Michael Kelly,CIPS,CRS,SRES

Last year I had the good fortune to work with one of the larger banks in the sale of their REO (real estate owned) or foreclosed upon properties. I attribute this to my attitude of always being helpful to everyone in our industry and to always being kind and considerate to all professionals who make up the galaxy of the great real estate community universe. A lender I had worked with for many years managed to get me an application and I became approved to represent this particular bank. I had a very good 2008.

We have also had Realtor/Agents who also represented banks in the liquidation of their assets. Many of these folks can be amazingly rude, arrogant, and not respectful of our time and energies; seeming to have forgotten what it takes to nurture a buying couple to the escrow table! But what's been particularly galling is the amazing "procedures" a Realtor/Agent must follow to get their offer presented. These "hoops" have been many and varied with the caveat--"Don't call me--I'll call you" attitude.

Well this seems to becoming to an end as more and more brokers have grown weary of these Realtor/Agent generated "procedures" enough to many an attorney involved in the process. Hence this decree, "If the client/bank has a specific "procedure" it must be in writing to the Realtor/Agent to be valid". We have many who have whole treatise on how to present your offer! These tomes make the buyer's agent follow many a step to present their offers. They have "codes", explicit instructions, warnings ("No FHA!) and other very specific criteria for getting the offer presented with the exclamation, "Failure to do so will result in the offer not being presented!"

Brokers have been getting an earful from their Realtor/Agents for a couple of years now about these REO Kings! In our marketplace REO's are a red-hot "Seller's" market. Just over a 30 day supply of product. They dominate the sales in certain areas and price points of our county. So now the attorneys are saying we don't have to take this anymore!! But here's the problem-are YOU going to be the guy or gal who goes up against the REO listing agent demanding a different set of rules for you? Do you really think by stating, "our attorney says you can't do this!" is going to endear you to the REO listing agent and get your clients the house? Want to risk one of your precious paychecks for principles?!! The great question of the minute here on Activerain? Your thoughts?

Our market in certain price points is a very hot "Seller's" market. If you are a bank/REO seller, we have a 1.5 months supply of homes available on the market. Overall, our supply is around 4 months. CAR states 6 months supply is a "balanced" market. However, Short-Sales? Over 7 months supply, 190 days on the market for solds! Now here's the conundrum of this "hot" market where our sales in December BEAT our July sales numbers!

Our sales in the REO/Short-Sales/New Home product categories, all Sellers who will NOT BUY UP, equate to 73% of ALL SALES!! And this market is 85% sub $500,000. Has there EVER been numbers like this before? And what does this portend for overall market stability? At first blush, the mid/upper end looses the "food chain" effect as 3 out of 4 Sellers are NOT going to be buying! How can we reverse this? But if our sales are predominantly in these market segments, what will it take to get regular home sellers to start pricing right to sell?

It is a riddle, wrapped in a mystery, inside an enigma!!

I find many a Realtor/Agent, after they've done their due diligence or contingencies for physical inspections, will come back with this long list of items and a huge dollar amount for a total. Now many an REO NEED a ton of work!! However, the Lender is NOT selling you a new home! Some Realtor/Agents come back insisting on new roofs, remodeled kitchens, bathrooms, residing, new flooring, windows,appliances, the whole enchilada!!

I suspect many do this as a strategy as many a Realtor/Agent who lists REO properties do not convey the "bad" news to the lender in fear of loosing the listing. Kinda like when you presented an offer in the old days and took your market analysis to SHOW the Seller just in case the "listing agent" hadn't done that! Always pissed me off when they did that!

The lenders don't like big numbers without very specific line-item costs! They may be totally aware of the properties condition (belive you me--I tell them and show them with tons of photos!) but need specific numbes in which to show THEIR supervisor. They like "menu's" in which to justify to THEIR boss WHY they would be willing to credit a certain dollar amount. So next time you get an offer accepted come back with a "line-item" list of repairs in "menu" form which the Lender can refer. You're far more likely to get what you want at that time. Remember, if you are the lucky "winner" of a multiple offer property be careful coming back with a huge laundry list. The "assett managers" are more than willing to tell you to stick it and go back to the 7 other offers for a better deal.

That's your REO tip of the day! And don't forget to listen to the "Real Estate Hour", www.KSRO, Sundays, 9 to 10AM PST or tune-in at http://MikesRealEstateShow.com and listen there!

I wanted to put this out there to the Active Rain community to see if we have another unregulated industry taking the already beaten down consumer to the cleaners along the path of foreclosure!-- The Loan Modifications Scam or Savior?

This is a big buzz word in the real estate industry. We have many folks facing upside down loans with equities gone and loan amounts exceeding current values by hundreds of thousands of dollars. They are scared to death of loosign their homes and are being preyed upon by Loan Modifiers who collect "up-front" fees of thousands of dollars for a promise of "Loan Modification. Are these folks for real? I know to collect "upfront" fees before a service is provided you must go through a registration process with the Department of Real Estate (california). So far only 55 companies have done this. But I googled Loan Modification and got over 200,000 entries coming up!!

Can anyone reccomend solid Loan Modification companies? Don't hawk your company but give me results! I just see this as a segment of our population at risk of scams after being scamed by "warm-body" lenders who had no problem representing them in the sale as an agent and then also as a lender collecting more fees on the loan end than on the commission side! Are these the same people?

I heard one report stating 25% of the loans which underwent modification went BACK into default. The source in the article said this was a good thing!! You lenders out there--how long could you originate loans if 1 in 4 defaulted!!?? So how does one tell the good from the bad? Simple question--complex issue. Would appreciate the Active Rain communities help on this one. Thanks!

I know times are tough for many a Realtor out there in real estate land. We are tempted to work outside our areas of expertise because we really NEED a transaction to close! But as the old guru once said, "Always want a deal but don't NEED a deal!" I see way too many Realtors working either out of their area or out of their area of expertise as they desperately need a deal! I hear it all the time and the excuses range from, "They are one of my best clients and absolutely won't work with anyone but me!", to, "It's my cousin, she only works with family!".

I see folks coming up to my area who cannot acess the MLS, can't get into the home as they don't have a suitable MLS keypad but insist they can perform and REPRESENT their client with the highest form of standard of care. I don't belive it! My market is dominate currently by the REO/Short-Sale with homes under $500,000 generating multiple offers and overbids. I see Realtor/Agents coming into my marketplace askng for a combinatin code to get into an REO I have for sale (we don't give these out as this compromies the security of our MLS and is strictly for Vendor/appraisal work), or insist I SHOW their clients a property! They then send me an offer, NOT TO THE GUIDELINES specified in the MLS confidential remarks (because they've never seen them!), based on NO local knowledge or market conditions because THEY NEED A DEAL!!

What of our client's needs? Does their buyer deserve this treatment? They are NOT alerted to the hot new listings, are fumbling around in the dark relying on a relative or Realtor/agent NOT keeping their interests in mind and at the fore of the transaction. So why not refer and get a 25% fee for insisting their clients work with a local expert! I have had Realtor's/Agents I've networked with for years call me out of the blue to have me "show" their client a property, ask me for "comps" and what price they should structure the offer!!

When our prices went through the roof across the Bay Area we had this happen all the time as Realtor/Agents felt why refer when I can get half!! Now with prices tanking the agents are repeating this because they are NOT closing any deals in THEIR market area!! I know I'm venting but this lack of standard of care infuriates me!! Your thoughts?