Why is the National Association of Realtors allowing banks to give Realtors the shaft on short sales?

By
Real Estate Agent with Sand Dollar Realty Group, Inc. BK627826

Yes this is a rant. 

I simply don't get this.  By now nearly everybody has gotten the word.  Short sales stink.  The process for so many homeowners, buyers, Realtors, title companies, mortgage brokers, etc. is often unbelievably long, frustrating, and painful.  And even when you do get the short saling lender to finally come back with a reply months later, the buyer has often given up and disappeared.  Why aren't the banks forced to use some of their TARP money to expedite short sales?

  

Back last Fall, our local Mid-Florida Regional MLS that covers some 13+ counties in Central Florida became part of a "pilot program" with Fannie Mae and Countrywide Home Loans regarding short sales.  Many properties were cherry picked by Fannie Mae into a streamlined program to expedite the short sale process.  The process includes a pre-approved price and a 30 day or less processing time. 

So what is the result so far?  Out of a total of 209 properties, as of today 43 of these properties have sold according to our MLS. Another 118 are on the market either active or waiting for the short sale to be approved.  And yet another 48 have either expired or been withdrawn. 

So only 20.6% (43 out of 209) of these short sales that were already price approved and all set up for an expedited streamlined closing actually have made it to a closing.  Granted this search is of the entire MLS area which covers several thousand firms.  And I know what the problem is because I have one of these pilot program listings.  The pre-approved price is way too high.  Real simple yet the bureaucrats still don't get it. 

Now compare that to the total short sale listings in our MFRMLS.  There are presently 25,088 active / pending listings that indicate they are in a short sale / 3rd party approval situation.  Since January 1, 2009 there have been 3,748 closed short sales, 3,418 expired, and 3,390 withdrawn.  That puts the chance of getting a short sale sold at 10.5% (3,748 out of a total of 35,644).  Wow that really stinks!  Granted it means the pilot program does give you twice the chance of getting it sold, but still it stinks!

Fortunately 20 of these SOLD short sales this year were by our firm, but still we need to see many more close. Many of our Realtors have taken lots of short sale training and I myself got a CSP (Certified Short-Sale Professional) certification.  But even with all that, there is only so much that can be done by us.

So my beef is ... where is the National Association of Realtors in all this?  While all these banks have their handouts for TARP funds, where is NAR?  Now I do realize that NAR did lobby Washington last Fall to do something about streamlining short sales, but come on.  Washington is doing little to nothing about this huge problem.  Instead they are spending money on all types of wasteful government projects and not going after the root problem to the whole economic meltdown.

With all the RPAC dollars given to NAR, why can't they get something done about these short sales???  Nobody seems to be able to answer the question, and NAR has basically been silent on the political side of this short sale issue ever since the Obama administration took over. 

Granted I haven't heard anything out of Congress or the White House either on this short sale issue.  They are trying to push for mortgage modifications, but come on let's be realistic.  If you are behind on your payments and the value of your house is 50% of what you owe, no mortgage modification plan is going to help out for a long-term arrangement unless the principal balance gets reduced to the current home value.  So just allow the sucker to short sale so the homeowner can move on with their life. 

Mr. President, Senators, Congress, NAR, where are you?!?!?

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(Copyright © 2009. Sand Dollar Realty Group, Inc. All rights reserved.)   Subscribe to my blog via RSS feed.

Rob Arnold - Your full service and investor friendly Realtor ® in Orlando and Central Florida.

ABR, CPL, CRB, CSP, GRI, Managing real estate broker, Notary Public

407-389-7318 / 1-877-389-7318 www.SDRhouses.com   We Buy Houses Florida

We sell foreclosures, short sales, and bank owned REO properties throughout Central Florida. We sell and list Central Florida real estate and Orlando real estate. Free list of foreclosure and short sale houses available.

I also provide flat fee MLS listings, For Sale By Owner, and menu-based services in most parts of Central & South Florida, the Space Coast, and the Treasure Coast including Orlando, Winter Park, Maitland, Ocoee, Winter Garden, Apopka, Altamonte Springs, Casselberry, Longwood, Winter Springs, Oviedo, Lake Mary, Sanford, Deltona, Debary, Deland, Mount Dora, Eustis, Clermont, Kissimmee, Winter Haven, Lakeland, Tampa, Sarasota, Bradenton, Miami-Dade, Fort Lauderdale, West Palm Beach, Port Saint Lucie, Melbourne, Daytona Beach, Ocala, Gainesville, Palatka, Jacksonville, Volusia, Brevard, and more.

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Ambassador
1,950,207
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

Another great example that NAR needs new leadership. . they have just started doing something about short sales this year. ..I was doing short sales two years ago

Jun 28, 2009 10:28 AM #1
Rainmaker
755,107
Thom Abbott
MyMidtownMojo.com |770.713.1505 | Intown Atlanta GA Condo Living - Atlanta, GA
Midtown Atlanta GA Condos For Sale

Don't even get me started on all of this! Why is it that there is a guideline out that banks CANNOT cut the agreed upon commission in a listing agreement if it's a Freddie/Fannie loan, yet every single bank does it at the drop of a hat? We as agents have to work our butts off, but at the last minute, "if you want this deal to work, you will have to cut your commission?" Just try walking into a bank and telling them you won't pay their monthly charges, etc. They will kindly show you the door.

As an agent in my office proclaims....real estate is now The Wild Wild West! You just never know!

Jun 28, 2009 10:42 AM #2
Ambassador
589,265
Julie Chapman
DR Horton - Lakeland, FL
New Homes Sales Lakeland Florida

I say that the NAR is replaced by a national organization headed by officers voted in by all of its members with a national mls and no local boards. Spend the money on lobbying.  This organization won't own Realtor.com or have other interests that conflict with our needs.

Jun 28, 2009 10:53 AM #3
Rainmaker
409,236
Karen Monsour
Coldwell Banker Fort Lauderdale Beach - Fort Lauderdale, FL
REALTOR, SSRS - Sells FL Waterfront, Short Sale Expert!

Don't get me started either. I have 4 short sales in the works.  One has been approved (since mid-Feb).  The cash deal with Countrywide has been a $275K cash offer on a $285K TH...Since the first week of Feb...One is a month old, One is three months old.  Countrywide cut the commission on us...

The banking situation is absolutely ludicrous.  Where is all that TARP money?

Rant away...we're all behind you!!!!!

Jun 28, 2009 10:54 AM #4
Rainer
302,425
Terry Haugen STAGE it RIGHT! 321-956-2495
Stage it Right! - Melbourne, FL

Rob, I have  my own opinion of NAR and it isn't pretty.  I sometimes think they have been bought by the banking corporations.

Jun 28, 2009 11:08 AM #5
Rainmaker
400,669
Hugh Krone
Weichert Referral Associates - Hamburg, NJ
Realtor, Sussex County NJ

Rob, Thee NAR is as intouch with the needs of realtors as congress is to the needs of the people.

Jun 28, 2009 11:36 AM #6
Rainmaker
257,428
Sandra Paulow
Aspen Properties, Inc. - Pinetop Lakeside, AZ
REALTOR, Associate Broker, GRI, SFR

Short Sales are the bain and the blessing of our existance right now.  If we don't particpate in them we starve, if we do, we violate ever ethic, law, statute and rule we ever learned.  I personally have not done one yet but have one listed.  I dread the hassle once I get an offer on the property.

The Bank Owned properties are almost as bad.  They do what they want and it doesn't matter what we as Agents are supposed to do under our State Laws, they do what they want and we take the risk. 

I know these are the situations we have to deal with in this market but can I say, Oh for the good ol' days when we could do business the right way.

Jun 28, 2009 01:03 PM #7
Ambassador
2,844,074
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Can I say the NAR and lobbiest were maybe behind the wrong candidates?  Of course I think lobbiest should be outlawed altogether, but that's a entire different rant.

Jun 29, 2009 06:10 AM #8
Rainmaker
300,275
Heather the Realtor Orlando, Lake Mary
LemonTree Realty - Orlando, FL
First Time Home Buyers, Bank Owned Homes

I would love to see the short sales go away and either remodify these peoples loans who can afford to stay with a remod or foreclose and send to reo status and move the inventory.

Jun 29, 2009 06:38 AM #9
Rainer
302,425
Terry Haugen STAGE it RIGHT! 321-956-2495
Stage it Right! - Melbourne, FL

Rob, I'd like to add, my son tried for over a year to purchase a short sale, any short sale.  After months of waiting to hear if his offer was accepted, he'd find out it wasn't.  I'm not sure why he continued to go that route maybe the attractive advertised prices.  But the bottomline is the banks are not interested in selling "short" if they think they can do better.

Jun 30, 2009 12:49 AM #10
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Rainmaker
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Rob Arnold

Metro Orlando Full Service - Investor Friendly & F
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