This comes from the California Department of Real Estate (DRE) via the Shasta Association of Realtors:
Consumer and Industry Warning, False and Misleading Designations and Claims of Special Expertise, Certificaton and/or Credentials, Wayne Ball, Chief Counsel, DRE.
“The DRE is issuing Cease and Desist on questionable and possibly misleading terms such as “expert” “Certified” and “Speciality” in marketing and advertising of assistance to anxious homeowners. A growing number of individuals and companies in the area of short sales, are advertising as “experts” and the like. Moreover, there are an increasing number of companies offering expensive course materials and leads that have no meaningful or substantive content, which are designed to allow those who pay for the same to claim they have “certifications” which are, in effect, worthless. DRE does not issue any special designations. Some questions asked What qualified you as an “expert” how did you get that “expertise” When you state that you are a “specialist”, what special qualification do you have and what does that mean?”
Just last weekend I saw an advertisement in our local newspaper from an agent claiming to be an “advocate” for homeowners in a distress sale. The newspaper wouldn’t print it if it wasn’t true, right?
Here are my thoughts:
1. There is a large conflict of interest possible for any agent helping a homeowner conduct a short sale. No short sale = No commission. Whose interests are foremost?
2. Sometimes a short sale makes sense, but not always. What’s really the advantage for the homeowner?
3. There are a (very) few agents in our market who are demonstrably able to get short sales done regularly and cleanly. Typically, the most successful don’t run ads claiming to be experts or having certification.
I’ve been told that every homeowner around here that gets late on house payments, and then has a Notice of Default recorded, will immediately be contacted by about 5 agents claiming that they can help them do a short sale, and promising many benefits. These are the agents you should investigate most thoroughly.
I do believe that short sales are better for our community than foreclosures. And certainly better for the short sale agents. But I still haven’t heard a compelling argument that they are always better for the homeowner. Informed consumers need to be aware of the facts, and greet claims of short sale benefits from agents with full awareness of the inherent conflict of interest. Contact the Shasta Association of Realtors if you have any questions.
PS. Lately we’ve heard that some banks are offering cash incentives to homeowners to do a short sale. I’d call that a clear benefit for the homeowner. All others please be wary.