Patrick Beringer

Patrick Beringer, Realtor

11555 SE 8^th #200

Bellevue, WA 98004

nwListingAgent.com

June 26, 2009

Kenneth D. Lewis

Bank of America Corporation

Bank of America Corporation Center

100 North Tyron Street

Charlotte, NC 28255

Dear Mr. Lewis:

I'm writing you to alert you that your company is engaging in a practice that's costing you millions of dollars. Specifically, I'm writing on a short sale property at XXXX on which you've already lost several hundred thousand dollars, and will continue to lose more because of the way your company is handling this transaction.

Last summer, I listed this property, which is vacant. Since that time, I have sold it about 8 or 9 times. Each time, the buyer made an offer and my negotiator submitted the offer to your loss mitigation department. Your company sat on the offer so long that the buyer walked away. We had to relist and resell the property. Each time we relisted, the value of the property was lower. Every time, your company took months to even acknowledge the offer and by then we had lost our buyer. This cycle keeps repeating.

Today we lost another buyer because BOA countered back at a price well beyond the market value of this property. We finally got a buyer to stick around for 3 months and now you want him to pay $90k above what better comps nearby are selling for. I understand the phrase "short sale" doesn't mean "free" but it also doesn't mean 'pay more than it's worth."

I understand your position of trying to mitigate your loss, but I must tell you that your practice of not responding to offers for months on end causes buyers to walk away as they have a lot to choose from in today's market. I'm sure you have smart people doing your BPO's, but I happen to be an active Realtor in this area and I'm telling you that no one's going to pay what your representatives think this house is worth. You're doing nothing but shooting yourselves in the foot.

Please consider improving the way you do business on short sales. You are costing yourselves money, you are costing me money, and finally, you are hurting your own customers.

Thank you

Patrick Beringer

After a long lull, some of my buyer clients are getting back in the game. What I've found to be fairly consistent in the last few weeks is that a lot of you are not answering your phone. Worse, you are not returning calls the same day. Some of my buyers are very limited in the time they can devote to buying and there are questions we need answered asap. Perhaps a more complete MLS listing would alleviate some of the questions, but that's a topic for another post I suppose.

You are the agent of the seller, and your responsibility is to represent that seller to the best of your ability. I would think that answering calls (or at least returning calls) from prospective buyers (or their agents) to be an important part of that.

This morning one of my buyer clients calls me and says he wants to buy either one of two houses he's decided on, but has questions about each. I call both agents and neither one answers. I leave messages. I call again a few hours later. I leave messages. Now my buyer calls me and says he wants to make a decision at 10 am tomorrow when I meet with him. I suppose whichever agent calls first will get the offer. I know some of you will suggest calling the broker, but as I write this it's after 10pm on a Friday night--How likely am I to reach a broker before 10am tomorrow morning? This is just one of several examples recently.

If we're in the car at 7pm and we drive by your listing and you haven't provided complete showing information on the MLS, or the lockbox is set to stop working at 7pm on a vacant home, or I can't get a hold of you to get some answers--You just lost a sale if my client wants to move on.

So please, start taking or returning calls the same day. I understand we all have lives outside of our job, but as a listing agent I think buyer's agents are gifts from heaven, especially in this market. As a buyer's agent, I just want someone to answer the phone!!!

I've just let a listing expire and watching agents scramble to grab the listing is actually quite humorous. I don't want this listing, and haven't wanted it for some time. Why? Because I was too passive with the seller and didn't stand up for myself. Allow me to explain:

While I didn't " buy" this listing, the seller asked me to list at a bit higher than I should--but at the time we weren't that far off. But the market is changing, is it not? A few months go by and a few offers have come in. Even if the offer was very close to the asking price, the seller would counter back at full price, against my advice. I explained, showed comps, explained again and basically told him that this is the best he is going to do. We get an offer at the actual market value. I beg seller to take the offer or at least counter back--reasonably. He refuses, convinced the house is worth full asking price. Fast forward a few months--The offers have stopped coming in, and showings have stopped as well. As the expiration date approached, I tried to get the seller to bring the price down as the value of the home was now well below even the first offer he rejected. Seller refuses. So I let the listing expire.

I did my seller a disservice by not cancelling the listing when he started rejecting offers. I did my seller a disservice by not insisting he drop the price, under threat of my cancelling the listing. And, yes, I did my seller a disservice by taking the listing in the first place--Unreasonable sellers damage the market, they damage themselves and they damage the agent who takes their listing. By being passive and letting myself get roped into carrying this listing I also wasted my time, money and energy. And now that the listing is gone, I feel a sense of relief.

Good luck to the next agent who gets this one! I know we've all had to deal with unreasonable sellers, or sellers that don't understand that values can change over time. We can educate them, but there will be times when it is best to walk away--Times when the seller refuses to let you sell their property.

Now if you'll excuse me, I have to fire another client.

I'm seeing more and more people come to websites like this to ask for advice from real estate agents. Some of them actually have their homes listed with discount brokers. Instead of addressing what might be a connection there, I'm interested in discussing what a slow market means for thrifty sellers.

In a buyer's market you've got a lot of inventory, prices are down and there aren't many buyers. Sellers need to realize that they can't command the high prices that a seller's market allows, since this isn't a seller's market. Ok, got me so far?

Now there's a lot of belt-tightening going on and and I don't blame sellers for wanting to save money wherever they can. Some may believe that paying an agent 6% is too much money so they choose to list with a flat fee broker. Great. I'm all for saving money. But there's more to selling a house than simply worrying about how much commission you're paying out. In fact, if you concentrate solely on commission, you're in danger of losing much more.

First, let's look at the commission itself. If an agent you just met is so willing to give up a portion of his/her commission just to get your business, how well do you think this agent is going to be at negotiating on your behalf? Do you think this person is going to be vested enough to work hard to structure the transaction in such a way as to put extra money in your pocket--Even if it's only a few thousand dollars? Will this person actually act in your best interest to the point of negotiating things you don't even know about, but which could benefit you -- will this person be interested only in getting an offer--ANY offer--signed and closed? I can't speak for anyone else, but my marketing is very expensive. I could never afford to be a discount agent because so much money goes into each and every listing I take.

Beyond the commission is the offer itself. Apparently this isn't as obvious as I thought, but what sellers (and buyers) need to know is that the way the transaction is structured can make a huge impact on the seller's net. I won't go into detail but suffice it to say this should probably be much more important to a seller than worrying about a commission.

There's probably a lot of flat fee sellers out there who are in for a very rude awakening. They're priced too high and they'll end up listing with an agent eventually, but only after their home has stagnated on the MLS for a few more months (probably causing them to sell at an even lower price than if they had simply priced it properly to begin with).

Keep in mind that buyer's agents are your best friend when you're trying to sell your house. You need to make nice-nice. You do this by allowing them to bring their clients through when they call you from 2 blocks away. You do this by leaving a keybox out so they don't have to make an appointment a week in advance to show your home to their buyer. You do this by not saying "Come back tomorrow, my baby's asleep/the house is messy/I'm tired/we have company/etc etc etc." Do you want to sell your house or not? Understand that buyer's agents sometimes don't have many opportunities to take their buyers out on tours. Buyers are busy. Sometimes they don't live here. So when I call you and ask to show your house and you say "no"--You've probably lost your one chance to sell to my buyer. But don't worry--we have plenty of other houses to look at.

But getting back to commission--Let's address what you're offering buyer's agents. Remember, these are your new best friends--They are the ones who bring buyers to your house! Looking through flat-fee listings (and many new developments) I see 2%, 2.5%, and the almost insulting 3/1.5%. (3% of the first $100k and 1.5% of the remainder). Let me state the obvious--This is a buyer's market. LOTS of inventory. NOT a lot of buyers. Ok--Got that? So if you have a house that arguably is one of MANY that buyers could choose from, would you really want to punish any agent who brings buyers to your property? If an agent knows there are 20 houses like yours that his client will like, and you're paying 2.5% and the others are paying 3, 3.5 or 4%, do you really think your home is going to be at the top of their must-see list? As a listing agent, I try to ALWAYS offer 3% or more, even on multi-million dollar listings. (It's true--Feel free to look up my listings on the MLS).

I guess the whole point of this post is to theorize that it's very easy to be penny smart and pound foolish. Saving 2% on commission is great--But if you're selling your home for 5% less to accomplish that--What have you saved?

As a listing agent in a down market, I consider buyer's agents to be godsends. I know there's a lot of competition out there and I truly appreciate offers and showings. As such, I try to do the following:

1. Educate my sellers on the importance of accessibility with regard to showings.
2. Make sure the keyboxes are not restricted after 6 pm (Yup, this happens).
3. Answer my phone, even after hours.
4. Put pertinent docs online so they will have them when writing offers.
5. Pay at least 3% SOC, even if I'm making 1% on the listing side.
6. Respond to agent inquiries immediately.
7. Ensure the buyer's agent has all the docs he/she needs and that the transaction is on track.

These things might be no-brainers, but they're becoming rarities. Here's two experiences I had recently:

1. I brought an offer to a listing agent and 5 days after mutual acceptance, the MLS still showed the property as "active." It took 2 weeks of gentle reminders for the listing agent to even get us the legal and form 17. It took 3 weeks for the listing agent to even send back the complete P&S. It took 4 weeks for the LA to get us title and escrow information.

2. Last Saturday I faxed over an OVER ASKING PRICE offer. I immediately called the listing agent and left her a voicemail letting her know. On Sunday I called again. Another voicemail. On Monday I called again. She said "Let me see if we got an offer on this...Oh yeah, here it is. Thanks." CLICK. My buyer's offer is now expired and the listing still appears "active" on the MLS. So what happened? Did they get another offer? Did the seller die? Did the agent move to Peru? I tried calling the listing agent, but her voicemail greeting didn't seem to give much information about the status of our offer...

As supposedly "professional" agents, we need to do a better job of representing our clients. Common courtesy is a great start.