I just got an email from The National Association of REO & Short Sale Professionals offering to make me a certified short sale expert.

Frankly, I have no badge or initials after my name, but a filing cabinet filled with closed short sales and about 12 in the pipeline so I kinda thought I was an expert. I am all for professional affiliations and that sort of thing, but does anyone know about this organization? There seem to be lots of foreclosure-related designations cropping up and I am trying to separate the wheat from the chaff, or at the least the worthwhile ones from the ones who want $100 for a web-course and logo on my website.

Any input would be appreciated.

I just got an email from The National Association of REO & Short Sale Professionals offering to make me a certified short sale expert.

Frankly, I have no badge or initials after my name, but a filing cabinet filled with closed short sales and about 12 in the pipeline so I kinda thought I was an expert. I am all for professional affiliations and that sort of thing, but does anyone know about this organization? There seem to be lots of foreclosure-related designations cropping up and I am trying to separate the wheat from the chaff, or at the least the worthwhile ones from the ones who want $100 for a web-course and logo on my website.

Any input would be appreciated.

I just got an email from The National Association of REO & Short Sale Professionals offering to make me a certified short sale expert.

Frankly, I have no badge or initials after my name, but a filing cabinet filled with closed short sales and about 12 in the pipeline so I kinda thought I was an expert. I am all for professional affiliations and that sort of thing, but does anyone know about this organization? There seem to be lots of foreclosure-related designations cropping up and I am trying to separate the wheat from the chaff, or at the least the worthwhile ones from the ones who want $100 for a web-course and logo on my website.

Any input would be appreciated.

If you are an agent in or around the bedroom counties of New York City (suburbs, Hudson Valley, Long Island, Fairfield County, CT) I am hiring both full and part-time agents. I offer ongoing mentorship, help with prospecting, training, and, oh yes, LEADS. Email me for details. I belong to the following MLS systems:

• Westchester-Putnam (includes the Bronx)
• Greater Hudson Valley (Rockland, Orange, Ulster, Sullivan)
• MLS of Long Island (Nassau, Suffolk, Queens)
• Fairfield and CT Statewide MLS (All of CT)
• Mid Hudson (Dutchess)
• I am open to joining REBNY or another local MLS for the right agent’s needs. This could mean Brooklyn, Staten Island, or Greenwich. The Bronx MLS appears to be approaching obsolescence with the expansion of Westchester-Putnam.

If you are not an agent but in a related industry and would like a Scarsdale mailing address, I have an open desk available in a very nice office in Scarsdale. This is perfect if you do mortgages, survey, appraise, are an attorney and need a pit stop locale, or do commercial brokerage. The facility has parking and many other amenities. I am willing to rent the desk to an agent, but only under specific circumstances. It goes without saying that you have to be of top notch character to be considered for either opening.

Email me for details on either possibility.

I was inspired by Bill Gassett’s recent posting on why listings expire unsold to share what I tell people when it comes to pricing their homes. Simply put, time costs money and money costs time. The faster you need to sell, the less you’ll get. The more money you want, the longer you’ll have to wait. Let’s take a house that I think will probably sell for $375,000, bearing in mind that in my market, the same house may have sold in 2005 for $475,000 (ouch).

Some people are more motivated than others. It need not be duress, they just want to get the show on the road and get packing. These are the people who don’t need their arms twisted about the whole different set of eyeballs their home will get at $399,900 than $409,900. The house shouldn’t take too long to sell. It may not sell the first weekend, but the odds of it getting stale are low.

Others are in hot water. They can’t wait 90 days. They need to tell a collection department (or a judge) that they have a contract on their home in order to hold off a foreclosure proceeding. They may need to price it at $349,900. It might get bid up higher because the market is efficient, but regardless, that will get the people moving on the place. They get less money but they benefit with a faster timetable. Time costs money.

The last group isn’t motivated by time so much as they are on money. For one reason or another, they want to hold out for their price. Let’s suppose these people want $400,000 or more. They might be stubborn, egotistical, or just in doubt about the true conditions of the economy. Or, they might just be of a more speculative mindset and believe that there is one special buyer out there that might pay them a premium for the place because of scarcity or condition. They might be right, but these clients will have to be prepared to wait longer than most of their peers. Again, time is paid for in money, but money’s cost is more time.

If the latter group is educated by their experience after a month or two, they’ll reduce their price. Some don’t get it and are on their 3rd broker in 2 years. Sometimes they will get an offer from that one special buyer but there’s no guarantee that the appraiser will agree, and that is a discussion for another day. If higher-priced people know in advance that they’ll have to wait, they should have less of a problem with a higher commission, a longer listing contract, or both.

It is an immutable dynamic in my experience, and if explained to sellers in advance, it saves me from being blamed for poor price advice, or, worse, priming the pump for another broker later on.

I have a listing priced at 219,000, and we received an offer of $185,000. Not uncommon in this market. The pre-approval included was also for $185,000. Now, I know that the buyer probably qualifies for more, but they don’t want to tip their hand. Some of you may not agree with me, but this strategy can backfire. I’ll say that in stronger terms:

It is a DUMB strategy.

What that $185,000 pre approval said to my seller was that the buyer is low balling him because they only qualify for $185,000 (a $35,000 price reduction, mind you) by an eyelash. They do not look like strong buyers. And their agent look silly for showing a $219,000 house to $185,000 buyers. So, instead of countering, my client had to be convinced that we wouldn’t be wasting our time dealing with unqualified people. And all in the name of people playing an antiquated head game. Do they really think we’ll just cave in and give them the house for $185,000 because that is all they qualify for? If they qualify for $275,000 are they afraid we’ll counter offer them for $275,000 for the $219,000 house? Madness!

The criteria for any wise strategy is a winning outcome, a losing outcome, or a break-even outcome. With that 185k letter there is no winning. The best they’ll do is break even. Break even/lose is not a wise tactical outcome. We countered them, but only with a promise of an updated preapproval. I am all for confidentiality, but not at the expense of making you look like a weaker, less qualified purchaser than you truly are. What if we get another offer and the people qualify for a bigger mortgage? You just sabatoged your case!

There may be scenarios where not tipping your hand is wise. However, with a starter home and 3% down, you’d better come up with a way to make your buyer look strong, or, at the very least, not overthink things to such a degree that they look weak. You just looked all through our closets when you saw the house; we’re not hung up on your secrets. Confidentiality is mean to protect, not weaken, a buyer’s case. Give me the real pre approval, and we’ll be as up front as you are going forward. Show me how strong your buyer is.  Give it to me straight!

I recall that during the campaign my wife and I would hear Barack Obama speak and then look at each other and say “Sounds great. How will we pay for it?”

Now, with an $825 billion dollar stimulus package on the table in the wake of a $700 billion bank bailout I am concerned. The people who were decrying the cost of the Iraq war being passed on to our children are silent about these expenditures. Why? Because it was never about fiscal responsibility, it was about politics. Why is Obama so eager to emulate Roosevelt, who presided over two terms of a depression? Roosevelt didn’t end the depression, World War 2 did. An argument can be made that he lengthened, not ended, the economic issues of that era.

Reagan inherited a terrible economy. Inflation, unemployment, interest rates and national morale were all deplorable. He didn’t make the government the solution, he got the government out of the way. 2 1/2 years later it really was morning in America again. Reagan presided over deficits but nothing like we are about to undertake.

Obama was elected because he ran a better campaign. And if he is successful I’ll be the first to admit it. But if I had my druthers I’d rather have RR in charge. Obama’s rhetoric sounds like the Great Leap Forward, which was a disaster. Let the markets fix the country. If you want to be a trust busting , more regulatory government I’d support it because it was corruption, and not capitalism, that failed us. For that I blame Bush, no doubt. Horrible oversight. But we ought not throw the baby out with the bath water.

We should not be fooled into thinking that the cyclical nature of free markets and recessions that come with them are a failture of capitalism and decide that more socializtion is the way to go. That is fool’s gold.

If deficits are crippling because of a war, how can they not be crippling from wholesale socialization?

I should first disclose that I am not, nor have I been in the past, an REO Broker. I have purchased them myself and I have represented buyers in the transactions many times over the years. It is as different an area of real estate from typical transactions as Podiatry is from Opthamology in medicine.These are things consumers must know before they purchase a bank-owned REO property here in my home state of New York. Most of the principles apply universally.

1. You should absolutely use an attorney who is FAMILIAR and EXPERIENCED with the purchase of bank-owned properties if you buy an REO (Real Estate Owned-by the lender) in the state of New York.  Even if your employer or union is providing you with subsidized or free legal representation, use of the wrong attorney can negate whatever perceived savings you are getting in the purchase, add to your stress level, and still have you poorly represented. This is, of course, to say nothing of the needless time and energy the other attorney and agents will have to expend bringing your attorney up to speed.
2. You are not being rushed-you are being given deadlines for efficiency. This is why you need an experienced attorney who won’t gasp or get the vapors about having to take shorter than a week to do anything. Lawyers typically operate at a casual pace in property transactions, but REO transactions have to go at a far faster pace, not because anyone is trying to bamboozle you, but because this is a NON PERFORMING ASSET and TIME IS OF THE ESSENCE. Not only that, there may be competing offers that they can go to if you or your attorney are going to dilly dally. So, a document that says “please sign and return tomorrow” really does need to be signed and faxed tomorrow.
3. You are buying the house “AS IS.” Nobody will dissuade you from getting an inspection, but unless there is an environmental issue, it is for your volition only. The bank will not make repairs. The bank will not put GFCI outlets near the sinks. The bank will not put new batteries in the smoke detectors. Do your inspection BEFORE you make the offer, because once you make the offer the clock is ticking with deadlines (see #1 and #2). You are already being compensated for the physical issues of the property with a lower sales price, often far more of a discount than market value less repairs.
4. You cannot speak with the bank. If you run into frustration or red tape, no, you cannot speak with the bank. I know it would be great to just have your lawyer and the bank iron the issue out, but “the bank” is not “the bank” as you know it. “The bank” is an overworked, underpaid asset manager in another state who will hang up on you so fast you won’t even know she answered. Why? For the same reason you’d be escorted out of surgery, a radio studio, an underwriter’s office, or court. People in those places are doing their jobs and do them better without your interference. Those are not settings for the public and your interference hurts the other people who, like you, are waiting. 
5. You have to pay the transfer tax the seller usually pays. This raises your closing costs a bit, but the lender is losing a ton of money on this deal and needs to economize where possible. Every lender does it. It is an established practice. It is part of the cost of doing business and worth the overall discount you are getting in your sales price for this property.
6. Exceptions cannot be made.If you are buying an REO in 2009 you are participating in the largest liquidation of property in the history of the planet. It is a huge undertaking that will completely break down if systems, efficiency and deadlines are subordinated to individual exceptions and personal requests. All large organizations have to operate this way or they will cease to be large organizations. Think of it this way: You have a certain cell phone plan. You can’t change it on a temporary basis or get the phone company to make an exception unless you pay for another plan.

Many in the public are rightly intrigued by the prospect of buying an inexpensive, bank-owned property at a discount from the norm. That is the Rose. The thorn is that the process is far less touchy feely and far more cold and automated. However, forewarned is forearmed, and knowing these things going in will enable you to be ahead of the process and not at the mercy of new, unwelcome discoveries. You should still enjoy that purchase, but you have to understand the rules going in.

This listing expired unsold a few days ago. This is the actual photo on the MLS posted by the listing agent. There were no marketing remarks, agent to agent remarks, showing instructions, or driving directions posted. I spoke with the seller a few hours ago and was informed it was a short sale. This was not disclosed on the old listing either.

Apparently, the photo was taken at night and never replaced with a photo in daylight.

I know how I feel about this, and you can be the judge of whether this is adequate representation or not.