In our Georgia region, real estate inventory is VERY slim. This is due to the continued recovery from the messes created with HELOC craziness 2005 – 2008 and the subsequent fall out. People are staying put. New homes aren’t being built in our area, people chose to improve the homes they were already in rather than move. This has reduced the cycle of inventory substantially to where it’s almost non-existent. Not only is this frustrating for real estate professionals assisting buyers who want to move to the area, but it creates an emotionally charged false market.
Recently we helped a young woman in her efforts to buy her first home. She found a home that needed about $20,000 in improvements to be comfortable and safe. She was willing to plan for that, but her budget had a limit due to her limited income. Because of low inventory, there was a bidding war on this mediocre home adding nearly 40% to the asking price. This was not from investors, this was from everyday people looking to buy a home in the area. Add the $20,000 needed to bring it to a pleasant condition and it’s so far out of our young home buyer’s market that it didn’t make sense. She was emotionally involved in the area and emotionally invested in THIS house. She wanted it. This is where morals come in. Having been through HELOC-AGEDDON in recent years, we’ve also seen cycles of false markets and the fall-out because the income doesn’t match with the upswing in crazy prices. People get into these homes, pushing beyond their logical limits for what a they should be committing to a mortgage, repairs and more. A slight hiccup may happen to their income and suddenly they are scrambling. It was financially tight before since they got in deeper than they should have, and now it’s beyond tight and they begin to get behind in payments. We’ve seen this too many times to count and it’s heartbreaking to witness.
Our clients and our neighbors.
Yes, as real estate professionals, we are in the business to close deals for buyers, clients and sellers. That’s how we make our money. But these are also our neighbors. We have to face these people. They trust us to guide them. Some are like our young lady in her 20’s. No parents to guide her. We are it. Specializing in foreclosures, short sales, HUD and the like also gets us painted as the boogeyman for “forcing people” to move from their homes. We take no joy in this, we are simply the face of the transaction – the outsider that can take the blame and brunt of the fear, sadness, and anger. Most of the time what led to the situation isn’t being told. Most of the time it’s due to a relative squandering the equity or HELOC without any plan to repay the loan. They bullied the elderly owner into using their free and clear home as an ATM machine. And the ugly process begins. In Georgia, we are a “non-judicial foreclosure” state. That means the lender can foreclose on your home without filing suit or appearing in court before a judge. This, of course, starts with a default under the terms of the original note. The borrower is sent legal notification at least 30 days prior to the date of the proposed foreclosure sale. This is sent by registered, certified mail or statutory overnight delivery and includes a copy of the advertisement of the foreclosure sale that will be published in the official county newspaper for public announcements. This published announcement is run for 4 consecutive weeks in the newspaper. We still aren’t sure what purpose this serves other than to shame the person, get the neighbors whispering, and alerting the scam companies as to their dire and desperate situation.
Because of that obsolete process, these already vulnerable people are laid wide open for smarmy, scuzzy scam companies who offer to “help” them with Foreclosure Rescue Scams, secure yet another loan, take the property off their hands and give them something well below market for it and many other low-life approaches. We’ve tried to advocate for the people who are targeted, reporting the unscrupulous companies to local law enforcement. However, because we are not related to the victims of these moral crimes, we can do nothing – no one investigates – and the gutter-level cycle continues. Yet, we are painted as the bad guys for processing the sale and purchase of the home. We know our market. We know the cycles. We also do our best to educate our clients and potential clients. Sometimes we do such a great job we lose the deal, but we can still look at ourselves in the mirror in the morning without being sick.
A Challenge to Real Estate Professionals:
We’d like to ask our colleagues across the country to be the adviser to these vulnerable people. They do not know your market like you do. They aren’t aware of the cycles, because this is possibly the first time they’ve paid attention. This may be the first time they’ve participated in a home transaction. We know we can’t save them all, but we don’t have to always take the low hanging fruit just to close a deal. When we allow our conscience and morals to guide our business practices, we raise up our profession and our reputation as an industry. Do right. Pretend you are helping a relative that you really care about and want to protect, but still get your full commission. Your professional experience has earned you that!
