West Galveston, TX

I sold my first foreclosed property in 2008. Until Hurricane Ike paralyzed Galveston Island and the economy collapsed the very next day. foreclosed property listings were not common at Pointe West, the West End resort community that is my specialty. And what the heck was a short sale? I had not even heard of that type of a transaction until 2009. Well, let's just say that I was forced to learn what these transactions were and how to walk a buyer through the purchase while maintaining their level of confidence. The amount of distressed sales at Pointe West skyrocketed and I saw list prices on properties that were 50% lower than what our Centex sales team had sold them for initially from 2005-2007.

3 years later, representing buyers that purchase foreclosured properties has become a huge part of my business. I just wrote an offer for some clients on a foreclosed condo that I sold for almost $275k more than the list price in 2006. Strange occurence, but I have been selling the same condos twice! I think that the hardest part of working with buyers on foreclosure deals is that they slow the process of getting a great deal by making low offers. When I work with a buyer and we have reached that point - advising my clients of the current market value of the property to determine an offer amount - I now come well-armed with all of the past sales that have occurred that year. It used to be that when Realtors, doing their job, suggested an offer range the buyer agreed to take our credible knowledge. With the national media constantly talking about the number of foreclosures, how buyers are getting "steals", etc., I think we all keep our fingers crossed when the client instructs us to write the initial offer for. That initial offer price amount usually will indicate to me whether my deal can get done.

Luckily, the offer I wrote tonight can get done. Although my clients are offering less than what I advised the market value to be, we're close. I feel very confident we'll able to negotiate this one out. What I have noticed (and am thrilled about) is that these lenders are now aggressively pricing their foreclosed properties to sell. This makes the properties a lot easier to sell to the buyers (price tag looks good) and the negotiating time spent is less! We'll get to the bottom here soon, and hopefully these lenders and banks will make the short sales and negotiations on foreclosures a lot easier. I think I can see the light at the end of the tunnel!

Some years back, I owned a good sized track of land with several hundred front feet on the road that vacationers take to access the many fine beach homes located on the west part of Galveston Island.

In recent years, it has been the location of my friend Willie Payne's Re/Max office, but back then I owned a second brokerage company in Galveston called Resort Realty. Our offices were on the property.

We were doing well and mortgage and business start-up money were fairly easy to get, so I hired a Houston architect to design a strip center that would include our real estate office. We'd rent the remainder to other businesses.

As is usually required, we gave the architect a retainer fee. In this case, I think it was about $5,000. The remainder would be due when he completed the plans.

When he delivered the work of his efforts, it was very obvious he hadn't taken into account the setback lines, the floodplain issues, and on top of that, the building was substantially too long for the land.

I refused to pay him. He refused to redo the drawings and make them right. We were at a standstill, so he decided to sue me for failure to pay. The suit was filed in Harris County (Houston) where he officed.

By then, I had been in the courtroom a number of times, not being sued but as an expert witness for one client or another. I decided I'd not retain counsel, I'd represent myself. It's called "pro se."

I decided that if I lost the case, I'd hire an attorney and appeal. I just wanted to see if I could win a lawsuit that I thought should be a slam dunk for my side anyway.

The Harris County District Court was that of a female judge. The attorney representing the architect was also a woman. I wondered if this would have any bearing on the decision.

Nevertheless, I went on. I filed my General Denial, wrote my First Answer, and I went forward with discovery. Neither side took depositions. I had one witness who was with Galveston's planning department who would testify that what was proposed could not be built. The plaintiff's attorney had one witness, the architect.

On the day of the trial, about midway through, the architect's attorney asked to approach the bench. She said, "Your honor, this man's an attorney...maybe not licensed in Texas...but he's a trained attorney. He's testified that he's not. "

The judge asked me again, "Mr. Cherry, are you an attorney? Have you ever attended law school?" "No, your honor," I responded to both questions.

So the trial proceeded. And the judge ruled in my favor.

The opposing attorney broke down in tears, grabbed her brief case, and ran out of the court doors, even before the judge had concluded the hearing and dismissed those present. The judge apologized to me and to the others for counsel's behavior. (I believe the judge ordered the plaintiff's attorney to write the order for the court.)

For the record, I never took a chance like that again. And my recommendation to all others, as they say on TV as the stunt driver does a double flip in the Ford F-150, "Unless you are a trained professional, don't try this at home."

BILL CHERRY, REALTORS

DALLAS - PARK CITIES

Our 45th Year

214 503-8563

WEB

A ninty million research facility to be built on the island at 6th Street and Harborside Drive has been approved by the University of Texas Medical Branch at Galveston. Approximately half of the 140,000 square foot building will be devoted to research. Construction is set to begin in early 2010 and be completed by 2012. Also, UTMB Galveston just received a $3.4 million grant to develop what may become the first effective drug to help conquer cocaine addition.

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