Replies to This Discussion

Permalink Reply by Wendy Smith on August 10, 2010 at 7:58am

I tried using an attorney-based firm, paid the membership fee then submitted two deals to them. Their set up was that if the bank declined the attorneys fees, then ok, its a numbers thing, etc (vs some firms want a piece of the commission) - I found that their staff that were handling the short sale had that attorney-mentality... e.g. they don't have to answer questions (the gal became irate when I asked why the file wasn't submitted - she'd had it for over a week), and they also demanded docs that I KNOW are not requested by lenders (another source of irritation for this gal when I told her that certain docs were not necessary)... Bottom line - I wasn't gong to add the stress of dealing with that personality/mentality..I pulled the deals asap.
I found a company in Plantation Florida that had the packages submitted in 2 days. Both BPOs have already been done. I get an email update on every file on every Friday and I am loving it.
I received an email from that attorney-based firm that announced they were raising their rates to $3995 - I think at that rate, many many lenders will strike the attorney fee from the HUD.
Hope this helps.

Permalink Reply by Hal Mayer on August 11, 2010 at 10:58am

I stay away from attorney negotiated short sales. My experience in Arizona is they don't know what they are doing any more than an inexperienced Realtor. I do require my short sale listers to consult with an attorney (my referral) prior to expending any effort on listing the home. This ensures they are advised of the legal possibilities in a short sale. I do the same with an accountant. Realtors who give legal and/or accounting advice are playing with fire.
I work WITH an attorney and accountant but won't ever turn the daily short sale tasks over to them.

Permalink Reply by Andrew Arild on August 11, 2010 at 11:25am

Thank you for the response Hal. I have followed the same course of action for my short sale clients since 2007. Every one of them is required to meet with a real estate attorney and a CPA prior to my listing the property. The reason for my question is that the short sale market seems to be shifting and approving lenders do not seem to be as cooperative in the past. This increases overhead when self processing and has lead to more transactions not closing. I have done almost nothing but short sales since 2007 and had a 100% closure rate until early this year. Now I am seeing a significant reduction in successful closings. I am looking at changing my business model to reduce my overhead, engage a RELIABLE attorney based firm to handle the negotiation and then work to start establishing a new revenue base. During the last half of 2009 I was certain that short sales would continue to be a viable way to generate revenue for at least a few more years. Early this year there was much written in the media about lenders making 2010 the "year of the short sale" to reduce non-performing assets from their books but I have not experienced that in my business. Have you?



Hal Mayer said:

I stay away from attorney negotiated short sales. My experience in Arizona is they don't know what they are doing any more than an inexperienced Realtor. I do require my short sale listers to consult with an attorney (my referral) prior to expending any effort on listing the home. This ensures they are advised of the legal possibilities in a short sale. I do the same with an accountant. Realtors who give legal and/or accounting advice are playing with fire.
I work WITH an attorney and accountant but won't ever turn the daily short sale tasks over to them.

Permalink Reply by Wendy Smith on August 11, 2010 at 11:30am

why would an attorney based outsource be better than a non-attorney based company? Negotiators are not intimidated nor impressed by attorneys. It truly depends on the short-sale-nego company - not whether or not they are attorney-based.

Andrew Arild said:

Thank you for the response Hal. I have followed the same course of action for my short sale clients since 2007. Every one of them is required to meet with a real estate attorney and a CPA prior to my listing the property. The reason for my question is that the short sale market seems to be shifting and approving lenders do not seem to be as cooperative in the past. This increases overhead when self processing and has lead to more transactions not closing. I have done almost nothing but short sales since 2007 and had a 100% closure rate until early this year. Now I am seeing a significant reduction in successful closings. I am looking at changing my business model to reduce my overhead, engage a RELIABLE attorney based firm to handle the negotiation and then work to start establishing a new revenue base. During the last half of 2009 I was certain that short sales would continue to be a viable way to generate revenue for at least a few more years. Early this year there was much written in the media about lenders making 2010 the "year of the short sale" to reduce non-performing assets from their books but I have not experienced that in my business. Have you?



Hal Mayer said:

I stay away from attorney negotiated short sales. My experience in Arizona is they don't know what they are doing any more than an inexperienced Realtor. I do require my short sale listers to consult with an attorney (my referral) prior to expending any effort on listing the home. This ensures they are advised of the legal possibilities in a short sale. I do the same with an accountant. Realtors who give legal and/or accounting advice are playing with fire.
I work WITH an attorney and accountant but won't ever turn the daily short sale tasks over to them.

Permalink Reply by Andrew Arild on August 11, 2010 at 11:53am

Wendy - Any outsourced 3rd party negotiator that I engage with needs to be adept at working with the lenders. My reason for preferring an attorney is add another layer of liability protection for me. Attorneys will usually require an agreement between the seller and the attorney firm which insulates me from any dispute that may arise.

Permalink Reply by Stephen Shafer on August 13, 2010 at 3:10am

Andrew,
I am associated with a law firm and do SS negotiations for them & other realtors for 2 years. I have a 6 files in Northern CA & 40 or so in 10 different states. We have the listing agent add 3% attorneys' fees in the listing agreement, once the real estate agent receives an offer I assemble the file from the homeowner/borrower with the help of the agent if needed.
If the bank will not pay any portion of the 3% I will get 1/2%-1% of the commission depending on the sales price, this has only happened 2-3 times. By farmimg out the SS negotiation you the realtor can continue to prospect for new clients.
Please call or email me if you need more info.
Thanks
Stephen

Permalink Reply by Rosie Zelaya on August 14, 2010 at 6:04pm

Quite an important post here. I can't say that I have a response unfortunately but I would definitely like to share what I've learned recently. There is a website I recently came across where a processing company has linked up with an attorney to provide "consultation" services to the homeowner (which is something we as Realtors should definitely encourage so that our clients get a well-rounded view of the potential risks involved with a short sale. The processing company submits a fee for these consultations to cover both services. This company has posted a sample approval letter where the lender DID approve "attorney fees" in the amount of $2997. The lender that approved this was Wells Fargo. What I would like to know though is: who is the investor that approved this? Was it a bank backed loan It will be interesting to test out this practice with different investors to see how it plays out. Especially when you get an M.I. company involved.

Permalink Reply by Wendy Smith on August 15, 2010 at 2:01pm

that's really decent that you work with the homeowner to get all the docs, etc - the firms that have solicited me (as the lisiting brokerage) still want me to work with the homeowner to get the docs, they just want to submit the package etc.

Stephen Shafer said:

Andrew,
I am associated with a law firm and do SS negotiations for them & other realtors for 2 years. I have a 6 files in Northern CA & 40 or so in 10 different states. We have the listing agent add 3% attorneys' fees in the listing agreement, once the real estate agent receives an offer I assemble the file from the homeowner/borrower with the help of the agent if needed.
If the bank will not pay any portion of the 3% I will get 1/2%-1% of the commission depending on the sales price, this has only happened 2-3 times. By farmimg out the SS negotiation you the realtor can continue to prospect for new clients.
Please call or email me if you need more info.
Thanks
Stephen

Permalink Reply by Stephen Shafer on August 16, 2010 at 4:24am

I generally work with the homeowner/borrower to collect all the documents the lender requires, I feel that once the agent referrs the file to me, it is my job to process the file. Wells generally approves $ 1500.00 to $3,000.00 attorneys' fees but no gurantee. Believ me as a realtor if I were not getting pais by the law firm I would think twice about the time involved to get a deal done. I honestly believe that a realtor time is best served prospecting for new clients not wasting time on hold with banks.

Permalink Reply by joe beauchamp on August 16, 2010 at 5:29am

I'm always putting in for atty fees - BofA response varies greatly upon the deal. Since I generally have fannie mae via equator, I can tell you that it is not consistent. I suspect the negotiator weighs in, also.

Rosie Zelaya said:

Quite an important post here. I can't say that I have a response unfortunately but I would definitely like to share what I've learned recently. There is a website I recently came across where a processing company has linked up with an attorney to provide "consultation" services to the homeowner (which is something we as Realtors should definitely encourage so that our clients get a well-rounded view of the potential risks involved with a short sale. The processing company submits a fee for these consultations to cover both services. This company has posted a sample approval letter where the lender DID approve "attorney fees" in the amount of $2997. The lender that approved this was Wells Fargo. What I would like to know though is: who is the investor that approved this? Was it a bank backed loan It will be interesting to test out this practice with different investors to see how it plays out. Especially when you get an M.I. company involved.