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Shift Tactic #11: Master the Market of the Moment

oe Quattrucci discusses the real estate market Shift Tactic #1: Get Real, Get Right and what it means for an agent’s business. Joe has dark hair, mustache and beard, is smiling and facing forward, and is wearing a light shirt. Also Shift Tactic #2, Shift Tactic #3, Shift Tactic #4, Shift Tactic #5, Shift Tactic #6, Shift Tactic #7, Shift Tactic #8, Shift Tactic #9, Shift Tactic #10


Shift Tactic #11:  Master the Market of the Moment takes a deep dive into some of the unique buying and selling situations a shifting market creates as it relates to financial pressures. Bargain hunters and investors help balance out excess inventory due to short sales and foreclosures. Joe Quattrucci explains in Shift Tactic #11 how the three stages of foreclosure provide both solutions and opportunities.



Shift Tactic #11: Three Markets of the Moment


There are many markets of the moment during a shift. As a market shift may increase defaults, this sets into motion a downward cycle of defaults and home prices.


The downward spiral as noted in Shift Tactic #11

Figure 1: “The Market Shifts” (Graphic courtesy of Beat the Shift by Gary Keller.)


Three of the most challenging markets arrive during the downward slide of the market. These markets generally consist of sellers that experience financial stress and fall into three different stages:


1. Short Sales

Individuals or families trying to avoid foreclosure, often currently in default on their mortgage


2. Foreclosures

Bargain hunters and investors seeking to buy value


3. REOs

Financial institutions with an above average number of foreclosures to sell


In these markets of the moment, sellers may be under a significant amount of personal stress. Sellers trying to avoid foreclosure or in the process of foreclosure may have difficult personal situations. It is always best to provide as much clarity as possible on the options they may be facing with their real estate transactions.


What is a Short Sale?


When a seller sells their home via a short sale in Shift Tactic #11, the transaction looks like this:


Mortgage Balance Due: $100,000

Short Sale Proceeds Going Directly to Lender: $95,000

Short Amount Still Due to Lender: $5,000


Sellers often take a short sale on their home if they are in financial hardship. This would be one method they can use to sell the property before their lender takes it via a foreclosure process.


So who owes the $5,000 that is leftover? Well, it depends. The lender could forgive that balance and cut their losses with the seller. Or, they could pursue a deficiency judgment to force the seller to pay the full remaining  balance, or even just a portion of it. However, in some states this difference must be forgiven. So truly, “it depends.”


What is a Foreclosure?


Should a seller be unable to sell their home (even with a short sale), it is likely that their lender will pursue foreclosure. In Shift Tactic #11, foreclosure is when the lender repossesses the property. The owner has not made payments or has violated other terms of their mortgage.


Generally, a foreclosure can be avoided, even after receipt of a foreclosure notice. There are many other options available to homeowners. However, time is of the essence. Homeowners must take action or face foreclosure. In most cases, lenders do not want to take possession of the home. They are focusing on loss mitigation, and may be more than willing to speak with the homeowner’s real estate agent about how they can prevent the foreclosure process.


What is REO?


Real Estate Owned (REO) is when the lender has taken possession of the property via the foreclosure process, often just after it was not sold at auction. This causes the lender many issues:


  1. The house is now on the lender’s balance sheet
  2. It costs them money to manage the house
  3. Maintenance costs add up, as often the home already has issues from deferred maintenance
  4. The lender must actively market the home, thus incurring additional costs


In the real estate industry, REOs present two distinct opportunities for agents:


  1. REO Seller Representative: listing agents who market their services to financial institutions needing to sell REO properties
  2. REO Buyer Representative: buyer agents who market their services to REO seller representatives and handle the buyer leads from those properties


Shift Tactic #11: Tremendous Opportunities with REO


In some markets, lenders may become the dominant force in listing homes they acquire through foreclosure. As a result, there may be dozens or hundreds of listings that need to be managed. Focus on making contacts with lenders and being persistent. Also, be sure to leverage networking opportunities to highlight your skills and interest in becoming a listing agent for REO.


On the buyer side, the biggest opportunity is for agents that can provide a high level of service and follow-through. Often other agents do not build the expertise and teams to address this side of the market. However, REO buyers often have a number of questions, need guidance, and have significant urgency to buy. Motivated buyers may be investors who are in the market for several properties. Therefore, making an investment in your own education for this market could be well worth it in the long run.


Main Points to Remember for REO:


REO agents earn their reputation by getting the properties sold.


If you help the Lender sell properties,

you become a very valuable and respected part of their business.



Real Estate Market Shift Tactic #11: Master the Market of the Moment with Joe Quattrucci


A market shift creates many different types of markets throughout the cycle. In all cases, there are various solutions and options for both buyers and sellers. Homeowners want to avoid foreclosure, and lenders prefer to not repossess the home. Therefore, real estate agents with experience and knowledge can help introduce workable solutions that help all parties to the transaction.


Check out Joe’s series of blog posts on the market shift to learn more about the issues and how you can position yourself for the greatest success. Keller Williams Arizona Realty is known as the best Scottsdale real estate brokerage, and for good reason: our industry-leading training and classes provide you with the best real estate education in the nation. Our brokerage features a top-notch coaching program and a strong and dedicated leadership team focused on your success.


Contact us today to learn more about the career opportunities available to you at Keller Williams Arizona Realty. Our coaches and leadership team members look forward to hearing from you!


Feel free to call us today: 480-767-3000





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