Photo courtesy of Will Pate
We can Teach You…
Every day in my inbox, there is someone offering to certify me to make short sales or handle REO properties for lenders nationwide who need my services, if only I get certified by the sender. Now I have been selling REO properties for the past 20 years, and I have never heard of the people offering most of these courses and certifications, but their emails assure me that there are thousands of properties just waiting for me to list as soon as I sign up for their service or complete their course.
And if REO properties are not my forte, then they offer to teach me how to identify potential short sale opportunities, and obtain a certification from them that will enable me to cut through the Gordian knot of the short sale process
Is Truth Important?
I have a Google Alert on the term ‘short sales”. One of the links that appeared was a “press release” entitled :Real Estate Agents Must Understand the Short Sales Process”. The lead paragraph of the release quotes Thomas Mitchell, Senior Vice President of RealtyU (which just happens to offer a “Short Sale Certification”) who states. “Residential real estate has so many areas of specialization that unless real estate agents take specific courses to improve their skill set it is impossible for agents to know how to best serve their clients” – Now I may not be the sharpest tool in the shed, but it seems to me that this individual just said that the real estate business is so complex that without taking his course, agents won;t know what their clients need. To me this statement is a lot broader then the headline of the article would indicate.
In the next 2 paragraphs Mr. Mitchell then says, “With the latest flurry of Short Sales taking place throughout the country agents need to understand new terms; for example Notice of Default (NOD). This refers to a recorded document which officially starts the foreclosure process. In most cases the lender can file an NOD on the 16th day that a borrower is late making the mortgage payment. However, in my experience, 99.9% of the time it is filed after the borrower is 90 days late.
Not the kind of information you just casually know, says Mitchell.”
It Just Ain’t So
Now I really have a problem. The Notice of Default is something that starts the process in states that use Non-Judicial Foreclosure (unlike my the Commonwealth of Pennsylvania, my home state). And in our state, the difference between Judicial and Nonjudicial foreclosures is taught in the Real Estate Fundamentals course that all licensees in our state must take prior to taking the licensing exam and becoming a real estate agent.
I’m not sure what constitutes, “casually” knowing something – perhaps that means you weren’t formally introduced to the fact, but you can at least say “hi” to it if you pass it in the hall on your way to the library. Whatever – The point here is that while consumers might not be familiar with the foreclosure process, it is something that everyone in my state is expected to know prior to getting their real estate license. Now I think Pennsylvania is a great place to live but I do believe that many other states have similar standards for new licensees. Therefore it would seem to me that understanding the basics of real estate finance, pledging property for the repayment of a debt, and what happens when you don’t pay that debt are pretty basic information for agents to have.
Then I have a second problem with this ad. Mr. Mitchell talks about the timing of this specific occurrence and shares with us his experience with it – except he doesn’t share with us what his experience is. Who is this guy who wants to certify us as specialists in a specific area of our business, and makes inaccurate statements to show real estate professionals why they need to pay him for a certification? Why should we listen to him? What weight is the designation he offers us? What reliance should a consumer put on a real estate agent with that “certification”.
I don’t want to keep pointing out inconsistencies in the article, or pick on RealtyU in particular (since there are a number of other “unwarranted”designators out there) , but I do have an issue with this obvious exploitation of the confluence of several bad situations. The challenging real estate market where some agents are looking for quick fixes combined with the number of people across the country in financial trouble who are faced with a variety of situations where they might be losing their homes.
So What’s the Problem?
I know that I really concentrated on short sales here, but I don’t want to forget the REO certifications. There aren’t any that Lenders (the sellers you want to impress) recognize or care about. They want people that have actually done the job, and know the risks and issues that are part and parcel of this specialty.
I know that schools need to make money. I know that schools like RealtyU are just looking to expand their offerings to compete with other schools for the dollars of real estate agents. And I know that if a designation grows to a point where a large number of agents want the designation, and there is a perception that it is an important designation, there can be BIG MONEY in selling the program to large national organizations, and an immediate pay day. But shouldn’t there be a requirement that such a designation have a thoroughly vetted curriculum and substantial course content?
I don’t think there are any short cuts to short sales, but I do think that a struggling agent might think this is a great way to increase their income. And I think that a scared and stressed consumer, who is told that an agent is “Certified” to solve their problem might place unwarranted confidence in such an agent and that unwarranted confidence might lead the consumers into a stressful and disappointing situation without the expertise they though was guiding them. Just reading a recent post by Matthew Rathburn entitled Loss Mitigation Officers, Gone Wild tells the honest issues raised by the Short Sale process, and points out issues that I’m afraid this type of course will not help an agent or more importantly, the consumer avoid.
For me, I think I’ll continue to sell REO properties and negotiate short sales without getting one of these certifications. What about you?