Editor’s note: This is the latest in a series.
Inventory of likely short-sale properties, like the devil’s uncatchable herd of cattle in the song "Ghost Riders in the Sky," is outrunning the ability to catch up. Or is it?
In the song, a large posse of "ghost rider" cowboys, with a "mournful cry," are forever chasing the devil’s herd but can never catch it. As the cattle come rumbling through the ragged skies, an old cowpoke, resting on a ridge, hears one of the cowboys call his name.
The voice tells him that "he must change his ways of living or he will spend his days chasing the devil’s herd."
Apparently, the cowboy in the sky who suggested the cowpoke change his ways had not changed his own, because he was still "riding hard trying to catch the herd." It happens.
You would think the opportunity to stop chasing an uncatchable herd of cattle throughout eternity would be enough motivation to make some changes.
Especially if the herd is catchable. Short sales, while continuing to grow, are becoming catchable, or in our case, closable. It’s the opportunity, and not the inventory, that appears endless.
The demand for real estate agents who know how to properly list a short sale is surging because the most motivated seller — the lender — needs to move a few million pieces of real estate, and fast.
Here’s what is going on:
- Lenders are recruiting and training staffs by the thousands to handle short sales and the projected foreclosures in 2012. A tsunami of adjustable mortgages are scheduled to reset. "We haven’t seen anything yet," says one source.
- Lenders are sending letters telling owners of pending foreclosures that the lender will pay them a substantial and specific amount at closing, with no further debt obligation, if they will allow an experienced real estate agent to sell their home in a short sale.
Realtors report that they have seen checks with amounts as high as $30,000 given to sellers at closing, in addition to the $3,000 Home Affordable Foreclosure Alternatives (HAFA) incentive.
Why the mainstream media has not reported on the projected cash infusion into the economy through this channel is a mystery. If you project that to 100,000 monthly checks (for example), at an average of $10,000 per check, it would have a real impact on the economy and the real estate market.
Realtors in several states have been closing these short sales for months with Bank of America, Chase, IndyMac, CitiBank and Wells Fargo, according to interviews with Realtors who closed them.
If you are not short-sale certified, you should be. Lenders want to work with experienced agents who know how to correctly complete paperwork the first time, and can help with valuation and negotiating issues. Training is offered by a variety of sources.
- Some title companies are asking their escrow officers to become short sale-certified so they can relate to real estate agents’ short-sale requirements, say industry leaders.
- If you are a member of a multiple listing service partnering with Fannie Mae’s Short Sales Assistance Desk service, you have a fully trained staff to call who will resolve short-sale issues you are having with the lender.
- As an alternative to shopping for resale short sales, some production homebuilders are offering concierge services to qualify your client, find a new home among their several communities, and set up the appointment with the buyer, builder and applicable onsite agent. In other words, these homebuilders are treating agents like prospects.
Today’s action plan:
1. Decide to quit chasing the devil’s herd of uncatchable inventory and chase your own herd, thereby changing the way you work and live.
2. Sign up for a short-sale certification course.
3. Ask your title company if their loan officers are becoming short sale-certified.
4. Ask a lender or two about their foreclosure prevention incentive program (over and above the $3,000 HAFA progam).
5. Consider lowered-cost new homes as an alternative to shopping for resale short sales.
5. Let me know what else you hear that is working for real estate agents.
We don’t have to like it, but we do have to understand that the market will change us, if we don’t change ourselves.
The choice is ours. We can operate in an environment of knowing that our services are greatly needed and that we need to sharpen our skills, or not.
For those who make the changes, this is a great time to be in real estate.
For those who do not make the changes, saddle up. It is going to be a long, hard ride.