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So...What's the Difference Between a Pit Bull & a Good Short Sale Negotiator?

So, what's the difference between a pit bull and a Good Short Sale Negotiator? Possible answers below:

A. The patience of Job

B. A persistent capacity to hound loss mitigation specialists to give an answer

C. Lipstick

D. All of the Above

lipstick smile If you answered "D", you're right in my book! :) Seriously though, negotiating a Short Sale successfully is one of the most demanding aspects of the job for professional real estate agents today. The job is made even more difficult by the fact that the success rate is so low for so many. One instructor told me recently that he estimated the success rate to be 10%!

The problem with that dismal failure rate is that a Short Sale negotiation will often require 90% MORE work than a normal transaction prior to the sale, during the transaction and in closing the deal. This starts with the research. Many Short Sales are set up to fail from the get go...aka, the Listing Price.

Research...

A good Short Sale Negotiator will do extensive research to ensure that the home is priced appropriately to sell and should be able to document if required with comparables. Research also involves a thorough understanding of the underlying factors which may impact the ability to sell the home such as multiple liens, the owner's financial condition, the payment history on the mortgage etc.

Organization..

The closing file for normal transactions may look positively anemic when compared to the pile of documents which comprise the documentation necessary to close a Short Sale. Being organized will aid in the request for immediate action on a file which has languished on someones desk for months but now suddenly has a demand for an immediate closing!

Persistence...

In addition to the listing paperwork, the lender will sometimes request additional documents from the homeowner...MULTIPLE TIMES. As a result, it is sometimes expedient to keep all this documentation on file and continue to re-send it to loss mitigation who have a propensity to "lose" things...

Positivity...

Yes, I made up the word! But, how else can you describe the optimism required to keep on keeping on when numerous messages remain un-returned, buyers become as skittish as a deer on the run, and tempers flare up with impatience? The ability to keep all parties informed and moving in the same direction sometimes feels like a Herculean feat.

So, that's my list. What makes a good Short Sale Negotiator from your perspective?

*Short Sales are defined as properties which are sold for less than what is owed on the mortgage note. Audu Real Estate has successfully negotiated a variety of Short Sales with multiple lenders. Contact us for a confidential inquiry.

Lola Audu, CRS, GRI e-Pro ~ Audu Real Estate

Lola Audu, is the Designated Broker & Owner of Audu Real Estate. Our company specializes in helping people buy and sell homes in the greater Grand Rapids, West Michigan area. We've had the privilege of helping hundreds of clients succeed in their goals of purchasing and selling property including demonstrated success in the negotiation of Short Sale Transactions. You can contact us via e-mail @ info@auduhomes.com or by phone at 616-791-0511.

Posted by Lola Audu~Real Estate Broker/Owner Grand Rapids, Michigan Real Estate on 07/08/2009 06:23 PM

Comments (54)

Short Sales in the Home Selling Channel

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54 Comments on So...What's the Difference Between a Pit Bull & a Good Short Sale Negotiator?

JUL

I don't envy the task of a listing agent/broker managing short sales.

Fact is, without agents to get these things going we'd have twice the foreclosures.

Lola, that's why I hate short sales. Too much work and too little success. I want my clients to be happy after the transaction.

i just know you handle all well....because you have patience and the know how!

Lola, As I was reading this list I thought this deserves a feature. Apparently AR thought so as well, it's a wonderful post! (And I did choose D.

I think a short sale negotiator requires a thick skin because the customers don't understand the degree of frustration and can think the fault lies with the negotiator. I don't understand how some of the title companies have the time to afford to the negotiating process. Ultimately does this time get inserted somewhere else as a cost?

I think you've hit many of the things that are important in getting a short sale done. Persistence and making sure you have all the information needed by the negotiator/bank.

As I've said before . . . short sales are anything BUT short! Yes, patience. But most people don't have the patience, and sellers need to walk with their property going into foreclosure. It's a nasty situation which I belive banks use which is NOT in the best interest of the seller.

Of course . . . with so much talking on the phone, lipstick must be re-applied multiple times throughout the day!

Patience and trying not be frustrated are key things -- all the best as you work on yours.

I think a good short sale agent has to have the ability to explain the procedure to both the seller and buyer and let them no up front the frustrations that will be involved. As for keeping a complete file on hand is a must as you stated the banks have a habit of losing things.

Patience is needed but also with Selling Agents!! After you explain the long process and after they got their Buyers to sign a 90 day "Approval Period" Addendum, they better than anyone should know that 10 days later is too soon to be calling for an update on the progress of the Short Sale!!!

Lenn, you're so right! We really underestimate the value of agents who are able to process these transactions successfully. I would love to see a study done to see how much banks are saving by NOT having these homes go through the entire foreclosure process and the damage that comes from having abandoned and vacant homes.

Russ, Short Sales are difficult transactions, that's for sure. But, when you are able to help a client avoid a foreclosure, that does have it's own reward.

Sally, some negotiations have been maddeningly frustrating, but somehow you just keep on keeping on...

Carole...:)

An...here in West Michigan, some title companies are charging more to close a Short Sale precisely because of the enormous hassle involved in multiple HUD's and other obstacles.

Christine...one cannot underestimate the value of those two traits in the process. Then there's a huge dollop of the grace of God involved too. :)

Carla, I think the term 'Short Sale' should be cited for "Truth in Advertising" Violation! :)

Melissa...so, very true...about the re-application of lipstick that is.

Bob & Carolin...Thanks.

Cameron...Great ADDITION TO THE LIST! EDUCATE THE PARTIES PROPERLY! Thanks.

Lola - some 30 years or so ago I had a partner that really resented working with women. That was until we had our butts in a jam and he didn't have to wonder where I was because I was right there in the middle of it all. After that he nicknamed the Pit Bull with a Powderpuff. It stuck for mannnnny years. LOL And real estate, in this economic climate, is no different. You just have to stand your ground, dig your heels in and ride it out. That is ... unless the short sales make you short circuit!

Sergio...Oh, so true! I think everyone who has negotiated a Short Sale has probably had that experience at least once. :)

Carol...I love it! "PIT BULL with a Powder-puff" Maybe, the answer for (D) should have been lipstick & heels. :)

I've negotiated well over 200 short sales (myself, not using a service). The 4 P's of succeeding are:

Patience - Persistance - Politeness - Perfectionism

Some loss mitigation officers have well over 300 files - each! - to handle. They don't need another rude person telling them how p.o.ed they are with the whole process. They don't need incomplete paperwork, there is no time to mess with this. Don't expect a call back - it's your responsibility to stay in touch.

Yes, short sales are never short, they always take longer than expected, but in the end, you are doing it for the one home owner who is trying to do the "right thing" and get the house sold in agreement with the lender rather than just walking away, as intensly discussed on other blogs here on AR ...

Lola, no wonder I have such a hard time with Short Sales, I have a & b but I am missing the Lipstick. I better talk to my wife to see which shade best suits me.

Susanne...love your 4 P's! Especially Politeness. Being rude doesn't help anyone & makes a tough process even harder.

George...there you have it! :) I'd be intrigued to know what shade is recommended. :)

I think experience in dealing with them is a big plus! I refer out to a company who has expertise in dealing with these. It is a small fee, but well worth it!

Sinking your teeth into the ankle of the bank representative and not letting go until they say yes. Another reason sellers of Short Sales need us.

Hi Lola -- You are right on. I would add LUCK! LOL

JUL

Lola- I am always very saddened when I hear from attorneys around here saying they have a 10% closing rate on short sales and they are attorneys! We close all our short sales, when we think we are going to hit that one that will be the one we lose; we just sink our pit bull teeth in more. It becomes a matter of caring but also keeping our ratio to be able to say, they all close. But we also do an intensive and complete intake evaluation over the phone with the homeowner.

One tip I have to offer for keeping the file ready to go is that sometimes an offer will not come in for a few months. We have our sellers email us their bank statements and paystubs every time they get one. That way their file is fresh when the offer comes in to go to their lender.

It is tough work, it is not easy, not for the faint of heart but we just don't take no for an answer.

Lipstick???

LOL :)

You have to have all 3.

It is hard, and I do a lot of screaming when I submit and offer on June 3rd and the BPO's are just getting ordered. I am nice, I smile but it is so very frustrating.

No one loves short sales but we have to do them or not be in business in Michigan.

What a great post and advice Lola! Working with a Realtor with experience in short sales such as yourself would seem to make the process go more smoothly.

Lola~

TOTALLY"D" and I'd like to reiterate Lenn's remark..." Fact is, without agents to get these things going we'd have twice the foreclosures."

Lola, it is sad to read 10% closing rate on short sales but the truth is there are many agents doing them who have no idea what they are doing and do not have the persistence and organization to keep up with them. Love your new word "positivity"!

Sharon

We are in process of negotiating a short sale now (actually we have an attorney handling it for us) in which the holder of the Second Mortgage is demanding that our commission be reduced 1% before they will even accept any paperwork. They are willing to accept a mere $6000 payoff AND they will not be paying our commission as that will be paid by the holder of the 1st mortgage who has no problem with our full commission.

The attorney argued vehemently with the 2nd but they would not budge. They said that it is their POLICY and they will not deviate from it regardless of who is paying the commission. They said they will block the sale and force the foreclosure unless the commission is reduced.

We are the listing agent and have agreed but the buyer's agent is PO'd about it... don't know where it will go from here but we do have the approval now from the 2nd Mortgagee and are awaiting approval from the 1st.

Fun, fun, fun... NOT! LOL

My closing ratio is around 90%. but, although i am a nationwide negotiator I cut my teeth in michigan years ago as an agent specializing before the market really turned downward. My job is not only inclusive of your list but i am also an advisor to the agents, a partner, an assitant and basically the list agents right arm during the short sale. This market is changing so dramatically that the it is near impossible for the average agent to keep up with the laws, rules and formats that apply to the short sale process.

With all deference to the Agent, the one performing this Herculean feat, a title company that will stay on top of things should not be overlooked. One that will get "yesterday" all the information that will be needed in those touchy negotiations with the short sale lender. One small change on a HUD-1 can be the difference between a go or a no go. Get a title company that will help you with that "complete paperwork".

The agent has the VAST brunt of the work and should always be backed up by a title company that is immediately responsive and in tune with the needs of the agent.

Just my two cents.

Kevin, eSettle, llc, MD, DC, VA, PA, NJ

Lola, You are so right! This truly is a difficult market for not just sellers and buyers but for Realtors as well. Each sale requires so much hard work, expertise, attention to detail and patience. We are the ones that must try to support and keep our clients calm while putting out fires. Great post!

Ha! Why are they called short sales?! They go on and on and on....

Patricia

The pit bull can bite the head off the loss mitigator.

Lola this is wonderful advice! It may take some work but if you have the tools and tenacity short sales can be very rewarding. Not only are you helping a homeowner in need but you've got a client for life. Who will they turn to when they are looking to purchase again, you! Who will they send their friends, family, co-workers who are looking for an agent, you!

I am sure it is a tough job. When the Short Sales stop these negotiators can probably move on to tele-marketing. Or maybe work for the State Department.

A team is our key. I handle the front end because I have 20 years of experience, and I have genuine empathy for the dilemna of a distressed homeowner. Charlene loves the details and the challenge of dealing with mortgage companies. By working together, and having a clerical worker, we avoid what I see is inevitable burnout trying to go it alone. Agents forget that the distressed homeowner can be time consuming because of their panic attacks. Why do we do it? First because we can, and second and most important, saving a homeowner from foreclosure creates raving fans like you have never had before.

Lola - excellent post! I would also add to your list the ability to build the relationship with the title agent, buyer's agent, loss mitigator (if possible) and to lead the group of all involved parties. In other words, team building and leadership are a-must skills. And - increduble politeness, no matter what.

The crazy thing is, those banks that decline Short Sales that are brought to them by us agents because they believe their asset is worth more, end of foreclosing on them and sell them for even less than what a Short Sale offer would have pocketed them. What other insititution would allow that kind of financial mismanagement to go on?

I have to agree with Joe. We have developed a team so the realtors can get and sell listings and we have a person who works only on the banks and mortgage company submitting the offers and on the phone with them endlessly. We've been very succesfull this way. I try to make the transaction as easy as possible for the person handling the communicating with the banks and get them the entire package with the loan numbers written on each page, if I need to fax the papers thats what I do to help as of now I've only had 1 denied. Call me Crazy I LOVE SHORT SALES!

Lola,

Very cute comparison and also very true. :)

I list short sale, sell them and close them successfully! But like Anita said above, I have developed a system that I work on every day.. really.. everyday.

I only take a short sale listing from a seller who is in distress, I list the property at the CORRECT listing price and make sure the buyer is not only willing but ABLE to purchase the home. Buyer agents like to sell my listings since they know they do not have anything to worry about. All my short sales have closed... with the exception of a seller who had an FHA loan, HUD denied the short sale.. go figure!

I LOVE SHORT SALES too! Every file is a RIDICULOUS amount of work and we often do not get compensated accordingly by the lenders but there is no better feeling that saving a seller from foreclosure.

BROKER Associate REALTOR® & Licensed Mortgage Broker - Senior Financial Advisor

United Realty Group - http://www.twitter.com/pattydasilva

Visit http://www.pattydasilva.com for SouthEast Florida's best properties.

I was laughing when I saw your word positivity! Good post, congrats on the feature. Obviously people don't know how hard these transactions can be!

Great piece. Just sent your post it to the listing agent I am working with on a short sale. Am sure she will appreciate it.

Wrote the offer back in April. The Bank has since changed persons the LA was initially dealing with and, of course, paperwork had to be re-submitted. It is frustrating.

Thanks for writing something we can all relate to.

Great post!

Kristi, I have worked w/ a referral company a couple of times. It can be a good partnership, although there is a part of me that prefers to maintain control of the transaction.

Terry...quite a word picture there, LOL...sometimes feels like that is what is necessary though doesn't it?

Chris...and I say AMEN!

Katerina, you have developed a very good system & that makes a huge difference!

Bruce...:) that's courtesy of Sarah Palin.

Missy...w/ close to 70% of our sold inventory in either a short sale or foreclosure situation over a significant part of the past year, it's been imperative to learn how to do these transactions. When the going gets tough...the tough get going. Smiles look prettier w/ lipstick...:)

Michelle, working with a competent professional makes all the difference in the world.

jane-Anne...Lenn has a way of hitting the nail on the head! She's right & it's a point which is often not really appreciated.

Thanks Sharon. Although everyone has to start somewhere, it's really better to work w/ someone who has experience if this is the first time.

Wow Tim, there are so many odd things that come up in these negotiations. One could only wish there was some standards in the process...after all, we have been dealing with this nightmare for several years. Good luck on your deal. FUN. :)

Short Sale Pathways & Kevin Stroud w/ eSettle LLC, it is a lot of work to process these types of transactions. Always good to know about additional resources and services. Thank you.

Always good to have you drop by Diane. Thanks. :)

Patricia...the term is a classic misnomer in most cases...

Thomas...only problem w/ that solution is it will also kill the deal. :)

Erin, that's true.

Gene...LOL :)

Lola....your points are great and I would add to it ones desire to truly help a distressed homeowner. Add your characteristics along with desire and you'll find a Listing Agent who will have a 100% Short Sale approval rating or very close to it. The low numbers indicating a lackluster approval rating, simply means that the Listing Agent is lacking in these characteristics.

Joe, the team concept can make all the difference in the world! These transactions can be incredibly draining on a number of different levels. Sounds like you have a good formula for service. Thanks for adding this insight to the discussion.

Svetlana & Anita...cooperation and teamwork make a tough situation more bearable. I like Joe's approach too.

Tarris...that is one of the most frustrating aspects of the whole negotiation. Sometimes, a poorly trained loss mitagator can cost the lender a ton of money when this type of incompetence comes into play. Most foreclosures are more costly to the lender than a skillfully negotiated short sale.

Evening Lola, Your post is a very well written overview of the short sale process. Still many agents who treat them pretty much like a traditional sale !

JUL

As I write this, I have been on hold for over 25 minutes waiting for someone in the Loss Mitigation Department at Bayview Loan Servicing to answer the phone....Sale date is Tuesday. There is one offer on the table and the bank keeps saying NO, NO NO! Oh, the frustration....

In any event, this post was great and gave me the motivation to stick with it and not take "NO" for an answer.

JUL

I have to go re-apply my lipstick - we got an answer from the first lender :) after 7 months (yes, I said 7 months) and the number 2 lien holder has moved to collections :(

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