Central Florida Short Sales: Quit whining about Short Sales. YOU are the problem.

Reserved Parking For "The Lovely Wife"...TLW...ROAR!

There will be a $5 service fee for handling whining comments on this post :)

TLW...ROAR!

I blog about this all the time. Don't do short sales if you hate them and if you don't want to do them. If you do short sales, then do them right. 

The number one complaint we get from short sale lenders is that the agents call them and yell and scream at their employees, how tacky is that! The number 2 complaint we get is that the agents don't send in the proper paperwork or they do stupid stuff like call them to ask them if this deal or that deal is going to work without any info!  Please get a clue! 

Of course, there is a lot to be desired from BofA- but overall- we have not had issues with any other lender. 

Broker Bryant--  Very timely and correct info in your Post.  Heh; speeding UP the foreclosure process?  What was that person THINKING?  Eeek.  Yes, short sale can be (and many ARE) frustrating but it's well worth it to most Sellers that qualify.  :) 

Bryant,

There are times when we wounder why we preach what we do then we come across something like this:

"I'm in the business of helping people salvage some of their credit and get out of a bad situation with the least amount of damage. Speeding up the foreclosure process helps nobody."

I can't imagine a better or more noble explanation for a listing broker's role in a short sale!

I'm proud to know you!

Bill

I'm with you BB! Short sales may take a little longer and may be more involved than traditional transactions but are worth doing! I've had quite a few successful SS and my clients and I have both benefitted from joining http://www.shortsalesuperstars.com

Ok Bryant, the next time somebody asks about a short sale, I'll give them your phone number.

It seems that there are many proclaimed experts who speak in platitudes without the experience to support what they teach (or preach).

Been there, done that and have the TShirt.  More power to you.  Id' rather slam my (&^%% in a car door than do another residential short sale....and I'm not sending Billie $5 cause I don't whine...even when I get my hand (yes hand) stuck in the car door.

R

Short sales!  Sound like life to me.....

Short sales are a big part of our market.  They are not easy but it sure beats the heck out of doing very little or nothing.  I hate not keeping busy much more the extra work involved with short sales. 

I have blogged myself that inexperienced agents are a huge part of the problem with short sales. That said, we can't let the banks off the hook. They ought to streamline the process to the length of time to underwrite a mortgage. The process is the same. 

When some of these places pay back their TARP money, they'll get worse, not better, because they won't be beholden to the government (not that it helped much). 

I don't understand why these lenders cannot streamline the short sale process. We listed a property in Celebration last Fall and after fighting with the seller's lender for several months, they streamlined the process and treated it very similar to an REO.  We submitted everything online onto their web portal and got the deal closed very quickly.  No endless phone calls waiting on hold, no faxing of documents into the Bermuda Triangle hoping that they wouldn't be lost 5 times before the bank finally responded, no waiting for weeks for a response. We closed the deal in just 30 days after we got a contract signed. 

Why can't all lenders create a similar system?

I'm still fighting (in denial?) foreclosures and short sales... mainly because I just don't have the time. But if I give in (wake up?), you will be the very first to know!

All the best to you guys in 2010.

I can't tell you how happy I am that short sales aren't a big part of the market around here. I'd love to 'get some experience' but I'm mostly happy to 'stay out of the way.'

More power to you.

BB, your title pretty much says it all. Earlier today we had a discussion on a similar topic.

Well, I need to brag that I just closed two buyers and one listing (with Randy) that were short sales. I was new to that market and even then..only a couple neighborhoods have a lot of short sales/foreclosures.  Bottom line, all were patient on all sides and it turned out great.  It's with a bunch of patience, tolerance and acceptance that we have no control over the whole short sale system, banks and so forth that we are able to do the job right...help our sellers ...and buyers for a common goal. A successful transaction.

Hi Bryant... I couldn't agree more!  Smart agents who are looking after their clients' interests will find a mentor for their first few short sale transactions.

OK. I'll be the problem. I don't want to do Short Sales. How's that for honesty? It strikes a chord that's just too close to my old days of selling mobile and manfactured homes. Too many sad situations, and a lot of work with little-to-zero payoff. My stress levels can't handle it. There. Total honesty.   =/

Geez....as realtors, we helped out buyers buy their homes. And if they want to stay, we should try to help them keep their homes. But if they have no choice but to leave, we should try to help them salvage their self-esteem, their credit, their belief in the system, and in keeping hope alive.

Although I've probably lost half-a-headful of hair that's now turned mostly gray, I am thankfu that we have short sale as an alternative to foreclosure, for our distressed homeowners.

My only beef is that many of the short sale negotiators are making it incredibly frustrating to go through the process.

Teaching classes on short sales and has never closed one themselves? I keep seeing people teaching blogging and social media that just set up a blog and haven't even been on Twitter. To me this is fraud and the states and companies need to stop helping short sales fail by giving these people a certificate that they are now short sale experts. I wouldn't want someone teaching me to drive that has never driven a car, but we are putting people's financial life at risk by doing just that.

Oh well... what are we going to do? Not too long ago there were half a million agents running around saying real estate is a great investment even though they've never taken formal classes in distinguishing what an investment is to begin with. ;)

BB,

I'm often appalled by listing agents who are clueless about short sales. When working with a buyer, I carefully vet the listing agent before having my buyer submit any offer.  The clueless aren't worth the effort...

I'm handling a short sales on the buying side. So far, so good. The listing agent knows what she is doing and she keeps in close contact with me. So far, so good. With most short sales around here, there is no room for negotiating. The price listed is what the bank wants period. My buyer's house is way under market value to begin with and even if he put 50k into it, it would still be well under market value. We got lucky with this one.

Bryant:

You have hit on a crucial point when the person in charge of training in short sales at a major Realtor association has never actually done one.  These are complicated and difficult transactions and agents who do them need to be educated in the process. There is training available out there if you want to do short sales.

Irene is right on. I immediately head to the MLS to look into the closing history of the listing agent. If they have 30 withdrwan/expired and 4 solds in the last year, I know what I'm dealing with. There are tell tale signs in the listing as well. Incomplete or innacurate info, and 1 photo are a good example.  

I agree, if an agent hates them, pass them on. Before we show one we ask some qualifying questions to the listing agent.  A few questions and you can tell if they have any clue what they are doing.

We are closing on 2 today, where they went smooth, smart agent on the listing end.

Thanks Bryant, you have expressed my thoughts perfectly. It is like the old quote from the comic strip Pogo, "we have met the enemy and he is us". Now because of the brilliance of your post I am going to erect a shrine in your honor.

"I heard yesterday, from someone in the know, that the person in charge of training for one of the Major State REALTOR(R) associations has NEVER done a short sale transaction!! How ridiculous is that?"

Nice.  God Help Us All!  I wish people who don't know how to do these will get out of the way.  I prefer to work on the buy side of these transactions and now that REO are scarce, one guess on where those agents are heading!  I submitted one about three weeks ago, took about a week and a half to get a counter.  Signed counter and turned it around within 30 hours, can we hear back from anyone or are we just one of several offers being submitted to the bank?

That's

so

so

so

so

2007!

The problem that complicates the short sale approval process is lack of uniformity.  Each short sale lender should have a list of forms and documents that must be submitted.  Some lenders are moving in that direction.  The short sale process need not be so difficult.

Bryant - Speed Up Forclosures?????  hhmmm  think about it.  An express lane to disaster.  Luckily I have 2 buyers in contract on short sales and the Listing Agents are Both "Switched On" and I am one lucky duck.  I am not pursing SS listings......I dont have the knowledge yet to provide the level of service needed.  Y'all listem....Ill bring the buyers. 

Bryant:  This may sound like I'm kissing butt a little on this ... but wow!  It sure was good to have someone place the blame (at least a little of it) elsewhere .. other than on a lending institution or lender.   I'm telling ya ... it felt kinda good!

Paul in #28 comment above said it well ... there needs to be some uniformity to the process, both for lenders and others involved in the transaction.  Right now there are sooooooo many rules ... and they change by the minute.  It's no wonder these transactions are a nightmare.  Until uniformity and professionalism is a requirement of these deals ... they will be hellish to transact.  There are glimpses of it turning around some now and then.  Hopefully that continues into '2010 and beyond.

Thanks for a great post and the opportunity for discussion ...

Gene

I heard yesterday, from someone in the know, that the person in charge of training for one of the Major State REALTOR(R) associations has NEVER done a short sale transaction!! How ridiculous is that?

Bryant, what is wrong with this? We, as a society, do this all the time...heck just look down the corridors of any State LEgislature ...even better yet, Congress

Sorry, but this really is an issue - bigger than most realize.  You know the saying, "those who can't do...teach" - and I mean no disrespect to our teachers - but unfortunately their rolls are filed with non-performers.

Happy New Year,

John

Excellent Bryant!  Great post, and so great to see other Rainers "getting real" as I just posted--let's go "AR-Mainstream" by getting real like this, folks...

Bryant - patience is key for both the seller and the buyer. I have found that you cannot hurry up the lender, and it will be at their pace.

If it wasn't complaints about short sales, it would be complaints about something else.  Some people just like to complain.  It may be job justification or just plain insatiable people.  Regardless, short sales are a major part of the industry.  Embrace them or move on.  Educate yourself and others.  Be a professional.

Bryant,

Short sales are not complicated. As long as one follows their guidelines and sends in all paperwork requested. Is when I run across unmotivated and poorly trained negotiators at the bank that it becomes a nightmare. And don't get me started on the second lien holders that in 2 occasions kept changing the payoff requested 3 times during the process with the first lender that took too long to even start the negotiation process ( 8 months from BofA as a first lender with a complete file and an offer on the range of the BPO value is not acceptable and is making the 2nd lender write off the loan and sending it to collection   .... asking 10 K then 20 then 36 K as a payoff will not get the transaction closed in a state that has nondeficiency non recourse loans. Period. That is when sellers get sick a tired of the process and I can't blaime them.

wait Mr. B... are you saying that you have encountered "fake purchase contracts" that have held up sales? Fake? That cannot be a legitimate way of doing business... how do you find that they are fake... I need to look into this more...

Happy Holidays to you and your lovely wife.

You are SOO right that sometimes its the Agent that slows down the Short Sale Process with the lender. Many times the packages are incomplete, but the agent will try to point fingers at the Lender instead of looking at what THEY can do to improve/speed-up the process.

I think when the agents that 'specialize' in short sales should focus on them. Agents should not go back and forth. You are either a Short Sale agent or you are not. Don't go back and forth because chances are pretty good you will get frustrated easily with the process and no provide all of the documents needed to move things along.

Having an agent train on Short Sales who has never completed a short sale transaction is ridiculous. As the saying goes 'you have to walk the walk before you can talk the talk'.

Unfortunately what you write is way too true.

Our MLS has a two hour Short Sale CE course with a local attorney, after which everyone thinks they are an expert. No wonder over 80% of the short sales in our MLS in the first half of the year expired unsold and ended up being foreclosed.

BB - I couldn't agree more. Our broker just sent out a "if you ran the zoo" survey and a fellow agent told me she wants him to halt agents without training from listing short sales. I couldn't agree more. They do a disservice to our seller, and a disservice to the buyer's agent and the buyer. What a mess. If agents don't know what they're doing, why get involved? It's precisely why I waited 2 years before listing one. I wanted to observe and understand the ins and outs before jumping in and making a butt of myself.

You remember the adage "Better to be silent and let people think you're a (insert expletive here) rather than open your mouth and remove all doubt"...or so it goes in my memory!

"Speed up the foreclosure process"  Reminds me of a line from A Christmas Carol when Scrooge is justifying not helping the needy because his taxes support institutions such as prisons and workhouses.  Someone remarks to him that some of the needy would rather die than go to such places he replies,   "If they would rather die they had better do it, and decrease the surplus population"

You're right. If we in the real estate industry corrected problems on our end, we wouldn't have such headaches. I'll admit it's not a quick and easy process to learn, but learn it or don't do it. It's our clients lives in our hands more than ever.

I'm so glad that you read something that riles / inspires you to write a counter-point!  Rick (#40) must have seen A Christmas Carol recently.  I remember that line too!  Remarkable.  I'm glad you're not a SCROOGE!!  I just don't know why the banks -- with their bailouts -- didn't have a moratorium on the ARM's adjusting.  They were happy with the interest rates then . . . why not keep them steady for awhile?  But NO . . . they just let the computer re-adjust them all, and VIOLA . . . meltdowns.

BB, this will be a first for me. Usually I agree with what you write and you do bring up some good and valid points.  Sadly the banks are a large part of the problem.  it isn't really in their best interest to allow a short sale.  They usually come out better on a foreclosure. Money pretty much dictates how things work.  if banks came out ahead on short sales greed would take over and the short sales would start happening.  people and companies tend to do what they are incented to do.  Where is the incentive for a bank to allow a short sale?

Have a happy New Year to you and TLW . . oh and that big baby I saw sitting on your lap in the picture. :)

I heard yesterday, from someone in the know, that the person in charge of training for one of the Major State REALTOR(R) associations has NEVER done a short sale transaction!! How ridiculous is that?

We've all heard the saying - Don't do as I do, do as I say!

The beauty of working with short sales is the transaction is a whole lot easier when it comes to getting them under contract. Sellers are easier to work with because you are helping them through a difficult situation. Really the only part that can be frustrating is the time it takes. Of course if you go into the deal expecting it to take 6 months then it really doesn't matter anymore.

A couple of comments:

Paul, #28 Lenders already have guidelines and forms. All you have to do is ask them for them and they will send you everything you need to submit the short sale. You can also save yourself some time by joining ShortSaleSuperStars and just clicking in the group for the lender you have the short sale with. All of their instructions and forms are right there for you to use.

Teresa #43, I have to disagree that a lender makes out better by foreclosing on the property. Every lender/banker I have talked to about this says the short sales saves them money. Not sure where you are getting your information from.

Paul #36, Without a doubt there are agents and 3rd party negotiators that submit offers to the lenders where the buyer is fake or has no intention of purchasing the process. They are hoping to sell the property to a real buyer prior to the deal being accepted so they can swap out "buyers".

If you speak with agents that handle 100s of short sales their closing percentage is normally in the 90s. How can that be if the lenders don't want to do short sales? Could it be that these agents know what to do? Why so a huge difference from what we see in the MLS? The answer is: TOO MANY AGENTS ARE CLUELESS AND ARE HARMING THE PUBLIC BY TAKING SHORT SALE LISTINGS BEFORE THEY HAVE THE KNOWLEDGE NEEDED.

Sorry but I call them like I see them.

Sorry to say that I take some responsbility for a short sale that went sour. I had the best of intentions, had gotten legal counsel several times, and still I personally fell short of the short sale mark.  The buyer, however unrealistic, passive/agressive, and difficult to work with she was, is not to be blamed for her anger at me.  I have been considering taking the CDPE designation to get more information so that this NEVER happens on my shift again.

Bryant, I think you are wasting your time.  160,000+ members of AR and the highest Short Sale Superstars has registered is under BofA and I think that is 163 members.  It is easier to complain than to learn.

Starting with a loan modification is the best medicine, although some may not be able to handle the modification or it may be short term relief for the stressed homeowner, the bank knows you are trying to do the right thing, the next step would be to put the home for sale and go for a short sale.  When the bank sees that you are doing the right thing - the bank may too.  No one wants you to foreclose.

Maybe we can speed up the foreclosures on the families with kids, or the elderly who has less income then needed. Some people are so disconnected it is unbelievable. And you raise a good point - if agents were really good at doing these, I think lenders would be much faster. There's a difference between a stack of crap and a stack of meaningful paperwork.

An, Before deciding whether or not to take the CDPE class you may want to consider taking the one taught by Wendy and I. Check it out  It's only $97 and walks you through a short sale from before the listing to the closing. Forms are included.

An, I hope Bryant doesn't mind me throwing my two cents in here.  I hold the CDPE designation.  I feel that MOST of the time spent in the class or DVD, whichever route you go, is spent explaining how we got here verses how we deal with the situation and proceed to getting houses sold.

Disclaimer- I have not taken Bryant's course- that being said, Bryant is actively selling short sales.  I would recommend taking Bryant's course before considering the CDPE designation.  The designation in and of itself has not brought me any business.  I do know that when I have needed help, Bryant has helped me even without me having ever taken his class.

All of that being said, I will be taking Bryant's course at some point in the future as I feel that the other class lacked a bit.

Bryant - Most of my time with short sale offers is spent educating the other agent.  Learn from those who *do*.

They're here to stay and we all need to learn how to navigate the waters.  The agents who refuse to "deal" probably won't have the income they would like.

I read that article and was also amazed at the comment about speeding up foreclosures! It certainly was an interesting discussion.

Bryant, is that person serious???? That is so bad for the consumer in most cases. Incompetence can take many forms - agent, negotiator, lender, you name it. Frank just had to take over one that was being mishandled by an attorney's office and was just not getting anywhere. It had been 4 months and we recently closed one with that bank in 52 days, contrat to close. He got permission from the listing agent and the seller and guess what? Things are happening! Duh! It's Wells Fargo and we love working with them.

Interesting comment stream. Good arguements on both sides pro and con.  The reality is in certain areas, short sales are a stop gap or prelude to foreclosure. They become even more convuluted when there is more than one loan involved.  I have closed short sales, as the buyers agent- and if it were not for the hard work of the lsiting agent, tenacity and patience on all sides, they never would have come to fruition.

There are two short sale short comings that I see becoming apparent.

1) "Investor" approval on the part of the lenders seems to be an escape clause to bypass guidelines to streamline the approval process

2) Attorneys pushing distressed sellers towards bankruptcy to halt preceedings.

Either of these will kill a deal on the vine.

Will short sales continue- sure they will. So will foreclosures,  will the economy eventually stabilize? Sure it will.  Not everyone can nor should they do short sales. Agents need to be very certain they are competant, willing to learn, and constantly learning how to do them better.

One thing is for sure, it is a constantly evolving process.