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Vicky Chrisn…, Real Estate Pro in Purcellvile, VA

What experience do you have with "professional" short sale negotiators?

Asked by Vicky Chrisner, Purcellvile, VA Thu Dec 11, 2008

Looking for insight (mostly from agents, but consumer comments are welcomed, also) about what "professional" short sale negotiators you've used or been introduced to, what, if any benefit you have seen from using them, what the down sides are, etc.

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I'm not a realtor as you already know from some of our previous dialogs. I'm also not an attorney (this disclaimer will make more sense later).

Sometimes working with a specialist can really help one to save a lot of time and effort. Short-selling is a niche area of real-estate that IMHO requires a specialist, because there are so many moving parts and pieces, hard deadlines, and ways to get burned dealing with them. Check out Tina C Wong's and Frances Flynn's Trulia profiles and answers. I know how to work with short-sales (usually pre-foreclosures), foreclosures, and REOs; and I can also tell they know what they're doing by their comments.

Handling a short-sale isn't rocket science--although it would be much easier for me if it were--rather it's just a tedious, mind-numbing process of dotting every 'i' and crossing every 't'. Handling a short-sale consists of several steps: 1) negotiating with the seller and lender, 2) navigating and filling out the short-sale package (which is an art in and of itself), 3) collaborating closely with a title agent and/or attorney (often to help identify and remove each lien on a property one-by-one), and 4) working with a real-estate attorney to ensure one doesn't violate any "foreclosure consultant" laws (in states that have them). That's the bird's eye view, and the devil is in the details. Matters become even more complicated if the seller has already filed (or is contemplating to file) for bankruptcy.

My point is if you (or other agents) haven't handled at least 10 of these, then you (or they) should probably get some help to ensure that you don't overlook something. I've heard of several cases of a bankruptcy judge reversing a short-sale over minor details; keep in mind that a bankruptcy judge has the power to rollback any and all transactions +/- 6 months before the initial filing and after the gavel has fallen.
1 vote Thank Flag Link Thu Dec 11, 2008
My experience has been that this does not close the deal any faster. On the contrary, it just adds another layer to an already complicated transaction, and in some cases, it can actually gum up the works. Here’s why:
• The average short sale negotiator gets about $1K per closed transaction, some a little more, some a little less
• If you figure that the costs of running a business is about 20% (phones, internet, computers, office supplies etc), a professional negotiator would need to successfully close 100 transactions a year to make an annual salary of $60…IF he or she closed 100% of the transactions, which just does not happen.
• For argument’s sake, let’s say they close 80% which is pretty darn good. That would mean that in order to make a half decent living, the negotiator is working AT MINIMUM, 125 transactions a year!
• Since the average SS transaction takes over 4 months to close, it’s safe to say that in this case, the “professional negotiator” has 40-50 open files on his desk at any given time! How is that beneficial to the buyer OR seller???

Now, you might make the argument that a professional negotiator has better systems than the average Joe, and that may be right, but no system can add hours to the clock! SS’s require babysitting, thinking outside the box, and sometimes just sitting on hold for very long periods of time. There has to be a compromise somewhere, and that may be your file!

I’ve also heard the argument that PN’s establish relationships with the bank’s negotiators and therefore can cut through some of the red tape because of this unique relationship. While that may be true in some cases, it can also be a determinate:

• Sometimes familiarity breeds contempt. One bad day, and you’ve made an enemy
• Bank negotiators burn out quickly! I’ve had cases where I’ve gone through three bank negotiators on one file.

• Sometimes the relationships get too chummy and the respective negotiators play “Let’s Make a Deal”. Your file might get sacrificed in order to push another through.

I close over 90% of my short sales because I do my homework before I take the listing and I don't overwhelm myself by taking on too many.
0 votes Thank Flag Link Sun Aug 16, 2009
Just from a stand-point of time management it makes sense to delegate to somebdoy who is office bound and can be on hold for long periods of time. Maybe a negotiator can also establish relationships on the bank side, be in a settlement company and cover that part of the requirements.
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0 votes Thank Flag Link Mon Aug 3, 2009
Great answer Dp2!! I am telling you out of my experience- I always like to hire someone who earn"their Bread" by doing what they are doing. I firmly believe in that. I tried 2 cases in 06 and figured, I can't speak banks language as efficiently plus putting in 45 minutes of hold at dinner time (since lender in west coast) , I attended few seminars to figure out what will work for me. Since then I have been doing short sales and actually understood the process more closely rather burning myself out of it. Now Cindy I agree it does add a layer but depends how efficient that layer is; changes everything. Short Sales do take longer - but tell me other than REO's and Short Sales - what else is selling so it will be wise if buyer and listing agents both put some energy to educate themselves and the client ahead!! Most often I see low knowledge or the client with a rush putting on short sales get frustated.
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0 votes Thank Flag Link Thu Dec 11, 2008
I've been on the buyer side of the transaction and didn't find it to be in more efficient. In fact when I would call the agent to ask questions they had no idea and always had to "get back to me". It seemed to put another layer in the transaction and it didn't shorten the process. We gave up after 60 days and I saw that the property took about 120 days to final settle.

As a listing agent it is more money out of your pocket to pay the negotiator and I'd like to see the statistics to show that a "professional" negotiator gets the deal done any faster than a diligent agent.
0 votes Thank Flag Link Thu Dec 11, 2008
Worked for me pretty well
0 votes Thank Flag Link Thu Dec 11, 2008
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