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Recently, I have been researching the estimated cost of an average foreclosure. Estimates range from $50,000 to $80,000 and account for losses to lenders, homeowners, local government (in property taxes), and neighbors (reduced property values). None of the estimates account for losses to real estate agents and other professionals in our industry. Yet, we are often the ones to suffer the most pain in our pocketbooks.

If it’s true that we have much to lose when housing bubbles burst, we also have much to gain in a thriving market. Because of this, we need to do everything we can to help stabilize our markets by helping homeowners avoid foreclosure and remain in their homes. Here are several things you can do to help stabilize your housing market:

Brush up on foreclosure rules and regulations in your state. Become the go-to guy or gal on foreclosures in your area, so you can educate homeowners on their rights and the timelines they are facing. (Don’t offer legal advice, unless you are a licensed attorney, but you can let people know their options.)

Train yourself on short sales and short re-financing. Lenders are often more willing to negotiate short sales with real estate professionals who know property values in the area than with homeowners. In addition, homeowners often have no idea of where to start with a short sale or short re-fi. You may be able to charge the homeowners a fee for your services in addition to earning a commission from the listing.

Get connected with a reputable loan officer who is willing to work with distressed homeowners to identify any refinancing options.

Connect with attorneys in your area who specialize in foreclosures, bankruptcy, and loan modification. Create your own mini-referral network. Depending on the regulations in your area, you may even be able to pay one another referral fees.

Connect with other professionals in your area, too, including mortgage brokers and credit counselors.

Consider hosting foreclosure self-defense workshops or seminars in your area. You can team up with other professionals in your area to deliver workshops or seminars that lay out all the homeowners’ options and help them decide which option(s) are most viable and desirable for them. When the homeowners choose an option to pursue, they are most likely to hire you or another one of the professionals you have teamed up with to serve their needs.

Tip: If you host a foreclosure seminar or workshop, offer it to everyone in the community who is facing foreclosure or knows someone who’s having trouble making their house payments. Many homeowners are embarrassed by their situation, even when they are suffering through no fault of their own. If they can save face by saying they are attending because someone they know is facing foreclosure, you can attract more participants.

Working to stabilize your housing market can often seem like a thankless job, particularly if you see other professionals in your area apparently benefiting more from your efforts than you do. These lean times will or have already weeded-out the part-time real estate agents, leaving you and other dedicated professionals like you to deliver practical solutions to ailing homeowners.

Keep in mind that helping homeowners stay in their homes can slow and eventually stop the domino effect we often witness in areas with rampant foreclosures. Only after we put a halt to the epidemic, can we hope to see signs of recovery – increasing demand, rising property values, and a return to healthier and more predictable commissions.

Published: March 9, 2009

In a conversation I had yesterday with a well established attorney friend of mine, she said “I wish I had waited to buy my home, I have lost all my down payment and equity”. Although this very well might be true, I responded to her and said, “just buy another investment home now that will cash flow, this will help to recover your loss when the market returns”. Not only will she have positive monthly income now, but she will have equity growing in two homes.