Instead of worrying about what the NAR is doing about restricting IDX feeds on meaningless searches, why don’t real estate agents learn how to increase their income by actually becoming more proficient at what they do? If you are avoiding short sales or if you shun short sales (gotta like the alliteration there) then perhaps it’s because you really haven’t taken the time to do them right.
Nearly half of 2009 has passed and instead of hunkering down and learning how to be proficient at short sales, many agents are ignorantly and lazily trying to “wing-it” through the process.
And I’m talking about the agents who actually have short sales. That’s the sad part. Rather than sit on the sidelines like the others, the incompetent make matters worse by blindly leading a Seller through a short sale process that is doomed to fail because they simply do not have the experience to get the job done right.
| Only 25% Of Short Sales Close. Why Is That? | ||||
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I have been reading a lot about the closing rate of short sale transactions and it has been bandied about that only about 25% of short sales actually close. The reason this is occurring requires a bit more delving into. So we did. We did a quick survey of sorts that I invite you to do in your local market. Heck, you may be able to do a survey by talking to the man or woman in the mirror. The data is that telling. Over a period of 5 days we called 50 short sale listings and asked them a simple series of questions: 1. What’s the status of the short sale? The answers to these questions told us why agents don’t have a higher closing ratio in their short sales. It’s simple, they don’t know what they are doing and are bungling the whole transaction. |
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Q. What’s the status of the short sale?
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A. Right answer…. We’ve sent the LOA to the bank and as you know there is nothing really to do until we actually get an offer. Unfortunately we don’t hear this when we talk to agents. We get all kinds of stories about how they have talked to the bank about this and that and it’s already done. Wrong! If you want your closing ratio on short sales to rise dramatically there is a defined timeline of what to say and when to say it. To do otherwise is going to kill your closing ratio. |
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Q. What stage of the foreclosure process is the homeowner in? |
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A. Right Answer…Right now the Seller has a Lis Pendens and a hearing on May 30, 2009. At which point the bank will be moving for summary final judgment. The Seller has no legal representation. (or something like this showing you actually have some knowledge of the foreclosure process) Unfortunately we don’t hear this when we talk to the bank. A lot of times they act as if it’s private information. Hello McFly…we already know the information. It’s a matter of public record! We want to know if YOU know what’s going on. Many times we call and the agents don’t even know a sale date has been set. They don’t even know how to check! If you don’t know what the process is you are doomed to fail time and again. |
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Q. What Kind of discussions have you had with the bank? |
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A. This one is the hidden landmine we throw out and the answer to this question more often than not ends up with us passing on a deal or telling our buyer to pass. Right answer…Well, we’re waiting for an offer from a strong Buyer. We can’t enter into any negotiations with the bank until we have a firm and strong offer. Unfortunately these really bad poker players have shown the bank all of their cards. We hear stories about they told the bank this or talked to the bank about that and they haven’t even had an offer. Go ahead and put the neon sign in the window so everyone can see you as an amateur. |
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Q. Do you have any signed offers yet?
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I love this one. it really smokes out the nincompoops! A. Right Answer...no if we had a signed offer it would show as pending in the MLS. Right now we are waiting on a strong offer so that we can prepare a complete short sale package and submit it to the bank. Unfortunately we hear this refrain..time and time again. We have 4 or 5 offers and our seller signed them all and we sent them to the bank for approval. Are you kidding me??? Nothing spells L-O-S-E-R more succinctly than sending multiple signed offers to the bank for the bank to “approve”. The bank is not the owner of the property and the contract is solely between Buyer and Seller. Nuff said..if you are an agent who is screwing things up by doing this, then it explains in part why your closing ratio on short sales is so low. |
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Q.What do you mean that the”short sale is already approved”?
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This one is another doozy! Unless you had a complete short sale package submitted and approved based upon a previous contract wherein the Buyer flaked out, there is no way you can have a legitimately approved short sale. What did you do? Call the bank and ask them what they would take? Tell me that you didn’t do that. If you did, “here’s your sign”! Right answer... We submitted a full package to the bank with another offer, negotiated the deal, got it approved and then the buyer couldn’t close. So we obtained an approval at that time but as you know the market is constantly changing and if you or your client puts in an offer we will need to get an updated approval. On the other hand, we hear agents telling us that the bank approved the short sale without a full package and without a valid contract. Sorry but we have to cal BS and hand you the big “L” lapel pin. |
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Have you done everything that you can
to maximize your income this year.
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If you want your short sale closing ratio to dramatically improve, which in turn means your wallet or pocketbook will fatten, then you need to stop trying to wing it and actually learn how to properly execute a short sale. Here’s one more question for you. It’s now May 2009. We’re coming up real fast on the end of the 2nd quarter of 2009. How much money have you made? it’s a real simple question. Look yourself in the mirror and ask yourself have you done everything that you can to maximize your income this year. If the answer you give yourself is realistic then it will be a resounding NO! We all can improve. I continually educate myself and I see a result in my income. I realize that personal investment has an exponential return.
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Learning short sales is doable, but it’s essential to ACTUALLY get educated about this complex process! There are SO many realtors out there claiming to be short sales experts… *sigh*