It is the first thing many of us were taught in the real estate business.  I can hear my mentor 10 years ago say now "You Can't Want the Deal to Close More than your Buyer or Seller". 

We all know this, but why don't we always practice this?

1. We need the deal to close because we need the lights on.  We must pay the electric bill on the day of closing.
2. We have such a vested interest in the deal closing because in our mind we already cashed the check.
3. We need the deal to close because the last day to pay for private school is the day of closing. 
4. We need the deal to close so we can continue to take showers.  We all know the water companies are ruthless and if we do not pay the water bill than it is going to be a little harder to sell real estate without taking a shower for a week or two.
5. We need the deal to close because we do not want to continue to eat maccaroni and cheese and roman noodles for dinner.  The kids are getting tired of jelly sandwiches too.
6. We need the deal to close so when the ice cream truck comes around we can afford to buy our kids a Chipwich.
7. We need the deal to close so we can pay back thee family and friends you borrowed from last month citing this deal would close on this date and I will pay you back then.  I promise.
8. We need the deal to close so we can stay in this business and continue to provide for the family.  We love the real estate business so we do not want to leave it.
9. We need the deal to close because our dog has cancer and needs surgery.
10. We need the deal to close so we can go on a vacation as we have not been on a vacation since last Thursday.

We all want to take care of our clients, and sometimes our fear of losing the deal dictates how we react to our client, and perhaps is not in the best interest of our client.  The amazing thing here is that if you truly take care of your client, and do not fear losing the deal it comes back 10 fold. 

Buyers are very sophisticated now.  Even the retired school teacher from the midwest will try and steal a home in South Florida.  They will have all the statistics and information about the market. Buyers are very sophisticated.

Since Buyers are so sophisticated you must make sure you have their best interest or not only will you lose that buyer, but you will also lose your reputation.  In order to stay in the business and be successful take care of your clients, and do not push deals on your buyers because you need to pay your electric bill.  Push deals on your buyers because you believe it is the best thing for them. 

We all like to bring up the Short Sale Process.  We all like to tout what we know about Short Sales, and how we are the specialist or the expert, but the truth is no one knows much about Short Sales.

The reason why none of us know about Short Sales is because the bank changes their guidelines everyday.  I almost think that the executives in the banks sit around laughing at us realtors and clients as they change another guideline to make it more difficult and to make it longer than what it used to be. 

The average short sale for us has been taking about 58 days.  It would be less days if it were not for Countrywide which is 162 days.  

We have found a refreshing trend out there that I wanted to share with everyone.  A couple banks have been changing their guidelines for the better.  Wachovia in some cases will call the listing agent and or the seller and offer $2000 and an extra 1% to the listing agent if they close by a specific time.  One of my agents had 1 where they received an offer and were able to get an approval in 2 days and close prior to the specified time.  Kudos to Wachovia as they are one of the only banks trying to shorten the process and being proactive about it.  This program is not for all loans, but for some it really gives the seller an true incentive to move quickly as well as the agent. 

I also saw where FHA backed loans are giving struggling homeowners $2500 in a program called "Cash for Keys".  They are giving a homeowner who looks as though they will be facing foreclosure $2500 in order to move out quickly.  They will essentially be doing a deed in lieu of foreclosure signing over the property to the bank.  There are a couple stipulations:

1. It must be a FHA backed loan
2. It must be on the market for at least 90 days at a realistic list price.
3. It must be left in good condition including the leaving of appliances and so forth.
4. The homeowner must leave within a reasonable time period in which the bank sets.

The above are just some examples of why no one is an expert in a short sale.  Many may know a little more than most, but like the old adage "He who speaks the loudest, knows very little"

It is a little funny in that Short Sales have become such a sensitive topic with most.  We all become so defensive when a buyer's agent calls up and asks about multiple offers or how we process a short sale.  The listing agent all of a sudden becomes that annoying kid in elementary class.  You know the one.  The kid who raises his or her hand and spouts off they know the answer to everything and goes on and on not just answering the question, but showing that they know everything about everything. 

My advice to everyone who processes short sales is be knowledgeable, but be open minded.  Maybe you do not know all the answers. 

I saw this article and thought it would be of interest to some of my colleagues:

 NAR: Agents and brokers can get SBA help

WASHINGTON - Oct. 1, 2009 - The U.S. Small Business Administration (SNA) has clarified its rules, saying that individual real estate practitioners and brokers are eligible for the agency's loans, which many could find helpful during tough economic times.

According to analysts with the National Association of Realtors, brokers may apply for America's Recovery Capital (ARC) loans, Section 7(a) loans, and Section 504 small business loans.

An initiative of the Obama administration's economic stimulus package, the ARC program offers no-interest, no-fee, deferred-payment short-term loans up to $35,000 that can be used to make payments on or replace existing business debt.

Under the 7(a) Guaranty Loan Program, individual practitioners can use money from participating lenders for working capital or debt replacement. Intended for long-term needs, the maximum loan amount is $2 million.

The 504 Loan Program, facilitated through community agencies, is ideal for individual practitioners expanding their business and in need of money to pay for fixed assets.

For more information, visit the Small Business Administration website. 

Source: Realtor (10/09) Vol. 42, No. 9, P. 10; Freedman, Robert

© Copyright 2009 INFORMATION, INC. Bethesda, MD (301) 215-4688

I am currently with RMLS, and over the last couple years have been frustrated with the level of service they are giving their members.  I and a few brokers represent about 1000 agents, and are seriously considering leaving to go to the Greater Fort Lauderdale Board of Realtors.  So I decided to have a tele-conference call with the Board of Realtors and RMLS to express my concerns and give them the opportunity to make myself and the agents we represent feel good about possibly some changes and upgrades in their customer service. 

The call was supposed to be a very cordial professional call to explain our concerns.  Instead it turned into what it always seems to be with the RMLS and that is:

• Defensive
• Condescending
• Smug
• An Attack

This was the president of the board of directors that is supposed to be helpful and serve its members impartially that really was so out of line I was absolutely appalled.  The problem with the RMLS is that they will never get it.  They have this entitlement and power attitude that they do not need to serve its members as we will never leave them.  Well, although we were considering leaving the RMLS prior to this phone call we already have meetings lined up with the other boards and have one foot out the door.  

It is this attitude that continues to me prevalent throughout the staff of RMLS.  Customer Service is so imperative in this day and age.  Customers demand it.  I thought we were the customers, but are not treated as such.  We would rather be at a MLS that appreciates us than one that could care less.  

This is in know way a reflection on the realtors association of the palm beaches (RAPB) as I believe they have been very helpful.  The reason why we are leaving is because of the attitudes of the RMLS.  Who has time to fight with their board these days.  Especially one that fails to appreciate its members. 

Isn't that an oxymoron.  Here is a local newspaper that has been in all the luxury hotels for almost 60 years, and a fixture in the Boca community for that same time.  We have relied on our news for so long, and it is such ashame that the downward trend of the economy has forced the Boca News to go digital at www.BocaNews.com.  They call it the interactive newspaper, but I still like to read my newspaper.  I still like to feel the paper rather than look online and read.  It is much nicer to drink a cup of coffee while reading the Sunday paper then going online to look at a computer screen.  I want my Boca News back.   

So many of us continue to look as Short Sales as a negative.  So I have prepared a list of what and why it takes so long, and what is short about Short Sales.

First the:

Short of it

• When you call the bank to find out an update on your file you get a very SHORT answer.
• When you submit a package to the lender you will hear back SHORT-LY (10-14 business days)
• A Lender's definition of SHORT is a lot different then a client's definition of SHORT.
• For some reason we think that if we call the bank 3 and 4 times a week that the bank will SHORT-EN the process when we know that is not the case.
• There is nothing that is SHORT about a SHORT sale.
• When dealing with banks some banks are much SHORT-ER than others (Countrywide)
• Many think that banks think like most people that is logical, but there is nothing logical about a bank when dealing with a SHORT sale.

The Long of it

• Unfortunately, everything takes a LONG time when dealing with short sales
• With managing expectations buyers and sellers will wait a LONG time before answering on whether to accept the offer or not.
• The LONG frustrating process becomes manageable when you communicate with all parties.
• The biggest problem with this LONG process is that lenders continually change their processes without communicating it to the people negotiating with them. 
• Communication is key to make a LONG process SHORT-ER 

I believe that Short Sales listings are very important. Besides being lucrative, it fufills our original objective and that is to help people make a tough situation better.  I got in the business t help people now my motto is "I got into business to help those Long Sales become Short"

Good luck to all and may everyone educate themselves before taking these short sale listings.

If looking for an agent to help you sell your Short Sale in Palm Beach County please make sure you use a Certified Distressed Property Expert. 

David Serle, CDPE, EPRO

RE/MAX Services

• Everyone is talking about it.

• Everyone knows someone who has done one.

• Everyone has thought of doing one themselves

• Everyone thinks they know everything about it.

So why are Short Sales not talked about in the media?  I am not sure, but recently I found an article that many in the real estate industry have been jumping up and down about.  Why does a short sale take so long?

Short Sales, why Sellers are Frustrated by them

Foreclosures, Foreclosures, Foreclosures.  That is what the media talks about.  Why?  Foreclosures are usually not great deals, and have many repairs that may be required.  Foreclosures are prevalent in the Boca Raton market, but Short Sales are probably 2 to 1.  Many economists and so called experts have been saying in order for the real estate market to recover we must stop the amount of Foreclosures.

The governments answer is for the banks to modify there loans so there payment is more affordable.  Doesn't that just prolong the inevitable for most?  Why not figure out a way to shorten the process for short sales.  If we streamline the process and make it more efficient, Guess what we will have:

• stopped the amount of foreclosures.
• Put prideful homeowners in the homes that will maintain their home.
• Bring a boost to the real estate industry including more transaction sides and volume which will trickle down to everyone involved in the real estate from the painter to the general contractor.
• Increase consumer confidence and increase consumer spending.  Statistics show that when homeowners feel safe and well in their home they spend more on durable goods.

Just by streamlining the process of a Short Sale we have solved most of the domestic problems.  Just as there is no logic when it comes to banks there is no logic when it comes to our government.  Everything becomes a filibuster.  Moving towards the future we have to become more proactive rather then reactive.  When you are reactive history repeats its self. 

I just came across this from www.FloridaRealtors.org

I think this would be horrible.  The problem with foreclosures is not that the lenders are forcing people out of their homes and into the street.  The problem with foreclosures is that there are a lot of them, and they are flooding the market.  They also are bringing the value of the neighborhoods way down because lenders just want them off their books. 

This program still will allow the lenders to keep the homes on the market which they will, but the homeowner will get to stay until the lease is over.  Interesting article.   

Rent plan may keep people in homes

TAMPA, Fla. - July 22, 2009 - Losing your home to foreclosure may no longer mean you have to leave.

Congress and the Obama administration are considering a controversial plan that would allow homeowners to rent their foreclosed home for at least five years. The proposal is setting the real estate community abuzz.

"It's clear that the modification plans have not been as successful as Congress had hoped," said Dean Baker, co-director of the Center for Economics and Policy Research. "We need something that will make more of an impact."

The program could reshape Florida's real estate market and the overall economy. Experts disagree on whether the effects would be positive or negative. One thing everyone agrees on is this: Florida doesn't need any more vacant homes.

The Sunshine State's foreclosure rate remains the third highest in the nation. During the first six months of the year, foreclosure filings jumped 50 percent from the same period last year. One in every 33 households received a default notice, auction notice or bank repossession.

Details of the rental plan are sketchy, but the idea is gaining momentum, according to U.S. Treasury Assistant Secretary Herbert Allison. He told the Senate Banking Committee last week that the proposal was being considered for homeowners whose mortgages did not qualify for modification programs to make them affordable.

Some versions of the plan involve lenders selling foreclosed homes to approved professional landlords. In other versions, the lenders would sell to private investors or keep the home and hire a management firm to handle the rental arrangement.

The rent would be determined by the market-rate rent in the area, determined by a professional appraiser.

Jack Rodriguez, president of the Greater Tampa Association of Realtors, said the plan would "tinker with the free-market enterprise."

"I know where Congress is coming from," he said. "But my gut tells me investors would shy away from this, and banks will end up stuck in the real estate market."

Baker, who first proposed the plan two years ago, said it has evolved and continues to be tweaked. Even though people who take advantage of the plan would still lose their homes, Baker said, the plan could keep that from happening to others.

"The lender would have more of an incentive to work something out through a modification because the home would be worth less," Baker said.

Under the plan, the lender still could sell the home but, Baker said, "The homeowner would come with the home."

The homeowner, turned renter, would be allowed to stay until the lease runs out, which could last as long as 10 years.

One potential problem, however, is that many homeowners who lose their properties aren't interested in staying as renters, according to William Apgar, senior mortgage advisor for the Department of Housing an Urban Development.

The program could have an unintended consequence, Rodriguez said. Lenders would feel pressure to shed properties to avoid becoming a landlord. Investors, who would have to give up some property rights, would low-ball lenders. The result could drag down housing prices even more. (The median sales price in the Tampa, St. Petersburg, Clearwater area was $141,100 in May, down 20 percent from $176,100 in May 2008, according to the Florida Association of Realtors.) Others think the plan is a win-win for everyone involved.

Don Burnham, a real estate investor in the Tampa area and co-founder of the Wealth Restoration Institute LLC, said the plan could be a hit.

Investors, he said, would want to buy the homes because they will know they have a long-term tenant and a steady revenue source. Lenders will like the plan, he said, because they'll be able to find buyers faster. Homeowners would be happy because they'll have a secure lease and not have to foot the bill to move.

Mike Larson, a real estate analyst with Weiss Research in Jupiter, said the plan is one of several the Obama administration is hoping will keep more homes from becoming vacant.

"We don't yet know fully how the plan would work," he said. "But if you have a warm body in the house who will keep it from going into disrepair and keep the lawn mowed, that will be at least somewhat helpful."

Although I did not vote for Obama, I still believed he was the better choice.  He was what our country needed as many of us needed hope.  However, he is really doing some things that just do not make a whole lot of sense.

I recently read about Obama's helath care reform.  He wants to subsidize the plan by taxing people making over $280,000. 

Lets just distribute the wealth.  We can be a socialized society.  How many socialized societies work?  The people that make over $280,000 are those who employ many of the average workers making $30,000-$50,000.  What do you think will happen to the employees of the worker making over $280,000? 

The problem with Obama is that he does not seem to think of the consequences before he acts.  Everything just has to get done and fast with him. 

An example:  He went and decided to push this Housing Recovery Act.  A part of the Housing Recovery Act dealt with appraisals.  Normally, a mortgage broker would just call up one of the 2 or 3 appraisers he works with and they would appraise the property.

With Obama's plan, the appraiser cannot talk to the mortgage broker.  The mortgage broker does not select the appraiser.  The Asset Management Company does.  So the mortgage broker orders the appraisal.  3 days later the appraiser calls the listing agent and meets them at the home.  Then about 7-10 days later the appraisal goes into the system, and they contact the mortgage broker and the appraisal is uploaded so the mortgage broker can access it.

On the surface this looks fine.  Here are the problems.

1. In my last 3 appraisals the appraiser did not know the area.  I know the appraiser is supposed to have an office within 20-30 miles.  The problem with that is many have virtual offices in many locations.  So you have an appraiser that mainly appraises property 50 miles away that knows nothing of the area, and the mortgage broker cannot even speak to them.
2. The intention of the appraiser not speaking to the mortgage broker is right, but the problem is that the appraiser is allowed to speak to the real estate agent which has more of a vested interest in the transaction.
3. If the appraiser did a poor job on comparables then the mortgage broker has to submit a request for review to the asset management company which in turn will contact the appraiser.  This can be a lengthy process
4. The time frame is just too long.  Where we were able to get appraisals back in 2-5 days they are now taking 10-14 days.  That does not seem like a huge difference in time, but it is as the seller is taking this home off the market for an extra 8 or 9 days. 
5. The appraisers now make less and do more work.  This system has forced out many appraisal companies because they are making half as much for the appraisal and are doing twice as much work as the guidelines of the Asset Management Company is much more detailed.

In conclusion of this program:

• This system forced people to look for new jobs.
• Forced seller to keep properties off the market for a longer period of time and in many cases received less money for their home because of this.
• You have appraisers appraising property that knows nothing about the area, and you can't even make an argument with them as you have to go through the asset management company if you have a problem.  Seem like bureaucracy to you?
• Appraisers can't speak to mortgage brokers, but can speak to real estate agents.

This program has unintended consequences, and this is what I am afraid of with health care reform.  We need to make sure we get it right, and have listened to every argument and consequence before instituting another multi-billion dollar program.