Hi,
My name is Dawn Uselding, I am new to ActiveRain and this is my first blog ever. However I am not new to Short Sales. And I am in the position of having insight on both the short sale negotiator and loss mitigation negotiators side.
I have been doing short sales for 8 years. I started in my own business helping rehabbers find and finance properties to rehab. I did this for 2 1/2 years until I caught the eye of an investor. We had been in competition on several properties over the years. At one point he (the investor) called me about a property we had both wanted and informed me the sheriffs sale was in 10 days and he couldn't get the lender to budge. To make a long story short, I closed the deal in 10 days and didn't pay a dime more than he had offered.
A month later after some negotiating on my own behalf I was working for that investor. Now years later I am again venturing out on my own. I am a virtual short sale negotiator. That means I facilate short sales without being in your office. Now why on earth would you need a short sale negotiator? Isn't that cutting your commission? Taking money out of your own pocket? These are questions I hear all the time. Let me tell you why a short sale negotiator is a good investment.
First you have to understand the other side. The Loss Mitigation Negotiator!! I have been blessed to be able to have an inside view into the other sides life. You wonder why it takes so long for them to respond. Well, until just recently my mother was a loss mitigation negotiator for Wells Fargo. Did you realize that they each have a minimum of 50 short sales they are assigned. That's the minimum, they can have over 175.
Another tidbit I bet you didn't know is, they receive bonuses according to how many files they clear (that means refused or closed on). So if you send an incomplete package, your more likely to be refused, than notified that more documentation is needed or a page is missing. Then you have to submit all over again. So making sure you have all the documentation they need is vital. However different lenders and servicers require different packages. Do you know which lender needs two years tax documentation and which needs only one? Which one needs the last three months bank statements and which doesn't need any? These are the details that make the difference between a complete package and an incomplete package. Are you aware of the standard breakdown of acceptable offers? For example:
- Fannie Mae 92% net of the appraisal
- Freddie Mac 92% net of the appraisal
- FHA 82% net of the appraisal
- VA 88% net of the appraisal
- Conventional 80% net of the appraisal
Those are general guidelines. They are impacted by the investor holding the note, 2nd and 3rd mortgages and many other factors. But they are a good starting point in knowing how good your offer is.
How good are you at negotiating liens? Because, you know the short sale won't be approved until the liens are negotiated. And as a Realtor you know how important the appraisal is. The lender has never seen the property unless it is a local lender. And did you realize that the appraisal is the starting point for negotiations, not what is owed on the property.
Having contacts with Loss Mitigation Negotiators can be huge!! When a short sale package comes through from someone they know and trust it moves to the top of the pile of short sales they are working. And why not, they are more likely to be able to close that deal and get a better bonus.
Another question that I get all the time is - are you licensed? The answer is no, I don't need a license. I am not writing offers or offering legal advise to you or your clients. I deal with you and my job is to present the offer as written with all the needed documentation and then to closely follow up on the offer and to be your liaison with the lender. I ask the right questions to find out what is needed to get the deal done, and get that information to you.
As for payment, I do ask for an upfront retainer. But my payday is at closing. I get paid a 1% fee. My fee is on the estimated HUD as a closing cost and not part of your commission. However my fee is negotiable, by the lender, just like your commission.
So, now hopefully you know a little more about why I think a short sale negotiator is an asset to your business. Especially if you deal with alot of foreclosure properties or you have never done a short sale.
I am looking forward to your comments and would love to hear from you.
Have a blessed day!
Dawn Uselding