I think that the distressed property law is going to have a large negative effect on our industry.  Let me give an example -

Suppose you take a listing and the seller says that they are current and expect to remain that way.  The seller lives in the house being sold.  They sign the new 1A listing form that says as much.  You market the home (spend money) and attract a buyer (with a buyer agent).  An offer is negotiated and signed and the contingencies are satisfied or waived.  One week before closing, the seller gives you a call and tells you that he is concerned that the closing may not happen and he will not be able to make the payment(s) on his house.  Since he has now told you that he believes that he is 'within 4 months of default', paragraph 4 of the listing agreement indicates that your broker needs to either terminate the listing or instruct the seller to sign a new 1A-DH listing.  What if the seller refuses to do so?

My interpretation (note that I am not a lawyer) is that your claim on a commission is gone.  The problem is that the new law defines your seller as a 'distressed home seller'.  If he has asked you (or you volunteered the information) that the closing will solve his problem, then you have offered the services of a 'distressed home consultant' (DHC) by offering to save his home from foreclosure.  The listing does not fulfill the requirements of a 'distressed home consulting transaction' - it is the wrong font, if for no other reason.

As a DHC, you are now a fiduciary to the seller and need to consider his interests above your own.  I don't see how your commission is in his best interest.  And doing anything to stop the closing is definitely not in his best interest.

You may argue that the seller does not have a 'good faith' belief that he will be in default - but how can you know that?  Many people live paycheck to paycheck and it can very easy to live beyond their means.

You may also wonder if sellers will be sophisticated enough to use this technique.  Unfortunately, I predict that their will be a service that advertises that they can save the home seller the full commission on their house sale for only $1000.  This would be perfect for the ambulance chaser that is not making enough money.

I don't want to be a cynic, but I think this law is really poorly written and is ripe for abuse.

 Can anybody tell me why my example is wrong?  Or why anybody would think that this 'consumer protection' law will NOT hurt the very folks it is supposed to help?

We had another coaching session with Walt Frey (http://www.waltfrey.com/) to discuss the application of the Ninja techniques to our business.  All but one of the participants is a real estate agent - the extra was attending for the first time and is a mortgage broker.  Here are the notes I took:

Group our contacts into categories that reflect the likelihood of referrals:

1. Raving fans who give you referrals
2. People who might give referrals if they were trained.  Most people need to be trained to give us the information about the referral so that we can follow up.  If the referral subject is told to call us, it is a cold call for them and not as likely to happen.  Instead, if we are given the name / phone / email of the subject, then we can do a warm call and can reference the referrer.
3. People who don't refer - why not?  is there something I can do to improve their impression of me?

Additionally, a referrer should be acknowledged in some personal way to encourage future referrals.  One of Walt's clients has an arrangement with a florist to deliver a rose to the referrer.  Another client sends a Starbucks card with a thank you note.  Always follow up with the referrer regardless of the result - we want to make sure that the referrer knows that we followed up on the referral, how it turned out, and that we appreciate their efforts.

We want to make sure that we are in business 'on purpose' rather than 'by accident'

There is a web site that tracks communities and appreciation - http://www.ofheo.gov/

The Ninja group sends out 2 newsletters each month - one is strictly real estate information and the other is 'sappy' (discusses personal life of agent).  The real estate version is sent out to 90,000 people nationwide, the 'sappy' one is sent to each agent's sphere.

Walt recommended that we read the book A Whole New Mind: Why Right-Brainers Will Rule the Future

We talked a bit about the subprime meltdown and the perceptions issues that our clients are displaying.  Walt talked about a NAR presentation that shows:

• 35% of all homes in the nation are owned free and clear
• 50% of the mortgages are prime and are fine
• 15% (the rest) are VA / FHA / subprime

Yes, the foreclosure rate has doubled nationwide - but that is only going from 2% of total mortgages to 4%.  96% of the mortgages are fine!  The news media is happily playing the doom and gloom song, but this is all about panic.  Once the fear calms, all that money that used to be available to buy subprimes on the secondary market is going to come back - probably with different lending criteria, but it will be back.

The majority of the session was dedicated to an exercise to focus our values - which values are the most important to each of us and how we should focus my activities to maximize those values.  I would write notes on this, but I think it is an exercise that must be experienced.

We talked about affirmations - they need to be written in present tense, personal, and positive

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