In cities where foreclosures are on the increase you'll find agents clamoring to become an REO listing agent.
They envision the possibilities: Offers galore and multiple pendings.
However, how does one break into the business?
The reality is this: There are very few agents handling the vast majority of bank owned listings.
And their responsibility is not completely rosy.
Among the issues these agents face are these:
- They may be required to pay for power, water, plus light maintenance and fix-up.
- They will need to do a great deal of due diligence to price, submit, re-price, counter, etc.
- Keeping all the properties processed quickly is a must... slip up and you lose your listings.
- Say hello to long hours and mounds of paperwork.
- Other agents may complain about you and call you a monopolist.
I realize many agents may see the above list and say, "I'll gladly accept that challenge. Sign me up."
Around the country, especially in the high-foreclosure cities, there's a rumor mill. The rumor is this:
"Pre-approved short sales are on the way."
Currently agents will short sale a home if the owner owes more than the home is worth and is unable to keep up with the payments. Market forces dictate this. If the house meets the criteria, the agent and seller fill out the required paperwork, list the property and forward offers to the lender. The lender, if motivated, will send someone to do some due diligence. This third party will let the bank know their opinion about the home's value.
This process is cumbersome.
The longer the bank waits, the more likely the buyer will lose interest or the home could lose value.
In short- the short sale system is broken.
Banks are searching for a better way.
In my opinion (and I'm not alone) it would be better for the bank to decide a price. Then the listing can be treated much like a bank owned property. The buyer will have a better chance of purchasing the home if there are more clear indications from the selling party.
If, or when, banks decide to move to pre-approved short sales, the market should be one step closer to equilibrium. Home values will be easier to predict and fewer homes will go to foreclosure.
It's baffling to me why the banks haven't already gone ahead with this plan.
- The buyer. They'll be able to feel more comfortable about their offer in terms of timing and price.
- The home seller. Fewer will go to foreclosure- thus shaving considerable time off their credit restoration.
- The short sale listing agent. They'll be able to provide more firm/less nebulous advice.
- The bank. They should be able to cut the depth and length of their loss due to foreclosure.
- The mega-lister. They'll have fewer listings.
- The middle man who negotiates loan mods, investment cash deals and data exchange packages.
What's your opinion?
Are we inching toward pre-approved short sales?
Are you for or against it?
I have nothing against the mega-lister... as long as they are able to shoulder the load in a professional manner.
However, I feel we'd all be better off if the short sales process were fine-tuned.
Chuck Willman is an Arizona based real estate agent specializing in bargain properties. www.AZvest.com.
Photo Credit: Tyranosaur by Sophie