With thousands of homes in foreclosure or selling at deep discounts, South Florida’s brokers and auctioneers have one of the busiest distressed real estate pipelines in the nation.
Nevertheless, some are expanding beyond the Sunshine State to pursue new opportunities. Scott Coloney is one of them. A broker with RE/MAX in Fort Lauderdale, Coloney launched his Foreclosure Response Team of Florida in 2008. He’s expanding his company into Michigan through a strategic alliance with another RE/MAX agency, taking advantage of the property value collapse around Detroit and other areas affected by the state’s industrial slump.
Coloney’s sales, marketing and technology company provides “loss mitigation services,” meaning it tries to speed up the sale of residential and commercial properties facing foreclosure. That requires financial specialists, lawyers, credit consultants and a sales and marketing force.
“I really feel like we have solutions for the market, and to stay in Florida just doesn’t seem right,” Coloney said. “I have a vision to go national with this program. If we can help people sell property through a short sale instead of foreclosure, we help people and ultimately help stabilize the real estate market.”
Coloney chose Michigan because of the intense distress there. According to the U.S. Bureau of Labor Statistics, Michigan leads the country with an unemployment rate of 10.6 percent. Michigan’s foreclosure crisis, meanwhile, is worsening. Michigan ranks sixth nationwide for foreclosures, RealtyTrac reports.
“Many of my agents had shied away from the short sale business because it’s so time consuming,” said Cathy Sherman Bittrick, broker/owner at RE/MAX SunQuest of Michigan. “Scott has streamlined the short sale process so there’s one credible voice going to the lender with all the information they need. It makes sense to partner with him and bring solutions to the market now.”
Coloney isn’t the only Florida real estate brokerage making moves beyond state borders. Chad Roffers, the former president of SKY Sotheby’s, launched Sarasota luxury real estate auction company Concierge Auctions in 2007 and is quickly expanding to other states.
Concierge Auctions recently opened an office in New York City and has a nationwide clientele. Concierge typically works with institutional clients that want to sell a portfolio of luxury properties through the auction model.
“Our model has proven very successful in other markets. Many times, our client is the first in a local market to hold an action, so it’s exciting for the public,” said Laura Brady, president of Concierge Auctions. “With offices in Florida and New York City, we can service any market in the country.”
Coloney recently expanded into Ohio, and has targeted Georgia, California, Illinois and Indiana. He’s also in talks with brokerages in other countries about expanding his foreclosure response model beyond United States borders.
Lew Goodkin, principal of Goodkin Consulting, a Miami-based real estate consulting firm, said Michigan is home to some “absolute giveaways” in the property market right now. Houses that were once priced at $100,000 are now selling for $10,000. The prices are drawing buyers from around the country and around the world.
“It always makes more sense to me for local firms to stay focused on their own backyard,” Goodkin said. “But with the strategic alliance, Coloney has easy access to the market and this expansion strategy could work well.”