Roost.Com launched yesterday. It was kind of hard to miss in the RE.net. If you haven’t yet heard about the site. It’s a real estate search portal that at first blush seems similar to what Greg Swann refers to as a member of the “Realty.Bot” family (Trulia, Zillow, Propsmart, Etc.). Benn would refer to them as another tech incursion. It has a slick search interface and is getting quite a bit of buzz
Deeper analysis reveals the site to be a completely different animal. Dustin asked the question on his blog “Who Gave Roost Complete MLS listings?” and I would imagine when agents begin to discover the site they will be asking the same questions. It’s been a while since I have been involved with IDX (Internet Data Exchange) so the idea that a broker could redistribute a feed of data to a third party site intrigued me. I found out that “technically” the brokers are not providing the data to Roost.
Each market in the site is represented by an IDX feed of MLS data from a broker that is essentially a co-branded version of a broker web site. That will not be clear to you as you visit the site, nor will it be clear to any consumer, but from a purely technical standpoint it is. Still confused?
Here’s how it works. If you visit Roost.Com and select a target market you will be sent to a page that offers you search options. Roost calls this “Geo-Targeting”. The page you land on is redirected to a domain name that is either a second level domain to Roost in some markets. (https://coldwellbankeronline.idx.roost.com for Aurora IL) or a domain owned by the brokerage (https://garygreeneidx.com/ Prudential Gary Greene in Houston). I’m not sure but I think it will depend on how locked down the IDX contract language is from one area to the next as to what level you will see a domain at. Evidently there is no limitation on the number of IDX web sites that a broker can own and provide the MLS listing data to. It’s apparent that one struggle will be implementing the strategy from one market to the next.
When visiting one of the Minnesota cities in Roost I was presented with a “Nag” screen that said I must agree with the MLS Terms of Service. The statement did not display completely in the text box and ended with…..You accept, without limitation o…… I figured what the hell, who wouldn’t want unlimited o’s? I’m sure it’s just a launch day bug, but it demonstrates an example of the challenge before them in having to accommodate different rules for different areas of the country.
So the next question that is probably on your mind is how each market will be represented by more than one broker? According to Roost they will be rotating different brokers through the system. In a comment on 4Realz a Roost representative said
“Roost is a completely open/inclusive platform for any type of broker (large, small, independent, franchise group, corporate, etc)”
How will they make money? From what I have read thus far, each broker will pay based on CPC model, (cost per click). Each time a broker shows up in a rotation and someone clicks for more detail on a listing, it will redirect to the brokers “primary” IDX site and the broker will pay for that click.
I think essentially what Roost has done is create a system by which they will create and host a broker IDX web gateway with their search technology and put the clicks up for auction in each market.
The overall concept isn’t completely original, Prudential has been doing the same thing with Yahoo Real Estate for some time now but Yahoo has maintained an exclusive relationship with Prudential thus far. One of things I found interesting is that Prudential is not placing a lead capture form up before giving access to the detail info in Roost.
What does this all of this mean if you’re an agent? In the end it’s nothing more than another way to advertise listings on the web and it will be up to your broker to decide if it represents a good return on investment. Building a national portal and brand isn’t going to be easy so at this point it’s anyone’s guess whether Roost will be able to gain traction. The search technology is cool, but that alone isn’t going to equate to a rapid uptake in consumer adoption.
It’s certainly a very aggressive and creative endeavor but I think in the long haul business models like Trulia and Zillow are being built in a way that offers them much more flexibility with regard to the overall consumer experience. More importantly it gives them an ability to generate revenue from a much wider base of options without being restricted. I know the process is certainly more tedious but I personally like the strategy better. Hey who knows? I’m no genius, I just play one on this blog!
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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