HOW TO EVALUATE A LISTING AGENT
1. What is your experience representing buyer and/or sellers in short sales?
Dealing with a knowledgeable and experienced agent who has successfully closed many short sales is the sine qua non for a successful short sale.
Thousands of agents are now taking short sale certification programs and presenting themselves as short sale specialists. Many of these agents have never closed a short sale in their lives. In fact many of the people teaching certification classes have themselves never closed a short sale.
Knowing the mechanics of a short sale is not enough. Lots of agents now have this information from taking one of the many certification classes now prevalent. It will not get the job done.
Ask the agent how many short sale they have closed representing sellers in the last year.
(Representation of the buyers in a short sale counts for nothing in terms of short sale experience since all the approval action goes on with the listing side.)
2. How many leins are there on the property?
First or first and second or HELOC, HOA, Condo, Special Assessment, Tax?
Second lein holders and HELOC holders can be extremely difficult and are very adept at killing deals and cutting commissions.
3. Who is/are the servicer(s)?
BOA, for example is extremely difficult to deal with. Much more so than Wells Fargo. So unless you just get lucky it will take a much more experienced and savvy agent to get an approval from BOA than WF.
4. Who is the investor or insurer on the loan?
Fannie Mae, Frerddie Mac, FHA or VA or Convertnional or PMI
Conventional loans are the Wild West for services since they can approve or deny thything the want.
Fannie Mae Loans frequently have PMI which means, nothing is happening without the PMI companies approval, so even if there is only one lien, there may be two approvals required.
FHA has a proscribed process with allows servicers little latitude for game playing.
5. Is the listing agent going to have one contract signed and submitted or do they say they are going to submit the offers to the servicer to decide which one they want?
I would advise my buyers to run away from any deal where the agent says they are going to submit multiple offers to a servicer. That tells me the listing agent is clueless. Why would you send multiple offers to a loan servicer who takes months to approve one deal? If the agent can't figure out which is the best deal in a multiple offer situation, they should get out of this business completely.
6. Has the servicer previously approved a deal which the buyer walked away from or has the servicer disclosed an acceptable price?
This may shorten the process, but not necessarily. Some servicers will force the agent to start all over from square one again with a new buyer, including ording a new appraisal.
7. Does the agent have any financial modeling program to determine wheather the offer is going to yield more cash to the investor than foreclosing?
This is how the lenders ultimately decide wheather or not to approve a deal. Absence of this means you are pretty much throwing darts with a blindfold on.
8. Has the property been priced appropriately?
I still see short sale listings where it is obvious the property is priced at a number which would pay off all of the leins. Ridiculous. Don't event think about buying this property.
9. Does the agent purport to be an expert?
I would be very, very wary of anyone who purports to be an expert. The only experts I am aware of are the guys sworn in as such in court rooms. I see new twists on servicer tactics and processes every day - and there are dozens of servicers representing hundreds if not thousands of different investor. And don't forget HAMP or HAFA.
10. Will an Attorney get you a better deal on a Short Sale?
Think about it. Until this year, most attorneys would have turned their noses up at dealing with loan servicers on short sales. Suddenly, they're experts in short sales.
I have experience in closing multiple short sales in the last two years and will be happy to meet with you and we can assess your financial situation to determine the best course of action in your individual situation. Please feel free to call me to set a private appointment at 951-312-8473
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