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What came first, the chicken or the egg? The Catch 22 for Realtors®, our short sale conundrum.

April 11, 2010

What came first, the chicken or the egg? The Catch 22 for Realtors®, our short sale conundrum.

chickenThere has been a bit of banter around the ‘rain lately about short sales. Law suits, violations of the Realtor® Code of Ethics, heavy stuff indeed.

Law suits have apparently been brought against Realtors® for taking part in short sales and not doing a good job. Their expertise was brought into question. There was, of course, some attorney bashing with that. I caution people to remember that for some of the public, we in the real estate industry are considered bottom feeders. (I know, unbelievable, but true I am sorry to say) I am not putting the blame on attorneys for the law suit, our current system of justice seems to promote such frivolous law suits. Not much different than the hot real estate market a few years ago where lenders were loaning any Tom, Dick and Harry money. Admit it, there were times when you knew in your heart that the buyer you had really wasn’t qualified, but did you walk from the sale? Are we all innocent of participating in the frenzy a few years ago?

I have heard it said that if we aren’t already experienced in short sales that we are violating the Realtor® Code of Ethics by participating with no experience. That, my friends, is a Catch 22. To those of you who are experienced short sale agents, how did you get your experience? By reading about them? I am reading about them too. Did you start somewhere. With one short sale perhaps?

eggFor myself, I am just starting down the path of short sales. We have not has as many as, say, Florida or California. But they are starting to heat up here in my area. I have posted about a trend here that is very disturbing to me, but I am told is legal, where the negotiator has pre-negotiated a price with the lender that is lower than the list price, the house is marketed until a buyer can be found. The negotiator actually signs the offer to purchase, buys the house and sells it to the new buyer within 24 hours for a significantly higher amount. Like, $20,000, $30,000, whatever they can get. In my book, for my buyers, that is not kosher. That would be a violation of my OWN code of ethics.

I would rather rely on myself, get what information I can from mentors who may even live 1000 miles away from me, read all I can about short sales, and do the job at hand. If that is a violation of the code of ethics, than all those who are seasoned in short sales violated the code of ethics at the beginning of your short sale career.

This Realtor® is not going to participate in the Catch 22, I do not believe I am violating the code of ethics, or if I am, it is no more than those seasoned short sale agents when they did their first few short sales. And if it is indeed a gross violation of our code of ethics then perhaps The NAR should put a stop to us participating in short sales at all! And on this train of thought, were we all violating the Realtor® Code of Ethics with our first few transactions?

You tell me, which came first, the chicken or the egg? We could always leave it to the short sale negotiators and attorneys. This is an interesting conundrum for sure.

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