I'm P*ssed Off At Some REO(Foreclosure) Agents

May 19, 2009 By 9 Comments

Apath

I try to behave myself, I try to keep my emotions www.ered so that my opinions can be read and understood without coming off so harsh that people click away before they finish reading.  Well today I just don’t care.  This is a list (though not comprehensive) of the reasons that I’m sick and tired of what SOME agents are doing:

  • “I haven’t seen the property so I cannot help you.”
    • If you haven’t seen the property, know nothing about it, and are not offering to help me find someone who has seen the house to help me, how can you possibly be representing the seller?
  • “I have so many listings that I cannot do X, or Y, or Z”
    • Your lack of staffing to handle workload or your inability to say “no” to too many listings is not an excuse for being unprofessional and arrogant.
    • This means you are too busy to act professional, which means that you are not a professional, which means you shouldn’t be a REALTOR since we are a trade organization of professionals.  Try selling a house without being a REALTOR and see how it goes.
  • Total lack of due diligence on anything related to the property
    • City inspections (that are required) are often forgotten or ignored till pressed by buyer’s agent
    • “Buyer and Buyer Agent to verify everything” – that’s code for I’m too damn lazy to do anything so a trained monkey would have done more checking on this property than I did.
    • The SMELL oh my god the SMELL. Why don’t you deodorize the home (or at least try) before you make me walk in and come out coughing and ready to vomit?
  • Responses from REO agents during offer submission can take days (even to confirm that the offer was submitted)
    • Apparently since they get multiple offers on most everything, they can provide no customer service because someone will patient to stick around.
  • Listing foreclosures at prices 15%+ under market value to garner multiple offers (10+ often)
    • This brings a lot of people through a house that they simply cannot afford because they can pay the list price but not the selling price.
    • Many times the agents do not respond to inquiries on status or questions regarding property/offer submission rules/etc. for days or sometimes they never respond at all.
    • An argument can be made that the listing is not a “true and accurate depiction of the property” as the list price is never intended to be honored.
  • Only one photo of the property and often it is out of focus, at night, or shows very little of the property.
    • Some times there are more photos of the outside, but none of the inside.
    • Sometimes the photos of the inside are shot so all you see is a floor.
    • Sometimes the photos show a great upstairs only to find a mold-infested basement.
  • House is a teardown or major renovation project but they say nothing of this is the MLS remarks.
    • It’s a total waste of time for my buyer and I to even see this house.
  • House could qualify for an FHA or VA loan (appraisal would be fine) and the seller will consider an FHA or VA offer but it isn’t listed as an Acceptable Term under the MLS.
    • I would have shown your house had I known it would have worked for my buyer.
  • FHA or VA is listed as an acceptable term but the house is so far beyond repair that it isn’t likely to work.
    • Thanks for wasting my buyer and my time (AGAIN) on a house we cannot purchase.
  • An utter lack of information inputted into the MLS listing
    • Why would they bother giving me and my clients information on room descriptions & dimensions, finished square footage, condition, features, etc when they can let 1/2 the buyers skip the property completely and the other 1/2 waste their time seeing a house that doesn’t fit their needs.
  • Little to no effort is made to check on the status of the title work before closing.
    • If there’s a problem with title work and the house doesn’t close on time a buyer may be homeless but there’s no concern shown from the listing agent.

Now this is not to say that all REO agents are doing this poor of a job and most of the time it is only a few of these issues on each house – still, the utter lack of professionalism and accountability of a few agents tarnishes the whole business since they represent a sizable portion of the total foreclosure MLS inventory.  I LOVE good competition and there are some GREAT foreclosure agents out there that do a fabulous job.

Filed Under: Community Issues, Ethics, Foreclosures and Short Sales, Info for Buyers, Opinion, Personal Experiences, Useless Ramblings Tagged With: , ,

Foreclosures and Safety

April 19, 2009 By 3 Comments

Caution - Foreclosure!

This past week I’ve been in many different foreclosures with my clients.  Some bank owned homes are in turn-key (aka mint) condition and are wonderful.  Others are…. how do I say this…. crap.  Many are simple run down and need repairs, cleaning and updating.  Many more though are safety hazards in their current form.  I’ve seen frozen houses (pipes burst creating icy stairs, floors, etc.) mold houses (where a wall of mold spores hits you when you step into a room) loose electrical wires, broken steps, rotted/loose flooring, and more.

From the moment I walk out of the car to the second I open the front door I am looking at general condition and evaluating the shoes on/shoes off policy… in houses in good condition with clean flooring we take shoes off, in houses where the condition and cleanliness are not good, we keep shoes on.  Often the house appears relatively clean but the stink is so bad that you are gagging through much of the house. Sometimes I’m tricked into thinking the house is good until we get part way into the home and I step on something nasty or we see something we need to get at in a dirty area and go back for the shoes.

I still do not understand why banks won’t do more basic repairs to the house.  I think that in some cases the banks don’t know enough about the condition or have not been counseled on making repairs.  In most cases the bank has not seen the property and is relying on the advice of others (or their fancy spreadsheets that give them all the answers using formulas that have nothing to do with reality). Often new carpet and paint will go a long way… and in other cases that isn’t nearly enough.

Today I’d say 90% of 1st time buyers are using FHA or VA financing, which both have higher property condition standards than Conventional, though the gap in requirements in continuing to decrease.  I estimate about 1/3 of the foreclosures out there are so bad that they either require Cash or Rehab Financing to purchase…. which dramatically reduces the potential buyer pool and in the case of Rehab Financing (FHA 203k is an example), it can substantially increase the borrowing costs due to the higher interest rate on these products.

Due to these issues, many foreclosures are selling for far less than they could with basic to moderate repairs… obviously the banks don’t want to start projects that could become a Money Pit but in many cases they are taking 2x – 3x the financial hit to sell it “as-is” versus making the repairs.  As my friend and fellow Realtor blogger Teresa Boardman says: “Banks can’t sell real estate.”

So if you are touring bank owned homes, PLEASE WATCH YOUR STEP!

Filed Under: Community Issues, Foreclosures and Short Sales, Opinion, Personal Experiences, Useless Ramblings Tagged With: , , , ,

Why the $15,000 Home Buyer Tax Credit is Awful

February 9, 2009 By 4 Comments

Government - Despair Poster

America is in serious trouble and it will take many efforts to bring the country back from a recession/depression.  While most of the measures that the U.S. Government is taking are well beyond my understanding, their efforts on housing are something I believe I have a firm understanding and it is with these efforts which I have concerns.

Many have argued that the reason the economy stopped growing was that housing started falling and that the way to grow the economy again is to stop the fall in housing.  My argument is that housing was just one of the things that bubbled out of control (as did personal debt, corporate debt, derivatives markets, etc) and that until these are all back in line with historical levels we can’t put a firm footing to build upon.

While most housing data uses the Median Sales Price of all home sales to determine affordability, I believe that this metric is not a good representation of current housing prices.  If we look at the Twin Cities, the 2008 Median Sales Price was $195,000… a healthy 13.3% decline from 2007′s $225,000.  If we separate the sales data into “lender mediated sales” and “traditional sales” we find that the Traditional Seller Median Sales Price has only fallen 4.1% to $223,000 in 2008 from $232,500 in 2007.

The lender mediated sales we have today, the foreclosures and short sales, are a relative short-term phenomenon on the timeline of home ownership.  Even if these sales persist for a few more years, when these sales are gone the only homes and prices we’ll have are those of the Traditional Sellers.  With interest rates near all-time record lows, the current prices are still affordable but when interest rates climb to 6.5% – 7%, which are still historically good rates, home affordability will sink 20%+ and we’ll again be faced with housing prices above sustainable levels.

The problem with the $15,000 tax credit currently being proposed is that it will artificially put a near-term bottom in house prices but leave us with prices still too high when interest rates move up.  Further, while this might provide a large incentive to purchase homes, if buyers are unsure about their job security, will they feel comfortable with taking on more debt than they likely ever have before?  To me, the best way to spend this money is to get the job market growing again and let house prices settle at whatever level the market forces dictate versus at an artificially higher level.  While this may seem more painful in the near term, I believe it will leave us better off in the long run and will help prevent a potential double bottom in real estate prices.

Added 2/9/09 @ 6:30pm-I forgot to note that this credit is proposed to last 12 months so while we all agree we need economic stimulus NOW what we get instead is Congress offering housing stimulus with no urgency to buy now, but rather sometime in the next 12 months.  I hope we’re better off in 12 months than we are today and while I don’t think this is the best course of action to take, I think that if we do use it then we’d be far better off to make it only good till July 4th or September 1st or something much more limited in timeframe.

Filed Under: Info for Buyers, Market Stats, Mortgage Rates, Opinion, Personal Experiences, Useless Ramblings Tagged With: , ,

22% of Minneapolis Association Realtors Lack Ethics (Training)

January 5, 2009 By Leave a Comment

Every 4 years the National Association of Realtors requires that members take a 2.5 hour class on the Realtor Code of Ethics to refresh their memories on what it means to be a Realtor and the level of professionalism they are expected to maintain and to expect from others.  The deadline for the current quadrennial ethics requirement was December 31, 2008.

As of 11:15pm on Monday, January 5 2009, MAAR’s web site states that 22%, or more than 1 in 5 members, have not yet completed their training.  The class has been available literally dozens of times over the last 4 years and is also available FREE OF CHARGE online and yet 1500+ members have not yet completed their training.

To many Realtors this class is a burden but it is an important component of what makes our membership valuable.  Anyone licensed by the state can sell real estate but to be a Realtor you have to commit to hold yourself and your peers to a higher standard.  I certainly hope my peers will rise to that standard quickly… they have until March 1 to complete their class or they will lose their membership in the association, which means loss of MLS access, electronic lock boxes, etc… basically the lifeblood of any successful Realtor.

For Realtors that have procrastinated for the last 1,468 days, you have 53 days and counting… better hurry!

Update 1/21/09:  With 38 days remaining, now just less than 10% of Realtors still need to complete their ethics requirements… we’ll see who’s left without a chair (and a membership) when this song ends on March 1st.

Filed Under: Community Issues, Ethics, Opinion, Personal Experiences, Useless Ramblings Tagged With: , , ,
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