Real Estate Brokers Just Want to Move Homes | LoanSafe.org

Aug. 15 (Source: By Jennifer Dixon, Detroit Free Press) - Fannie Mae and Freddie Mac rely on a network of real estate brokers to sell foreclosed homes in southeast Michigan, but knowledge of the neighborhood and getting top dollar aren?t always a requirement.Many of the brokers are more keen on selling the homes in volume than in maintaining property values ? that is, if they can find the properties.

A Lapeer County broker who sold an Independence Township property for Fannie Mae listed it on Oakland County?s Dixie Lake. The problem: The house was on Walters Lake, 12 miles away.

A Redford Township broker selling Oakland County lakefront homes for Fannie Mae listed them at prices so low that buyers signed purchase contracts within days of the properties going on the market.

A Flint real estate agent selling a Fannie property in Waterford failed to mention it was on a lake. Still, it contracted for sale in three days for $176,000, $32,900 above the asking price of $143,100.

John Mogk, a Wayne State University law professor who specializes in real estate and urban development, said the use of out-of-town brokers raises the likelihood that they will be less invested in maintaining property values in a community.

Fannie and Freddie, he said, are better off ?using local brokers ? who know the neighborhood, who can promote the features of the neighborhood than someone from a distant neighborhood who doesn?t have the same understanding.?

Spokesmen for Fannie and Freddie said they share the goal of neighborhood stabilization.

Freddie spokesman Brad German said the company lists foreclosed homes at competitive prices and its brokers ?know the market, know the local buyers and know what drives local values.?

But several metro Detroit Freddie and Fannie agents openly acknowledge that their prime goal is selling foreclosed homes quickly and in volume, practices that experts say tend to deflate prices of individual homes.

?If you don?t nail the price right the first time, you?re all done,? said Kent Colpaert, a Grosse Pointe Park broker whose real estate company, the Bearing Group, handles foreclosures for 30 major lenders and lists several Freddie Mac sales. ?It will sit there, get vandalized ? and decrease in value even more.?

He said Fannie and Freddie can?t afford to keep vacant foreclosed properties on the market for 90 to 120 days hoping for a few thousand dollars more.

Mark Rice, vice president and chief financial officer with Edward Surovell Realtors of Ann Arbor, said the company receives sales assignments from Fannie and Freddie and it is a ?volume business.?

Rice said the mortgage giants recently changed their strategy and are now giving foreclosure assignments to brokers located closer to the properties they are selling.

Dave Rukkila, also with Edward Surovell Realtors, said of Fannie and Freddie properties: ?You have to churn them ? it?s volume sales. In this market right now, you try to sell as many as you can.?

German of Freddie Mac said, ?The supposition that keeping the property on the market longer will increase the likelihood of selling it for a higher price seems counterintuitive to us. The longer a piece of property sits on the market, the more likely the seller will have to lower the price to sell it.?

Louise Braun, an Independence Township appraiser who has studied Fannie and Freddie sales extensively in Oakland County, analyzed 124 Fannie and Freddie properties contracted for sale in February in central Oakland County and found that roughly half were marketed by real estate agents from outside the county.

For example, real-estate agents from Clinton Township and Grosse Pointe had two listings in Milford. Three Troy listings were with a Flint agent.

?Local Realtors are the best salespeople for their communities,? Braun said. ?They live there and they work there. There know all the positives about the communities. They have a motivation to preserve and enhance the values in their own communities.?

But sellers such as Fannie and Freddie, whose priority is selling homes quickly, don?t need a local broker, said Bob Taylor, past head of the Michigan Association of Realtors.

?All you need is someone who will answer the phone and forward the paperwork,? said Taylor, who works in Birmingham.

?I work in a narrow market. I specialize in that market. I can rattle off more statistics than you can find on the Internet. I used to live in Sterling Heights, but I don?t do business there. I work in Birmingham,? he said.

But Samer Salami, an independent broker in Redford Township who ? until recently ? sold Fannie Mae foreclosures across metro Detroit, rejects criticism that he doesn?t ?get? communities in, say, Oakland or Macomb. Salami said he drove by his listings once a week and knows the territory. ?We?re familiar with the cities, the counties,? he said.

But Salami also acknowledges his role as a Fannie broker: ?We work off volume.?

Erik Ambrozaitis, a Realtor for 22 years in Rochester Hills, said he?s seen Fannie and Freddie give agents up to 60 homes to sell at once, so they may not work as hard on any one home.

?Some Realtors have so many listings that they don?t care,? he said.

The agents get their commissions, but taxpayers ? who bailed out Fannie and Freddie ? will have to swallow the loss on deflated home sales.

Source: By Jennifer Dixon, Detroit Free Press

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