The new president of the Fresno Association of Realtors is emphasizing training this year — and even many veteran agents may need it.
That’s because short sales and foreclosures, once a minor part of any housing market, have come to the forefront. When home values started plunging, bankers started calling. The time of reckoning arrived for many people who owed more on their property than it was worth.
Around half of all the listings in Fresno and Clovis are either bank-owned or a potential short sale, in which the lender and borrower agree to sell a house for less than what is owed. So, more real estate agents have to understand the peculiarities of those kinds of transactions if they want to be in the game this year.
The Association of Realtors, under the leadership of 2010 president George Mees, is sponsoring more seminars on navigating foreclosure and short-sale deals. Even Mees is a student, because he resisted short sales for much of his 36-year career, which began when he was 23 and fresh out of Fresno State.
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“I have done them,” he said. “But there was nothing I liked about them.”
Short sales involve a sometimes frustrating process that can include negotiations with bank representatives in different time zones and states. Miss something in the application packet and agents often have to start again.
The homeowner is technically the seller in a short sale, but the lender is the 300-pound gorilla — and often dictates the deal.
“The bank is the overwhelming force in the transaction,” said Patrick Prince, a Fresno real estate agent who specializes in short sales. “The bank comes in at the last minute. … If you know how the bank will respond, you can make the process go smoother.” Mees assumes the presidency at a time when sales are strong — but not because the economy is robust. Low prices, low interest rates and tax-credit programs are fueling interest, most of it from investors and first-time buyers.
The 7,688 existing houses sold in 2009 represented a 93.8% increase from a dismal 2007, and it was 34% more than sold in 2008.
But realty agents, who get commissions from the sales price, have to sell more houses because prices have tumbled. When prices fall, so do their incomes.
“Agents have to work twice as hard to make half as much,” said Mees.
The real estate slowdown drove out some inexperienced agents, but the recession has prompted others to give real estate a try. Last year brought refugees from mortgage and title companies, and other industries that downsized.
And they all need training. “This is new ground for all of us,” Mees said. “It’s a whole new ball game for everyone.”