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Like any industry, and any profession, lack of change or adapting can make a slight to significant impact on one's business. There are a few things in our current market / economy that make me cringe, yet I hear/see them EVERY DAY and they are becoming more and more common ... "lease with option," "Buyer with credit issues...," and "short sale," just to name a few.
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24 Comments on Listing Short Sales: my NEW personal policy | What do you do??
Hi Derek,
Interesting idea, you are right short sales are time consuming and often we don't get paid. My only concern with trying to collect a fee up front would be is there's another agent around the corner willing to take the listing without one. You may be losing potential business in the end...just a thought. :)
short sales...who needs em.... your list is a good one. And i like the fee idea because when you get down to the closing (assuming you EVER get there) the bank will want you to reduce your commission to 1%.
I simply refuse to do them. Life is just too short and there is too much real business out there....
great article on your blog!
I read somewhere that 30% of the current inventory is Non-Approved short sales. Just think if these came off the market, while the banks approved the short sale, how much quicker the current inventory would move.
You have to be able to control your business. Great post!
I am with you all the way!
Steve - thank you for stopping by and commenting!
Virginia - yes, I am new to these in the last couple years and I think they are here to stay! Thanks for commenting.
Kelly - you are absolutely correct ... thank you for stopping by and commenting. I think almost 60% of the Pendings in our MLS are some type of financial hardship ... either foreclosure or short sales.
Mystery poster - thanks! :)
Derek,
No question short sales are more work. My view is that banks are getting homes back at a record rate and are willing to deal. They don't want them back if at all possible. Very true that if the listing agent is on the ball it REALLY helps!
Interesting idea on the upfront fee. I don't think I could pull that off though.
Carmen - thank you for your comments! I just wish the banks would take some care to try and get a higher price for their inventory (i.e. staging). Those basement-bottom prices are killing us all....
Lynn - I appreciate your advice ... thank you! I will be sure to keep that in mind...
Derek:
Does your broker take their piece of the non-refundable $500-1000? Interesting idea.
Derek, I do all that except the Non-refundable fee. I would feel bad asking them for a depoist when they are they are having financial issues.
Melonie Haag
Unknown - Oh sure ... the Broker enjoys a piece of everything, right? :)
Melonie - thank you for the comment. I respectfully disagree. IF they are not paying their house payment, in theory, they have MORE money on-hand then they normally do!
Hi Derek. I've been toying with the idea of an upfront non-refundable fee... as of today that will be a condition to handling a shortsale. Thanks for sharing the great tip! Keep them coming.
DEREK--You should get he authorization letter an fax right away--make sure you're on record for that loan and it can make the submission of the contract much smoother. You can also get whatever information they require upfront. Once they receive the authorization order the payoff. Once you have that then you can have a better idea of your pricing. Typically the lenders would want 80% of the amount owed. If you have to list for less than that then you know you should start a bit higher than you wanted but then you will better show the lender you tried to get close to what they need and the market couldn't bear the price and it wans't just you.
I find that is is also good to do a damage log and submit it with the contract, it will make your contract look better is they see that they will have other expenses if they foreclose.
Meet the person doing the BPO and explain your point of view of the pricing plus give them your comps. Most of the time they will be happy that you saved them some work and if they use your data then your BPO will be favorable.
In your listing contract write the price reductions in for the 1st and 15th of each month. This way it's automatic and you don't need to have the price reduction conversations and if they're all on the 1st and 15th then you save lots of time trying to keep track of all that activity. Same goes with the listing expirations, you should have them all for the 30th of each month.
Also, send yourself market updates for the communities that your listings are in. They will let you know the pricing of all the properties and you can use the same information for submission to the Mitigators to further establish the pricing and market conditions.
Keep it up. Great post and tick with it. It will get easier with experience and the lenders will eventually figure it out. Don't forget that most of the Loss Mitigators were probably working at Home Depot
Derek, I respect your right to choose how you run your business, and I think that most of your ideas regarding short sale listings are good, but I just cannot justify taking a $500-1000 upfront fee. It sounds good and makes good business sense, But I can't do it.
The overwhelming majority of short sale clients I have had the privilege of representing are facing short sales for reasons of genuine hardship. These are peope who have suffered catastrophic illness and have 10's of thousands of dollars in unpaid medical bills, have been unable to find work for many months, had a young spouses pass away prematurely, etc. These have been people who during the course of the listing had no home or cell phone where I could contact them because they could not afford one and checked their e-mails on their lunch hours at the public library. I have had FHA Short Sale clients sobbing when they received a $1,000 particiapation incentive check at closing because they could go to the supermarket and buy food for dinner or now had the money to put down a security deposit on an apartment for themselves so they could stop sleeping on friends' sofas.
I have been a short sale specialist for nearly 4 years now and look at my short sale business as an opportunity to help those who genuinely need my assistance. Yes, you are correct, these transactions take more time on my part to complete. Yes, the lenders frequently have their hands in my wallet trying to cut my commission or asking me to pay for transaction related costs, and Yes, I could probably make more money focusing on other types of transactions, but if I required my clients to pay an upfront transaction fee that they do not have and which they will not gain upon completion of the transaction since the lienholder gets all the proceeds, I would not sleep as well at night.
Lisa and Vincent - Thank you! I have enjoyed everyone's perspective on this topic.
Sidney - Excellent information! Thank you for the post and for taking all the time to share that valuable information.
Steve - I appreciate your stopping by and commenting. You have surely seen some difficult situations and I agree ... from those folks I would not take a fee. I am rarely seeing situations like that, though. I am simply seeing people that got in over their heads and now aren't making their house payment. If they aren't going to make their house payment, then I feel that I should see a nominal fee for all the work involved in POTENTIALLY getting a sale on their house.