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Is NAR Moving In The Right Direction? Am I?

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Signpost at Cape Foulwind, West Coast, NZ

A goal is reached.

If you’ve been around AgentGenius for awhile, you may remember my post “Join the Committme.” After the Google/Scraper debate, I was quite frustrated that things went the way they did and I made a decision to try and work to move into some committee work on the local and state levels in order to get my feet wet and eventually move to the national level.

I received a DM on Twitter this morning from Todd Carpenter telling me to look for an email from NAR President-Elect Vicki Cox Golder and to call him if I had any questions. I wasn’t quite sure what it meant and the obvious sort of escaped me. I waited through the day and finally saw an email from NAR in my inbox. I opened it and what followed was an invitation from NAR to join a committee at their request.

I had to read the email a few times to fully understand what was going on, but basically I had just been handed one of my goals as a Realtor®. I was being asked to join a committee. A few weeks ago, the Texas Association of Realtors® had turned me down for a committee position and the jury is still out on my local board, but I did apply as I said I would.

The theory of it all.

In speaking with Todd a little later in the evening, he explained that NAR was looking to “find new and willing voices to help shake things up.” Because of Todd’s involvement here at AgentGenius as a constant reader and commenter, he knew who I was and knew what I had to say. I guess you could say he put in a good word for me.

NAR’s new theory of bringing in some people that may not be your traditional committee members is interesting to say the least. Here I am a Realtor® still getting established in the business and they are asking me to step up. I find the idea encouraging in that perhaps NAR needs to think of some new ways to connect with their membership and perhaps opening the doors to the hallowed halls of committees a bit more is a step in the right direction. By giving people like me a voice, perhaps there can be some great discussion between people who have a billion years experience and a guy like me who’s still learning, questioning, and thinking about each facet of the industry. A set of new eyes and ears.

I wonder what other agents out there think. Is NAR moving in a good direction? Is it a good idea to let less experienced agents loose on NAR committees? Have I made a good decision by accepting the invitation? Can I add something to the conversation? So many questions and some new responsibilities. Ones I’m ready to take on and look forward to. What do you think?

Although completely unrelated to this conversation, I would like to thank everyone from AgentGenius – writers, readers, and owners who helped me with my attempt to get to BlogWorld 2009. Thanks, it just goes to show that friendship can be built on a social media platform.

photo courtesy of Tim Musson

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Matt is a former PA-based rockstar turned real estate agent with RE/MAX Access in San Antonio, TX. He was asked to join AgentGenius to provide a look at the successes and trials of being a newer agent. His consumer-based outlook on the real estate business has helped him see things from both sides. He is married to a wonderful woman from England who makes him use the word "rubbish."

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40 Comments

40 Comments

  1. Jeffrey Douglass

    October 1, 2009 at 11:49 pm

    Matt, NAR is really all of us. I think that it is great that they are reaching out to those newer in the business for some fresh perspectives, and I believe that you will be amazed at the workings of the organization. It is always so easy to complain about things from the outside, but NAR is a member driven body which has done many great things for real estate and the consumer.

    So yes I think you did the right thing getting involved and I have enjoyed reading your posts and think you will be a good voice.

    Glad you made it to blog world!

  2. Todd Carpenter

    October 1, 2009 at 11:59 pm

    >>Is it a good idea to let less experienced agents loose on NAR committees?

    Yes.

  3. Vicki Lloyd

    October 2, 2009 at 12:41 am

    Matt –

    I think it’s great that you stepped up to the plate and volunteered to help on a committee.

    NAR is a member driven-organization, and unfortunately, many of the “old timers” are also “old thinkers.” They have been running all the committees for many years, and probably don’t even know that the world is changing.

    Newer agents are often given the impression that you have to be in the business a long time to have any credibility in making the decisions, but it may also be true that the newer agents are just intimidated and assume that they don’t have enough experience to be a contributing member.

    Congratulations on being “recruited” to represent us an an NAR committee!

  4. Carolyn G-Tu

    October 2, 2009 at 2:23 am

    Matt, I remember that post last fall and definitely think it is a positive step. I wish more agents would step up and volunteer. I’m busy at the local level on both my local board of Realtors and regional MLS committee. I have noticed that many people especially on the MLS committee have been there for many years. Good luck and hope you make an impact.

  5. Randy Hooker

    October 2, 2009 at 2:49 am

    Eat or be eaten?
    If you’re not my ally, you’re my enemy?
    Are you freaking nuts?
    No booze, my friend — just questions.
    …randy

  6. Jim Reppond

    October 2, 2009 at 2:53 am

    I agree NAR seems to be moving the right direction, but they have a long way to go. Todd is a great addition to the organization and it’s good to see they seem to be listening to him.

    I still think NAR is WAY out of touch with reality and need a swift kick in the pants. Until I feel I am not being held hostage as a member against my will they will continue to hold them in contempt.

    Good luck and I hope you can change the course of the Titanic.

  7. Matt Stigliano

    October 2, 2009 at 7:23 am

    Jeffrey – You first line sounds like the new NAR commercial (that has yet to be made): “Matt, NAR is really all of us.” I certainly would like to think so and this will give me the opportunity to see that for myself.

    Todd – First, thanks. Second, your answer is obviously something I agree with. I’m a big fan of the “new agent” – and not just because I am one, but because they represent an opportunity to look at things from a fresh perspective and sometimes in their naivety they might ask questions that might solve the problems. It will be interesting to see how other committee members react to the idea. One thing is for sure, I plan on making the most of it and trying my best to learn, add what I can, and have a good time doing it.

    Vicki – One of the things I’ve sort of “fought” against in my time as a real estate agent is the concept of new vs. experienced. I will never knock an experienced agent for working hard and getting where they are, but I’m always the first one to mention some of the shoddy work I’ve seen out of some very experienced agents. I really think experience has little to do with competence. That’s not to say that all experienced agents are incompetent either! There is a certain “I’m new and don’t know if I fit in” kind of state that new agents go through – which I think helps weed out those who will last and those who won’t. Real estate is a pretty tough career to start, but once you get that confidence that says “I do belong here” suddenly it all starts to flow a little better. Perhaps this move by NAR will help showcase this to newer agents and they will be more likely to step forward.

    Carolyn – I would have never thought of stepping up had it not been for the Google/Scraper saga. I really owe much of my fire when that happened to Jay Thompson and Paula Henry. They not only showed me what was going on in the Associations/Boards, but made me realize that sitting and crying about would do no good. My own “fire” was only fueled when I spoke about it here on AgentGenius and I saw how everyone was encouraging and wound up giving me tons of advice. Benn and Lani were ultra supportive of me in it and seeing as how I think of them as a mom and dad figure to my real estate career, it only made me more determined. I hope that I can add some real quality value to the committee and NAR in general.

    Jim – I’m curious – how long have you been a member? One of the things I know about NAR from reading, listening, and asking questions is that it is a slow-to-change behemoth of an organization. With so many members, I imagine it’s hard to please all of the people all of the time, but I don’t think that should ever act as an excuse. I’m hoping to learn a lot so that I can understand how it works and will most certainly encourage and positive signs I see. I remember thinking that bringing Todd in was a good idea, but also worried (publicly) that it might soften his voice. I don’t think it has, although I do remember thinking some of his stuff seemed a little to “company line” once or twice…and spoke to him in regards to that as well (right here at AgentGenius). What I applaud is that NAR knows I can be vocal about what I don’t like. In some ways they take a risk with someone like me, because I’m not going to report back and say “everything’s fine” if it’s not. I think they know the value in that though, both from a “change” standpoint and a “PR” standpoint. Taking on Jay Thompson was a great example of that. Jay’s a mouthpiece for no one except himself (and those he chooses to be one for) and I give him a lot of respect for that. NAR knew his feeling on the MLS and invited him to engage rather than to wish he’d shut up. That is most certainly a step in the right direction.

  8. Joe Loomer

    October 2, 2009 at 8:52 am

    Matt – which committee where you invited to join?

    I can’t think of a more positive voice out there for us. NAR’s involvement in the MIBOR debacle left many of us scratching our heads and wondering why good decisions can’t be made quickly. Hence the perception of this lumbering behemoth unable to take a stand and be the voice of the agent vs. the archaic cronyism with its own set of rules (rules that do not seem to be in lock-step with NAR’s blurry visions).

    With the Matt Stiglianos and Jay Thompsons getting a foot in the door, the future’s so bright, I gotta wear shades

    Navy Chief, Navy Pride

  9. Jay Thompson

    October 2, 2009 at 9:43 am

    “Is NAR moving in a good direction?”

    That they are moving at all, and taking a BIG step they never would have before has got to be a good thing.

    “Is it a good idea to let less experienced agents loose on NAR committees?”

    Absolutely.

    “Have I made a good decision by accepting the invitation?”

    I certainly think so!

    “Can I add something to the conversation?”

    Of this, there is no doubt.

    Welcome to the machine Matt. And thank you.

  10. Missy Caulk

    October 2, 2009 at 10:03 am

    Matt I am excited for you and NAR. My daughter is going to be on that committee, so I KNOW you all will have fun and shake things up.

  11. Benn Rosales

    October 2, 2009 at 10:09 am

    Old school wisdom mixed with new school methods – listening on both sides of the coin is where the magic can happen, somewhere in the middle is something very special.

  12. Jim Reppond

    October 2, 2009 at 10:17 am

    Matt – I’ve been a hostage (ummm….member) of NAR for the last 8 years. Although, since I haven’t taken the online multiple-choice Realtor ethics class lately I might be lying.

  13. Atlanta Real Estate

    October 2, 2009 at 10:54 am

    Matt:

    That’s awesome. You wanted it, noe here it is. Don’t waffle – go for it.

    Even if it does not end up being a path you ultimately want to pursue, you will gain the experiences and know you made the right choices.

    Maybe you will love it and move up the food chain and that would never happen if you didn’t try it in the first place.

    Go4it!

    Rob in Atlanta

  14. Dave Phillips

    October 2, 2009 at 10:58 am

    Matt, the rumors of NAR’s demise have been greatly exaggerated. They are trying to get someone like you involved in every committee. While they/we might not move as fast as bloggers would like, they are moving in a direction that I think is very positive. It will take a while to turn the Titantic, but you (and others) will provide a lot of help. I think you will find that they are starving for new ways of thinking and will readily embrace your ideas (even if they do not approve them right away – see recent indexing issue as an example). Thanks for being willing to participate.

  15. clint miller

    October 2, 2009 at 11:09 am

    I, for one, welcome this entire concept with open arms!! And, quite frankly, it’s about time. 🙂

  16. Tim McDonald

    October 2, 2009 at 11:19 am

    Matt,
    Less experienced agents bring a fresh perspective that most people tend to lose the more “comfortable” they become with their career. I’ve found this true in just about every job I’ve had. When I first start I am full of ideas, most of which never happen, but at least it gets people thinking. I think that’s the best part of getting involved.
    I joined the call after REBCChi and joined 2 committees on the local association level. Going to my first meeting for one of them today! Keep up the great work and have fun at BlogWorld09!

  17. Bob

    October 2, 2009 at 11:36 am

    Good job, Matt.

    “While they/we might not move as fast as bloggers would like,…”

    Dave, NAR does not move as fast as most of its members would like. Those members blogging are just the ones that get heard. Matt proved that.

  18. Tina

    October 2, 2009 at 12:41 pm

    Matt,

    Thanks for this timely post. It is definitely a move in the right direction. VAR (the Virginia Association of Realtor’s) did something similar last year and we have been having a lot of fun walking into committee meetings with our netbooks and iPhones, twittering and shaking things up.

    Tina in Virginia

  19. Drew Burks

    October 2, 2009 at 12:45 pm

    Matt,

    Congrats on your invitation to join the NAR Committee. I just rec’d mine yesterday also. Looks like we will get the opportunity to work together and become friends in 2010.

    Let me know if I can support you in any way. Have a great weekend.

    Drew Burks – Broker
    San Diego CA

  20. Daniel, The Real Estate Zebra

    October 2, 2009 at 1:11 pm

    Congrats, Matt. Being an incoming chair of an NAR forum, I talked with Todd and NAR folks about this quite a bit. It think their efforts are both sincere and long overdue. I know that having folks like you on committees will stretch the organization in ways that it has never been stretched before, and that is most certainly a good thing.

    Rock on!

  21. Todd Carpenter

    October 2, 2009 at 3:10 pm

    >>” I talked with Todd and NAR folks about this quite a bit”

    Daniel, Jay Thompson and Jim Duncan were all a tremendous help in the effort to push this pilot program forward. Both in their advice, and in the examples they set by serving. Thanks Guys!

  22. Susie Blackmon

    October 3, 2009 at 3:21 am

    Long overdue. Congratulations! It’s obvious you have much to offer.

  23. Matt Stigliano

    October 3, 2009 at 11:15 am

    Joe – I’m very excited to see the actual workings of the committee – not just the “what we need to do”, but the “how we do it.” As you mentioned the slow reaction of NAR in regards to MIBOR seemed to leave many scratching their heads. It seemed like it was going great and then the brakes hit the tires and we wound up at a standstill with little to show for it.

    Jay – I’m sure I’ll talk your ear off in Vegas about it (which by the way, I can’t wait for). I asked most of those questions in the rhetorical sense. I knew what I thought, but of course, having just been asked to join I was a little on the biased side. I was also curious to hear from the people that have more or less helped make me the agent I am today.

    Missy – That’s awesome that she will be there too. At least now I know I won’t feel too new, as I’ll at least have someone to talk to on day one with a common link.

    Benn – I definitely think there is always something to be learned from both sides of any coin. I read blogs that I disagree with all the time and then go back for more. Why? To understand why someone might see if from that side. Sometimes, my opinion shifts because I read something I may not have thought of before. (Go see my comment on your post about social media strategy – having fluidity is useful in many places in life.)

    Jim – I’m going to guess you’re not a big fan of the Ethics course then. I took mine last year and was pretty shocked at how it was done. Education is constantly debated here (and everywhere else) and I hope perhaps some of those that wind up on the committees affecting education (and ethics) might be vocal about that. If we’re going to get the respect we clamor for as Realtors®, I think this would be a huge task to take on to help improve upon that.

    Rob – There is certainly no waffling here. I did want this. And I’m going to take it and see where it leads. I’m chomping at the bit to learn and know more already. I’m very thankful for NAR picking me (and some of the others they’ve picked as well) and more than happy to do my best and tell others about my experiences.

    Dave – In my limited experience with the Association itself, I have always thought that the problem may not lie within what it wants to do, but rather with what it takes to get it done. That’s not to say that every choice they make is going to be stellar (especially since we all have so many differing opinions), but perhaps if the process is improved, along with good ideas going in to change/create/adapt policy we might come out the other side with a amazing Association.

    Clint – When I saw your name, I was pretty sure of what I would read. I know you’re big on the idea of new ideas, strange ideas, and taking chances (that are calculated risk). You’ve never been one to act as if someone’s lack of experience should stop them – instead, it should fuel them.

    Tim – I have often “spoken out” on the subject of experienced vs. inexperienced and what it means. Of course since I am a new more-inexperienced agent (in terms of years and transactions), it often sounds like I’m just defending my newness I think. Although I am, I also disagree with the idea that only a well-experienced agent can perform this or that task. To me, the best thing I have is the ability to come to the “experts” and ask them questions so that I can a) get the answer I need to perform a task and b) learn.

    Bob – I think bloggers are always seen as wanting everything quicker, but only because they’re the first ones to react in a (large) public manner. Because I can write a blog post the minute an announcement is made, I am capable of being the “thought leader” on a topic, while those who don’t blog are probably having the same thoughts, but can’t get them into the public view without sending them out via Pony Express.

    Tina – One thing I’ll be curious to see is how some of the tech-solutions might affect future NAR meetings. At the speed with which a tweet can spread, will they need to control it in order to be sure that the correct facts get out there? Remember how bad the twitter-spread of the changes to the First Time Home Buyer Tax Credit (saying they were allowing it to be used as downpayment) were? In one day, we caused more problems than we solved. HUD and NAR both had a headache on their hands and a lot of agents had some explaining to do.

    Drew – Well congratulations to you as well! What committee will you be on?

    Daniel – What committee did you get @LilZebra on? Seriously, since you were one of the people that helped make this happen, I thank you. Forward thinking by others may be the catalyst to more new thinking. I like that. One of the things I wonder is what will be the effect of people being brought in instead of people working to get there. Will the “selected” members have a different sense of purpose? Will they take on the task with a different view? For me, it was a goal, but not for a few years (after I had built up some experience at the local and state levels), but because I’ve been given the chance, it becomes less of a goal and more of an honor. Because of this, my purpose in being there seems more important to me than had I worked towards it if that makes sense. I don’t know the committee members that are out there in the system already, but is it possible that some of them are doing it for career more than purpose (I wouldn’t dare suggest that all of them have that goal), but since there was a group selected, we might feel that we have to “perform” in order to honor the privilege of being asked to serve. Just a thought that popped into my head.

    Todd – Well I’d most certainly like to thank them all, as well as you and anyone else that was involved in this idea. Obviously, I benefit from this decision, but I must say even if I hadn’t been selected, I’d be applauding this move. I hope that it proves to be a good one for NAR so that it might continue.

    Susie – Thanks. I hope I can offer something new and learn a lot. I’m really excited by it and can’t wait to get started!

  24. Joe Spake

    October 3, 2009 at 11:16 am

    Matt, congrats and good luck. NAR is finally realizing that they can’t continue on the old school track. I know you will be a strong voice on the committee.

  25. Bill Lublin

    October 3, 2009 at 10:36 pm

    Matt: Congratulations- I am so glad that you were one of the folks tapped as part of this initiative- and I’m so glad that you’ll get to participate in the process. The most unusual part of this process is not just the new voices (they’ve always been welcomed) but the fact that NAR went to ask people to serve instead of waiting for them to volunteer – hopefully stirring others to make the request – you don;t need to wait to be asked to be welcomed as a new voice.

    Look forward to seeing you at the national meetings –

    Jim; Why would you brag about avoiding the quadrennial ethics training? During your 8 years in the Association, there have been lots of changes to the code of ethics- In fact I am in Chicago this weekend working with a sub-committee that crafts those changes and discuses them with the Professional Standards committee during the annual meetings. So why is avoiding that requirement something that you would boast of in a comment? Don’t want to pick a fight about it, but if you’re proud of being a professional (as you seem to be) why wouldn’t you want to be current on those things?

  26. Jim Reppond

    October 4, 2009 at 9:24 am

    Bill – Gee, I didn’t mean to come off as “bragging”, but I DID mean to come off as cynical. You you REALLY think you can teach ethics via an online multiple choice class? Gimme a break!

  27. Matt Stigliano

    October 4, 2009 at 10:06 am

    Joe – I definitely will do my best! If I don’t you can personally call for my impeachment.

    Bill – Perhaps one of the things NAR could do to improve volunteerism is to push this new idea as well as making the committee sign up seem a little less daunting. I wanted to give committee membership on the national level a try, but unfortunately it seemed that the cards were stacked against me in terms of experience on the state and local levels. I can see why NAR would prefer someone with some experience in these areas (much like being President, it’s obviously preferred if you’ve done some government work on state or local levels before you get there). That’s why I didn’t volunteer this year, but instead worked to move into state and local. I’ll be curious to see if the national work I do gives me a boost to the other two (I would suspect it would).

    As for the Ethics issue regarding Jim’s comment, I would like to see the questions become a little tougher. I took my quadrennial online class and found it to be pretty easy. Ethics is a difficult area and perhaps we should be tested at a higher level in order to raise the ethics to a higher standard. Perhaps if you fail, they can push for a mandatory class that you must take or a more in depth class lasting longer and covering more points of ethics would be made available to help strengthen those skills for the future. I would gladly welcome a change like that.

    Jim – I admit, I’m not a huge fan of the online courses overall after having taken one. I found it to be a little too easy. I do see Bill’s point though that admitting to it (whether bragging or not) on a public forum doesn’t look good. Instead of laughing at it and mocking it, perhaps you can speak with Bill about things to do to make it better. I know Bill listens to a lot of ideas and he’s one of those that would love to see the Realtor® public come away better, smarter, and more ready to take on the world of real estate.

  28. Bill Lublin

    October 4, 2009 at 10:44 pm

    Jim – I agree that the Quadrennial ethics could be ( and should be) tougher, but the sheer scale of trying to get over a million people to do anything is somewhat daunting – especially when the enforcement part is through tons of local associations across the country. we’re only in the second cycle of the project, and there is already a workgroup that has been trying to address the concerns that you and Matt (and I) all feel need to be addressed. That said, I appreciate the challene of distance testing though I am not a big fan of on-line exams myself.

    Matt; I think that NAR leadership was sensitive to the daunting application process, and thats why they’re reaching out as they are. I am so excited that so many new faces will be in the mox, and will have the opportunity to participate- and I look forward to NAR leadership working in the direction that that have been working on through Presidents Gaylord and McMillan and our incoming President Vickie Cox-Golder (all of whom have been instrumental in this process of change and engagement.

  29. Keith Lutz

    October 4, 2009 at 11:04 pm

    Congratulations Mike! I think this is great that NAR is doing this. I am new to AG, so now I have alot of catching up to do on my reading past blogs and what has inspired you!

  30. Paula Henry

    October 6, 2009 at 11:25 pm

    Matt – You have been a consistent source of encouragement and no doubt have jumped in with both feet. Congratulations! NAR is definitely moving in the right direction, they chose you 🙂 Best!

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Residential

Short sales: the top 3 title insurance troubles

Short sales are not without challenges, but knowing the answers to the most common obstacles and questions can aide in a less stressful transaction.

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The importance of title insurance

When my husband and I purchased our first home, I was very young and very green. At the closing, our agent passed us our title insurance policy and said, “Put this in a safe place, and do not EVER throw it away.” At the time, I had absolutely no clue about title insurance, why it was important, and how it could save you from a world of trouble.

Decades later, working short sales, it’s the title reports and those dreaded liens that seem to be what gets us into all sorts of trouble. In fact, most of the reader questions that I received this past week related to title woes.

Three common short sale questions

Question: When I run the Statement of Information for my seller, it comes up with a child support lien and a mechanic’s lien. My seller says that he is aware of those liens, but has no money to make good on those debts. What should I do?

Answer: In short sales, the first lien holder will authorize funds from the proceeds to pay off a variety of expenses associated with the sale. These include commission, settlement fees, title insurance fees, and other mortgage liens. However, it is extremely uncommon for the short sale lender to offer to pay off a seller’s personal debts. Before you spend months and months processing the short sale, I’d strategize to ascertain whether you will be able to help the seller make good on these debts prior to closing. Otherwise, you should probably run like the wind.

Question: I am dealing with the IRS on a tax lien that needs to be released prior to short sale closing, and the IRS won’t budge. What should I do?

Answer: First off, it’s always a good idea to get non-institutional liens released early. At the time that you take a short sale listing, work with the title company to run a Statement of Information on the property owners. That way, if something comes up (like an IRS lien), you have plenty of time to work it out.

Generally, the IRS and the state tax authorities have mechanisms in place to remove these liens from title at no charge, since there is no equity coming from the sale. A tax attorney can guide you through the process. However, ask your title officer or title representative if they can work with you on this problem. The good news is that some title companies can help agents and you can avoid working with the IRS.

Question: I have a second lien on title with Chase Bank. Yet, when I contact Chase Bank, they tell me that the loan has been charged off and I need to contact the company where they transferred the loan. However, they do not have a record of where it was transferred. I’m between a rock and a hard place. What do I do?

Answer: This kind of chaos happens all the time with short sales, and it is very frustrating. Generally, if you contact the executive offices at the bank where the loan was held originally (in this case, Chase Bank), they can have their research department obtain information about where to call.

Another option might be to ask the lender for a “zero demand”. If they charged off the loan and show a balance of zero, then maybe they will send a zero demand and not further short sale negotiation would be necessary for this lien. Hey… without a second lien on title, maybe this won’t even be a short sale any longer!

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Coaching

How to avoid short sale buyer frustrations

Minimizing the frustrations that come with a short sale is often seen as a mythical possibility, but with these simple tips, any short sale transaction can go more smoothly.

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Short sale frustration all around

Representing a buyer in a short sale can often be very frustrating. Primarily, that’s because of the unknowns associated with the short sale transaction. For one, nobody knows how long it’s going to take to obtain short sale approval. Actually, you don’t even know if you will get short sale approval. Not only that, but you also have to wait a fairly long time to learn the approved terms of the purchase. It’s frustrating to wait and wait, and then learn that the direction of the short sale is not the direction that the buyer is interested in taking.

Good communication is the key to short sale success. It’s vital for short sale listing agents to make communication with the buyer’s agent a regular and systematic part of the week. No matter how insignificant the short sale task, it is important to communicate with the buyer and the buyer’s agent and let them know that there are baby steps towards short sale approval.

One significant step towards short sale approval often comes after the bank’s valuation (BPO) when the bank makes a counter offer. Depending upon the short sale lender, this counter offer can come via email (in an email message), via telephone, or through an online platform such as Equator.

And then there are the counter offers…

Buyer’s agents and buyers often request to see the counter in writing. However, depending upon the short sale lender, this is often just not possible. Bank negotiators have contacted the short sale agent via phone, reviewed the settlement statement, and alerted the short sale agent as to what they will approve and what minimum net they might take accept in order to move forward with the short sale.

Since these counter offers usually do not come in writing, it’s important for the buyer’s agent to set the buyer expectations accordingly. Make buyers aware that there is lots of ‘verbal’ back and forth during the process. Many times it is only the short sale approval letter, the document that allows them to close, which comes in writing.

If buyers are willing to wait and keep the faith and understand that this process is a little more challenging and unique then most, they may find that they are getting a great deal on a wonderful property—often in better condition than the abandoned REO down the street.

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Coaching

Short sale: are there situations when agents can’t earn a commission?

Short sale: are there actually situations where an agent would not get paid? There are some complicated situations when it comes to short sales, and we address one here today.

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A short sale listing agent recently reached out to me to ask whether an agent principal can earn commission in a short sale transaction. This agent, Agent Alice*, was told that there are certain situations where licensees cannot earn a commission when buying a short sale.

The question:

Agent Alice received an offer on her listing from Agent Alex. Agent Alex is both the buyer and the principal. Agent Alice wanted to know whether the bank would pay a commission to Agent Alex at closing, since he is both the buyer and a principal.

The answer:

All of the major lenders including Fannie Mae and Freddie Mac employ some sort of arm’s length affidavit in which the buyers, the sellers, and the agents acknowledge (often in front of a Notary Public) that none has a business or familial relationship with another party outside of the transaction. Between this affidavit and investor guidelines for short sale commission, it is uncommon for the short sale lender to permit a commission to be earned by an agent principal.

Agent Alice then asked me whether Alex’s Broker, Broker Bob, could represent Agent Alex and earn a commission. While I do not work for the short sale lenders and cannot predict each short sale lender’s response, I’d say that it would be best to avoid this scenario, since the two have a business relationship outside of the transaction.

My two cents:

When I recently posed these scenarios to a group of agents, many shared creative ways to obtain a commission for Agent Alex. Remember that any creative solution whereby Agent Alex earns commission must also show his commission on the HUD-1 that is approved by the short sale lender prior to closing. As such, it is highly unlikely that there is a legitimate workaround for this problem.

The solution:

The easiest and safest way for Agent Alex to purchase Agent Alice’s listing is to seek representation outside of his brokerage. Not only will this assure that the buyer’s agent earns a commission, but it will also assure that all parties comply with the requirements of most lender short sale addenda.

 

*The names of the agents and the brokers in this post are pure fiction. Any relation to real listing or buyer’s agents is merely coincidental.

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