I'll Have a Big Mac, a Quarterpounder with Cheese... and a House!

By
Real Estate Agent with McCall Realty

Short Sales and McDonalds, a better mix than  you might think.Short Sale Tales... and Short Order Cooks.

(LAKE TAHOE REAL ESTATE BLOG) Our recent follies with short sale departments at various banks, and particularly those with 3rd party servicing companies, have led us to one inescapable conclusion. The people working there today all worked at McDonalds yesterday.

The idea that they are working, these short people, is a misnomer. Its the fast food industry meets the housing industry, and the result is not gradual coronary thrombosis, it’s instant paralysis... from head to toe.

It’s like the primary hiring criteria for short sale employees is a pronounced cranial vacuity, one so vapid that one does not understand, nor care, that spending time somewhere is not work.

Nor is work not answering the phone, not returning phone calls, losing documents hourly, not remembering what you, or anyone else in your company said yesterday, or anything of the sort.

 An Example  :
Here’s an example, and then lets solve the problem... for both short sale departments... and McDonalds.

We have a listing that is a short sale. It took the owner 6 months to get his bank, through a 3rd party servicing company, to allow it to become a short sale in the first place. (We won’t name the company, but you might find it here.)

Part of the short sale approval process included an appraisal ordered by the bank.  From an appraiser who does not work in this area, who does not have experience with appraising value here, who called us to help him. And then overvalued the property by at least $50,000.

But rather than tell the Owner, and thereby us, the bank either never looked at the appraisal in the first place, forgot about it completely, or decided for some unknown vacuous thinking reason to keep it to themselves, like one would keep  a secret formula... for, well... a Sausage McMuffin or something else of world changing importance.

Banks would learn a lot if they listened to a good short order cook.So we get an offer on the house. A fair one. Three months ago. And we fax all of the documents to the short people daily, and we call them daily. And it’s like ordering in the drive-through lane, expecting to hear something, somebody, anybody on that little speaker... when McDonalds is closed!

All the while, of course, and its understandable, the buyer and the buyers agent want to know if their offer is accepted. One for hundreds of thousands of dollars. But the short people just can’t be bothered to respond. Apparently they are so busy not responding to other people they can't respond to us. (It's like a Joseph Heller novel, only more absurd.)

Finally we get a breakthrough. We find one of them, six weeks into the fiasco. “I can’t talk to you,” the short person said, “I need written permission from the owner.” She was unimpressed when we explained that we had sent it daily for weeks on end... with no response.

She was equally bored that we had an offer where time was of the essence. In fact, Ms. Snippity Short would not give us her email address, the address of her office, a direct phone number, or anything to help us give the company she doesn’t-work for real money.

Obviously it’s had to find incentive with a paid-by-hour mass of incompetance posing as an employee.

Two weeks later, we find out that they will only accept the appraised value. The one done by the appraiser who doesn’t work around here. So the long and short of that offer was the buyer just went away. And the house now sits.

 Adding Insult to Injury  :
Here’s what’s going to happen, and it’s not an isolated incident. This is happening much of the time all across this country. The house will become bank owned. The short people will pass it on to the banks REO department, which will then get it appraised again.

It started with the amoeba... and went down from there!They will also “fire” the listing agent, who did their job correctly, get a new listing agent, one they've probably never met before, and put it back up on the market... for much less than the offer that the short people either rejected, or failed to respond to at all. (Heller would roll over in his grave.)

That’s right folks, the bank, and whoever would have thought it, has people posing on their behalf who will turn down more to take less. Come to think of it, McDonalds employees are much smarter than that. (Instead, we’re now thinking short people must come out from under rocks at the perimeters of deep, dark forest ponds.)

It appears that the short people don’t share with the REO people. That would be too easy, and this is not a case of the right hand not telling the left hand what it’s doing. It’s a case of the right hand not knowing there is a left arm.

It’s like the CIA, the FBI, the Department of Immigration and Homeland Security not sharing information with each other... and then still claiming defiantly that they are in the intelligence business.

  The Solution  :
So the solution is simple. First, lets get rid of short sale departments all together. Then lets put Ronald McDonald in charge. It will be a step up, after all. And it’s always better to put a clown in charge who knows what he’s doing, than a hand-me-down clown who doesn’t. (They may be a seque into politics here, but we’ll pass.)

Then lets get McDonalds to handle all short sales in store. We’ll have the realm of short order cooks run the show. They’re efficient, like a machine, meeting and fulfilling customers and their needs everyday.  (You gotta love it.)

It will start in the drive-through lane. “I’ll have a Big Mac, a Quarterpounder... and a House,” we’ll say into the microphone, and a voice in the little speaker will instantly chime, “would you like the house supersized?”  (Already, I’m Loving It!)

If one goes inside, the usual McDonalds offerings will all be up there on the backlighted overhead menu above..., along with the featured short sales of the day.

We’ll step right up and say something like,  I’ll have a number 4, a number 2, and the 3BD rancher with the pool. Efficiently the person behind the counter will ask, “for here, or to go?”

“And an apple pie on top,” we’d remember, and voila, the person is at the cash register, keying in the order, and then would say, “that will be three hundred sixty-three thousand dollars... and sixty-five cents.”  (Are you lovin' it more?)

It’ll be perfect. Done in an instant, and there won’t be any falderal, no miscommunication, or lack of it, no passing the buck, or not getting the buck at all, with this solution. Every happy meal, and every transaction will be immediate, and wonder of all wonders, none of the McDonalds employees will turn around, keeping secrets from their manager, and sell a Big Mac for less.

Because all McDonalds employers can recognize a bigger number from a smaller one, even if its money. If banks would just remember that alone when it comes to short sales, what a much more understandable world it would be.

Ok, the video below is predictable, but I’m Loving It too!

 

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Show All Comments
Rainer
674
CHARLES/JOHN VAHRATIAN/MURPHY
ZEPHYR REAL ESTATE - Palm Springs, CA
I really enjoyed your adventure with the banks. It is all true. Currently we are working with a couple who have recently put in an offer on a short sale property. Months ago they tried to purchase the SAME HOME via the short sale situation for over $250,000 more. Then, no response from the banks, today, no response from the banks. The banks have fired/retired so many of their employees that the volume of the business, old, new, current is just overwhelming for the skeleton/inexperienced staff. This also happened in the early 90's. Same scenario, same unfortunate outcome.
Aug 14, 2008 01:58 PM #34
Rainmaker
46,494
Phil Hanner
Keller Williams - Daytona Beach, FL
Phil at http://www.portorangeflhomesforsale.com/
Fun knee. A few months ago I asked a loss mitigator (not the filter people) how long she had been doing this type of work. She said 3 weeks. They pulled everybody out of customer no-service and put them in loss mitigation to keep up with the workload. Can only imagine what happened to customer service. Thank God for push buttons on the phones to navigate customer service. Every short sale offer I have made as a buying investor or Realtor that has been turned down has resulted in a net loss of 15 to 22% for the foreclosing entity. I guess they believe they know my market better from their desks 3000 miles away. I track this data and include it with my short packages along with projected cost to foreclose, hold, and depreciation.
Aug 14, 2008 02:32 PM #35
Rainmaker
654,143
Joetta Fort
The DiGiorgio Group - Arvada, CO
Independent Broker, Homes Denver to Boulder
'Short' people with a Crazy 8 Ball! Tee-Hee-Hee!!
Aug 14, 2008 02:45 PM #36
Rainer
13,545
Jorge Verar
Coldwell Banker Commercial SouthWest - Houston, TX
Commercial Real Estate Broker
Gary you just made my day... :) so true so true... I have an idea... what the owner should do is get a listing agent in the area , then the Realtor should prepare a BPO, owner then send all this information to the lender and tells them - I can only sell this much $$$$ as per my broker's opinion. Now I would like you to approve a price you are willing to accept.. Heres is a HUD 1 - estimated amount to close and for you take the loss..... I am broke and no money to come up at the closing - I can no longer pay monthly so you better get your act together to avoid my imminent foreclossure. We need to sell this property in 3 months (closed). If I do not receive a reply in 10 days.. bye bye.. I will not waste my time with you as I said I am broke would you help me....
Aug 14, 2008 03:08 PM #37
Rainmaker
150,925
DeAndrea "Dee Dee" Jones
Home Buyers Marketing II, Inc. - Manassas Park, VA
The Northern VA Real Estate Lady
Try to resist the temptation and stay away from short sales unless your buyers have no other inventory choices. If we decrease the short sales in escrow (almost like a boycott) maybe just maybe they may get the clue to revamp the system.
Aug 14, 2008 03:09 PM #38
Rainer
5,775
Scott Forcier
Admiral Real Estate Eastside - Issaquah, WA
I Killed another Short Sale today. It was a 1/2 combo. 1st was owed approx $250,000, 2nd approx $100,000. The house has been listed for 9 months, the last 6 at $220,000. For the last 2 and a half months I've had an all cash offer ready to close on a moments notice for $220,000, the only offer I have. The first was willing to give up $10,000 to the 2nd and only net $188,000, a $60,000 loss. But after 2.5 months, the 2nd ordered a BPO and some agent told them it was worth $295,000. NEVERMIND ITS BEEN LISTED FOR 6 MONTHS AT $220,000!! My guess is that this agent was trying to brown nose their way into a future listing or something, but obviously is clueless! I am not going to name names, but I've heard nobody sells as much real estate as they do. Anyway, the 2nd said they would take their chances the trustees sale would bring more money for them then the $10,000 we were offering and they would not agree to a short sale. All this based on a BPO. Yup. The house has been on the market for 6 months at $220,000 and only has one offer. But most likely, a buyer with all cash will show up at the courthouse and offer MORE then $260,000. This is what the bank thinks. In order for them to 'consider' the short sale (after sitting on their thumbs for 2.5 months) they want a solid cma that shows why we think it's only worth $220,000 and deliver a FULL payoff from the 1st so they can see just how much it needs to bring at auction. I told them I am done working for free. Killed the deal, cut my losses, advised the buyer to go to the courthouse and probably buy it for less then $220,000 as the first is most likely to discount, and will enjoy watching the second go from $10,000 to absolutely zero dollars. I've been working on this listing since January and I've got absolute zero. It was time to cut my losses. You know, before Jan. 2008, I had a personal policy to not even show short sales to any buyers at any price. I got sucked back into it because the media has convinced every buyer it's the way to go. Today is the last day. I'm going back to doing what's right for me as a professional. I will not show another short sale to any buyer for as long as I live. Courthouse steps or REO and that's it. If any of you would like me to send you clients that want to buy a short sale, post up. They are your's for the slow, painful, taxing, unproductive, frutrating taking. By the way, when it doesn't close, it's your fault. As such, I am advising all agents to pro actively kill their short sales today. Do it now. Free yourself. Send over the paper work. Your clients will blame you now or blame you later. You will get paid sooner because you will convert to working on reality based transactions. You will thank me. Imagine how much better off you'd be if every call you made to the bank/loss mit/short sale/loan servicing blob of waste was made instead to a FSBO/CANC/Expr'd/COLD CALL FROM THE PHONE BOOK! Seriously, what's more enjoyable, cold calling or short calling? Neither right,but your doing one of them. Which is more productive to your bottom line. Why don't we just count up the shot dead short sales? The short sale kill counter. This here is #1. Let's make the world a better place. How many can we get? Who's the best short sale sniper?
Aug 14, 2008 03:38 PM #39
Rainer
24,674
Gene Ward
Area Pro Realty - Danville, CA
Gene Ward
Why have the banks been trying to get approved to sell real estate along with CDs and savings accounts? To make money. If this is an indication of their abilities to get into the real estate game we're all in trouble if they ever get approval. I have a question about something I heard recently as to why the banks are in no hurry to accept or close short sales. Do the banks have insurance on the troubled home loan that pays them 50% of the loans value if foreclosed? If yes, the bank recoups 50% of the loans value when the property is foreclosed. Now they own the property and can lower the listing price to recoup the original loan amount, and in some cases even make money. Anyone else out there heard this scenario?
Aug 14, 2008 04:17 PM #40
Ambassador
406,565
Virginia Hepp
ERA - Mesquite NV Homes For Sale - Mesquite, NV
Mesquite NV Homes and Neighborhoods - Search MLS

I haven't done a short sale yet and will now wait for MacDonald's to take it over.  If I am going to have a MacTransaction, at least I know I will be getting a MacCheck.

Thanks, Gary, hilarious and I am lovin' the links.

Aug 14, 2008 06:02 PM #41
Rainer
48,899
Jill Ford
Keller Williams Realty of Pinehurst - Pinehurst, NC

If this weren't so true it would qualify as the most hilarious thing I have seen this summer.  I have a second offer--the first one got tired of waiting and withdrew--on a short sale listing of mine.  The bank said we were good to go.  I called both my seller and the buyer's broker with the good news, and then got a call back from the lender saying, oops, maybe not.  It seems we have whaever that was ironed out, and we are back on track, but will we actually make it to the closing table before this buyer needs a roof over their head more than they need a great deal on a house--anyone's guess.  Fortunately though, no outside short people in this, just loss mitigation people internal to the lender.

Aug 14, 2008 06:07 PM #42
Rainmaker
1,866,751
Gabe Sanders
the BlueWater Realty team specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Great post.  I've got my headaches with Wells Fargo at the moment, going on over 100 days!!

Aug 14, 2008 06:08 PM #43
Rainmaker
298,489
Heather the Realtor Orlando, Lake Mary
LemonTree Realty - Orlando, FL
First Time Home Buyers, Bank Owned Homes

Great post I think it's safe to say most of us have experienced this exact situation. I think half the problem is the fact these people are paid by the hour and not by the file closed. I think these people would care more and work harder and faster. They could care less they get paid either way;

Aug 14, 2008 06:57 PM #44
Rainmaker
123,402
Tchaka Owen
Keller Williams Realty - Hollywood, FL

Yossarian....er, I mean Gary, this is an excellent blog!!  Your manner of writing had me laughing all throughout.  I feel your pain thanks to a 4-month time waster with an unnamed lender earlier this year as well as a hold pattern I'm currently in with two other short-sale deals. 

Aug 14, 2008 08:22 PM #45
Rainer
6,446
Dave Klein
REMAX Professionals - University Place, WA

There is a really good system by Lee Honish works great ShortSalesGeni.us (ssgenius) excellent content he is selling a service  a good one.

Aug 15, 2008 12:51 AM #47
Anonymous
Anonymous
Anonymous

This situation is repeated verbatim hundreds of times in a week all over the country.  It's ludicrous.  Why bother offering short-sales if you are going to be stupid about it?

Aug 15, 2008 08:21 AM #48
Rainmaker
119,216
Kim Dove
Watson Realty Corp - Jacksonville, FL
Realtor - Jacksonville FL

Gene, I have heard this scenario. This is the reason why I won't show a short sale that is insured by fha or va.

Aug 15, 2008 09:15 AM #49
Rainer
22,662
Mel Aclaro
RealtyU - Anaheim Hills, CA

Hillarious story.  Love the metaphors and, the "new business model!"  Only one tweak I'd probably want to add to your McDonald's short sale house.  That is, the price list for the menu items should be set by a Taco Bell employee who works at a branch out of state!

Me
RealtyU.com
twitter.com/melaclaro

Aug 15, 2008 01:12 PM #50
Rainer
968
Lori Bettes
Mailand Realty - Viera, FL

You gotta love it when you go through most of the above torture but you actually get the bank to give you a verbal acceptance but they have to wait on the Mortgage Insurance to make up their minds what they want to do (we are now three months into it) and then the Owner has a friend step in and say he wants to buy it at the last minute, submits submits HIS offer to the bank behind the listing agents back and the bank accepts that offer instead.  It almost makes ME want to get a job at McDonalds!

Aug 16, 2008 05:04 AM #51
Anonymous
Anonymous
Anonymous
I sure hope you are running for office soon!! You have accurately described and summed up my business for the past eight months. I believe that, for a variety of reasons, a variation of your proposed model will come to pass and that the same idiots will run it with only a small improvement in results that we could classify as good. Let's here it for the good ole Peter Principle!!
Aug 18, 2008 02:06 PM #52
Rainmaker
312,949
Karen Pierce
Karen Pierce | Housing Counselor |Oregon - Medford, OR

Your analogies/metaphors are very funny, while telling a sad tale of the state of affairs in bank negotiations.

Aug 25, 2008 12:09 PM #53
Rainer
21,743
Josh David
Bridgeview Bank Mortgage - Tampa, FL
Purchase Specialist... www.joshdavid.us

Hello Gary, I belong to a group "Carpe Diem Partners, LLC'. Carpe Diem offers a free negotiation for your short sales for FREE and there is NEVER an expense to either you or your clients.

Carpe Diem is a buy and sell company, not buy and hold company. Carpe Diem has completed over 500 successful short sale transactions, and currently holds over $37M in escrow.

The process typically takes 60-120 days. All Realtors are still entitled to their 2.5% commissions on all of your listings. You will list your property on the MLS like a normal listing with your client.,

If you are interested, I would love to talk to you about getting started. I simply provide you with an informational lead sheet, (email me for one, josh@josh-david.com) and  send it back w/a CMA and we will have an approval w/in 24-48 hrs. As of this week, you will be able to track all process in its entirety online @ www.mycarpediempartners.com (the website is still under construction, so please don't probe around in it yet)

Sound good?

Cheers to "09"

JD

Jan 12, 2009 01:36 PM #54
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Rainmaker
337,606

Gary Bolen

CRS - Lake Tahoe Real Estate Information
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