Yes, you can be a hero and have the best year of your life.
“One in 10 homeowners is not paying their mortgage.”
“One in six homeowners have a reverse mortgage.”
“Seven out of 10 homeowners who lose their home to foreclosure did not contact a real estate agent or lender prior to the foreclosure.”
These are just some of the statistics I heard at a February short-selling summit in Carlsbad, California.
The guest speaker was Alex Charfen, co-founder of the Distressed Property Institute, who added that, regarding the current market, “what’s happening has just begun. If this was a baseball game, it would be entry number two or three.”
And while today’s market isn’t a game, it is, Charfen says, a “once-in-a-lifetime gold rush” if you become the short-selling expert in your area. That doesn’t mean a reluctant “Yeah, okay, I’ll do that short sale,” or a desperate “I’ll take that short sale, I’ll take anything!” That doesn’t mean just add “Short Sales Expert” to your business cards and advertising.
It means that you have spent a lot of time acquiring the knowledge to become an expert in helping people who are facing the worst (or almost) financial crisis of their lives. It means you are looking for prospects in a short sale situation. It means that you advertise to those prospects, accept them, and commit to helping them negotiate the best possible outcome.
It means you understand you’re not doing this just for commission control. He wants to sell that house. He wants to help that family avoid foreclosure and financial ruin. You want to help not just your client, but your entire community so it doesn’t become a ghost town of empty, abandoned houses.
Why would I want to do that, you are asking? Why not let another agent deal with these people and their problems? Just give me a nice family with two incomes, 720+ FICO, steady jobs, a great down payment and I’ll find them the perfect home.
Of course you will. That is, if you can find that dream client.
There just aren’t many of them out there. If they’re that dreamy, they’re usually already in a house and won’t move up or down or anywhere else until the economy is in better shape. It’s that lack of dream clients that drives a record number of real estate agents out of business every month.
So who is out there to buy short sale properties? Lots of first time buyers, especially people who are renting. Relocation of families that have to move. Investors looking to start or expand their portfolio. Short sales are an opportunity to purchase a property below market value. Read: A great deal for buyers. There are plenty of properties to choose from, and banks would rather sell the property than go through the time and expense of foreclosure (i.e., “They’d rather remove a nonperforming asset before acquisition,” as Charfen puts it).
What is truly unfortunate, worse than unfortunate, is the number of people whose homes go into foreclosure when they could have had a successful short sale. There’s a lot of misinformation out there, and there are a lot of people who actually think, “Short sale or foreclosure: same thing.” So they don’t make one mortgage payment, and then another, and then another, and their lives go into a high-speed downward spiral.
It doesn’t have to be that way, says Charfen. Once an agent is armed with training and a support network, “the agent lets the people in his database and others know that he’s the short-selling expert, that he’s available and can help the seller find to sell and the buyer to buy.He begins helping people, and his delighted customers enthusiastically recommend him to their family, friends and co-workers in similar situations.He is known as the ‘superhero’ of short selling who not only handles short sales professionally and efficiently, but saves people from foreclosure.
That’s not to say short selling is easy, it’s not. They require significantly more and different documentation than a traditional real estate sale, and one missing piece can set transactions back for weeks or months, or kill them altogether. Being a short sale superhero requires exceptional negotiation skills as you represent the seller and interact with the buyer’s agent or various buyer’s agent offers. At various times, you may be in contact with attorneys, title people, property tax people, contractors, tax accountants, accountants, and others. And then there’s the lender in the form of a loss mitigator, an underappreciated and overworked individual who already has 300 files on his desk and why should he prioritize yours? No, short sales are not easy. If they were, everyone would be doing them, right?
There are incredible opportunities right now for real estate agents who
o They are willing to spend time educating themselves about short selling.
o Are committed to putting systems in place to help manage these complex transactions.
o You want more than a commission check – you want to help people get the best possible financial results and get on with their lives.
Those agents will thrive in this market and make 2009 the best year in its history.