If you are a lender or mortgage professional, it would be good if you wouldn’t shave your head (and therefore your hair) off before stepping into the board meeting. You’d be surprised at how many cleaver lenders think they know everything about everyone, then curve them around and pray they don’t get burned. Here are some questions, from a lender’s perspective, that you should ask yourself when considering a short sale listing agent. If the answers are ‘yay’ or ‘nay,’ then that agent is the right agent for you. If the answers are ‘boo’ or ‘nay,’ then you should keep out of his or her hair. But let’s not go into unfair dealing.
Does the realtor have ‘guaranteed’ listings?
Some short sale listing agents may make the claim that their short sales and REO listings are ‘guaranteed to result in the listing. Does the agent have Fannie Mae or sightings of the dollar amount to list each property? No, might not even happen. But look at the listings either before or after the company claims the ‘guaranteed’ pools of ‘guaranteed’ listings. Are the listings real? Often, the listing agent simply may not know whether a property is a short sale or an REO. A short sale listing is a property in distress that a lender has approved for a short sale and is offering to let the property ‘work its way through the pipeline.’ But a listing is not a property in distress that a lender will approve for a short sale.
Will the agent give you exclusive listing leads?
An exclusive listing lead is information exclusively given to the listing agent which the lender will not be given to the acquisition agent. It costs a listing agent nothing to provide because the listing broker is actually profiting from the sale. Why then is a bank so quick to deny the request for exclusive listings? Look at the listing prices of the property. In an REO scenario, the prices are only partially negotiable because the banks are already taking a loss and will be fighting not to eat up all the upside money of the loss. In a short sale scenario, the banks are already receiving a profit from the sale and, even though they ‘may’ open the property to the public for a glimpse, often will reject the low-ball offers. That puts the listing agent in the position of ‘ contesting’ the price paid or making ridiculous lows as a way to get the listing. The listing agent is getting paid a commission for having the property listed and having contact with all potential buyers; so there is nothing ‘numbers’ to pay. If the agent is open to listening to your requests and setting your expectations at a level that will result in a successful and profitable closing, then look at the listing as an opportunity for the listing agent. The bank is paying the commission, and they don’t want you to go broke while they’re pulling the rug out from under you. If you look at the listing as an opportunity for your representative to not waste his or her time, then any other logic, the deal just doesn’t stack up.
Is the agent truly an ‘asset’ and partner to you, not the bank?
Don’t mar the wonderful relationship you and your agent have. The agent has a fiduciary responsibility to the bank to be an asset and partner to you. Be wary of any agent that tries to lose the bank as a service to you.
The larger banks are more likely to be open to working with agents that will achieve results for them that are in line with their goals, even to simply cover the operating expenses of doing business with you. They will, of course, be looking to get the highest price possible and are in it for the long haul. You can convince a bank to delay the foreclosure process and there are many other strategies you can use to work with a bank, but if you aren’t skilled in these areas you should go where the money is… direct lender money, that is.