Ever have a near-miss death experiences?
I’ve had three. Two in the water, one in mid air.
Whistling along at five hundred and fifty miles per hour,two howling jets propelled us, the flight crew, flea sized bags of peanuts, a million pounds of metal, luggage and ridiculous hope, towards Vegas.
It was noisy. Passengers chatted, dozed and laughed while Flight Attendants smiled, slung drinks and served crappy sandwiches. I don’t know what the in-flight movie was, it sucked.
Like a steel wheel hammering an unexpected pothole, the floor beneath my feet banged rudely violent with a flash of vibration. Previous droning blinked silent. A startled hush sucked sound from the cabin. My mouth went instant dry. My skin tingled. I could hear my adrenalin laced blood whoosh through my veins. I fought a primal urge to stand and run or fight or something.
Four feet away, like nothing happened, our Flight Attendants re-assuredly smiled, slung drinks and continued to casually serve those crappy sandwiches I mentioned earlier.
Doubt dissipated, confidence re-inflated and familiar friendly sounds refilled the cabin. We flew on like normal.
What would have happened if the Flight Attendants froze mid pour, broke conversation, flinched and Freaked-Out? Or if the Captain jumped on the intercom and in a breathless panic blurbed, “This is the Captain speaking, all is sorta-safe, fasten your seat belts – super-tight, I hope we make it, please pray for our plane. That is all”?
Flight crews are professionals. They fly millions of miles. Turbulence in all sizes, odd clunks, shrill screeches and the unexpected can un-nerve and Freak-Out untrained eyes and ears. The flight crews know that their behavior influences the confidence and comfort of the passengers.
Wanna know when to panic? Watch the Flight Attendants, listen to the Captain, if they act rattled, surprised or otherwise Freak-Out, it’s time to pull the rip-cord on your personal panic parachute.
I call this safety signal thermometer – The Fight Crew Freak Out Factor.
Real Estate Turbulence and The Freak Out Factor
How much turbulence can your passengers experience in a real estate transaction? Like the weather and nature, there are hundreds of moving parts and dozens of players, all outside your control.
How many wrinkles are ironed, fires quenched, nerves calmed, egos massaged, butts kissed and kicked, emotions soothed and misdirection corrected are there?
As a professional real estate agent you manage details, calmly communicate, assertively advocate, resolve sticky situations and lead for a living. Like passengers’ bulleting through thin air, when scares and surprise arise, your clients look to YOU for the Freak-Out-Factor.
When things escalate wildly, as they often can, if you Cave-In and Freak-Out, everyone panics. Panic is the enemy of goodwill and confidence. Panic sucks the delight out of a positive experience.
Remain Cool and Confident.
When the Fit Hits The Shan, remember the Freak Out Factor. Resolve to solve. Lead with calm-confidence and above all Don’t Freak-Out . Perform!
Thanks for reading – Rock ON.
PS. I notice in this post I’m using a lot “yous”. “You” should this, “you” should that, etc. I wanted to share that the “yous” I use are writing style related. I wouldn’t presume to tell “you” what “you” should or shouldn’t do. I didn’t want “you” to think I thought I was some kinda of pompous self-appointed authority, know-it-all jerk. I’m just sharing some thoughts and observations. Thanks.
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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