Published by the CIPS Network of the National Association of REALTORS®

Third Quarter 2006

A New TRC Expands Her Sphere

By Debra Allen, TRC, ABR, GRI, e-PRO

Last April, I attended the SIMA convention in Madrid, Spain. It was a wonderful, very entertaining, and educational experience. This was my first time attending an international convention and I didn't know what to expect. The orientation program was very well planned and gave me a very good start in the networking process.

Networking and Learning

On my first night at the convention, during the social hour, I made contact with several U.S. brokers, agents, and developers. Through the course of the week, in the business as well as in social settings, I met agents from many countries, including Bulgaria, Spain, Panama, Jamaica, and Argentina, all of who were very friendly and well informed about their real estate markets. They seemed eager to share information with me.

Once the education programs began, I heard prestigious international speakers discuss subjects as diverse as comparisons of the U.S. and European markets, new real estate and computer platform capabilities, and opportunities in the booming Arizona real estate market. I learned about growth in Panama, and got to meet with several Panamanian developers and made some great connections. I particularly learned from presentations given by Nicolas Corcione from Grupo Corcione on his projects, and by Grupo Capital.

The best thing I did in Madrid, however, was to complete the requirements for the Transnational Referral Certification (TRC). As a TRC, I have access to an international referral network within which I can market homes worldwide for my sellers, and receive buyer referrals from other TRCs around the globe.

Working the Leads—Locally and Globally

As soon as I returned home, I followed up with my new colleagues by telephone, e-mail, and postcard. The response was overwhelming. I let it be known in my local sphere about the success of trip to SIMA, and one of my clients told me he was moving to the Sarasota, Florida area in the next couple of months. I was able to refer him to a REALTOR® I met at SIMA who works just minutes away from where the client was moving. She responded promptly to my client, and was able to help him find a home, where he will be relocating shortly.

But, best of all is that as a result of the networking I did with REALTORS® I met at SIMA, I was able to participate in a trip to Panama . In Panama, we met with several groups. Grupo Capital, a one stop real estate brokerage and legal firm gave us detailed information about legal ownership as a non-citizen in Panama. Grupo Corcione gave us a tour of their residential developments, Ocean Park II and Greenbay I and II, properties with phenomenal panoramic views located in Costa Del Este, the most valued real estate master plan project in Panama. The following day we met with Jose Boyd, a broker with many years of experience in Panama, who educated us on the Panamanian market and explained how referrals are done between U.S. and Panamanian agents. 

Business is Everywhere!

On my flight home I met a man who was looking for property in the Dominican Republic, but found the prices too high. I told him about Panama, about its growth and the very reasonable cost of living, world-class healthcare, and hurricane-free tropical climate. As an extra incentive I told him about the low taxes, stable economy, and the U.S. dollar currency. I gave him my card and Jose Boyd's card. When I got back to my office, I found an email from the man on the airplane to me and Jose Boyd expressing an interest in purchasing a home in Panama. Currently, we are scheduled to meet in Panama in July for a home finding trip.

In retrospect, SIMA was the best convention I could have attended to get started in international real estate. The networking with U.S./Foreign Brokers/ Agents and Developers was inspiring. You have to be an outgoing person and have the ability to communicate with strangers in order to build relationships. But the key to success is really in the follow-up. I am certainly planning to attend the SIMA convention again in 2007. And, this experience has inspired me to proceed quickly with my plans to complete the requirements for my CIPS designation.

Debra Allen, TRC, ABR, e-PRO, Prudential Arizona Properties, Gilbert, AZ. was born in Bremen, Germany. She came to the United States in 1996, has been a REALTOR® since 2003, and has recently become a member of Prudential's Relocation Team. Reach her at +1.480.797.4080, or at Debra.Allen@pruaz.com.

This article was published in the REALTOR Magazin online : 06/01/2007



Sold up short
How to Succeed at Short Sales

Unfortunately, short sales are a reality for home owners who owe more than their property is worth. If you have patience, persistence, and a knack for problem-solving, this niche could be for you.

You're so happy you got the listing — at least until the sellers inform you the price you're suggesting based on your careful CMA just isn't enough. Why? They owe more than that on their mortgage and home equity loans. Welcome to the world of short sales.

Flat or falling home prices, home-equity credit lines, 100-percent financing that sucked out equity, and spiking interest rates on adjustable mortgages are converging to create a regrettable, but expanding, niche for real estate practitioners: the short sale.

To help you gain a better understanding of short sales and what it takes to specialize in this growing area, we took a look at some of the most common questions on this topic that you and your customers likely will face today. Armed with this information, you can decide whether short sales are an avenue worth exploring for your business.

What is a short sale?

A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers' mortgage obligations and closing costs, such as property taxes, transfer taxes, and the real estate practitioner's commission. The seller is unwilling or unable to cover the difference.

Some — although by no means all — short sellers may also be in default on their mortgage loans and be headed for foreclosure. However, home owners who bought at the top of the market or who took out large amounts of equity with a refinance and who now need to sell because of divorce or job transfer may also find themselves upside down, owing more than the home is currently worth when closing costs are factored in.

What and how should I disclose about the short-sale property to prospective buyers?

Opinions vary on this topic, although most experts favor disclosing that a property is a short sale in the comments section of the MLS listing. Others suggest waiting to disclose the need for lender approval of the sale until a buyer is ready to make an offer. Debra Allen, GRI,ABR®, e-Pro®, with Prudential Arizona Properties, Gilbert, Ariz., uses a disclosure form prepared by her brokerage just for short sales. She also had a special sign rider for the yard sign made indicating a property is a short sale.

What tax liabilities will a seller have as a result of a short sale?
One often overlooked aspect of short sales is that a seller must count any amount forgiven by the lender as income and pay taxes on that income, even if no actual money was received. The IRS requires lenders to submit a Form 1099 stating the forgiven amount. Sellers who meet the Internal Revenue Service definition of insolvency (either in bankruptcy or with debts exceeding assets) will not have to pay taxes on the forgiven amount.

Tip: The U.S. House of Representatives has introduced the Mortgage Cancellation Tax Relief Act (H.R. 1876), which would eliminate taxes on any debt forgiven on a principal residence through either short sale or foreclosure. The NATIONAL ASSOCIATION OF REALTORS® has been working to support this bill.