The Right Kind of Thinking
Achieving success is primarily a mental thing. One can observe the physical actions and results but sitting behind those actions and results are thoughts. “Correct” thoughts. The right kind of thinking leads to the right kind of actions. In any meaningful and desirable activity there is an infinity of incorrect ways to attempt to accomplish the intended result. There are but a few “correct” methods. Correct is being defined in this context to mean it works. That kind of thinking will produce the intended result. Usually, even in what could be classified as a purely “physical activity” the difference between achieving the result (winning) and not achieving it (losing) is mental. An example of this would be after Roger Bannister broke the 4 minute barrier for running a mile. Prior to him doing it everyone knew it could not be done. The fastest runners on earth knew they could not do it. Once Roger did it, it was then known it could be done. In the next three years 16 other runners also did it. It is doubtful the cause was Super Wheaties.
So, what are your “Four Minute Miles”.
Look for the Idea
I will share with you something I discovered some years back that has made all the difference for me. Being able to spot “enemy line”. To really grasp this concept imagine that an enemy has put you in a hypnotic trance and that all they need to do to ensure your failure is to get you to buy into certain ideas – the enemy line. If they can get you to embrace these ideas your failure is assured. Please understand that I am not suggesting that the failure ideas one carts around in their head came from an enemy hypnotizing them or even from an enemy at all. I found them most of mine were stupid ideas I dreamt up myself while tired, hungry or just not doing all that well due to some loss. So to get the full benefit of from this it is not necessary to find where the idea even came from – totally alright if you do, but not a vital step. All you are looking for is WHAT the idea is.
Take any goal you want to achieve. One that you want but isn’t very real to you. It seems too big. Distant. Do it later. Too hard to achieve. But you really would like it if it was possible, but it really doesn’t seem like it is truly possible. Any goal. As soon as you put your attention on that goal the various Enemy Line concepts you currently have get mentally activated to some degree. So to find them all you have to do is put your attention on the goals you want that you have not achieved. They will start to pop up, one by one.
Write them down
The beneficial result can not be accomplished if you don’t. Either write them on paper with a pen or pencil or write them in a Word document, but write them all down. Each and every one of them that you can think of, in writing. For me, it was a list I kept in my computer called, “Enemy Line List.”
Get Some Distance
Having this negativity in writing is vital for a couple of reasons: writing these ideas out – in full – and labeling them as “enemy line” separates the ideas from you. And gives them the correct label – mental poison. Writing them out puts some distance between you and the ideas. The ones you have that you are already aware of as you read this are not likely the real “mooring lines” that are actually holding you back. Which is why the writing step can not be skipped. As you start to write them out you will think of others. I would sit and write them until I could not think of any others and then stop. Sometimes a few minutes after stopping, sometimes the next day as I was driving somewhere, I would think of more. I would make a note as to what those where and as soon as I could I would add them to the list in my computer. You will stumble upon some that will get you to sometimes wonder if you should laugh or cry. Maybe both. But getting these pieces of poison out of your head and correctly labeled makes it possible to recognize those ideas for what they really are the next time one of them comes drifting into your head.
Do not stop to worry about “what is realistic”. If the idea is in conflict with your goals it belongs on the list. Period. Any idea, no matter how “practical” or “realistic” it may be – if that idea or concept is in conflict with your goals, put it on the list. This doesn’t have to ever be something you share with anybody. It can be, if you want it to be but don’t worry about embarrassment. Just write down any thought that is not in full alignment with your objectives.
A Real Life Sample
I’ve shared this idea with many people over the years, and to my knowledge every one of them experienced relief. What follows is a real sample that a fellow Realtor sent to me (who wanted to be a lister). As I will never say his name, I will publish the list he sent me in full. These were his:
1. Listing agents don’t really add much value…they just put a sign in the yard and another agent comes along and sells the house.
2. Realtors are overpaid relative to the value they add.
3. Realtors aren’t really that smart; a lot of them are housewives just looking for something to do.
4. It is embarrassing to be affiliated with a profession that is so poorly regarded by the public.
5. Real estate is beneath a person with my level of education (according to wife).
6. Realtors are smarmy weasels and sleazy sales men.
7. I’m bothering people when I call them to prospect.
8. I’m no different than any other listing agent…we all basically do the same thing.
9. I don’t want any more listings because sellers are unrealistic about what price it will take to get the home sold and therefore the sellers are just annoying.
10. If price is all that really ultimately matters in getting the home sold why do you need an agent to go through all the (unnecessary, wasteful, expensive) motions of marketing the home – and why do you need an agent anyway, just price it to sell.
11. I don’t want any more listings because they are not selling in this market; working with buyers in a buyers’ market is a better strategy.
12. Sellers expect me to bring the buyer as the listing agent and that is simply not statistically likely.
13. Seller’s are unappreciative of what you do for them.
14. We can’t handle the workload of more listings than we have now.
15. Many agents are prospecting expireds and fsbo’s and we’re all using the same scripts and all sound the same to the sellers.
16. Seller’s can’t tell a dime’s worth of difference between realtors.
17. Full service brokerage is going the way of the dinosaur…commissions are too high and with the internet, all a seller needs is a discount broker and to get the listing online.
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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