A SHORT SALE SAGA

February 4, 2010 at 11:31 pm Leave a comment

Negotiating a short sale is complex. Every transaction is custom-made depending on the seller’s loan, the seller’s lender, the negotiator, the seller’s situation and the buyer.

A negotiator of a short sale transaction is similar to a conductor conducting an orchestra. All instruments in a symphony must come together in harmony, just as all parties in a short sale must come to terms to allow a short sale to close.

Six months ago, I started negotiations on a short sale with one of the biggest banks in North America. It is by far the most horrible bank with which to negotiate a short sale. The bank’s reputation is such that, in some cases, Realtors will not put an offer in on a home if the seller’s loan is with this bank.

The bank took 30 days to upload the documents in the system. The file then was transferred to the first phase negotiator to check for completeness of the file. Then, it got transferred to a phase 2 negotiator who decides whether to approve or decline the short sale. I emailed and called one to three times a week, but the negotiator never picked up her phone. She did not answer any emails either.

I escalated the file to the supervisor and the next day I got a secured email saying that the file was transferred to a different phase 2 negotiator and the 15-day period for review was reset to Day 1. What the heck?!?

Three months into the short sale, the new negotiator again did not respond to my weekly emails and phone calls. Customer service would not escalate the file until Day 15 had passed. I escalated the file anyway to a supervisor and a new email came in from the newest Phase 2 negotiator. After two escalations in a row, the newest negotiator came back with the investor’s guidelines, dictating that the lender would not cover many of the title fees and would ask for the commission and closing costs to be reduced, and so on.

Regardless of the changes, I was happy to finally get a response from the negotiator. I called the buyer’s agent to share the great progress, only to find out that the buyer was under contract with another home and walking away from the deal. I would have retained the buyer if the seller’s bank did not waste too much time changing negotiators.

In the fourth month of negotiation, a new offer came in. I presented the new offer to the seller’s lender but they told me that the file was already closed because the additional documents they requested were not submitted to the bank I argued that it was submitted so they reopened the file. I took a deep breath, glad to have a second chance with this offer. But wait… I had to start all over with the new offer and wait for the bank to assign yet another Phase 1 negotiator. What the heck?!?

A week later, the new Phase 1 negotiator was assigned. It was clear to me that the negotiator could not spell or write in clear English. But regardless of his literacy level, he had the power to decline the short sale as it was only a few days before the foreclosure date. Sure enough, he declined the file because the seller wouldn’t pay a $3,400 extension fee. I was so furious. I sent the negotiator a well-deserved critical email with copies to his supervisors. He reversed his decision in response to the email and extended the foreclosure date for a month.

We are now on the sixth month of the short sale and still going. The file was assigned to a Phase 2 negotiator who seemed better trained than the others. After review of the file, the Phase 2 negotiator countered $7,000 more on the purchase price. The buyer declined the counter offer.

The negotiator suggested I put the house back on the market and get a higher price. I convinced the negotiator that the market value she was basing the counter on was incorrect and sent comps to prove my case. She then agreed to submit the current offer to upper management for approval. So, that’s were we are for the moment. The file has gone through six negotiators, closed and reopend twice, one counter offer, and lost the first appraisal report six months into the short sale without conclusion. It’s been a roller coaster ride.

All the short sales I’ve done in the past have successfully closed, but this one is a particular challenge. The bank has a poor system of processing short sales and a lack of trained and qualified negotiators to determine the fate of a $500,000 home and the future of a homeowner. The bank’s practice of passing the file among several negotiators does not allow ownership and accountability; no one claims responsibility for the file if it is lost or badly-handled. Short sales are a menacing process which I have learned to accept and deal with successfully. It is THE dominating category in the current real estate market and will be for some time. Handling these sales is not for every Realtor, but for someone who has the tenacity and care for their customers to survive.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals. Tags: , , .

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