Earlier this morning, I was scouring the web reading many of the blogs that inspired me to start blogging. I came across a post from Real Lawyers Have Blogs that discussed the ambulance chasing behavior that has given lawyers a bad name. It especially struck me because of the overwhelming number of Ad sense ads I have been encountering across the web that are advertising contingency lawyer services for the Chatsworth Metrolink train accident. I will admit that these bothered me a bit because of the concept of profiting at the expense of others tragedies, but I always brush these off telling myself that trial lawyers have to make a living too.
Then I came across Kevin O’Keefe’s blog post at Real Lawyers Have Blogs where he discusses how there may not be too many lawyers, but rather that advertising avenues have made ambulance chasing too easy. By the time I had finished reading the post, it got me to thinking about how the perception of real estate agents has been on a freefall and that it might be just rightfully be due to advertising schemes on saving your credit by selling your home via short sale. A short sale is a term used in real estate to describe a homeowner selling a home for less than what is owed on it via bank approval. Even though no one is maimed or killed in situations like these, I still feel like it is a form of ambulance chasing. I feel similar to the way Kevin felt about his fellow lawyers. That is, agents, such as myself, should not be listening to all of the marketers out there about drumming up business by preying on those who are distraught. I believe that agents who purposefully go out in search of people who are in foreclosure or approaching foreclosure is the equivalent to ambulance chasing. Just because we have sophisticated marketing methods for advertising to these folks, does not make these activities any less of a vulture-like behavior.
I would like to thank Tom Antoine and his blog for exposing me to Kevin O’Keefe’s blog, as it provided me with contemplation on what constitutes professional behavior.
December 16th, 2008 at 12:39 pm
Can I agree and disagree with you. I agree that advertising for short sales has gotten out of control but where I disagree with you is that as a professional realtor you have to give your clients all options. Once you explain the risk rewards they are adults and have to make the decision for themselves.
April 11th, 2009 at 9:38 am
I’d have to say I disagree with you. Offering home owners in distress your expertise and ability to effect a short sale on their behalf in an attempt to salvage their credit and avoid foreclosure is definitely a service worth advertising. No one is purposefully trying to lose money on their home - it’s just a fact of life in some markets when an owner is no longer able to keep up with the payments and the value of their home has fallen dramatically. An ambulance chaser, in my opinion, is an attorney who artificially creates an opportunity to capitalize monetarily on a situation that should otherwise be left alone (perhaps minor fender bender, for example, in which neither party was hurt). Realtors can’t force homeowners to do short sales. It is either a good option (to avoid foreclosure) or it is not (perhaps the homeowner is better off declaring bankruptcy). I agree with Cedar City - Realtors have an obligation and a duty to offer options. Not sure I would necessarily advertise the ability to provide short sales services but then again, I do not specialize in that area.
April 13th, 2009 at 6:52 pm
It is fine if others do not agree with my stance on advertising to obtain short sale listings. However, anyone that believes that you are saving the homeowners credit is mistaking at best and lying at worst.
Currently there is no difference in the inpact on ones credit score between a foreclosure or a short sale. In addition fannie mae and freddie mac guidelines give very little benefit for doing a short sale over a full on foreclosure. Not to mention to complete a short sale one has to have been behind on payments and doing a short sale does not fix that either.
I believe that the only benefits to doing a short sale for the seller is piece of mind and the ability to in the future write a letter stating that you do everything you could to be responsible during your financial hardship. The only other benefit to the real estate market place when it comes to short sales is that the home is less likely to be trashed allowing it to sell for more thereby reducing the escalation of price reductions and it will leave fewer vacant homes that can be used by criminals.
April 23rd, 2009 at 9:27 am
I think the key to your thoughts is “advertising to obtain short sales” and agree with you, it is much like ambulance chasing.
May 10th, 2009 at 2:42 pm
IMHO, helping a client obtain a short sale rather than a foreclosure shows that the homeowner is trying to do everything they can to avoid foreclosure. Just letting the home foreclose is easier than the short sale process. My hat is off to those Realtors who do “short sales” for people who want to do everything they can to avoid a foreclosure. It may just be a “conscience” thing with those homeowners and the Realtor is doing them a great service.
July 10th, 2009 at 11:43 am
The short sale is part of the real estate landscape these days. I still believe that a short sale beats a foreclosure, but both must be devastating to the former owner. I do believe that agents need to offer options, but not present themselves as short sale experts if they are not. I am not and would not advertise to attract listings.
Worse than the short sale pursuers are those who pursue listings from families who have just lost a loved one. It happens.