Jon Griffith, Certified Short Sale Negotiator

I’m on a bit of a tirade today as I work through a few short sale issues and personal banking issues that shouldn’t exist.

I have a firm understanding of my value to a large corporation.  It’s purely monetary, and I’m just a number.  To further exacerbate the problem, one of the companies mentioned in the title is owned by the Government, and the Government is the last entity on the planet that I place my trust in.  The only thing that I can trust in is my own ability to survive.  I am 100% responsible for 100% of my actions 100% of the time.  Period.

Things don’t happen to us.  They are a result of choices we make, and today, I choose to shift my entire financial strategy from big bank, to small bank.  Here’s a simple illustration of what drives me to be suspicious of big banks.  I recently noted two independent tweets from the “team” of twitter support people at both Wells Fargo and Bank Of America.  Let me first disclaim that I don’t believe that either bank has genuinely taken an interest in supporting their customers through twitter for any other reason than to appear as though they care.  There’s no possible way for them to support all of their customers through twitter.

A recent Tweet fromWells Fargo:

@jimgoodman I work for @Ask_WellsFargo & saw ur tweet. (I also replied to @corkz.) Plz follow & DM with the details. We want 2 help. ^JR

…and now a similar response from Bank of America:

@RealScottsdale I work for Bank of America. Were you able to find a resolution to your Equator question? ^km

Perhaps they care, perhaps they don’t.  It’s possible that they both follow a basic protocol that has organically grown through the phenomenon known as Twitter, or it’s possible that they have both hired a 3rd party support organization who answers questions based on a list of policies and procedures.  It could be that they are just hiring whomever to “do it the way the other guy does it.”

Either way, the only responses I have ever received from the “support” department from a lending institution has been something to the tune of, “I work for the bank, so I can help you, I hope we helped.”  No real help is being offered.  They’re simply fielding tweets to gauge customer perception, and they should probably already know that the amount of bad comments will inherently outweigh the good comments, because that’s how people work.  People will always tell 10 people how terrible something is before they’ll tell one person how good something is.

GRRRR.  Good bye big banks!

Dear Wells Fargo,

After nearly 20 years of banking with you, I am leaving.  I will be finding someone else who cares about me more.  I will find someone who doesn’t charge me to hold my money, who doesn’t rip me off when I use the ATM that’s part of the “network,” who doesn’t eat up my money every month at a rate of return that makes what you pay me look like a fee in itself.

I will find someone who makes decisions based on who I am as a customer, not as a number.  I will find a company who is in touch with their client, and who doesn’t hire a team of people to “handle customer service issues” through one twitter account with canned responses.  I will put my money where I can shake the hand of the people connected to the pulse of the company’s culture, who understand and believe in the vision of the company, who aren’t sheep, controlled by a corporate attitude.

Bank of America?  No.  Chase?  No.  Citi?  No.  Don’t worry Wells Fargo, I’m not going to leave you for another famous bank.  I’m going for the bank next door, cause she’ll care more, and we can raise a family of children named Benjamin, Lincoln, Grant, Jefferson, and Washington together.

When I deposit my certificates of appreciation, I do so trusting that you appreciate it, and so far, you have not appreciated me.  So, farewell.  I’ll never come back.

The process of selling a home short of what you owe is simple in concept, but very difficult emotionally because it involves you and your home, and your prospect of foreclosure, and your finances.

As a short sale expert, it’s my job to first market your home, and second, negotiate with the lender so you don’t have to.  Banks listen to us because our job is to circumvent their B.S. and we’re not emotionally invested in the financial situation, and because we know the market and they don’t.  We are invested in you and your success through this process.  We know the facts and we get the job done where the job can be done.  Banks don’t really listen to their customers.  In fact, they’ll use tactics to frighten you into emptying your retirement accounts to stay afloat until all of your money is gone and you’re truly realizing the hardship that was inevitable anyway.  They know that most Americans feel held hostage by their “credit scores” and they’ll use that to keep you paying your mortgage even in the face of financial hardship.  As long as they get their money…

It’s best that you allow your Certified Distressed Property Expert the room to do the job you have hired them to do.

Through the process, you will be hounded by your lenders, you will be called, you will receive letters that may cause you to freak out.  You may even start searching for alternate solutions in desperation.  Don’t do this.  It’s critical that you give your short sale expert room to work.  There’s a process involved and deviation from that process is the first thing that will slow the process and in some cases prevent success.

Sometimes the job cannot be done.  You need to know this.  A short sale is how we attempt to prevent foreclosure.  Banks do it because it saves them money.  Foreclosure is expensive for them, and they don’t want to own houses, they want to play with money.  However, the clock is ticking, and there is no guarantee that we will be able to achieve an agreement with the lender.  We do it all day long, and have been very successful at it, but nobody can guarantee that it will work.

What I can guarantee is that if you aren’t 100% trusting of your realtor, and you find yourself seeking alternative solutions, of which there are none by the way outside of finding someone else to start all over again, then you’ll be saying to your agent, “I don’t think you’re able to do the job, so I’m going to have someone with more clout, more experience, or more legal knowledge tackle it.”  As a result, your agent may resign the listing to take on more loyal and trusting clientele.

A good agent will know when he in over his head, and a good agent will resign from the job if he recognizes that he can’t solve your short sale problem, whether it’s truly unsolvable, or it’s because you aren’t giving him or her the room needed to do the job.  If you feel like you need to seek outside help, such as an attorney, then feel free to do so, but I would encourage you to read my story about “Attorney Negotiated Short Sales are Still Just Short Sales” so you understand why they offer this service.

What does it take to negotiate a short sale?  That’s easy.  It takes a home owner who wants to sell their home.  It does not require a lawyer, a REALTOR, or any other special entity.  There is no requirement for certification, licensing, or any special degrees that are required to talk your lender into accepting a payment for less than you owe.

The Path of Least Resistance

Attorneys don’t have any more power to negotiate your short sale than you do.  What they do have the power to do is charge you a retainer up front to do exactly the same thing that you can do.  Now, as a short sale expert, I can tell you that you do not want to be the one handling the negotiations.  It is time consuming.  You’ll be on the phone constantly with your lender hounding them for information.  You’ll be taken away from your work, your family, and your peace of mind.  You’ll make roughly 60-90 phone calls and will be bullied by them.  Regardless of the fact that you could do this yourself, you would be crazy not to hire someone else to do it for you.

So Who Do You Hire?

Well, that’s completely up to you.  But hiring a CDPE Realtor is your best and least expensive avenue.  Through the process you are going to have questions that need to be answered.  You’ll have questions that involve deficiency judgments.  That’s when the bank holds you responsible for the difference between what you owe, and what the home sells for.  Those questions are answered by an attorney.  You’ll have questions about your tax liabilities.  That’s what your CPA is for.  Then you’ll have questions about selling your home and negotiating with the lender.  That’s what your Certified Distressed Property Expert is for.

So Who Negotiates With the Lender?

The CDPE Realtor handles this for you.  Why?  Because he or she is paid at close of escrow and does not charge you up front.  If you hire an attorney to negotiate your short sale, you will pay a retainer before anything comes of it.  If the lender doesn’t agree to the sale, you cannot recover that money.  CPA’s just don’t do this type of work, so you wouldn’t ever hire them for anything other than tax advice.

Why are Attorney’s Selling Negotiation?

Because there’s a market for it.  But you still need a Realtor to list your property and negotiate a contract price on your behalf.  Also, because the attorney gets money up front.  They also give you no guarantee that they will succeed.  Just because they’re an attorney does not give them any more ability to negotiate with your lender than anyone else.  They aren’t “forcing” the banks legally to accept less than you owe, but because they’re “attorneys” there’s some sort of mystical magical power that people think they have as opposed to a Realtor.  They’re just doing what your CDPE Realtor has been thoroughly trained and is well-qualified to do for you.

Note:  It is absolutely critical that your Realtor know how to manage a short sale.

If you’re going to sell short, don’t you want someone who has your best interest in mind?  I don’t charge an up front fee to do the same job better than they can.  Take the path of least resistance, and least financial risk.  Leave the legal issues up to the attorneys.  Leave the sale negotiation up to us.

There’s a certain threshold in a given area regarding how much you should upgrade your home and how much it will make a difference in the competition. It would not make sense to put a $5000.00 stove in a $200,000 condomimium, etc. That’s just one example. So, when a prospective tenant or buyer is looking for a place to buy or rent, there’s also a threshold to their perception of value, and when something seems out of place, it won’t matter to them that you have the nicest property in the area, when it comes to considering the rent or price.

Most upgrades will increase the ability to sell or rent your home over the next door neighbors, but it won’t guarantee that you’ll be able to draw a premium based solely on those upgrades, especially if the area in which you’re renting or buying doesn’t warrant such upgrades.

For potential rental properties, if you ever find yourself saying, “I can’t drop the rent that low because my mortgage is more than that,” then it’s time to think about the cost of carrying a vacant property.

Let’s say your mortgage payment is $1500/month and your home can draw $1200/month in rent. That’s a loss of $300.00/month when it’s rented. If it’s not rented, it’s costing you $1500.00/month.  If you rent it for $1200/month for one year, you’ll lose only $3600.00.  Let’s see, $3600 divided by $1500 is 2.4.

You choose.  You can be realistic about your asking price and get the property rented and lose $3600 in 12 months, or you could hope and pray you get someone to rent your house at your inflated price and lose $3600 in 2.4 months.  Hmmm… 12 months versus 2.4 months.

If this is your way of thinking, it’s just not realistic and you may need to be innoculated from the virus, infection, or well whatever it is that’s keeping you from seeing the real market conditions.

Remember, time is money and the entire nation is getting a swift lesson in loss mitigation.  Most of us are in a “collection” mindset.  We want the full payment and we want it now, and we waste all of our time trying to hunt it down.  The best method is to mitigate your loss by getting something going…anything.