Adriana West

An investor called me and told me that he was interested in buying all my Short Sales. I was thrilled, even though I thought it was too good to be truth. I met with him at my office and he gave me a contract that I would have to use to work with him.

In explaining his contract to me, he said that his "idea" to buy all my short sales that I had been working was that he would make an offer from the beginning of the process (with a rather ridiculous amount) and that I had to find another buyer to make an offer (for more than his). Then he would give the other buyer the option to buy the house, but he would keep the difference between the two offers at the end of the transaction.

I talked with my lawyers, and in Georgia it is not illegal to agree to this kind of transaction, but from my point of view it is unfair. Especially when I as a Real Estate Agent am representing a seller in distress, not the bank, not that investor. I understand that every human being needs to make their living, but it is not always the fair way.

Sellers, would you like it when a person is taking advantage of your situation, playing with your financial future. How many of you believe that this investor is going to be fair, if the bank does not accept his offer, or the investor does not allow any competing offers to be presented if he does not make money on the transaction. Even worse, how many of you believe that this investor will buy the house at the end of the day, if he's lucky enough for the bank to accept his offer, but no second buyer has come along to make another offer?

Short Sales are demanding and can also be a source of revenue for lots of investors. Which of these investors will be interested in the seller's financial future? It was good for my sellers that I am interested in their financial future and helping them make a new financial life for themselves. Let me know if I can help you protect yours.

I was working with a client in Kennesaw GA. He was convinced that the honest thing to do was to try to continue paying the mortgage as long as he possibly could, even when his wife had been fired and they need to use what little savings they had to try to make it.... Until a Short Sale was approved.

Eventually we received an offer and waited for over 3 months for an answer, with weekly phone calls to the Lender's Short Sale dept. Finally, I received an answer: This file is not a top priority for the Lender to review. They do not have a time frame for the review process, and the person who gave me this news promptly hung up the phone on me.

How can it be that the lenders in this country are punishing those who are trying to be good citizens, do what they're supposed to do, and "play by the rules"? In this case, my client was continuing to crunch numbers and make huge sacrifices while they were waiting for an answer.

Is this really the time to be trying to teach us all to be bad citizens because this fits the Lender's Guidelines? Please tell me what kind of behavior we should expect and accept from these lenders? They are already more responsible for the problem than is the public. Do we have to give up our moral principles in order to become a priority file for the lender?

Let me know your thoughts. Why do we bail out those who have caused the problem at the expense of those who play by the rules? What can be done to fix it? How do we tell our lawmakers to apply some "common" sense to common problems? Leave a comment here and let us know.

Another Great Success Story for my client in Roswell, GA. I've been working with this client on a Short Sale transaction for 8 months now, and we had wonderful news this week.

First, some background on the scenario. The market value of the property was $900,000. There were two mortgages with different lenders. As I noted in an earlier blog, in the beginning my client thought it would be easier for me if he hired an Attorney to negotiate with both lenders. In the earlier article, you can see why that made me decide never to let an attorney negotiate for me again.

We worked with an offer for over three months - a great offer at the time. The lienholder in second position wanted, and even demanded (how funny!), to net $42,000 from the short sale, and have a deficiency note in place on the borrower for the balance of the loan. Oh, and my commission could only be 1% (which the lawyer agreed to, by the way).

Even when both lenders agreed on the transaction, I managed to increase my commission back to a reasonable amount, and my client was tempted to accept the deficiency note, the second lienholder took a month to send me their acceptance letter. During this time, the buyer got tired and walked away.

I took control of the negotiations away from the attorney when my commission was ridiculously reduced, and started over from scratch after the buyer withdrew his offer. Months passed, and finally I received an offer $100,000 BELOW the initial offer - just three days before the property was to be foreclosed. I contacted the lenders, and Lender 2 - even when they knew they were going to lose everything - demanded a specific amount in order to accept the transaction. The next day, when I received the Acceptance Letter, it included a deficiency note that at this time was not part of the agreement (they had not mentioned it in the phone call).

They were offended when I told them it was not going to work. They stated they would not negotiate any further. I thanked them for their time and hung up. The next day at 7:00am, I received a phone call from the same negotiator stating that they had reconsidered the offer and were open to agree to the original amount and no deficiency note. Because the second lienholder was lazy and made unrealistic demands, at the end of the day we closed the transaction paying them just $16,000 and no deficiency note whatever.

The Lender in the first position was always very helpful and open to work through the transaction. My client is thrilled that after 9 months they sold their house and do not owe anything to any lender. Now at the end of the transaction, do you think the Attorney was working in my client's best interest? Or working for an outrageous hourly fee for their own benefit?

Share with me your stories. I would like to hear from you. I love to share this kind of success story with my current and future clients, and remind them: you are in great hands with me working on your behalf.

I respect the companies who negotiate Short Sale transactions for agents, but in my personal opinion, I prefer to handle my own negotiations. Let me illustrate why. A few months ago, one of my clients thought that it would be easier for me if he hired an attorney to negotiate his Short Sale with both lenders.

After three months of frustration, with my client paying ridiculous fees to this attorney, here is the settlement that he reached:
- My client was going to have a deficiency note from the second lender in the amount of $160,000
- My commission would only be 1%
- The Buyer's agent would only get a 1% commission
- He would get his fees, directly from my client's pocket

After discussing this with my client, who could not handle the deficiency notice, I stepped into the negotiations and tried to fix it as soon as I heard, about a week before closing. The second lienholder did not give us the acceptance letter, and we ended up losing the buyer. If the client would have to declare bankruptcy because he couldn't pay the deficiency note, a foreclosure was his better option. But I kept on trying.

I do not have anything against anybody, but I truly believe I am in this business to help people in a fair and honest way, on all my listings and transactions. This is my livelihood and I need to be paid for all the effort, time, and help that I offer to my clients. This is why I believe that all the parties involved must work with honesty toward the same goal: Helping a homeowner in distress to create a new future on the financial level.

I applaud all those of us who strive to achieve our goals of helping people, and being paid for our work. I can say with pride that none of my clients has ever received a deficiency note after the short sale has been settled. And this is why I will never accept a listing where I need to allow an attorney to negotiate on my client's behalf again.

We learn from our experiences. Tell me how you work, and what kind of responses you get from your lenders. The end of this story is an incredible success, and I will tell you all about it in a couple of weeks when we close this transaction.

Well now, after my Reality Check marathon, I have GOOD NEWS.... Lenders have realized (not all) that Foreclosures are not the solution... And they have moved some of their people from the Foreclosure departments to the Loss Mitigation Departments. They are making them stronger, more effective, with trained people. YEEAAHH, this is GREAT NEWS, Agents. This is the YEAR OF THE SHORT SALE.

Let me give you one of my examples: I had a house in Sugar Hill in the Short Sale process. The owner had 2 loans with the same lender, and I presented an offer to the Lender (a good offer). I had been waiting for about 10 days to pass before calling them back and asking for feedback about my Short Sale packet - and to see if they had assigned a negotiator to the file. Well, on day 10, before I called them, I received a fax with an Acceptance Letter for the second lien. WOW! That was a new world for me. I called them very astonished about what I had received. The person who answered me, a very professional gentleman, told me that Yes, he had seen in the file that this was the letter for the second lein, and to call back in a week to ask about the first lien. On the 20^th day, I received another fax - the Acceptance on the First lien!

I called again and congratulated them on their process, telling the person who answered tha the last time I had done a Short Sale with them (6 months ago) they had taken three months to close, and that I was astonished at how much they had improved their service in 6 months. The man told me that in the last 6 months, they had brought in more than 300 people, and that was the reason for their great service.

Well, this is happening more and more. Small lenders have thought about how to implement and improve their Loss Mitigation Departments all the time, and when we agents send them a complete Short Sale packet, things go very well. Short Sales are going to be the way forward in this market for us Agents during 2009 and 2010.

The interesting part of this story... We had to close a month later because my Seller had not had time to find a house to rent!

Leave a comment and let me know if you are seeing the same improvements over time as I am. Are there "star" lenders out there doing a great job? Laggards who haven't seen the light yet? Let me know your experiences.