RE Licensee REO’s

[sdrealtor]

I’m sure this will be met with glee by the Piggingtonian masses but I have been seeing an interesting trend. Every week I get a report on all the new NOD, NOT and REO filings. Each week I see a familiar name of a Realtor I have run into that had a very nice business a couple years ago. In general, they seem to fit a very specific profile:
-licensed within the last 5 years
-neighborhood specialists for a specific area with strong market share
-got stuck with a pile of listings last year they invested heavily in trying to sell but as the neighborhood expert got caught trying to hold up the comps and ended up losing them after they expired.
-believed in the Kool Aid they were selling and leveraged themselves into a McMansion with a large mortgage
-relied heavily on RE with a sole earner or both RE dependent and must not have recognized the cyclical nature
-thought they could make it on volume and tried a discount listing/buyer rebate strategy

Not sure if any one of these was deadly but the cocktail of it all certainly was.

[TemekuT]

So Correct, sdrealtor.

Both myself (broker) and my husband (broker) have watched this play out in our neighborhood. The ubiquitous “Everyman” became a realtor/investor in the last few years, speculated on property here in Temecula, got caught in the flip cycle, and just walked away and let the property go. Your posting is timely because just a few days ago we were counting the brown lawns here and commenting on how many were realtor owned (if you can call 100% financed flips owned!). We have watched two realtors on our street lose houses that they lived in. First we saw the NOD’s, then the leased luxury cars disappeared, then the gardeners ceased gardening, then the NOT’s, and in one case, unwillingness to vacate led to bargaining and $$$ in exchange for possession.

We are now watching the realtor across the street trying to hold up the comps. “I’m not going to give my house away” is his line. He can’t accept the downturn, even though his house has been for sale about 15 months and even though as he chased the market down he Heloc’d twice and is now mortgaged about 30% over the market value of his house.

And next door to us the “realtor/investor” finally got a renter in the place…but…the FY 2006-2007 property taxes have not been paid.

It seems like a lot of the recent licensees out here were operating as “neighborhood specialists” and at the same time, flipping property at not exactly arms’ length transactions within their investment groups.

We don’t understand why the DRE lacks funding and manpower to shut down the obvious scam agents. Our 2 reports of extreme wrongdoing were ignored by the DRE.

Too bad the ethical, conservative, competent agents and brokers are automatically tossed in the same pot with the rest.

[PerryChase]

I know a couple who is a Broker team. They sold their house (luckily at a profit) and moved in with the parents. Yet they can’t accept that the market is down. They still drive the Porsche SUV and are hoping that the market will pick-up this year, or next.

They are telling me that it’s time to buy. I just smile and say that I can’t afford it.

[Bugs]

Whats bad for the realty agents is bad for a lot of people.

I’d be willing to bet that there are at least as many loan originators on that list as realty agents, and the only reason there are fewer appraisers on that list is because there are fewer appraisers in general. There are probably a bunch of contractors and subcontractors on that list, and probably some car salesmen and “motorsports” business owners who relied on MEW money for their wares.

[JJGittes]

But but but these are supposed to be the professionals that David Lereah says us dumb folk need to guide us through the most important financial transaction of our lives.

How could they have been so wrong??? Could Dave and his minions be blowin smoke….nah…

[SD Realtor]

Funny you say that bugs. A few weeks ago I received an email from someone who posts here asking about a foreclosure property. When I looked up the owner it was a mortgage broker!

SD Realtor

[LookoutBelow]

I figured as much….but they had one hell of a fun ride for a while !! 

They saw an opportunity, they took the chance, they gambled, won a few times, then they got addicted to it and finally got caught short..Ride was over ….Im sure 30-50% of all sales the last 2 years were "Serial Flippers" like these….Lots of Porsche SUV's to be had cheap right now, imagine in 6 more months ? Hmmm… I do kind of like the looks of em, and at THAT price, it would be a steal !!

[sdrealtor]

I agree that it wsnt just realtors that got caught in the crunch but what struck me is that these were not run of the mill agents. These were relatively top producers that over leveraged themselves, overpromised to clients and tried to do so with a business model that fell apart when the volume dried up. It was almost as if they mini verions of Ipayone.

I doubt 30 to 50% of transactions were serial flippers in SD. I would be surprised if it was even 10%.

[Author]

Posts