Angelo Mozillo, chairman of Countrywide, called a customer seeking loan modification “disgusting,” when he accidentally replied to his email rather than forwarding it to his staff. The customer had gotten Mozillo’s email address off of Loan Safe (a forum I blogged about earlier), and then used one of the Forum’s templates to request the modification. 

View the entire text of the email.

See it in the LA Times and USA Today.

If you do not have Xobni, you must get it. I could give an elaborate dissertation on how amazing it is; however downloading it says it all. Your email will never be the same.

This quoted paragraph was part of an article I recently read from a Las Vegas Real Estate Agent and the following was my response: 

“Many Las Vegas Discount Realtors, not all of them, just place their listings in Multiple Listing Service and wait for another Las Vegas Real Estate Agent to bring them a buyer.”

Let the games begin!

Most agents, period, place their listings in the MLS and wait. Why? Inherent laziness. Lack of experience. THIS IS NOT THEIR FULL TIME JOB! And given time, I could come up with a few more reasons.

There is a Hybrid.

When I became a Realtor 3 years ago I wanted to offer homeowners an alternative. I wanted to separate myself from the pack. I was so proud to become a Realtor. I started offering Las Vegas discount realty services because it allowed me to work in volume. This gave me massive experience as I learned to work one transaction after another. Referrals would fly in. As good as I consider myself on the phone, I still prefer a referral to a cold call. Who wouldn’t?

Because of my conscience, I could never give my clients discounted service. It was my choice, not my clients, that I became a discount Realtor. They deserved no less than the best I could offer. With this thinking, combined with Internet marketing, I listed 125 homes my first full year in business and sold 50 of those.

64 of the former were a direct result of Internet marketing. 17 of the latter…Internet marketing.

What can be said about MOST discount Realtors can be said about MOST full service Realtors. I have heard countless times from prospective clients, “My last (full service) Realtor said they were marketing my home but when I asked them to show me where and how I was told, ‘Oh, in different places.’ or ‘Well, we market all over but we really can’t share that information because of competition.’ (Bull$*it)

I tell my clients to Google me before they ever hire me. I want them to be overwhelmed with the amount of marketing they can expect to get when they hire me. They Google: “Richard Brain” las vegas

Make sure the quotations are around my name only as shown. I appear on the first page of major search engines multiple times (3-7) for multiple keyword phrases.

OK, enough of my shameless plug.

I not only offer full service at a discounted price, I stay in communication with my clients weekly. I ask for referrals every chance I get. I follow up on showings and provide that information to my clients in the back office of the individual property Website that I build for my clients. Staying in communication with my clients is more than a lot of full service Realtors do. What? Am I lying? Am I just making this up? My clients feel like winners because they know they made the right choice in hiring me to preserve their equity.

What’s in it for me?

My clients have no problem using me to purchase their next home. I helped them to make a bigger down payment. More of my clients are able to qualify. Even if they move out of state they trust me to refer them to an agent at their destination.

It’s all about buyer leads!

We all know this to be true, or should. I’ve had as many as 64 active listings at one time. How many buyer leads do you think that generates? In one weekend I received over 100 calls. I even taught, for a fee, I’m no idiot and I’m not leaving money on the table, a well known full service real estate company from San Diego to do what I’m doing. 16 days after our meeting I received a voice message telling me they had locked up 50 to 70 thousand dollars in buyer contracts based on the information I provided them.

Oh, and I don’t care if anyone believes it or not. I got paid $1,500 for 6 hours of my knowledge and I can prove it.

In conclusion.

I agreed with the article whole heartedly for the most part. It is this general consensus of discount Realtors that I look to exploit. Everyone that survives in this industry has a niche or business model. I have mine and it works for my clients. When every other agent in town is promoting how good they are and why they are the best I take a back seat. I promote my clients property. I get their property sold. Guess what happens next? My clients promote me. So I got what everyone else was after to begin with but mine is stronger because it’s a third party referral. I don’t self promote.

Thank you for your article and thank you to all that take their time to read this. I hope this was helpful. I hope someone out there got a new perspective. There’s enough business out there for all of us. Just try to do it the right way.

To all our continued success! God bless.

I want to extend an overdue welcome to Blue Collar Agent’s new friend and co-author Richard Brain. Richard joins us from the steaming hot Las Vegas real estate market (or is that a steaming hot foreclosure market? I sometimes get those mixed up. wink. wink.). He is the founder and owner of exposemyhome.com

Richard first caught my attention with his comment on my hobbit furniture post:  

Next thing you know the builder will be making the toilet seats smaller so he’ll feel more endowed.

I thought to myself, “This guy has the sense of humor and hutspa (sp?) to be an awesome blogger.”

…. and as you can tell by his first post, he’s an awesome blogger indeed. Welcome aboard Richard. I look forward to reading your many posts to come.

Read Richard’s Bio.

This is my debut article on BCA.  I’m very happy to be here and I’d like to thank Trevor Smith for accepting my offer to be an author. 

I was recently asked what I would consider a strong Internet presence. 

The following was my response:

I remember reading in Napoleon Hills classic, Think and Grow Rich, that when Henry Ford was on trial, having only, if I remember correctly, an eighth grade education, he was asked how it was possible that with such a lack of education it was possible that he had the competence to run a business as vast and complex as building automobiles.

His response was priceless. “I don’t have to know about this aspect or that. I have 11 buttons at my disposal. When I want a chemist, I push a button. When I want a metallurgist, I push yet another button. The key to my success is not that I know everything but that I know how to surround myself with those that know what I want to accomplish. (Key Alliances).” Or something along those lines.

The judge threw the case out citing that only a man of competence could have responded in such a manner.

My point is this. You don’t have to be #1 on page 1 of search engine results. Nearly 70% of consumers do business with companies on the first page.  Get it?  First page.

There are 10 possible chances to be on the first page. I’d rather my Las Vegas discount realty services appear five times on the first page through alliances then be #1. I have more chances of being found.

I test keywords. I see who placed on the first page then I find a way to align myself with as many of those as possible. I try creating reciprocating links with the owners of those elite sites. However, that’s not always possible.

My next step, I look for a way to participate in one of those elite sites; the first pagers.  That’s how I found BCA.

I comment on blogs.  This creates back links.  I look for a way to be added to their site.

I create blogs. I provide information and try to sell no one.

A strong Internet presence to me is all about pushing buttons and aligning myself with the ones that already know what I want to accomplish; to be on page one.

Recently Redfin limited the types of short sales they service. To some this may seem “anti-consumer” in that we are limiting the choices of what our customers can make an offer on. However, I believe this is the most pro-consumer thing Redfin has done since rebating 2/3rds of its Buyer’s Agent Commission.

Here’s why: By making an offer on a short sale property there is a very large chance that you are offering to buy real estate that isn’t really for sale.

Let me elaborate:

I assisted clients with making offers on approximately 10-13 short sales over the last 9 months. Out of those transactions, all of them were accepted by the seller, but only 1 closed. Given this success rate, I should either be fired instantly or there is a fundamental problem with short sale listings.

Here is what I believe is wrong with short sales:

• Most short sales are signed around instantly by the seller, giving the buyer false hope that the transaction has a high chance of success. In reality, most sellers who are in short sale will sign any offer they receive.
• Most short sales have two lien holders on the property.  While the first lien holder generally approves the short sale within 3-6 weeks, the second lienholder will often sit on the contract for months at a time. Why? A second lien holder has the most to lose in both a short sale and foreclosure auction. In essence, they will get little to nothing. However by stalling a short sale, they can postpone the first lienholder from foreclosing on the property while simultaneously using their debt collection goons to scare money out of the home owner.
• Most MLS’s do not have clear guidelines on how a short sale transaction should proceed.  Many thanks and blessings upon Jeff Coop and NWMLS for giving us a form to clarify these issues; however most MLS’s are not clear how transactions involving a short sale should handle earnest money, inspection timeframes, appraisals, etc. There are times when buyers will deposit $5000 - $10,000 Earnest Money, spend $400 on an inspection, and $450 on an appraisal, only to find out that the bank had no plan to even consider an offer at the seller’s list price.
• Most agents don’t file their Hardship package, BPO (Broker’s Opinion of Value), and Estimated HUD before listing a short sale. These things are absolutely mandatory for a loss mitigation department to consider a short sale; however most listing agents do not file these things until after they receive an offer on the property. One of the easiest short sale transactions I ever did was because the listing agent had taken the time to file these documents beforehand, and had actually gotten the list price pre-approved prior to listing the short sale! We closed in 30 days.
• Most buyers have misconceptions about what is involved with purchasing a short sale. At the start of the transaction, a short sale seems like a dream come true. “I will by this house at a firesale price and have instant equity as soon as I move in,” many buyers say.  In reality, short sales generally take 3-6 months to complete, during which time buyers are left in a limbo-land about their real estate future. Many times agents will go for weeks or even months with no communication at all from the banks. In the meantime, interest rates change, other potential properties come and go, and the buyer becomes frustrated with the entire process.
• Buyer’s have no control over whether their transaction closes.  There are few times that a home buyer will feel more out of control then during the purchase of a short sale. A bank will not talk to a buyer about the progress of approval. The bank won’t even talk to the buyer’s agent about the status of approval. And in some rare cases, the bank won’t even talk to the listing agent about the status of approval. This means that the only thing a buyer can do is sit and wait…. and wait…. and wait, while their home purchase is decided by someone who is 4-5 people removed from them.
• Many homes in short sale have other liens and judgements attached, including back child support, mechanics liens, court judgments, and the like. If the seller can’t pay their mortgage, they likely can’t pay these. If this is the case, one of two things has to happen: 1.) the buyer pays the judgments/liens, or 2.) They have to be negotiated along with the mortgages to be removed or reduced.
• Most Short Sales simply don’t close. Although there is no way to get complete data from my MLS (homes are just noted as short-sales in the agent-only remarks, there is no data field for them), I have done some unscientific study of the closing rate in the Seattle Area (King County, Pierce County, and Snohomish County). Here is what I found:
  • There are appx 989 short sales on the market
  • In the last 6 months appx 351 short sales have closed
  • In the last 6 months appx 692 short sales have expired or were cancelled
  • There are appx 524 short sales that are currently subject to inspection or pending (i.e. waiting on lien holder approval)
  • Assuming that 1/4th of the STI or Pending short sales close (which I think is generous), and that 1/4th of the expired or cancelled short sales relisted, it appears that about 23% of homes that are listed as short sales in the Seattle area actually close.

Once again, this is an unscientific study run on a Saturday morning in my pajamas - but you get the point: If you write 4-5 offers on a short sale, you get might get 1 of them to stick. Here’s the rub: If it takes about 3-6 months for each offer to be accepted or rejected, it could take a home buyer up to 2 1/2 years before they can get a short sale to actually close! Do you know anyone who is willing to wait that long?

Given these issues (and probably many others), Redfin has limited the short sales they service to those with the highest chance of success. Successful short sales tend to have all of the below qualifications:

• Homes with only one lien holder (mortgage)
• Homes in which the hardship package has been filed by the seller/listing agent
• Homes in which the listing agent has had experience with short sales
• Homes with no other liens or judgments other than the mortgage

Once again, I wholeheartedly think this policy does right by our customers - because like most agents, we want to help our buyers purchase homes that are actually for sale - not homes with just a yard sign in the front yard.

For real estate agents negotiating a short sale, or assisting someone with a forbearance or loan modification, I have found the website of all websites for info on cutting through the red tape and getting things done at a Bank’s Loss Mitigation Department.

The website’s name is LoanSafe.org and the people there don’t mess around. For instance:

Not getting help at Countrywide’s Home Retention Department? Just email Angelo Mozilo (CEO), Chris Oltmann, and David Bigelow - their email addresses are posted right here.  Oh - and I almost forgot - CC The Vice President of the United States, the Treasury Department, Dateline NBC, NBC Nightly News, Newsweek, and the Today show.  Two people on the forum did it and had executives working on their loan modification or forbearance with in a few hours.  Like I said, these folks don’t mess around.

Oh  - and do you keep getting the run around through automated systems when you try to call the loss mitigation department? Try these numbers - they’re the direct lines for LM Departments for every major bank in the U.S.

Or - have you been told that you can’t get a loan modification because you’re not behind on payments? Shannon did it, and got her loan modified to a 5.7% fixed rate for 5 years without damaging her credit one bit.

They also walk borrowers through the RESPA laws regarding what kind of complaints banks are obligated to respond to by law.

Many thanks to Moe Bedard for a great Forum - keep up the good work advocating for consumers. 

On an unrelated note: if you’re looking for a job as the Vice President of a Home Retention Department, Countrywide is hiring. I wonder if they include combat benefits in the salary?

Bonus: Check out what this San Francisco Agent did to get one of his listings sold.

My wife and I are refinancing our house. Wait. That isn’t quite right. Let me try again. My wife and I are making a valiant attempt at refinancing our house. However there has been some…. ummmm….. hiccups.

Last week a friendly elderly gentleman pulled up to our house in a 1995 Ford Taurus. He seemed innocent enough with his soft spoken voice, digital camera, and cute little measuring tape made for sewing projects. “I’m just going to take a look around, snap some photos, and I’ll be out of here.” he said. “No problem! Take your time,” I said. 20 minutes later he zoomed off in his well kept sedan, never to be seen again. “What a friendly chap,” I thought to myself….

The next day my image of the elderly gentleman went from, “That guy should play Santa Claus at the malls” to ”If he’s going to be like that, he should at least give me 30 pieces of silver.” That’s because in my inbox stood the Grimm Reaper of my refinance - the appraisal report.

There, in a 12 page neatly packaged summary complete with photos, I was told that my house is worth 9% less than I bought it for. Ouch…..

“This can’t be right,” I thought to myself. “4-5% depreciation, sure.  But 9% depreciation!”

I summoned the power of Encyclopedia Brown and the Hardy Boys and began digging into The Case of the Atrocious Appraisal.

First, I read the report in detail.

“Home is in an appreciating market.” Check.

“Homes in the area are selling in less than 3 months.” Check.

“Home is in good condition and built with average to above average materials.” Check.

“Economic conditions in the area are favorable.” Check.

‘What the heck!” I thought to myself.  ”This looks like an appraisal from Las Vegas in 2005. Either I dramatically overpaid for this house, or I’m missing something.” I decided to do some further digging.

I pulled up the listing detail sheets of the 3 comparables the appraiser used to value my home. One was the exact same house as mine. “That’s a great comp,” I thought to myself. The other 2 homes also had similar square footage, bedrooms, baths, and lot size. Everything matched up.

Then I saw it. In 8 point font hidden under the “Agent Only Remarks” stood the death certificate of my lower monthly payments and better interest rate:

“Sale Subject to Lien Holder Approval.”

I went to the next comp,

“Sale Subject to Lien Holder Approval.”

and the next one:

‘Sale Subject to Lien Holder Approval.”

I sat in my empty office with my jaw wide open in amazement. Amazement went to anger. Anger went to me yelling.  Then I noticed that my dog Moses thought I was yelling at him, so I stopped. I took deep breaths, massaged my pressure points like they taught me on the in-flight video to Vietnam, and calmly called my lender. 

“We can challenge the appraisal if you want,” he said. “Send me three comps that you think are more accurate, and I will send them to the appraiser.” “Oh, I will,” I said in the type of whiny voice that Seinfeld uses when he’s agitated. Within 25 minutes I had pulled 3 indisputable comps, prepared a CMA, and emailed it to my lender. “This has got to work,” I thought to myself.

The next day, another email from the appraiser stood at the top of my inbox. “I was not able to revise your appraisal because the comparables you provided to me had upgraded kitchen cabinets and hardwood floors.”

I went through the four stages of grief:

Shock: “Moses, does this look right to you?”

Denial: “This can’t be right. He’s going to send me another email that says April Fools!” 

Anger: “I’ll show you what to do with your upgraded kitchen cabinets”

Resolution: “I guess there is nothing I can do. I can only challenge the appraisal once. I guess I will have to start the refi process over.”

And so the foreclosure crisis hit the Smith household this week. It wasn’t me pontificating about it on a blog. It wasn’t me warning a client about it. It wasn’t in San Diego or Las Vegas or Miami. The foreclosure crisis happened to me this week… and I’m still coming to grips with it.

One of my favorite country songs is “Going through the big D and I don’t meet Dallas.” Its a man telling his sob story about all the things he lost in his bitter divorce with his wife. Here’s a sample:

Six short months we went together
Decided it should be forever
Two paychecks are better than one
A diamond ring and it was done
I bought her a house like I said I would
In a subdivided neighborhood
The fuse got short and the nights got long
It was over long gone, before I knew
Where I was headed too
I’m goin’ through the big-d and don’t mean Dallas
I can’t believe what the judge had to tell us,
I got the Jeep, she got the palace
I’m goin’ through the big-d and don’t mean Dallas
Things like this are never final
I’m still paying on the Vinyl flooring
In the laundry room, it’s multicolored
And waterproof
It’s a little bit tough to face my friends
The ones that said that I jumped in
The river of love a little to soon,
That was August, This is June….

This seems to be the trend in bitter divorces. Both parties asking for the world, not so much because they want the world, but because they know that their spouse wants it. They come to the negotiation table with twice the demands that they really expect to get, and only half that they really want.  The strategy is this: Ask for everything, so that when you give up things you didn’t want in the first place, it looks like you are negotiating.

I’m not an attorney, so I’m not sure how effective this strategy works with divorces, but I can say that from my experience it does not work well when you are buying a house.  Here’s why I don’t think it works:

• This is not a bitter divorce. Therefore ticking off the other party right from the get go would not be considered a “win.”
• Many times its the little things that end up angering sellers. Its not so much that you offered $30,000 under list price. It’s that you offered $30,000 under list price and asked for them to re-do the kitchen counters that Uncle Joe installed just 5 years ago. The request for the countertops took your offer from a “market issue,” something that the seller can feel detached from, to a personal insult on the seller’s taste and their family’s workmanship. 
• Compared to a bitter divorce proceeding, you have an advantage when buying house: You know what the other party wants upfront. They want list price (and maybe some other terms in the listing). This gives you a great idea of how well your offer is going to be received. Don’t get me wrong, most sellers understand they need to negotiate in this market; however its nearly a sure bet that if you offer 10% below list price, its not going to sit well.  If the house is overpriced, its often better to either informally discuss your offer with the listing agent to see if it is viable, or wait until the listing goes through a price reduction. Its all psychological. Your same offer that was 10% below list price before may now only be 5% below list. This will be much more palatable to the seller.
• Remember, negotiations usually aren’t finished when mutual acceptance is reached on the original contract. Most of the time you will conduct an inspection and ask the seller to pay for some repairs. If you ticked the seller off during the original negotiations, even if you got the price that you wanted, you may lose during the secondary negotiations.

All in all, the important thing to remember is that the seller is not your enemy, and real estate negotiations are not the Battle of the Bulge. By negotiating reasonably and asking for only what you really want, you will end up with happy parties on both sides. I am constantly surprised by how many of my clients get more of what they want by being cordial and respectful negotiators, rather than going for the jugular with their initial offer.

In my post about acknowledgements and apologies, Mark Daugherty left this comment:

Perhaps one of the reasons you conflict with other agents is your “holier than though attitude”. When you repeatedly post that agents who work on commission have less integrity that those who are paid a salary, you should expect some ruffled feathers. You have been challenged on this issue by a number of posters and most of the time your response is absent. You don’t “acknowledge” and though you shouldn’t have to “apologize” for giving your opinion, you should respond and defend your opinion when those whose creditability you’ve attacked challenge you. In my opinion, the blogoshere is a great tool for sharing opinions and ideas that helps all of us move forward. If you use a blog only to promote your agenda, you cheapen the medium.

Mark, and anybody else who feels this way, I am so sorry. Seriously. I never have intended to come off this way.  I hope everyone will have guts like Mark to call me on it when I’m acting like an arrogant little punk. I’m going to think about this a while, and hopefully do a little better next time. Sincerely ~ Trev