J Philip Faranda

With the economy in decline and the housing market more so, real estate agents are leaving the industry. This is first and foremost a sad thing for anyone who loses a job or has a business fail; I never like to see anyone suffer or have financial problems. Overall, however, there is a silver lining to that cloud for the consumer and the licensees who remain active in the industry.

Not all, but a disconcertingly high percentage of the ex-agents should never have been agents in the first place. In the market run up from 2002-2005 we saw an unprecedented number of new and reactivated licensees enter the market to share the bounty. However, while the short term profit may have been favorable, we are still paying the price of the inexperience and, often, the negligence of practitioners who were able to outrun their mistakes in the irrational exuberance.

I remember well the calling cards of new agents who could hardly believe their good fortune at their involvement in a high-dollar transaction. Deals got screwed up left and right, but who cared? Another offer was a week away. And if you had a neophyte representing you in a purchase, it was never their fault your offer wasn't accepted, you just lost a bidding war. We had people who never sold a house in their life collecting commissions on multimillion dollar sales like it was candy land. Just like the stock market spike of the late 90's, many of people looked far smarter than they really were.

I know this because I am part of the cleanup crew. People listing their homes for sale today are horrified to discover that decks, finished basements or bathrooms they were told were legal at their purchase are, in fact not in compliance. Neither the last listing agent nor their buyer agent bothered to pull the property card, and the title company missed the detail in the rush of the time. I am in the midst of selling a property that last passed title in 2005 which has a submerged oil tank that would have failed a test in 1995, let alone now. It is costing my clients over $20,000. Twice in the past few months I have run across people who have excellent credit inexplicably stuck in high interest loans, most likely because a loan officer decided that profit superseded honesty. Where was their agent? Where was the advocacy? The list goes on, but I wish I had a dime for everyone who tells me that they regret using their newly licensed cousin or part-time aunt for their agent last time.

In each of these instances, an agent was paid handsomely. They did not earn that commission; it was monopoly money they used to buy homes and cars that they can no longer afford. In many cases they meant well, and their broker is responsible for the mistakes. We'll never know in most cases, but our collective karma has caught up with the industry. Sadly, whatever price we bear is more than being shared by our clients who trusted us with their financial lives and were often hurt. We made our bed and now we are sleeping in it.

This brings us, of course, to today. One agent I know has his real estate website redirect to another endeavor. BMW's have given way to Hyundai's. An attorney told me recently that his biggest source of bankruptcy filings and short sales are real estate agents themselves. Enormous brokerage offices have rows of empty desks. And I am bombarded by solicitations for 2nd income opportunities from people who must know that agents are scrambling for income. Attorneys are actually thanking me for referrals.

But those of us who remain plying our trade have discovered a new environment: fresh air. It isn't so noisy in here anymore. The overwhelming percentage of agents I am dealing with now are returning my phone calls and emails in a professional, timely manner. Oil tank tests, surveys and other due diligence are being handled in the beginning of transactions and not as part of a last minute scramble. Many agents are telling me how they remember the last decline in the late 80's and how they coped. We are a profession again, not a pit stop for career nomads. We are conducting business, and even though the circumstances are worse, the process is civil and professional because the frosh and junior varsity are no longer clogging the field. And we know how to cope with the PR problems exacerbated by the "exes" because we always have.

Consumers now should have more confidence in the industry because by and large the pickers of low hanging fruit have left the market. Those who remain are survivors, fighters, and overall far more professional and experienced. They don't pick apples with a broom and bucket; they know how to use a ladder. The drama may come from the outside, but far seldom from the agents themselves. It is for these reasons that I am glad the herd has thinned. I no longer have to sift through newbie's to find a competent colleague. And these are people that know how to return a phone call, pull a property card, review a good faith estimate, and advocate for their clients. I'm not doing their work for them, or cleaning up their mess.

I salute the survivors, and I look forward to closing transactions with them. Together, we'll help repair the damage done in the past decade and build the public's confidence in the profession.

I don't know what the full story is, and we'll perhaps never know, but Caroline Kennedy has withdrawn from consideration to replace Hillary Clinton as a New York Senator. My money is on the idea that once Caroline Kennedy found out that she wasn't Gov. Patterson's choice for NY Senator, she took her ball and went home. Regardless, this ends a media circus that taxed my faith in my fellow NYers who thought she'd be a great choice.

Appointing Caroline Kennedy as Senator would be extremely demoralizing to most New Yorkers. She would not have earned it save for her accident of birth, and it would be contrary to the spirit of upward mobility that the current administration seeks to champion. Simply put, nepotism sucks. Yes You Can unless there is a Kennedy who wants it. Sorry.

Enormous deficit aside, my faith in Albany was on the upswing before this spectacle. The Empire State Hypocrite was out of office in disgrace, replaced by a man who appears to be down to earth, honest, and pragmatic. He is visually impaired and a minority. Yes He Can.

But my favorite thing about Governor Paterson is that he signed the Commission Escrow Act, something George Pataki vetoed in spite of the huge legislative (and popular) support of the bill. This was a long time coming, and I am hoping that it is the first of many things that are positive coming out of Albany instead of the partisan gridlock we all put up with.

Frankly, I am disappointed that Ms. Kennedy wasn't dismissed earlier. From my vantage point this was ego driven, and she got a rush from all the attention, at least while it was positive. If her name were Caroline Faranda she's have gotten as much ink as a possible Senator as my dog. Her appointment would have rendered the Commission Escrow Act more of an anomaly than a trend.

Here's to a trend of progress, and not slipping back into politics as usual. I wish Caroline Kennedy well and appreciate her philanthropy, but the delusion that she was qualified to be a Senator would have undermined us all. I hope the new Senator is the best choice for New York and the country and not the best political choice. I also hope that it continues what appears to be a movement to restore New York as the Empire State and not the Red Tape State.

Buying any foreclosure is tricky, and a short sale is probably the longest process. Is purchasing a short sale right for you? Perhaps you rent in Westchester, Rockland, Putnam or Dutchess and are considering a short sale purchase in one of those areas. Here are some things you ought to know:

• You can't be in a hurry. Negotiating a short sale might only take a month but in most cases it can go 90 days or longer. So don't hire a mover, end your lease or lock your rate until you have confirmation that your offer is approved by the bank. If the seller accepts your offer that isn't an approved short sale; any offer the seller accepts still requires approval from their lender.
• You are buying the house "as is." In rare cases, such as in an environmental problem, the lender will pay for repairs but most if the time you are getting the house as is, as found. The seller is in hardship, so they won't be able to help either. So make sure you do your inspections and know what you are getting into before going forward.
• You can't "flip" the house. Short sales are very good deals in most cases but not so very low that you'll be able to turn a short term profit. They usually are retail value, less repairs and maintenance, and perhaps less a bit for speed.
• Status updates take longer. Unlike regular transactions where updates are a phone call away, all parties are forced to wait on the lender, who is not, shall we say, committed to keeping everyone happy. This doesn't mean that the purchase is lost in the ether; but it does mean that more patience is required than normal.
• If the listing agent is not a short sale specialist, it may turn into a nightmare. You wouldn't want a podiatrist giving you root canal, nor do you need a rookie cutting his or her teeth on the biggest purchase of your life. Short sales are hard for experienced experts like myself; an agent who is doing their first or 2nd short sale is in for a long ordeal. The best way to handle that transaction is to not enter into it. If the house looks right for you and a short sale is disclosed, ask how many short sales the listing agent has successfully closed. If the agent hasn't done many, the best thing to do might be to pass the house by. Otherwise, you might be in for 6 months of frustration.
• Subordinate financing takes longer. If the seller has a second mortgage, then two lenders have to render their approval, and coordinating the two complicates matters. Some specialists won't even list those homes (I do.). Ask if there is another lender, and even if they are the same institution, it will add a measure of difficulty (the same lender but two different loans means two different divisions or departments). Do a lien search on the home before going forward. If there is a 2nd lien the listing agent hasn't disclosed you might consider walking- they may not be in command of how to close this workout.
• Ironically, you have to be ready to close rather quickly. This is the "hurry up and wait" irony of the short sale process. The lender will make you wait far longer than a normal purchase for a decision, but when that decision is issued there will typically be a 15 or 30-day deadline to close or the sale approval has to go back to review. By this point you should have done your inspections and other due diligence completed. Once the lender approves the sale it is then time to lock the rate, call the mover and give notice on your apartment.

This is a broad overview, but it boils down to knowing when to hold and when to fold. No two short sale transactions are the same, even with the same lender. If you are in a state where attorneys are used it helps to have an attorney represent you in the purchase with short sale experience, but at the very least make sure they are experienced at real estate.

The long process aside, buying a short sale does put you ahead of the market, as the prices are more aligned with where the market is heading. This is significant, because the places where the bulk of my short sales are done (Westchester, Rockland, Putnam and Dutchess counties, and ther same goes for NYC and Long Island), prices are so high that even a 5% reduction can mean tens of thousands of dollars to you.

J. Philip Faranda is Westchester's Premier Short Sale REALTOR. Find out more at www.NYShortSaleTeam.com

Chesley Sullenberger is the pilot who saved all aboard yesterday's Flight 1549, which you have no doubt seen and read about by now. The local news calls it the "Miracle on the Hudson" and I agree. The man faced a freak occurrence, made a life or death decision, warned the people, exercised heroic skill, and then walked the sinking plane TWICE to make sure all were out.

And everyone was saved. This man is a hero.

It is also worth noting that once he did his job, hundreds of others were able to do theirs well also. The NY Times called the rescue effort "an ad hoc flotilla of boats." I get chills. So I extend my gratitude to NY Waterways, the Coast Guard, the NYPD, FDNY and the rest. But this is about Sully, who made the event possible. Without his clear thinking, excellent decision making, and perfect execution, it would have been just another unfortunate event.

I therefore am calling on President-Elect Obama to appoint Chesley Sullenberger to a new position of US Economy Czar, overseeing the Federal Reserve, the SEC, Fannie Mae, Freddie Mac, and to answer directly to the President. Here are my reasons, and they are sound:

• Mr. Sullenberger knows how to handle a crash better than the clowns we've had the past few recessions.
• Mr Sullenberger told the passengers to brace themselves for a hard landing. How I wish Bush, Greenspan, Dodd and the other politicians would have had the guts to do the same. We would have been more prepared.
• Mr. Sullenberger knows how to make a decision devoid of political consequences, with simply the best interests of all in mind.
• He was the last man out of the plane. He made sure nobody was left behind. That is the antithesis of all the corporate scoundrels who got tens of millions in golden parachute money after they ran their companies into the drink, leaving them to sink.
• "Sully" is all about safety. He is the founder of Safety Reliability Methods, Inc.

The USA is a meritocracy. We succeed when we put proven winners in charge and we fail where nepotism occurs. Chesley Sullenberger is clearly underutilized. I would love to see how this guy would handle some jerky loss mitigator who won't approve a short sale, Bernard Madoff, and the rest of the crew who contribute to the mess. How would things have been different if he were in charge when Katrina occurred or when the sub-prime crisis hit? I say we'd all be better off. Move over Lenn Harley, you were my first choice until yesterday.

Thank you, Captain Sullenberger, for reminding us that there are heroes in our midst.