My costs of doing business are significant, particularly when I am representing the seller in a transaction. Staging, photographs, brochures and all those printer cartridges, not to mention my time, can be a drain on the old bottom line. That is why I am toying with the idea of tweaking my business model.

I am considering adding some language to our multiple listing service write-ups: "We are experienced listing agents; over 99.76 percent of our listings successfully close."

My costs of doing business are significant, particularly when I am representing the seller in a transaction. Staging, photographs, brochures and all those printer cartridges, not to mention my time, can be a drain on the old bottom line. That is why I am toying with the idea of tweaking my business model.

I am considering adding some language to our multiple listing service write-ups: "We are experienced listing agents; over 99.76 percent of our listings successfully close."

No, that’s just silly. No one uses semicolons in the MLS, and I spelled all of the words right. How about this: "Buyer to pay 1 percent transaction facilitation intermediary fee. Our ‘Just Listed’ postcards, the ones that talk about how experienced we are, cost a lot. And our growing pipeline of business is significant, so we had to hire some guys to help with the more mundane tasks, like answering the phones."

Then I will add a little 17-page attachment explaining "how I work" and outlining the requirements for playing our game of house.

"Buyer to be prequalified with three reputable lenders, two of whom are my cousins. Offers to be written with a Bic rolling writer (black). Contracts to be delivered by mule train, avoiding the interstate, and never on Tuesdays. Copy of deposit check, family trust documents, and a brief essay on the history of the U.S. space program (double-spaced) to accompany all offers. No exceptions!"

"That’s crazy," you are thinking. "You can’t get away with that!" Well, think again. All the cool kids are doing it. And I will get away with it because my listings will be so artificially underpriced that I will be beating would-be buyers off with my yard sign.

It’s been a month of entry-level buyers for us, which means it’s been a month spent in short-sale hell. And I am not even talking about the absolute delight of spending six months waiting for a faceless lender who observes all of the banking holidays to make eye contact with my client’s more-than-full-price offer, only to return an "acceptance letter" with enough conditions to send all but the heartiest attorneys back to basic training.

I am talking about the Rube Goldberg-like process of interpreting the rules and actually getting an offer submitted before we are mowed down by a thundering herd of investors and flippers — or before my clients decide to just skip this step altogether and move straight to the retirement home.

It’s a supply-and-demand thing. In the more affordable price ranges, we are seeing huge demand. As for the supply, it is mostly of the short-sale or lender-owned variety, with enough strings attached to keep Yo-Yo Ma in business through the next real estate cycle.

"Possibility of 1.5 percent fee prior to split for negotiator," the attractively priced listing description read. "Buyer to pay $1,595 for third-party negotiator," said another. Yet another specified that the buyer would be required to foot a 1 percent bill for the lender liaison. My partner went out on a limb and asked about this one.

"Who does it go to?" he challenged. The agent explained, "As a matter of full disclosure, our negotiator is in-house, but I don’t make any money off of her. She does nothing but talk to lenders all day, every day, to keep things moving."

For a short-sale "expert," it sounds like a cost of doing business to me. Admittedly, processing a short sale is time consuming. I know — we have managed plenty of them. But there is no magic involved, no special skill set required. It just takes time, patience and perseverance.

Much of my job requires those things, and that is where I am thinking I should be pursuing my own cost-recovery program. First, though, I need to make it look really hard. And, that is where the "policies and procedures" attachment comes in. …CONTINUED

My favorite short-sale attachment is the one floating around our market that is the brainchild of a really expert "expert." I know this because he is on TV at all hours, interrupting my infomercials to remind me of his expertise.

Now, in our neck of the woods, an accepted offer pending lender approval means that the property must be put into "contingent" status to reflect the not-really-available-anymore nature of the sale. It is an MLS requirement, yet this agent has found a loophole.

"No offers will be signed or accepted until we open escrow," say the rules. Further, when the lender does finally accept an offer, all would-be buyers (and after six months, we are talking potentially dozens) will be given a chance to submit one "best and final" offer.

In other words, the original offer is meaningless, likely a monumental waste of time and effort. It buys your client a place in line — nothing more.

Is this in the lender’s best interests? Maybe, but it could also be that this is in a listing agent’s best interests, particularly given that it keeps the lead-generation machine fed for two changes of the seasons. Those swift sales can be such a dead-end street.

Another agent’s short-sale policies and procedures don’t carry the same uncertainty — one offer will be accepted, submitted and protected — but the entry fees serve to limit the buyer pool by scaring away the non-gamblers.

First, buyers must be prequalified by a certain mortgage broker, one who also happens to be acting as the loss mitigator — and one who, as luck would have it, is also an attorney and wrote the policies.

There is a nonrefundable fee required of the buyer to obtain this prequalification, with no guarantee that the buyer’s offer will ever be submitted to the bank for consideration. If the offer is accepted, the buyer is required to deposit funds into escrow and complete the appraisal prior to lender response, on the come, not knowing when or if the lender will accept their price.

So, by the numbers, we have a small entry fee which gets the buyer his keno card. If he is allowed to play, we have an approximate $500 investment for an appraisal, and he has to park a couple of thousand bucks in escrow for the duration of the next must-see TV season. For most of my entry-level buyers, this is a pricey game with crummy odds.

If you can’t beat ’em, join ’em. Rather than require an appraisal on faith, I could just require that the buyer write me a nonrefundable $500 check. If we eventually close escrow, I’ve got their appraisal covered. If not, then I can offset one of those pretty print-marketing pieces where I remind the neighbors that I am a specialist.

But no FHA or VA loans, please. And don’t call me; I prefer faxes if you have something to say. I’m a busy, busy girl.

Now, if only I can find a seller who would be willing to grossly underprice their home.

Kris Berg is broker-owner of San Diego Castles Realty. She also writes a consumer-focused real estate blog, The San Diego Home Blog.

***

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