Hi folks. If you handle Short Sales then you are probably aware of the new trend..... Lenders/Servicers partnering with auction companies to "assist" in the selling of the property.
The two partnerships that are causing the most discussion on the web are Nationstar/Auction.com and Ocwen/HubZu.com
In most cases your seller will NOT be able to opt out of these required auctions. So be prepared to have to deal with this. You can try but in most cases if the borrower doesn't use the auction service the Short Sale will be denied.
My biggest complaint with this has always been the lack of disclosure and the way that they spring the auction requirement on the borrower and the agent at the last minute. In fact Nationstar and Ocwen usually won't even bring it up until AFTER the agent has already found a buyer for the property.
We work the short sale, sometimes for months, submit documents to the lender, find a qualified buyer only to then be presented with this auction requirement. It can be very frustrating. Especially if they now try to reduce the commission to pay the auction company. I offer guaranteed co-brokes on short sales. The lender reducing the commission after the fact can be very problematic.
And of course they have no qualms about throwing the existing purchaser to the curb.
So what can we do?
- Call the servicer at time of listing and ask them if an auction will be required.
- If they answer "yes" then see if they will do the auction now instead of waiting for a contract before they "verify the offer" at the auction. Auction.com will do this. I'm not sure about HubZu.
- If they won't answer the question..escalate. You really need this information upfront.
- If the auction is required adjust the co-broke in the MLS and provide as much info as you can about the auction process to the buyer side.
- Full disclosure to all parties is imperative. Prepare a written disclosure and have it signed by all parties.
My guess is that these auction services are going to become more and more prevalent. the bottom line is that the lenders want as much money as they can get for the property. The auctions have always worked for their REOs so it makes sense for them to want to do the same with short sales.
As agents we have to decide whether or not we want to take these types of listings. I had decided to take a pass.
BUT....things change. I now see this as an opportunity for me to create another niche. So...I'm learning their systems and procedures.
If you are a Florida agent or Florida Short Sale Seller and want help with Nationstar/Auction.com or Ocwen/HubZu.......I can help.
****Tutas Towne Realty will list or co-list any of these types of Florida Short Sales anywhere in the State of Florida. 50% referral fee for co-list. Let's talk
**********************************
like buttons
Comments
Bryan
Hi! I have just had two loans back to back sent to Aution.com and Hubzu, respectively. In the past I was able to deny these programs and am now being told in order to move forward with the short sale we will have to use these services. I am torn about what to do, or what to tell the sellers and buyers. I would like to make a stand and shut down both files, though by doing so I would not be helping my sellers, which is why I got into this business in the first place.
I have been doing much research and believe that NAR should be involved in this. In the meantime, I would like to learn all that I can, as knowledge is power. I am not a FLA agent, I am based in MO. Anyway you would be able to share more with me what you know? Or at least steer me in the right direction? I am a top short sale agent in St. Louis and would like to stay that way. Thank you.
Bryan, you are right! I just closed on one with Ocwen through HubZu. It was not fun but like you said, educating yourself about these is the best way to go! Thanks for your insight.