David Mortaz

I was reminded of this quotation by Mohandas Gandi after discovering by accident that a Buyer's Agent who had submitted an offer for one of our REO Listings had wasted no time to trash our business practices on her Facebook blog!! Her exact quote was " Writing an offer on REO property on sellers terms. Listing agent provided 3 pages instructions on bold print: NO LOW BALL OFFERS accepted, please do not ask for credit, inspections, disclosures, please do not call.....Frankly, I can't wait for this REO era to be over"!

Well, my natural inclination was to trash her in our blogs! But then we would have a village full of idiot realtors who are all blind! This however, caused me to go back and review the 3 FULL page instructions we do provide to help some agents who have never written an offer on REOs.

This section doesn't say anything about asking for credit, inspections, disclosures. In fact, it's illegal to advise clients against inspections. In the section of 3 page document about Highest & Best Offer, we state, "Please, No Low-Ball Offers since it's a waste of everyone's time.

So, you will be the judge if these are accurate representation of our intent to educate and facilitate the process of liquidating properties for our clients and help buyers agent become more effective. "Please, No Low-Ball Offers since it's a waste of everyone's time" is NOT the same as "NO LOW BALL OFFERS accepted". There is a huge difference here since not accepting offers is illegal and we are bound to submit ALL the offers to our sellers. But discourging low-ball offers is completely different.

This is perhaps why Realtors have a similar reputation of attorneys and politicians. Because some of us, see a piece of information and spin it to gain an advantage. It shows desperation and complete disregard for the ultimate cost which will be born by ALL realtors. The fact that she's trying to use Social Media to build her business is understandable, but to mis-quote and mis-inform her audience is simply sleazy.

So, instead of exposing her sleazy tactics, I went to her facebook page and dropped a polite and private note that perhaps she should be careful not trash the other principals in her ACTIVE transactions. I mean, what sort of idiot you have to be to risk your active transaction by trashing the other principals!?

What would you do if someone mis-used and abused your published information and you were in a transaction with her. I would like to hear from you.

We recently had our most difficult REO escrow with a broker who brought a weak cash buyer and wanted us to cooperate with him to help secure the property for his clients. So, we signed up a CA Broker Referral Fee agreement to document his plans to share his sell side commission with us.

I should have known we are dealing with a dirt bag the minute we got them a counter and he started claiming he needs credit for repairs despite his clients and him signing the counter that stated they accept the fact that they will get ZERO dollars for repairs discovered during inspection since this is an AS-IS REO property.

To make the long story short, the held the property hostage and refused to provide any estimates for repairs from contractors. A lesson here, if a party eamils you requests for repairs that are round numbers ($10,000), then you know it's a bogus claim since estimates for repairs at least have some odd numbers in them which ends in cents and dollars. After they held the property and escrow hostage, we got them a $4,000 reduction in sale price to account for their bogus claims! But wait, this gets interesting.

During a visit to the property we discovered that they had started working on the property and remodeling the property BEFORE the close of escrow! They had removed fixtures, sheet rock and some signs from the property! So, I am thinking about Trespassing, Theft, Property Damage.....since they had busted a door to get into the property. All the selling broker claimed ignorance that he was NOT aware the buyers intentions and that buyers thought the escrow had recorded.

We had to get Mechanic's Lien release to get our seller clear of any potential liability and then escrow closed. Then the wait for the commission check turned from days to weeks; only to discover that the Escrow company is waiting for the Selling broker to send a Broker Demand which is consistent with the Broker Fee agreement they had signed with us!

He was not sending it in and his admin claimed he was in Vietnam traveling with no access to phone and emails! On the 2nd week of the wait, I call the dirt-bag; only to discover that Vietnam had apparently installed new telephone lines and he was accepting phone calls. His claim is that his Buyers are very upset about the Broker Fee agreement and he know wants to CANCEL this agreement or at least cut it in half!? Are you smiling too!?

Does it make sense to take this guy to small claims court!? Have you ever work with such people before!?

We are starting to enjoying the Water Boarding treatment we get from our HOA managers who despite cashing our check for documents, refuse to even acknowledge that they have received our order!!

Some of them don't accept online payments or credit cards which creates a lot of delays. I guess setting up an account with PayPal would be too inconvenient. In one case, this HOA manager was claiming she had NEVER received our document request, despite the fact that I had emailed it to her! I forwarded her the original email the 2nd time and she was still denying it. Then came the cashed check and she was STILL denying that she NEVER received our order for documents. Needless to say, we had to print/scan a copy of the canceled check and email her a copy before she agreed to process it!

The challenges is that we anticipate a lot of REOs from this development, so there is no option to go ballistic here. And if we escalate to her management, the next condo listing will be jeopardized since she will find a way to get even.

No offense to our guest at GitMo, but if this is NOT Water Boarding, what is? I know some friends of the former White House were not classifying Water Boarding as Tourture, but this clearly goes well beyond the realm of professional conduct.

However, I am happy to report that after being Water Boarded for 3 times last months, my team is no longer calling it Water Boarding, they affectionately refer to it a "Freedom Tickling" by the HOA!! This experience had made us much more appreciative of SFR listings and thought me a lesson not to EVER invest in a Condo!

What do you guys experience? Any one Water Boarding you these days!?

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!?