I’ve always been good at second-guessing myself.
I am the king of the “what if” game. What if I do this? Will the outcome be (a), (b), or (c). If its (c), what will happen next? And if that thing happens and then I do (b) as well, will the outcome be more like if I had done (a) in the first place? I was never good at chess, but I should be, because I plan out scenarios in my head all day long and second-guess everything. Not always in a negative way either. In some ways I’m proud of my ability to do this, but in some ways its a curse. Spending time considering the options and the outcomes can waste valuable time and help convince me to not take the path I should take for the best results.
I’ve been getting phone calls lately from Market Leader about their product Growth Leader. You know them well by now I’m sure. There’s been articles here, there, and everywhere. Now, I’m as skeptical as they come when it comes to someone promising me traffic, leads, clients, or transactions. I’ve been through the deluge of calls from these companies that smell new-licensees like a Vampire smells blood. I’m not interested. Why? Well, at this stage of the game, money is a huge factor. In addition, I’ve heard through the various blogs, friends, and office water cooler talk that a lot of these companies just aren’t worth it. Many of these companies have been rude to me on the phone, so its been easy to say “no thanks” and hang up before we get too far into the conversation. So when Growth Leader began calling, I wasn’t really listening to be honest. They were very nice on the phone, so I give them credit for that, and the woman who contacted me (Robin) followed up with in a nice way and sent me some more info. She didn’t badger me, so she also gets credit for that.
ActiveRain has been doing some test runs for Growth Leader
I had read some posts referencing a partnership where ActiveRain was getting some agents a free trial of Growth Leader in return for a weekly blog about Growth Leader and how the agent felt about it. I read them, then forgot them. Since Market Leader had already contacted me, I assumed they had what they needed from their test cases and were now in the launch phase and trying to get people like me to sign up. Even if the trial run was still open, why would Market Leader be interested in a guy who’s oonly been on ActiveRain for a few months and hasn’t even finished setting his own website up yet (its getting there…slowly but surely). Second-guessing at its best. One night, I read another post about Growth Leader and something about it sparked my interest. It also had a direct link to Bob Stewart’s original post seeking willing guinea pigs. The post was dated November 14, 2008. Too much time had passed and to top it off, my city wasn’t listed in the test areas anyway. Second-guessed myself again.
For some odd reason, I ignored my thoughts and emailed Bob anyway. I actually forgot that I wrote him, when the following evening a call came in from a strange area code. It was Bob Stewart on the line. We chatted about Growth Leader (and a bit about ActiveRain as well) and he told me he’d love to have me on board as a guinea pig (he didn’t use those words). I was thrilled. I had almost not even attempted to contact Bob. I had almost second-guessed myself out of a potential opportunity. One that could prove to be good for me. If Growth Leader works, I win. If it is absolute crap, I win again, because I can tell people about it so they don’t spend their money on it and I look like a hero. Why would I have thrown away the chance to be a winner no matter what the outcome?
You can kill your career with your own thoughts.
I’ve become more and more aware of the psychology of myself since becoming an agent. Things I did that I put up as stumbling blocks all the time are slowly coming to light. Easy, little, tiny thoughts that could be career killers. And as I make my way through them, I’m learning how to cope with my own worst enemy – me. Next time you think it can’t be done or that its too complex, stop what you’re doing. Just stop. Put down the phone, step away from the keyboard. Just stop. Stop and play “what if” games. What if I did this and it does produce a positive result? What if I didn’t do it, what opportunities will I be missing out on? What if I don’t take some chances once in awhile – will I remain stagnant or will I learn something new? We control our own thoughts and our own destiny. We can make them work for us or work against us. The choice is pretty simple.
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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