Martin Kalisker, WEICHERT, REALTORS®- Synergy: Metrowest's Preferred Realtor

Congratulations Natick! You've finally got the attention of the world looking down at the Natick Common figuring out what many of us residents already knew - - Natick is a great place to live!

Well, CNN actually ranked Natick the #8 best place in the country to retire. Although I am (hopefully) many years away from that milestone, I do enjoy living in South Natick and helping the community and its residents in the homeownership services that my firm has to offer.

Click here to read the entire CNN article.

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BORED WITH YOUR CURRENT JOB?

Do you feel like your office is holding you back from your true potential? Is your broker competing with you for new business? Do you sometimes wish that you could work with an energetic and fun team of seasoned and new agents that enjoy the benefits of being affiliated with an office that provides superior technology; a lucrative compensation package, including profit sharing; company generated buyer and relocation leads; and office management that does not compete with agents for new business?

Come see what WEICHERT, REALTORS®-Synergy has to offer.

Interested? Contact us now at http://synergy-metrowest.com/contact.career

http://www.synergy-metrowest.com

Thank goodness it's Friday. I've had a busy week.

I thought that I would enjoy a cup of decaf this morning while reading blogs from my favorite real estate blog site - Active Rain. But instead of divine inspiration and thinking about how neat it is to be participating in one of the greatest things a person can do - fulfilling the American Dream of buying a home - I got depressed.

It started with a blog entitled "The extinction of the Realtor" . I'd like to rename it "If the lemon ain't ripe, don't try to make lemonade". It seems that we are scraping the bottom of the barrel when we have to blame others for our failure to succeed earn a commission. Real estate has definitely changed. Personally, I'm happy to see the dinosaur like "icons" of the business leave. I'm happy to see new blood, but saddened to see that many of the new agents are coming into the business looking to be fed, rather than to go out and shoot the elephants themselves. And then there's the rabbit hunters. They may have been big game hunters at one time, but now they go after wounded animals and rabbits. You know what I mean - the Realtor who goes after Short Sale and Foreclosure listings and buyers without having a clue about what it is all about.

So, the point of The extinction of the Realtor a.k.a. Dinosaurs have to die too, is that the big banks holding the notes of upside down homeowners won't negotiate and let the Realtor make a commission for selling a home. While I am very sympathetic to the underlying reasons why someone goes upside down, I also know what it is like to see the situation from the view of the bank. I really wish more Realtors® did. That way, they wouldn't try to do short sales or pre-foreclosures on their own, but would enlist other financial and legal experts to ply their trade and build credibility to the situation. Otherwise, it's just sour grapes for the Realtor when he doesn't get his way and the bank will not negotiate the terms of the note that it owns.

I'm coming at this from an "educated" viewpoint. My prior background in public accounting, banking, securities prime brokerage and hedge fund financial management allows me to do so. Wells Fargo, Deutsche Bank, BofA, all the rest are not necessarily the bad guys! Most did not originate these loans. They bought a pool of assets (mortgage notes) that were sold to them as having a specific duration (income producing life) and yield (income) and return of principal. When a home is being sold short, the owner of the mortgage note loses a) principal; b) income from interest over the remaining life of the note; and c) some cash from the redemption of the mortgage note that cannot be invested at the same yield as before.

Most Realtors® don't understand this. In fact, I think anyone selling a short or foreclosed property should have this knowledge under their belt. Many Loss Mitigation Certified (LMC) brokers do.

There areshort sales that are being allowed for viable "hardships" and the government has offered money to those lien-holders that are willing to negotiate a short sale. But there are "strings attached" and many lenders don't want the government's money to deal with the situation. Sure, a homeowner can't be held responsible for a loan that was originated at XYZ home mortgage and gets sold (the note, not necessarily the servicing) to Chase and then Chase "pools" these notes into a mortgage backed security and sells it to Bear, who then sells part of it to Deutsche Bank and the other to a private hedge fund. But this is the reality. Deutsche Bank didn't do anything wrong. Neither did the hedge fund. If they write off the loan balance in a short sale, why should their investors suffer?

I know what you are going to say next. "Well, Deutsche Bank is going to take a loss if they have to foreclose the property." Sure, holding real estate is not exactly what a nationally chartered bank is supposed to do. But there are things such as credit default swaps on mortgage backed securities that cover these risks. Short sales are not a covered loss. Bankruptcy, default, etc. usually are. So, there's an entire other universe of investors out there that are writing "insurance" on the credit risk of these mortgage backed securities.

Confused. Good. That's what I am from reading so many short-sited blogs about the big bad banks and how Bear Stearns and Solomon Smith Barney (Citigroup) - - (remember Long Term Capital...?) ruined the entire financial community with securitizing mortgages. If they hadn't done this back in the 90's, there wouldn't have been money to create new loans. So then we'd all be facing 18% interest like our parents did when they bought their homes.

Maybe in hindsight that would have been better, it would have prevented people who couldn't afford to be in a home from buying, and many more people would be happy renting.

Happy Friday!

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BORED WITH YOUR CURRENT JOB?

Do you feel like your office is holding you back from your true potential? Is your broker competing with you for new business? Do you sometimes wish that you could work with an energetic and fun team of seasoned and new agents that enjoy the benefits of being affiliated with an office that provides superior technology; a lucrative compensation package, including profit sharing; company generated buyer and relocation leads; and office management that does not compete with agents for new business?

Come see what WEICHERT, REALTORS®-Synergy has to offer.

Interested? Contact us now at http://synergy-metrowest.com/contact.career

http://www.synergy-metrowest.com

BPOs are often associated with foreclosures and short sales, but other companies such as relocation firms order BPOs. A BPO stands for "broker price opinion," and it involves using a process very similar to an appraisal.

Companies hire a real estate broker to prepare an opinion of value. The representative of the broker, generally a real estate agent, compares three similar properties that have recently sold to the subject property and adjusts upwards or downwards for differences. The final result in an opinion of market value.

Broker price opinions are sometimes controversial, especially if the agent preparing the BPO has little experience or knowledge about the neighborhood. But BPOs typically cost less than a full-blown appraisal.

The reasons and timing for using a real estate broker for a BPO might include:

The cost of an appraisal is to be avoided.

When refinancing for lower rates or other reasons is a booming market, lenders are doing a great many of these loans. In many cases, the home has a recent mortgage where a full appraisal was performed. To lower costs, the lender may decide to hire a real estate broker to do a BPO, or broker price opinion.

In cases where a lender is considering foreclosure, or even if they are working with the borrower to come up with help with their situation, the lender will order a BPO. This allows them to get a reliable estimate of the current value of the property, compare it to the mortgage balance, and recommend solutions.

Coming up: Types of BPOs

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BORED WITH YOUR CURRENT JOB?

Do you feel like your office is holding you back from your true potential? Is your broker competing with you for new business? Do you sometimes wish that you could work with an energetic and fun team of seasoned and new agents that enjoy the benefits of being affiliated with an office that provides superior technology; a lucrative compensation package, including profit sharing; company generated buyer and relocation leads; and office management that does not compete with agents for new business?

Come see what WEICHERT, REALTORS®-Synergy has to offer.

Interested? Contact us now at http://synergy-metrowest.com/contact.career

http://www.synergy-metrowest.com

I'm at my wit's end with Realty Trac and Foreclosure.com. It seems that I am in the service business, whereas they are in the taking other people's money business. To go one step further, these companies are making my service business look bad to consumers.

Let me explain. Our national website www.Weichert.com, has teamed up with Realty Trac to provide consumers access to foreclosure, REO and auction properties throughout the country. When someone inquires about a property that they see on our website, a local agent is contacted and a "warm transfer" of the consumer to the agent occurs. When they are looking for something with an MLS number, I'm all over it. However, when they give me a Realty Trac property ID, I'm at a loss.

Sure, I can put on my "salesman pitch" and inform them that I'd be happy to research the property and contact the asset manager on their behalf, but in reality, these listings are just a "teaser" to the American Public, because I have yet to speak to anyone who can assist me with a bank-owned property other than telling me "wait until we list it with a broker and put it on the MLS...". So, I smile and let the consumer know that I will look into it and will call them back. "By the way, if I can't secure any information on this particular property, could I help you look at some other foreclosed properties that are on the market right now in your price range...?"

So, now I work through the information on Realty Trac (using my paid "premium" membership), and find that not only is the property address incorrect (wrong town and zip), but that the property in question actually was resold several months ago.

Where's the value here? The consumer is upset because they can't get an immediate answer. They get upset when I call them back with corrected information. They get upset with "why is this thing advertised if it's not for sale?" and they often don't care to be "educated" about how a foreclosure deed price is very different from a resale price.

Does anyone have a positive experience about how to make these websites work for you as a Realtor and help you grow your business? I've actually called some of their "recommended" agents to see what they have to say about Realty Trac listings and I have yet to speak to anyone who can justify the service that these websites offer. If they are being used as a "lead generator" for real estate agents like they are with my company, I wouldn't build a business plan out of these leads, that's for sure.

I read an interesting article in Inman News the other day about the controversial subject of Dual Agency, aka direct deals or "double dipping" by some. In other words, taking both sides of the commission by representing the seller and the buyer in a real estate transaction. Here's the article that I read.

DESIGNATED AGENCY VERSUS DUAL AGENCY

In states like Massachusetts, we have enacted regulations that provide for disclosed designated agency in all real estate transactions. Many people may be familiar with the scenario where a real estate agent provides them with a form that they need to sign when they first meet with him/her. This form is called a "Mandatory Licensee Consumer Relationship Disclosure" and it sets forth the role of the agent vis a vis his client (you). It states whether the agent represents the buyer or seller in a transaction. It also states the relationship of other agents in the realtor's firm.

Some firms only represent buyers. Some only represent sellers. These are known as buyer agency or seller agency firms. All agents and brokers in these types of offices represent your interests if you are selling (sellers agency) or if you are buying (buyers agency) - but you will never see a realtor who works for a buyers agency taking listings; and vice versa. I'm not going into the merits of such relationships, but there are firms out there that do quite well as buyer or seller agency firms.

The more common relationship with a realtor though, is through an office that practices designated agency. These firms (it is safe to say that all of the major national real estate organizations) represent clients who are both sellers and buyers. Through designated agency, the real estate agent that assists you must tell you, in writing, whether they will represent you as a buyer's agent or as a seller's agent. As such, they owe you the duties of "undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability, provided however, that the agent must disclose known material defects in real estate."

In short, the disclosed buyer's agent can show listings of other agents in his firm, and a disclosed seller's agent can take on buyers that are not looking to purchase any of his listings.

Now comes the open house (and the dual agency hogs are sniffing and frothing at the mouth...)

What do you hear when you go to an open house?

a) "Hi, my name is Joe Designated Agent, welcome to my open house. There are so many exciting features about this house that I'd love for you to see. Could I ask you to please put your name and contact information down on this sheet of paper so that I may follow up with your agent with any questions and to obtain important feedback for my seller? I see that you aren't working with an agent right now, is that correct? I'd be happy to answer any basic questions that you have, but if you are interested in the house, I'd prefer to introduce you to someone in my office who works with buyers like yourselves and who can represent your interests as a potential buyer, since I represent the seller."

or

b) "Hi, my name is Heidi Hogg. Welcome to the open house. There are so many exciting features about this house that I'd love for you to see. Are you folks here by yourselves? Don't worry, I'd love to work with you. Why don't I show you around myself so we can get to know one and another. Did you know that I can probably get you this house cheaper if you work with me because the seller will not have to pay a full commission on the buyer's side?"

What's wrong with this scenario? Most states do allow designated agents to enter into dual agency. And if working with the listing agent can help the buyer save on the purchase price, isn't that to everyone's advantage? NO, it isn't. Firstly, a designated agent must obtain the mutual consent of both parties to enter into a dual-agency relationship and notice (usually written) must also be obtained from the parties. Remember what I said about "undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability, provided however, that the agent must disclose known material defects in real estate." Well, under Massachusetts law at least, here's what the disclosed dual agent provides: "A dual agent shall be neutral with regard to any conflicting interest of the seller and buyer. Consequently, a dual agent cannot satisfy fully the duties of loyalty, full disclosure, obedience to lawful instruction which is required of an exclusive seller of buyer agent. A dual agent does, however, still owe a duty of confidentiality of material information and accounting of funds." So, in the end, disclosed dual agents have only to provide "reasonable care, confidentiality and accountability, and disclosure of known material defects" to their clients.

IS IT TIME TO BRING DUAL AGENT HOGS TO THE SLAUGHTERHOUSE?

Let me start off by stating that I have been a disclosed dual agent before. Sometimes, I fell into it. Other times I brought it on. What's the difference? Well, say I have an existing relationship with a buyer client. I've even gone as far as entering into a contractual relationship as an exclusive buyer's agent. Shortly thereafter, I list a home for sale for someone else. It is important to note that the buyer client came first. In this situation, if my buyer client wants me to show him the house that I just listed - I can do so, and can represent both parties - if and only if both parties agree to me switching to a dual agent capacity. Am I a hog?

It depends - many would say. Did I take a full commission from the seller? Did I tell the seller that I didn't want to sell his house to one of my clients because of the inherent conflict of interest? Did I tell the buyer the same and offer him the chance to work with another buyer's agent in my office? Did both buyer and seller understand the consequences of dual agency? In my case, the answer is "yes" to the all these questions.

"Wait a minute..." many of you are saying. "You took a full commission from your seller - you're a hog" Well, yes I did, and no, I'm not. My buyer's agency agreement set forth my fee to the buyer and that is what the seller was offering the co-broke side. "How come you didn't reduce the seller's side of the commission?" The answer to that was that a variable or dual rate commission was not originally envisioned when the listing was taken, and the seller felt that I should have been fully compensated for my efforts.

So, if I did it, why can't others? Good question. Was I the predatory type of agent like Heidi Hogg? No I wasn't. I accommodated two clients and satisfied my agreement to market and sell the home and attract a buyer. But, Heidi is still a hog. Let me explain.

Heidi makes a regular practice of double dipping. She goes into listing appointments fully prepared to reduce her commission to the seller if he allows her to sell it to a buyer that she procures. From the very start, she is conflicted and not working in the seller's best interest, but in her own. She has no intention to co-broke (share the listing with an outside agent). She either keeps the listing "in her pocket" or makes it very difficult for outside agents to schedule showings. Worst of all, she approaches un-represented buyers and convinces them that they don't need a buyer's agent when she can do the same work for them - and possibly get a better price for them (wait a minute...who is she going to get the better price for - the buyer or the seller?).

Some lawyers would argue that Heidi isn't even a dual agent at all. She is still a seller's agent and can only serve as a non-agent facilitator to the other party. Thus, the seller is the agent's "client" and the buyer is the agent's "customer." Even though Heidi believes, and has led her client to believe, that she can become a disclosed dual agent - it would be contrary to agency law for her to abandon everything she knows about the seller's interests and try to play impartial. I'll leave it to the lawyers to play with this thought...

PARTING THOUGHTS

"What's your point?" you may ask. Well, disclosed dual agency does happen and in certain instances, it is appropriate. However, in the great majority of cases, buyers and sellers alike are being taken advantage of by greedy agents who in reality serve their own interests ahead of their clients. One might say "what's the big deal with an agent acting as a dual agent, since the seller knows how much he needs to receive and the buyer can figure out his own offer price?" Fair enough. But the bigger question should be "in dual agency, how does an agent deal with home inspection issues? Who's side is the agent going to go to bat for if the buyer wants a credit for a new roof and the seller is refusing?"

What if the agent discovers a material defect as part of the home inspection that he/she was not previously aware of? Does he now have to disclose that defect to other buyers if the deal falls through with this particular buyer? Wouldn't the seller's agent have been better off not attending the home inspection or reviewing a copy of the home inspector's report? As a designated seller's agent, I would want to stay far, far away from reviewing any inspection reports, lest someone accuse me later of knowing something that I should have/could have disclosed.

In summary, become an informed consumer. The listing agent is not your friend if you are a buyer. Seller's should demand designated agency to get value for their commission dollars spent and buyers should have their separate representation for the reasons discussed above. Rarely, should the paths cross.

My final comments on the subject? Stay kosher. Don't eat pig.

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Is now the right time to sell your home? Contact WEICHERT, REALTORS®-Synergy for a complimentary Price Trend Analysis that you can use to evaluate your options.

Looking for other options? Meet with a local Weichert neighborhood specialist to discuss how our expertise can provide you with a competitive edge in selling your property. Stop chasing the market. Let the market chase you! Contact us now at http://synergy-metrowest.com/cma.htm

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