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The EXTINCTION of the Realtor?

It seems to me that the extinction of the Realtor is at hand. The abundance of Short Sales and the new hard line tactics employed by the Lenders is causing more and more agents to leave the industry or just avoid Short Sales altogether.

Already there are agents that pronounced their unwillingness to get involved with Bank of America Short Sales...that is quickly being expanded to Wells Fargo, Chase and the once shining star in Short Sale negotiations, IndyMac (now OneWest). How much further into the future will it be until the majority of agents stay away or find another career or niche?

Can the extinction of the Realtor be too far off?

I've been going back and forth with Wells Fargo, who holds both mortgages. The First agreed and the Junior Lien is playing Hard Ball...we offered them $5,000, they said NO!..at least $10,000, they countered...We said OK, they then came back with a Promissory Note for the balance of the amount owed ($85,000). We then tried to find out what it would take to get rid of that Note...they said $38,000 cash, we countered with $28,000. They told us it would be submitted to the Approval Team...Well, the Team said that wasn't enough and countered with $47,000! What happened to the $38,000? But wait! We were told that was no longer available...OH! and the homeowners would still need to sign a note for the balance.

WHAT ?!?!?!??!??!?!??!?!

This property will go into Foreclosure and with negotiations like this, who can see a viable future for Realtors dealing with these Lenders?

Sidney Jimenez, CDPE

www.RoadtoForeclosureRelief.com

www.SidneyJimenez.com

Contact Me: 954-665-9449

Or Send Me an Email to Go Over Your Foreclosure Relief Options: Info@SidneyJimenez.com

Sidney Jimenez is a Certified Distressed Property Expert and can help you with all your options to avoid a Foreclosure in Pembroke Pines, Miramar, Coral Springs, Margate, Davie, Weston, Southwest Ranches and the neighboring cities in South Florida. You can count on Sidney’s expertise to handle your Short Sale, he’s “Delivering Winning Results”

Posted by Sidney Jimenez, CDPE, Short Sale Expert, 954-665-9449, on 09/17/2009 02:38 PM

Comments (83)

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83 Comments on The EXTINCTION of the Realtor?

SEP

They underestimate us and the length of our memory. The future will be ours and they will be the ones gone.

Is there any chance that these banks will get their act together someday soon?

JON,

Everyone asks that question! The problem is that we seem to think that they need to conform to our clients needs. Apparently, their behavior is profitable and they are just getting tougher now that their profits are returning. I truly believe that they are behaving exactly as they intend, we need to realize that.

The buyers will lost, but more importantly the economy will lose. Our economy is suffering now from the loss of market value and loss of equity for the 20,000,000 home owners upside down.

We're in crisis and only those with viable pipelines of business will survive.

LENN,

The point is that even with a pipeline of business, how can most survive if the Lenders are pushing more homeowners towards Foreclosure rather than avoiding it?

Remember this...what industry benefits the most with a country full of people with severely damaged credit? The Lenders, right? And who is controlling how these sales and settlements are being reported? The Lenders, right? That doesn't seem like a good combination, and this is the same industry that pushed the country into a Recession, so what makes anyone think they care NOW?

I understand the frustration. Recently received my CDPE and I am gearing up for advertising my newly acquired designation.

The sad part of this whole thing is that the homeowner and the lending company both benefit from a short-sale. The cost has to be phenominal for the lenders when they foreclosure. We list HUD owned properties and on one house alone they spent over $10,000 to determine the concentration of lead-based paint on both the interior and exterior. The most concentration was on the outside shutters and instead of removing they painted them 3 times and paid someone to test the concentration each time. The new homeowner was going to install new windows and the shutters were removed and thrown away the week of closing. Such is how our tax money is being spent.

My belief is that the banks and mortgage companies are not going to get it together anyway soon and distressed homeowners are still going to need our assistance and hopefully there are several we will be able to help avoid foreclosure!

Scary, but true! I won't go near a BofA deal. They, as well as the others you mentioned in your post, don't care about the consumer. And, with some of the so-called "Shared Loss Agreements" that they have with the FDIC, there is no incentive to change their ways. Bummer!

MELINDA,

I'm also a CDPE and I know the importance of trying to help as many homeowners as we can. The reality is that the Lenders seem to be benefiting from homes not being approved and that being the case there is just so much any of us can do. We've been in this market since late 2006, and things with the Lenders are just getting more difficult.

BOB,

Don't get me started on that!

Sidney...

I am guessing this is going to be a great discussion. As to whether or not Realtors see extinction. I don't think so. I don't believe the general public is ready for that move yet.

TLW...ROAR!

TLW,

If it were only up to them!

It's cyclical . . . it happened in the '70's during the S&L bustup. Foreclosures and short sales will be over with soon . . . then back to business. But, my year is okay . . . and I've not done a short in my local market. I'm off from last year, but I'm very busy!

Since the barrier to entry is so small to enter the field, this field will never lack for a supply of agents. How well they do is another story. A true meritocracy indeed -- not a bad thing in my book.

Realtors will not become extinct. The homesellers and buyers need us more than ever right now. And whether they are willing to acknowledge it or not, YET, so do the banks. There needs to be a standardization of procedures in short sales, starting with a preliminary approval on the seller's merits. Why should we spend our time (and that's ALL WE HAVE TO SELL) finding a buyer without knowing if the lender will approve the Seller's situation first? The banks can approve a brand new loan in 45 - 60 days, so why not a short sale within 90 days? I think they (the banks) are pinching dollars to save pennies by not having enough people working on these files, and not thoroughly training the ones they do have. Their computers must be pretty bad because every time you try to get information its goofed up.

We are not experiencing a short sale or foreclosure problem like other markets and I feel we will be out of the short sale woods by the middle of next year. This is hardly the end of realtors, if we purge the weak so be it. It has been coming for a long time. Survival of the fittest is just fine by me.

I had the most amazing experience with a BoA short sale that went to settlement today! Amazing. Actually from the time we got a contract to approval from the bank was 3 days. From contract to closing was 40 days. My sellers dad was in banking since Christ was born and pulled strings and was able to get it done. I think it was helpful that BoA was on the news that day for being a horrible bank for short sales as well.

I hate short sales. I never want to sell one. I have listed a handful and closed only one. I can think of so many better lead generation ideas that would pay off.

Thanks for the article.

Bank of Americas and a lot of banks commercials are aways expounding how they care and they're family oriented and images of families with little kids on the seashore...it's all a bunch of crap. We know their true face, and it is ugly. It's not pretty on the front end with loan origination and certainly not on this back end of foreclosure. I have a sale that is going into escrow with BOFA as the lender. I'm keeping my fingers crossed!

I have yet to encounter a short sale, but I can only imagine. My broker is waiting for an approval on one that he submitted 5 months ago. I don't know who the lender is but he gets in here early and makes the calls every other day. As far as Realtors being extinct I dont think so. It will be a game of how far you can stretch your money.

The banks need to work on their loss mitigation department staffing and training. I'm just happy the government won't allow them to open brokerages and get into the business.

CARLA--I'm very busy myself, but it is not translating to income at the same pace as the work being put in. At this pace most of us won't have a choice but to move on.

CHRIS--The trick is to keep the numbers steady and at this pace the ranks are losing ground at a quick pace. There are some MLS systems and brokerages that can't sustain their services.

PAT--The call for standardization has been on-going for the last three years with no progress. That tells me that the Lenders are fine with the system as it is. Sellers and Buyers need us, but the Lenders are throwing a wrench into that because they won't let most sales go to closing.

MICHAEL--Short Sales and Foreclosure will be around for the next several years. There are more than two years of Option Arm mortgages yet to readjust to higher interest rates and the Commercial crisis hasn't hit it's stride yet. That will throw more fuel onto the fire....Survival of the fittest, yes...but the Lenders are deciding what closes and what doesn't, not the agents or their clients.

TIM--Everyone is expendable...look at the hit the Appraisers are taking in their ranks with the advent of the HVCC.

JON--They did it with the appraisers and the HVCC program. Sooner or later there will be a brokerage making a deal or becoming a subsidiary to sell the REO's. If real estate wasn't so local, I think it would have happened by now.

Actually--what about GMAC Real Estate? wasn't their parent company a Home Lending institution GMAC

Sidney - It will leave us few who are banging our heads, like in your photo OR more agents will farm out their short sales to third-party processors. It's a trend.

Sidney it's frustrating to say the least. I have found it sometimes to best to just let the deal die and then submit a new one. I just did that and Fifth Third went from killing the deal because they wanted $35,000 four weeks ago to agreeing to $1,500 today with a different buyer. Go figure.

I don't think the realtors are going anywhere. Why are you bothering with short sales that's my question. The lenders are cooperating less and less and it seems less worthwhile for you. How much time & effort into this so far? Hours? I bet you will see that's it's a bad business decision. I'll sell em when they become an REO.

Sidney, I want to add that the downside of doing it my way is that I have to keep selling the same properties over and over again. It is getting old.

Sidney - I am feeling your pain. Had a similar situation with Wells Fargo and lost the sale because they could not come to an agreement on it and decided that (although the house did not have any other offers on it) there would be a better offer coming along on it before it foreclosed. Ridiculous. If this is our future, then it will be a loooonnnnnnnnggggg one and we will have to figure out a way to make Wells Fargo negotiate with the junior Wells Fargo...?!?

It's just a change in scenery just like when discount brokerages entered the industry.

Sidney, short sales or other specialties, if Realtors don't sell something, the natural law is they will go EXTINCT. It is a fact.

I love the optimism of this bunch, but let's take off the rose colored glasses for a minute and actually see what is happening around us.

HEATHER--The discount brokerages did a lot of damage to the profession and made the industry a cookie cutter profession. We were lucky their business plan did not survive the crisis...on the other hand there were many traditional brokerages that shut their doors also. This scenery will be around for a very long time, it is not a trend..it is a reality and the amount of sales will not support the amount of agents currently practicing, especially since the values and commission have come down...we need more closing while there are less sales.

EMILY--Our experience will WF is becoming the norm rather than the anomaly.

BRYANT--Taking into consideration the amount of man-hours needed to close a deal..how many more hours do we need to toil in order to just survive?

LYN--If we all concentrated on REO's there would be even less agents surviving. Eventually, the REO is going by the way of the corporate culture and the majority will be handled by bigger "specialty" brokerages.

WENDY--Either way, we can't continue to work on these deals without having experience some type of burnout or getting poor.

WHAT IS THE ANSWER...ONLY THE FUTURE WILL TELL.

It seems to me that the extinction of the Realtor is at hand.

I respectfully disagree. It's not an extinction event, but there definitely is a thinning of the herd.

Great post, all these banks suck and in the beginning none of them knew what they wanted or how to even get these short sales closed. Most of them still don't know what they are doing and now we are having the problem of the negotiator being changed every week and the paper work not being given to the new negotiator so that sets us back to the start every time they change.

JR--Deep down and after 3 YEARS, do you really think the Lenders don't know what they're doing? They might not be doing what we want them to do, but I can't believe that they will continue to purposefully deny Short Sales unless they wanted to and there is another angle for them to let the properties Foreclose.

BRUCE,

Extinctions take time and is a slow process....

Will it happen? I don't think so

Can it happen? The seeds are definitely there

Remember how the banks were trying to strong arm their way into real estate? Well, once they were finally turned down, we may have let our guards down too soon. Let's face it! They ARE in real estate. They decide the price, the commission and anything else. I don't know if the real estate lobby can go up against the banking lobby, but if these guys are not stopped soon, this entire country and 99.5% of the people in it will be bankrupt! They keep pushing their greed, making businesses go out of business, and employers still in business, laying off and cutting incomes. How long can we 'wait' for 'this little slow down' to pick up? Everyone I talk to is out of a job, upside down on their home, and 'on empty' with their savings. The banks have ALL of the money, refuse to lend so businesses can STAY in business, and try to blame it all on us. Our government MUST step in and force them to play by rules we can ALL live with. If not, the future appears very grim.

The extinction of the Realtor is a little exaggerated HOWEVER I do believe that real estate is definitely undergoing changes and different role models is developing....

There will always be a need for full service realty. There is emerging -real estate consulting , fee for service with a menu of services offered for a client to pick and choose from and pay as you go. Not a discount brokerage.

I agree there is definitely a thinning of the herd and that is not bad.

I disagree that the discount brokerage did the damage.......The damage was done by the state, local and national level of realtor organizations turning their eyes away from blatant misrepresentation and fraud going on. Discount brokerage evolved because the american consumer were seeing thru the facade of those who called themselves professional, not performing and/or abusing their role at a cost and at a price the consumer believed did not warrant. The consumers were demanding a different model. I cannot tell you how many times I personally ran into fraud in particular with dual agency and loan servicing in one stop shopping and this had nothing to do with discount brokerages.

Trying to turn in these yo yo's was worse than trying to pull teeth. DRE wanted the public or consumer to directly complain. Some brokerages did not want to get involved with the accusations as they believed it would take away from the agent performing and being focused.

I have stated this before years ago and I will state it again......Just like in the medical profession had they policed their own the present state of health care would not be where it is today .....I know because I worked in the health care profession for 30 years and I also witnessed abuse and fraud .....I saw the exact same state of affairs when I entered real estate.......The blame is back on us directly and not on any one particular business model.......... The standards of obtaining a real estate license needs to be raised. The standard of training needs to be raised. We are seeing several real estate companies heed the call on training and have implemented and improvised their real estate training.

Having stated that I believe many consumers now in the market have realized the value of full service realtors and appreciate those realtors who work with professionalism and keep their clients interests at hand. The feedback we have been getting is reflective of such.

Discount brokerages are still around, not in numbers as before.

What is emerging is this---Realtors will need to start farming and/or looking for a stable resource of clients and actually have a plan of action for business. If a Realtor is failing today it is because there was no plan of action...

Many realtors have been spoiled in the recent years due to to influx of buyers and sellers wanting to sell.You sneezed and a buyer or seller appeared. Many have never developed a business plan.

One needs to be diversified as well. This may mean property management along with sales. Perhaps offering other real estate services .

In terms of Wells Fargo, that has not been our experience. Some burps along the way but I believe it is more in how the short sale is presented, the negotiator involved, the experience of the realtor or entity in charge of the short sale negotiations as well as the homeowners circumstances whether the loan is recourse or non recourse etc. and/or a combination of above.

We have been given recent information that Wells Fargo in fact is looking to streamline the process and move things forward more efficiently. It may still take awhile but they do have a program in progress to work out the kinks. Of course, like anything, time will tell.

Now do I think the banks have also been up to no good......YES I do.....I believe since the justice dept knocked them out of real estate prior to the actual meltdown there is still an undercurrent to see realtors fail and cause as much misery and panic as possible. PLEASE remember the banking industry tried to take over real estate period and the realtors would have become an employee of the banking industry. Not all of banking but there is definitely a bad attitude towards realtors in general.

In some REO circles we are seeing that now.....Agents are hired as employees not independent contractors and are on salaries..What I have found to be very interesting is how investors are allowed to purchase homes that are bank owned before they go on the market at a substantially lower price than the bank would have obtained if these homes had gone on the market. Is there some collusion there between asset management companies and certain investors? I thought one of the big deals was to try to recoup as much of the loss as possible?

We have successfully performed short sales in the past few years. YES we have noticed and seen short sales on some levels become harder and have become exasperated as well with some of the entities mentioned here.

BUT we have also seen by not giving up and being persistent and seeking and finding the sources of management to speak to has been bringing results. Just happened again yesterday with one of the entities mentioned. Catherines efforts paid off and a new dialogue was established with negotiator and it appears now the home that appeared destined for foreclosure is actually going to be approved for short sale.

More than ever one needs to stay focused, have a plan of action and plow thru the negativity. For some it may mean leaving real estate.

I think banks have gotten away with way too much. I can't wait until the day they get theirs, and it will happen. Everything comes full circle. Those banks forget who their support team is, Realtors, Appraisers, Mortgage Brokers, Inspectors, on and on. Banks are lucky I don't rule the country, I would have let them go out of business and probably signed many prison sentences. I guess that's my military background coming out, I'm a little more hard nosed than most.

Sidney- I just wrote a post on Tuesday about why the short sales and loan mods get turned down. If you don't mind I will post the link here so more people can read about what goes on behind the scenes and why. It was reblogged 28 times already.

First, I think many agents should leave the business and I will hold the door for them. 98% of all the buyers agents that bring us offers- I have or Nestor has to hold their hand even with CDPE designated agents through the entire process. I am shocked that I still get, what is a short sale and 70% of the agents think the bank owns the home on a short sale.

Extinction event, probably not. Evolutionary event, in coastal markets, absolutely. Sidney, from opposite ends of our coast, we see it every day up and down the streets of our towns. Our Sacramento market is saturated with short sales. I hear agents discuss the difficulties and concerns about the processing and knowledge requirements to properly handle a short sale and their fear of doing them. If short sales are out of their comfort zone, through knowledge or commitment, they should not touch them; as they are not properly serving the clients.

Luckily, Sacramento has many talented short sale brokers and agents. These are also the same agents who will still be standing at the end of this business cycle, better prepared and trained going into the future of real estate. Agents will not be extinct - there is really no other industry prepared nor willing to step in and do what we do.

Hi Sidney. In the Tampa Bay area I see that the ranks are thinning but I highly doubt that we will be extinct. At least the strong ones remain standing.

Hi Sidney - You and I share the same outlook and experience of the new difficulty of short sales. Something is going on that we don't know about. I have a good friend who works in escalations at Wellsfargo Home Equity. She told me that they recently changed their policies. What she could do for me last year has changed greatly. Even with Wellsfargo Home Mortgage as the primary and with an approval letter in hand, the Equity side is suppossed to hit up the real estate agents on their commissions and get more money from the seller.

Something is going on and I agree with your blogs that these lenders and their investors have a hidden agenda or benefit to deny short sales.

Countrywide turned BofA is a nightmare. Without my inside connections in escalations, I wouldn't take their listings either.

Keep up the great work!

I think that the banks and mortgage companies are sometimes their own worst enemies.

Sidney,

It sure is very complicated out there in the short sale land. Many lenders just seem largely incapable of dealing with what they are supposed to do. It's a shame.

Short sales are certainly frustrating, and the banks make them difficult. However, I don't think there will be a realtor extinction on the horizon, just a thinning of the ranks.

Man that is a terrible situation. What will you do now?

SEP

Sydney,

I still believe presentation is critical... the short sale proposal better be complete and fully documented. Here's one I recently got approved. This short sale proposal was submitted to Wells Fargo on 7/31/09. It was approved in 16 days by both negotiators. The seller is getting divorced (documentation provided in SS proposal), he has pulled money from his 401k for legal expenses, (401K statement provided in SS proposal) which resulted in a $14,000 tax ramification(documentation provided in SS proposal). He owed $550,000 on the 1st, $120,000 on the 2nd (HELOC). 80/20 100% purchase money. His financial hardship is a -$3700 a month insolvency issue.

The property was listed on 5/18/09. On 7/31/09, I submitted the only offer we received at $439,000 asking for 3% credit for closing costs, the buyer is an attorney with 20% down going FHA w/great ficos, and a $5,000 earnest money deposit in escrow. My short sale proposal cover letter was written to sell this buyer & outlined a detailed picture of the sellers financial hardship.

I provided area market conditions IE; active pre-foreclosure sales & REO's, TourFactory statistics, Trulia statistics, a detailed CMA, and comps from my title company to support the fact that this offer was 96% of FMV.

In my HUD1, I requested the 1st provide the 2nd with $5,000, indicated the seller would contribute $5,000 at closing, the buyer would accept $4,000 towards closing costs and each Realtor would contribute $1,000 from our commission. The 2nd received $12,000, 10% of what was owed and the deal is closing 9/30/09. No promissory note and all deficiency rights waived.

Each short sale is a fight, one that must be fought hard with the proper documentation, ethics and proper pricing. Realtors need to take a close look at whether it was predatory lending, and scrub the seller's financial hardship. Sellers have to understand their financial situation may require them to bring cash contributions or require them to seek BK assistance.

As far as the extinction of Realtors goes, those will fall that are meant to. Realtors that invest in their training and have a thrust for knowledge will stand tall and fight for those homeowners who really need a highly skilled professional representing them.

Short sales. I've done them for years. There are now too many "short sale" experts out there. Many have never even completed a transaction. I don't think we are going to be extinct, just a falling out of numbers.

Seems there will be a place for Realtors who have either the wits, patience, or a pipeline to more business -- but if someone is new, not enough funds to market, or otherwise inexperienced, they will have an increasingly hard time it would seem -- our 2 cents.

This is yet another indication that our value is in counseling our clients, not merely in matching a buyer and a seller.

Sidney,

Good morning. Cream always rises and I have been getting my Buyers some of the best Buys in years within my unique Coastal Community http://GulfHarbors34652.net

Steven Zimmerman Realtor ABR GRI / Prudential Best Realty http://retaggr.com/page/StevenZimmerman

Hi Sidney, I understand the frustration when dealing with shorts. To say short sales are forcing agents out is a bit of a stretch.

Hello Sydney

In the SE Florida market we feel the acute pain. After a large portion of these homes have been abandoned during the process with all utilities turned off, the condition of the home is abysmal. Roof issues, mold issues, squatters, removal of appliances and anything else that isnt nailed down...and additionally, you do submit the offer. The latest twist from the bank owners is, we have multiple offers and have your buyer submit the highest they will pay...they may as well auction it off.

The voluminous amount of paper work expended could kill more tress on this planet than necessary. Oh...and the best part is...timelines mean nothing!

For grizzled vetrans who have lived through these cycles and are prepared economically will survive. Since the market has also been upside down for a two year period prior to the second quarter of 2009, some realtors will go the way of travel agents....they will become extinct!

Love that picture! I'm dealing with a supposed short sale expert on behalf of my buyer. Having closed a bunch of short sales myself, I know he is far from being an expert. That photo made me think of myself every time I have to speak with him, lol.

Only the tough will survive although they may pass through a few bi-polar moments!

I don't think we'll ever be extinct. Let's face it, if we have to give up trying Short Sales, we'll end up with more foreclosures to sell. So less money for the banks but we still win. Sadly the losers will be the home-owners.

TERRY,

Boy! Did we touch a nerve? I agree with most of what you said but I also think that most agents are little naive. We've been hearing from Lenders for the past three years that they are getting the process streamlined and more efficient. That may be so, but there a two things that no one mentions about those improvements. I don't think the improvements are necessarily going to mean better results for agents...it could just mean that they can do the work with less people and bring down their own costs and the second is that they can be improving their methodology to approve these Short Sales and will now be more pro-active as to finding ways to extract more from the homeowners before they approve...

Lenders are about making money at any costs, is there still a doubt about that? Like I've said before, we work with a homeowner but they work in numbers and although it may seem their decision is crazy...in the long run they will make a certain amount and the rest can fall by the way side...Let me put in terms we may understand better....Most of us were taught that if we want a certain number of sales, we would need to make a certain amount of contact with the public, get a certain amount of meetings, convert a certain amount of those meeting into clients and then close enough sales to meet our goals. Same premise, they can request the same thing from everyone knowing that a small percentage will comply with their demands and everyone else can just Foreclose.

DOUG--I've lost faith that they will get theirs...All the government programs have been voluntary, they have not be forced to help anyone even though they caused most of the hardships that exist in the economy today. We ALL have to do what they want, to a certain extent, or the deals don't get done.

The entire industry will not be able to cope with the stress involved in trying to close these Short Sales...If you take a poll I would venture to guess that more than half of the agents would tell you that they won't deal with BofA...and they are the BIGGEST holder and servicers of these toxic mortgages.

NESTOR--There are many frustrated agents out there that just need a closing in order to survive to the next month. They need to get something done and with all the different techniques being practiced it is difficult to know who knows what they're doing and who doesn't. That makes most a little frantic and we should all have an understanding of that and try to be a little more patient towards our fellow agents.

CATHY--You may be right, there is no one ready to step in, but we are also not as successful (as an industry) when it comes to getting Short Sales closed. A savvy agent might find a way to get things done but the bottom line is that the Lenders are in control of what gets done and what doesn't. Lately, it seems they have decided less is better. This country used to be No.1 at many things...today, we don't have the same standing...without a careful view of the reality we are living it is possible that we may go away...Lenders already control who gets the REO's..there is a large segment of the Realtor population that is already working FOR the LENDERS

LANA--We have a few more years of this kind of market...Even some of the strong will fall, I fear. I know many very good agents in my area that have had to cut their operations, get a job or break up their teams just because there wasn't enough cash coming in.

SATAR-I hope more people start to be skeptical as to what the mass media and the Lenders are saying. It seems too many want to believe everything will be fine without taking a hard look as to where we may be going...did we make that same mistake from about 2002 to 2005?

SYBIL, ESKO, CHRISTINE--don't sell them short..they will not willingly lose money for over three years now. There is a gameplan and they are making money...we just may not see it clearly now.

JAMES--What can we do? Keep trying to revive the patient until they are declared!

I don't this really has anything to do with us as Realtors its simply the big banks arrogance banks that should of not been bailed out they lose so much more money when it goes to foreclosure but still they do it. this has happened to me as well if the banks did not get that bail out money they would be doing what ever they could to minimize losses instead they have this too big too fail and have an air about them that they will just get more money from the govt. like AIG.

this is just the current market but it will pass in time possibly year or two and there will be less and less of those short sales.

GARY--The presentation is critical and I think most that pay attention to that will get their approval. The problem I'm finding is with the terms of the approval itself. They request substantial cash, won't budge on the reporting language and they also still want the rest of the amount owed...basically, it seems they want a Foreclosure because most of my clients feel they are getting the same outcome. There is no negotiations on those points and they more or less tell you to take it or leave it. Many homeowners will just walk away or not even try a Short Sale. Even many agents stay away from them.

With all the time and expenses invested in these negotiations, how long can most last? Not long, unless you have a high volume.

(NOTE--I understand that a Short Sale and a Foreclosure are miles apart, please don't send posts with the differences. I was merely stating what the client feels when they are faced with unreasonable demands from the Lenders.)

Short sales..what an oxymoron! Quite frankly the short sale/foreclosure debacle defies logic.

What can we as Realtors do about it? For one, let's just stop putting for sale signs up when the homeowner nor the agent never even made contact with the bank! Perhaps we should grass root the issue and use board dues to collaborate and hire a legal analyst; we need to blow the horn on yet another crisis of the banking/mortgage industry.

Realtors extinct? Never happened, it's called life...just sold a cute bungalow to a nice young couple due to have a baby, after a few more they'll need a larger home!

Great post!

BILL,

There are places in the country where this is more visible than others. In my area, it is abundantly clear that many, many agents have left the business. License renewals are down and there are two local real estate boards that are having trouble just paying the bills. Also, NAR has reported that the median age for real estate agents is 54 years old and the experience level is 16 years....that shows that the old guard is still surviving but that there is a dearth of new blood coming in...what happens when the old guard starts retiring and we have less agents coming into the fold?

CORINN--Who picks the agents that do the REO's? Who's to say they won't just create a system like the appraisals were the business goes to a small group and put the rest out to pasture. The Appraisal industry is going through this now with the HVCC program...

GREATER--Don't be so sure that they are losing more money by the properties going into Foreclosure. Their business is to MAKE money and they will not be doing something that loses money for the long term. If they are being difficult with the Approvals then there is a reason for it.

These people would rather have nothing than something? They should learn to cut their losses.

Realtors will not become extinct. There have always been people entering the business and leaving because it's just too much HARD WORK. They didn't expect to have to work, for heaven's sake!

I was just speaking with a rep from a local big bank and they said that when they took over a failed bank the fdic took the loss. I don't know if they took all of it or not, but the new big bank hasn't had to worry about the short sale / foreclosure mess because the fdic took care of it. Their words not mine.

So in other words REO's are gonna be hotter than ever !!!!!!!!!!!!!!!!!!!!!!!!!!

I agree that the ranks of agents must be thinned simply because there aren't enough transactions to go around. In my market, the number of closed units is down 30 to 50% over last year. This means that there are a lot of agents who will not have enough transactions to make a living. The discounters seemed to have thinned out the most here, probably because they don't have enough volume to make up for the small commissions earned on each transaction.

Like Katerina, I'm ready to hold the door open for the part-timers and unprofessionals to leave the business. We agents won't go extinct but it will definitely be survival of the fittest. I was surprised recently to see a chart showing the average age of realtors going up over the last five years. To me that indicated that the old-timers have built a business over the years that enables them to survive the downturn.

It is awful what your clients are going through. I have been working with an attorney here in New Jersey on Loan Modification and My experiences have been very much like yours.

I am one of the ones that actually has an aggressive and involved attorney to work for. Regardless of working directly for an attorney with the modification... I find myself in these tennis matches. Wells has been the worst offender. I just found out on Wednesday that Wells after turning us down three times is finally helping my client. Through this entire process my client and I took turns wanting to give up but we had to push through.

From my perspective we can't afford for agents to go extinct. Real estate is a team sport and without realtors I believe that clients will begin to suffer. I remain hopeful and prayerful that all will turn around over time. My business plan revolves around me building recriprocal relationships with my real estate partners. I pray every day for our mutual success.

I harken back to my days on Wall ST (actually Broad St.) in the 90's

Stock brokers are going extinct. The future is online Discount brokerage houses

I laughed than, I laugh now. All this will do is weed out the dead wood

Wealthy are too busy being experts in the field they specialize in and make their money in. The rest of america, for the most part are not sophisticated enough to handle the Real Estate Transaction. While the weak may fall by the wayside, the strong will thrive

There have been many comments on this Post which is Excellent by the way. I dont see an extinction of Realtors. However we were sitting around the office right after the melt down started. You know, the day everything stopped. Anyway we were discussing the market and economy and truth be told WE ALL SAW THIS COMING!!! The bubble had to burst, the arms had to hit. This current climate has caused the "shister" mortgage people and the "used car salespeople" of Real Estate to bow out. The true, honest and passionate members of the Industry Will prevail.

Im no Realtor(R) yet :-) but I would think that the short sale thing has got to be a bit trying. REO's are the new Shift from what I am seeing. I graduated RE School in May and we had a class of 30 in that course. No extinction here. The Heard Will Thin and The Nourishment Will Be Abundant.

I know how it can be dealing with the lenders......take a deep breath and re-boot. You cant fix stupid

As a short sale specialist with a team, what might drive me out of the business is not Countrywide although that is a close call. It is the owners who have so little appreciation and gratitude at the work you have to do on theie behalf. As they say, no good deed goes unpunished.

Sidney- That is me, Katerina who made that comment. Believe me, my kids know more about short sales than most of the agents in our market. I do have a lot of patience and that is why I train them for free so they can keep their buyers in the deal. This is not just about short sales. It is about basic contract understanding, knowing what is confidential and what is not. If you are running a business you should be staying on top of your game. If not, then you may not be cut out to be an entrerpreneur. My biggest pet peeve is agents who treat this as a job not a business. I may be sounding harsh, but sometimes tough love works better than enabling incompetance. Katerina

an example of blogging just to blog

This is a mad mad mad mad world. The banks are nuts. there is no logic in short sales.

Just like a virus that is 100% deadly will cause its own extinction if it does not mutate to a form that does not kill its hosts, so will short sales either get modified to work better or they will become extinct as fewer buyers and their agents will tolerate them. They have the power in the end.

There are still a lot of other sales out there that are REO's or conventional. As the market recovers, and it will (Remember the late 70's?) short sales will either become easier to close or they will fall to the wayside.

I suggest that those who think that real estate agents are a dying breed get out of the business now. Only an insane person would stay in a business that will cause them ruin. However, the rest of us that know that this cycle will also start to move more into the positive range will be happy to pick up those customers that you will no longer be serving.

This is still going to be a person-to-person business. People may want to search from home on the internet, but when it comes down to seeing those homes and writing contracts they will still want a trained and experienced professional working with them. Regardless of how many ads we see on tv about how "I saved $16,000 selling my own home" there are many many more sellers out there who are complaining about doing it that way. Of course, those will not be on the ads.

Nope Realtors will always be here. Banks will always be here. Mortgage brokers ... that is a different story.

SEP

Sidney, the banks are like children: if you offer them one candy...they want two and so on. Don't feed the monster. Wait it out and you may come out ahead

SEP

Amazing isn't is that we hear all of this rhetoric about how THE BANKS...Want to Work with the PEOPLE! Did I say Rhetoric??????? I'm sorry I meant BS! Joy

SEP

GENE--You can be sure that if they are handling these things the same way they have for the last 3 years that they are making money, we just don't see it. I have thoughts on how they are doing it and I have several other posts explaining how. They are not losing as bad as we may think.

MARTE--There are plenty of agents working hard but the closing are far apart because of the Lenders control of the outcome. There are many more leaving than coming in, and the ones coming in will leave much quicker than in the past.

INTEGRITY--Are you speaking of OneWest...that is a good example. When they were IndyMac everything went well and working their files was almost a pleasure. Now that they are OneWest it has become the same nightmare it is with the other Lenders. To me, that means that Short Sales is not their priority.

MICHAEL--There might not be an explosion of REO's. The Lenders are trying to find ways to control the amount of inventory in order to stabalize prices. They are behind the big push to lease the property back to the homeoners AFTER they have been Foreclosed. That helps keep the property off the market until the Lender decides when to sell.

CAROL--You're right, the average age of Realtors is 54. That means that the younger agents are leaving and there are few that enter and stay. What happens if that trend continues? There has always been peaks and valleys in real estate. The difference is that today the sales are being dictated by the Lenders and their approval of Short Sales. That is not a natural swing..it is an outside force that can gain control of the market and manipulate it to their advantage.

DANIEL--Business Week has an interesting article on the death of the Stock Broker and their evolution of becoming "Financial Advisors." No longer are their calling to seel you stock but are now getting involved in insurance, will, and any other vehicle that will give their clients a financial plan that is not based solely on Stocks....the stockbroker, as you remember is dead. As a matter of fact, even the brokerages have changed their titles and no longer have stockbrokers but Financial Advisors, Financial Associates...ect.

Sidney,

I would not characterize my market here in Charlotte NC as dominated by short sales. In fact, I haven't listed or sold a short sale in the last two years. Prices have declined, yes, but we didn't have the huge run-up in prices that you did in Florida so we still have many/most sellers with equity in their homes.

The reason that I see agents leaving the business is the severe decline in number of units/transactions. There simply aren't enough transactions for every licensee to make a living.

SHERRIE--I agree with your thoughts, but I think Short Sales are giving real estate agents an even worse name than we had in the past. Agents submitting multiple offers, leaving sellers high and dry and into foreclosure, telling their potential clients they can't do anything to avoid a foreclosure...ect Real estate agents are not separating themselves in this mess. I think there are too many that just have eyes set on the cash. I hear many clients avoiding short sales depending on the Lender. What do you think that says to the public? If I can't make money I won't help. I have done Short Sales and not made a dime because my commissions might have to go and pay for something no one else is willing to pay. My goal is for that homeowner to avoid a foreclosure...and sometimes that means a sacrifice on my end. How many will do that? How many can do that?

JOE--Unfortunately, most don't see what we do. They have the frustration of nothing happening but they don't have the insight of all the frustration and fight most of us do on their behalf. After the deal closes, I see a much better grasp as to the situation and more appreciation for reaching the goal.

KATERINA--I spoken to you on a couple of occasions and you come across as if you know everything and everyone else is dumb is not the way to go. You need to use your knowledge as a base of helping other reach the level you think you have reached. I know something for sure...if you didn't have the people you have working for you..you'd be lost...How's that for tough love.

NO MORE...--So I guess you are posting just to post?

JOHN--You may be right, however...this country is fast becoming a country of bad credit scores. The Lenders are not willing to turn this around quickly, they are more decided to stretch this out and make a larger profit from the carcass of what was once a healthy market. The turnaround in the 80's was driven by a healthier economy....this time around the turnaround will be dictated by the Lenders and the unscrupulous quest of profits. There was a time when we all thought that Appraisers were going to be here forever..they have a highly specialized vocation....but the Lenders are going to do away with their independence now that the HVCC is going to take hold. They will be employees getting a set fee for their services, instead of running their businesses.

JOY--You have the best post! Amen.

CAROL,

That is a contributing factor. It is not just the Short Sale infested areas that will thin out the ranks...the economy, job losses, cuts in pay, credit score deterioration, affordability, there may be more homes standing that there are buyers in the country. I won't be shocked when the brokerage model comes about that will turn everyone for a loop. In the hey day it was the discount brokerages that created headaches for many...who knows what tomorrow may bring...but one thing seems to be true, most agents are to comfortable in their belief that nothing will change. To me, that is a huge mistake.

SEP

I was successful in closing a short sale 1st lien and 2nd lien with CitiBank recently. It was frustrating because of never being able to speak to the same person. You had to stay on them everyday. The only major concern is that the sellers understand their consequences, there will be some. That is why E & O claims for short sales are soaring.

NOV

This business was DOA when the boards starting putting listings on the internet. With the internet, and an escrow officer, who really needs a real estate professional anymore? Not to knock the advantages to having a true professional, not a newby, or a wanna-bee, but really, the access to the listings was the hinge on the door.

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