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I guess I have finally figured it out why GMAC had been so "forgiving" about my shortsale, that the negotiator saw fit to keep stalling the auction date. Oh well maybe they are just nice people but the headlines this week say something severe.I really believe some benefits are coming out of this. We all know that the banks were hammered with defaulting property and it got beyond them to start pencil whipping things. I had a couple of friends my self that had loan mods in process and then the bank foreclosed on them. One of them is currently suing Chase.

What I think will happen is this...the fall REO storm may never come, except for Fannie and Freddie because well...they are sinking and have tons of stuff they they need to pay taxpayers with. Finally we can calm down and be realtors, offering our help to people.

The shortsale will be a mainstay for sometime and banks must be more efficient at it. We agents have much to learn about shortsales... pricing property CORRECTLY so the BPO is close to MLS price (two of my shortsales as representing the buyer recently exploded this way. Buyer walked because of too high an asking price). We need to cooperate to get the job done and not be greedy as to how much comission we make. I shop property based on what my client wants...not how much do I make on it. Had an office collegue ask me about my shortsale today and when I told her that we may need to cut into the comission split to pay the jr lien holder that the first afforded only so much to.She quickly told me that she will not work for less than 2.5 % because she has done alot of work with that buyer. Guess customer service does not come into play here because she was not willing to make it necessarily happen for her customer if they turned out they wanted to see it.

As always what we need to do is to offer SERVICE. Make sure the seller cannot qualify for a mod first and then if they appear to qualify, help them get one; list the property in case of failure. Some because of job status, will never qualify but we must outreach to homeowners and comfort them as much as possible and work on the BEST SOLUTION FOR THE HOMEOWNER not our pockets.

REO's will exist and I am convinced that they will always goto the well connected realtors. I have noticed some asset companies give assets entirely to one person : Ocwen/Altisource and Goodman and Dean are good examples of this. Unfortunately, this does not mean they are good at customer service. I saw on a particular website the names of REO brokers that were rated by normal homeowners needing their services and they were not rated favorably at all. Also had another REO agent tell me last week that I "needed to educate my buyer" about how the bank works. Seems like the bank has him by the _______...and I will not say it. I wanted to make slight changes to the addendums as they were very favorable to the sellers and I have a duty to protect my buyers. I told him everything in real estate is negotiable. He would not even explore the points I raised.

Asset companies and banks will continue to need us realtors to guide them. We are the experts in our field and need to be open to ever learning more about our profession. The mistakes made are not going away overnight.

I believe the major banks facing this crisis will be forced to more diligent in the future. Even in my state,California which is non -judicial...the state attorney general called on GMAC to explain their procedures for foreclosure.

Someday I do want to sell REO as well and do a five star job at it that will make an asset manager smile and confident, but lets see here...people still will leave estates (probate) and I do not think divorce is going away (divorce sales)..well I know , I guess I should go help Mr and Mrs Frank Mc Court and maybe Tiger get rid of some of that property.

Talk to you later my friends,

John

****THIS BLOG ENTRY WAS ORIGINALLY WRIITEN BY ME FOR ACTIVERAIN BUT I THOUGHT IT TO BE USEFUL HERE*** Go ahead and use it publically if you want to!

Whether you are the buyer OR the seller, participating in shortsale proceedings can try your patience, but can be less stressful if you are working with the right agent. Shortale tranacting is defineitely not for the non-dedicated. I am therefore going to lay down expectations of operating on both sides of the transaction. IN ALL CASES MAKE SURE YOUR AGENT IS ACCESSIBLE. My clients will call me late at night to check in and they know I will answer them. Do they have a specialization , either Partner First Preforeclosure Certified or the more common Certified Distressed Property Expert certification?

IF YOU ARE THE BUYER...

All I must say is to hurry up and wait! Well ok there is a little more to it than that. Shortsale proceedings are dependent upon the bank really. The short sale right now that I have can get me an approval in about 2 weeks and they are the most efficient I have seen. I have a shortsale on the buying side with Bof A and Chase and they might have an approval in 2 weeks more as we have been in the process for about a month now. One agent told me that US bank was taking several months(which I fail to believe really in this HAFA era). The listing agent should know what sort of time line they are on because you do not want to be held up for something that may not fufill. Shortsales have a high failure rate, especially if there are two lenders. The listing agent should update your agent regularly as to progress of the transaction. No communication is a bad sign...I have a client buyer that wanted frequent updates . I called and emailed the listing agent to no avail. She called him on her own as she went to the owner's house, and the listing agent then apolgetically updated me on the progress. Try not to ask for too much. Banks like cash offers especially in these situations because they can reduce their costs of payouts. They sometimes will pay closing costs but not always and they will not pay for a negotiator....that will come from the buyer's agent or the buyer's pocket! Don't think about "repairs" because you will not get any. In short , the less you ask for , the better. Lowball offers do not work. If the listing indicates" approved " shortsale than that is a good sign that that is the minimum price they will accept. Offer that if not more!

If you are the seller...

Please cooperate fully with your agent. They will need lots of financial information that the lenders will need to see to justify the shorting: Paystubs, Bank Statements, Letter of Authorization, and the Hardship letter. Don't be surprised if the lender issues their own paperwork as this will happen about 75% of the time. Make sure your agent expalins the merits of each offer. Reject lowball offers as this will waste everyone's time. If your bank has filed a default notice, or threatened a sale at auction, they only thing that will stop the clock is a bona fide offer near the approved price. The bank will send out an evaluator to verify the validity of the offer. They might initially approve a slightly low offer if it is close to BPO price.Please know too that although you may detest your bank that they may require a note to be signed by you that you will pay them x amount of dollars (Greentree wants 5% of the sales price). This is generally much better than a foreclosure since you can buy again in 3 years vs 7 years if you get a government backed loan (FHA,VA,FNMA,Freddie Mac)

Check with your agent if they use a negotiator in the process ( a lawyer negotiator is the best) as they may be able to help stem the impact. They should never charge you for the services as the fees come from the agents or sometimes the buyers. The agent can go at it himself but it is very time consuming. Be aware of the negotiators with an "investor" They will flip the property and this is generally not ethical. Be aware also that they need a RE license just like your agent.

Make sure that your home is accessible to prospective buyers. It may be an inconvience but you need as much exposure as possible to several eligible buyers and you really do not have time to stall. REMEMBER FORECLOSURE STINGS!