"What Buyers and Sellers REALLY Want"

Ok, Ok, I get it.  I don't like it, but I do get it... Sales people are not among the most admired groups on the planet.  We wear plaid sports coats with striped pants and have mustard stains on our ties.  Our shoes are never polished.  We chew cigars and say things like, "This one has your name written all over it," and "This baby has all the bells and whistles," and "Better grab it now, before it's gone!"  Ouch! 

It's little consolation to know that we Realtors operate (or should) under the oldest business Code of Ethics in the US, outside of "the learned professions" of engineering (Go, Georgia Tech!), medicine, and law.  It is very comforting to know that we, along with all the bridge builders, doctors, and lawyers never do bad things!

There have been a million surveys done to ask people how to make things better between the two sides of a real estate buying and selling equation.  And, no, having an iPhone and being a master Tweeter does not make us credible.  Here's what people want.  Here's what "earns us permission," a Passport, if you will, to "handle their fine china."  Here's what they want from the Realtor who would be chosen to learn their financial secrets and be given a set of keys to their family home.  They need satisfying answers to these three questions:

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  Can I Trust you? 


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  With the keys to my home, as well as the keys to my family's financial future?  Is The Golden Rule central to your behavior?


• Can You Help Me?


• Are you good at what you do?  Are you really competent?  Do you stay on top of industry training?  Do you embrace technology and the latest marketing trends?  Do you have a track record of success and a database of happy, satisfied customers who would use you again?


• Do You Care About Me (and my family)?


• Will you go the extra mile to help me accomplish my goal?  Do you act with believable empathy?  Are you a "giver" and not a "taker?"

"Let's Let The Dogs Loose"

When my son played football in high school, they were the Bulldogs, or the Dawgs.  I certainly rooted for them, but as a Georgia Tech Yellow Jacket, it was tough, because of our disdain for the Univ of Georgia "Dawgs."  At every game, at every first down or touchdown or extra point or field goal or tackle or interception... or if the waterboy raised his arms... ad nauseum, we heard it:  "Who Let The Dogs Out?"  Remember it?  It came out in 2000 (The Baha Men's only hit).  I couldn't get it out of my head for several years - and I hope to God that writing this doesn't bring it back!

Well, this terrific cartoon (above) shows up in the paper and I hear the song again!  last time I wrote about HAFA a bit sarcastically.  I'm sorry.  But this cartoon shows the simplicity of our dilemna.  Streamline the foreclosure/short sale process and BINGO!  The bottleneck in the housing market starts to unclog! Our economy starts to flow and jobs are generated again!  What a concept!  But banks are resistant to speed.  They don't want to have to report all the debt to their stockholders.  They are happier to mislead them.  You know - "Short term partial fix and let the next team take the hit!"

But I swear to you, it really is that simple.

$3,000 Distressed Move Assistance?

So today's business news in the Daytona paper says:  "GOVERNMENT LAUNCHES SHORT-SALES EFFORT"   Dateline-Washington:  "The government launched a new effort on Monday to speed up the time-consuming, often- frustrating process of selling your home if you owe more than it's worth.  The Obama administration will give $3,000 for moving expenses to homeowners who complete such a sale - known as a short sale - or agree to turn over the deed of the property to the lender.  It's designed for homeowners who are in financial trouble, but don't qualify for the administration's $75,000,000,000 (that's $75 Billion) mortgage modification program."

Wow!  I think there should be a law that says the word "government" must always be in upper case letters... and that anyone who speaks it, should do so reverently and with their head bowed.  Just go to the GOVERNMENT (head bowed) Money Tree and get some!  They'll just take it from "those rich ba*#@^ds" and give it to those who really deserve it!

This "Short Sale vs. Foreclosure vs. Deed-in-Lieu of Foreclosure vs. Mail Your Keys to the Bank and Walk Away vs. Screw This, Let's Gut the Place and Trash It Too," is a whole new era in American real estate... and verification of "the human condition." 

We can hate and blame the banks all we want (and it's mostly justified)... yet there is plenty of blame to go around.  Borrowers are not immune.  To say it's the bank's fault, because they gave loans that people couldn't afford, is absurd.  Come on!  Remember how mad you got when you were a kid and your Mom said, "If all the other kids jumped off the bridge, would you jump too?"  Hey, the banks did not give 100% warranties that home values would skyrocket into infinity!  Stuff goes up... and stuff goes down.  If we were making $30,000 a year, didn't it seem just a tiny bit weird that we were buying a $500,000 house?

Oh, and on this morning's news that mentioned, "or agree to turn over the deed of the property to the lender?"  BE CAREFUL!!!  If you give the deed back to the bank, you may face a future of credit challenges, as if you'd been through an actual foreclosure!  Talk to a reputable, honest, experienced Realtor before you do anything.  Ask if your Realtor holds the industry gold standard in training - the coveted "CDPE" Certified Distressed Property Expert designation.  You may also want to consult with your attorney and your CPA.  (I know you're laughing and shaking your head... "If I had an attorney and a CPA, I probably would have enough assetts to not be in this mess.")  There are, however, plenty of homes on the ocean and high on hilltops with city views... that are in some form of distress.

So, here's some of the explanation of the government programs - HAMP and HAFA - At their best, they could help to aleviate the real estate bottleneck of distressed sales.  Let's hope so:

H A F A

- means Home Affordable Foreclosure Alternatives Program.

HAFA was designed to provide incentives for Borrowers doing a short sale (or a deed in lieu) in order to avoid foreclosure.

Loan Servicers (Mortgage Companies, Banks, and those that do the actual loan servicing) who participated in HAMP (Home Affordable Mortgage Program) are required to participate in the HAFA program. For the rest, it’s voluntary.

The HAFA program is set to begin on April 5, 2010 and all HAFA agreements must be finalized and signed by December 31, 2012.

HAFA Provisions:
•Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
•Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.
•Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).

•Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
•Uses standard processes, documents, and timeframes/deadlines.

•Provides the following financial incentives:

◦$3,000 for borrower relocation assistance;
◦$1,500 for servicers to cover administrative and processing costs;

◦Up to $2,000 for investors who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one-for-three matching basis.

•Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation. [http://www.realtor.org/government_affairs/short_sales_hafa]  
BOTTOM LINE:  It's a government program - a bureaucracy at its core - and will be hard to implement and monitor.  It's too soon to tell how it will wash out.  At its worst, it will hurt taxpayers and profit the banks even more.  At its best, however, it could be quite successful and clear out about half of the distressed properties clogging "normal" markets.  Let's hope for the best!