Now I know from prior experience on this site I am going to get some vehement obections to this post but I wanted to put my two cents in anyway. I am at this point in time about one transaction away from making a company wide decision to not accept short sale closings that are processed by realtors.

 

Why you might ask...

 

As far as I am concerned it all comes down to financial responsibility. I would say that on almost 50% of the transactions we close that are negotiated by realtors there is some last minute fix that needs to be made because they do not understand the closing process and haven't completed everything in order to properly approve or close out the file. The most distressing thing about this is if there is a screw up. If the negotiating realtor didn't close out the file correctly. Has an approval letter that is expired and didn't get the extension. Or in the most recent case has an E-mail from the 2nd lender stating they will approve said amount but never actually got the approval letter. The financial responsibility falls on us.

 

Yes, it's our job as a closing company to notice these items and we do. What happens though when for some reason the processor on the file was overly busy and doesn't follow up to make sure the realtor negotiating the file did their job correctly. Who ends up being financially responsible when the new owner finds out there is still a mortgage on the property because they were all not closed out correctly. The closing company. The realtor could possibly be sued by the seller for not negotiating the loan correctly and the seller may win damages but guaranteed if the buyer makes a claim our title insurance company is going to pay it out in full. Too many of those and you're out of business permanently. Now as I said we've caught them all. All the little mistakes that our clients make when they negotiate their own files but what happens if we miss one?

 

I'm starting to think I may not be willing to take that risk.

 

So, now for your thoughts.

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I wrote a blog post about this.  It goes beyond this all the way to liability to the agent.

http://josephalfe.com/2011/11/short-sale-road-rules-should-you-be-d...

Ahh Cody!!  I agree and disagree with you.  I LOVE Realtors that have completed short sale transactions on the sell side, but do I think they should all *NEGOTIATE* short sales???  No way.

 

My company is a 3rd party firm and we work with an AMAZING title company/legal team that assists us on almost every transaction.  In fact, we work with 4 lawyers offices between buying and selling and representing title. 

 

Let's be fair here.  Do I think title co's should be negotiating?  Or should lawyer offices be negotiating?  To answer and put everyone in the same group as NO would be remiss.  Everyone has a certain level of skill in negotiating short sales.  I have a lawyer in MA that touts himself as a short sale lawyer and he is HORRIBLE.  I know this from first hand experience as I bought two short sales using him and had to TELL him what to do.  It's kinda scary.  So,the same is true for title co's, debt negotiators, realtors, lawyers, etc., that claim to know all there is to know about short sales.  Show me the proof!! If you can show me hand over foot, dozens, hundreds of approval letters, I may listen. 

 

Not everyone has the same experience. 

 

I learn every week in this industry, and I would NEVER claim to know everything either.  It's constantly changing.  I love this site because I learn.  Do I think just because someone has a real estate license they should be negotiating short sales?  HELL NO.  I can't tell you the horror stories I've encountered with agents that didn't know what they were doing. BUT keep in mind my LAWYER story.  This lawyer CLAIMS to be a short sale lawyer and he's a paper pusher...he can't do a CMA..doesn't know property value, can't talk to homeowners and empathize with them, doesn't know the latest industry news, etc., and he can do title and close a sale!!

 

My point is, everyone has different experience levels, including agents, lawyers, title co's etc.  You have to do your homework to know who can get the job done.

Smitty your posts are always spot on.

In my case usually the buyer's closing agent screws up.  They don't fax the wire confirmation or final HUD and arms-lengths like they are supposed to (and clearly stated on the approval letter). 1/3 of the time the buyer's closing agent doesn't understand instructions from the lenders or puts wrong numbers on HUD or cannot figure out how to make it 0 to seller.

 

The closing company is supposed to be checking all approval letters BEFORE closing...even the lenders require them....

 

I usually have to follow up behind the buyer's closing agent and fax the info myself because too often they don't do it even when I tell them over and over.  Fortunately, my sellers use an attorney experienced in short sales who can guide buyer closing agents when needed.

 

The only thing the sales agent should be doing is submitting it to Equator when needed.  If the closing company followed instructions (including adding loan numbers to wire confirmations) I doubt there would be much to clean up!

 

As a closing company how in the world did you attempt to close a sale without an approval letter from each lender???? That is basic.

 

 

 

Apparently you read what I posted and took your own definition. I never said we went to closing. I said it was caught. One of the many things we do catch. I just worry a little because we close a lot of files many of them short sales that we negotiate. My procesors are very used to having files come in fully complete with everything done correctly. One day one of these files that is not done correctly might slip through and it makes me nervous.  

I do appreciate the input from everyone here, it made me think.  

LOL.  Cody, I hear you loud and clear.  I'm not a fan favorite on this site as many don't like 3rd party negotiators, and my viewpoints aren't what the majority normally is in alignment with, but that said, we can't group all in one category.  I know that's not at all what you were going for and I applaud you for taking the minority opinion and publically speaking it.  I've been called out dozens of times before and can always support my opinions thankfully.  I will fully admit when I'm wrong and when others do it better than me.  I'm very thankful for Wendy and Bryant and this site as it has been instrumental in many of my approvals :)

Cody, by that reasoning "one day one of these files that is not done correctly might slip through" could apply to any type of sale, not just short sales.  So far this has not happened , apparently your firm and your employees are very good and thorough at thier jobs,, bravo!!   Keep doing what you are doing, perhaps offer training sessions to agents in your area as to some of the most common mistakes you are finding and go on from there.  Perhaps if you have some agents that make the same mistakes over and over you could contact them and express your frustration and how you can work together to make changes, and for those agents whom you have never worked with before, continue to be extra diligent until they prove themselves to you.  But actually , extra diligence on everyones part should be the rule of thumb for all of us, no matter what type of sale it is.

You were right Cody, there is a lot of comment on this.  You have not stated who supplies title here.  Is it the seller or the buyer?  In the part of NY where I live, title is purchased by the buyer and a search is done a few weeks prior to closing.  If there is a 2nd lien it will come up then.  I know I have personally gotten to the point before I list a property, I do my homework and pull title myself.  It saves a lot of embarrassment later on.  I also know the title companies around here ask for the payoff letters before getting to the closing table.  I have had to get banks to change the language of a payoff letter to satisfy the title company.  There are way too many people out there today who are calling themselves shortsale experts.  I for one, will tell someone one that I am experienced in short sales, but to be honest, there is really know one who is a expert because every short sale is different, every bank is different, every buyer is different, every realtor is different.  You get the drift.    I am sorry you have had a few bad experiences.  But don't blame all realtors for a few that are remiss in their actions.

Sounds like the problem you are having is that you aren't dealing with a short sale super star just another agent. You should be more careful with who you are dealing with. My team of attorney title company and myself are very well in sync when we go to the closing table ever dot is dotted
And T is crossed!

Bottom line. I am a short sale expert realtor and the tilte company I use to do my short sales is a short sale expert.  I know as much as they  know and can monitor  everything they do..

 

They are good and I have never had a problem.  In other words it does not matter who is doing the short sale. Whoever it is needs to be expertised, bottom line. . Find someone to do your short sale who has knowledge not just a title.

I love the great discussions on this site! In my opinion some agents shouldn't be allowed to sell any real estate, short pay or not! :D my escrow is fantastic...but I did take a co listing once and used the escrow company he requested...NIGHTMARE some of the same issues that have been discussed... No netting seller at 0, HUDS that don't match the approval, mis-spelled names on final HUD . But of coarse being a "superstar" (ha ha) you bet your but I caught it! So yes...some agents should NOT negotiate short sales. We're a small family owned company and my broker has all agents co-list shorts w/me so that we can make sure to dot our i's and cross our t's.

For the most part I would agree with you, however, for the most part. Many Realtors are taking short sales and, quite frankly, don't know anything about them. They are dangerous to their clients and can easily lead them down the road to foreclosure. I have seen this many times. Then there are Realtors like myself. I invested the time and money and traveled across the country to earn my credentials. I have read the HAFA/HAMP manual several times and keep up with the day to day changes and so has my staff. I find almost none of the third party negotiators have taken the time to get a single certification or attended any conferences. It is at these conferences I have met some key people and have proprietary numbers that are used only as a last resort. I was one of the first to earn my CDPE designation and then became REOMac certified (now Equator), CSSA and NASSPro. I spent month researching and writing the, Foreclosure Wars White Paper, The 33 Point Streamline Short Sale Plan, The Want Us Fail, Their Fingerprints are all over the corpses, and many more. Due to my extensive short sale work I have been in newspaper stories in USA Today, Miami Herald, Palm Beach Post Times, Sun Sentinel and interviewed by NPR. I have been asked to serve as a short sale panelist on the National, regional and local levels. I often hear horrific advice given to clients by lawyers, and I have lawyers call me with questions. I can accurately answer 99% of questions posed and will find the answer to the 1% I don't have the answer for. As a Realtor who handles too many short sales I am in a unique position to control the entire process from qualifying the client, marketing the home at the right price, qualifying the buyer and their lender, negotiating contracts that will close. My team and I have over 400 approvals and we have never failed to get a short sale approved whether we are negotiating with the lender(s), MI companies, HOA's and condo association, service release companies, default attorney's and even on occasion directly with Freddie. I have tried a few third party companies, owned by lawyers, and two did a great job and two failed to the point I took back one file and closed the other was my only foreclosure. Another important reason we handle our own is outstanding client contact. My staff and I have meetings three and sometimes four times a week and discuss every file. My clients, buyer's agents and buyers can call me day and night and I can give them an accurate update as I don't have to call the third party and wait for an answer. My files are all in drop boxes and every file has a conversation log. I can access the drop box from anywhere in the World if the answer is not at my fingertips. Usually third parties have people with little negotiation skills or contacts at the lenders which include proprietary emails and phone numbers when a file is stalled or declined. Most third party staffs work 9-5 and don't have the driving force to not let a single client's home go into foreclosure. My past and current short sale clients include a CPA. three lawyers, five doctors, three Federal agents, two military officers, two developers, two police officers, five teachers and the list goes on. Almost all my clients get a full waiver of deficiency and those that don't are very pleased with how little we settle for with a full release of deficiency. The payback is my clients love us, feel we have saved them from financial ruin and 99% of my business comes from my clients who can recommend us with 100% confidence.  This is why some Realtors SHOULD handle their own short sales. You may want to check out:  www.AskMeAboutAShortSale.com and my blog:  www.AskAboutAShortSale.com

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