Real Estate Agents Must Remain Positive. After all, the new Short Sale regs are better than a sharp stick in the eye!!

By
Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372

HOW AGENTS CAN SUCCEED IN THE NEW SHORT SALE ENVIRONMENT.

1.  Attend as much CE for Short Sales and Foreclosures as you can.

2.  Qualify those buyers before writing offers.  The market favors cash, high down payments, etc., more than at any time in the past 50 years.

3.  Brokers should monitor agents' listings and sales more closely to avoid non-viable contracts.

4.  BE CAREFUL and do NOT become engaged in illegal activities involving "MORTGAGE MODIFICATION". 

THE SHORT SALES ARE GOING TO BE AROUND FOR QUITE A WHILE.  As more home owners with negative equity MUST sell, expedited Short Sale regulations will move the transactions along to closing faster than in the past.

Once a real estate agent or broker understands the background and practices of the banks and servicers in a Short Sale transaction, we can offer better services to home owner/sellers and home buyers.

The new Short Sale regs are better than a sharp stick in the eye!! 

LEARN THE NEW SHORT SALE REGULATIONS. 

Will the banks always follow the Short Sale time lines?  Experience advises us to not expect them to and prepare home buyers for the worst case scenario.  If a buyer needs housing soon, Short Sales are not a good option.

Understand that there are so many loopholes in these new "regs" that an
elephant could jump through them. 

Show me a normal transaction where the seller didn't respond to an offer to buy within 30 days and I'll show you a home that didn't sell.  Agents and consumers expect to close in a short period of time.   Banks do NOT.

The new and improved Short Sale regulations were most likely designed by entities who have no real estate transaction experience.  

Resign yourself to accept the fact that the frustration imposed on consumers and listing agents and buyer's agents resembles the infamous water torture process.

Experienced real estate practitioners know BEST PRACTICES and these new short sale "regulations" are not an example of best practices.  A very helpful article by Esku Kiuru gives some insight.

"FHFA – Federal Housing Finance Agency – had a friendly talk with Fannie Mae and Freddie Mac the other day and cajoled them into setting up firm short sale response time guidelines for mortgage servicers managing their home loans. . . . . "

This post inspired by Esko Kiuru, see:  FHFA nudges Fannie Mae and Freddie Mac into action on short sales

 

ADVICE TO REAL ESTATE AGENTS AND BROKERS. . . . Train, train, train.  The more you train, the more you'll understand the new Short Sale market and the better you'll serve the real estate consumer.


Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.


             

Home Buyers



"Honey, do you think we can close on this Short Sale before school opens?"


"I don't know Dear, our agent says it should take only 2-3 months or more but there are no promises."


 

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Rainmaker
158,289
Tina Gleisner
Home Tips for Women - Portsmouth, NH
Home Tips for Women

Sounds like you

re advising cautious optimism with a lot of education, both classes & hands-on ... to do it right!

May 20, 2012 05:51 AM #10
Rainmaker
640,856
Stephanie/Bob The Ruiz/Miller Team
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Lenn, great post.  With regard to the timelines you are so right.  We have seen so many programs on short sales and it seems only the banks can truly control the timeline.

May 20, 2012 06:31 AM #11
Rainmaker
592,490
Laura Giannotta
Keller Williams Realty - Atlantic Shore - Little Egg Harbor, NJ
Your Realtor Down the Shore!

I hate to be a cynic, but the banks will continue to do as they please.  We will continue to get training and the banks will continue to hire people that don't have a clue.

May 20, 2012 06:52 AM #12
Rainmaker
78,401
Manny Rosa
Rosa Agency - Belleville, NJ
New Construction - Union & Essex Counties, NJ

Realtors must get used to dealing with Short Sales, they will be part of our vernacular for many years to come.  I agree with you that training is crucial, and knowing buzz-words like "Escalation" and when to use them can be the difference between a declined Short Sale offer and an approval.

May 20, 2012 07:16 AM #13
Rainer
89,673
Bernadette A. James
Serving Sugar Land, Missouri City, Richmond and Pearland - Sugar Land, TX
Broker-Associate, Keller Williams Realty SW

Lenn, the short sale negotiating process is not for the agent who is faint of heart. With all the new regulations coming out it is absoulutely important that agents stay abreast and always be mindful to act in their client's best interest, The short sale bank is a totally different story.

Laura-I agree.

May 20, 2012 07:17 AM #14
Rainer
127,873
Ron Aguilar
Real Estate Buying Advice - Salt Lake City, UT
Mortgage & Real Estate Advisor since 1995

Feel good that the banks still pay commission on Shorts. If you hate selling shorts then get more equity listings. Many of my buyers on apartment leases are willing to wait for shorts, what does that say to you?

May 20, 2012 07:28 AM #15
Rainmaker
835,781
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
your real estate writer

While I agree that agents should learn all they can about dealing with short sales, I have to agree with Laura (#12) when she says the banks will continue to hire people who don't have a clue.

May 20, 2012 08:13 AM #16
Rainmaker
264,903
Mike & Eve Alexander
Buyers Broker of Florida - Windermere, FL
Exclusively Representing ONLY Orlando Home Buyers

Florida has a ton of short sales which unfortunately we show. The chances for the short sale are only as good as the listing agent...so I ask a lot of preliminary questions.  All the shorts sales we sold last year actually closed at around the 4 month mark...except for one. 

That one that did not close was a listing agent who hired a law firm to negotiate the short sale with an out of country selller. After 5+ months of getting answers that did not fit...and I insisted on the seeing the power of attorney letter.

I was sent a forged POA document and with forged signatures witnesses. 

Eve in Orlando

May 20, 2012 08:26 AM #17
Rainmaker
264,903
Mike & Eve Alexander
Buyers Broker of Florida - Windermere, FL
Exclusively Representing ONLY Orlando Home Buyers

...and let me add...in each short sale, the buyer came in at list price and in each case the bank asked for more money...once even $90k more than their own appraisal.

Eve in Orlando

May 20, 2012 08:29 AM #18
Rainmaker
827,414
Lyn Sims
RE/MAX Suburban - Schaumburg IL Real Estate - Northwest Suburbs of Chicago - Schaumburg, IL
Schaumburg Homes

I'm so sick of the whole short sale discussion. Nothings changed (they say it has) for the 3 years here on AR that I can see.

May 20, 2012 09:19 AM #19
Rainmaker
28,239
Georgia Perez
Windermere Real Estate / WSI - Seattle, WA
Broker, ABR, CNE, Seattle, WA 206-356-9872

Lenn, as always great advice. I do many, many short sales and am curious to see if much changes with the new regs. One can hope! In the past, I've closed one in as fast as 30 days - but have one now that is just closing after almost 8 months (it involved a bankruptcy too). Sometimes I ask myself why I do so many of them! Since so many agents really don't want to invest the time for often low returns, I kind of feel like those of us who have invested in CE and have tons of experience with them must continue to serve the people who need us!

May 20, 2012 10:04 AM #20
Rainmaker
362,227
Paula Hathaway, REALTOR, Sr. LBA,
Douglas Elliman Real Estate - Southampton, NY
...Finding Your Place In The sun!

Lenn: How timely and essential this post is! As you know, this particular market has not been hit as hard as other parts of the country but as time goes by and as the housing market continues it's malaise, we are seeing more and more properties hit the skids!  In terms of declining values, the natural by-product is a real need to sell, sometimes as a short sale--and we are starting to see more and more of those at the higher price-points. Prices have declined so much here that we expect a re-emergence of the buyer who is looking specifically for short sales. This information you have shared is critical, especially for those like me who have not seen the need in the past to know alot about short sales...Now is the time to get "with it" as you suggest in this post... Thanks for the valuable information!

May 20, 2012 10:32 AM #21
Ambassador
1,710,919
Margaret Rome, Baltimore Maryland
HomeRome Realty - Baltimore, MD
Sell Your Home With Margaret Rome

The success of a short sale is the relationship of the listing agent with the bank. Check out that listing agent before you enter into a contract.

Margaret

May 20, 2012 10:32 AM #22
Ambassador
2,424,385
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Bryant.  I agree and always vet the listing agent as well as the buyer.

Andrea.  I agree and have thought about the changes that banks have stuck us with on many occassions and it makes me sick.

Tina.  The operative word in "cautious".

Bob.  That has not changed or improved one bit.

Laura.  BINGO

Manuel.  Buyers who need a home are out of luck.

Burnadette.  Agreed.  There's no way to avoid them.

Ron.  It says to me that the banks never did, don't now and probably never will know how to sell real estate.

Marte.  I agree 100%

Eve.  Too bad the banks have no COE.

Lyn.  The timeline is slightly shorter, sometimes.

Georgia.  I hate what they have done to our industry.

Paula.  The short sales distort our market significantly.

Margaret.  HA!  I won't even show a short sale without vetting the agent and that doesn't guaranty anything.

May 20, 2012 11:13 AM #23
Rainmaker
280,101
Marnie Matarese
J Wood Realty - Sarasota, FL
Showing you the best of Sarasota!

The short sale is here to stay but I have become very particular about any listings I will take as well as any buyers I will work with to try and procur one.  If they cannot understand the process after my explaining it to them and have unrealistic expectations about any area of it, I leave the driving to someone else.  Great article!

May 20, 2012 02:32 PM #25
Ambassador
2,424,385
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Marnie.  Great comment and I agree. 

I have spoken with few (if any) buyers who understand the process.

May 20, 2012 03:22 PM #26
Rainmaker
1,273,656
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes
A great post.  I am not sure how some of these large brokers can monitor the work by the agents in their office.  I cannot watch my 6 kids, how could I supervise 40+ agents.
May 20, 2012 05:29 PM #27
Rainmaker
330,133
Jon Quist
LONG REALTY - Tucson, AZ
Tucson's BUYERS ONLY Realtor since 1996

Are the new "regs" even in effect yet? And the banks will have to be watched closely to see if they follow the new rules and speed things up. I currently remain skeptical.

May 21, 2012 12:10 AM #28
Rainer
13,775
Alicia Stukes
Exit 1 Stop Realty - Bowie, MD
GRI, CDPE, Notary

Lenn

I agree that education is a big piece of the puzzle with short sales.  In order to navigate through the process the buyer's agent must be familiar with the "in's and out's" of short sales. 

May 21, 2012 05:45 AM #29
Rainer
67,929
Deborah Fox
Villager Realty Inc - Selinsgrove, PA

Lenn, you just brought back a flood of memories. My first exposure to real estate was my ex father in law, who passed away last Thanksgiving at age 90. I still cannot believe it when something he regularly said comes out of my mouth. "Better than a poke in the eye with a sharp stick" was one of them.  Another was, "don't say bah bah when you can say bah".  That was back in the day when the Broker paid the entire (substantial) long distance phone bill...... Anyway, thanks for the flashback - and the truism!

May 23, 2012 07:11 AM #30
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Lenn Harley

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