The Philadelphia Real Estate Blog

Philadelphia Short Sales - A Sweet Victory

We recently had a successful Philadelphia short sale for a Center City Condo in the Victory Building at 10th and Chestnut.  This was a very sweet "Victory" as we had to negotiate with Bank of America through five separate buyers to finally make it to a settlement table.   To be honest, we almost gave up on this one as the lender for whatever reason was just not being reasonable with what they were willing to accept and there was not much more we could do and with the mountains of hours we had into it already, we were also getting very frustrated.  However, we still represented our clients who were so extremely nice and cooperative every step of the way.  They urged us to try one more time with the short sale which we did and sure enough, we did it!

As many of you know out there, Bank of America has a reputation of being one of the more difficult lenders to work with to get a Philadelphia short sale approved.  You must be extremely equipped with the Equator process, the short sale process, have patience of a Saint and communication skills of a super hero in order to improve the chances of short sale success.  Not to mention knowledge of the real estate market inside and out for issues with valuation of a BPO like we did on this one in regards to recent sales in the Victory Building.

We thank the buyer and the buyers agent for being patient.   A successful Philadelphia short sale is a "win-win" for all the parties.

And for you potential Philadelphia short sale sellers out there, make sure you contact the right listing agent to handle the short sale to navigate through the process and get you to the settlement table.  Expertise and experience is a must.  If you are in Philadelphia, feel free to contact us or email thesomersteam@gmail.com to inquire further.

Other Philadelphia Short Sale Articles:

Philadelphia Short Sales - Another Successful Short Sale at Waterfront Square

Philadelphia Short Sales - Another Succesful Short Sale in Point Breeze

Philadelphia Short Sales and Short Sale Success - The Somers Team

Short Sale Specialists in Philadelphia

Short Sale Specialists in Philadelphia - Plan and Prepare for Success

Philadelphia Short Sale Terminator Rises Again!

Another Whacked Out Short Sale Call:  Fraud Running Rampant

I think this economy is making some folks a bit whacked in that they are outright asking Realtors to commit fraud with them.   This one phone call we received is not an isolated situation.  It goes something like this:

"I have done a lot of research and need a professional short sale expert to negotiate a successful short sale on my house.  I found you online and you seem to have a lot of experience."  We talk for a bit...  "I already have an "approved" short sale on my property so that might help a bit."  We talk some more about the process.  It turns out that his version of an "approved" short sale is that he had a phone call where the bank suggested a short sale as an option (not exactly an approved short sale).

At the end of the conversation, the seller says "Oh by the way, I expect a kickback on the sale since the buyer is going to get a good deal on the property."

Are you kidding ?  We politely say "Thank you, but we are not interested.  If you would like to have it done the right way, feel free to call us back."   The seller says "That is okay.  I will keep calling around as I am sure I will find someone to agree to do it."   Wow !   I hope that is not the case.   We have had other similar calls in that one potential short sale seller said "I need $5,000 to go to Florida.  Can you make this happen ? "  We said "Thanks, but no thanks".

The bottom line is that Stephanie and I love our real estate licenses.  We are not going to get involved with any type of fraud situation, period.  The audacity of some of those folks is pretty outrageous.  It is called "Defrauding the Lender" .

The other prevalent issue that Realtors get called on from their short sale listings are from investors looking to do "Flop" deals.  This is when an investor gets under contract at an insanely low price on the short sale listing, takes control with the negotiations with the lender, asks the Realtor to continue to market the property and incentives the Realtor with multiple commissions.  The Realtor finds another buyer, and then there are multiple settlements.  Thus, the investor hopefully gets the bank to agree to the low deal and then "flops" it to the new buyer, making the profit the same day.   This is clearly defrauding the lender as the second deal was the value the lender should have received and the Realtor particpated in the fraud.   One of the center city offices in Philadelphia just got blasted for this recently.  All of the agents got relocated to a different location, the manager got let go and many of the agents simply left amongst the concern of the fraud investigation.  Not a pleasant situation for that office...  Some lenders are now placing restrictions in that sales cannot occur for a certain period of time and title companies are protecting themselves from this as well.  Of course, investors will then take the deals to "their own" title company to avoid some of those restrictions. 

The bottom line as an Agent is to be very careful and protect your license.  If it smells wrong, it probably is.  Just say "thanks, but no thanks" !!!  Just go about closing your short sale listing the right way.

I know there are some very experienced short sale experts out there.  Please add your experience and thoughts in the comments below.  I think we will see more repercussions on these types of situations in the future.

What type of experiences have you had with whacked out short sale calls ?

Have you been asked to commit fraud ?

Should a Buyer Pay a 1.5% Negotiation Fee to Expedite a Short Sale ?

We had a recent short sale with a Keller Williams office in the county where their policy, or perhaps the listing agent's policy, was to charge the buyer a 1.5 percent negotiation fee to help expedite the short sale process.  In the beginning when we submitted an offer for our buyer, I inquired with the listing agent and asked about this policy and he simply stated, "It helps me do more short sales.  If I had to be on the phone with the bank, I would not get anything done."  I inquired why charge the buyer and why not keep this on the sellers side and his reply was, that's how they do it and it works for him.

Okay, whatever.  I had my issues with it but the buyers wanted the property.  And I figured since they had the short sale well under way (or so I was told), perhaps the extra fee would not be that big of a deal. The buyer would be getting a great deal and the whole process would be expedited. 

Fast forward... several months...  Below is an illustration of the last conversation I had with the KW Agent. I was trying to wrap my mind around this agent's version of "expediting the short sale process" for a fee to my buyer.  CAUTION !  Not for the faint of heart, of for people with anger issues !

Chuck, You say I should know there are no rapid responses in Short Sales.... Please! A Rapid response is not even possible at this juncture. When we got under contract in December LAST YEAR, you told me that this deal was well underway. "Well Under Way" Your words! You said you knew what the bank needed for a fast settlement and you had this "great company"  that would "expedite" the process for a fee that had to be passed on to my buyer. THEN you had your seller accept our offer. THEN the story changed. That was just the beginning of the lies. We increased our offer price 2x's for the bank ! What happened? If we are giving the bank the net offer that they wanted 2x, we should be able to  get some straight answers from you, right Chuck? What is the flipping hold up? That document that you say is "holding up the process", the sellers financial worksheet that you say needs to be sent to the negotiator... that should have been set to them months ago! Does this seller even have a real hardship, Chuck?

Why is the buyer paying 1.5% of the sales price, Chuck? We were misinformed numerous times that the bank accepted our offer. OOOPS !  That was a misunderstanding.  I loved the one where the bank wanted to accept an offer LOWER than what we were offering. That was my favorite and that was what Lynn (from the negotiation company) told me. THEN I was told, OOPS! wrong again.  The bank wants to NET another arbitrary number.  So we agreed again to the numbers that were tossed at us. Then it was a need for an updated financial worksheet! Before that it was a "Government SHUT DOWN" ?  Come on !! I am just trying to wrap my mind around  what has been happening on your end. Honestly if you look at what has transpired in the last few months you'd have to agree, it just sounds messed up (not the language I actually used !!!).  Why again is the buyer paying 1.5%?

Lower counters? Government shutdown?  Whose kidding who?

Long story short, the property did finally settle.  We did chip away at the negotiation fee a half percent for the despicable way that this was handled (should have waived the whole darn fee).  That was even before our commission was chopped from the bank. Oh... But the cherry on this Banana Split was when they demanded the Buyer pay for a fee Keller Williams forgot to put on the final settlement sheet. Un Frigin Believable !

As many of our readers know, we DO A LOT OF SHORT SALES for our sellers.  I am not exactly sure why the listing agent had to hire an outside company to do the legwork.  But in the beginning of the deal, he was honest when he said, "it helps him do more short sales".  During the deal, it must be said it was useless speaking to him since basically he took no part of the deal and did none of the negotiation with the bank.  Thus, we were left dealing with the incompetence of the "negotiation" company, who we found out later were not attorneys.  There was one woman there who stepped up at the eleventh hour who finalized the deal by perhaps luck but am not sure what they did.

Thus, this leaves me with the following questions:

• With this model, is it fair for consumers to pay for the growth of the listing agents business ?
• Same question goes for the growth of this Keller Williams office ?
• Is it common in other states for this type of a negotiation fee being passed to the buyer ?
• Is this practice similar in other Keller Williams offices ?

For example, I have seen other Keller Williams agents in Philadelphia brag about their "in-house" short sale department.  I hope that this in-house department is not passing the cost to the consumers.  I have a problem with that.  I also have a problem with a high cost on the sellers side as well as that could interfere with the negotiation process with the lender.   An expert listing agent with the proper resources and training can handle doing these short sales.  Ever hear of the Certified Property Distressed Expert (CPDE) designation ?  (On a side note, I have nothing against Keller Williams and am not picking on them.  This may be an isolated situation.)  

Before writing this blog post, I consulted my friend Bill Gassett, a top producer , a short sale expert, who uses an attorney on his short sales.  He stated that he had never heard of having that type of cost being passed to the buyer. 

What are your thoughts ?  

Philadelphia Short Sales - 4 Times is a Charm !

When you take on a Philadelphia short sale listing, it is safe to say that you better plan on working hard, really hard.  There are many things that can come up in a short sale property that can prevent you from going to settlement.  More often that not, the nuances are on the sellers side in terms of getting your short sale approval.  Many blogs have been written about this in regards to taking forever and a day to get that short sale approval, or the bank just not working with the seller.  Or you have inexperienced listing agents that cause deals to fall apart as they do not have experience with short sale listings.

Well this is a different twist.  The buyer agent needs to have control of their buyer and understand the short sale process as well.  Sometimes you have to sell the property more than once as you have the short sale approval but the buyer flakes or backs out for whatever reason.  

In our recent case, we had to sell the property 4 times !!!!  (I wish the bank would have paid us 4 times)  .   In a world where buyer agents are worried about whether a short sale is going to get approved, I am more worried about there side of the deal performing ! 

In any event, our seller was a trooper.   She understood how difficult it was and sometimes things are just out of your control.   Her original loan was with PHH.  It was amazing how her purchase appraisal ever came in at the purchase price but I guess that is another story...

For now, 4 times is a charm for this Point Breeze home !  And one more short sale is one less foreclosure for the community !

 Related Philadelphia Short Sale Blogs:

Philadelphia Short Sales - Another Successful Short Sale in Point Breeze !

Short Sale Specialists in Philadelphia - Plan and Prepare for Success !

Philadelphia Short Sales

Philadelphia Short Sale Specialists

Philadelphia Short Sales - Another Successful Short Sale in Point Breeze !

We had another successful Philadelphia Short Sale settlement this past week.  We take a lot of pride in this as short sales are a ton of work.  Our folder for these deals typically becomes two or three times the size of any other deal with the amount of documentation that is needed as part of the short sale package.

With this deal, the lender was Wells Fargo who was not too bad to work with.  It certainly helped that the seller provided all of the information in a timely manner for the short sale package initially.  In addition, another reason for the short sale success was the cooperation of the title company we used.  We have found that often times it is the experience of the short sale negotiator you are assigned to that makes a difference and in our case the one that we were assigned to with Wells Fargo was exceptional.

However, there are always things that can trip you up on a short sale, things that you may not expect or just things that are aggravating.  In our case, the two main things were:

1.  BPO (broker price opinion) -  We had a very difficult time scheduling the person doing the BPO to get into the property.   She would only go into the property on certain times and refused to go in the property without being accompanied by myself after finding out it was "tenant occupied" even though it was essentially vacant and there was a puppy.  We have a lockbox at the property and had no problem with showings.  We lost 2 weeks on the short sale during this process.  Long story short, I met her at the property, opened the lockbox, unlocked the door to a property that was 90 percent vacant.  Was a bit insane.  In hindsight, I think this woman should retire.

2.  Buyers mortgage company - The buyers mortgage company dropped the ball for settlement when our short sale approval time frame was running out.  They had ample time to process the loan.  It was a mess.  The title company stayed Friday night on the day of settlement until 8:00 waiting for the residual paperwork to come from the mortgage company which never came.  It was finally emailed around 9:00 pm so our title clerk met with the buyer on Saturday to finalize the paperwork. 

And by the way, this same mortgage company was pushing very hard that they had to do the title work on the deal as well.  Yeah, right !  I could only imagine.  If that was the case, not sure if we would have had a settlement at all !

All in all, Philadelphia short sales are tricky and it is so critical to work with a Philadelphia short sale specialist on your short sale deal !  We do not outsource the short sale work, we do the work ourselves.  We have seen other companies charge the buyer 1.5 percent or $5,000 which does not make a lot of sense when as a listing agent, it is your responsibility to negotiate the short sale.  In addition, it leaves more negotiation room for your client and the buyer as well. 

Lastly, it must be said that the other agent on this deal, Rae Dennis, was a pleasure to work with.  If not for her and her buyer, chances are the deal would not have made it to settlement either !

If you are in need of a short sale, feel free to contact us at thesomersteam@yahoo.com or 215-400-2620.

Philadelphia Short Sales - Welcome to the Real World !

We are fortunate in Philadelphia that a relatively small percentage of our sales are made up of distress properties - bank owned properties and short sales.  Many Realtors in their Philadelphia careers will never be a part of a distress property sale, which is okay.  Others make it their livelihood.  With us, we are not exclusvely short sales agents, but we are short sale specialists as we recognize the need for sellers and consumers to have an agent that is proficient in the process, and even more so in Philadelphia since there are not too many Philadelphia short sale properties -- thus not many agents that are short sale experts. 

In any event, after listing a short sale condo in Center City, I got a phone call yesterday from a top producing agent blasting me about my lack of professionalism in regards to the photos that were taken on the property.  "Have you seen the photos ?"  she asked over and over. 

What was worse is how my professionalism was questioned as a Realtor and was basically labeled as a bottom-feeder for being so awful.   She was flabbergasted in how I would not get the place more cleaned up and so forth. 

I was really taken aback by this phone call.  She does not know any of the history with this property or the distress situation of the owners.   Without going into all the details, the place looks ten times better now than it did two months ago !!   We took 25 photos of the property and have many nice photos of the exterior and the common area.   We spent an hour inside the unit moving around trash and cleaning off counter tops doing the best we could with what he had that day.  We did not have time to wait to get this property on the market due to the distress situation as it needed to go on the market immediately. 

Besides, if we have a fluff description and only took pretty photos of the one or two spots of the condo we may be able to find, I know what would happen.  The agents would yell at us when they got there saying why did you waste our time with this faulty description and misleading listing ?  We are being honest with this listing.  It is in distress and in complete need of repair and updating and thus, priced accordingly.  

As an agent or a consumer, what would you rather see ?  The truth and honesty ?   Or fluff and misleading statements and well picked photos of the unit ?

I am thinking that this agent is perhaps living in a bubble of only selling million dollar condos where every listing is picture perfect which is a great world to live in.  We have some of those listings, too.  But there is also the real world... the real world of bank owned, reo properties and short sale properties. 

My suggestion is to get used to it.... even in Philadelphia.

Welcome to the Real World !

What do you think ?

Oh yes, to really answer that question, for those R-rated property photos and a full opinion, we want your honesty, please click on the link below:

http://www.thesomersteam.com/logansq/2301cherry_3j/gallery.php

RELATED BLOGS:

PHILADELPHIA SHORT SALE SPECIALISTS

PHILADELPHIA SHORT SALES

It was Philadelphia Short Sale Friday for me here in sunny Philadelphia ! I declare a day out of the week where I follow up with all of my  Philly Short Sale deals.  I have to follow up with the bank to see what's what because they DO NOT follow up with me.  Calling in to check up on how the Short Sale is progressing is a predictable process for the most part. 

So, I put my "game face" on, dial the 800 number, yawn, stretch, and begin the warm up activity which is the twenty questions / preliminary interview to get an update on the status of the Short Sale. 

I give the customer service person my name, the correct spelling of my name, my client's name, the correct spelling of my client's name, the full property address, loan number, the last four digits of the client's social security number, my phone number, my email address, the office number, and whatever else they may need (by this point I have already faxed or email my authorization 3 or 4 times)

Then I get my update !  I check to see that they have all of the docs they need and I ask if they need anything from me or my client.

Here is a conversation I had today with Wells Fargo's Short Sale Department:

Me - "Let me get this straight. You asked for an updated Pre-Qualification letter from the buyer's mortgage company.  I gave you a mortgage commitment 2 weeks ago."

Wells Fargo - "Yes Ma'am, but according to the notes, the negotiator cannot open that email."

Me - "I figured as much. That is why I faxed it, too! Was the negotiator able to read the fax I sent to her?"

Wells Fargo - "Yes Ma'am.  According to the notes, it looks like she had to ask a superior to see if the mortgage commitment would be acceptable instead of a Pre-Qualification letter and it looks like no one has responded to that inquiry yet."

Me - "Does the negotiator know that a mortgage commitment is better than a Pre-Qualification letter?"

Wells Fargo - "No Ma'am. Is there anything else I can do for you today?"

Me - Aaarrrggghhh!  (silent scream)

Paper covers Rock in this Rock, Paper, Scissors Round.

And the story continues...

This is my conversation with the Buyer's Agent:

Me - "Wells Fargo insists on a Pre-Qualification letter not a mortgage commitment."

Buyer Agent- "TD Bank refuses to issue a Pre-Qualification letter. They say it is too far along in the buyer's mortgage process and it is not their policy. They Won't Do It!"

Hey No fair !!!  We can't play the game without Paper !!

This game is not over for me. I am no quitter ! And I bet you are not either. This is probably a very similar situation that many Short Sale Real Estate Specialists have experienced.  Perhaps it was a Pre-Qualification letter.  Perhaps it was another document or situation that clearly brought into the light how completely green the negotiators and the customer service people are regarding the mortgage and Real Estate process.  Perhaps their short sale was accidentally deleted from the system or they had to resend the package in several times ?? 

I mean no disrespect to the industry, comparing the Short Sale follow up process to a childish game of Rock Paper Scissors.  But the haphazardness and frivolous way in which the short sale process sometimes plays out needs to be brought out in the open.

I want to talk to a knowledgeable negotiator who understands the industry.   And I would like the banks to stop playing the Rock Paper Scissors game with our clients !

Stephanie

*** credit goes out to Frank Ratka, RE/MAX Access for teaching me everything I know about Rock Paper Scissors.  Frank is officially recognized in his own mind as the Gold Medal Winner of the Rock Paper Scissors game !

Philadelphia Short Sales - Another Successful Short Sale from The Somers Team in Point Breeze!

This past week we successfuly had another one of our Philadelphia Short Sale listings go to settlement !!  The seller was extremely happy to avoid a foreclosure and the buyer was happy to get a great opportunity on this Point Breeze home. 

For this deal, as most of them can be, instead of a short sale, the buyer termed it a "long sale" as it did take months for us to finally get the short sale approval letter from Wells Fargo.  Further, the buyer was the third buyer so it was an even longer process for us.

But at the end of the day, it makes it all worthwhile as the way we look at it, one more short sale is one less foreclosure.  This will help this block and this community now as this new buyer will begin working on the property immediately.

A Philadelphia Short Sale listing requires extensive knowledge and experience of the short sale process.  If you are considering selling your property via a short sale, make sure you contact an agent that has extensive experience in them.   It can be the difference between success and failure. 

If you need assistance in the Philadelphia area, contact us at thesomersteam@yahoo.com .

Also to see more of our writing regarding Philadelphia Short Sales and Short Sale Success click on the following link:

Philadelphia Short Sales and Short Sale Success - The Somers Team

Philadelphia Short Sales:  A Winning Formula for Short Sale Success !!

Stephanie Somers here from The Somers Team.   Call me a pessimist.  Call me a realist. Call me what you will, but I never really been called "lucky". Though in hindsight, perhaps I am particularly with Philadelphia Short Sales.

I think I may have stumbled onto what seems like a formula for a successful short sale:

P + R + L = SSS

Pessimism + Realism + Luck = Short Sale Success

This formula is based on 3 different factors to be taken with a dose of humor and awe at the utter randomness I have unveiled ! Too much Freakonomics !

1) Back-out Buyers (Be careful what you wish for)

2) Customer Service Representatives

3) Good ole Lady Luck

Pessimism Spurred by Back-out Buyers

As a Realtor partner of Chris Somers the Team Leader,  I pretty much do a majority of the back end work on our Short Sales. I will call on Chris,  nick name "big guns", when I have exhausted all of my charm with the negotiators of Short Sale deals. Very recently I have taken notice that "Back-out Buyers" are a growing phenomenon with almost every Short Sale that parks itself on my desk lately. It has become so prevalent that I have vowed from now on, I will assume that at least 1 buyer will back away from every short sale we do between the time we begin the process until we reach the end.  Call me a pessimist ! I have started to tell our clients to expect to go through more than 1 buyer during the Short Sale process. I have also begun to develop a list of Back-up Buyers in the event that a Back-out occurs.  If or when it happens, I want my client to be prepared. The short sale process is difficult enough for the seller and if they are blindsided by a back-out buyer, they may loose hope in the process and loose faith in me thier Realtor and advocate.

Realism:  It is what it is.  Deal with it.

I think we'd all agree that educating the consumer is certainly part of the Real Estate profession. And I will be the first to admit that there are Realtors out there that could use a few tutorials.  I wonder why the Bank's Customer Service Employees, the ones that heard all of the incoming Short Sale calls, do not have more education regarding Short Sales and Customer Service ? In my experience, it is not uncommon for the customer service person in the Short Sale department of any given bank, not to know what they are talking about. The right hand typically does not know what the left hand is doing. They may not know how to use the computer software to access the note on your file.  They may not fully read the digital files and miss telling you about important tings that will impact your Short Sale. They may not be familiar enough with the terms used in the notes to feel comfortable reading them to you, and thus omit very important information. This is not true in all cases but it is sadly true in many many many cases. I mean no insult. It is what it is. I expect it and deal with it though persistence.

Just the other day I found that one of our short sale files was "closed-out". A close-out often occurs when the Short Sale Package is incomplete and the negotiator gives up trying to work on the file due to lack of data or communication from the customer or Realtor. They just shut the file down and focus on another file. I do not blame them. They are beyond busy.  BUT, they closed-out one of MY Short Sales!!!  They claimed that they have been emailing me for a week or two and I had not returned their email ! Absurd I say ! I had called at least 2x per week for the last 3 months and each time I called I had to give all of my contact info to the representative including my email and phone number every time ! Somehow they wrote down the wrong email once.  Then they used the wrong email address.  Talk about luck... and when I had called in as usual the customer service reps I spoke to  NEVER communicated that they were trying to contact me. I was tipped off that something was wrong when I was transferred to an automated message: DO NOT CALL AGAIN FOR ANOTHER 30 DAYS. IF YOU DO, IT WILL JEOPARDIZE THE SHORT SALE PROCESS. (Bank of America) Luckily I had caught this mistake within minutes of the Close-out and was able to salvage the process. I guess luck was on my side.

No logical explanation can make sense of what can sometimes transpire with Short Sales.  Just go into it with Pessimism + Realism + Luck and you may get a taste of Short Sale Success !

Good luck out there !

Recently, we have had 2 long, hard-fought short sale deals where we went to war per se to get the deals approved. With diligent follow-up and negotiation and up against a deadline on both deals, the great news is that we got both deals approved !  Woo hoo !!!  Wait, wait... the buyer is no longer interested ??  What ???  Thanks for telling me now buyer agent.   How long have you known this ??  This is 100 percent different from our conversation just one week ago.

One deal was approved within our contract time-line and the other deal was a few days after-wards.  So at least in one case the buyer is in default.  But more importantly than that, what about the time lost for each of these sellers ?  Each deal took approximately 3 months to get that short sale approval.  What are these buyers thinking ?

Is this a trend ?  Are others seeing this in their markets ?  I hope it is just an isolated case for us.

The good news for us is that our streak of every short sale listing we have taking on has received short sale approval.  We will continue to work hard to get new buyers for these properties to maintain our streak of having every short sale listing go to settlement too.

I guess it goes back to that saying for these "remorseful buyers".....  BE CAREFUL WHAT YOU WISH FOR !

Please share similar experiences or what your thoughts are in regards to this situation.