Distressed Properties: The New Market

More than 1.9 million foreclosure filings were reported on more than 1.5 million U.S. properties in the first half of 2009.

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A 9% increase from the previous six months… Lurking in the shadows? A large wave of bank-owned properties yet to hit the market. For real estate professionals, the distressed property environment has given new meaning to being at the “center of the transaction.” Never before has there been a more critical time for agents and brokers to step forward.

Early Adopters

For some, dealing in distressed properties is not new territory. These are the real estate professionals who are now leading the charge in short sale education.

“Our real estate business focused on short sales and foreclosures, so we saw what was coming,” says Alex Charfen, co-founder, along with his wife Cadey, and CEO of the Distressed Property Institute in Austin, Texas, and the CDPE (Certified Distressed Property Expert) designation for Realtors.

“We had the privilege of sitting with hundreds of distressed homeowners and helped take them from complete panic to walking away from the closing table with their problems resolved,” recalls Charfen. In its first year, the Institute grew to 1,500 members, and just one year later, is now at more than 9,000 members.

In the Trenches

For agents, however, working in short sales and distressed properties is not only a chance to help homeowners, it is often a must for survival in today’s market.

Agents handling distressed properties will also need to monitor changes in state and local regulations that impact the process. As Bass says, “When it comes to short sales, there is no constant-it is a moving target.”

The Reality of Short Sales

In tackling short sales, there’s a lot of perception versus reality to be dealt with, particularly regarding a bank’s ability to quickly and efficiently process short sale requests.

“Leadership has stepped up to the plate and federal guidelines are being put in place, which is bringing organization to the conventional short sale process,” says Spickes. “We’re seeing more of a cohesive, holistic type of effort.”

What Consumers Need Most

Dealing with homeowners in distress puts the relationship skills of agents to the test.

“The first thing you have to do,” says Davis, “is manage the emotional state that the homeowner is in. You have to explain to the homeowner that instead of going down the path of foreclosure, they can save their credit with a short sale.”

“The biggest challenge is figuring out what the best solution is for the homeowner and helping them move toward that solution,” says Charfen. “You must put the homeowner first and then everything else will follow.”

“The homeowner is so upset and going through so much,” says Davis. “They want somebody to help them take care of things. If an agent comes in and asks the right questions and shows that they know their stuff, the homeowner will immediately trust the agent. This is not about being a better salesperson; this is about being really educated.”

“We feel this is such a privilege for the agent to be invited into this very personal space with the homeowner,” says Spickes. Helping homeowners stay in their homes is a cause that Spickes and the agents she trains are honored to be a part of.

Distressed homeowners also need someone to put things in perspective. “Many people feel that listing their home as a short sale is an embarrassment,” says West. “I congratulate them for admitting they need help-I tell them this is just a house. Don’t worry about it-just move forward.”

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If you need assistance in dealing with a foreclosure situation or short sale, visit the online resource center for more information.  Go to www.backyardhomehelpcenter.com.

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2 responses to this post.

  1. tough times most of us are going thru presently, good thing they are well educations real estate professionals who can short sales some homes and save a few lives from being wrecked with foreclosures

    Reply

  2. i do real estate work as well, and I am glad banks are deciding to accept short sales, it has help many family’s save face, and at the same time made it possible to get some deals… but i still run into those stuburned banks that just will not consider a reasonable short sale offe… but the way things are i am sure in no time that will change…

    Reply

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