Real Estate and Grief

It doesn't matter if REOs are here to stay or short sales are the new REOs. It's the sense of helplessness that it brings to the homeowners and agents alike.We are talking about the new revolution in real estate.

Will you be a fighter?

And yet, a new model of real estate snuck up on most of us. It started with a small band of rebels, the ones who threw away the old, tired rules and instituted fresh new ones. The rest of us stood by and watched, some of us in horror, some of us in awe, most of us hoping the rebellion would be short-lived, that soon we could return to the old model and the old way of doing things. But the rebels’ voices became louder and more strident.

They called it ‘The Short Sale Revolution’

Ultimately, we couldn’t do anything but notice.To notice, though, is not to accept.

First, we had to go through the 5 Stages of Grief.

Denial
Anger
Bargaining
Depression
Acceptance
At first, we entered a state of denial. This can’t be happening, we said to ourselves. And even if it is, it won’t last long.

Then we got angry ... good and angry. At the banks, at Wall Street, at Washington, at buyers, at sellers ... at the unfairness of it all. Why me? we whined. Why real estate? Why my profession? Why now?

Then we bargained for the old ways, stuck to our business models, and dug in our heels. Wishing and hoping all the while for everything to return to the way things used to be.

Towards the end, we became depressed, wondering if anything would ever be the same again. We experienced feelings of hopelessness and frustration. We mourned the loss of business and the putting off of dreams. We felt a lack of control and were confused about what to do next. Sometimes we cried. Other times we yelled and shook our fists at the sky.

Finally, realizing change was here to stay, we accepted the truth, and more importantly, understood it wasn’t our fault. We began to look for solutions. We started revising our business plans, throwing out what didn’t work, and trying new ways. During the process, we adapted to the way things are and not the way we wished them to be. We also learned that this is an ongoing process. If ‘this’ doesn’t work, maybe ‘that’ will. The learning curve is steep. The rules change constantly. We have to adapt every minute, every hour, every day. And we have to remember that we’re not only reinventing our business but reinventing ourselves.

What happens when foreclosures and short sales work their way out of the system ... one year, two years, three years from now? What then? Will all our hard work be wasted? Not in the least. Because we will have survived and become stronger for it. And we’ll be better at what we do.

It’s the dawn of a new era. Welcome it. Embrace it. Spit in its eye when you feel the urge. But keep on ‘keeping on’. The real estate market is here to stay, and so are we.

Need help in Southern California short sales, reos, loan modifications

call me

Carmen Cooley Graham 619 218 7390

Keller Williams

DRE # 012961519
Don't be a victim I am here to help.
www.Carmensellssandiego.com

carmencooleygraham@yahoo.com

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Comments

  • Carmen that is an awesome close ratio for your short sales, far superior to any I have ever seen even from the best Short Sale agents in my area. When I say 1 in 5 close form original contract in my area I am talking about overall, not mine or my brokerage statistics……but the entire county.

    Mainly the people I was referring to is the buyers not the sellers, The length of time involved is very frustrating and I see these properties going under contract and coming back active a couple of months later. Many buyers are so frustrated they will change realtors in the process, sad but true.

    One of the biggest problems down here is pricing, the agent on the sellers side is only interested in getting an immediate contract, therefore pricing is on the rock bottom, a couple of months later a guy like me goes out and does a good BPO and the value comes in 10k higher than contract price and the deal falls through. Now I am not one to squash a deal but I have to justify my value and you know as well as I do that is through the comps and listings, unfortunately market trends are factoring in as well.

    Now get this….My area is short sale and REO driven, the pricing is being driven by short sales however values are driven by REO and currently we have approx 4 short sales to every REO, the REO’s for the most part go under contract immediately as there are many that will ditch a short sale in a second. Now the time it takes a short sale to close could be an easy 4-6 months but REO’s are real time and are the market indicator as to which way values are going.

    Example: 6 months ago I could list a REO at $75k and could generally expect to get somewhere around $70k, because the pricing is still based on short sales the listing price has not changed, however I now can list a property at $75 k and will more than likely get multiples and end up with $80k for a 13% increase in value. There is a lag time in short sales which is slowing increases in pricing but giving them an unjustifiable value by the time they get to the BPO phase.

    It is very common for the banks to go completely through the process and then want $5-$8K more to close, this adds to the frustration and many fall through leaving very unhappy buyers. The good news is that the property will generally come back on the market as a “Bank approved price” now a buyer will have a 50/50 shot, what I mean by that is a bank could let it go through at the approved price for the last deal OR! Like I’ve too many times….just start the process over again.

    Like I said earlier, this is a very ugly part of our market, especially for the buyer, hopefully we will see changes in procedure this year.
  • Great points Tony but I have found that even in a short sale the relationship with the seller does not end. You need to keep them on track so they can build their credit back up and buy again. Fannie and Freddie are or have changed tjeir guidelines so that after 2 years you can buy again with 620 credit scores. Also, 98% of all my short sales close- it's not luck but constant communication with the banks and not taking no.Every short sale that I have done the seller has referred 2-4 friends and I have the buyers added to my data base. I firmly believe the banks need more agents and common sense people calling the shots and not Government but the reality is the housing mess is here for another 2-3 years and whatever you want to specialize in just be darn good at it.
  • Carmen......good gawd.....I feel like I've just been on the couch with my inner most troubles spilling out all over the floor......Geesh...I need a drink now!

    LOL, I am just kidding, but I do have to say that anybody that dedicates themselves to the short sale market is...and has to be a fighter....a constant fighter, and I don't see an improvement in this segment. Matter of fact, I think the banks might be back peddling in many ways because as much as we have adapted and systemized to conform and strategize our business we still have no ultimate control on the outcome.

    There are so many “wrongs” in the way that they are handled that I have a difficult time showing, listing or contracting and currently in my area only about 1 in 5 close ratios from the original contract. The sad thing is the sellers, buyers and agents all go in with good intentions but more often than not things turn ugly.

    2010 is the year that many banks are trying to get their house in order to accommodate short sales in a timely manner; however the problem with this statement is that the banks have a plan that sometimes does not line up with good intentions. As long as the banks are not held accountable to the laws that you and I are as licensed professionals there will be no consistency in the short sale market. There is simply no recourse against a bank if a deal goes south….just suck it up and deal with it.

    With regular market sales you have a willing seller looking for a willing buyer, with REO sales the losses have been taken and the asset needs to be unloaded, but with short sales the banks have profitability and balance to their spreadsheet that they must try to maintain and it is sometimes a good time to let an asset go but in most cases it can be equally good to hold on and prolong the loses or simply foreclose. I have seen many that are under contract for 3 to 4 months foreclose; now why would a bank do that if they have a willing buyer? There are many reasons for this, unfortunately we never know.

    Yes we all have to adapt or conform but for right now short sales will be a small, not large part of my business. The biggest reason is that I want my customers for life, I do not want to put anyone in a no win situation or hostile situation, I get too many of those buyers that come to after a short sale gone bad, and the agent that has helped them for the past 3 months has been kicked to the curb as well.
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