Editor’s note: This post originally was written for elsewhere but has come back here. I’ve read it through a couple of times and my issue really isn’t with the agent being quoted (though I do disagree in the extreme with some of the marketing-based assertions about short sales). Where I have a problem is Inman News presenting opinion as fact, especially when the opinion comes from someone with a vested interest in having that opinion appear to be a fait accompli and not ever disclosing the subject’s conflict of interest.
This is one of those internecine real estate-type posts but I always think a glance behind the curtain to see what we real estate agents see every day can be rather illuminating of the real estate business as a whole.
On this morning’s Inman News update came the tidbit that “experts” are expecting short sale inventories to remain strong for the next to five eight years.
Said Holly Maloney, a certified short-sale specialist with Huff Realty in Cincinnati,
“It’s a market that’s going to be there. You either learn how to do it, educate yourself or work with someone who knows how to do it, otherwise you’re going to be giving business away.”
Maybe you saw the article. If so, what you didn’t see was that Holly Maloney also is a part of a group called “3 Blondes and a Short Sale,” which not only negotiates short sales on behalf of agents but also will “teach you how to thrive with short sales and use your new skills to save your sellers’ sanity and credit, as well as your community’s values and possibly your own career.”
More on those claims, straight from the group’s website, in a moment.
On my own blog, I’ve been stuck on an anti-media soapbox of late, and frankly, articles like this don’t help lower my blood pressure a great deal. Am I wrong to believe that if someone has a vested interest in prolonging the short sale market that said conflict should be mentioned more prominently? (In fairness, maybe it appears later in the article below the subscription filter.)
The notion that “you’re going to be giving business away” is predicated on the absolute that short sales always end in a closing and a commission check. Reality, however, proves that absolute is anything but. In fact, in an arena where optimistically only one in six transactions ever make it to the closing – regardless of the skill level of the listing agent involved (a good short sale agent can lead to that one in six and maybe increase the odds slightly; a poor short sale agent may as well light the paperwork on fire) – most real estate agents can find better odds playing the don’t pass line at a craps table.
Gambling isn’t a steady foundation on which to build a career.
Advocating the abolition of short sales also isn’t a steady foundation on which to build a career, especially if you want that career to involve speaking at national real estate events where short sales remain the “in” thing, but to my mind it’s a position based much more in reality.
Returning to that website statement, short sales do not preserve community values. A cursory glance at closings in the MLS will show that the relatively few short sales that close (in comparison to those listed) do so at prices that tend to bring down the overall market for the neighborhood.
Want true preservation of values? Look at fix-and-flips, properties bought well below market, repaired and put back on the market at a premium to market value. Even a small premium and successful closing is enough if not to nudge the needle up then to keep it from falling further.
Saving clients’ sanity? Only if you consider Chinese water torture to be sane. Waiting months for an answer (yes, this means you, Bank of America) and leaving a client in limbo isn’t going to enhance anyone’s mental health.
Saving clients’ credit? Maybe if you’re discussing one of the rare short sales where the buyer remains current on his or her mortgage payments. Outside of that, given the credit score hits that come with a late payment, “saving” is a relative term.
Truthfully, the idea of abolishing short sales is an academic exercise at best. Politicans need their acronyms to sell to voters, agents need to hope for those commission checks and vendors will continue to sell their wares.
But this doesn’t mean you have to become a part of the system, as this article suggests. You can have a successful career in real estate without ever writing a contract on or listing a short sale. It takes a client base willing to ignore false list prices and listen to reason, and it takes self-confidence that the path you’ve chosen will lead to success.
It’s both that simple and that difficult all at the same time. The choice is yours. Just don’t believe the news without finding out who is behind the story, for your own sake.