Why raise this alarm now, in 2010? It’s being whispered that some (not all) mortgage brokers and lenders are angry at being required to become licensed in Georgia and are looking to make examples of real estate practitioners who they see as encroaching into lender territory.

March 31, 2010 marks the “drop dead” date by which mortgage brokers, mortgage lenders and the independent contractors working with them who solicit, process, place or negotiate mortgage loans for others or who work on renewing or refinancing mortgage loans for others must be licensed by the state or exit the mortgage business.  The state and federal exams each applicant must pass are onerous, to say the least.  I’m hearing that over 70% of the applicants are not passing either the state or federal exam and having to retest prior to March 31, 2010.  It’s high stress time in the Georgia mortgage business, especially for the less reputable mortgage companies. 

Why would real estate licensees be suddenly singled out for retribution?  Well, could it be that REALTORS, those real estate licensees who join a Board or Association of REALTORS and pledge to adhere to a National Code of Ethics, were supportive of the efforts to force licensure upon the mortgage industry? 

Real estate practitioners have been required to be licensed in Georgia since 1925.  Anyone printing a business card or setting up a web site could call themselves a mortgage lender until the 2007 passage of the Act.  And those active in the mortgage business prior to 2007 were “grandfathered” until the upcoming March 31 deadline.

Coincidental to the 2007 passage of the Act, the mortgage meltdown gained momentum in Georgia.  Reasonable people have discerned that unknowledgeable buyers and homeowners over-borrowed on over-valued properties.  No one wants to allow that to ever happen again and the reins have been tightened by all parties involved in the real estate financing transaction – the real estate licensees, the appraisers, the lenders, the closing attorneys and the title companies.  Please note that all the participants listed were licensed by the state in 2007 except the lenders. 

Please don’t misunderstand me; this is not a blanket criticism of mortgage lenders.  The reputable lenders will survive both the licensing process and the current economic downturn.

Today, though, real estate licensees are being threatened with prosecution for listing properties with outstanding mortgage obligations in excess of the current market value and assisting those owners in the process of proving to their lenders that an offer to partially pay off the total indebtedness may be better than forcing the lender to eventually foreclose on the property. 

Since when is paying off a loan “negotiating”?  And, since most mortgage loans have been packaged, sold and resold, perhaps multiple times, exactly which lender would negotiate with the final mortgage holder of a specific mortgage?  The mortgage lender which originated the loan? And are they still in business? 

Keith Hatcher, the Governmental Affairs Officer for the Georgia Association of REALTORS (GAR) has stated that it is his opinion and the opinion of key elected officials who serve on the Ways and Means and Banking and Finance committees that it would be a stretch to interpret the Act in this fashion and that this is not the intent of the Act.  GAR is, in fact, working with the chairman of the Ways and Means committee to draft an amendment to the Act which would clarify that it is not a violation of the law for real estate licensees to assist in the negotiation of short sales.

Can’t happen soon enough in my opinion.

What are your thoughts?

HUD has announced an increase in the upfront MIP (Mortgage Insurance Premium) from 1.75% to 2.25%. This amount is added to the loan amount and financed into the monthly payment.

What does this increase in MIP really mean in dollars and cents? 

Example: $100,000 base loan amount with a 30 year fixed 5% interest rate

Prior to April 5, 2010 the MIP added to the loan amount is $1,750 for a total loan amount of $101,750 with a monthly payment of $546.21.

After April 5, 2010, the MIP added to the loan amount is $2,250 for a total loan amount of $102,250 with a monthly payment of $548.90.

This is only a difference of $2.69 in the monthly payment!

The amount we should be focused on is $8,000 and the date we should be focused on is April 30, 2010. The First Time Homebuyer Tax Credit of up to $8,000 is available on properties that are under binding sales contract by April 30, 2010 and that close by June 30, 2010.

The HUD change to MIP is minimal. HUD has also proposed a reduction in seller contributions from 6% to 3%. This change is expected to pass and expected to come into effect mid summer. This change will only impact those sales where the seller was willing and able to pay up to 6% toward closing costs.  Buyers will still be able to lender fund closing costs that are not covered by the 3% allowed seller contribution.

For now, I suggest we focus on the opportunity of a Federal Tax Credit of $8,000!

When the billboards were originally erected a few years ago, the number of homes for sale was around 74,000. Over time, the number climbed to over 110,000 in early 2007. Six digits became the norm for months and months and the billboards were featured on Good Morning America and referred to in various media as the semi-official barometer of the Atlanta real estate market.

Then the market changed as credit tightened drastically and qualified buyers became as scarce as Mets fans in Atlanta.  At first the billboard number kept growing and growing – local builders and other sellers who previously didn’t think they needed to list their properties for sale with professional real estate licensees began listing just to expose their properties to the smaller group of buyers looking.  Billboard-watchers became alarmed that the huge number of homes for sale would cause buyers to shop around forever, looking for just the right “steal”. 

Beginning in late 2008, though, the number of homes for sale in Atlanta began dropping.  It was 81,085 on January 6, 2009, below 80,000 by May, below 75,000 by August and still dropping. 

I started a contest within my department (Broker Support) to guess just how low the number on the BHGRE Metro Brokers billboard would go in 2009.  Some expected it to bottom out in the summer.  John Rausch, Timothy McFadden, Charlie Ratcliff, Charles Morrow, Bridgette Freeman, Will McGowan, Dexter Dix, Carolyn Nicholes, Charity Cason and I and even Kevin Levent (our President and CEO) submitted their “how low will it go” estimates.

John, Timothy and Charity were eliminated by June (optimists, obviously).  I was knocked out in August, along with Dexter and Kevin.  Bridgette, Carolyn and Charles hung in there until November.  Only two remain – Will McGowan, who estimated 58,900 and Charlie Ratcliff, who looks like he is the sagest of the sage, with his estimate of 62,500. On December 31, 2009, the billboard read 65,121. Congrats Charlie!

So, why is the number of homes for sale in Atlanta dropping? 

What was happening to cause the number of properties for sale to actually decrease amidst constant media stories of foreclosure after foreclosure?  In my opinion, several factors were at work:

* Obama’s program to incent lenders to modify or refinance loans in trouble (www.makinghomeaffordable.gov) was finally getting a little traction, slowing the number of desperation sellers
* Real estate agents and lenders became more experienced at working out “short sales” and allowing homes to sell and close,
* Sellers who didn’t absolutely HAVE to sell, held back and stayed in their homes,
* The $8,000 first-time homebuyer tax credit spurred many buyers to go ahead and make a commitment to a home (the now expired $1,800 Georgia Tax Credit also helped),
* Banks held back on their foreclosed inventory, deciding to rent out or simply hold many properties until the market improves,
* Interest rates stayed very low.

And I’m sure other factors were probably involved, too.

Let me know your guess.

Now, how low do you think the number of homes for sale will drop to in 2010? And where do you think it will be at the end of 2010? I’d love to hear your thoughts.

A new chapter has begun for Metro Brokers and it’s turned the Atlanta real estate market on it’s heels. We are the first real estate broker to run dual brands. As of this week, our brand name has changed. For the residential brand, we are now Better Homes and Gardens Real Estate Metro Brokers. For our commercial brand, we are now Coldwell Banker Commercial Metro Brokers.

I weighed many options and this was the best decision for the company, our agents and our customers.

It’s been an exciting week for Metro Brokers. We made the announcement on Monday and acquired approximately 150 agents immediately. We launched a new, faster, easier to use website that the agents love. And now, we’re working through the process of swapping out all of our yard signs, business cards, name tags, brochures, flyers, and hundreds of other marketing items with newly branded items.

My staff and I have been working constantly for months on creating this opportunity to re-invent, re-establish, leverage our strengths and re-launch when others are attempting to rely foolishly on past success and outdated methods.
 
Metro Brokers is the largest real estate company in Georgia, and it didn’t happen by luck. Our company boasts many of the finest sales associates in the business, and we support them with a dedicated staff unlike any other independently owned and operated real estate firm. Through our mutual pursuit of excellence, Metro Brokers is able to make that claim.

Coming To A Decision
 
The past decade has brought many changes to our industry, and more changes are on the way. But unlike other companies, we do not follow change – we are in front of it. We have continued to innovate in the face of these changes, always staying ahead of the curve, and you can expect more of it.
 
To continue our tremendous growth, I chose to partner with Better Homes and Gardens Real Estate and Coldwell Banker Commercial for our residential and commercial brokerages respectively. We are still independently owned and operated and I will still run the company, but our name and logo has changed.

Changes For the Better
 
Our combined strengths are what this partnership is about. Our programs will remain: Our training, technology, systems, websites and marketing to name a few. However, our new franchisors will provide our sales associates and customers with more information and new programs.
 
For instance, if you travel to our new residential homepage on metrobrokers.com, you will find a brand new section – Real Estate Tips – that contains new information regarding housing trends, home makeovers and the buying and selling process. There is even a great video section with tons of details for new homeowners and those looking to sell.

Don’t forget to check out our new commercial homepage too at www.cbcworldwidemetro.com.

I’m proud of everyone that made this conversion possible, and looking forward to all of the new signs that will be erected all over metro Atlanta as we finish up our sign exchanges. We are blazing a path for the future at BHGRE Metro Brokers and CBC Metro Brokers, and we want you to be with us!

It’s been fun hearing what everyone in the Atlanta real estate market has to say about our decision. Many people still wonder how I made it happen. Let me know what you’re thoughts are on our big announcement.

Ritz-Carlton Credo (you know, I should get a complimentary weekend with all of this promotion):

“The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission.

We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience.

The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.”

Now, lets analyze the Ritz-Carlton credo. There’s a lot of lessons to be learned.

Credo: “The genuine care and comfort of our guest is our highest mission.”

Meaning: It’s already established that if you’re a guest of their hotel, your care and comfort is most important to them. So regardless of who you are, what you’re spending, how young or seasoned you are, they’re going to make your experience at the Ritz-Carlton memorable.

Lesson 1: Make “the genuine care and comfort” of those that you encounter in everyday life MEMORABLE.

Credo: “Finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience.”

Meaning: What ever service it is that you offer, from real estate sales to mortgages, to car/home insurance, to closing/title services, etc… we must provide the best services and facilities that we can. If you see a piece of paper on the floor, pick it up. If a light bulb needs to be changed out, don’t complain about it, own the problem and get it fixed. These are just some of the ways that we can ensure that our internal and external customers receive the “finest personal service and facilities.”

Lesson 2: Do your part!!!

Credo: “Experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.”

Meaning: Do you leave that type of impression on people when you leave the room? When you leave a Ritz-Carlton Hotel, that’s how you feel.

That should be your goal whenever you leave the room – to give them, that type of feeling.
President and CEO Kevin Levent taught me that when I first joined the company – “never leave someone with something negative to say about you”. Let them leave with something more memorable…“I’m looking forward to seeing you again”, “I can’t wait to do business with you in the future”, etc.

In my previous blog, First impressions are lasting, that may be just as important as what you do or say before the farewell.

Lesson 3: Leave them with a reason to come back!

Tell me…How do you leave a lasting impression on your clients?

The bill extends the existing $8,000 tax credit for first-time homebuyers, plus adds a new credit for current homeowners of up to $6,500.

Current Homeowners can qualify for $6,500 Tax Credit

The new $6,500 tax credit for current homeowners is by far the most exciting portion of the bill, giving some much needed assistance to homebuyers looking to move up to a larger home or relocate to a new area. To qualify, current homeowners must have lived in their home as their principal residence consecutively for 5 of the previous 8 years.

This means that even if a homeowner is currently renting, but moved out of a home they lived in and owned for five years within the last three years, they are still eligible for the $6,500 Tax Credit. If they have been out of their home for three years or longer, then they are eligible for the $8,000 Tax Credit!

Tax Credit details

For both credits, homebuyers must have an accepted sales agreement in hand by April 30, 2010 and close no later than June 30, 2010 to be eligible to claim the tax credits. The extension is wonderful, but April 30, 2010 is not that far away. Extra time is required if the property selected is a short sale or foreclosure property. And current homeowners need added time to market and sell their existing home.

The new bill also expanded the income limits, effectively opening the tax credit to more buyers. Income limits have been raised to $125,000 for single taxpayers and $225,000 for joint taxpayers. Previously, they were $75,000 and $150,000, respectively. This is essential for the tax credit to reach as many homebuyers as possible.

Buyers who qualify don’t need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

Finally, there has been a maximum limit set at $800,000 for the cost of the home.

Exception for Military

The credit has been extended an additional year for military personnel that were deployed overseas for a minimum of 90 days in 2008 or 2009. In other words, the credit ends for everyone on April 30, 2010, except active-duty military working overseas. They have until April 30, 2011 to finalize a contract.

Homebuyers received an early holiday gift with this extended and expanded tax credit, and now it’s time to take advantage of it before it’s too late!

Do you know someone who qualifies? Share this great news with everyone you know.

This is a small part of the Obama Administration’s Making Home Affordable program, launched October 1, 2009.  MHA will target support to working homeowners who have made every possible effort to stay current on their mortgage payments by providing new access to refinancing and offering reduced monthly payments.  Full information for homeowners and agents can be found at www.makinghomeaffordable.gov. 

Specifically, there is a very simple Yes/No questionnaire on the website to determine whether a homeowner is eligible for low-interest refinancing (up to 125% of today’s’ market value) and an equally simple questionnaire to determine whether a homeowner is eligible for a loan modification bringing monthly payments down to an affordable amount. 

Over and over again, the public is warned of “foreclosure rescue scams” and given information on recognizing these scams.

How does MHA impact the listing, selling and closing of Short Sales? 

The MHA program is being managed by the U.S. Treasury and Fannie Mae.  It covers more than 85% of existing mortgage loans, including loans owned or guaranteed by Freddie Mac or Fannie Mae, FHA loans and loans managed by about 50 of the major loan servicing companies.  For those loans, the new MHA program and processes are mandatory.

The good news is that this is an actual attempt to simplify and standardize the short sale process, rules and paperwork.  Realtors who want to close short sales will need to be aware of MHA:

1) There are clearly defined steps which the seller’s lender(s) must now follow when (a) loan(s) are in default (or imminent default).  Refinancing or a loan modification through MHA must be attempted BEFORE a loss mitigator will even consider the possibility of a short sale.  Then and only then will a loss mitigator use a specific net present value formula to determine if the lender(s) will net more from a short sale than from a foreclosure.  The decision is strictly financial. 
2) Agents will continue to list properties with the individual homeowners, but the lender’s loss mitigator will set the price and listing term which will range from 90 to 365 days.  The lender will still need to approve any offers accepted by the homeowner.
3) Great news!  Fannie Mae Servicing Guide Announcement #09-03 clearly says there will be no negotiation of short sale commissions.  “..closing of pre-foreclosure sales may not be conditioned upon a reduction of the total real estate commission to be paid to real estate agents to the level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6% of the sales price of the property in aggregate.”

What should good agents do? 

There is now more to know about listing short sale properties.  If you are helping homeowners in financial distress avoid foreclosure, you will want to learn more about MHA so you can help your sellers determine if they must work through the MHA program in order to be eligible for a short sale.  Take all potential sellers who owe more than their house is worth and who do not have assets to pay any loan deficiencies in full at closing to www.makinghomeaffordalbe.gov BEFORE listing.  Who knows, the seller may discover they are eligible for a low-interest rate refinance or a loan modification and not need to do a short sale at all.  You may help a distressed homeowner stay in their home. 

A full and up-to-date list of the participating lenders and servicers is available on www.makinghomeaffordable.gov.  Any loan with these entities is subject to the MHA program, so determining whether the loan(s) in question are eligible or not eligible for refinancing or loan modification is crucial before listing any property. 

A partial list of lenders and servicers in our area includes:  Allstate, American Home Mortgage, Aurora Loan Services, Bank of America, Bay Federal, Bayview, CCO, Carrington, CitiMorgage, Citizens First, Countrywide, EMC, First Bank, First Federal, Franklin, GMAC, Green Tree, HomEq, Home Loan, IBM, J.P. Morgan Chase, Litton, Ocwen, OneWest, PennyMac, PNC Bank, RG Mortgage, RoundPoint, Saxon, Servis One, U. S. Bank National, Vantium Capital, Wachovia Mortgage, Wachovia Bank, Wells Fargo, Wilshire Credit and many, many more. 

How many short sales have you handled in the last year? Do you know someone who may benefit from this?

The media has been buzzing with the news that the Homebuyer Tax Credit has been extended, and a new tax credit of up to $6,500 for repeat homebuyers who have owned their current home for 5 years or longer is available.

This news broke after a congressional aide leaked positive news about the extension of the tax credit. Unfortunately the news stories did not lead with the fact that this congressional aide spoke to the media under the condition of anonymity, because “he WAS NOT authorized to publicly discuss the deal that Senators have been considering.”

Many people heard and saw news stories on Wednesday evening and Thursday morning that simply said, “Senators agreed Wednesday to extend the tax credit for first-time homebuyers.” But there was a lot more to the story! The key information missing from most of the reports is that members of Congress are still NEGOTIATING the details of both tax credit provisions.

These two tax credit provisions are expected to be added to a bill that would extend unemployment benefits for up to 20 more weeks. This bill could be finalized and voted on as early as next week. 

The extension of the first-time buyer tax credit and an additional credit for repeat buyers would be a major positive for consumers and the housing market. Unfortunately there is also major opposition from some due to fraud. The Treasury Department has reported that nearly 74,000 individuals who claimed the tax credit did not appear to qualify for it, at a cost of half a billion to the government.

Linda Stiff, the deputy commissioner for the IRS said, “Anytime there is an opportunity
to receive cash back it tends to attract people who might have an intent to defraud the government,” She went on to say that the agency is committed to rooting fraud out of the program and that the agency has already opened 8,000 fraud related criminal investigations.

How many of you have received the tax credit or know someone who has received it? How are they using it? How many of you know someone who is eligible but didn’t take advantage of it?

What are your thoughts on the extension? Do you think it will pass?

Chinese drywall hit our shores in 2000 due to a shortage of American made drywall. We were going through a huge building boom and a few years later the shortage grew worse when Louisiana had the Katrina disaster.

The problem with the Chinese drywall is that it contains sulfide gases. The issues concerning Chinese drywall were first noticed in the Dade County area of Florida. Now it has spread to Georgia, Alabama, Mississippi, Louisiana, Texas and Virginia. What federal investigators have surmised, to date, is that high heat and humidity are causing gas emissions from the drywall. 

The most obvious sign of defective drywall is that homeowners notice a “rotten egg smell”, hence the reference to Shakespeare’s quote form Hamlet. Along with the odor, there is the appearance of corrosion of metals and wiring within the home. Electrical outlets, circuit breakers, mirrors and other metal items attached to the walls of affected homes turn black. An electrician should be called in to assess the extent of the damage.

The houses that are affected are those built or that have been renovated between 2000 and 2008. It includes condominiums as well. The cost to repair is expensive and not all insurance companies cover defective construction materials either.

If you’re a homebuyer, you’ll want to ask your home inspector questions if you suspect Chinese drywall. If you’re a Realtor, be sure to speak with the homeowner about this issue when listing a home. Ask about peculiar smells and metal discolorations. It’s better to know up front about property issues than to deal with an angry buyer after the fact.

There are numerous articles on the Internet regarding Chinese drywall. Now is a good time to learn the details about this relatively new issue. I wish I could say “all’s well that ends well”, but we’re not near the end of this story as yet.

Have you come across Chinese drywall in your home/listing? What’s been your experience?

Properties are auctioned at the courthouse steps of the county where they are located on the first Tuesday of every month. These properties must be advertised in the legal newspaper of that county once a week for the four consecutive weeks prior to the auction. This gives you a little time to try to find out more about the property.

Preparation

If you’re thinking of purchasing a property at the courthouse steps, it’s very important that you do your Due Diligence. Unfortunately, inspecting the property is almost always impossible, as the current owner isn’t going to open their doors for interested parties to come inside! There is always the risk that the property could have structural problems or other problems that could be expensive to remedy.

However, you can and should order a title report to determine any liens that are on the property because when you purchase a property at the courthouse steps you get everything that comes with it (such as liens, an additional mortgage, past due taxes, etc.).  In addition, a survey would determine the lot lines and if there are any easements or encroachments on the property. 

Auction Day

On the sale date the lender’s attorney conducts a public sale some time between 10:00 a.m. and 4:00 p.m. The attorney reads the legal notice and announces that he is ready to receive cash bids (“cries the bid”). In some cases there is competitive bidding between unrelated third parties. In other cases there is no bidding at all, and the lender becomes the successful bidder. Normally the lender’s bid includes the total investment, which is principal, interest and all other foreclosures costs (legal fees, advertising fees, and Ga. Transfer Tax).

The foreclosure attorney will only accept cash, so the potential bidders are walking around with pockets full of certified funds. Unlike some states, Georgia does not have a redemption period allowing the borrower to redeem the property after the foreclosure sale takes place. 

Just like any other investment, buying a property at the courthouse steps offers the greatest potential return on investment; however, it also holds the highest risk to the investor, due to the limited means of investigating as mentioned above. The phrase “let the buyer beware” certainly applies to those purchasing at the courthouse steps!

I’d love to hear stories (successful or otherwise) from readers who have purchased a home from the courthouse steps. Be sure to leave me a comment with your story.

If you’re talking more than 50 percent of the time during a conversation, you could be alienating others. Ask yourself these questions and start learning tips to improve your service with buyers and sellers:

1. Are you creating a dialogue? You may be so focused on making a point that you begin talking at your customer rather than with them.
2. Have you ever interrupted someone when they’re talking? (Huge pet peeve of mine) This can often alienate someone and is hard to overcome. Try to resist the urge to rush the conversation too much.
3. Are you asking the right questions? During the conversation, find out what’s most important and make notes of it. Ask the buyer to rate the features they want in a home in order of importance. For example, if they want a home with a large dining room, find out how many people it needs to accommodate.
4. Are you listening with both your ears and eyes? Some people will tell you what you want to hear, but their body language may say something else. Pay close attention to their eyes, if their head is tilted, if their arms are crossed, if they’re nervous, etc. This could mean they’re impatient, annoyed or they’ve tuned you out. Listen for the tone of their voice too.
5. Are you distracted or trying to multi-task? If so, you could miss out on a key piece of information. It also tells the customer that they’re not important enough to have your full attention.

So what do you think? Could your listening skills need some tweaking?

What is a Foreclosure?

It refers to any property which has been used as security for a debt and has been sold to satisfy the debt when the property owner defaulted on payments or other terms in the mortgage document (such as not paying the property taxes). Usually the property is sold to the entity which is owed money. The party foreclosing on the property may be a mortgage lender, a private individual who had “owner-financed” the property, the county sheriff, local property taxing authority, the IRS, a homeowners’ association or a tradesman with an unpaid lien against the property. These entities usually turn around and try to resell the property by listing the property for sale or placing it in an auction.

Foreclosure properties are generally sold “as-is, where-is” which means that what you see is what you get, including the trash in the yard and abandoned furniture in the house. Buyers can and should inspect properties carefully before making any offer, or make any offer contingent upon a satisfactory “due diligence” period of time. Most foreclosure sellers seek to sell for “market value” but are realistic as to current market conditions.   

What is a REO?

 It means “real estate owned”. Banks and credit unions may refer to properties taken back by foreclosure as “REO”, for short. All REO’s have been foreclosed on, but it’s important to remember that all foreclosed properties may not be REO’s because they’re not always owned by financial institutions. 

Buyers must bear in mind that the seller of an REO property is a corporation, working Monday through Friday, 9am to 5pm and we don’t know which time zone they are in. There is no personal involvement on the part of the REO seller and buyers may feel they are watching moss grow on a rock. Something IS happening, but it’s so slow it’s difficult to tell. Many REO’s attract multiple offers and the seller tells all bidders to submit their “highest and best” offer. They mean it. They will look at all the offers side by side and determine which one nets the most AND has the greatest chance of closing easily and smoothly. 

REO sellers like simple offers – cash with proof of ready funds, 30-day closings and no contingencies other than a “due diligence” inspection. Most REO sellers are very fair about giving potential buyers time to inspect the property and notify the seller of unanticipated issues. Most REO sellers also charge buyers $50-$150 a day for any delays past the agreed-upon closing date.

What is a Short Sale?

 It means the sale of a property not yet foreclosed, which yields less money than is owned to all the creditors having a security interest in the property. Many mortgage lenders prefer to receive a partial settlement instead of incurring the costs of legally foreclosing, possessing, managing, insuring and marketing the property themselves.

Sellers’ lenders (all of them) must agree to receive less than full payoff or the Short Sale cannot occur. Obviously, the junior lenders would like to see some money rather than receive nothing and they may play hard ball to do so. Some Mortgage Insurance (MI) companies, which insured lenders against loss in the event the owner defaulted on a loan, are now demanding that defaulting owners sign promissory notes to repay the amount the MI company has to pay out.

Short Sales are extremely time consuming, involving many parties and require a great deal of patience and flexibility on the buyer’s part. Short Sales are NOT for buyers needing a home quickly.

What is an Auction?

It applies to a method for selling property to the highest bidder. The properties being auctioned may or may not be foreclosures or REO’s. The properties may or may not be “distressed”, the sellers may or may not be “motivated”. Properties may have a “reserve” price below which the seller will not sell. Some auctions are “absolute”, meaning the highest bidder wins, no matter how low that bid may be.

What’s your experience with these types of properties? What do you prefer?

No surprise there. Most sellers cannot believe that they may have a “loss-on-sale”. They want to know what their options are first. We now know that these and other issues facing transferees are causing a shift in the strategies employers are using to evaluate the employees chances of having a successful move and giving the transferees more options for a new assignment.

Here are a few of the new tools used by Relocation Companies to evaluate a relocation:
1. Get a pre-move offer CMA on the prospective transferee’s current home.
2. Send the transferee to the new location for an area tour. I’ve scheduled four of these in the past two weeks.
3. Offer temporary assignments with several rental options.
4. Offer a loss-on-sale allowance to the transferee who is very desirable, so he/she will consider the move. 

What can you do to turn these strategies into commission dollars? The obvious answer is to embrace these new policies and make it work for you. Here are some ways to turn the above policies into new business.
1. Pre-move CMA’s are a great way to show the client you are willing to do the ground work, therefore you’ll be the right agent and get the next actual listing.
2. A great agent knows that any opportunity to talk in person with a prospective transferee could result in a sale OR a possible referral from them.
3. If you work with renters you’ll have buyers just a few months down the road.  These are becoming increasingly more important.
4. If a transferee takes a loss-on-sale, they’ll probably spend less on a house on their new move. Turn this in to a positive strategy for them. Point out that they’ll have an easier time selling in a lower price range (You’ll also have an easier listing to sell when they move again). They’ll have smaller utility bills and less house maintenance. If you make it a happy experience they’ll feel good about their choices and think you’re the best agent ever.

The new relocation landscape may be a bumpy one, but I think the road can be made smoother if we continually re-think how to accommodate the transferee in the coming years. What are you seeing in the relocation market?

In addition to setting the pre-licensing education requirements, testing standards, licensing requirements and continuing education requirements for real estate licensees in Georgia, the GREC is also a resource for the public to use if/when members of the public feel that they have not been dealt with fairly by licensees. The GREC takes complaints from the public very seriously and investigates every situation for which they receive a written request. Frustrated or unhappy buyers, sellers, tenants and landlords sometimes threaten real estate licensees with, “I’m going to report you to the Real Estate Commission.” Smart licensees know this is a serious matter.

How exactly is the public protected by the GREC? 

Money

Real estate licensees (including their brokers) must follow very strict laws regarding the receipt of, handling, depositing and reconciling of all “trust funds”. Trust funds are money belonging to a buyer, seller, tenant or landlord being kept in a Trust Account by a broker, such as earnest money, security deposits, pet deposits, key deposits, repair escrows, etc. The GREC requires that all such funds be turned over by a licensee to his broker “as soon as practically possible”.

The broker is then required to maintain a separate, federally insured account for those funds and to deposit those funds in that account as quickly as possible unless the parties have agreed otherwise in writing. The broker is also required to follow the written instructions of the principals with regard to disbursing those funds at a closing, the end of a lease, upon receipt of a written agreement between the parties or in the event of a dispute between the parties. 

So how does this affect a buyer, seller, landlord or tenant? The public is harmed if trust funds are:
• Misplaced or lost
• Deposited in a licensee’s own account
• Not deposited in the time period agreed to and the funds are not honored
• Not disbursed when appropriate if the broker fails or refuses to disburse the trust funds when appropriate
• Borrowed against by the broker

Licensees are also prohibited from offering or receiving undisclosed “kickbacks” for referring the public to services such as mortgage lenders, home inspectors, appraisers, etc. These undisclosed costs would invariably be borne by the public.

Documentation

Copies of all written agreements between real estate licensees and members of the public must be provided to the signers as soon as possible. This includes Listing Agreements being provided to sellers and landlords, Buyer/Tenant Representation Agreements being provided to buyers and tenants, and Leases and Purchase Agreements being provided to all signing parties. All offers must be presented to the seller/landlord for consideration unless the seller/landlord gives the licensee other written instructions (“only present cash offers”, for example). 
Licensees are required to disclose the fact that they have a real estate license whenever buying, leasing or selling any property they (will) own or in which they (will) have an ownership interest. No member of the public should feel “tricked” or deceived when conducting business with a licensee. 

Fair Housing

Real estate licensees are forbidden from conducting business in any manner which restricts the sale, leasing, negotiating or availability of any real estate to any person because of race, color, religion, sex, handicap, familial status, or national origin. Likewise, licensees may not engage in “blockbusting” or implying that a change has or will or may occur in an area. 

Expertise

No matter how well-trained and/or experienced a licensee may be, the licensee is NOT qualified to do appraisals, conduct inspections, give tax advice, render legal opinions, certify structural integrity of a property, guarantee future profits, conduct environmental assessments or otherwise give any expert opinion for which the licensee is not also credentialed. 

The public should not ask or expect licensees to provide these other services, but licensees are often asked questions outside their realm of expertise. Licensees who ANSWER those questions with anything other than, “I’m not qualified to answer that so you should consult a tax attorney/lawyer/engineer/etc.” can harm a buyer, seller, tenant or landlord who believes that the retaining wall is perfectly sound or that real estate always appreciates 10% a year. 

It’s important to realize, too, what the GREC cannot do. They cannot make a buyer, seller, tenant or landlord agree to specific contract terms. They cannot make a seller refund earnest money. They cannot solve commission disputes. They cannot make the builder finish the house faster. And, unfortunately, they cannot make licensees punctual, polite, considerate or sympathetic. 

Has the GREC ever had to come to your rescue?

Let me suggest what the future Atlanta relocation agent might need to be prepared for:

1. More experience will be a requirement, probably 3-5 years.
2. More accountability and impeccable credentials.
3. More mobility. You’ll probably be working from your car and home more than an office.
4. You’ll need all the latest technical tools including laptops, blackberries, iPhones or other smart phones, scanners, and the latest in digital cameras. Plus, you’ll need all of the most up-to-date software required for working with today’s corporate clients. Okay all you techies, what else will you need?
5. More training offered especially by our corporate clients. We see a lot of training sessions are likely this coming year and will be web based.

The new transferees are on much tighter budgets. So you may have to help them with some of the services that their employers used to provide. Many are in need of temporary housing, so it would be wise to keep a list of “suite hotels” with you. Provide the trailing spouse with a list of career counseling services. And if the employer does not move their household goods, be sure to offer van line services as well.

No space suits at this time, but be prepared for other changes that may sound far out there. Who knows what new advancement is waiting us?