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Suzanne Macdowell's Blog

By Suzanne MacDowell | Agent in Mount Arlington, NJ

If I were President of the United States...

my first order of business would be to address the poor economic conditions in this country.  How would I do that?  By recognizing that real estate leads every economic recovery and concentrating my efforts first and foremost on the housing market.

The reason real estate leads every economic recovery is that so many jobs are created and kept due to a strong housing market.  It is estimated that one job will be created for every two houses sold.  And that doesn't count all the jobs that will be KEPT for each house sold.  I was brainstorming with my mortgage partner not long ago, we were considering putting together a monthly lunch of the professionals we work with during each real estate closing.  We wanted to get their input on new and current rules and regulations that could effect our end of the real estate business as well as to provide our own insights.  We estimated that a minimum or 12 people would be involved in an average transaction, and that number would grow depending on such factors as whether the house had public water and sewers or depended on septic systems and well water.  And THAT doesn't take into account the many, many people who make their living in whole or in part as people maintain the home over the years.  To me, addressing the housing market is a no brainer when it comes to our economy.

So, what would I do to improve the current housing market.  Well, as a short sale and foreclosure specialist, I would do everything I could to get the banks OUT of the real estate business!  If I could I would FORCE them to use realtors to negotiate their short sales and then hold the realtors accountable under the laws of agency to do what is best for the bank AND the home owner. 

Banks are lenders, they are NOT realtors.  They do NOT know the local real estate market.  They do not know how to market a home properly for sale.  And they do not understand market forces.  If they DID they would not put ridiculous rules in place that work against their own best interests in getting short sale properties sold for the highest price possible in the shortest amount of time.  Let me give you an example. 

I recently listed a short sale property. The owner was divorced about one year ago.  He had applied for and been denied a mortgage modification three times.  He had managed to bring and keep his payments current, but without the modification he had no money left at all at the end of the month and he just could not go on that way any longer.  That's when he got fed up and called me to sell the house.  I told the home owner, in my opinion X is the current market value of your home, let's list it just slightly below that amount, and just below the closest competition.  Then, I told him, if within two weeks we don't have a minimum of 10 showings we will know the price is too high and we will lower the asking price to X.   Two weeks after that, if we have showings but no offers, we will lower the asking price to X.  He agreed.  Two weeks later, when we had no showings we lowered the asking price 10%.  We not only got showings, we got an offer, a very good offer, very close to market value.

In the meantime we got the short sale package from the bank.  The requirements are the most ridiculous, draconian rules I have ever seen.  First of all, the owner MUST be at least 31 days delinquent in his mortgage payments.  This will ruin his credit rating and cause him untold financial hardship for some time to come.  Second we must actively market the property for a minimum of 120 days.  120 days during which the bank is losing money even though they have a perfectly acceptable offer on the table.  Then they ask for the usual financial documents to prove the client truly cannot afford to pay the mortgage any longer, but they want all those documents scanned and sent to them by email in ONE EMAIL!  The amount of documentation they require is so large, I doubt it will get by the firewall, but they insist that if it is broken up into two parts, they will discard parts 2 to the end and deny the short sale. 

I have never seen such stupidity in my entire life and our legislators seem to lack the knowledge or the will to put an end to it.  If I were President, I would say to the banks, too bad, you screwed up, nobody is guaranteed a return on any investment, take your lumps and let's all get on with our lives.  You're lucky we didn't just let you all fail.  Take what you can get and be glad you didn't lose even more money.  Then I would take banks out of the business of negotiating short sales and put the people who know how to get the job done and done well in charge, realtors! 

And THAT would get our country's economy back on track.  Plain and simple!

Comments

By Spirit Messingham,  Sun Sep 30 2012, 14:44
Interesting, thanks.
By Ken Allen,  Sun Sep 30 2012, 17:39
Thanks for some interesting thoughts.

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