Selling a “Pre-Foreclosure Investor Strategy” to Real Estate Agents
By Bob Lachance
If you visit agent blogs or discussion threads you will no doubt run into controversy about whether or not real estate agents should work with investors to buy and resell short sale properties. There is a crowd of agents that do not understand and will always refuse saying that the process violates an agent’s ethical and fiduciary responsibilities. However, there are agents that, with proper explanation, see the benefits of working with a real estate investor to get their short sale properties sold.
The benefits to the seller are countless. But here is the deal: There are a lot of gurus out there teaching investors to do things the wrong way. Ways that put agents in the midst of ethical and fiduciary conflicts, ways that put lenders on alert that they are not intending to perform as the purchaser and put sellers in a tough spot when the investor bails out in the middle of the process, before the home can be sold.
An agent will not want to risk their license and career. So, you will need to be sure that you confidently explain to them that:
1) You will never cross representation lines
2) You will never do anything that could be construed as fraudulent or misleading
3) You will fully disclose your intentions to all parties
4) That you understand the seller has a choice
5) You will perform if your offer is accepted not contingent upon terms outside of the contract.
In today’s real estate world, agents are a big part of any short sale success. The lenders want to see that the seller is represented… plus, the agents will do a lot of the leg work for you, know the local market, are trusted by sellers in distress, and are experienced at building a buyers list.
And so you need to sell the benefits to the agent:
1) You will help them get an offer to the lender
2) They could help you resell the property and earn an additional commission
3) They will have a listing client with a “short sale approved” price if your offer is denied
4) You will save them negotiation time and frustration.
5) You can postpone any possible foreclosures from happening by being able to submit an offer to the foreclosing lender
And so make sure to drive these benefits home with the agent, and be completely transparent with them right from the start. And also understand that in some cases it may take a deal or two to gain the agent’s trust and support. For some agents this will be their first exposure to short sales, and more specifically in working with an investor.
But also make sure to remind them that the reality of the situation in today’s market is that they had better come to accept short sales and not shy away from taking them on, because this year we will see nearly two thirds of all listings be properties that are over debted. And so they will have to come to embrace short sales, or else they won’t stay in business.
And another thing to remember….as much as investors need agents to complete short sales, it can also work the other way too. If an agent has a listing that is about to go to foreclosure and unless they can get an offer in, then guess who is going to be able to accomplish that before the foreclosure? Exactly…the investor.
For more real estate industry articles and videos visit www.RealEstateBusinessMentors.com and www.ShortSaleDailyNews.com.
great post! keep it up, i will be visiting more often