I met a fantastic bankruptcy attorney a little under two years ago. He was moving back to the Fox Valley area, and he needed a small office space for his law practice. I was able to find him a comfortable space to hang his shingle, and we developed a friendship.
Last year, I got a call from him to do a comparative market analysis for one of his bankruptcy clients. They were preparing their case for bankruptcy, and they need a fair market analysis of their assets.
The attorney had been using an online service to determine home values, and when he had presented their analysis to his client the trouble began. The online analysis cost the client $100 and it was a one page "form." It insinuated that they had searched local tax records and analyzed the market, but the results were far from accurate. It came up with a value almost $80,000 over what they neighborhood would support, and it said the St. Charles market was a vibrant and growing market. While values have not depreciated much in the area, the St. Charles and surrounding communities are far from "vibrant and growing."
I drove by the house, reviewed local comparables, and assembled a multi-page report for the attorney for the same $100.
The attorney says that when the judge asks about the client's home value, he shows them the rofessional looking report and rarely questions the findings.
Since that initial inquirey, I have performed close to 20 comparative market analysis' for him, and he has referrred me to another attorney. I am trying to assemble more attorneys to work with, and I hope they take me up on it. If they continue to use online services for home values, they are doing a big dis-service to their clients.
PLEASE NOTE: The CMAs must be "arms length." You cannot have a relationship with the client yourself. You cannot attempt to get the listing if it is necessary to sell the house. You get paid for the service, knowing that there is no further anticipation of compensation.
Finally, the current economic conditions have forced many people to explore bankruptcy, and it is so important to select someone who will look out for their interests. Before formalizing my arrangement with this attorney, I worked with a couple of people filing bankruptcy through some legal "shops." Both have had difficulty getting their cases closed. A process that should typically take weeks to conclude have been going on for months. One contact has been trying to get their bankruptcy closed for 10 months and counting. If you would like to get in touch with my attorney, I would be happy to pass his contact information to you.
As I titled this entry, Bankruptcy Attorneys are in the black. My client met his 2008 production goal in September, and I have performed 6 market analysis' for him in the first two weeks in 2009. He is a great resource for your clients in trouble and to help you understand this aspect of our real estate environment.