First of all, please allow me to preface this blog post with the following statement...."I am NOT against the use of third party negotiators handling short sale transactions. There are many effective third party negotiators and some that I would even use....after a lengthy interview, of course. The actions of some third party negotiators DO NOT reflect the actions of ALL third party negotiators".
....No that I've gotten that out of the way, it's time for me to speak my mind.
We all know that the FHA PFS program (the best thing since sliced bread in my book) is first and foremost, a pre-approved short sale program. In fact, being proactive in ensuring that your FHA Short Seller is allowed into the program is paramount for a successful FHA short sale. One of the main reasons is that the Seller is protected from foreclosure throughout the duration of the program. This is a CRUCIAL point to this story...
True story....I was talking to a local listing agent about a short sale that she was listing. She came to me for advice on whether or not I used a third party negotiator since she was contemplating doing the same. I told her that my control issues forced me to handle each and every short sale personally since I honestly had not met a negotiator who would work a short sale as hard as I do and who had a close rate as successful as mine. Now, don't get me wrong...I wasn't being arrogant, only honest. If I found one who did, I'd definitely punt a few of mine over to them. She began to tell me about the scenario that her client's were facing. They were three months delinquent in their mortgage payments and had an FHA loan. She mentioned the third party negotiator that she was working with and I quickly informed her that I'd interviewed this firm and they were adamant about the fact that they would not send any paperwork or begin the short sale process until after they've received an offer. I told her that it would be pretty risky for her clients if she waited on an offer instead of proceeding to send in the requested paperwork and get them into the FHA PFS Program. She then began asking me about the program....I WAS STUNNED!!!! I then realized the enormous amount of faith that she was entrusting to a third party when her clients were clearly depending upon her expertise and knowledge (or lack thereof). I explained the program to her, gave her a couple of websites to research different programs for different loan types, and encouraged her spend a weekend researching these different programs. Her response to me was "I don't have time to do that".
What do you mean, "you don't have time to do that"? You're totally comfortable with remaining ignorant with the entire process, ignorant to the options that your client has, ignorant to the danger of waiting on an offer before starting the process and protecting your client from foreclosure? She was completely comfortable with passing the buck to a third party negotiator who had a policy of throwing a multitude of files up against the wall to see which ones would stick!
I pondered her response for the remainder of the day and realized that there are some agents who will list a short sale with absolutely no intention of closing the transaction! If it closes, it closes...if it doesn't, then "oh well". These people are literally playing Russian Roulette with someone else's financial future and advertise themselves as "Specialists". We're not talking about Monopoly money!!! These people are desperate and it's unfortunate that so many take advantage of this desperation by NOT providing their clients with useful and knowledgeable information regarding their decision to sell short.
Okay....I'm stepping down from my soapbox for the day! Thanks for listening.
**********************************
like buttons
Comments
Dirk, I fully understand what is legal in Florida, that is where I am. Not sure if and when you sold real estate but I can assure you that my E&O coverage is more than adequate and my deductible is far less than $5000. The state of Florida is very clear on what an agent can or can not do in a short sale. Your suggestion is merely your opinion and not a legal opinion at that.
My E&O is OK with me working short sales as is the state of Florida.
Evelyn your last statement hit the nail right on the head. Great response
Dirk:
I am presenting an offer to the bank - with all the banks required documentation. The servicer using investor guidelines makes the decision whether to accept the offer. Until the servicers use attorney's or more highly trained personnel I will continue to process short sales.
We can argue finite legal issues and since you don't know what E&O company I have or don't have your post reminds me of attorney's trying to bully real estate agents with dire consequences then when given an opportunity to "negotiate" a short sale give up at the first "no".
After more than 6 years of processing short sales for clients I am fully aware of deficiencies and how they are handled. I work in unison with an attorney who handles any unusual issues.
Thanks for your concern.
@ Dirk, I can only assume that you are an attorney?
I run across agents like this all over. They prefer to pass the buck to an attorney or 3rd party negotitor thinking they are passing off the risk. If I am going to be sued I rather have it happen based on my supposed actions vs actions from a 3rd party even if its a "short sale" attorney.
Like you I am sure there are some 3rd party negotiators that are great, but I have not run across any. There's is a volume numbers game while it's my commission that is at stake as well as my clients future - so I rather do the processing myself. After all how much control do we have over the 3rd party negotiator's staff and their training??
Nice to know these types of agents are not just in my neck of the woods. Thank for the share.
You're welcome, Dirk!