This is not to say that it is easy. Short sales are still a mine field to negotiate. Some of the "streamlined" processes actually create additional problems, such as an over-reliance on AVM's (Automated Valuation Models) as the instant validation of an acceptable offer. These AVM's are close - sometimes, and WAY off other times. Many banks plug the offer price into the HVE and if it doesn't spit out that the offer is "acceptable", they reject the offer, and if the sale date is close, will often just take the property to trustee sale. End of story.
Know this: they can be challenged. Freddie Mac uses the HVE: Home Value Explorer. Their loan servicers don't HAVE to look any further than running the number by the HVE. In fact, Freddie Mac told me that directly. If it's way off, however, they do have the **option and authority** to order a physical interior BPO. (though, they will often tell you otherwise) . One just has to be insistent in a polite, collected and persuasive manner. They CAN and WILL do a BPO if you can demonstrate effectively that the situation warrants it. If you're just whining, and trying to convince them to take a low-ball offer - you should, probably, try harder to get an offer in the fair market value range.
Some excellent short sale negotiators have been "born" through this trial of fire with the foreclosure market - many agents are choosing to turn the negotiation over to a specialist. As I mentioned before, I have an in-house specialist, whom I adore - but I've also recently worked with another agent's favorite negotiator (reluctantly - in truth) named Josh Culver , who is excellent as well. (btw - I have nothing to lose or gain by recommending Josh - he just did a great job!) We have a very competitive, multiple offers market, so his market strategy includes having the buyer pay his fee - since the seller (short sale lender) won't, the owner, usually can't and reducing commissions down to 1% doesn't make sense for the agents either, and results in counter-productive marketing. In a recent escrow, we had the buyer pay the 1% fee - but asked the seller (short sale lender) to pay 1% of the buyers closing cost so it was a wash. Funny, the banks will pay some closing costs, generally, but they won't pay the same fee if it's labeled: "short sale negotiation fee". They have guidelines - and if their guidelines say "No warranties - no 3rd party fees" - then shift the money around and structure the deal in a way that fits their guidelines. It's not that the banks are being unreasonable - they just can't function if they have to re-invent the wheel for each and every individual circumstance. It's our job, as agents, to figure these things out, and structure the deal in the clients best interest, n'est-ce pas?
I would recommend before anyone jumps in bed with a short sale expert that they ask some very pointed questions and get some intelligent answers before handing over the reigns. (as a consumate control freak - I would insist upon it!) If they can't tell you what the bank's process is...how long it should take, when to know if it is taking too long and what to do about that - I'd personally move on. There are still many agents who B.S. their way through and stumble onto the path by accident. There are plenty of folks with 1.5 short sales under their belts who now know everything....hmmm. I'm not saying everyone should have hundreds of shortsales to their credit - but if one doesn't have the experience...maybe one should team up with someone who does?....just a suggestion...
I appreciate the chance to exchange some strategies between agents here - I think it's helpful - we're all in this together, and if we genuinely help each other, all of us are going to make it out of this foreclosure crisis sooner than later. Likewise - I appreciate it most, and encourage my fellow agents to submit insider tips and helpful info rather than launch into self promotion and links to one's short sale advertising pages... seems a little...icky...to me? Let's remember - this is a forum, not a commercial.
Jeri Creson, Broker
TotalAccess Realty Advisors
* We are NOT seeing any big surge in Short-Sales. They are plodding along of roughly 12-17% of our monthly sales being SS. Our high has been just over 100 back in July but that's now fallen to 80 (17%) in September with total closed sales of 468.
* Our Continue to Show status (CTS) however shows some 1150 listing in this status with a whopping 650+being short-Sales!
* In our MLS we are seeing agents using an escrow/title company (we're in Northern California where they are ONE and the SAME!) to allegedly "negotiate" the SS. However, in California you must be licensed or an attorney to do this. The title company charges $1200.00 per deal which Lenders are not want to pay so the listing agent states, "Buyer to pay $1200.00 to _____title company for short-sale escrow" which fries many of us who don't like a previously agreed to business fee being dropped on our buyers!
* Also, the listing agents are throwing in interesting phrases to split brokerage fees. One guy stated, "All fees to be split 50/50 with Selling office receiving a maximum 2.5%"! Now what's up with that! Many of these folks are getting as much as they can and capping the Selling office brokerage fee. They usually state "we're doing all the work" not having an ounce of empathy for the Buyer's Agent who has written 15-20 offers for this ONE client!
* Our issues usually come down to the dreaded "Approval--subject to the following" letter. Most often it is the unsecured, or worse, a cross secured note wherein the lender is demanding a large note for the "forgiven â€œdebt.
* We have also had the lenders stating they will seek recovery even after our attorney has confirmed the non-recourse of a note. Thumping their chest doesn't do anyone any good!
Great answers so far. I agree with Jeri, this is a FORUM and NOT a COMMERCIAL! Many who lack the nuances for social networking make this mistake. As Ricardo Bueno states, "I just want to shake your hand but youâ€™re jamming your tongue down my throat!"
You are the short sale guru ... but I see a lot of other people now specializing in Short Sales, like in my area we have The Short Sale Company who I just had a cross transaction with that closed. Its a tough game for many, no doubt.
Many agents and brokers just shy away totally. It can be one of the MOST frustrating transactions to ever deal with, and up to 5 months to close whereas the normal transaction averages 4-6 weeks. Crazy.
I will take them all on. We close maybe 50% it seems to me, it would be a lot more but you cannot always control your own clients and the Lien Holders response. Mostly its just learning the ropes, what to do.
I do not solicit other agents or brokers to get their short sales with a split, like some do, but its ok to do that if thats your game. However I do share some info on what a short sale is all about at:
Once you have learned all the facets and requirements, you may want to just refer short sales out to agents who specialize in them like Greg or others. Those that get the hang of it may just want to do their own and play the waiting game. To me..? Its just business.
Don Sr. / Broker
The seller I am trying to buy from bought in the nineties when house prices were lower than today's value.
But she is upside down because the house was used as an ATM cash machine, Cash out refinance after cash out refinance.
These kinds of sellers (and their listing agent) will get you into a contract as a buyer and waste your time and money.
Then the seller will cancel your deal at the last minute, after you have spent money on appraisal and inspections. The reason? Seller learns that B of A does not formally forgive the debt owed in writing. Something her listing agent could have told her was probably the case eleven months ago.
Ask your real estate agent to screen any short sale for the rare short sale that is saleable with cooperative banks and willing sellers. Odds are, you are better off buying a repaired flip house, or a move in ready bank foreclosure than a short sale.
Percentage wise. I listed two short sales this year. One sold, (Chase, single loan, deficiency balance forgiven, 24 hour approval, excellent buyer) the other is now lender owned (Cooperative lender and seller, timid buyers)
When I did not control the listing, I have had perfect buyers, but been at the mercy of listing agents who did NOT properly screen their sellers for willingness to pursue a short sale to conclusion.
A new corollary to this thread is: " What percentage of short sale listings do you turn down. because the seller is not qualified, or willing, or you know you have an uncooperative bank? It is linked below:
I lost a few buyers in the process and had to put the listings back on the market a few times, but after a lot of hard work and patience the properties sold at the short sale.
The real challenge is when there are two loans on the property. You start with the first lender. They do not respond quickly and in a declining market, the value of the home goes lower than the offer that was received. The lender wants to do 2-4 BPO's on the property. If the BPO comes higher the buyer backs out. The roller coaster starts again. You look for a new buyer, the buyer offers a price that the bank wants, the bank takes a while to look into this offer and finally approves it.
Now you are ready to negotiate with the second lender. They demand that the first lender pay them $10k. The first lender only agrees to $2000-$5000. You go back and forth for a month and the buyer backs out again just when you thought you had done it this time.
Agents are so put off by the whole process that they don't want to sell a short sale listing. And then there are agents that will list it but are not motivated enough to follow up with the lenders. They think that the lender said they will respond in a week so even when they don't hear back, they do not want to call the lender again and in a short sales situation, as an agent you need to call the lenders every week and keep following up till the approve the short sale.
From all of this you can see the patience one needs in dealing with the challenges of a short sale. It just does not make sense as to why the banks cannot get their act straight and help in making the short sales easier since it is a win-win situation for them, and the seller who can avoid a foreclosure and of course the agent and the overall market since the foreclosure properties are bringing the prices down.
Help-U-Sell Achievers Realty
40083 Mission Blvd
Fremont, Ca. 94539
No one really had any idea that families would be losing their homes. My heart goes out to these families as we know this turn of events does not appear to be ending.
Susan Penn, PA, SFR, CDPE, EWM Realtor
It is irresponsible for a listing agent to take a short sale listing if they intend to outsource the negotiations to someone other than another agent on a referral basis. Attorneys screw things up. :)
Any consumer should consider this reality, and use caution on anyone claiming "X%" of our short sales close!
There is definitely no substitute for experience, and the best place to start is to find a good, experienced agent in your area to help with the short sale:
It does all start with finding a good agent:
All lenders will accept, based on varying issues regarding, policies (both internal and external), encumbarances, debt to be forgived, language of loan default, investor ratios, mortgagor solvency issues etc, will determine approval.
Frustrations - are based on the understanding the knowledge of the mitigagtion process of all parties attached to the outcome.
Experuiences - many.
Accomplishments - as in any real estate transaction having buyer and seller happy and me being paid.
Happy short selling.!
The most frustrating part to me now is waiting on the MI companies who hide behind closed doors, shields and anything else to keep from being discovered and will not speed up their process.
1. You were married to a real estate agent and you are a scorned man.
2. You could not pass the real estate exam.
3. You passed the real estate exam, excited to start your "career" in real estate, but figured out.... WOW!Clients actually have to like you to do business with you.
Bottom line is, you really have too much time on your hands! With ALL the amount of money you claim to have (I doubt anyone on here cares), why do you enjoy attacking agents here on a network site? Your remarks are arrogant, and you really do come across VERY ignorant. I doubt you have a PHD, but am pretty certain from your responses that Google is your ONLY and BEST friend! ~Bettina
Lots of short sales and REOs on the market, and it seems like there's houses being sold left and right.
When you take those properties out of the picture though - and look at the typical resales - you have the same property sitting around that's been here for a while now. You have the majority of people trying to hold on as long as possible - and hope to ride it out, a handful who are just tossing ridiculous numbers out there to see if they can get a bite at '06 prices, and a handful who are genuinely trying to sell thier house - but can't complete with the "deals" in the short sale and foreclosure market.
The reason sales are up in MY area is simply a "fire-sale" is NOW underway. This also applies to new construction as it does re-sale. The REO's are slashing and burning prices while the new home communities are doing likewise. But more telling is this--our Realtor Marketing Breakfast on Tuesday mornings tours the East side of town one week and the West the next. Historically we've always had more agents and properties participating on the East side but we'd get a good amount for the West. However, for the past 5 months our Westside tour has sometimes amounted to only a page or two at best, maybe 12 properties. 90% of the properties are REO/ShortSales. We have a ton of inventory on the Westside but the REO guys just don't PUT them on tour. When I start to see good old "homeowners (you remember those folks don't you??!!) once again selling homes on the Westside of Santa Rosa I will declare for all to hear--THE MARKET IS NOW MAKING A REBOUND!!
Until then, all stories on sales increasing are simply people selling to survive--before the Iceman Cometh!
good luck out there!!
I deposited my short commission check yesterday. - That is the positive side of the story. The negative is that it was ten times the headache of an average transaction. The other headache is that my commission was guillotined ( shaved is too soft a word for what they did to me )
One irony of the commission takeaway is that had the principals left my commission intact, and closed six months ago, they would have netted more to the creditors, and the buyer would have collected months of additional rent from the tenants.
The goal and result of cutting the brokers commission, was purely to punish the brokers for procuring a buyer. As long as creditor negotiators remain hostile to buyers and agents, I will continue to advise people that buying a short sale should be a buyers last resort.
The disincentives to both buyers and agents far out weighs the 2 to 3% discount from market value that can be squeezed out of a short sale. Although the addenda from asset managers on Bank owned REO's are also hostile to consumers, they are usually not as terrible as short sales, and the discount from market value can also be as high as 2 to 3%.
We've had some deals get approved with $250,000 short! There's a reason the "Debt Relief" Bill had a 3 year and $2,000,000 limit. I think those in the higher price points can hold out "longer" and have more resources than those in the lower price points. This has a ways to go!!
Every weekend when I go to show homes, half of the short sale listings my buyers want to see have sellers who 1> do not have lockboxes 2> do have restricted hours. Such as "showings between 10AM and 2PM, Tuesday and Thursday only" by appointment only. Must make appt through listing agent. It is not that I mind the extra work trying to set up those appointments (okay, I do mind) It does send up a big red flag that maybe these sellers aren't motivated.
It is ALL about having a good, experienced short sale expert to assist you. For no cost local short sale assistance, check out -
ONLY choose an experienced short sale agent with a proven track record. Check out -
Visit us at http://www.shortsellmyhome.net
So far 100% of all the short sales I have negotiated have closed.
Help-U-Sell Achievers Realty
40083 Mission Blvd
Fremont, Ca. 94539
It is good to find an experienced short sale agent first who knows how to get them done one way or the other:
Active Single family homes: 6,492 of these 1,722 are shorties and 495 REO
6 month solds:------------------2390--------------823---------------------------858
With some understanding of the duration of the shortie-to-close time required, we can see more than 50% are closing, a remarkeable change from 6 monts ago.
However, I will focus my energy on the bigger pie.
Past few years have been 30-40% then this past year with equator and reoprep managing the process I wold say 50 to 60% and it seems that lately I have been at about 80% so this is a sign that things are improving. I have to give a thank you to the folks at reoprep because they have assigned quite a few SS listings to me and have been a blessing to work with.
Lisa Allen, REALTOR, CDPE, SFR
Short Sale Specialist
At the moment we are having sucess with a little over 80% of our short sales.
Here is a hint to my fellow agents. Whether it is a Lender (Short Sale) or an Asset manager (REO) when they send their questionaire and want the Buyer's contact info (Present address, Phone Number, Email and my favorite - Social security number) they get My Officee address, my email, 555-55555 for a phone number ande 123-45-6789 for a SSN I learned a long time ago there unscrupulous people out there that wait for your buyer to wear down and the listing to expire and then resurect the deal after you are out of the picture
Coldwell Banker Vanguard Realty
Homestead Realty Inc