NAR advises agents NOT to sell to “Flippers” because it benefits only the investor?
This may be the single worst piece of advice I have ever read published in such a well respected association and qualified professional news source for Realtors and real estate professionals. First, for purposes of full disclosure; I am a full time investor and do invest in purchasing short sale properties and I am also a full time licensed real estate broker in the state of Arizona and have been for 18 years; and our firm does represent distressed sellers, as well as in many cases, our own investment company as buyers of those same short sale properties with the obvious written dual agency disclosure to the seller and also the third party lender who ultimately approves the sale. The advice I am referring to was written by Scott Thompson with ServiceLink, a national lender platform in Rancho Cordova, CA. in the April 2010 edition of Realtor magazine, published by the National Association of Realtors. www.realtor.org/realtormag The name of the article was “Short Sales Ethics: 6 Temptations to Avoid” and number 4. is titled: “Selling to Flippers” It states: ” Unless the investor in a flip is prepared to add substantial value by fixing up the property, don’t participate in a flip. Short sale flips benefit only the investor, who’s clipping off moneythat could go to an already bleeding lender.”
Where do I start? First of all, an investor is NOT the only one who benefits! What about the homeowner/seller? Our goal is to get them out of the house and the situation they are in and close the short verses letting the house go into foreclosure and devastating their credit and/or potentially force them into personal bankruptcy. The SELLER WINS! Oh and by the way, what about the lender? They have a solid cash buyer, us, who will do what we say we will and close the deal as per the contract and on time therefore mitigating the lender’s loss tremendously. The LENDER WINS! Also, not another run down vacant house on the block sitting there for sale for months, only to sell for LESS as an REO , which would have hurt the lender much more and brought down sales comps. The NEIGHBORHOOD WINS! Also; the new buyer, soon to be new homeowner, now buys the property at STILL a HUGE discount (that’s AFTER the investor’s evil profit!) and can now make an offer and close quickly because ALL the hassles of the former seller’s transaction and their lender were solved by that nasty investor who clipped off money from the poor lender. NEW BUYER WINS! And; don’t forget about the real estate agents; they make a well deserved commission from the hard work that really does go into getting all the parties to a short sale to the table to close an almost always difficult transaction. The AGENTS WIN! The agents/brokers like us that pay the dues to the (NAR) the National Association of Realtors. Investors and brokers/agents are of the same breed; we are all entrepreneurs who are out working for ourselves, taking risks to feed our families and many times working many hours on transactions that we may never get paid from. So let’s don’t forget that investors often times drive our markets and make the deals close that otherwise would not and our involvement in the process benefits ALL parties involved, NOT just the investors! Without investors, free capitalism and those of us willing to work the hard deals, this market we are in would slow to a screeching halt. So I believe strongly that it is grossly irresponsible to encourage real agents to NOT sell to a Flipper (basically slang for an investor who resells for profit – God forbid!) and slant the advice toward being unethical is certainly an insult to all investors and brokers/agents of the world.
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Is buying a foreclosed home really such a great idea right now? Shouldn’t we wait and see how long it takes for the market to bounce back from this recession? I know some cities are coming back quicker than others, but what about our country as a whole?
Hi Cyril: Thanks for your posted comment on our blog. I believe that there has never been a better time to buy a foreclosed home than today (depending on what you pay for the house) I never take a wait and see attitude when it comes to investing; we just need all the facts about the house and even more so the market. Every market is different; we need to know the market we are in very well to become successful in this arena.
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