Highlands County Talk

Mmmmmm.   This should be a subject of intense debate. 

How much are you willing to forfeit of your commission for this critical service? 

Is that person now going to communicate with your buyer client???   Mmmmmm.

More questions than answers.

I wouldn't want one of my buyer clients to be turned over to an office clerk.  That's what the banks do in their loss mitigation departments. 

What about the risk to the agent when a mistake or perceived mistake is made.  Unless someone with responsibility to the buyer for representation, agent or broker, there could be confusion. 

My opinion as a broker is:  If you want short sales, then the AGENT (not the broker) needs to service the listing.  Otherwise, it is a referral situation to a person in the office who is a short sale specialist.

Andrea, I would not like to turn my buyer clients over to someone else, but I do wish that the listing brokerage would assign someone to update and communicate about offers to selling agents.

After submitting an offer we rarely hear from the listing agent and spend hours chasing down answers.

If we blame lack of communication it on other agents, then we look as incompetent as the banks do.

Andrea...

This is exactly what we're getting ready to do. It will allow Broker Bryant to concentrate on other things that are geared towards our future.

TLW...ROAR!

Hey Andrea,

I hear your frustration. These files are really time consuming. But I agree with those above...the downside of turfing off the work to a non-licensed clerk may outweigh the upside benifit. Lots of agents hire non-licensed assistants to handle the administrative aspects of the job...freeing them up to focus on business generation. This is perfectly appropriate, and for some, an excellent business decision. But as a broker who has spent countless hours shepherding these deals through loss mitigation departments through the years, I share Lenn's concern above. Whose license is in play if there a mistake made here? It's probably better to find another licensee to share these short sales with. You get 'em, and let her service 'em. Between the two of you, you'll have to figure out how to divide your side of the split.

Andrea, more and more agents around my part of Florida are now using Title companies that have dedicated personnel that will deal with the bank.  They then make their money doing the title work and often cost no money to the agent or seller.

We do short sales. We are working with a local attorney who does all the negotiating, so we can deal with both buyer and seller. This attorneys office usually negotiates the fee with the lender and does not hit us up for a portion of the commission. We have found that third party people want part of our skin, and they then send it to their local attorney friend to finish the deal. Hook up with a local attorney and become the short sale specialist. Make sure you use an attorney who does mostly real estate, or their court time will interfear with your real estate time. Lenders will not like this, nor will you.

This is a good idea.  Hand it off to someone in the office to handle it.  Unfortunately, we would have to also give them a portion of our commission for all their months of aggrivation.  and, in most cases, our commission is also cut from the seller's lender as well.

It is a good idea to promote this idea of "short sale expert" though

Don

I know an office here that did that. It was a disaster, she was horrible. Of course this was one office but the listing agent would not know what was going on, we would have to call the Short Sale Negotiator. She never answered and it fell apart.

You could hire someone for your own team who you trained to handle the calls.  Remember the person you put in charge of your files would also have to be on every letter of authorization to the lender to be able to call and talk about your clients file.  I couldn't imagine handing off a file to someone who was responsible for the entire office and my file was just one in a stack.  Sounds like what the lenders are already doing with our files.

Hiring a office person to coordinate may make sense to help the listing agent. If the listing agent is willing to help pay for it.

Being on hold for 40 minutes or faxing a document for the 3rd time to a careless loss mitigator is niether a valuable use of our time nor a sacred fiduciary duty. How nice it would be if 95% of our time were spent on short sales actually negotiating with the lender's rep or clarifying an important part of the hardship package. It isn't. Short sales are 95% perspiration and 5% conversation.

YES. A responsible broker with agents who do short sales absolutely should have a dedicated assistant for the grunt work, so long as the actual sensitive activity is still handled by the agent him or herself. If the dedicated person isn't good, get a new one. It is like anything else- an assistant helps us leverage our time. If you are doing short sales at a broker that doesn't offer rudimentary support, either switch to a broker who does or stop doing short sales. The litmus test is that 9 of 10 short sales should close with a full commission. No kidding.

Like Bill, I do short sales, and we have an attorney negotiate the file directly with the bank. It is the best of both worlds; the client has a fiduciary negotiating the workout, and our business doesn't shrivel while we wait on hold for a poster child of antipathy at the lender. It helps that the lawyer and his staff are absolutely dynamite.

Andrea,  Try to see this from the broker's viewpoint.  We're trying to maintain the same level of service to our clients and agents and making less money.  The percentage of short sales that actually close is small.  I recently had a friend complete one where the lender said, "Sorry REALTORS, but there's no money for your commission."  The bank does not have a listing agreement with the REALTOR and the owner has no money so the REALTORS just worked harder than they ever had and didn't even get paid. I'm afraid if agents in my firm want a "short sale person" they'll have to find, hire, train and pay her/him.

I'm glad you posed this question Andrea. 

In my experience handling Short Sale home listings, I wouldn't say it's a cake-walk but I have not found the process to be as horrible as I hear some Realtors complain about.

I tend to follow all of the steps I've learned in the various advanced short sale training classes I've had, and it's worked well thus far. Out of the 12 homes currently listed with me for sale, 4 of them (or 33% of my inventory) are Short Sales. For one of them I was able to secure a "full approval" on price, commission, closing date terms within 2 weeks of making sure the seller's financial package was accurately submitted to the lender's loss mitigation person.

Now I have a direct line to the lender and they return my calls within 48 hrs. Not sure if this is something that I'd want or need to delegate to someone else, because it's really important for me as the "Short Sale Realtor" to shepherd the transaction. In fact, many attorneys who really know their stuff when comes to handling "Short Sales" and "Pre-Foreclosures" will say the same thing; have the experienced "Short Sale Realtor" deal with the bank at the onset.

Thanks for spawning good food for thought!

Andrea, in theory it sounds like a good idea having someone else doing all of the follow up work. However in my experience, the work always get done right when you do it yourself. If your Broker decides to do this, let us know how it works out.

Andrea,

Most short sales never get to the closing table.  In fact, this process is so frustrating, most agents just give up.  Whole lot of work with usually, no reward or result.

Market areas will dictate the need for broker policies to accomodate this type business.

In most rural areas there is not much need for this type service.  In larger markets, I would say, absolutely.

We prefer a relationship with a title company that has a great short sale program. We use Village Settlements in Gaithersburg, MD. They make it happen.

Andrea - it's certainly an interesting idea. I like where you are going with it, but I think the cost that would be involved to the office, therefore impacting your take-home commission, may turn off a lot of people into putting this into practice.

This is a very interesting thread.

One thing to remember, if things go badly, the agent and their broker WILL be brought into any litigation. 

If I'm the one at risk, I want to be the one making the decisions and communicating. 

Of course, I'm the most risk averse person in the real estate world.

Andrea, interesting and very timely post.  We just talked about short sales this past week at our sales meeting.  My broker is concerned about the unknown fallout from short sales in the future. What we talked about are a team we know  who are specializing in short sale listings. They are coming in this week to talk to us and we are looking at referring short sale listings to them because no one in my office is wanting to specialize in that right now.   I don't mind working with a buyer but do not feel skilled enough to work the listing side.

To me, it seems counter-productive to have someone else take over the most important part of the Short Sale, the part that will make or break the entire transaction. It is also dangerous to hand over such an important transaction that the outcome will affect your client for many, many years and in some cases for the rest of their lives.

It is much more prudent to learn everything there is to know about how to successfully navigate the negotiation process. When you have the entire process down to a system then there are certain aspects that can be delegated to others. (Ideally, to your own assistant.)

I use an Attorney here that handles all of the negotiations. He has a 98% success rate and I prefer not to have the liabilty. We are an Attorney state so he creates all of the addendums and contracts for the parties. I also use a transaction coordinator for the other paperwork. I do about 3-5 short sales a year, the rest is mostly bank-owned, I find the key to a successful transaction is great communication with all parties.

Wow, lots of responses! Thank you guys! What an interesting perspective you all bring to the table.

I wasn't quite honest in my original post (don't tear me apart just yet).  Our office has now a paralegal/closing agent that works our short sales for us. As a closing agent, she has been closing short sales for years. As a paralegal she is experienced with such procedures and foreclosures as well. She has excellent connections to a long list of banks and she's not taking "shoot!"

My broker's wife is an attorney and is seeing more and more business coming from homeowners in foreclosure. It made sense for her to hire a paralegal/closing agent to do the pencil searches and get on the phone with the banks. Our Short Sale "Wonderwoman" is being paid by my broker's wife who benefits from referrals of clients that are beyond best before date when it comes to short sales.

I submitted two short sales contracts to her on Tuesday and the packages were completed, submitted and communications established by Thursday. When it comes to customer care, seller or buyer, Wonderwoman gets all required docs from the client, puts the package together, does HUD1, submits the package, establishes communications with lender, negotiates. I keep the client in the loop on everything. My job is to get short sale listings, prepare the client and find a buyer.

Our office offers a complete short sale package: listing, short sale negotiating, legal counsel, closings. It's true one stop shopping for homeowners in distress. They can unload their worries and sleep a little better at night knowing they are in good hands.

The bottom line is: I can trust my clients' transactions in the hands of an expert and have the time to do business as usual [get listings, show property, sell real estate].

What's in it for my broker? More listings (equals more closings). No longer will we have agents saying "Uh, I don't take short sale listings!" or "Uh, ummm, I don't wanna show short sales!" It put agents without short sale experience at ease!

I actually like this idea.  As long as the listing agent remains active and in the loop and keeps all parties informed of the process I don't see anything wrong with having one dedicated person who communicates with the banks.  This might actually make the process more efficient because they would have experience and begin to make contacts at the various banks.

Andrea,

This is an interesting approach. I suspect that having "Wonderwoman" paid for by your broker's wife...who stands to gain referral business into her law practice...while being married to your broker...creates a complicated web of disclosure issues that need to be properly managed in order for this all to be legal. But I'm sure that with her being an attorney, they've got it all handled. My concern is that in your description, it's the paralegal...who doesn't work for you or your broker...who is doing the negotiating. I still worry that there could be too much exposure here for you. I'm interested in other thoughts on this and will stay tuned...

As a Broker myself I like for my agents to handle their own listings. If they are not able to handle the listing then it can easily be referred to one of the other agents in the office who can handle it. As always, if they are having trouble in communicating with the lender or any other problems that they can't seem to handle I will assist them and teach them how to overcome the problem.

At no time would I ever want to have someone other than the listing agent servicing the transaction. If the agents are properly trained and given the tools that they need to succeed in their profession then handling a short-sale should not be that difficult. When problems are encountered I find it best to face them head on and find a resolution...it is all a learning process and if you don't get your feet wet you will never learn how to swim.

Thanks for all of this! I am new to the business (since 9-08) and finding this absolutely informative both pro & con. I learn something almost every time I read the blogs and posts.

We in our office have about 50-50 short sale & reo listings and as of yesterday not one regular seller. I have sent a link to this thread to my broker as she has been working short sales for awhile now, hopefully she will add some here too.

I will be thrilled whenever I get a listing of my own whether it be a short sale or not.

Keep up the great posts!! I want to learn more:)

While we don't have a in-house short sale negociator, I work with an professional short sale negotiation company,  Alliance Loss Mitigation, and they take deal with the banks for me -- without taking a cut of my commission.  They negotiate their fee as part of the closing costs.

They offer training for agents who want to work with and have done seminars both for our agents and for our clients.  They also post updates to my listings on "manage my short-sales" so that I always know what's going on and can update the other agent and my client.    I couldn't be happier!

"I wasn't quite honest in my original post (don't tear me apart just yet).  Our office has now a paralegal/closing agent that works our short sales for us."

Not quite as reflected in your original post that generated all of the suggestions.

That said, when the broker is required to answer a Complaint for Damages from a buyer or seller, they won't be able to send the paralegal. 

I guess I should have been more clear. My goal was to see how others felt about the idea, getting pros and cons without interjecting my office situation.

All disclosures regarding my broker's relationship to his wife (business wise that is) are always being made to all clients, no matter what transaction.

I spent 3 hours last week trying to get someone from Regions Bank on the phone, just to confirm that they received the letter of authorization I was asked to fax to 3 different fax numbers. Each fax took 10 minutes to begin with because they didn't go through right away. That's 3 1/2  hours I did not spend prospecting, taking listings or showing property. I have 3 short sales pending right now. The market is picking up, let's say I have 3 more pending by the end of March. I cannot and will not spend my days on the phone doing nothing but talking to lenders - eventually I'd run out of homes to sell because I don't have the time to take listings.

Lenders don't have their CEO's or investors negotiate short sales. They have loss mitigators doing it for them. Why wouldn't I share the workload of a short sale with an experienced negotiator? Two minds are better than one, 4 eyes see more than 2.

I appreciate everyone's concern regarding legalities and such. I trust my broker's wife as an attorney.

I'm with Lenn.  I'm always with Lenn . . . I wish AR would have those "recommend" thingeys . . . I'd be recommending her posts and comments all the time!  You have ONE TWO recommends from me, Lenn!  (Plus my two cents:  Short Sales will trickle out, thankfully, over time.) 

You're probably right.  My approach is very hands on because I'm a fiduciary for my buyers. 

That said, sitting on the phone trying to get through to a bank person doesn't have to be done by a fiduciary, but can certainly be done by a clerk or paralegal. 

As a buyer's agent, I've learned that with short sales and foreclosures, particularly with short sale, the best procedure is to be available when they call.  That means answering the phone, returning messages, etc.

The percentage of closed short sales will increase dramatically. 

ANDREA,

You should invest in an eFax. It will save you tons of time with the chores of faxing. It is a two minute step that is just like sending an email directly from your laptop. It will even notify you if the fax went through or not.

Let me ask everyone a question that seems to escape the conversations. But first let me set it up. Would everyone agree that the communication with the lender is very important? I hope so. And can we agree that the entire deal that we've worked so hard to put together can fall apart during this crucial step? OK. Then why do most people think that the person we hand the file to will have MORE time than we do to make contact with the lenders. If we use the example above, and the "processor" takes three hours to contact the lender then what happens to all the other files on their desk. Why does someone else have the time to sit on the phone and still get everything done, if we don't?

I've had the experience of doing my own Short Sales and having another "short sale processing" company do it, but as wonderful as they were...it always took them longer to get the file done. Those companies are actually busier than we are. I truly believe that everyone needs to get the proper systems to make everything run smoothly and not waste time doing repetative tasks but still have time to take care of the tasks of their business.

Become a CDPE Today

Short sales are not overtaking our market here. However, we do have them. There is a company here now that does nothing but negotiates short sales for agents. Their fee is SEPERATE from our commission. Do you have such a company?

BethAnn,

Those types of companies are popping up everyday. They are usually a lawyers office or a title company with a different name. As a matter of fact, one of the biggest such company in our area is acutally a real estate Broker that has hired a few "processors" to man the phones. Many of those companies are wonderful but most will do little to enhance the probability of an approval.

I think their success is not based on results but the fear & frustration of most agents unwilling to learn the proper ways to prepare for a Short Sale.

As a broker myself, I am happy to report that we do have someone like this on our team.  He also teaches MCE classes on short sale topics.

Andrea, interesting thread.  I would say the BEST thing would be to have the broker provide the TRAINING to best work short sales.  I'm not sure about how much communicating can be handed off, then what about who is authorized to speak on behalf of the client?  But, your idea does have merit. 

Andrea, I think that would be a great selling point to attract agents. As long as you have the right systems and people in place there is no reason it couldn't work well. You do not have to have a real estate license to negotiate a short sale. Short sales are far more time consuming than they are difficult.

Agree with Lenn, would not want our clients turned over to an office clerk.  And remember if an office does do something like this, the money has to come from somewhere to hire the person. with short-sales already notorious for getting less commission, do agents really want still less commission by having their commission dinged by a broker who is hiring someone? Our 2 cents.

I have an outside person set up to represent any short sales in my company. This person, though not directly employed in our office, works for our office and other offices. She is very well versed in the art of Short Sale negotiation and in my opinion does it far better than most Realtors. She negotiates her own commission.

This is not turning a client over to an office clerk but rather someone with a lot of expertise. We recommend lawyers, mortgage brokers, inspection companies, why not Short Sale specialists?  I have always felt that if the people who are most proficient in something are the same ones handling it, then all will go smoothly. Personally my client is going to get much better representation if I have a skilled negoitiator doing this while I handle the Real Estate aspects for which I was trained.

This is NOT to say that the Realtor does not follow everything closely and must be right on top of what is going on at any given moment. I have seen many botched Short Sales. Too many went on to foreclosure after having ready willing and able buyers only to sell for less than the original offered price. This, to me is a tragedy and some of the reason is uniformed people are handling these.

The company I am referring to is Alliance Loss Mitigation (Spokane Wa)

Andrea—I'm a Loss Mitigation Consultant. Initially I worked for a company specializing in loss mitigation. I became certified through them, but I'm now working as an independent. The services I provide takes the drudgery of short sales off of the Realtor which allows them to do what they do best. Staying on top of lenders and making certain that each case moves through the system as efficiently as possible is what we do best. The Realtors and clients I work with appreciate my expertise and the positive relationships we build together as a team.

This has been a inteteresting topic so far.. think I will PARK and watch the debate :)

I work with a partner who primarily works the files and keeps our clients informed with weekly updates... while I prospect and market the listings.

Just closed another Las Vegas short sale this past Friday.. 45 days from the day the offer was submitted and accepted by our selling clients.

We currently have 14 Las Vegas short sales for sale...

No way would we just pile the file on one designated person for the office... We know our clients and we should not behave like the banks having one person handling a hundred plus files....

Not all short sales in my office are at the same stage at the same time, just like all our pending transaction don't close at the same day. I don't see a work overload happening and we don't have a hundred plus files. The 3 1/2 hours on hold do not happen every single day for every single short sale.

I took several short sale classes, I do read about it as much as I can and I received my Certified Short Sale Professional certification yesterday (ta-daaa). I'm fully capable of explaining to a client what a short sale is, what the procedures are, what the benefits are and determine wether or not a client is a good candidate. I can figure out if the numbers work out. I'm there for my clients every step of the way. I'm trained to do all that. I'm not trained to negotiate with banks. There, I said it. I simply haven't had enough short sales happening to say "yes, I've pretty much seen it all". Wonderwoman does and it puts my mind at ease to tell my clients we have an expert negotiator on our team.

I've worked with title companies specializing in short sales and I was never able to get a live person on the phone to check up on things. Big sales pitch, pizza for everyone and a free day planner for attending the "class". Nothing was ever done in time, nobody was ever available or would even remember my client's name. All I have to do now is get out of my chair, walk down the steps and voila. Wonderwoman knows my clients just as I do. She's in contact with them, she knows how old their kids are. It's ALWAYS a team effort. I don't dump files on her desk, I entrust her with my clients. Big difference.

I've said for a long time that agents wanting to do short sales should become licensed as such because a short sale requires skills and expertise not taught in real estate school. I believe in my heart that working with this expert negotiator is the very best I can offer my clients.

I get uncomfortable reading brokers in this thread state that few short sales close. If this is your experience, you really ought to refer those listings out. I close 9 out of 10. I have cut my commission once since 2006.

There are experts in your market in most cases. If short sales aren't working out for you, refer them to someone who'll pay you a fee at closing and will get them closed- that is what is best for the client.

To Andrea- if what you are doing works, keep doing it.

Wow - what a great discussion / debate.  I agree with J. Phillip above.  Every short sale listing that we have taken out has SETTLED.  I am pretty excited about that.  And Philadelphia is not really a short sale haven.  If the agent knows what he/she is doing on the listing side, there is a good chance of success.  Also a good buyers agent is needed to go over the process.  I think having an assistant is a great idea to help with the logistics so agents can do what they do best, sell and communicate with their clients !  The person certainly has to be proficient and an expert.  That is one of the great things being in a husband and wife team as Stephanie typically is in more contact than the bank and I am out on appointments.  And if need be, I will step in with the Bank as well.   This certainly is a great topic.  It looks like some of the people are talking about the buyers side where my impression is that the original post talks about being on the sellers side to work on procuring more listings and having help with the logistics of each deal... similar to a conveyancor per se but more experienced to deal with the communications and headache requests that the banks make (over and over).  Often times, we need to send the short sale package 3 or 4 times as it is lost or mishandled, or the authorization needs to be sent over mulitiple times... or the HUD-1... and on and on.  Especially when the file gets "reassigned".

Andrea,

I have an attorney for a small fee will take care of the negotiating for you.  She has even given some Teleseminars and is quite good at it.  Just as Lenn commented how much are you willing to give up?  I mean I have admin and we have a transaction coordinator in the office if you are inclined that for a price will manage the transactions.  To date we (my team) have been able to handle everything in house but, I am seriously thinking of using my attorney for the short sale negotiation.   Nothing prompts more attention then legal letterhead. 

Yes, I'm talking about the listing side of short sales. The buying side isn't negotiating with the bank anyway. 

ANDREA,

If you earned that designation and you can explain the entire process to your client, then you are able to negotiate the sale. Don't sell yourself short (no pun intended). I earned the CDPE and I believe I'm better equipped to negotiate the sale than most "processors." If you understand the consequences then you can help your client navigate through all that and you can do it better than anyone because they are your client. I'm sure "Wonderwoman" is great, but what happens if she's not around? YOU CAN DO IT!

The experience you will gain and the knowledge of the process will help explain everything even better and it will give you incredible credibility. Do you know what happens with those assets? You will have to spend less time prospecting. The homeowners will come to you.

LARRY,

I don't know the specific rules in NC as to who negotiates the Short Sale, but my experience has been the opposite of what you believe. A lawyer's letterhead does not prompt any kind of positive attention in the Loss Mitigators. The lawyers usually have their paralegals do the paperwork and submit all the forms.

The are some great processing companies out there, but they are not miracle workers. If they're honest with themselves they will tell you that the negotiations are as strong as the package that is submitted. In other words, the better the package that he agents put together...the better the negotiations will go. There are no secrets, it is just a big numbers game. Will the lender lose more by accepting you contract or going through a foreclosure. The better job the agent does in showing the short sale is the best bet, the better chance there is of an approval.

An by the way, if there are less expenses on the HUD there could be more for you in a commission, I've gotten up to 7% approved.

Become a CDPE Today

I wouldn't hold my breath for a broker helping out...many are just trying to stay "in" business...get a va....We have...it's the only way to fly and do SS and keep moving !

You may want to check with your local title companies, First American Title in my area has a short sale specialist and she is awesome. The fee is $1000.00 paid at closing (bank includes it when negotiating). If the deals fall through no fee is paid! I would not trust just anyone and my gal has no contact with my client everything goes through me. For me it's a win/win at least until I do a few more and get a little more comfortable with it. Not so sure that Brokers would be jumping on the boat!