5 Words This Phoenix Short Sale Agent Loves To Hear-"I'm Just Following Investor Guidelines"

If you've done more than a few short sales, you've undoubtedly heard your negotiator mumble these 5 words.  To me, this is another way of saying, "You are right, I was wrong, but I have no other choice but to put the blame on someone else (i.e., the investor).  As an experienced Phoenix short sale agent, I look at these 5 words as an opportunity for you to win.  

Let me give you a quick example.  Last week we were informed by a negotiator at GMAC that she would not approve a 3% seller concession towards the buyers closing costs on one of my Phoenix short sale listings.  When we asked why, she told us that it was a cash deal, and Fannie Mae doesn't approve seller concessions on a cash deal.  Fair enough, I thought, as this is a typical practice in today's short sale world.  But, there was only one catch....The buyer was using conventional financing.  Oops!  So, we kindly reminded the negotiator to review the HUD-1.  No problem, right?  Wrong!

Next, she said that because the buyer's proof-of-funds (which we provided to show they had enough for the down payment) showed that they had $45,000 in their bank account, "they could afford to do the deal without any seller concessions".  HUH?

When I reminded her (through Equator) that the amount the buyers have in their bank account has absolutely NOTHING to do with whether she was making a good financial decision on a short sale vs foreclosure for her client (Fannie Mae), she said, "I'm just following investor guidelines".  I love it when they say that. :)

My response to her was as follows..."Your job as a negotiator is not to guess what funds the buyer might be willing to contribute to the purchase of a short sale.  Your job is to determine whether you are making a sound financial decision for the client you are representing (Fannie Mae).  In essence, you are telling me that you are willing to allow this home to go to foreclosure because you "feel" the buyer can afford to pay more for the house, instead of relying on your BPO.  We have closed dozens of short sales in the past 6 months (the majority with Fannie/Freddie), and I've never heard of this guideline.  Please send me a copy of this new directive from Fannie when you get a chance.  This afternoon, I will be escalating this file to Joe Johnson and Sam Smith (actual names withheld) with Fannie Mae, and I'm sure you'll be hearing from them shortly.

Fifteen minutes later her response was, and I'll quote, "The only reason the funds were mentioned is because you indicated that the buyer did not have the money to close.  I will reach out to my contact at Fannie Mae, as well as Joe Johnson and Sam Smith".  

Her response is telling me two things...First, she never even presented this to Fannie Mae.  Second, she realized she made a BIG mistake.

I would bet my commission that in the next 24-48 hours, we will receive an approval on this Phoenix short sale.  

If you are negotiating short sales, you need to remember something...More and more, we are hearing that negotiators are being paid a commission, based on the difference between what you offer, and how much they approve.  Phoenix short sale agents should keep this very important thought in mind when negotiating their next short sale.  Like Ronald Regan said, "Trust, but verify"....In the case of short sale negotiators, "Verify, then trust".  Most importantly, don't take NO for an answer.  The reason that so many short sales fail is because agents give up without pushing the limits.  When you know that your negotiator is wrong and you are correct, ESCALATE TO THE HIGHEST LEVEL!

Until next time...