Short Sale “Flip” Realtors

Short Sale ThiefHere we go again! Now before you decide to crucify me, read the entire blog. for my point. It seems that in every Bull or Bear Market in real estate, you can always count on a few things. In a Bear Market, you can always see the late-night infomercial’s of “get rich quick buying foreclosures” programs. In the 1980’s and 1990’s, it was Dave Del Dato, today, take your pick. Consumer: those guys get wealthy selling you DVD’s not buying foreclosures! Want to make money in real estate? Hire a reputable Realtor who knows the renovation game and who is experienced themself in that process. If 2005-2007 taught you anything, it should be that in real estate and the stock market speculation business, there are risks.

Now, here is what else you can depend on: Shady Realtors slithering out from their holes to “help you” get in front of the market. In 2005, how many Realtors did I see buying houses for $500,000 and then the lender giving them $200,000 on top of that to “renovate” the home (that never seemed to get renovated). They were driving new Ferrari’s and Lambo’s and when the market went belly up, they gave the houses back to the bank, but kept the cash. Sooner or later, when this market clears up, I’m certain jail will be in order for some of them.

Now the Short Sale scam artists. They show up with “I’ll negotiate the short sale for you” plan. You list your home with this Agent and a third party negotiates your sale. Say you owe $250,000 and this “negotiator” you hired gets an approval for a sale at $150,000 (and assume the market fell 50% to 60% in your area). Then, that Realtor puts in MLS that they have an approval for $175,000. Then Realtor B from 123 Realty brings an offer for $175,000. Well, the Realtor and his buddy just put $25,000 in their pocket EXTRA without trying to disclose too much to anyone about what is going on.

Nobody got hurt right? WRONG! First of all, in my opinion, it is unethical for a Realtor to be involved with this practice. For one thing, knowing you can sell for more and selling this lower offer to the bank while KNOWING you are going to flip this house for extra money is flat out misleading the banks. I don’t care what your personal opinion is about the banks and how they screw Realtors and cut our fees at the table and that government bailed them out. What is WRONG is WRONG and two or three wrongs by the bank does not give us the right to STEAL MONEY from anyone. The people getting SCREWED are the SELLERS who hired those agents under the pretense that they were being helped. The fact is, most Sellers will have a judgement put against them for the deficiency of the sale. So instead of the seller in this example getting $75,000 judgement against them, they will now have a $100,000 judgement against them. THEY HAVE TO PAY THAT MONEY BACK THAT THE REALTOR JUST STOLE FROM THE BANK.Sooner or later, the house of cards will come down again and close all the loopholes. But for now, those Realtors who participate in this type of sale should be ashamed of themself. Before you cry “Sour Grapes” because I am not making that money, I have closed 94 sides in 2010 and will close well over 100 transactions this year. I have been selling real estate for twenty years now and the REASON I have lasted this long is because I refuse to deal from the bottom of the deck and I refuse to screw the Sellers who hire me to get them out of the scenario that they are in. If that means I take a haircut at the closing table, I’ll take it. What I refuse to do is feed my greed at the expense of others while hiding under the “it’s legal” defense. It is NOT MORALLY correct and if those Agents would get off their lazy asses, they would be able to make a nice living as a Realtor ………………….. while genuinely helping people. There are no short cuts in real estate.

http://www.headofrealestat.com

Advertisements

Short Sales: Some Realtors Hurting Sellers?

Everyday as I comb the MLS, I see Expired Listings from Realtors that were “Short Sales” or as we called them in the late 80’s and early 90’s, “Short Pays” (after the Savings & Loan Scandal). There is NO WAY that after 365 days OR MORE that those listing should not have been successfully sold. Certainly there are exceptions (I have one with an AMEX lien that will not go away and the lien has to be paid by the Buyer outside of closing) that is taking longer than expected and there are exceptions to this rule, however my issue is THIS:

An inexperienced Realtor will take this Short Sale listing knowing they don’t know how to put a deal of this magnitude together. They fill the homeowner up with the “Yes We Can” speech (and we all know how good that is working for our country) but they really don’t know what to do or where to start. And WHO wants to help them in their office without getting 50% of the deal?

The BEST thing an agent that is not a veteran of Short Sales, to do is to give this listing to another agent for a referral fee so the homeowner can escape the mess they are in. That is the best thing to do for the client. Pretending to be a Short Sale Expert when in fact you are not is against the ethics of our business and gives ALL REALTORS a bad name.

We need to clean this mess up and come down hard on those agents who don’t know what they are doing and either train them like we do at Exit Realty or help them, regardless of if we get a cut or not. And I’m not talking just to new agents. In Tampa, many of the Luxury Home Realtors of yesteryear are giving Short Sales a try. With luxury homes in such poor demand, they think they can learn something new. One Luxury Home Specialist (self-proclaimed the greatest Realtor who ever lived) only closed 10… T E N houses last year! His active listings reads like a who’s who of Tampa and he has a HUGE number of ACTIVE listings, but he averages LESS than one closing a month. But WHO are they helping by giving the perception that they are something they are not to sellers? Some of this falls on the homeowner who picks up a magazine and assumes that agents who have those listings must be good so they list with them, not knowing that the agent they select may have Active Listing Inventory that FAR outweighs the number of homes they sell in a given year.

Homeowners need to investigate how this business is run before they select an agent to sell their home ESPECIALLY if they owe more than the home is worth. The truth is, they may not even qualify for a Short Sale. We need to be honest with the homeowners and tell them the TRUTH, not what they want to hear so we can just land another listing. It is not right and we need to police this internally and keep the market going in the positive direction it is going in now. I’m tired of cleaning up other Agents messes.

What say you?

http://www.headofrealestate.com/http://www.headofrealestate.com

Exit Convention in Washington D.C.

Just got back from a week of fun and learning at the Exit Realty Convention in Washington D.C. and I am just blown away by the entire organization. From the regional owners to the trainers to the Brokers and agents to management and staff.  I spent about 18 years with ERA and went to many a convention, but never have I experienced the overwhelming SUPPORT the Exit organization gives to its membership!

I learned more in 6 days than I have in the past 6 YEARS! Exit Realty really cares about US and my move to Exit was the best decision I could have made for my family…… for my retirement!

I am just blown away by the Forbes family, by the support I get from them, all the way to the top of the food chain in Exit.  I feel part of the family, like I belong.  That is how Exit treats their agents

That was before they rolled out the red carpet for ALL of us in Washington D.C.  Steve Morris is a first class of a man and a GREAT leader and a great motivator.  I could not believe the access we all had at the convention.  The breakout sessions were the best I have ever been to and a special call out to Valerie Reyes who just blew the crowd away with her “Summit” session.

If you are burned out with the same old same old, give Exit a look!  My Team was #1 worldwide with ERA in 2008, like #4 or 5 the year before.  I was never treated like anything other than another number, another fool that paid them $30,000 to $40,000 a year in franchise fees and nobody knows your name!

Moving to Exit was the best decision I have EVER made and as I watched Steve Morris hand out a $100,000 check (like they do every year) to the lucky guy whose name was randomly pulled out of a barrel, I thought to myself, “wow, it’s nice to belong to a company that actually gives something back to the agents that made the company what it is.”

To learn more about Exit Realty, visit my website at http://www.headofrealestate.com

Can I get An American on The Phone?

I want to SCREAM!  It seems like……….. well it does not SEEM like, it IS! EVERY TIME I make a call to a lender for a Short Sale, to get a pay-off  or for any reason, I get a foreign call center and speak to a person who can’t really speak english or understand my questions.  Why are Americans not getting those jobs?  No wonder Short Sales are so difficult!  I don’t care if those call centers were on the Island of Peaky Peaky and they were answered for FREE!  The lenders are losing out and getting false information in the translation.  You ask a question, they pause…………… so they can look up the “canned response” on the computer screen and then they READ a reply back to you!

The President ran on this platform last year (outsourced American jobs).  Now he is in power and I want to know why this is on the back-burner?  This is a giant mess and as they say, the chain is only as strong as its weakest link and brother, that is not a weak link, it is flat out BROKEN!

Wake up lenders, loss mitigators, Bank CEO’s, decision makers and stock holders!  The first line of communication between your client and your company has fallen……. and it can’t get up …….until those jobs are given to Americans or at minimum, people who can actually speak the language of the clients they are speaking to! 

That is the way I see it!

For more information, go to http://www.headofrealestate.com

No “Friends” In Real Estate?

No friends in real estate? Consider yourself lucky! One thing I have learned over the years (I read this in a book recently) is that all things being equal, a person will do business with the person they know, a friend. All things NOT being equal, people will STILL do business with the friend over a more qualified person in the same field.

I wonder if the same could be said about doctors? You need triple bypass surgery and your golf buddy just graduated medical school. Would you let him do the surgery? How about this: You are wrongly accused of murder and the guy who works with your wife just passed the Bar and is a “part time” attorney. Do you hire him to defend you?

Why in the world do people do this in real estate? Next to death and divorce, the experts say that buying or selling a property is the most stressful thing a person can do in life. In 75% of the cases, the homesteaded property is that persons largest asset. When buying or selling, I OFTEN see the Agent that represents those clients is a “friend” of the family.

I know that in 2005, some of those “friends” not only led their clients to the water, they forced them to drink all the Koolaid! Fast forward to 2008. My “part time job” is being a janitor, cleaning up all the Koolaid that got thrown up! I saw million dollar deals handled by the most inexperienced agents in Tampa that knew nothing about the ins and outs of this price point or any price point for that matter.  Thus the term SHORT SALE was born! Who knew what that was three years ago? Now it is ingrained into our vocabulary!

The State and County appreciate it because they are reaping huge tax dollars from unnecessary tax bases that legally, should have been adjusted but were not. Sometimes, the Buyer is overpaying by hundreds of thousands of dollars as well.

The bottom line is this: If you are going to play the game of real estate, make 100% you are playing with a winner! All of those agents that were soooo cocky in 2005 and 2006 are long gone. Who can you call to clean up this mess? This mess that was crated by those “friends” in the business who never thought the bubble would bust……… because they never knew anything but a bubble!

Back to the reality of the fact that the same Agents cleaning up this mess are not the ones who made it. The ones who made it, cut a fast buck and are on to the next quick dollar (remember those “Day Traders” a few years ago?). The true professionals will pick up the pieces……. like we always do. Those new to an area: If you don’t have a friend in the real estate business, consider yourself lucky. You get to work with an agent that actually has the credentials to the job for you and to do it RIGHT…..if you do your homework before you hire an agent.

A final note: When I was a new Realtor in 1991, my Broker, the late Juanita Dennis, required new agents to work with a mentor for six months or for the first ten deals of their career. Then, for the next 10 deals, the Broker or manager of the office had to review offers and listings before they were submitted to the office or to a client. After that, they kept a very close eye on your deals until they were satisfied you could do the job! Today, you get your licence (not in all, but many offices) and you get your experience practicing on live, unsuspecting clients. THIS IS JUST WRONG. Welcome to the world of the TRANSACTION BROKER! No liability to the Broker equals a “who cares if the client gets burned” attitude. Why should they worry? There is no longer a hook at the end of the fishing pole!

Turn in Your Keys?

On March 31, Fannie Mae sent out new guidelines to lenders intended for walkaways and other foreclosure situations. Fannie will now prohibit foreclosed borrowers from getting another mortgage through the giant investor for five years. 

____________________________________________________________________________________

I say to this WOW!  What it boils down to is this: The lenders are waiting for the Federal Government to bail them out. When they were clipping borrowers for 9% or 9.5% loans in 2005 things were GREAT, the REASON they charged those rates was R I S K. Now that the greed plan did not pan out, everybody sits back and waits to see what Uncle Sam is going to do. 

Freddie Mac? Fannie May? They say “hey, lets see if we can make it worse” and release new guidelines to try and scare property owners from walking away from homes!  GREAT IDEA!  The problem is this…….. many (not ALL) property owners are SMART for walking away. They owe $150,000 more than the home is worth. They make $50,000 per year.  Why would they pay that loan to a lender who is unwilling to work with them on this worse than expected realty market? Why would they spend 10 years to get “right sideup” again when the lender who tried to rape them at 9.5% is unwilling to help? If lenders are not going to take “Short Sale Offers” while waiting for the government to step in, what option are they giving the average layman? Can they forgive the back payments and add them to the rear of the loan? No! Will they refinance those borrowers into today’s rate? NO, will they sell the home to an investor for less?  Eventually. But to THE property owner, there is threats, intimidation, relentless harassing calls and every attempt is made to make their life miserable in despicable attempts to force borrowers to come up with monies they don’t have.  A novel idea is this: Try helping them out!

If lenders don’t get a grip on this situation FAST, foreclosure and bankruptcy filings will be even greater than they are today. As bad as you may think it is, the current lending guidelines are making “turning in your keys” the smart thing to do sometimes.

For more information, go to www.myforeclosureattorney.com and know your options!

The “I Quit” Mistake

Here we are in a much different market than anyone could have imagined a few years ago. We keep hearing about the foreclosure boom. Most sellers are unaware that they have rights. They get a letter from the mortgage company saying that they are 3-4 months behind on payments and that the lien holder is going to file suite against the property owner. They get scared and move out.

MISTAKE.Those Sellers have rights. A reputable real estate attorney is your best bet for legal advice, but I will tell you that the “Short Sale” era is here. There is no need to be foreclosed upon. Many times you can stay in your home until it sells. Maybe it will take a year or sometimes two for the lender to get a reality check, but I will tell you that if you are in this situation and decide to just “walk away” from the house without consulting an attorney, you are making a huge mistake. A great website to visit is www.myforeclosureattorney.com . Know your rights before you make a bad situation worse.

Most lenders will work WITH YOU, not against you. If you need help, you must know the right way to ask for it. You can make the BEST out of a BAD situation.