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THE UNDERBELLY OF THE SHORTSALE AND FORECLOSURE WORLD - A REAL ESTATE AGENT'S PERSPECTIVE

By
Real Estate Agent with Charles Rutenberg Realty Inc. 516-575-7500 NRDS ID#641625055

THE UNDERBELLY OF THE SHORT SALE AND FORECLOSURE WORLD - A REAL ESTATE AGENT'S PERSPECTIVE

 

I never planned to get involved in short sales and foreclosures. My preference was the senior population, hence my SRES designation. Early in my career, I signed on with a referral company. The leads I received brought me into contact with the seedier side of the real estate business.

I met some really great people who just didn't have the income to buy more traditional properties, and justifiably, were attracted to the rock bottom prices of distressed homes. Who wouldn't want to get a good deal? For those with only 100K or so to spend on a house in New York, a short sale or foreclosure was truly the only option.  Jill Sackler, NYS RE Agent, SRES

From time to time, people would tell me that they were successful in purchasing one of these investors' specials, and I think it's possible to get lucky. However, my experience with Long Island's rather large inventory of short sales and foreclosures has proven to be a real test of perseverance and endurance.

First-time homebuyers are always unaware and are often disillusioned to find out that the low asking price listed is intended to generate multiple offers. Especially in the lower price ranges, houses will almost always sell for full asking price or more and, of course, cash is king.

The bank will wait to make a decision until there are several offers on the table. Prospective buyers need to be counseled to begin with their "highest and best." There may not be an opportunity to put in a higher offer. This purchase practice differs from the customary negotiation process of conventional housing. Unfortunately, it is usually not until they've lost several properties, loads of time and experienced heartbreak that they begin to understand this concept, Even so, in desirable neighborhoods, investors will win out every time.

Even without tenants, these properties can be almost impossible to get into. Less than reputable agents will refuse to call you back, hoping you'll get disgusted and give up. Obviously, if it's a house in halfway decent shape, dozens of people are going to be interested. The agent knows the property will sell quickly and is probably saving the house for one of his own clients in order to double-end the deal.

I had one foreclosure specialist tell me that purchasing a property in Nassau County, a very nice area within reasonable commuting distance of New York City, was simply not possible. Assuming there is nothing wrong with the listing, which can cause even investors to lose interest (i.e., title issues or unusually high taxes) there are always buyers ready to snatch it up quickly. This professional further stated that, in order to be successful, I needed to go to Suffolk County, where my chances of finding a distressed property for my clients was much greater. With the sheer number available, and their even greater commuting distance from NYC, Suffolk County's short sales and foreclosures are considered less desirable.

Just as frustrating is when these super deals are bought so quickly by those in the real estate business,  they have not even been advertised to the general public. This certainly smacks of insider information and in other fields, would be considered a problem and against the law.

Corporations advertise properties with special 888 phone numbers to call. At these seemingly shady places of business, it is impossible to find someone to speak to. Even the reception area is set up with voice mail. Leaving 25 messages won't help a bit. They have no intention of getting back to you. The listing agent's name is fictional. If, by luck, someone answers your ring or you creatively find your way around the labyrinth that is commonly known as a phone directory, be prepared to hear that no one exists by that name. If you naively point out that this is the name listed on the MLS, you may very well be asked, as I was, for the number of years you've been working in the real estate business.

There are agents who purposely give you the wrong code to a combination lockbox and show no remorse whatsoever if you happen to complain about the frigid, rainy or snowy outdoor temperatures. Mentioning that your clients include a young couple carrying a baby and Grandma who can not stand for long and periodically needs to use the wet steps as a resting place elicits a very weak apology. Other agents make you participate in a treasure hunt just to get inside the home. You'll need to dig up the Sentri lockbox buried beneath the oak tree in the backyard to find the piece of paper on which the sought after combination is written for the second lockbox which was placed on the front door.

Tenacious to the bitter end, I'm surprised I haven't been able to sell more of these homes. But the system is difficult to penetrate and unless I aim to spend my days on the courthouse steps, getting to know the regular investors at auction and finding my place in a system in which I was warned "I'd be eaten alive", I'm not likely to have any more luck in the future. I suppose I'll just concentrate on my niche.

 

Posted by

Jill Sackler

 

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CHARLES RUTENBERG REALTY INC.  *****  516-575-7500  *****

 

ABOUT THE AUTHOR: Graduate REALTOR Institute 

Jill Sackler, NYS Real Estate Broker Associate based on Long Island's South Shore
 
 

Sunny Isles, Fl 

       Specializing in Lifecycle Real Estate 

"When your family doesn't fit your family home, I can help."
 
 
 
 
 
   

   

©Jill Sackler 2010
 

 

Comments (13)

Ron Marshall
Marshall Enterprises - Saint Michael, MN
Birdhouse Builder Extraordinaire

First of all, you have some very mean and nasty agents there.  And, I might, if I were a realtor, talk to their brokers about their conduct. 

That aside, staying in the trenches (meaning your niche) and then learning the other side of the business, perhaps from someone in your office willing to mentor you would be helpful. 

I know that is how one of the agents I work with learned her skills.  Just a suggestion.  I know how disheatening it can be....or I can imagine it.

Sep 18, 2011 11:42 AM
Sheila Newton Team Anderson & Greenville SC
Berkshire Hathaway HomeServices - C. Dan Joyner - Anderson, SC
Selling the Upstate since 1989

I would suggest that you take the CDPE course.. I think you would find it very helpful

Sep 18, 2011 12:58 PM
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

Foreclosures are certainly not the most desirable part of the business.  You really need to be in the right place at the right time.  Short sales are also not for the faint of heart, and we can't always avoid those when  sometimes they dominate an area.  This has become a tough business.

Sep 18, 2011 01:39 PM
Cindy Westfall
Premiere Property Group,LLC Portland Metro & Suburbs Oregon - Tualatin, OR
ABR,GRI Your Tualatin & Portland Metro Real Estate

Hi Jill, Short sales and forclosures are not the easy pickins that many clients think...or like you said, if they are in any decent shape they will either sell for more than the asking..so when you get those clients the continually want to lowball on these..it can be a futile. It certainly does sound you have lots of agents out there that are not willing to work in a good co-op fashion. Yep..concentrate on your niche where you'll be happier in the long run.

Sep 18, 2011 04:01 PM
Not a real person
San Diego, CA

Sounds like a little ranting going on! That's alright. This is a great place to rant because we all support you.

Happy Monday!

Sep 18, 2011 11:56 PM
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

Ron - I should have clarified that these agents are most definitely not from big well-known companies where it would even be possible to make a complaint. In my area, well known franchises are minimally involved with distressed properties and, to a large degree, all reputable offices are on the up and up. No, these are one or two man operations that set up and disappear just as quickly. They often come from the city where real estate is a whole different animal.

Sep 19, 2011 01:09 AM
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

Sheila - If I were to pursue it, I would definitely take your suggestion. CDPE would be helpful.

Jane - It is a tough business and they really don't dominate my area. It's just that being associated with a certain referral agency gave me an introduction to this market that I might not have had otherwise. I got quite the education over the last couple of years, and I'm thankful for it.

Cindy - It's great to have a niche but it's also good to go outside it and have broad knowledge of the entire industry and the various markets that make it up. I know that this was not wasted time, even though it didn't necessarily translate into dollars, I can speak knowledgeably about this market.

 

Sep 19, 2011 01:22 AM
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

Russel - Sounds like a rant, really? I was going more for Consumer Education à la Katerina.

(Notice my accent mark!!) Thanks a bunch.

Sep 19, 2011 01:28 AM
Joshua Harley
Fathom Realty - Plano, TX
CEO, Tech Geek, Innovator, Disruptor, US Marine

Apparently about 35 a month are closing in LA - I think that is pretty remarkable, because as you point it (it's TOUGH!

Sep 19, 2011 02:16 AM
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

Joshua - It is tough. Thanks for stopping by.

Sep 19, 2011 02:23 AM
Cindy Westfall
Premiere Property Group,LLC Portland Metro & Suburbs Oregon - Tualatin, OR
ABR,GRI Your Tualatin & Portland Metro Real Estate

Hi Jill, that's the great thing about what we do..each and every transaction is always a learning experience in one form or another, and like you said, you have inside knowledge of how these work. Whether it's a segmant you want to go after in your marketplace..well, that's where you niche helps. That said..we go where the business is..and right now, these are a huge segmant of where the business is.

Sep 20, 2011 08:52 AM
Thomas McGiveron
BangThePhones.com - Sayville, NY
Thomas McGiveron Lic. R.E. Broker Associate

Good stuff.

Sep 28, 2011 03:00 PM
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

Cindy - It really is hard to avoid that segment of the business.

Thank you so much, Thomas.

Oct 01, 2011 12:31 PM