by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com)
I ran across a blog post about vetting a short sale agent by a guy named Michael Davis from Annapolis, Maryland. Basically he’s teed that agents are running around getting this Realtor designation called a CDPE which stands for “Certified Distressed Property Expert.” The upshot of his post is that no 3-day class can prepare you for the realities of working a short sale or foreclosure, only experience can. I agree with some of the points he makes and disagree with some others, so I’ve excerpted some of his post here along with my comments.
Just an FYI, by our count Kate Stevens and Ron Barry (my two partners at St. Augustine Team Realty) and myself have sold or are in the process of selling 42 short sales/foreclosures, and we lost another six to banks or lenders that rejected the offers we brought them and then foreclosed.
My comments below are in italics.
HOW TO EVALUATE A LISTING AGENT IF YOU ARE REPRESENTING A BUYER (excerpted from Michael Davis’ “Top 10 Questions to ask a Short Sale Agent” link above)
1. What is your experience representing sellers in short sales?
I agree, this is a good question to ask, but buyer agents that have worked short sales bring valuable expereince to the table as well.
Dealing with a knowledgeable and experienced agent who has successfully closed many short sales is the sine qua non for a successful short sale.
I agree, but short sales are kind of measured in dog years. Three successful short sales are like 7-9 successful straight sales, as much work and as stressful as they are.
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.
I don’t know the qualifications of the individuals teaching these courses, but bookwork in real estate is about 15% of the knowledge. The rest is hard-earned experience. Like coaching basketball.
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.
Yeah, but it sure helps. Just knowing the roadmap and the process can keep people calm and working towards an eventual successful sale. But really knowing the roadmap comes from experience.
Ask the agent how many short sales they have closed representing sellers in the last year. I would also ask them if they have closed any representing a seller with the particular loan servicer who is the third party approver(s).
This is a seller specific question, but I still believe buyer agents that have worked these transactions bring a lot to the table, because in the end everyone goes through it together. Heck, the seller in a succesful short sale transaction will know more than agents that have the “CDPE” badge but no actual closings, because these sellers lived it, filled out the pertinent paperwork, and dealt with the lender themselves to a certain degree.
(Representation of 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.)
Complete and utter bullshit. There are lazy agents out there who learn nothing from any transaction. And true, the buyer agent doesn’t handle any of the list side paperwork and shenanigans that go on with the lender. BUT, a buyer’s agent who can keep a buyer on board through a process where there is no information on the status of the offer with a minimum close date of 120 days is a rare agent and a special agent.
The listing agent needs to know how to escalate a deal to get an approval. Some loan servicers – BOA immediately comes to mind – reflexively decline short sales and, I believe, manufacture values, notwithstanding what their appraisal or BPO says, hoping to extract the maximum dollars from the buyer and agents.
Yes, you have to know how to game the system, or these things will never get done.
The agent needs to know how to get to management to get an approval with Servicers like this. In fact the listing agent needs to know how to do this just as reflexively as the servicer who is going to reflexively decline the deal.
As an agent you could learn how to do this. Or you could hire pros who know what the hell they are doing to do this for you (we do), and focus your complete and total real estate energy getting ALL your listings sold, not just one or two. Additionally, after the approval there’s work to do getting the listing sold that the negotiator has nothing to do with: the standard nuts and bolts of all real estate transactions.
Negotiating price prior to getting to the Management level is going to prolong the process, not shorten it. But the listing agent has to know how to get around the lower level negotiators.
That’s why we hire pros to do this for us. I need to be out there selling your listing, or getting a backup offer on your short sale in case buyer #1 can’t wait 90 days for an answer on their offer and walks (which happens all the time). Not waiting on hold with a bank for three hours.