences as a new blogger and new agent. They encouraged me to write about the good, bad, and ugly and to tell you about my successes and failures (and even told me that I basically had a huge group that would help guide me via their past experiences, so I’d be a step ahead of the game). They encouraged me to start blogging and sent me on my merry way.
If you’ve been following along, you’ll know that I dove in with a lot of gusto and love blogging and real estate – combining the two has made it even more exciting for me. I am having a ball. I’ve recently been really trying to build my blog/site and work on making it even better. I’ve had some good successes lately – my traffic is picking up and I’m even receiving comments from people other than Jeff Turner and my dad. This is the tipping point we all waited for at one point. Its the day you know you’ve made some impact. I have miles to go, but at least I know there are people out there.
With my new found traffic, the world seems so silent.
Now I know people don’t just start calling and emailing the first day and say “sell my house” or “I need to buy this house, will you be my agent?” I have received some calls and emails, but I kind of was expecting a few more. Just a few, I’m not asking for much.
Today, while researching something totally unrelated to my blog, I had a revelation. There was a simple reason no one wanted to talk to me about my blog or why they hadn’t come calling to buy and sell with me as their agent. In all my work to build a great blog and an interesting site (which is still being worked on every day), I had totally let something slip. In months of filing out online profiles for this social media gadget or this networking tool, I had become so used to my face, my name, and my contact info being everywhere. Guess which one I forgot? That’s right, on my entire site, there is no contact info! I couldn’t believe it when I realized it. I had been building and thinking and planning and coding and tweaking – and never once thought of how someone could pick up the phone or send me some email. Grrrrr.
Lesson learned, research started.
I’m going to go do some research now on some contact plugins and forms to see what I want to use. Expect to see something up there tomorrow at the latest. Let it serve as a reminder that sometimes, in all your hard work, you might be missing the most obvious thing on earth. Take a few minutes and try to be a blog reader, not a blog writer – what’s missing from your site? Sometimes, you just need to take your fingers out of your ears to figure it out.
photo courtesy of Gramody
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!
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.
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:
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.
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.
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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Ben Goheen
April 22, 2009 at 9:18 pm
Ahhh, sometimes it’s the little things that get missed and are the biggest oversight.
I see you’re using WordPress on your site. If you’re going to include your email make sure to use the PHP enkoder plugin (https://www.weaselhat.com/phpenkoder/) so you don’t get spammed to death. Notice the source code of our contact page: https://www.mnhome.org/about – no email to be found but you can’t tell by looking at the site.
Matt Stigliano
April 23, 2009 at 11:48 am
Ben – That’s just it, it was so little and so obvious, that I just completely overlooked it. I’ve learned over the years to constantly stop what you’re doing and go back and look at things trying to find the obvious.
Thanks for the tip on the encoder. I just looked at your site – that’s pretty cool how it does it.
Matt Stigliano
April 23, 2009 at 2:07 pm
Ben – I installed it and a contact form, so I’m up and running!
Michelle DeRepentigny
April 24, 2009 at 10:49 am
🙂 Bless your heart, it is so easy to overlook something. The best thing I ever did on my blog was install the text widget from RETechBlog.com, it has really increased the amount of contact I get.
BawldGuy
April 24, 2009 at 3:48 pm
Now I don’t feel so bad. 🙂
Missy Caulk
April 24, 2009 at 8:43 pm
Happened to me too, oh the info was there but not easy to find.
Gwen Banta
April 25, 2009 at 9:38 pm
Matt, you are THE EXPERT to me, so I am trying to learn from you. I would never have thought of the need for contact information myself if it hadn’t been for you. Maybe I’ll change the name of my blog to GwenBantaCallMeNowBeforeIHaveToBegAt323-656-0714 just so it doesn’t slip past anyone!