Notes From Readers: The Distressed Debate

Although Jim Klinge does a good job at outlining the issues with short sales (Commentary, "Measuring Distress," May/June 2012, page 45), I disagree with his conclusion that a property will sell for more as an REO than as a short sale. In my market, a short sale will garner a higher value than an REO because REOs often have the water, electricity, and gas turned off. This means a conventional or even FHA mortgage is out of the question because these services need to be turned on for appraisers to complete their work. This limits most REO properties to cash buyers. Cash buyers will not pay as much as someone who can obtain financing. And although I agree that most sellers on a short sale show little initiative to sell their home, the fact that it’s occupied often means it’s in better condition than a vacant home. Should the sellers want to prolong their stay, listing the property is really not a sound strategy because it doesn’t stop the foreclosure process. I have listed many short sales in which the sellers were motivated. For one reason or another, the sales fell through. The homes eventually went into foreclosure and sold for less than the amount a buyer was willing to pay when the homes were listed as a short sale. —Gregory Schmidt, Mark International Real Estate, Staten Island, N.Y.

Letting a home go to foreclosure is not the answer to the current housing market price problem. If we let all the owners who could market their homes in a short sale go to foreclosure, the amount of shadow inventory it would create would be so large that most of the fair-market sales would decline and the market would stall again. It sounds like that’s what Klinge is suggesting. —Anthony B. Miller, L&F/Fonville Morisey Real Estate, Durham, N.C.

Display of Pride

Thank you for including Nancy Corey and The New Wave Group in your story on the next generation of real estate professionals ("Fresh Eyes," May/June 2012, page 30). Nancy is an awesome manager, and she takes a lot of pride in The New Wave Group members. I had the chance to sit in on their meeting and was blown away by how serious all the members are, not just about their own careers but also about helping each other. They are a lot more than a flashy picture and a branded name. —Derek Cuculich, NRT LLC–Southeast, Sarasota, Fla.

Message of Generosity

Erica Christoffer's article in the Weekly Book Scan ("The Business of Generosity," June 4, 2012) means the world to me. You have let me feel some love from NAR, and that makes a big difference for me. Here’s to continuing to spread the message of the Generosity Generation. —Michael J. Maher, Realty Executives, Kansas City, Mo.

Supreme Court Provides Clarity on Brokerages' Fees

In a case against Quicken Loans, the U.S. Supreme Court provided clarification about administrative fees charged by brokerages. At issue was the intent of a provision of the Real Estate Settlement Procedures Act prohibiting unearned fees. In the ruling, the court said the RESPA provision very clearly applies only to fees that are split with another provider (for more on this case, see this issue's ethics column). —Posted May 30 by Robert Freedman, manager of multimedia communications, REALTOR® Magazine.

Vivianne Rutkowski responded: This is a great free-market decision. It is up to individual lenders or brokerages how they want to conduct their business. This is not necessarily free money. Unless the company is worth the fee, it will lose clients.

Who’s The Mystery Woman?

Keen observers noticed, on the cover of the May/June 2012 issue, the photo of a woman who wasn't actually in our 30 Under 30 feature ("Their Way," page 22). Due to an editing error, Melissa Kennedy’s photo was missing and that of another candidate, Heather Valentine, was included. Valentine was one of our 50 finalists in both 2011 and 2012. Now, at our Web site, she’s part of the 2012 class. We are thrilled to welcome Valentine into the 2012 "Class of 31" and we apologize to Kennedy, Valentine, and the rest of our readers for the error. To meet all the honorees, visit the 30 Under 30 program home page.

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Note: Letters and blog posts are edited for space and clarity. Publication of a letter doesn’t constitute an endorsement of the writer's views by the NATIONAL ASSOCIATION OF REALTORS® or REALTOR® Magazine. Submission of a letter constitutes permission to publish it in any form or medium.