This morning we welcome John Lowe on his maiden blogging voyage. John, along with Lisa Yates, is a member of our real estate “team”. We are admittedly short of the requisite sandlot nine, but we have just the right number to keep all of the bases covered. We have been encouraging both John and Lisa to contribute here for awhile, as they each have so much insight into this business, so many stories to tell, and so much wisdom from the trenches to impart. So, John wins our No Fear award for being the first to take the plunge with his fabulous, first-hand observations on the wacky world of Real Estate Owned properties. Welcome, John! (No pressure, Lisa).
Having attended a few seminars on Short Sales, Foreclosures and REO’s I felt reasonably armed and dangerous, ready to tackle these transactions. Talk about naive, was I in for a surprise! What nobody had discussed in the seminars is the communication quagmire associated with some of these transactions. “Guilty” lenders will go unpunished by name but I’m surprised at the ill will created during a transaction. Who is on the other side of the wall in these faceless corporations? The key bit of advice I would give to buyers and their agents is to lower your expectations as nobody on the seller’s side seemingly has any desire to dazzle you with their performance or any expectation of doing future business with you. Several transactions have been marked by entering the twilight zone where communication, consideration and professionalism are all on the endangered species list.
Not wanting to fall into the trap of making sweeping generalizations, I cannot help but wonder if this market segment attracts or promotes problems by its very nature. The distressed nature of the sale has the lender/bank seeking to stop the bleeding and minimizing further losses. Does this loss mitigation effort lead to low cost/low performance service providers? Sorry if I have offended anyone by casting such a wide net, but my experience tells me that I’m swimming with bottom feeders when in the Short Sale/Foreclosure/REO pond. If all service providers (seller’s agent, escrow, title, etc.) specializing in this market segment have sold their souls to the bank via reduced transaction fees, then we certainly have the poster children for the old adage “You get what you pay for!”. Another possible explanation is that this niche market has been dormant for quite some time and it will take a few months to ramp up and get well-trained, professional staffs in place to support the growing number of transactions.
So, buyers and buyers’ agents, beware these shark-infested waters. If you are representing an investor you are probably evenly matched and ready to do battle. A non-investor buyer, looking to occupy the property and seeking the killer deal, is probably in for a tougher ride than expected. Another adage to close on, “No Pain, No Gain!”. So hang on, enjoy the ride and don’t be alarmed by the occasional shark bite! Just think of yourself as being your client’s shark repellent and do your best to shield them from fatal attacks!