Allison Jung

Hey listing agents,

Please keep us Buyer's agents informed on a weekly basis of what's going on with the short sale process. It's very frustrating for me to have emails and phone calls go unanswered. Even if you have no news, email me once a week just so I know you're alive and haven't forgotten about our file.

Buyers are often times willing to wait if you just let them know where they are in line. But with no communication, it feels like the deal is falling apart and buyers are more likely to give up the wait and pull out.

Make it a great week!

I'm sure each of us have a New Year's resolution of some sort. For me, I have about 5.

1) Complete the full 90 day program for P90X... in 90 days and not over the whole year!

2) Focus on listings and streamline the short sale process using the Short Sale Genius trainings.

3) Spend at least 30 minutes everyday of unadulterated playtime with my daughter.

4) Build a "real" website for myself using WordPress.

5) Sell my house in New Orleans and invest in a couple of homes in Las Vegas, NV.

#2 is probably the scariest of them all. I just invested a large sum of money to learn more and be more efficient and effective. I know it's only worth the energy I put into it so I need to give myself 45 minutes each day to dedicate to their services.

Anyone else out there a member of SSG?

When I first got started in real estate there was a catch phrase that I heard and I'm reminded of it each time I see an overpriced listing that's been on the market for way too long.

"I'd rather let you go now than let you down later."

My broker said this to me as I was preparing for one of my first listing presentations. I knew going into the presentation, the seller had an inflated amount in her head of what her home would sell for. My broker coached me to understand that taking an overpriced listing was of no benefit to me or to the seller. if I listed the home for more than the market would bear, the seller would sit impatiently for weeks and maybe months while the home received no action. The blame would be put on me, the seller's agent, for bad marketing and the relationship between the seller and the seller's agent would eventually sour.

"Be honest and strong about your price recommendations," advised my broker. Give them a range that will price the home competitively and give you both a fighting chance in a tough market. Back up your recommendations with proof showing homes that were priced aggressively and how long they were on the market, versus homes that were priced too high and sat on the market for ages.

If the seller doesn't agree to your price recommendation, let them go. Part ways on friendly terms and wish them luck with selling their home. There's no sense wasting your time and money when you could risk letting them down in the future and getting bad mouthed along with it. People will sooner tell their friends about a bad experience than a good one. Think about the last time you went to a restaurant and had a bad experience. How many people did you tell?

The seller has to have respect for you from the beginning. Stick to your guns and know that you're making the recommendation to the best of your ability and for their benefit and be ready to say, "I'd rather let you go now than let you down later."

P.S. Another good one I've heard was "Mr. Seller... I understand that you feel $450K is the right price for you home. I tell you what, let's try listing it at my recommended price of $395K for two weeks and if we don't get any action, we can list it at $450K as you've suggested." :*)

In Las Vegas, short sales are a large part of the real estate market. In a quick glance today, there are 12,913 homes for sale. 5,027 of them are short sales. Additionally, 6,682 short sale homes are currently in contract and waiting to close. These homes could be waiting from 2 months to over 10 months to close. As you can imagine, this is nerve wracking for buyers, sellers, and all brokers and agents involved.

A short sale means the owner is selling his home at a price that is less than what he owes the bank (who holds his mortgage). The sale can only happen when the bank agrees to be "shorted" the money. As a real estate agent, short sales are some of the most frustrating transactions. The banks take FOREVER to give you final approval. As a buyer's agent, you may have a willing buyer with cash in hand and a respectable offer. The seller and seller's agent may be thrilled to have the offer and agree to it within 1 day! But then... the waiting begins.

The seller's agent suffers endless hours on the phone on hold waiting to be connected to a bank representative, who may or may not have your last conversation on file. In one conversation, the bank representative might tell you that you're waiting for a negotiator to be assigned and to call back in 10 days. But when you call back, they haven't assigned one and the supervisor "escalates" the file. I personally think this is a bit like putting a little red flag on one of your emails to say it's important. Blah! Then, they tell you to check back in 5 to 7 business days. But when you do, another representative says the last representative did NOT escalate the file but "I'll do it for you right now. Please check back in 5 to 7 business days." So the seller's agent takes a deep breath and tries to keep her/ his composure. S/he calls the bank back a week later. This time the bank representative says "a BPO has to be completed before a negotiator can be assigned. I'll put in a request for one to be completed. Please call back in 10 days." So you wonder... what the heck were y'all doing the last 4 weeks?

In the meantime, you have a buyer who's anxious to get an approval. You have a seller who's anxious to get an approval. Everyone wants to know what's going on and the buyer's agent is trying to get more info but the listing agent has none to give. So now the buyer wants to look at backup properties and the buyer's agent can't really blame his client for wanting an alternative.

The waiting and the waiting is what kills many of these short sales. Buyers become impatient and withdraw their offers. Sellers sit and hope that someone else will come in and make an offer without disrupting what progress may have been made with the bank getting towards an approval. I've had short sales take over 7 months to close. Thankfully the buyers were not looking to move in. They just wanted a vacation home and they were willing to wait for their favorite home.

One thing to note. Some agents are listing short sales at very low prices. They're arbitrarily putting a low list price to generate interest and hoping to get multiple offers to submit to the bank. The problem with this is that the list price was never approved by the bank to begin with. So even if you have a buyer that puts in an offer at list price, there's a chance that the bank will come back with a higher asking price. Now, your buyer rejects the offer and you've wasted weeks and probably months waiting for this result.

I've worked on a number of short sales and though real estate agents and brokers are trying to find a uniform way of doing things, it doesn't seem uniform yet. If there is an accepted offer that's just waiting for final approval from the bank, the property should be placed in "contingent" status which takes the home off the market. Not all agents are doing this. Some are leaving the home on the market and accepting as many offers as possible and faxing them all into the bank as the offers come in. The listing agents are rationalizing their actions by replying to all the buyers with a multiple offer addendum.

This really sucks because ethically, the first offer should be the only offer. That buyer should be given a fair shake at buying the home and coming to a final approval with the bank. However, if the listing agent is having the seller accept several offers after the first one and faxing them all in... and one of them is higher... the bank doesn't care who came in first. The bank is just concerned with their bottom line and would simply want to negotiate with the highest offer first.

Customers and clients ask me, "Why are banks dragging their feet with these short sales?" And I've also wondered why I've seen a home listed as a short sale, go contingent for months waiting for final approval, but then get foreclosed on instead. To add insult to injury, the bank turns around and lists the home for sale as an REO for 15% less than what they could have gotten had they simply approved the short sale 10 months earlier. Why would a bank do that? It costs LOTS of money to foreclose on a home. The bank has lost thousands of dollars while the home was listed as a short sale because the owner wasn't paying their mortgage. Additionally, the paperwork and bureaucracy that goes with filing a notice of default and taking back the home costs money. Then the bank has to PAY someone to clean up the house and sell it! It doesn't make sense!

I've been told it's because the short sale departments are overworked and understaffed. And that the short sale department does not communicate with the foreclosure department in a big bank. So, although the owner of the home is trying to work something out with the bank by short selling it, the clock is still ticking on the other side and the foreclosure pushes through anyway.

Another explanation is that many of the homes on the market in Las Vegas were bought by investors. Banks are less likely to negotiate with an owner/investor on a short sale because the bank feels the investors were out to make money and have now created losses for the banks based on the investors' speculation. The bank would sooner work with an owner/occupant because their purchase was to create a home and not a business.

So if you lost your job, can't afford the house payments anymore, and have been offered another job that requires you to relocate, you've got good reasons for the bank to work with you. The chances of short sale success are greater. The main thing to remember is that a short sale is going to take a lot of patience for all involved and if you are the buyer or buyer's agent... you're going to feel out of control and and in need of more information. Be proactive and call the listing agent if s/he doesn't call you first. If s/he wants your business and wants you to stay in the waiting game, s/he'll do his best to keep you informed so the wait will have more meaning.

I've noticed lately that many condo owners in the highrises are lowering their prices. Recently I had a client ask me to make offers on rentals anywhere from 10 to 15% less than the listed rental price. To my surprise, most homeowners were wiling to lower their rents by $100 to $200. Some of these homes hadn't been on the market very long either. I wonder if with more highrise units coming onto the market, homeowners of these units are feeling pressure of competition. The ol' "a bird in the hand is worth two in the bush."

For consumers who want the luxury of highrise living but not the price, be open to lower floors. It's no secret that rentals on the 2nd to 5th floor of a highrise are harder to rent out than high floors and homeowners of these lower floor units are sometimes offering these units at midrise prices.