Home : Blogs : AnnaMarie Dalbey : AnnaMarie's Blog

Life in the Short Sale lane!

Well I gotta say that this market is surely shaping up to be a whirlwind! Besides listing "Short Sales" how many of you are writing offers up on "short sales". I tell you I've been in this business a long time so i really don't need the practice any more!LOL Yeah, I guess when you do enough of these types of sales you know what to expect, but when I go to write an offer on a property that my clients want, I feel as though someone is scratching a chalkboard with nails when the listing agent on that property indicates she is gonna send in "ALL" offers to the bank. I'm like aren't you only gonna send the best one, "Oh no they want all of them". Well how many is that, oh TEN.....Okay is it just me or do other people feel that you give these Loss mitagators multiple choices and we've lost the war! I really can't beleive with all the classes available to us a agents that we still have agents that don't know how to do short sales ..... I guess I'm old fashioned but I feel we need to know how to do our job, so take some time to learn. The market is changing fast and we have to adapt with it. I use short sale genius and they are wonderful! The software alone is worth it, to keep track. I've recently become an Ambassador for Helping a Million Homeowners. My goal is to help these homeowners leave the home they have been living in with dignity. Come on people we are the professionals! I take my commitment to my clients seriously. Yeah . it's alittle crazy at times but I love it! when everything works out and they are released of that burden, come on, that's when we look at why wer'e doing what we do and SMILE!!

Hey everyone, Have an awesome day!!!

Posted by AnnaMarie Dalbey on 09/17/2009 03:27 PM

Comments (44)

advise, short sales, experience

This post has been included in California Information Riverside County, CA Information
Post is included in group: Realtors®
Post is included in group: Prudential Network
Post is included in group: Christianity and Real Estate

44 Comments on Life in the Short Sale lane!

SEP

AnnaMarie...

The folks that are doing short sales with out a clue scare the crap out me :)

TLW...ROAR!

AnnaMarie -- It is an agent's fiduciary duty and part of our code to send ALL offers to the seller.

Chris you are correct about having to send all offers to the seller but in a short sale the bank is not the seller. All they are is a contingency, a really big contingency that is hard to clear.

IMOP, the only offer you send to the bank is the buyer you feel the most comfortable with. The one who fully understands the process and you truly believe will close the deal.

Too many people are putting their own personal interest above the consumer... and that is an ethics no no... If you don't know what you are doing, then refer the business to someone who does.. or better yet, don't try to get it in the first place because you don't have the knowledge and expertise.... it is like misleading adversting.

You have to have a lot of patience when it comes to short sale properties, listing and selling them. If an agent is unclear on the proper procedure he should not be listing the property!

When we are negotiating short sales we will take all offers but in order we received them. Keep them as backup. Let the potiential buyers know that there is another offer being worked. Always give the first buyer every chance to counter (if the lender counters) or walk away and then put the next offer on the table.

The lender will only work one offer at a time and to submit every single offer to them will only confuse them. Lenders will ask such thing as the purchase price and buyers name so they can keep track of which offer they are working. They understand that buyers will walk for any reason.

AnnaMarie....I could not of said it any better!

Short sales require real work and not just learning the "stacking order" of paperwork.....If your short sale efforts are faxing paperwork then waiting. That sounds more like fishing then short sale negotiations.

It's jungle out there...

Thanks for the post - short sales are very tricky and the more we can learn about them in advance the better - I always appreciate agents who work one offer at a time on these - it seems that is the way it should be done!

As a CW/BoA SS expert they will only deal with one offer at a time. Thus this adds to the tedious bureaucracy of their 3 phase negotiating procedure. Send highest and best, best meaning the most patient buyer who is willing to hang in the game. Thanks Ann Marie for helping me keep my chin up.

AnnaMarie, glad you are one of the ethical hard working ones out there helping your buyers.

I must agree Joan! Better to refer than cause someone to lose their home. Short Sales are not something you can guess at. I qualify the seller to see if they truly will be approved for a Short Sale. I have been doing them before they were a big phenomina.

AnnaMarie, I think working short sales is a form of community service - where we do get paid but we put in lots of sweat equity to get there, and it's not guaranteed but usually works out because of our hard work. Congrats on the Gold Star!

Sharon

Don't forget - the SELLER decides how many deals get sent to the bank. It's not up to the agent to decide. It's a better plan in many ways to just submit one best offer...but it depends on the bank, the situation and the timeframes in the contracts.

My policy is usually to only send one, but each case is different, and the seller certainly has a say.

Short sales are a lot of work, but a necessity in our area. I submit one offer to the bank. The seller is still the seller, not the bank.

We have to do what we have to do to survive and short sales are a part of it right now.

SEP

I have recruited a short sale expert to my company to handle all short sales. This way I have a licensed Realtor handling the transaction from start to finish. Great post

Thew secret in doing short sales NOT to take everyone that comes your way. .just the ones that makes sense

AnnaMarie, unfortunately you are right, a lot of agents here in my area a totally clueless when it comes to short sales and that creates a bitte bit of a disaster. Here in Florida most agents work as transaction brokers and that creates another dilema. I always work as a single agentand as that my priories are very straight forward. I do the best I can for the seller or the buyer whichever one hired me. When I am on the sellers's site I submit only the best offer to the bank (speeds up the process) and I tell everybody else that they are back up offers only. When I am on the buyers site, I insist that my offer is submitted to the seller and forwarded to the bank.

AnnaMarie:

You are correct! Sending multiple contracts into the lender is just going to confuse them - or worse, slow down your file or kill it.

I agree totally with the comments above - "all offers will be considered" but the best one goes to the lender. And it may not ALWAYS be the highest offer!

We qualify the buyers as much as we qualify the short sale sellers. An offer above full price that asks for 6% seller contributions and struggles to come up with the earnest $$$ may not be accepted above a cash offer for less than asking price.

We sometimes forget - or are not knowledgeable in the first place - The homeowner is the seller that we represent. The lender approves the "short payoff" that will be accepted, not the contracts.

Sending more than one offer to the bank confuses the bank send in the first good offer then take a back up in case the first doesnt go thru or the buyer gets tired of waiting. Let the realtor know it is going to be a backup. Everything depends on the bank each bank does thing different.

Great post. I believe in submitting one offer. Present all offers to the seller but select one offer. My duty is to the seller not the bank. If you send all, you are more than likely not going to have any buyers left by the time the bank reaches a decision not to mention the bank will take longer to process. Why.. because if I am representing the buyer I cringe when agent submits all. I know that by submitting all,waiting the short sale out is not in my clients best interest when multi offers are submitted. Why would I convince my buyer to stick around when it is a long time to wait for an even bigger fingers crossed, hope they take it! In addition I do not think highest and best always works. If the highest is above the comps. it again is not in the best interest of my client. This leads to problems of bank wanting the offer and buyer not willing to pay difference over comps. And... it is already compounded by what will be the comps at the time the bank makes a decision, that could also have changed. Then buyer walks and now bank may not settle for a more reasonable offer easily. I think sellers should pick an offer that is easily replaced if buyer walks. All others go into backup position if they want it. The goal IMHO is to help get your clients (seller) home sold so that they do not have to face foreclosure and all the ramifications that follow that. Also picking someone whom you think has a stronger desire to stick around is important.

Additionally, constantly following up with bank is crucial. And finally.... updating buyers agent of progress of your actions with bank. I think when there is contact with buyers agent there is a better chance that the buyer is going to stick around.

Most agents haven't done short sales in my neck of the woods but they are becoming more common. As long as agents due their homework and due diligance everything should progress well. I find that explaining the process to buyers and sellers and calming their fears, since they are not in control, is the difficult part. The uncertainty of not knowing if there will be short sale approval from the lender/lenders is the most daunting for all involved.

AnnaMarie,

You handle your short sales the same way I do mine. The process works too if you work the process! Closing 2 shorts a month for past 5 months. Will close 3 this month as we're starting to fill the pipeline a little faster, and getting better at working the banks to get them through their pipeline faster too!

Got that you use the Short Sale Genius software; but, for edification of folks who would like to learn a good short sale program/process - could you share one or more programs that you feel have taught you best. Maybe that is Short Sale Genius too - if so, please confirm.

Keep up the good work helping homeowners!

Kent

You have helped one million homeowners? Really? Can you explain more about that? That's a pretty huge and impressive number!

AnnaMarie,

Tell me more about Short Sale Genius software. What is it? Anything that helps me organize and streamline the process, I'm all for it.

AnnaMarie: I couldn't agree with you more. Agents that send multiple offers are the ones that are clogging the short sale approval system. The negotiators don't know our local markets. They don't know which offer is solid in terms of appraisal. Agents are only shooting ourselves in the foot when they do this. And I'm sure they are the same agents that get P.O.'ed when buyers write multiple offers on multiple short sales and wait to see which one gets accepted.

There is some fraud going on in the Short Sale market. You probably do not have to send in all the offers,the problem is sometimes the best possible offers are not sent in.

Ann Marie, I do get frustrated by short sale listing agents that do not seem to know the difference between an offer and a contract. They treat their listing as if it is bank owned and forward all the offers to the lender for their decision. It is not the lenders house to sell! Since the seller does not sign any of the offers the lender is stuck with a bunch of expired offers!

One contract executed by both the buyer and seller is what should be sent to the lender. The listing agent should hold onto the executed back up offers and keep all potential buyers up to date with the progress of the short sale and inform them when they have moved up in the list if a potential buyer drops out. If the bank finally approves the short sale contract...great! If they approve the short sale but counter to a higher price, then original buyer should have first shot of meeting the higher price and if they back out of the offer, then the listing agent should go to the back up offers in list order.

It is a tiresome but necessary task now that I have to call each short sale listing I plan on showing to find out how the agent proceeds with their short sale. So many of them do it incorrectly. It is really sad, because it's hard enough having a short sale go through when everything is done correctly. And the poor sellers who have the unknowledgable short sale listing agent are stuck with their home listed as active for many months with continuous interruptions in their life with all the showings. Whereas if their listing agent handled offers properly, within a matter of days or weeks they could be in contract along with back ups waiting for bank approval and cease having any further showings. That would cut down some of the stress in what is already a traumatic enough event in their life.

Upon submitting an offer to a Seller, how can you be sure that your offer has actualy been sent to the Seller's Lender? As one of the comments to your post states, there is fraud in the Short Sale market and in many cases, the Buyer's agents have no way of communicating directly with the Lender that is supposed to be reviewing your offer. Is there any real way of confirming this to your Buyer?

Miriam - The listing agent or a 3rd party negotiator hired by the homeowner or listing agent should be in direct communication with the bank in a short sale. They are responsible for communicating the accepted offer to the bank. I have never been part of a short sale situation when the homeowner was the one communicating with the bank.

One reasonalble offer goes to the bank. If the listing agent is doing it any other way, I will advise by client that it will probably be a waste of time. Any other offers should go in line, and only be considered if the initial buyer does not agree to the banks price. Let's keep it simple, everyone. We are helping our clients here, not the banks!

When I wake up from a short sale nightmare, I repeat to myself, Code of Ethics, Code of Ethics. If only those Realtors who don't know what they are doing on short sales would not sleepwalk through that education.

On the buyers side the most important thing you can do is to find out the qualifications of the listing agent and see if they know what the hell they are doing.

Ah yes...the long and tedious road of a short sale. For agents who know the ropes, these transactions can go relatively smooth albeit slow. But OMG if you get with an agent who is not skilled in short sales. YIKES!

SEP

Yeah Anna Marie. I have an "Agent" still trying to figure out the short sale process. It has been 6 months since we made that offer! I would withdraw it, however, my clients love the home. They are still shopping though.

We are still working for the Seller (home owner) not the bank, that is the point it is a Pre-Foreclosure listing. If we do our jobs by selecting the first best offer, have the seller sign and send it to the bank we can keep all the players in their traditional rolls. Do not let the bank do the Realtor's job, we select the best offer and negotiate with the bank, we do not just ask the bank what do you want to do. Continue to help families during these troubling and financially trying times.

Hi Anna Marie, Great post! Yes, it seems short sales are getting more prevalant.. Want to learn all I can on these. congrats on feature post!

Usually most banks will only look at one offer a time, so when an agent tells me that on a short sale, depending on the bank, most of the time it is not true

I wonder why anyone would allow the banks to control thier business.

Ok I know , iknow. What the heck am I talking about ??

Well why do you waste your time & your buyer's time dealing with this multiple offer

scam ?The seller is already a victim in this scenerio,I don't believe the buyer & the

agent also need to be as well.

The Bank will choose $$ over terms every time & reduce Your commision as well.

While your waiting 90 to 180 days, your buyer ,is missing a lot of good opertunities.

I wish all of you success & happiness. I chose not to work for the Banks, but for my

Client & my business.

Bob E.

I wonder why anyone would allow the banks to control thier business.

Ok I know , iknow. What the heck am I talking about ??

Well why do you waste your time & your buyer's time dealing with this multiple offer

scam ?The seller is already a victim in this scenerio,I don't believe the buyer & the

agent also need to be as well.

The Bank will choose $$ over terms every time & reduce Your commision as well.

While your waiting 90 to 180 days, your buyer ,is missing a lot of good opertunities.

I wish all of you success & happiness. I chose not to work for the Banks, but for my

Client & my business.

Bob E.

AnnaMarie - Great post and congrats on the feature. I agree that agents who are unfamiliar with SS should NOT do them. I have seen many cases where the listing agent did not understand the SS process and the home ended up in foreclosure. There were offers but if the listing agent is completely clueless on the SS process the buyers end up walking and the seller is left holding the bag.

Ambassador for Helping a Million Homeowners! How in the world did you do that? That is an incredible number!

Banks are already overwhelmed and sending offers in numbered order from time received is the best way. I help the seller on each offer as it comes in by having them counter to a realistic number and then we let other Agent know that their offer is Primary, 1st backup and so on. You must disclose them as a backup as like any other contingency. #1 RULE is to put it in writing!

SEP

Somone brought up a good point about it's not the banks home 'yet' to sell so why are you sending multiple offers to them? Where's the seller?

SEP

Has anyone seen the practice of placing a short sale listing in the MLS and then stating in the Agent Remarks "Seller does not want any showings" ? I tried unsuccessfully to take my buyers on several occasions to this listing only to be rebuffed by the agent or had my voicemails ignored. It was on the MLS for 35 days as Active short sale and then a few days ago it went contingent! How can an agent and seller accept an offer and be acting in the interest of the seller's lender when they have consistently refused to show the property?Has the agent acted in the interest of the bank by not allowing other agents to bring their clients and so make offers? Did the agent double end by accepting sign calls only? This stinks in my opinion but I am seeing it quite frequently especially in areas where demand is high - List the house and stop your competition from bringing a buyer with an offer higher than your clients - great sales tactic!

I am actually horrified that many agents don't actually know the difference between a short sale and an reo sale.

If you don't know that your fiduciary duty is to the seller and that the banks approval is just a contingency then why on earth are you even listing the house? I have even heard of agents asking the seller to sign all the offers and send them to the bank - are they expecting the seller to sell the house multiple times to different people?

The most sensible way to handle it is to state a period of time in which you as the listing agent will accept offers for your sellers review. At the end of that time the agent guides the seller on the most appropriate offer to submit for approval by the bank, pick one and seller signs it and let's the successful offeree know, and the offer goes to the lender(s) in what is known as a "short sale package" which consists of hardship letter, bank statements, tax returns etc as proof that the seller is unable to pay the mortgage but here is a buyer ready to take the property at this price. The status on MLS changes to Short Sale Contingent (in California) and other offers are placed in backup in the order they were submitted.

It is quite common now for short sale listing agents to only accept offers where the deposit check is cashed and placed into escrow. When this happens it is a good idea to ask the listing agent to change the status to pending on MLS as a sign of good faith. It is also vital as a listing agent to keep the buyer and the buyers agent involved by supplying them with regular updates on progress. Most short sales fall apart because the listing agent doesnt bother to do this and the buyers lose interest.

It ain't rocket science! :-)

Leave a response…

Name:

Email:
(optional)

Comment:

What does the graphic say?