Adriana West Team Blog

The Top Ten Simple Rules

Adriana West (Prudential GA) — Wed, 02 Dec 2009 10:13:26 -0600

Yesterday was Foreclosure day in GA. For the 5th time, I saved one of my listings that has been going through a Short Sale process since April 2009. I spent over 4 hours calling Bank of America and then arriving to extreme measures to be able to beat the incompetence that we Agents live with every day with the people who answer their phone.

I was asking the person who answered the phone for the 6th call in two days if she can tell me a number, just an estimate number, of the Foreclosures they have every month because their Departments do not talk to each other.... Obviously I did not get an answer. I think the number is BIG.

I'd like to use this forum to generate a top 10 list of our own. The Top 10 Ways make the people who work in lender Loss Mitigation departments more productive. What do you think?

If you have done short sales for a while, there's no doubt that you have your own suggestions for what could make the process easier for all involved. We all know how bad the problem is. And it is growing worse.

Lender Loss Mitigation Departments are overwhelmed. Anyone who has been negotiating with the large lenders over the past 3 to 6 months, I am sure, has seen the same change I have seen. The Loss Mitigation Departments cannot keep enough trained people on staff to process the workload. Response times are getting longer and longer. The responses are getting less and less competent. The incidences of just plain rudeness or clear demonstrations of a lack of training of their representatives is increasing in frequency; but remember those folks are paid hourly regardless of whether they do a good job or not. As a consequence, our buyers are walking away, and our Sellers are going to Foreclosure.

It is not right that the incompetence and in adequacy of the lender's management and training programs cause us to work harder for even less money. But what can we do? They're the lender. They have the money. They have all the cards and control the process. It's their way, or the highway.

But what if...? What if we could make the rules? What rules would we make up? I would like to use this post to spark a contest. Please post by way of comment on this blog your suggestions for how the lenders can improve the short sale process.

And let's have some fun with it too. While this is a serious subject, one which affects our livelihoods, there's no reason why we cannot enjoy ourselves in building up the list of suggestions for our favorite whipping boys in the loss mitigation departments of major lenders.

I would ask you to keep it short; no more than two sentences for a rule. The rule should be focused on loss mitigation departments.

This could actually be the start of something big... It might become the vehicle by which we developed a referral network specifically targeted at short sales; or maybe an industry-specific focus group. There are many ways and many directions in which this can grow. Let's start with some simple top 10 rules for loss mitigation departments, and see where it goes.

Let me throw out one simple example rule just to get us started:

Answer the telephone with a smile and the honest intent to help the person on the other end. If you can't do this, then work on your files and computer screens until you're in a better mood (kind of hard with the increasing incompetence...)

So share your ideas for rules with us. Let's all hear what can be done to make our lives easier. Who knows, maybe Bank of America is listening. Maybe one of us has the ear of the senior executive at Wells Fargo or Bank of America and can present this list of them. Or maybe, just maybe, reading through a bunch of humorous rules will lighten the day of our fellow agents.

So let's have some fun, and if it can be productive fun so much the better!

Suggestions for heavy-duty fax machine?

Adriana West (Prudential GA) — Sun, 29 Nov 2009 15:45:16 -0600

I use two different "all-in-one" printers for faxing. They both give me grief when sending large faxes. As a short sale specialist, I routinely send 60-90 page faxes to the lenders for my short sale packets. Both of my printers are rated to handle 50 pages of paper through the automatic feeder, yet routinely a page gets mis-handled out of every 15-20. This results in me having to resend faxes frequently, and to have my assistant "babysit" the machine by hand to ensure that it is feeding only one page at a time. It is a huge cost in office productivity.

Does anyone out there have a good solid business-class fax machine to recommend? One that really handles paper well, and can deal with 100 page faxes? None of the office supply stores or big box stores have anything remotely serious.

Adriana
http://www.shortsale-queen.com/

Commercial IDX in GA (That I can embed in my website)?

Adriana West (Prudential GA) — Sun, 29 Nov 2009 09:51:04 -0600

Has anyone run across a viable commercial IDX for Georgia (or nationwide that has significant GA content)? I'm looking to add a good commercial search to my website - one with no (or very minimal) branding that I can IFRAME into my pages.

Adriana

Going Back to Far Wells?

Adriana West (Prudential GA) — Wed, 18 Nov 2009 07:50:13 -0600

I just received the most interesting phone call! I need to write this blog while the details are fresh in my mind.

I had a couple of short sales where the second lien is a line-of-credit from a major unnamed lender (go figure... from the title). In both cases, the first lender was reasonable and responded within an appropriate timeframe with an approval. In both cases, this second lender refused to accept reasonable amounts, or the amounts dictated by the first lender (which in one case was THE SAME LENDER holding both loans). The negotiator from the Line of credit refused, and refused, for several months to try to work with my Seller: If they were not going to get their significant percentage of the outstanding balance, plus a promissory note, they were not going to release the lien. There is no room for negotiation. There is no flexibility in these guidelines.

It became clear that this lender was simply not going to accept the short sale transactions I was negotiating with them. The sellers reached the point where things could no longer wait, and decided to file bankruptcy. Both of them.

Now here we are three weeks after our last conversation with this lender. I had stopped calling because the clients had filed bankruptcy. There was no point. So I just get a phone call from the negotiator who has both files asking me for a status on the transactions. "Oh, they have both filed bankruptcy because your organization would not accept to negotiate a short sale in any other way than your guidelines."

The negotiator asked if there was any way to bring the Short Sale back to the table. "Sorry, no, as I understand it, all the papers have been filed by the Seller with the court."

The negotiator gushed about how unfortunate this was, that now they had some leeway to work with. Did I have any other clients that she could help me with? The change in tone and manner was astounding!

I cannot help but wonder... how many bankruptcies and foreclosures did it take to prompt this phone call? And, have they really changed their ways? Are other lenders sounding like they are beginning to see the light? Please let us know what you are experiencing out there.

My house was foreclosed and I did not know…

Adriana West (Prudential GA) — Fri, 23 Oct 2009 08:17:38 -0500

In the last week I have received many responses to the last blog that I wrote (Do They Really Know What They Are Doing?). The majority of the people (who happened to be homeowners) have told me that after working a short sale with Bank of America for months, and having strong offers, the bank foreclosed and never gave a response to any of the offers.

One of these was a homebuilder who had more than $200,000 equity in his house, and even so the bank foreclosed. Well, BOA clearly shows the it has no feelings involved with these processes. I truly believe, however, that it is my responsibility as an agent to follow up with this bank and make sure that my listings are not foreclosed in the middle of the process. I can say that I have saved each of my listings from foreclosure between two and four times each during the short sale process. It is a long and frustrating process, one in which I spend over three hours doing it each time, but I truly believe my clients deserve this time and effort.

I show the bank that it is a good business decision not to foreclose, and when they see that I do not give up calling and calling until the extension is given (I think I become a pain in their...), then they do it.

Your clients really deserve an agent who is working in their best interest. Are you really up for all this hassle? If the answer is no, please refer these clients to an agent who is willing to make this commitment and has the experience to make it happen. It is better for everyone involved, and could mean the difference between bankruptcy and saving the client's financial future.

Do They Really Know What They Are Doing?

Adriana West (Prudential GA) — Thu, 01 Oct 2009 11:56:21 -0500

A couple of weeks ago, I contacted Bank of America to try to stop 3 foreclosures on different properties where I had submitted offers about 4 months ago - and all this time they had not "had time" to assign a negotiator. Usually, I need to call three or more times before I am lucky enough to find a person who really wants to help me and make the best of his/her time for the company they work for.

The first person who answered the phone told me that there was no way to stop the foreclosure unless the negotiator said so. By the way, remember I still don't have a negotiator? Between calls, a negotiator had been assigned - who decided to close the short sale without telling anybody.

I hung up in frustration, and called back again. The person who answered the phone this time told me that she cannot do anything. I asked her to transfer my phone call to her supervisor, and she asked me to hold. 10 minutes later, she returned saying her manager was too busy, and after looking at the file her manager stated that the offer was too low and they needed one more than 30K higher in order to stop the foreclosure. It was now clear that the only goal she had in mind was to get rid of my phone call and move on - the numbers did not make sense at all and were considerably higher than the outstanding principal. I hung up again.

Calling for the third time, I reached someone who really wanted to work and do what she was being paid for. After sharing my frustrations with her, she explained to me that her company received 400,000 short sale packages every week!

The numbers do not fit in my mind, but let's assume it is accurate. I said - with these kinds of numbers, the company must be hiring like crazy. She said "Yes, indeed, they are hiring." But who are the people who are in charge of these files? I realized that every time I make a call, I need to talk to at least three or four people before I find someone who really wants to work and deserve their monthly paycheck. So how much are the banks losing for their lack of interest or ability to hire people who really care about doing their jobs right? Employees who really care about the bank and have the knowledge to do the job. Do they really know what they're doing?

Tell me: are you hearing the same volume from your lenders? How often are you speaking to the same person you spoke to in the past? Do the people you talk to have the knowledge to be able to do their jobs, or are you training them - saving Bank of America the training expense?

Proactive Sellers and Realistic Agents...

Adriana West (Prudential GA) — Tue, 15 Sep 2009 20:16:37 -0500

Two closings I had a couple of weeks ago were Short Sales where I represented the buyer for a change. Interestingly enough, both sellers were proactive. They knew all the parties involved wanted to achieve the same goal: Close. That is why they allowed me to talk with their lenders on their behalf during the final stages due to the fact that their Listing Agents were not familiar with Short Sales.

Both of these short sales took less than 2 months to complete and close, and the attitude of one of the Listing Agents was great. He knew that the only way to close was with my help. He was open to learn, to listening to all the advice I gave him along the way, and to share with me all the difficulties he encountered during the process. We solved them together, without ever failing to represent his client's best interests.

I am working right now with another Listing Agent who does not have a clue about Short Sales, and her ignorance equals the size of her ego. I'm sorry if that makes me sound rude or egotistical, but the truth is that I am not comfortable if someone else is playing with a Seller's financial future.

We are living through some tough times, but I think our values and ethics as Real Estate Agents needs to rise above any kind of personal need of the moment. My advice for all agents who are getting involved with Short Sales is to learn the process, and the obstacles you might encounter, from a specialist before you play with someone else's financial future. If you do not feel savvy enough, be proactive. Co-op with an agent who can share with you their knowledge and experience, or work with the buyer's agent who has been through several of them and knows the ropes. Use their experience to build your own. The war of egos should be over, try to give your client the best service you would expect for yourself in their situation.

We can all work together in situations like this where we generate a win-win situation for everyone, not competing and starving each other. Share your ideas for how we can cooperate in this fashion for everyone

6 Months Payment Protection Now Available for Buyers

Adriana West (Prudential GA) — Sat, 18 Jul 2009 21:11:37 -0500

Prudential Georgia Real Estate is now offering a revolutionary program called Homeowner Education and Loan Protection (HELP) designed to offset fear of buying in this economy and market. Many people who might consider buying a house right now are putting off that decision becasue of uncertainty about the economy and their job. Car companies have been offering Payment Protection programs for this very reason, now Prudential is taking that idea to the Real Estate market.

With unemployment hovering around 10%, this is offsetting the effect of the Federal $8000 tax credit, Georgia's $1800 tax credit, and the indredible buyer's market we are experiencing. Even with these incredible numbers, people are hesitating because they are understandably worried about the safety of their job. This program will help alleviate the hesitation.

The HELP program is administered by the Rainy Day Foundation and available now from certified Prudential Realtors. It combines the Payment Protection program with an Education program to help the buyer during the first two years, with the goal of helping the buyer stay in the home. The program costs $500 and is funded by the Seller at closing.

With this program, if the buyer loses his job within 24 months of purchasing the house, the program will pay up to $1,800 per month for up to six months. Buyers may negotiate it into the purchase contract, or sellers may offer it in order to make their properties stand out and be more attractive to buyers.

Click on http://vidego.multicastmedia.com/player.php?p=44059 to view a video explaining the program.

What’s Important in Your Life

Adriana West (Prudential GA) — Tue, 07 Jul 2009 21:00:53 -0500

Now is the moment to really understand what is most important in our lives...

In speaking with various people I've found it interesting that for us human beings these moments are going to be a new history in many areas. One of them is changing our idea about pride and what success means. Having to decide between trying to do a Short Sale or lose your house in a foreclosure, many people opt to ignore their situation until it is too late. In their eyes, it is shameful, and their sense of loss of confidence is very high for many of them - ending in depression.

I am not a psychologist, but I can share with you that I am a human being, one that life has taught from a very young age that having pride about the wrong things can lead me to disaster. Over the years, I have understood that the life these things have taught me were not something to be ashamed of. They were to raise me up, learn a lesson, and keep going forward being stronger and smarter. What tough lessons they were....

Two weeks ago, I had an appointment with a young gentleman who wanted to understand his options about Short Sales.

When I met with him in my office, he apologized for not speaking well... At first, I did not understand, it seemed to me that he spoke perfectly (he does not have a thick accent like mine... ? ). After a few minutes more, I understood - that because of the level of stress that he was living with the economic problems and with the thought of losing his house, half his face was paralyzed.

We spoke for several hours, and after a couple of days he called me. He said that he was ready to begin the Short Sale process. When we met again, several days later, he was another person. His face was much better, and he was very optimistic about the future.

For me, it is an honor when a person allows me to walk with them during these difficult times, and show them that there is hope and a new beginning at the end of the Short Sale process. I have no doubt that I will meet all my clients again in a couple of years, and they will be strong again - in their mind, their spirit, and their family.

Once again, I come back to the fact that while these transactions are harder and sometimes less financially rewarding, the personal reward that I get out of helping people more than makes up for it. Share your stories with us about helping people, or about people who could use this kind of help.

Do Your Clients Get Deficiency Notes?

Adriana West (Prudential GA) — Thu, 02 Jul 2009 09:08:16 -0500

A couple of days ago, I was talking with one of my colleagues about Short Sales. I was astonished when my colleague told me the story of one of her clients in Woodstock, GA. The client had a first mortgage and a line of credit with one of the banks that was saved from collapse by being bought out during the crisis. During the Short Sale process, the second lien holder said that the only way the Short Sale could happen was if the client signed a deficiency note - because when they signed the papers for the line of credit, they signed two types of notes: one against the house, the other was a Personal Note. Since the lender had the Personal Note, they felt they had the right to have a deficiency note signed by the home owner, or otherwise the Short Sale would not happen.

The client decided to sign the deficiency note. Three months later, and life has moved on. They now live in a different state. Their son won a scholarship to go to college, and their life was taking a positive turn.

Last week, they found out that their bank accounts had been frozen. They had left their checking and savings accounts with that same bank that had required the deficiency note. The bank froze their accounts and took all the salary earned by the husband - and did not stop there. The son who was going to college also had his account with that bank, and had received his scholarship payment as well. But since he was a cosigner for them..... The bank took all the scholarship money as well.

How far can a bank go with a deficiency note? Far enough to ruin the life of a student waiting to start his college career, certainly, and without a moment's troubled conscience.

This story has helped me fight even harder every day for my clients, and to NEVER accept a deficiency note in any of my transactions. If you end up agreeing to one on behalf of your clients, at least tell them to make sure they don't have any other accounts with that bank - or any of its tangled siblings as the banks buy each other out.

Please share your good and bad experiences with me - we can learn from each other.

What are you looking for? An Agent or an Advocate?

Adriana West (Prudential GA) — Sat, 20 Jun 2009 16:14:06 -0500

Last month, I closed on a property located in Loganville, GA, representing the buyer. The property was brand new construction; the bank had foreclosed on over one-third of the subdivision.

Even though it was a foreclosure, the bank agreed to pay for:

$5,000 in closing costs
$   480 for a home warranty
$   330 for HOA transfer and assessment fees
$   300 to install two new windows that had been broken
$   400 for a termite bond

As we were closing, the attorney saw those numbers on the HUD and told my client that he might have had a good advocate in the process, and my client agreed with him. When the closing had ended, the attorney turned to my client and told him that he had closed that morning on a house in the same subdivision, with the same floorplan, for a price $35,000 higher than we were paying.

In these times where everyone is counting the pennies, you need to look not just for an agent who will represent you, but for an advisor who will advocate in your favor during the whole process. One who will help you to purchase your dream home while looking out for your best interests.

I would like to earn your business by providing you with that same level of service, and have a client for life. What do you buyers think of this kind of service? Leave us a comment here and tell us what kind of service you are looking for.

Stimulus package from Whom?

Adriana West (Prudential GA) — Tue, 16 Jun 2009 21:19:59 -0500

I love hearing that these blogs are helping people in one way or another, whether it be a seller in distress or an agent trying to make some Short Sales happen, to gain experience and make more transactions in this very difficult market. But I don't think the lenders are getting the same message.

One of the longest transactions I've ever had over the years I've been doing Short Sales is with one of those lenders who "didn't need the Bailout money," they said, in order to survive. But in the end, they decided to accept the government's money anyway - or excuse me, our money - yours and mine.

The theory they started out selling us, the public, was that the money would be used to help all those people in financial distress. A few weeks later, the lender decided instead to use the money to buy another large bank.

So, you will understand if I sprinkle a little sarcasm in my story about this lender. I have been working on this one since September 2008, when I sent an offer I received to the Loss Mitigation Department. The negotiator assigned to the file took all the way through December and into January to even order the BPO. When the BPO came in, he decided to counter for about $4,000 more than the offer because the offer seemed low. By the time he countered, now it was February.

So let's do the math. This man waited four months to process the file, order a BPO, and make a counteroffer for $4,000 higher. This means the negotiator was asking, in effect, for the amount of money the seller had not paid on the mortgage for those 4 months. Is it fair to the seller, who his doing everything in his power to sell the property, when the negotiator delays and delays the process?

After the negotiator finally gave me the numbers for the counteroffer, and the buyer actually accepted them, I sent all the documents. Once again, I could not reach anyone by telephone until a month later, when by magic, the loan was assigned to a different negotiator.

It took all of February and March to finally have this new negotiator answer my calls, who proceeded to tell me that their counteroffer was for even more money than they had originally agreed.

After convincing the buyer yet again, the negotiator finally sends me an approval letter, with which the closing attorney tells me he cannot close because the terms are unclear and the transaction might be open to fraud. Yes, fraud. After explaining all this to the negotiator, he decides to send me a new approval letter, asking for yet another higher number (for the third time changing the numbers and the approval letter).

Then he had the temerity to tell me that if the buyer did not accept this change, I should reduce my commission to match his numbers.

I would love to know if this negotiator is paid a flat salary or a commission. I would love to know if he's willing to give up a little of his salary to close a short sale. Or maybe, as we see in the news every day, he not only gets a salary, but a nice bonus. But to me, the real question is: Are they doing the job they're being paid to do?

Now you ask me, why are you doing this? Why put yourself through all this? Well, let me tell you it's not all about the money. As you can see, left and right, they always want to cut my commission. But at the end of the day, I firmly believe that I've helped someone begin a new life and have a new opportunity to reconstruct their future and their financial standing. Maybe I'm naïve, but the truth is I feel pretty good. Especially when I win one of these big battles.

In other words, the only kind of STIMULUS PAKCAGE that homeowners in distress receive is through fair and honest agents that do not give up in the process, fight for their clients, and make a Short Sale happen. If any of you are in need of this type of Stimulus, let me know. You can be assured that you are in good hands.

Playing with your financial future

Adriana West (Prudential GA) — Thu, 04 Jun 2009 20:43:50 -0500

An investor called me and told me that he was interested in buying all my Short Sales. I was thrilled, even though I thought it was too good to be truth. I met with him at my office and he gave me a contract that I would have to use to work with him.

In explaining his contract to me, he said that his "idea" to buy all my short sales that I had been working was that he would make an offer from the beginning of the process (with a rather ridiculous amount) and that I had to find another buyer to make an offer (for more than his). Then he would give the other buyer the option to buy the house, but he would keep the difference between the two offers at the end of the transaction.

I talked with my lawyers, and in Georgia it is not illegal to agree to this kind of transaction, but from my point of view it is unfair. Especially when I as a Real Estate Agent am representing a seller in distress, not the bank, not that investor. I understand that every human being needs to make their living, but it is not always the fair way.

Sellers, would you like it when a person is taking advantage of your situation, playing with your financial future. How many of you believe that this investor is going to be fair, if the bank does not accept his offer, or the investor does not allow any competing offers to be presented if he does not make money on the transaction. Even worse, how many of you believe that this investor will buy the house at the end of the day, if he's lucky enough for the bank to accept his offer, but no second buyer has come along to make another offer?

Short Sales are demanding and can also be a source of revenue for lots of investors. Which of these investors will be interested in the seller's financial future? It was good for my sellers that I am interested in their financial future and helping them make a new financial life for themselves. Let me know if I can help you protect yours.

Lender: This file is not a top priority to review…

Adriana West (Prudential GA) — Sat, 09 May 2009 06:39:04 -0500

I was working with a client in Kennesaw GA. He was convinced that the honest thing to do was to try to continue paying the mortgage as long as he possibly could, even when his wife had been fired and they need to use what little savings they had to try to make it.... Until a Short Sale was approved.

Eventually we received an offer and waited for over 3 months for an answer, with weekly phone calls to the Lender's Short Sale dept. Finally, I received an answer: This file is not a top priority for the Lender to review. They do not have a time frame for the review process, and the person who gave me this news promptly hung up the phone on me.

How can it be that the lenders in this country are punishing those who are trying to be good citizens, do what they're supposed to do, and "play by the rules"? In this case, my client was continuing to crunch numbers and make huge sacrifices while they were waiting for an answer.

Is this really the time to be trying to teach us all to be bad citizens because this fits the Lender's Guidelines? Please tell me what kind of behavior we should expect and accept from these lenders? They are already more responsible for the problem than is the public. Do we have to give up our moral principles in order to become a priority file for the lender?

Let me know your thoughts. Why do we bail out those who have caused the problem at the expense of those who play by the rules? What can be done to fix it? How do we tell our lawmakers to apply some "common" sense to common problems? Leave a comment here and let us know.

No Deficiency Notes for MY clients

Adriana West (Prudential GA) — Sat, 14 Mar 2009 15:33:22 -0500

Another Great Success Story for my client in Roswell, GA. I've been working with this client on a Short Sale transaction for 8 months now, and we had wonderful news this week.

First, some background on the scenario. The market value of the property was $900,000. There were two mortgages with different lenders. As I noted in an earlier blog, in the beginning my client thought it would be easier for me if he hired an Attorney to negotiate with both lenders. In the earlier article, you can see why that made me decide never to let an attorney negotiate for me again.

We worked with an offer for over three months - a great offer at the time. The lienholder in second position wanted, and even demanded (how funny!), to net $42,000 from the short sale, and have a deficiency note in place on the borrower for the balance of the loan. Oh, and my commission could only be 1% (which the lawyer agreed to, by the way).

Even when both lenders agreed on the transaction, I managed to increase my commission back to a reasonable amount, and my client was tempted to accept the deficiency note, the second lienholder took a month to send me their acceptance letter. During this time, the buyer got tired and walked away.

I took control of the negotiations away from the attorney when my commission was ridiculously reduced, and started over from scratch after the buyer withdrew his offer. Months passed, and finally I received an offer $100,000 BELOW the initial offer - just three days before the property was to be foreclosed. I contacted the lenders, and Lender 2 - even when they knew they were going to lose everything - demanded a specific amount in order to accept the transaction. The next day, when I received the Acceptance Letter, it included a deficiency note that at this time was not part of the agreement (they had not mentioned it in the phone call).

They were offended when I told them it was not going to work. They stated they would not negotiate any further. I thanked them for their time and hung up. The next day at 7:00am, I received a phone call from the same negotiator stating that they had reconsidered the offer and were open to agree to the original amount and no deficiency note. Because the second lienholder was lazy and made unrealistic demands, at the end of the day we closed the transaction paying them just $16,000 and no deficiency note whatever.

The Lender in the first position was always very helpful and open to work through the transaction. My client is thrilled that after 9 months they sold their house and do not owe anything to any lender. Now at the end of the transaction, do you think the Attorney was working in my client's best interest? Or working for an outrageous hourly fee for their own benefit?

Share with me your stories. I would like to hear from you. I love to share this kind of success story with my current and future clients, and remind them: you are in great hands with me working on your behalf.

Do Agents Really Need Help from a Third Party?

Adriana West (Prudential GA) — Sat, 07 Feb 2009 17:54:39 -0600

I respect the companies who negotiate Short Sale transactions for agents, but in my personal opinion, I prefer to handle my own negotiations. Let me illustrate why. A few months ago, one of my clients thought that it would be easier for me if he hired an attorney to negotiate his Short Sale with both lenders.

After three months of frustration, with my client paying ridiculous fees to this attorney, here is the settlement that he reached:
- My client was going to have a deficiency note from the second lender in the amount of $160,000
- My commission would only be 1%
- The Buyer's agent would only get a 1% commission
- He would get his fees, directly from my client's pocket

After discussing this with my client, who could not handle the deficiency notice, I stepped into the negotiations and tried to fix it as soon as I heard, about a week before closing. The second lienholder did not give us the acceptance letter, and we ended up losing the buyer. If the client would have to declare bankruptcy because he couldn't pay the deficiency note, a foreclosure was his better option. But I kept on trying.

I do not have anything against anybody, but I truly believe I am in this business to help people in a fair and honest way, on all my listings and transactions. This is my livelihood and I need to be paid for all the effort, time, and help that I offer to my clients. This is why I believe that all the parties involved must work with honesty toward the same goal: Helping a homeowner in distress to create a new future on the financial level.

I applaud all those of us who strive to achieve our goals of helping people, and being paid for our work. I can say with pride that none of my clients has ever received a deficiency note after the short sale has been settled. And this is why I will never accept a listing where I need to allow an attorney to negotiate on my client's behalf again.

We learn from our experiences. Tell me how you work, and what kind of responses you get from your lenders. The end of this story is an incredible success, and I will tell you all about it in a couple of weeks when we close this transaction.

NEW YEAR - GREAT YEAR – GREAT SHORT SALES IN GEORGIA

Adriana West (Prudential GA) — Tue, 20 Jan 2009 20:29:32 -0600

Well now, after my Reality Check marathon, I have GOOD NEWS.... Lenders have realized (not all) that Foreclosures are not the solution... And they have moved some of their people from the Foreclosure departments to the Loss Mitigation Departments. They are making them stronger, more effective, with trained people. YEEAAHH, this is GREAT NEWS, Agents. This is the YEAR OF THE SHORT SALE.

Let me give you one of my examples: I had a house in Sugar Hill in the Short Sale process. The owner had 2 loans with the same lender, and I presented an offer to the Lender (a good offer). I had been waiting for about 10 days to pass before calling them back and asking for feedback about my Short Sale packet - and to see if they had assigned a negotiator to the file. Well, on day 10, before I called them, I received a fax with an Acceptance Letter for the second lien. WOW! That was a new world for me. I called them very astonished about what I had received. The person who answered me, a very professional gentleman, told me that Yes, he had seen in the file that this was the letter for the second lein, and to call back in a week to ask about the first lien. On the 20^th day, I received another fax - the Acceptance on the First lien!

I called again and congratulated them on their process, telling the person who answered tha the last time I had done a Short Sale with them (6 months ago) they had taken three months to close, and that I was astonished at how much they had improved their service in 6 months. The man told me that in the last 6 months, they had brought in more than 300 people, and that was the reason for their great service.

Well, this is happening more and more. Small lenders have thought about how to implement and improve their Loss Mitigation Departments all the time, and when we agents send them a complete Short Sale packet, things go very well. Short Sales are going to be the way forward in this market for us Agents during 2009 and 2010.

The interesting part of this story... We had to close a month later because my Seller had not had time to find a house to rent!

Leave a comment and let me know if you are seeing the same improvements over time as I am. Are there "star" lenders out there doing a great job? Laggards who haven't seen the light yet? Let me know your experiences.

Reality Check #6: For Agents who list Short Sales

Adriana West (Prudential GA) — Tue, 30 Dec 2008 22:06:50 -0600

Before the end of the year, I wanted to finish my Reality Check series. I think I have VERY GOOD NEWS for the new year!.

But I think it important to make a remark about the responses I've received from this series - like Gene Allen: "Seems like everyone will be a short sale expert by the time all this is said and done."

Ladies and Gentlemen, I have to say that there are very FEW experts in short sales in this market. Recently I have come across several agents who think they know short sales, such as the case of one of my Alpharetta Short Sales. The client was referred to me by an agent in Illinois. Her ‘strategy' was to list the property for 10% below the cheapest in the subdivision, and lower it 5-10,000 every week.

Another case is one I ran across yesterday. I was looking for a condominium for my buyer in Atlanta. I found a Short Sale for $20,000 below the foreclosures that sold in the same building, and that agent proudly commented that she had multiple offers on the property.

OK, so you are all going to ask me: And what does it matter? For me, a lot. The mentality of many agents that start working in Short Sales is to reduce the price of the property, without studying the area and the subdivision to have a clear idea of how much the lender will be likely to accept in an offer. Since they do not do this homework, their idea is to get the most offers under that percentage, send them to the lender, and the buyer waits for a month or two without a response thinking that the lender is going to accept it. When the lender comes back with a counter for more than the listing price of the property, the buyer is so involved in the transaction that he'll accept the increased price.

If I were the buyer, making an offer for the listing price, and after two months I am told to accept a price higher than the listing price, I would not buy that property. Why? Because I would feel like I was being scammed. Nor would I ever work again with the Agent "representing" me, the one who involved me in this transaction.

If I as the buyer have the option to choose between several equal properties (such as a cluster home, townhouse, or condo) on the market, and I have to wait for months only to have the price increased on me, I would rather buy one of the foreclosures where I don't have to wait for months for a transaction that is never going to happen.

Now: do you think the agent that listed the Short Sale was really helping their client? Acting in their best interest? How many of these offers have a realistic chance to work? Lenders pay for appraisals and BPOS, and if the numbers do not make sense, they foreclose anyway.

Negotiators have way too much work to review all the offers submitted by agents who follow this shotgun strategy - especially when those offers do not make sense. It is difficult to sell Short Sales, and these kind of agents are not helping the market at all.

Let me know your opinions, now that we know we are going to all be experts... Or maybe just a little more realistic about the market, lenders, and short sales.

Reality Check #5: Are they giving houses away?

Adriana West (Prudential GA) — Sat, 27 Dec 2008 07:58:57 -0600

A week ago, I was working on a Short Sale in Sugar Hill, GA in which the Seller did not have any equity and the fair market value of the house is $140,000. This house had not did not need significant repairs and was in good condition.

I received an offer, which requested a reply. The offer was for $40,000. By law, I have to present this to my client. But isn't it incredible that Buyers think that banks are giving away houses? I had already begun the short sale process on this property with another, higher offer, and I'll tell you how the story ends in January, when we close.

When working with buyers who want a ‘deal', I ask them first what for them means a ‘great deal' because if for them it means that the bank is giving away houses, my idea of a great deal is completely different.

For me, a great deal - especially when I am representing a Buyer - is giving them the opportunity as a Short Sale Specialist giving them my expertise and knowledge to find a property which is below market value, which will appreciate in two years or less, and in which my client can have a good equity in that same period.

But I still haven't found the waiting line where the bank, just because I'm so nice, will decide to give me a house. If any one of you out there know where that line is, please let me know. I have several clients in distress that would love a house for the next few months.

I realize that 2008 and 2009 are the years of opportunity, but these opportunities are made by people who want to work hard and make a difference. Not for those who want to make themselves rich in a day. Or maybe I'm the one mistaken, or in the wrong line.

Share your experiences with me and let me know how mistaken I may be.

Reality Check #4: Real Estate Agents and Short Sales

Adriana West (Prudential GA) — Sat, 20 Dec 2008 02:45:44 -0600

It is incredible how many times I get a call from an agent in Metro Altanta, and when they hear that the property is a Short Sale, they decide not to show it.

Ladies and Gentlemen, I would like to share with you that Short Sales are a great way to continue in this market as a Real Estate Agent, either helping a seller in financial distress or motivated buyers with their next dream home.

Sellers will become clients for life, when you are there at their side helping them through their toughest time ever. Buyers are also going to be very impressed with your ability to help them walk in with equity in their dream home from day one. And most important, you will be able to continue your business as an agent - which is my passion and way of life. The market is showing us that there is a time for competition, and there is a time for us agents to get together and cooperate.

By the way, statistics show that after this Foreclosure madness, Lenders are getting ready to shift all their energies to the Loss Mitigation Departments due to the fact that Foreclosures are not working - too much money has been lost already. 2009 is going to be the Short Sale year, whether or not you make the shift with the market and are ready to represent your buyers in the best ever market to buy houses. I will be working with each of you as a professional on the listing side, and it will be my pleasure.

Reality Check #3: Great Offers, Stubborn Lenders

Adriana West (Prudential GA) — Wed, 17 Dec 2008 22:27:30 -0600

The reality is that lenders lose millions daily with foreclosures, but not that much with a Short Sale process. We, agents that work with Short Sales, are adding a small drop of help to all this financial mess in which we are living now.

In the month of November, I received an offer on one of my Short Sales in Cumming, GA (Forsyth County) which had great numbers for the lender. After sending my Short Sale packet, and going through the BPO process, etc., the Negotiator for the lender called me and told me the number for their ‘final counter offer': Full Payoff.

The builder had not finished the subdivision. They are selling NEW construction for far less than the negotiator was asking, less than the buyer had offered.

At the end of the day, the buyer decided to withdraw the offer. When the lender understood his mistake, he offered to accept the original amount from the buyer's offer.

Too Late... When I tried to call buyer's agent again to revive the transaction, he was very frustrated and not very cooperative.

Agents and Buyers, I share your frustration. My advice is that even though the lender is aiming that high, please understand that most of the time the people who have been assigned to a particular file have not been in that position for very long. Usually it is 6 months or less. If you are patient and are sure you have made a fair offer, stick with it for a bit longer. The lender will understand that they need a reality check.

At the end of the day, if we AGENTS work on our client's best interests, we close more transactions, and I said to this particular Agent: Christmas would be a better holiday for everybody.

Reality Check #2: Stubborn Lender Aims for Full Price

Adriana West (Prudential GA) — Sat, 13 Dec 2008 09:44:46 -0600

During the first week of November, I received a call from a lender with whom I had been trying to do a short sale on a property in Gwinnett County, GA. I shared certain interesting facts with the lender about the subdivision.

1. The subdivision, as originally planned, would have 45 houses. Only 24 had been completed.
2. The last 3 builders in that subdivision filed for bankruptcy.
3. Three brand new houses were for sale as foreclosures between 50,000 and 70,000 lower than their original price because the builder gave up and they still have not sold.

I had given them an offer from a buyer who was willing and able to purchase the property. But this lender called me and told me that he wanted to counter the buyer's offer with a full price counter - much higher than any of the foreclosures already available in that same neighborhood. I reminded them that I had already sent the information I shared with you above, and told them that the counter would not be accepted - the deal was not going to happen.

The person from the bank told me that they were doing this counter in order to raise the offer to the highest possible. I reminded them that I am a Short Sale Specialist with almost three years of short sales under my belt, and this was the best and highest offer they would ever possibly get in this current market.

In the end, the person told me that was their strategy, and to just tell him what the buyer decided. Just as I predicted to the lender, the buyer terminated the contract and went and bought one of the foreclosed new construction properties in the same subdivision for $100,000 less than the lender had countered.

Lenders: Just how much more do you need to lose in order to recognize a good offer when you get one? Take it, and don't let that motivated, willing, and able buyer walk away.

This house is still on the market, and I hope that if I get another offer, the lender will have more sense, be more realistic, and stop throwing away money.

Do you have other horror stories of lenders, buyers, or sellers that needed a reality check? Leave a comment here and tell us the story.

Reality Check #1: Stubborn Lenders and Short Sales

Adriana West (Prudential GA) — Sun, 07 Dec 2008 12:32:35 -0600

Some months ago, I had been working on a Short Sale for several months in Lawrenceville, GA. After investing many hours of work, and finally finding a buyer, the lender who owned the loan told me that their system was so SLOW that there was no way to stop the foreclosure process and make the Short Sale happen.

My client was a senior citizen who did not have work, and could not afford where he was living. As I mentioned, we had a buyer willing and able to buy. The offer I received in July was to close "As Soon As Possible" and his loan was processed and ready to close.
Still the lender was going to foreclose.

Let's look at the reality four months later:

The lender has foreclosed on the property. It has been on the market for $2,900.00 more than the offer I presented to them, and they still don't have a buyer. Isn't it incredible that a lender would prefer to pay all the costs associated with a foreclosure ($7,000.00 would be a very cheap estimate), to have a house on the market for another six months, without getting the least bit of revenue - and at the end of the day sell it for LESS than what was offered in the Short Sale? On top of that, now my client will end up owing much more money to this lender, who will be investing yet more money on lawyers trying to collect on that debt from a Senior Citizen with no job and no income - whose children are now caring for him.

This is the beginning of my new series called Reality Checks because I have run across people on each side of a transaction who are not living in reality. This lender was one. In the series, we will also explore Buyers, Sellers, and Agents on both sides that need a Reality Check like this lender.

To me, this thinking is amazingly short sighted and stubborn. Everyone loses except the lawyers. The lender, for sheer stubbornness, will lose thousands of dollars - just because their system was too slow to stop the foreclosure engine.

Have you experienced examples where someone involved in a Real Estate transaction needed a reality check? I'd love to hear about it. Please leave us a comment here.

Foreclosures Dramatically Rise

Adriana West (Prudential GA) — Fri, 28 Nov 2008 12:27:00 -0600

Statistics show a 25% increase this year in foreclosures, from September 2007 to September 2008. Foreclosures are at an epidemic level we have never seen before. The bailout was supposed to help, wasn't it?

Well, yes it was. But keep in mind, it happened in October and will take some time to have an effect. In addition, it was never intended to stop foreclosures, but to prop up the credit market overall so that money can continue to flow. At best, it stops the slide in prices that occurs when buyers cannot get loans to buy. Its aim was the overall economy, not the individual.

The original bailout idea was for the government to buy "troubled assets" meaning those mortgages that were in default and near foreclosure. The thinking was that it would provide funds to the banks to loan again, and provide some cover for those facing foreclosure so they don't lose their house immediately. Renegotiation of the loan might be possible, allowing the homeowner to afford to keep paying on their home.

But all that has changed. The government has decided instead to invest in stocks of the banks. It provides them with the same cash to operate, but they keep the bad loans. And many banks, instead of using the money to make loans, are using it to purchase other banks.

So where does the homeowner stand in all this? On the sidelines. Essentially, for you, nothing has changed.

The FDIC, however, actually has proposed an idea aimed directly at you. They want to create a 300 billion dollar program to renegotiate loans.

Also Wednesday, Housing and Urban Development Secretary Steve Preston said the government may let more borrowers qualify for a $300 billion program designed to let troubled homeowners swap risky loans for more affordable ones. The program was launched Oct. 1, but there are concerns that lenders won't participate because they have to voluntarily reduce the value of a loan and take a loss.

Unfortunately, the treasury secretary is adamantly opposed to this, and the President has already expressed his opposition to it. So there is no relief in sight right now for the homeowner in trouble.

This means that Short Sales are just as needed, or more so, than they were before. Call me and let me see how I can help you get out of financial trouble, and preserve your chance at a financial future. And comment here with your opinions of the bailout, the economic crisis, and the government's response. We'd love to hear from you.

Is a Short Sale the Right (or only) Option For You?

Adriana West (Prudential GA) — Mon, 24 Nov 2008 07:39:45 -0600

As a Short Sale Specialist in the Atlanta area, I run across all kinds of people in a variety of hardship circumstances. The first thing I need to do is figure out if a Short Sale is right for them. It is not for everyone, and I only take on the Short Sale if it is right for the client.

After hearing what has caused the current hardship, I try to help the client understand their options. Each situation is different, and there are no clear lines to which option is best. Generally, though, there are seven different options.

Refinancing. Can you qualify for another mortgage, one that you can afford? That's always the best option.
Selling the house as a normal transaction, even if it means bringing cash to the table - if you can.
Working out a plan with the Lender. Amicable settlement is better for everyone.
A Short Sale. The lender must agree to accept less than the principle and not hold the seller responsible for the difference.
A deed in lieu of Foreclosure. Give the house to the lender to terminate the mortgage. The homeowner might be responsible for the difference between what the lender sells the house for and the principle.
A Foreclosure. The homeowner loses the house and their credit rating is damaged.
Walking away. This is the absolute last resort. The homeowner's credit rating is heavily damaged.

Let me help you figure out what option is best for you. Give me a call, or leave a question or comment here. I'd love to hear from you.