For years, I was one of the few REALTORS that did REO in my area. There is only one REO specializing company, and I started locally with them. Short sales, bank repos, it all took a bit more skill than the rest of the agents in our market, and I finally decided to stop doing them.
Still, every year about 25% of my sales were REO.
Then the world fell apart. My friends Cindy Bond and Merry Brown Hayes have both related this is the hardest they have ever worked in real estate. I am not complaining. I had sales, was ranked 12th with my company, and was in the top 20% of my market. I would have done even better, but had a junior partner and I let him take a percentage of my closings.
There are new guidelines put out by the banks concerning REOs every week. Getting loans to go through has become a crap shoot. Most transactions have at least several issues and problems to overcome in the last two years. There is almost always one or two insurmountable obstacles.
Short sale nightmares abound on YouTube and ActiveRain. Only a percentage of all short sales go through. Last figure I read was 31%.
Even once homes get past the foreclosure and get on the open MLS, these often go unsold, but depress the market while they are listed. They then go to auction, fetching far less than their already discounted listing price.
What does the bank care. They have already, through their convoluted accounting measures, written the property off. So, once it gets sold or auctioned off, those sales go on their books as virtually pure profit.
It is not just the banks as the evil side of things. Appraisers are under incredibly stringent new guidelines. These appraisals can kill a deal in no time at all. HUD guidelines are not meant to overcome badly abused properties, making most of the homes that are at bargain-basemement prices only available to cash buyers. Yet, they depress home prices of properties that are fully financeable. Bad economic model.
What's even worse are plumbers, well inspectors, and many, many others practicing real estate, writing opinions and more that affect transactions, thinking they understand this new market and are oh, so willing to participate by involving their thoughts on paper. Of course, in the state of Idaho, we have a statutory duty to reveal all, and often we have to have multiple plumbers, multiple appraisals, muliple inspections, while the deal dies.
The most heinous of all is the rampant practice of law without a license.
It is not easy being a real estate agent these days.
We are the new bartenders, listening with the skills (or lack of them) of a psychoanalyst, to the multitudes of problems and issues of our sellers and buyers. Bankruptcy, divorce, and all the ailments of the bad society and economy are the ear-bending sessions we endure for our clients. It can be heartbreaking.
The results have been REALTORS who don't know what they are doing, less due diligence, and a mass exodus of agents from the field. In our area, fully one third, over 100 agents, did not have a transaction in 2009. Another third had only one or three deals, for less than $500,000 in sales, and the rest graduated up from there. About a quarter of our local agents have not renewed their licenses.
And things are not getting easier.
It is hard to relate to people how much more we are doing now than in previous years, but if they read this, they might understand.
If you are still in real estate, congratulations, and...my sympathies.
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