If your a preferred agent with GMAC then you already know this but for those who aren't read below. This is going to get very interesting and I sense some major changes coming from this. I don't know if there's an active moratorium but we've been told that all of our assets were to be placed on stand by no matter what status theyre in as well as all CFK's and evictioons.

FHA Financing Now Available For REO Properties

The Rental Sector Is Looking Up

I have found that being in the BPO and REO business is much like playing a competitive sport when you were a youngster. Whether your favorite sport is football, basketball, baseball, soccer or any other sport, one of the first things you were taught was offensive skills, which of course was soon followed by defensive skills. The better you were at both, the more likely that you would be successful at beating your opponent, right?

The same scenario and expectations applies within anyone's BPO and REO business, the only difference is that we are now all grown up and more is on the line and at stake.

When I got started in the BPO business in Sept. of 2006 the phrase, 'Broker Price Opinions' was something that a very select group of people in the real estate business knew about. I'm guessing that the percentage was very low at the time.

I was able to put together a BPO Manual for others (in Jan 2008) who wondered what a BPO was, what it involved and every possible question under the sun as it applied to broker price opinions. Sales of my BPO Manual really took off in early to mid 2007. I had to presume that at this point the 'secret' was out of the bag. So, it had to be a matter of time before everyone jumped on the bandwagon. I was right!

For those that heard about and saw the tremendous opportunity they benefited greatly if they dove into doing BPO's. For many REO listing became the next logical product of the vast amount of BPO work they did. For the next two years, I saw more and more people jumping into the BPO and REO business.

During this time I also talked to lots and lots of people in the business. They came from all walks of life, backgrounds, time in the real estate business and everyone had own their opinions about the BPO business. I appreciated each and every phone call, email and letter that I shared with my fellow peers. They helped me understand so much about the business that I would never have been able to figure out on my own. I owe a lot to these countless number of fine folks. If you are one of them, thank you very much for everything! :-)

I guess a good secret can't stay hidden for long though, huh! Thank goodness. This business is filled to the brim with open-ended possibilities.

And in the end, if you have found or are finding that many in this business stay very guarded and extremely secretive about their own BPO and REO business (I can respect and understand the need behind this) there are a few others that will share their knowledge and expertise with you. Me being one!

Feel free to drop me a line sometime, I'd be more than happy to help in anyway I can!

Keep your chin up and keep shooting for the stars!

Warmly,

Nicole Ocean

Hello All, I've been a REALTOR since 1999 and I knew the market was coming to a very difficult time in the beginning of 2006. I wasreferred to a listing and this homeowner did not know what to do. Well Itook my first SHORT SALE in 2006. Did I know what it was?, No I didnot--so I Inquired and asked everyone who that I knew were in thisbusiness for a much longer time than me. All I heard was - Don't do it!They are difficult. So I listed this first short sale in February of2006. Agents Did not know what it meant when I disclosed on the MLS.Agents would call me and ask what this meant. Well it took me 9 monthsto get it approved and another 45 days to close the deal. It seemedthat I along with the bank were on a new way of doing business. I was aprevious Loan Documentation Representative at a Commercial bank and Iknew that Modifications back in the 90's were something we dealt withand I knew they were possible.

Well then I started to hear the bankers say we need to do a BPO? What is a BPO? Well I learned the Short Sale lingo very quickly. Of coursewanting to get in the Foreclosure side and since I had no InsideConnections I started to sign up for the BPO companies. I did not knowwhat I was doing and where this was going to lead me. I later found outthat the BPO companies were not the companies to work for because theyare a "mill" company. What?

Okay so I did research, and spoke to other agents and of course I had all these companies wanting to make money by selling BPO lists andShort Sale Information. Don't get me wrong I did buy a BPO list and andShort Sale package and a REO list, did it help? Somewhat... I signedup for the Mill companies.

I did not pay any attention to the blogs and the negative stuff on the internet about short sales and BPOs. So I did them, I did not careif it would get me anywhere. I reasoned and I said to myself...since Iam doing BPO's then this should help me in my Listing presentations and Ishould be able to transfer this same way of doing BPO's in to my CMApresentations and list a home at a Fair Market Value and I should haveno problem with selling a home.

Well its been about four years later and finally I hit jackpot. I received a call from a buyer, so I thought. I was very busy this daywith having to complete BPOs that were due this day. I set aside all mystress, and concerns and started to talk to this buyer. He wasinquiring on a Short Sale I had, and asked if I had many offers and ifthey were above listed price. I knew that this was not a buyer, I knewthis person probably had a home in the area and was trying to figure outhow much to list his home for. So I did the REALTOR switch. I turnedit around and asked if he had a home in the area and did my sellerspresentation on the phone. The Buyer...Seller then said. I am actuallyan Asset Manager, and we have a home in the area that we are going tobe taking back. Immediately all the BPO information that I had storedfor all these years came to live. I started doing a BPO mini spokenapplication with this Asset Manager. I then asked if he wanted me to doa BPO for this asset. Well I did a CMA and I specifically asked thisAsset Manager if I could follow up on this Asset and Email once amonth. I made a point to tell him I would not bother him. So I did aspromised, I would email once a month or every One and a half month. Igot that listing! Yes! I was a banker so I know how difficult it is torespond to all the voice messages, and to all the unnecessary emails.So I kept my subject line very easy and the body of the email very shortand professional, and of course with my tag line.

I am know working with this Asset Manager and with several Asset Managers from this same Company. I am in Finally! Yes, the good olefashion way.

Freddie Mac starts new First Look Program which allows homebuyers 15 days to purchase a HomeSteps REO home before investors can write an offer.

In addition to owner-occupant buyers searching for their primary residence, Freddie Mac’s First Look 15-day window is open to buyers who are part of HUD’s Neighborhood Stabilization Program (NSP), as well as groups affiliated with the National Community Stabilization Trust (NCST).

For the full article from DSNews click here - First Look

I kept receiving calls from this lead generating company Reply Real Estate. I always said, "No". Then I received a call from Amber and she told me that it was a 30 day trial "Cancel Any time". I confirmed cancel anytime, I also confirmed that if the leads were no good and did not respond they would credit, she told me I would receive max 3-5 leads. She was so nice and assuring. I said, "Yes". BIG MISTAKE!!!!! I received 8 leads. When I responded and said that none of them were responding to my emails or phone messages and to credit, they replied with, "Thank you for your email. While we are certainly able to guarantee a prospect's contact information as well as their initial request for the aid of a realtor, we unfortunately are not able to guarantee the prospect's level of interest."

Then to top that off, since I signed up in the middle of the month my 30 day trial turns into basically 2 months. So now I receive 14-16 leads. Now they want to charge me $54.00 each. You add it up. And I have only heard back from 3 of the leads: one just wanted to know the value of his home for tax purposes, one just wanted to know the list price of his neighbors home and the other was not interested in purchasing or selling. So do they sound like viable leads to you? Talk about a SCAM....

I cannot get any reply from the company except sorry your trial ends on the 18th and you will receive leads up until then.

DO NOT sign up for this company...............

Hello Friends,

I have been working for certain valuations company for quite a while.

They have been good to work with. Their format is straightforward, form is easy, no crazy questions you cant answer intelligently...

I got a request to do a slew of vacant land and lot valuations. There was no form, so they sent me a spreadsheet to fill out. No problem.

Some of these were side by side lots in the same subdivision. Hooray, you just copy one to the other, and then change the photos. A true 7 MINUTE BPO!

All along, I knew the client was the FDIC. I asked, will my name be on the report. Always the answer: YES!!!

Then, they asked me to do another lot in a subdivision I had dont before. I asked them to send me the report I had done earlier, which they kindly did. The ACTUAL REPORT that wend to the client.

Guess what it had for broker...AVAILABLE UPON REQUEST

Now I ask you, who is going to request that ever???

No one. Can you imagine? "Hey, we need an agent quick, call up xyz and see who did this report!" Right, and magic corn makes reindeer fly...

I wont disparage the company...I wont even say who it was. They have their reasons for doing what they do. And its their business--they are obviously free to run it like they want.

But I do take exception to the common practice among BPO companies of getting brokers to work cheap by offering "your name and number are on every report."

I wonder how many other companies do the same thing.

Butter

My sister in law as executor of the estate just sold my mother and father in law’s house. She chose a realtor who lived in the neighborhood who also was an reo realtor without a lot of reo inventory right now. (Not an unusual situation) She turned out to be the perfect agent for the job because of her REO background. She took a home that was filled to the brim with things that no one in the family wanted, had it cleaned out, trashed out, secured, on the market at an aggressive price, and sold in 2 weeks. I couldn’t have done better myself, except I would have staged it, but that is a separate story.

Getting a probate or trust sale ready for market is very similar to an REO. When a homeowner dies his or her personal property must be disposed. Things of value need to be appraised for tax purposes and are distributed accorded to the terms of the will, or in the case of no will sold and the money distributed according to state law. There is often much left over that is not of value and someone needs to trash the home out, much the same way as an REO home is trashed out. This job is often left to the realtor. The home will almost always be vacant, and again the realtor will need to make sure it is secure.

While probates and trusts do have some differences in the technicalities of sale from an REO, many of the disclosure exemptions are the same. The executor is exempt from the transfer disclosure, the seller’s questionnaire, the smoke detector requirement, and signature on the natural hazard report, but not exempt from providing the report. If the realtor knows anything about the property he or she does have a duty to disclose anything that is material.

Homes that are sold through probates or trusts are very often not perfect. There may have been a death on the property or there could have been many years of deferred maintenance when the owners got older. They may even have been left empty for a period of time while the owner was in assisted living or a nursing home. Like an REO property the realtor must make adjustments to the suggested price based on these issues which are common to both kinds of sales. (Generally the death on the property is not found in REO properties, but it can happen.)

The other big similarity is that both REO homes and trust or probate homes have to be sold. They are not owned by people who have the luxury to test the market and sell if they get the price they want. They need to be sold, either to settle an estate or in the case of an REO to mitigate a loss. As a result they are a wonderful opportunity for a buyer to get a home at a great price or a realtor to get an assured sale. Both sides win in these types of sales.

So why the comparison? If you are an REO realtor and add probates and trusts to your repertoire then many of the skills you have learned are very useful. If you are an investor it is a good place to look when REO inventory is not getting you everything you want. If you are an end user buyer these homes are worth exploring because of the motivation of most of the sellers.

Has anyone found a way to get payment from BrokerPriceOpinion.com? We have not been able to get paid since May. Everyone else pays great except these guys and eValonline but we do not work for them any longer. BPO.com gives me a date but nothing yet. I am putting them on hold as well now.

We are going to the five star conference next week and I hope to find some other brokers with similar problems and see if we can find a remedy. I would appreciate any input.

New HUD Process

I had the opportunity to attend a webinar for new HUD listing brokers and there are somechanges, I think HUD is improving their customer service and their system, Ihave been selling HUD homes since I started in real estate 5 years ago, alwaysfrom the buyer side and sometimes it was very frustrating, and I think some ofthe new changes will make things easier.

I think the most important change is the time allowed for home owners to purchase FHA uninsurablehomes, in reality it is harder for a home owner to do all the renovations, andsome either don’t qualify or don’t care much about a renovation loan. Now withthe new deadline, it makes more sense for investors to start bidding earlier.

Well here is an overview of the changes.

· Separatecontractors responsible for property management and marketing/sales.

· HUDHomestore.comis a one national site for everything.

· Commissions,minimum $2,500 divided equally between listing agent and buyer’s agent. Maximum6% commission also split equally for both listing and buyer’s agent.

· NewBroker Registration Process.

· Earnestmoney (made out to HUD) submitted with the contract.

· ElectronicLock Boxes.

HUD has divided the country in 4 contract area and every region is divided in a smaller set ofsubregions.

HUD register, (no only listing agents) brokers may advertise, and hold open houseson HUD properties, however they must gain approval from the Asset Manager.

For agents to bid and sell HUD homes, their broker has to be approved by HUD and have a NAIDnumber and also both broker and agents must be register with HUDHomestore.com.About this site it is one site for the entire country, purchasers will see whatbroker see, bringing more transparency to the transaction, Asset Manager willlist properties on a daily basis instead of once a week. Also this website isthe only place to submit a bid.

House insurable or Insurable with Escrow will have an Exclusive “Owner Occupant”period of 30 days, a 10 day biding period and if no offer is accepted then bidswill be reviewed daily for another 20 days only for owner occupant.

For Uninsurable Properties there will be a 5 day exclusive Owner Occupant period, after thatbidding will be open to all purchasers on a daily basis if an acceptable owneroccupant offer was not received.

Also agents have to make sure they have complete sales contract HUD form 9548 andcertification of broker form, Lead Base paint, Radon and Mold, MED, ExtensionPolicy, Home Inspection, Owner Occupied (if applicable) and local requireaddenda, together with a pre-qualification letter form a certified, licensedlender if sale contains a mortgage contingency. Agents have 48 hours to submitall those documents to HUD after bid acceptance

Earnest money will be held by HUD’s designated closing agent, and they will notify thebrokers who will closing agent will be once the contract is ratified.

Important Reminders

Never take or give a property key to anyone, absolutely no repairs prior to settlement,remember that all HUD homes are sold ASIS, do a pre-settlement inspection, alldocuments and contracts have to be submitted to HUD with in 2 business days.

Are we in a declining market or am I the only one to have this feeling?

Here is my BPO litany: “Declining market often indicated by similar property presently

listed at lower value than most recently sold similar property!” Should we worry to explain the declining market? Can we blame some facts as lack of buyers, lack of available financing, present economy, what did or did not do the present administration? All the above? …

May be but I am coming with an additional scenario and I will be curious to know if anyone is experiencing similar conditions. REO listings… Those that all agents are dreaming to have in their portfolio and some are working so hard to just get one.

My location is unique in Marin County North of San Francisco with median SFR as 794K

and 400K for condo. This morning I have pulled up from the MLS this property located in Tiburon as one of the most desirable site in the nation and listed at $ 950K with

MLS remarks as “This property won’t last long, Hurry before it’s sold.”

Additional researches reveal 201 DOM and 7 prices reduction, no open house and

listing agent located at hundred of mile away…. 40% or more of the REO listings are with agents located within another County. I already have commented on this topic and

it does not seem to improve at all. Actually, I believe it is deteriorating.

I have completed a large amount of BPO for any reasons affecting the loan, before the auction, after the auction and when the listing is not sold and finally expired.

Valuation companies are asking in their BPO form why the property did not sell

and expired by now. My answer is a question as why this $ 800k property never had a Broker Open House neither an open house??? Answer is because the listing agent is located more than one hour from site and apparently there is no reason for this agent to drive one hour each way to market this property BECAUSE he/she has a relationship with asset manager.

I have heard an agent in my office who is not involved with REO business and

talking to is buyer client about a new REO listing, advising his client to wait for price reduction since the property was listed by one of these REO agent from other County! (LOL).

Now here is the bad part: this REO property not properly marketed will be sold after multiple price reduction and will be used as comps for BPO and appraisal lowering again the property value for any future sale in the close proximity. The present administration and other silly excuses are not the only reason of this declining market.

Each listing I have and especially REO has a BOH and open house until the property is

in well established contract. I have had BOH ranging from 30 to 130 agents.

This is actually very important at first because it eases the process to bring their clients,

and almost more valuable because I know from that morning if the property is well priced or not. Does it mean I won’t accept listing from other County?

Sure I did and I will but I commit myself to do the extra driving as much as I can to sell the asset at is best value. I have driven on a rainy Sunday for open house on a one bedroom condo at less than $ 100K. This is what I owe to the seller as my fiduciary duty. I should comment as well as the above County as Sonoma is accessible by freeway with involve just a commute while East Bay or other Peninsula Counties are separated by the San Francisco Bay which involve crossing a bridge with toll and all traffic issues. They are not really just another County but more a different world. I have shared this with some asset manager and their answer is they are not doing such business as their agents are doing good business and are located within 10 miles from the property. Sure, …10 miles can be on the other side of the bridge which is a different world !!!! May be not doing this kind of business but MLS results are indicating the reality.

Do I point out on other agents ?

Not really, numbers are here in the MLS available to anyone and also I am taking care of my business but also of asset owned and each property owner from the neighborhood.

This REO listing had multiple offers above the listing price and equal to my BPO.

The appraisal value and sold price was concluded at below the listing price because

two REO properties were used as comparable and sold at low value due

lack of marketing for the same reasons explained above.

It affected my sale which now will affect other future sale. Voila!

There has been lots of talk lately about short sale fraud. Understandably an appealing topic, most of the recent discussion centers around a recent Corelogic report suggesting one in every two hundred short sales across the United States are "very suspicious."

Although discouraging we remain in economic turmoil on the housing front and distressing that despicable individuals continue prey upon the misfortunes of others, it's misleading to categorically label an investor driven back to back transaction, known as "flopping," as fraud. Though a noble cause, focusing efforts on how to stop bad people from doing bad things is not only a losing battle in this instance it completely ignores the root problem of the short sale process and prevents us from finding a relevant and lasting solution.

Phenomenon of the Short Sale

Short sales occur when a homeowner (borrower) attempts to sell his or her home at a price that is less than the full amount owed to the bank (the lender). Most often a short sale occurs as a last ditch effort by a homeowner proactively trying to avoid a full foreclosure proceeding, which results in losing their home to the bank, being forced to move, and like a bankruptcy, becoming locked out of the financing market for a period of seven to ten years.

Banks prefer short sales to foreclosure because they (in theory) resolve the outstanding debt faster and result in the bank losing less money in the settlement of the bad debt. Before the emergence of our current housing crisis, banks reluctantly agreed to a short sale unless the homeowner displayed one of five generally understood "hardships." Those included, loss of job or income, forced relocation (typically due to a job), death of a spouse or income provider, divorce, or an increase of interest rate that made the monthly mortgage unaffordable.

This all changed after the collapse of Lehman Brothers, and the shifting political winds created amid bank bailouts, job losses, and precipitous drops in home values. American tax payers and politicians demanded something be done to help "Main Street America."

The result of this perfect storm included the largest federal infusion of tax payer capital into the banking system since FDR was in the White House and a myriad of federally mandated programs aimed at helping banks remain solvent (on paper) as they work through bad loans. For Main Street, the programs give unfortunate and honest homeowners relief until they get back on their feet (HAMP) and allow other homeowners a graceful exit from the stress and burden of unsustainable mortgage debt.

Short Sales, once rare, have become more prevalent and outnumber both traditional sales and REO sales in some of our hardest hit markets. For example in Stanislaus County, dubbed the mortgage fraud capital of the country, two of every three home sales occurring last year (ending June 2010) were short sales.

Mechanics of a Short Sale

A short sale does not occur unless the current homeowner decides he or she wants to sell. Further, the homeowner alone decides to whom they will or will not sell the property. This bares repeating; In a short sale the borrower, not the bank, markets and sells their home to a willing buyer.

Banks do not enter into the short sale process until the homeowner finds a suitable buyer for the home, enters a binding contract, and submits the required financial and hardship documents to the lender.

Although reported as a simple transaction, the short sale is anything but a "straightforward transaction." I tell my clients the short sale actually involves two transactions. One the primary real estate transaction between the owner of the home and the potential buyer, and two the debt settlement transaction between the owner of the property and the lender holding the mortgage(s) in default.

With the exception Wells Fargo (only applying to securitized loans initiated by Wachovia, Golden West Financial, and World Savings all failed banks previously absorbed by Wells Fargo) a bank will not begin negotiating the debt settlement portion of a short sale transaction until a seller has submitted a valid offer from a ready, willing and able buyer. In other words, they will not discuss accepting less money on the outstanding debt until someone steps up to buy the property. If this does not happen soon enough, the bank will foreclose on the home. This is the crux of the problem.

Most buyers making their housing decisions have real life issues to contend with. Children entering the school year, coordinated moves from one home to the other, obtaining financing for the new purchase all require the buyer to spend money and meet deadlines. In a traditional sale, the buyer makes an offer and the seller responds within 3-5 business days of receiving the offer. This is not the case in a short sale.

Although the seller may respond within the same time periods outlined above, neither party is contractually bound to deliver on the agreement until the bank decides what price and terms they will accept. To make matters more complicated, most banks can take from 30-60 days (sometimes longer) before responding to an offer. Adding insult to injury, most banks leave little to no margin for error, all the while reminding sellers and their agents that they may pursue the unpaid debt after the short sale (deficiency judgement), and oh by the way, the clock is ticking, so...

The result of this mess is fewer buyers willing to wait around for a short sale to close unless they have a reason to do so (translation: cheap enough to wait it out). Another result, buyer agents refuse to expose their buyers to such nonsense or, on the listing side seek innovative and creative ways to prevent their clients from losing the home to foreclosure.

This is key factor in the process. The real estate agent represents and is bound by a fiduciary duty to the seller of the property. In no way is the real estate broker/agent representing the bank in a short sale transaction, and in no way are the banks looking out for the seller's best interest. It's also important to note the seller, with few exceptions outlined in the HAFA program, is expressly prohibited from benefiting financially as the result of a short sale transaction. Therefore the primary goal of the seller in a short sale is to avoid a foreclosure; real estate agents are bound by their fiduciary duty to the seller to work diligently and obediently towards that end.

Motivating Factors of a Short Sale

In light of all this why does anyone attempt to complete a short sale? This answer is different for all parties to the transaction.

Banks and/or lenders are primarily driven by profits or the mitigation of a loss. Simply put they are attempting to collect as much as possible on a bad debt. In a recent article at thestreet.com John Gittelsohn writes, "the average loss in principal for prime loans that went into foreclosure was 42 percent, compared with a 33 percent loss for short sales, according to Amherst Securities Group LP, an Austin, Texas-based company that analyzes home-loan assets." Banks lose less and recover faster by allowing and encouraging sellers to pursue short sales.

Sellers are seeking closure. Coming to grips with the financial loss or loss of a family home is devastating to everyone who faces the situation. However the most excruciating part of this process more often than not is the wait; waiting for the phone calls from creditors, waiting for the mailed letters demanding payment, waiting and wondering if the Sheriff will show up one day and lock them out of the house and throw all their belongings to the front lawn.

Many sellers are motivated to complete a short sale to once and for all put an end to the ordeal. Unfortunately the process welcomes them with more waiting; waiting for a real buyer, waiting for the bank to respond to that offer, waiting for the bank to process paperwork, the list goes on.

Of course there are other very valid reasons why a borrower would pursue a short sale. For example a short sale is far less devastating to your credit rating compared to a foreclosure. After a short sale, a defaulted homeowner can re-enter the housing market and obtain financing on a new home in two years or less as compared to the seven to ten years they wait after a foreclosure. In a short sale you are proactively advocating for the best possible debt settlement from the lender, in a foreclosure you are leaving the outcome to chance and the lender will not be kind as they seek to remedy their loss (of course this does not begin to address the reasons associated with strategic defaults, another topic all together).

Buyers too come with their own set of motivations - most clearly seeking a bargin. This is not a bad thing, nor is it surprising; Finding a deal is as American as Apple Pie. If you need examples visit a going out of business sale, the wholesale district of your local central business district, or a Ross Dress for Less on a Sunday afternoon. However, as most of these retailers will tell you, there is no brand loyalty in the bargain basement. Translation, buyers are fickle and unreliable more often than not in a short sale, and most will leave the transaction in a heartbeat if a better deal comes along, leaving a seller vulnerable to missing a short sale opportunity and again facing a foreclosure.

Enter the Investor...

Some Investors are Their Own Worst Enemy

Type "short sale wholesaling" into Google and you'll know what I mean. They market themselves as ninjas, guru's, money making maniacs, and often times resemble Family Guy's Al Harrington more than a trusted financial adviser or capable real estate expert. Many of these so called investors present themselves surrounded by piles or cash, expensive homes or cars and expound the virtues of making huge profits with no money and little effort. In a nutshell they are out for themselves and work at the expense of all other parties to the transaction.

They make promises they cannot keep and suggest outcomes that are unlikely to occur. They proliferate because distressed homeowners are desperate for financial salvation, want to believe anything that sounds like a solution, and have lost faith in government programs that fall short of expectation and benefit some while neglecting others. This opportunistic group, gives sound capable real estate investors a bad name.

Crazy as this sounds, this "speculator" has his or her place in the current market and a seller is still better served by this group "flopping" a short sale compared to going through a complete foreclosure. Unfortunately, left unchecked or unregulated, these groups edge out real investors or home-buyers who add value back to a distressed asset through renovation or deliver a once dilapidated property back to the rental market after moving through a distressed sale. Their actions also cause banks and government agencies to take sweeping actions that harm the overall housing recovery (eg. initiating the 90 day no flip rule).

There is no place for fraud, misrepresentation, or lack of compassion. Those acting with such reckless abandon should have no place in a short sale transaction and won't when banks begin expediting the short sale approval process. A faster process will attract better buyers willing to pay more and intent on sticking with the transaction to the end. With the risk of losing a buyer over time mitigated, sellers will also be more willing to continue with a buyer willing to pay more for the property. This will effectively edge out the "floppers" all together.

The Same Goes for Many Real Estate Agents

The sad fact is that for a few hundred bucks, an Internet connection, and a few hours over the weekend any agent can become a Certified HAFA Specialist. Equally, by paying a few bucks to the local Association of Realtors and attending a half day seminar any agent can become SFR (Short Sale and Foreclosure Resource) Certified by the National Association of Realtors. Conspicuously missing from the list of requirements in obtaining these "expert" designations is actual real world application. Yes you read that correctly, you can become a certified expert without completing a single short sale transaction!

Yet this new market along with new and innovative technology provide for a new paradigm for real estate professionals. As Chris Brogan and Julien Smith reference in their book Trust Agents, today's influencers are those who trade in trust, reputation, and relationships. Author Seth Godin describes the indispensable business leader of today as a Linchpin, the artist who inspires change by connecting with people in a positive way, changing people by connecting with them in a way they want you to connect with them. He goes on to suggest it's all about adding value.

It's no longer good enough to plant your face on the bench at a bus stop, at least nor more than it's about hanging as many for sale signs as possible in a particular neighborhood and waiting for the calls to roll in. It's no longer about gathering a litany of acronyms to follow your name, at least no more so than it is about controlling the flow of information on the local MLS.

It's time to become less of a salesperson, and more of a trusted and capable adviser.

Finding a Solution by Shifting the Focus

So what is the point of all this? This is an opportunity for all of us affected by this housing crisis to step up and become indispensable by allowing ourselves to shift the focus from prevention to solution. It's a call to action for all of us working towards a greater good. One of my little league coaches taught me that there is a very big difference between playing to win vs. playing not to lose. I believe the same applies to the current housing crisis.

We've been in prevention mode long enough - preventing the meltdown of the financial crisis, preventing foreclosure for homeowners who are upside down on their mortgage, preventing fraud, preventing strategic defaults...

Bad people do bad things, we're not going to change that. However, it's a heck of a lot harder for bad people to do those bad things when everyone else is actively participating in making things better.

If banks don't want to get short changed on a short sale flop, make it faster and easier for everyone to get a short sale completed. The "flop" in and of itself is not illegal and banks do not have the right to force an owner to sell to anyone. They do have the choice to foreclose or allow sellers to settle their debts for less.

If you want to make money as a short sale investor, become part of the solution for everyone. Don't turn a buck at the expense of someone else, make your spread by adding value to the transaction.

If the government wants to fairly help Americans resolve their mortgage issues, stop unfairly dictating who is and who isn't justified in walking away from their mortgage debt, and once and for all let the market correct itself. As David Streitfeld of the New York Times alluded to last Saturday, there is a growing sense of exhaustion with mortgage intervention. It was a valiant effort to save homes and help new buyers enter the market, yet our free market economy seems reluctant to prop up an over-leveraged market.

Finally if you want to become a more successful short sale agent, become a Trust Agent, trading on reputation and relationships. Know your client, continue to learn and always serve your client's best interest in the transaction.

After all, the ultimate fraud prevention is a viable solution.

Unpermitted space is a common dilemma in our area. Often homeowners finish off attics or basements without wanting to go through the hassles or expenses of getting permits. Often they want to avoid the extra property value increase for tax reasons. Well these decisions come back to haunt them when they try to sell. Price per square foot is a commonly used measure of value for homes, at least it is in the Triangle of North Carolina. Frequently, listing appointments get tangled when discrepancies in the online tax records for square footage differ significantly from the measured amount of heated square feet. The red flag goes up, and as agents, we start searching for permit records. Buyer's agents and listing agents are much more in tune with their liability regarding the square footage of a home now than they were years ago. Law suits against agents and former homeowners have raised awareness.

Recently, a listing of mine had about 400 s/f of unpermitted finished space. At about $100/sf, that adds up to about $40,000 (I know you can do the math, just put that in for the WOW factor). The sellers purchased the home years ago with the room already finished without knowing it was not permitted. Now, in order to advertise this space - without future legal worries, we had to get it permitted retroactively. Several buyer's agents have already called me to ask about the permitting of the room. The hassle and expense of the process was worth it for the homeowner to be able to advertise and sell that area. Advertising 2700 heated square feet means 2700 permitted square feet! Nobody wants a buyer coming back after the sale claiming a $40,000 discrepancy.

The lack of a permit can also negate future insurance claims. If a fire or other problem arises from the unpermitted space, the insurance company can deny claims on the space and any portion of the home damaged from problem. Can you imagine that coming back against the agent or seller?

The process for this listing started of at the permitting office with about $225.00 in fees. The process in Apex, NC requires you to have the area updated to current codes, not the codes that were in place (and much less stringent) 15 years ago when the work was done. Also, the inspector had the homeowner remove some wall panels and ceiling panels to see what was going on behind the walls. We were fortunate, not too many issues on this home. Because the house was listed for sale, we had to find a licensed electrician and HVAC business to sign on the permits. If permits are applied for by the homeowner, and they are living in the house, not on the market, this is not a requirement. The homeowner can sign off as his/her own general contractor (under $30,000 of improvements). I was able to find contractors I have done a lot of work with to help us out, and we had them do the code improvements. The sellers did have electrical code upgrades to make - ARC fault, added few ground fault outlets, replaced all outlets with tamper resistant outlets, and added an outlet (one every 6 feet). They had to insulate an exterior wall around a french door, which was luckily only 2 sections of paneling. The homeowners had to remove a section of paneling to show that a header existed above an opening - luckily it was up to code. The overall expense was about $1,600, certainly worth it.

Again, if you are considering converting space that will increase the livable area of your home - adding a finished attic or finished basement- take the time and spend the money to go through the local permitting process. It's much easier to do this before than after the fact. And I'm told that inspection fees can be punitive on a homeowner who decided to finish off rooms without getting permits up front.

You may not have ever heard of Techwood Homes however, that doesn’t negate its pivotal role in American history, our history.

Techwood Homes was the first public housing project in the U.S. Located in Atlanta Georgia, it was completed in August of 1936. However, keep in the back of your head that it wasn’t till November 1937 that it was opened and dedicated by the trumpeter of Social Housing, Franklin D. Roosevelt, himself.

Now, it’s also important to know why America decided to get in the business of Government housing. The reality is, America had a concentrated number of poor and most all of the poor were living in slums. These were not nice places. In fact, many municipalities contributed large majorities of all their criminal activities to the slums and the poor who lived in them. So, in many ways, the American Government got into the business in the name of reducing or eliminating crime and yes, if it also progressed the Socialist Agenda…….well, that was a side benefit that wasn’t talked about much.

Now, the Techwood Homes were posh. They had bathtubs, electricity, ranges, garages, laundry facilities, library and even a kindergarten on site. By all accounts, they were nice, for what they were.

The sad part of this story was, the irony behind what eventually happened to Techwood Homes. You see, it became what it was supposed to prevent, a nest of crime, corruption and an example of urban blight.

After Techwood Homes were developed, many other Social Housing units sprung up in many urban settings, namely, New York, Chicago, New Orleans and San Francisco. Unfortunately, I can’t think of a single one that was ever trumpeted as a triumph…..I wonder why?

In 1996, Atlanta decided to destroy the Techwood Homes, it was an embarrassment to the city and because they were entering the world stage due to the Olympics, they couldn’t allow the blighted structures to stand.

The fact is, where you find poverty, you will almost always find high crime. It doesn’t matter how nice the house is, where the house is located, who maintains the lawn and plumbing, poverty is an incubator to criminal activity.

The Progressive leadership learned their lesson and decided that Social Housing, in the sense of large institutional style structures just weren’t a good way with progressing their agenda to provide government housing in their socialist society. I guess they never realized the power of poverty.

Shortly after these failed attempts, it became a political death nail in a politicians preverbal coffin however, it didn’t stop the agenda. It was during this time we saw private sector subsidy’s in the form of Section 8 housing and others.

Well, the socialist mantra, to never let a good crisis go to waste has never had such gusto. You see, during this housing crisis, which was engineered by progressives through the Community Re-Investment Act, they now see the light at the end of the tunnel. That’s right, a Progressive crafted crisis will give them the ability to forward their agenda and provide Social Housing through programs such as HAMP and other Foreclosure Prevention programs.

Yes, I am saying it and I am not apologizing.

I believe this housing bubble was engineered, crafted and laid in plan through the use of the Community Re-Investment Act and in turn, the Progressive dream of every American to have a home, laid down by F.D.R. can now be accomplished because no politician has the fortitude to tell people if you can’t afford your home, get out!

Make no mistake, I am all about saving people from foreclosure but, I also know that unless a homeowner has a job, counting peoples unemployment benefits as income so they can get approved for HAMP is a recipe for a bigger disaster or better yet, a door way for more Government assistance and possibly eventually allowing the Government to cancel the homeowner’s debt and remain in the home through a bank the Government has institutionalized or taken over……let’s say ….I don’t know…..Bank of America.

I do believe, it’s Obama’s agenda, along with the Progressive party, to either cancel the debt of homeowner’s who are struggling to make their payment or at least, give enough government subsidy that the homeowner can keep their homes under the waving flag of social housing. Be careful America, we are treading on dangerous ground.

Thursday night a property dropped on market in the desired target neighborhood (no inventory) with all the criteria met and more priced @ market. Within 24 hours a drive-by was conducted and appointment to show.

Prior to our appointment I was able to collect some important information (telephone conversations w/ the Listing Agent and Sellers) that would prove to be most valuable...the facts as follows; original sellers/homeowners, sellers are personal friends of the listing agent, family pets/birds that need a home, and the need to stay in the home long enough for the son to complete football season. Our Short Sale Offer to purchased addressed every seller desired condition including a heart filled cover letter from the buyer's family (5 year old daughter signed), a Full Price Offer, No Cost Rent Back (until end of football), and a new home for the birds. By Friday morning there were multiple offers and one buyer came back 3 times w/ a 10% over asking and we secured the contract.

Do not over look the details in negotiations. We were awarded the contract. Do your job well.