One lesson I have learned from all of my short sale negotiations is don’t argue with a negotiator. A negotiator is not a final decision maker. They can not make any decisions without checking with upper management. When that negotiator tells you it cannot be done, or tells you this is the only way they do it, and you know that is not true because you did it last week on another file, stop arguing with them and look for a decision maker who can fix the problem.

Sure sometimes it may be fun to just argue a little and give them a few pokes, but as my partner Kristin always says, you catch more with honey.

When you are on the phone discussing your short sale file keep in mind they person you are talking to most likely does not have the authority to make the changes you want. Stop arguing with them about what their policies may or may not be and use your contacts to find someone who can help  you out.

Short sale or foreclosure? You are getting ready to make a decision on your Gilbert or Chandler home, should you let it go back to foreclosure or do a short sale? Well just like many questions it depends, a real estate attorney can look at your loan documents and tell you what is the best option. Kevin Hardin of Thomson Law did a video for us a few months ago and he said it is almost always better to do a short sale over a foreclosure, but not always.

Sometimes home owners get so frustrated they just want to say “bite me, here are your keys back.” But saying bite me to a bank can be like saying bite me to a great white shark. Banks have been working over the last couple of years to go through all the legal statutes and all the loopholes that may be available that will allow them to squeeze out a few more dollars from Phoenix East Valley home owners.

If you walk away from your house and let it go to foreclosure you are relying and hoping the bank does not come after you. There are plenty of people in court right now defending themselves from the bank in these cases. Even if the bank doesn’t have the right to come after you, that doesn’t mean they won’t at least try.

A short sale allows you to go to your lender and work out a deal where you can get it clearly written in writing that the bank will not come after you for any money after the transaction is complete.

Here in Arizona we have some anti-deficiency laws that protect homeowners who to got foreclosure. But if you think those laws are going to protect you from the bank at least trying to squeeze a few more bucks out of a home owner you are sadly mistaken. We have seen it happen. East Valley Team co-owner Kristin LaVanway herself has had it happen to her.

This past week was a good reminder on a couple of short sale lessons that we all know, but sometimes need to be reminded of.

Quick background on June 15th LBPS sent us a counter offer on a 70k Tempe short sale where they stated that the MI company was requiring the seller sign a $12,000 promissory note or they would decline the short sale.

On June 16th our seller told us he was unable and unwilling to do that as his liability would be zero if it was foreclosed on and he had a financial hardship that would not allow him to do that. So on the 16th I passed that information to LBPS.

The following week I put in a message to the negotiator on the file and would continue doing this for the next few weeks. Each time I inquired I was told it was still being reviewed, which is pretty standard so far.

On July 7th I was not happy with the lack of response I was getting from my negotiator so I called in on the general short sale phone number for an update. The support person checked the file and said there was a letter in the file from MI dated June 17th that said the offer was approved with no contribution from the seller and they were not sure why the letter was never sent to me. They were going to message my negotiator and tell them to send it off and I should have it in a few days.

A few days later I check with my negotiator and once again she stated that the MI company needed a promissory note and the information I received was wrong. My next step, hang up the phone and call back into customer service.

I get someone else and they are able to verify the same thing, the letter is indeed there and they are not sure why we did not have it yet.

By now I was just pissed, the negotiator was obviously just trying to milk more money out of the deal instead of getting it closed and was lying to me.

I email the negotiator and cc her manager then left a voicemail for her manager. Wouldn’t you know it, the very next day I get an email from my negotiator apologizing and saying there was a miscommunication and she would get the letter to me.

So two reminders, if your negotiator is saying they need something, that does not always mean they do and second if you are not getting the answers you want, hang up and call someone else.

So the most common question we probably get when discussing short sales is, “Are short sales really any better than foreclosures?” The answer is absolutely and I think even we who deal with them day-to-day in Arizona forget.

There was recently a file where the homeowner decided to let their home go to foreclosure because they did not want to deal with the headaches of the short sale. The home had a first and a second, both purchase money so they are protected under the Arizona anti-deficiency laws in the state.

Well just because they had no right to come after the homeowner did not mean they wouldn’t come after them. As a matter of fact about eight months after the home was foreclosed on the homeowner started receiving calls from debt collectors.

Sure enough the bank sold off the bad debt and a debt collection agency was coming after them for some money.

Now you are reading this so you understand that the homeowner was protected and will win this case, but how many others out there never talked to an attorney and would just assume they needed to pay the money.

When you do a short sale, you control the process and you can get the language to guarantee your protection written into the agreement letter.

http://www.youtube.com/watch?v=4wdNu528kus&feature=channel_video_title

There was a time, not that long ago, when we were comparing offers from buyers on our short sale listings that the investor would often have the advantage over a home owner. The reason we used was the investor did not have to live in the property by a certain time frame and may be more willing to stick around while you negotiated the deal with the servicer.

This no longer seems to be the case. We have increasingly seen over the last few months that when we get an approval letter in or a very reasonable counter offer from the bank that investors are no longer there. What appears to be happening is they are putting in offers all over the place looking for the best deals, saying they are willing to work with you. Then when it comes time, they are gone.

If an investor puts in multiple offers, then a month later puts an offer in on your listing, there is a good chance at least one or two of the earlier offers will be approved and then you are left as the seller facing foreclosure. I don’t think people realize how they are messing with the homeowners lives by doing this.

I am not saying never accept an offer from an investor, I am just saying give it careful consideration and don’t assume just because they are an investor they may be willing to stick around longer. It may be the opposite.

Primary home owners maybe your best chance to get a deal closed, if they really want to live in the property they may be willing to stick around and give the process a better chance to work out. Also $1,000 earnest money from a homeowner maybe a much bigger sting to their pocket than it is for the investor.

Let us know what you are seeing.

About a hear and a half ago I did a video post on Nationstar and how they were bordering the line on ethics by trying to strong arm my buyer into using them to purchase a Nationstar REO even though my buyer was the high bidder. Well their questionable practices have not changed at all since then and based on recent activity I would never use them personally to purchase a house. While I have many issues with big banks, Nationstar is the most consistant one I have problems with.

I recently had a short sale I was working with Nationstar and had many issues from the beginning with the file. Just 72-hours from the foreclosure date Nationstar came back to me and said they needed some updated docs for the MI company. Within an hour I provided the missing material to Nationstar. The next day I called for an update and I was told the MI company was reviewing the file. I consistently made calls for the next two days and was told by the negotiator that if I could close before the foreclosure date (48-hours away) that the MI company was willing to issue approval. Well seeing this was a finance deal, that was not going to happen.

I immediately got on the phone with the MI company and tried to make inroads with them. The morning of the foreclosure I get someone with authority to make a decision on the phone at the MI company and they told me they were still waiting for the documentation from Nationstar that I had provided a few days ago. I was furious and sent it to the MI company right away. They did a quick review and issued approval 30 minutes before foreclosure. Nationstar refused to work with me and foreclosed anyways and despite my efforts for three days after refused to rewind the foreclosure.

Now I hear about a new issue with Nationstar that mirrors what they were doing with their REO properties. I had a local guy email me after finding my earlier video on Nationstar and tell me about a short sale Nationstar was servicing. He was purchasing the short sale and was requesting closing cost assistance, nothing out of the ordinary. He was told by Nationstar that they would approve the assistance, but only if he used them for the deal.

This is a short sale right? Isn’t the idea to avoid foreclosure and to assist the investor on the loan from losing more money by preventing foreclosure? I wonder how the investor would feel if they knew Nationstar was playing these games? I am guessing not to happy.