When I first started doing short sales, I had four short sale offers I needed to get approved. Each of the banks had turned down the offer. I had hear about escalating the file. But, I didn't know exactly how to do it.
What if the negotiator got mad at me for going to their supervisor? They might blacklist me and the file. Then the short sale would never get approved. Turns out I was overestimating the negotiator's power. Here's what happened.
The first house was selling for 175k. The negotiator had countered back at 208k, which was the BPO value. I thought we were dead in the water. The net to the lender was 73% of BPO. I had been told that lenders won't accept less than 75% of BPO, no matter what. The buyer wouldn't raise their offer either. So I gave it my best shot.
I built a case study on why the bank should accept our offer. This went way beyond the typical short sale calculator. See, most negotiators will look at a short sale calculator, see they'll lose more in foreclosure, and still turn down your offer. It doesn't make sense, but that's what they do. I knew I needed more ammo than the simple calculator argument.
So I built my case. I escalated the file and made the first part of argument. I could tell that we were getting close. They did their last squeeze. I called the buyer and he turned it down. When I relayed that back to the supervisor, I knew we had a deal. He told me I would get the approval the next day.
There are a lot of myths and fears about escalating the file. Let me go thru one of them here.
Escalation Myth #1: I don't want to escalate the file because it will get the negotiator in trouble and they will get mad at me.
Escalation Truth. Sometimes escalating the file is the only way you can break thru the lies the negotiator is telling you. For example, before I knew any better, I lost when I had a 175k offer on a 195k BPO. The negotiator told me that he would get his bank in trouble if he even submitted the offer to Freddie Mac with the seller paying 3% of the buyer's closing costs.
Before we could get the file approved at 175k, the buyer had found another property. The buyer walked. Aaarrrggghhh!! We ended up selling that house for 172k a few months later. This time around I knew how to escalate the file. The 172k offer was approved. I've put together a course on How to Escalate a File. If you're looking for more info on how to escalate the file, go to http://www.HowtoEscalateAFile.com .
You can see my e-mails and faxes, what I say in them, the case study I lay out, and how to get a file escalated to the supervisor.
Thank you for reading this,
Sincerely,
Ben & Chris Curry
We work at Keller Williams in Gainesville, Florida
P.S. If your short sales are getting turned down, your sellers are being forced to bring money to the table, or you are sick of having good fair offers turned down on properties, then you have to learn how to escalate the file. Here are a few of the approvals we escalated and got approved.
Approval from Escalating #1: BPO of 217k. Sales price of 170k. Net was 145,841. That is 67.2% of BPO. Negotiator turned the file down. We escalated the file and got it approved at the 170k.
Approval from Escalating #2: 255k BPO. 225k offer from buyer. 198k net that was 77.5% of BPO. Negotiator said they would only take a net in the 82-84% range. We escalated the file and got it approved at the 225k. If we had netted them the 82% of BPO, the buyer would have had to raise their offer by 13k.
Approval from Escalating #3: 175k sales price. $152k net on a 208k BPO. 73% of BPO. Negotiator turned down the offer cold. We escalated the file and got it approved at the 175k.
Approval from luck: 120k sales price. 100k net on a 135k BPO. 74% of BPO. Negotiator turned down the offer cold. This was before I learned how to escalate. I lucked out and we got an offer for 14k more and it was approved. We would have lost 3 of those 4 files if we hadn't escalated them. However, you and I can't rely on luck to pay the bills.
P.P.S. Today, we are getting 90% of our short sales closed. This is true even for offers we previously would have told the buyers to not waste their time. For more information on how to escalate your short sales and get them approved, go to http://www.HowToEscalateAFile.com . You can see my e-mails and faxes, what I say in them, the case study I lay out, and how to get a file escalated to the supervisor.
Comments(0)