More Foreclosure Related Transactions
I don’t know about you, but there are a lot more foreclosure-esque real estate transactions (bank owned, FHA/VA Repo, Short Sale …) happening lately… at least in my neck of the woods. It is getting to the point where we are closing at least one to two foreclosure-related properties a month (buyer/seller) – in ADDITION to the “regular” ones we close.
Bank owned deals aren’t so bad, but the short sales are massive amounts of dain bramage. Recently, it has gotten to the point where Derek and I could not avoid them any longer. But we sure as heck didn’t know how to effectively deal with them, either.
And the last thing that the real estate market needs is a bunch of real estate agents who know NOTHING about short sales … out there taking listings that are SHORT SALES. These homeowners are in enough of a mess. They don’t need a “regular” real estate agent. They don’t even need a “great” real estate agent. They need someone who knows what the heck they are doing when it comes to short sales.
We figured that we need to be competent in ANY market that we work in so, Derek and I decided that we needed to learn more about short sales to survive in this market.
Becoming Better Educated
We went to all the free title company classes about effectively listing and negotiating short sales. They were a little helpful, but not enough. We wanted more.
Finally we found a program that we thought would help us … and MAN! It was one of the best investments that we ever made in our Real Estate education and business. Now, normally I don’t jump around and do a dance about a product or service (well, unless it’s Real Estate Shows) but here is an exception… so I am taking this time to share our experience.
Certified Distressed Property Experts
“Stop Walking Away From Business you can earn commissions and help homeowners in the process (on the deals other agents don’t know how to handle).” – CDPE Website
Derek and I just finished a 3 month course, and are now Certified Distressed Property Experts©. This was a six 2-hour per session course about how to effectively LIST and SELL a short sale listing. We got an information packed manual and a whole notebook of duplicate able and customizable forms and worksheets designed to help streamline the short sale process.
But What Did We Learn?
I think my brain was going to explode during each session with all the awesome information/statistics/tips, so instead of making this post EVEN LONGER, here are some of the highlights of the class:
This course helped us understand and really identify the difference between a DISTRESSED Seller who NEEDS to sell and a DISENCHANTED homeowner who just WANTS to sell. A short sale is not an option for the latter.
We also got great tools for full qualifying the people and properties that we may work with:
- Distressed Seller: Why are they distressed? The Top 16 reasons why a homeowner is distressed include: Rate adjustment, loss of job, death, divorce and incarceration. Where are they at in the foreclosure process? Where they are in this process determines HOW and IF we even get to work with them.
- Distressed Property: What are the economic and physical factors that are contributing to the distress? Identifying ALL these factors will help you better negotiate the short sale with their lender.
The CDPE courses also gave us GREAT insight to the emotional situations surrounding distressed sellers, and gave us tools to help us be appropriately compassionate, understanding and patient.
… and we also learned how to apply the same compassion, understanding and patience to the people at the loss mitigation departments of the mortgage banks that we work with. And that little piece of information has paid off in GOLD. The minute we started asking helping-focused questions to the people on the other end of the phone … we started getting STAR treatment. To the negotiator – or whomever we speak to at the mortgage company, we say:
“I understand that you are probably buried in work, so we made sure that we sent over a complete short sale packet for 123 Main Street (both via fax and USPS) to make it as easy as possible for you. WHAT ELSE CAN WE DO TO HELP YOU get our file processed and closed as soon as possible?”
I’m telling you! It works WAY Better than, “WHAT?!?!? You want me to fax that *!?%*?! packet AGAIN?? You people are the most inadequate people on the planet!!” (You can THINK it, but just don’t say it …)
There is an astronomical turn-over rate at these places, and we need to be PREPARED to have your file “transferred” at least once during the process.
Other things that we discussed were:
- How to put together a bullet-proof short sale package and what verbiage to use when negotiating with banks.
- How to augment your current business by helping distressed sellers short-sale their home … without engulfing all of your time and energy.
- How NOT to get raked over the coals by the lenders and actually get paid a decent commission to LIST and SELL short sales
How the Certified Distressed Property Designation Impacted Our Business
Even BEFORE we finished the course, we were seeing results:
- We negotiated and closed a short sale before our seller even missed a payment (OMG!) and were paid a 6% commission (we co-oped 3% to the Buyer Agent) AND got all our transaction fees covered, as well.
- We successfully extended the foreclosure dates on 3 distressed listings by 6 Months!
- We comprehensively educated all of our “distressed sellers” regarding the entire short sale process, which has de-stressed them enough to work WITH us to get things done in a timely manner.
We have found that the Certified Distressed Property Expert Designation is already helping our business. We are now short sale expert real estate agents who can competently work with distressed properties, and can take this competence to make our business grow even further.
If you are seeing an influx in distressed properties in your market, and would like to become more competent in short sales … and better your business in the current market … Then check out the Distressed Property Expert Certification website, or call: 1-800-482-0335
Jim Gatos
November 5, 2008 at 4:51 pm
I became a “Certified Foreclosure Prevention Consultant” through Roger Butcher and his “ShortSalesExpress.com” website. I had 2 success and one failed short sale. I had to take ALL this information and then let Shortsalesexpress.com do the short sales. They keep one percent.
I am going to try a short sale lawyer in my market area and see what they do. Other agents swear by them and I don’t have to give up the one percent. Besides they have a great track record.
Sometimes those certificates mean nothing. Roger told me in Mass and Colorado he can’t do loss mitigation because the laws are so stringent if the homeowner doesn’t want to pay us for our work they can legally NOT pay…
Bob Wilson
November 5, 2008 at 5:21 pm
I’ve been doing short sales for a long time. The last two days have been pure hell with one lender and 5 different files.
Get the lender employees to take the course and then it will make a difference. The biggest problem isnt the agent anymore, it’s the moving target that is the way some lenders process short sales.
Russell Shaw
November 6, 2008 at 12:51 am
VERY nice post, Mariana. Excellent points. I believe that short sales *are* the future and that they will become much much easier for agents to successfully complete.
We don’t count them as escrows until we get the approval from the lender but currently have 20 files that have been submitted to the lenders.
Mariana
November 6, 2008 at 8:19 am
Jim – ALL certifications/designations mean nothing. It is the education that it takes to GET them, and what you DO with them… THAT is what matters.
With the CDPE designation, I pay NO ONE a fee – not the company, not a lawyer … no one. The courses have taught us how to be competent without having to solicit the services of others.
I am in Colorado, and I NEVER charge my clients for my services – whether the home SELLS or they figure out a way to stay in it.
Mariana
November 6, 2008 at 8:22 am
Bob – We are professionals, and the folks at the banks we work with do not need any kind of professional experience – and I doubt they are paid well either. Sad but true.
Russell – Thanks! We don’t “count” them until we have full approval from the lender … and even THEN…
Steve Simon
November 8, 2008 at 9:50 am
All designations started out the same way as a method to build some level of exclusivity for those that were already there; while building an enterprise to designate future applicants. The by-product (if you’re lucky) is that after a while the courses required to receive the designation actually do improve and take on substance.
After doing a few deals this and last year I can tell you with a fair amount of certainty:
Each lender that holds a lien has a unique way of doing things,
Some lenders will continue to market and hope while they leave your offer in limbo,
Many of the lien holder’s staff are inexperienced,
Most of the above are working way to many files to be comfortable,
90 percent will chew on commissions until what’s left is nothing to right home about…
The above being said, in my area that is pretty much the only “Play” in the game!
Paula Henry
November 8, 2008 at 9:54 am
Mariana – This is excellent information. I started studying short sales through America’s Home Rescue about 2 1/2 years ago. Knowing the ins and outs of “how” has helped me close every one I have had a contract on this year.
Today’s environment is definately a lot easier to negotiate short sales than 2 years ago when banks were scrambling to get their loss mit departments back.
I do not charge my clients, EVER! I have one now where the clients paid someone previously $700.00 (for what I do not know).
One thing you touched on which is crucial – if agents do not know how to do a short sale they should stay away. A recent closing narowly escaped foreclosure, because the home had been on the market for 9 months without showings or an offer. It was priced too high to be a short sale. Agents must know how the banks work and what they will and will not accept.
Sorry to take so much space 🙂
Mariana
November 9, 2008 at 10:07 pm
Steve – What I like about this designation is that it fully addressed EVERYTHING that you mentioned, and what we have learned has gotten us QUICK responses and MORE Commissions.
Paula – I get SO frustrated when I see a pre-forclosure home sitting on the market overpriced by and under educated agent.
Derec Shuler
November 11, 2008 at 11:35 pm
Mariana, thanks for promoting the importance of having an expert handle these transactions. I’ve gone through the program and there’s so much information I feel it’s a disservice to attempt to handle this without having this specific education.
Are you guys using a negotiator or handling that yourselves? Best, Derec
Bill Lublin
February 23, 2009 at 10:12 pm
@Mizzle Awesome post – After serving as the Chair of NAR’s Short Sale Work Group and spending the last 21 years selling REO’s I can tell you that you made a couple of great points – the most important of which might be that is you don;t get the people at the lender on your side, you make your job that much harder.
I can also tell you , that during the Work Group’s communications with Freddie Mac and Fannie Mae, and other lenders, the third party short sale “facilitators” do nothing that a well educated and aggressive agent shouldn’t be doing for their client.
Kudos for going out and obtaining the additional training to do the right job for the time and for your clients!