David Mortaz

Some of our Asset Management companies that offer us REOs for sale, don't compensate us for evictions!! Their rational when we hinted on getting compensated was that "you are getting paid for the listing and the eviction is part of this".

Evictions take a huge emotional toll on my team and it was a hard sell to begin with let alone when the agents have to do it one their OWN dime and OWN time! Several times, we have hired translators to help with occupants, only to have to compensate them from our own pocket! We have stopped this practice since we discovered that we can NOT bill these services to our clients.

Now comes the new wrinkle where some of these evictions are heading to California Superior Court!. And we must appear in court and offer testimonty in support of lender's eviction attempt. This is a huge time sink, since most court hearings get postponed at least several times. To add insult to injury some of these properties might NOT convert to REO listings either. One of these contested evictions ended up being sold at Trustee Sale after we had spent weeks negotiating a Cash-For-Keys agreement.

Granted our success is based on building relationships with our Asset Managers, but when it appears that the other party doesn't appreciate our time and service, the relationship tends becomes abusive. We already invest a lot of time and energy in nurturing these relationships, but something doesn't feel right with these kind of practices since it sends the signal that our services are worthless to these clients.

How far are you willing to go to appease an Asset Manager!? Where would you draw the line!?

Just in case you were wondering how hot the real estate market is in San Jose, we just received a Cash offer for $320,000 on a Bank-Owned (REO) property we listed 3 hours ago for $275,500!! I know Goldman Sachs made tons of money, but is the recession over!? Why would someone write a cash offer for a property in Alum Rock area of San Jose and offer more than what the bank is asking!? The only conclusion I can draw is that it's PRICE!!

There has been plenty of theoretical justification for buyer's use of "psychological Reference Point" in Merchandising Research. And it points to this Reference Price as a internal standard against an "Observed Price" in marketing to consumers. Bottom line is that Retailers use the SALEs gimmicks to move out inventory where the consumers spend a lot more money without regard to "Quality" when the merchandise is priced well below our internal standard!

Have you ever taken home a shirt from the Clearance Rack, knowing full well that you will never wear it because it has a SALE sign on it!? Have you ever paid too much for something only because it was on Sale!? And believe me, pricing properties lower than everyone expectations really works! It generates tons of interest. And precisely because people are seeing prices well below their "reference point", we believe they over spend!

Could it be that my bankers are taking a page from Retailers and are marketing properties the same way Retailers conduct Sales!? We are seeing quite an interesting trend where our valuations are cut when we price REO properties for sale! One industry observer was stating that the FED has asked the banks to keep the property prices low, to avoid the creation of another Real Estate bubble!! We think it's having an opposite affect. What do you think!?

I am desperately looking for suggestion to better communicate our Asset Manager’s requirements for a true Pre-Approval vs the canned Pre-Quals we are still getting! Despite the fact that we state in the Private section if the MLS listing that the Pre-Approval should include a “Loan Number, Rate, Term, ....etc”, we are still getting the same Pre-Qual letter from the loan officer in their office! Is it the similarity in the names!? Is it because most realtors don’t know what to ask for from their loan officers!? Is it the culture gap between the lending side and the real estate side of the house!? What is it?! The problem becomes a tactical nightmare when we are getting more than 10 offers per listing and we have to unite the original Purchase contract with the 2nd attempt at getting the pre-approval right! We are convinced that the buyers are put in a difficult position if their agent neglects the financing side of the transaction. Have you figured out how to communicate this requirement!? Please help if you have! Please, please help ………………………………!

Our Monterey County listing in South Salinas was posted on MLS yesterday and it's already generated 3 offers. Part of the reason is that we aggressively marketed the property even while we were waiting for the Listing Agreement and price. We hosted an Open House and posted the property on Craig's List while we were waiting for the Listing Agreement and price! Our own website which is syndicated to Yahoo, Google, Vast, HotPod, Trulia and Homescape also generated a lot of info requests for the property. The results are more qualified, pre-screened buyers with less probability of cancelations! We got more than 12 buyers who had called and got on the waiting list for us to notify them and their agents when the price becomes available. What works for you?! We invite your comments.

Our recent REO listing in San Jose generated more than 27 offers and we had to stop accepting offers in 3 days when the Asset Manager wanted to focus on top 4 offers. That was when one agent called and insisted that he will be making a strong offer. I informed him that there are 27 offers with ALL of their pricing above the asking. What he told me next is the inspiration for this blog.

He asked me: "will you sign and Non-Disclosure Agreement that you will not share my offer with anyone else"!? At first, I wasn't sure what he was asking, so he repeated that he will require an NDA before he sends me an offer! I replied that I have 27 offers and I don't think I will have time to publish his offer to anyone! He then said, "I will take you word on it and won't send you an NDA"! The next day his office called and wanted to see if they can deliver the offer manually since their fax and scanners were NOT working!! A day after we had stopped taking offers they emailed us a document which was a scanned copy of an MS Word document which was NOT readable!!

Granted some of this content belongs in my blog on "How to write the Highest Offer on an REO and still lose", but I needed to ask the question posed in the title. Have you have ever been involved in a transaction where you had to sign an NDA before seeing an offer from the buyer's agent!? What's the big deal with his CAR forms!? Is it the buyer who wants to remain anonymous!? With 27 offers who need the headache. Even if I had one offer, I would not sign the NDA.

Would you!? I welcome your comments!!