Dear REALTORS,
Lotus Realty Group will be running a holiday special on our original 1% negotiator fee. Any short sale transactions that come in ABOVE $350,000 between November 1st, 2011 thru December 31st, 2011, we will be offering our services for .5%. (A HALF A PERCENT.)
I wanted to share with you exactly what the 1% negotiator fee covers when you outsource your short sales to Lotus Realty Group:
Why use Lotus?
1. Qualified, experienced and professional staff. Everyone employed at Lotus Realty Group are licensed REALTORS.
2. # 1 Real Estate Attorney, David Bright. David Bright is my attorney at Lotus Realty Group. My short sale package has all of the disclosures to protect all parties in the transaction. All disclosures were either co-created with David or approved by David. David is a huge asset to have on our team and he is always available for my clients.
3. Experienced negotiators with all of the large financial institutions( and the small ones) and are able to handle all of the banks requests and requirements before the file hits their desk.
4. We have a stream lined process that allows our company to handle all files with ease. Our organizational skills are like no other. Nothing falls through the cracks.
5. In addition to negotiating your file Lotus Realty Group offers the following assistance to REALTORS:
A) Prospecting
B) Prequalifying
C) Full short sale package readily available to hand off to your clients to get started.
D) Pricing and listing
E) Marketing
6. Lotus Realty Group will only take qualified short sale transactions. We will only take deals we know we can close and not waste time on deals that do not make sense. This allows us to maintain our excellent track record of closing short sales.
7. Weekly updates
The goal is to build your pipeline with the right deals. If you have thirty in your pipeline on a regular basis you will be closing 2-3 monthly.
The questions to ask your self are:
A) Can you do the negotiating yourself and build your pipeline to where it needs to be?
B) Does it make more sense to hire a company for less than the 1% fee for negotiating your file where there is a lack of service and legal protection to save a little money and in return lose sleep at night?
Here a couple suggestions to help you with the 1% negotiator fee:
1. Ask the buyer’s agent to split the fee with you. If the buyer’s agent understands what it is he or she is paying for to ensure the deal closes it has been my experience that they are willing to contribute.
2. Offer 2.5 % to the cooperating broker in the MLS and 3.5% to the listing agent if you have to carry the full 1%.
REALTORS, we have truly created a system that works. Where do you see your business headed? What number do you need to make next year? Have you thought about it? Have you written it down? What do you need to do to execute your business plan? Where is your time best spent?
I would like to end with a short story. When I first started my business I had my hands in several cookie jars. I was door knocking and taking listings, working with buyers, looking into a property management service as an addition to my business, and becoming my own broker to build a brokerage. It was EXHAUSTING!
When I changed my business model and decided to focus ONLY on negotiating for other REALTORS and perfecting that system all of the sudden I looked up and everything had come full circle. I get 3-5 of my own listings monthly by referral only. 6-10 new transactions from other REALTORS monthly. I have created this on a $500.00 monthly marketing budget. Sign calls come in and I hand it over to one of the agents on my team . We are still in the process with the paperwork at the DRE to become our own broker but it is happening. And it has all happened by laser focus on one particular part of the business.
I would like to encourage you to evaluate your current status and consider allowing Lotus Realty Group to help you achieve your goals.
(Quote) "Persistence is the ability to maintain actions regardless of your feelings. You press on even when you feel like quitting. When you work on any big goal your motivation will wax and wane like the waves hitting the shore. Sometimes you’ll feel motivated, sometimes you won’t. But it’s not your motivation that creates results - it’s your action.
Persistence allows you to keep taking action even when you don’t feel motivated to do so, and therefore you keep accumulating results. Persistence will ultimately provide its own motivation. If you simply keep taking action, you’ll eventually get results, and results can be very motivating." – Zig Ziglar
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
Monday, October 31, 2011
Tuesday, October 25, 2011
SB-458! How it is effecting negotiating with 2nd lien holders
Since the SB-458 was passed on 7/15/2011, stating that 2nd lien holders can no longer pursue for deficiency judgment I have experienced difficulties negotiating with subordinate liens to accept the typical 10% of the payoff balance. The seconds are wanting more due to the inability to pursue the homeowner once the short sale is complete. They are tired of hearing the same argument that we all know is not just an argument but a true statement; they will get NOTHING if the home forecloses. If you are dealing with extremely large balances I can assure you the 2nd lien holders are going to give you a run for your money.
I have a client who is a disabled veteran. He is ill and has a true hardship. The first is BofA and the second is Chase. I have approval from the 1st. The 2nd balance is quite high and they are asking for 30%. I am just a tad shy of the traditional 10% towards the payoff. Chase refuses to take it and is willing to let the home go to foreclosure. I definitely have a fight on my hands but I am always up for the challenge.
I am also seeing a rivalry between Bank of America and Chase. If it is not a HAFA qualified borrower and there is a second lien, typically BofA will only contribute $3000 to the 2nd payoff. I have had two transactions now with Chase in first position and Bank of America in 2nd position and let me tell you; Chase is giving Bank of America the same courtesy no matter how large the balance is. The table has been turned in these instances and 10% is off the table.
Originally when SB-458 came out it was such a win for homeowners to be able to short sale their home without the ramifications of a deficiency judgment. Don't get me wrong, there are many instances where some transactions go smoothly but the ones that don't are problematic. For my client that is a disabled veteran; he has a true hardship. He is ill, has no money, and is unemployable. All parties have rallied together to get this 2nd lien holder- Chase, $19,000. I have never even seen a 2nd get that much no matter how large the balance is. And they are still willing to foreclose.
I feel that because of this new law and this power struggle that is taking place; 2nd lien holders are going to be more problematic in the future. I feel it is unfair to these homeowners that truly need the help. What good are these new laws that are being implemented if the banks are going to keep tightening up their guidelines and their greed to make it nearly impossible. OR..are they calling our bluff. Stay tuned.
We can only do our best with the information we have at any given moment. In the future taking short sale listings it would be in your best interest to make sure you know the following up front:
- Who are the lenders ?( 1st and 2nd )
- What are the balances?
- Where is the money going to come from?
I say this for the following reason: if you know who the lenders are you will know how much the 1st is going to give to the 2nd payoff. If you know the balances up front then you will be able to determine what it is going to take at minimum to satisfy the 2nd. Lastly, knowing the answers to the first two questions, you will be able to determine if you need to pull money from other parties to get the deal done.
Do not be afraid to ask a seller or buyer, even agents ( god forbid) but it may be necessary at one point or another if they would be willing to voluntarily contribute to the cause. It is going to get ugly. The best we can do as always is pre-qualify and set proper expectations. But we have to be willing to ask the uncomfortable questions.
It truly troubles me to see these issues continue to get worse. I have to believe there are good hearted people in the corporate world who wants to lend a hand to those in dire need of help and at the same time help our market recover faster by avoiding foreclosure.
In these uncertain times I cant tell you how many homeowners I talk to who are in fear. Everything is uncertain in their lives and they want to get through this process and get back on their feet pointed in a more positive direction. Uncertainty cannot be helped. Nothing is certain. But cooperation is key. If we cannot cooperate together; we as REALTORS, homeowners and the banks ( SECONDS); we will all be chasing our tails.
It is my hope that when the government passes these NEW LAWS that they think them through so we can truly STOP the bleeding. It appears that we are now just plugging holes one after another in a barrel to stop the leaking.
(Quote) My basic principle is that you don't make decisions because they are cheap; you make them because they're right.
Ronald Reagan
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
http://www.lotusrealtygroup.com/ 858-764-7300
I have a client who is a disabled veteran. He is ill and has a true hardship. The first is BofA and the second is Chase. I have approval from the 1st. The 2nd balance is quite high and they are asking for 30%. I am just a tad shy of the traditional 10% towards the payoff. Chase refuses to take it and is willing to let the home go to foreclosure. I definitely have a fight on my hands but I am always up for the challenge.
I am also seeing a rivalry between Bank of America and Chase. If it is not a HAFA qualified borrower and there is a second lien, typically BofA will only contribute $3000 to the 2nd payoff. I have had two transactions now with Chase in first position and Bank of America in 2nd position and let me tell you; Chase is giving Bank of America the same courtesy no matter how large the balance is. The table has been turned in these instances and 10% is off the table.
Originally when SB-458 came out it was such a win for homeowners to be able to short sale their home without the ramifications of a deficiency judgment. Don't get me wrong, there are many instances where some transactions go smoothly but the ones that don't are problematic. For my client that is a disabled veteran; he has a true hardship. He is ill, has no money, and is unemployable. All parties have rallied together to get this 2nd lien holder- Chase, $19,000. I have never even seen a 2nd get that much no matter how large the balance is. And they are still willing to foreclose.
I feel that because of this new law and this power struggle that is taking place; 2nd lien holders are going to be more problematic in the future. I feel it is unfair to these homeowners that truly need the help. What good are these new laws that are being implemented if the banks are going to keep tightening up their guidelines and their greed to make it nearly impossible. OR..are they calling our bluff. Stay tuned.
We can only do our best with the information we have at any given moment. In the future taking short sale listings it would be in your best interest to make sure you know the following up front:
- Who are the lenders ?( 1st and 2nd )
- What are the balances?
- Where is the money going to come from?
I say this for the following reason: if you know who the lenders are you will know how much the 1st is going to give to the 2nd payoff. If you know the balances up front then you will be able to determine what it is going to take at minimum to satisfy the 2nd. Lastly, knowing the answers to the first two questions, you will be able to determine if you need to pull money from other parties to get the deal done.
Do not be afraid to ask a seller or buyer, even agents ( god forbid) but it may be necessary at one point or another if they would be willing to voluntarily contribute to the cause. It is going to get ugly. The best we can do as always is pre-qualify and set proper expectations. But we have to be willing to ask the uncomfortable questions.
It truly troubles me to see these issues continue to get worse. I have to believe there are good hearted people in the corporate world who wants to lend a hand to those in dire need of help and at the same time help our market recover faster by avoiding foreclosure.
In these uncertain times I cant tell you how many homeowners I talk to who are in fear. Everything is uncertain in their lives and they want to get through this process and get back on their feet pointed in a more positive direction. Uncertainty cannot be helped. Nothing is certain. But cooperation is key. If we cannot cooperate together; we as REALTORS, homeowners and the banks ( SECONDS); we will all be chasing our tails.
It is my hope that when the government passes these NEW LAWS that they think them through so we can truly STOP the bleeding. It appears that we are now just plugging holes one after another in a barrel to stop the leaking.
(Quote) My basic principle is that you don't make decisions because they are cheap; you make them because they're right.
Ronald Reagan
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
http://www.lotusrealtygroup.com/ 858-764-7300
Monday, October 17, 2011
Changes to the HAFA Program through Bank of America
Bank of America released an article today on the current changes they have put in place with the HAFA Program ( Home Affordable Foreclosure Alternative Program)that went into effect on October 15th, 2011. I would like to encourage everyone to go to the Bank of America website for more information regarding these changes. I would first like to share who qualifies for this program as I still have many questions in this regard from REALTORS and homeowners on the guidelines.
Who qualifies for the HAFA program?
a) If the loan was originated on or before January 1, 2009
b) If the loan is past due or if the homeowner believes they will be missing a payment in the near future.
c) If the property has been vacant or rented out for less than 12 months, and the homeowner has not purchased another property in that time frame.
d) If the property is not vacant or condemned.
e) If the unpaid balance on the loan is no greater than the following:
1 unit: $729,750
2 units: $934,200
3 units: $1,129,250
4 units: $1,403,400
f) If the loan is not a Fannie Mae or Freddie Mac backed loan
g) If the homeowner has a true hardship and qualifies for a short sale
Incentives for homeowners through the HAFA program
After completing the program a homeowner may receive $3000 to assist with moving, rental and other relocation expenses.
Please note: Once the homeowner receives a letter from their lender to enroll in the program they have 30 days to respond. They will need to call the number on the form and let the lender know they would like to proceed with a short sale and pre qualify for the HAFA program.
Current Changes to the HAFA Program with Bank of America effective 10/15/2011
a) Borrowers may use their incentives to pay for transaction costs such as overdue utility bills or minor repairs, etc.
b) Bank of America will contribute up to $6000 toward the payoff of second lien holders.
I think these new changes will be very helpful. I just had a second lien issue today that was remedied due to the $6000 that BofA is contributing. I also feel if there are extra costs in the transaction a homeowner can help with using their incentives;that would solve problems at the end when trying to figure out where the money is going to come from,which happens alot in short sales.
Bank of America will want to see the home marketed for at least 120 days. If there is a sale date on the property, the sale date will be put on hold while the home is in the pre screening and marketing stage. There are two documents that will be required:
1. RMA- ( Request for Modification Affidavit)
2. Dodd Frank Cert- (Wall Street Reform and Consumer Protection Act)
Many of you that work with Lotus Realty Group have seen these documents requested by us. Once they are sent they need to be signed and returned as soon as possible to keep the file flow in continuous movement forward.
I have had many calls from clients and REALTORS who are not sure of the forms and the time lines; or if they qualify. It is important to make sure we are pre qualifying and setting proper expectations with our clients and the only way we can do that in an effective and efficient manner is to educate ourselves on these programs. This will also ensure we are giving our clients correct information and not setting ourselves up for an over promise and under deliver situation.
This information will be helpful on listing appointments with distressed homeowners. If you have any further questions in regards to this program or general short sale information, please feel free to give us a call. Either my staff, or I will be able to assist you.
Extra Tip
When pre qualifying your clients I would find out if they are aware whether or not they have MI. ( Mortgage Insurance) Any loan that has MI will need to get approval from the MI company before the short sale can proceed.
(Quote) A classical work doesn't ever have to be understood entirely. But those who are educated and who are still educating themselves must desire to learn more and more from it.
"Karl Wilhelm Friedrich Schlegel"
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
Who qualifies for the HAFA program?
a) If the loan was originated on or before January 1, 2009
b) If the loan is past due or if the homeowner believes they will be missing a payment in the near future.
c) If the property has been vacant or rented out for less than 12 months, and the homeowner has not purchased another property in that time frame.
d) If the property is not vacant or condemned.
e) If the unpaid balance on the loan is no greater than the following:
1 unit: $729,750
2 units: $934,200
3 units: $1,129,250
4 units: $1,403,400
f) If the loan is not a Fannie Mae or Freddie Mac backed loan
g) If the homeowner has a true hardship and qualifies for a short sale
Incentives for homeowners through the HAFA program
After completing the program a homeowner may receive $3000 to assist with moving, rental and other relocation expenses.
Please note: Once the homeowner receives a letter from their lender to enroll in the program they have 30 days to respond. They will need to call the number on the form and let the lender know they would like to proceed with a short sale and pre qualify for the HAFA program.
Current Changes to the HAFA Program with Bank of America effective 10/15/2011
a) Borrowers may use their incentives to pay for transaction costs such as overdue utility bills or minor repairs, etc.
b) Bank of America will contribute up to $6000 toward the payoff of second lien holders.
I think these new changes will be very helpful. I just had a second lien issue today that was remedied due to the $6000 that BofA is contributing. I also feel if there are extra costs in the transaction a homeowner can help with using their incentives;that would solve problems at the end when trying to figure out where the money is going to come from,which happens alot in short sales.
Bank of America will want to see the home marketed for at least 120 days. If there is a sale date on the property, the sale date will be put on hold while the home is in the pre screening and marketing stage. There are two documents that will be required:
1. RMA- ( Request for Modification Affidavit)
2. Dodd Frank Cert- (Wall Street Reform and Consumer Protection Act)
Many of you that work with Lotus Realty Group have seen these documents requested by us. Once they are sent they need to be signed and returned as soon as possible to keep the file flow in continuous movement forward.
I have had many calls from clients and REALTORS who are not sure of the forms and the time lines; or if they qualify. It is important to make sure we are pre qualifying and setting proper expectations with our clients and the only way we can do that in an effective and efficient manner is to educate ourselves on these programs. This will also ensure we are giving our clients correct information and not setting ourselves up for an over promise and under deliver situation.
This information will be helpful on listing appointments with distressed homeowners. If you have any further questions in regards to this program or general short sale information, please feel free to give us a call. Either my staff, or I will be able to assist you.
Extra Tip
When pre qualifying your clients I would find out if they are aware whether or not they have MI. ( Mortgage Insurance) Any loan that has MI will need to get approval from the MI company before the short sale can proceed.
(Quote) A classical work doesn't ever have to be understood entirely. But those who are educated and who are still educating themselves must desire to learn more and more from it.
"Karl Wilhelm Friedrich Schlegel"
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
Tuesday, October 11, 2011
Foreclosure Back Log Deepens
Delinquent borrowers are spending more time in their homes without making mortgage payments due to the foreclosure backlog. Once borrowers start missing mortgage payments they spend an average of a year and nine months, or 611 days in foreclosure before banks repossess their homes according to LPS mortgage monitor. That is more than twice as long as three years ago, when the average was 251 days. Earlier this year, the average was 523 days.
The number of defaults in the pipeline has been huge and there are more problem loans than ever before. With so many bad loans, servicers have had to prioritize which ones they can work with and which they need to push aside.
My number one concern is that some homeowners who are facing foreclosure and know they will not be able to afford the home any longer; are not making an attempt to short sale their home. Why should they? If they are able to stay in their home mortgage free until the bank gets more effective and efficient in filing NOD'S and starting the foreclosure process. This mentality I am afraid is very common but here is the problem with that way of thinking; the banks ARE becoming more effective and efficient and it is only a matter of time before they have a strong system in place and they are turning foreclosure notices like MAD. The lenders want these off their books. It will happen.
It has been my experience that homeowners either don't know what their options are or they are simply frustrated and need some guidance. I have spoken to many delinquent homeowners who have changed their minds at the last minute realizing that they did not want a foreclosure on their record however; in most instances it is too late.
Foreclosure will do TWO things:will do two things:
1. Damage a homeowners credit far worse than a short sale due to the period of missed payments.
2. Keep our market depreciating.
This can be bad on so many levels. Here is one scenario:
Lets say a homeowner decides he or she is going to stop making their payments. They try a loan modification but they are not successful. 12 months has went by without a payment and then they decide they want to short sale the home because they don't want the foreclosure to damage their credit. Here is the problem; their credit has already been hit significantly due to the period of missed payments. Not only that; but now the home has depreciated in value even more which will effect the actual offer we get on the property verses what the bank will want to net in order to allow the short sale to go through.
Here is how this should have been handled in my opinion:
The homeowner realizes they can no longer continue making their payments. They hire a Real Estate professional to have a strategic plan of action in place to short sale their property. ( BEFORE THEY ARE MONTHS BEHIND)
This is in the homeowners best interest for the following reasons:
a) It gives us time to get a short sale through without an NOD getting filed giving us the freedom to market the property and negotiate without racing against time lines and still allowing the homeowner to stay in the property while the short sale is taking place. They are becoming delinquent but it is in a controlled manner with a plan attached.
b) Allows us to help the homeowner transition into a rental with a payment they can afford.
c) Allow us to help our client enroll in a credit recovery program to help them buy a home again in 18-24 months vs 5-7 years with a foreclosure on their record. A home that is actually APPRECIATING.
d) Helps us do our part to avoid flooding the market with REO properties.
There has been alot of fear and confusion brought about with the housing market crash. Add the unemployment rate and it feels chaotic for most homeowners experiencing difficulty. But I would hate to continue to see people give up and not take the next indicated step in recovery. It is up to us to be able to educate these homeowners with the truth and reality of the situation. Once we can break that barrier then we can help them get back on their feet with grace and grounding and help them achieve their goals. Scrambling at the last minute does not do anyone any good in the grand scheme of things.
(Quote)
“Nothing profits more than self-esteem, grounded on what is just and right.” John Milton"
"Lotus Realty Group is hiring REALTORS. For more information please give me a call."
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
The number of defaults in the pipeline has been huge and there are more problem loans than ever before. With so many bad loans, servicers have had to prioritize which ones they can work with and which they need to push aside.
My number one concern is that some homeowners who are facing foreclosure and know they will not be able to afford the home any longer; are not making an attempt to short sale their home. Why should they? If they are able to stay in their home mortgage free until the bank gets more effective and efficient in filing NOD'S and starting the foreclosure process. This mentality I am afraid is very common but here is the problem with that way of thinking; the banks ARE becoming more effective and efficient and it is only a matter of time before they have a strong system in place and they are turning foreclosure notices like MAD. The lenders want these off their books. It will happen.
It has been my experience that homeowners either don't know what their options are or they are simply frustrated and need some guidance. I have spoken to many delinquent homeowners who have changed their minds at the last minute realizing that they did not want a foreclosure on their record however; in most instances it is too late.
Foreclosure will do TWO things:will do two things:
1. Damage a homeowners credit far worse than a short sale due to the period of missed payments.
2. Keep our market depreciating.
This can be bad on so many levels. Here is one scenario:
Lets say a homeowner decides he or she is going to stop making their payments. They try a loan modification but they are not successful. 12 months has went by without a payment and then they decide they want to short sale the home because they don't want the foreclosure to damage their credit. Here is the problem; their credit has already been hit significantly due to the period of missed payments. Not only that; but now the home has depreciated in value even more which will effect the actual offer we get on the property verses what the bank will want to net in order to allow the short sale to go through.
Here is how this should have been handled in my opinion:
The homeowner realizes they can no longer continue making their payments. They hire a Real Estate professional to have a strategic plan of action in place to short sale their property. ( BEFORE THEY ARE MONTHS BEHIND)
This is in the homeowners best interest for the following reasons:
a) It gives us time to get a short sale through without an NOD getting filed giving us the freedom to market the property and negotiate without racing against time lines and still allowing the homeowner to stay in the property while the short sale is taking place. They are becoming delinquent but it is in a controlled manner with a plan attached.
b) Allows us to help the homeowner transition into a rental with a payment they can afford.
c) Allow us to help our client enroll in a credit recovery program to help them buy a home again in 18-24 months vs 5-7 years with a foreclosure on their record. A home that is actually APPRECIATING.
d) Helps us do our part to avoid flooding the market with REO properties.
There has been alot of fear and confusion brought about with the housing market crash. Add the unemployment rate and it feels chaotic for most homeowners experiencing difficulty. But I would hate to continue to see people give up and not take the next indicated step in recovery. It is up to us to be able to educate these homeowners with the truth and reality of the situation. Once we can break that barrier then we can help them get back on their feet with grace and grounding and help them achieve their goals. Scrambling at the last minute does not do anyone any good in the grand scheme of things.
(Quote)
“Nothing profits more than self-esteem, grounded on what is just and right.” John Milton"
"Lotus Realty Group is hiring REALTORS. For more information please give me a call."
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Wednesday, October 5, 2011
Huge decline in home sales to Investors
An article on CNN Money I read today explains that the sales of homes to investors have declined more than half over the past five years. The article also states the number of investors who are flipping properties has fallen even faster. ( Please read the below link for more details)
With a majority of the homes for sale on the market being short sales I can see why the number of investor sales have declined. I have a lot of phone calls from agents who want to put offers in on my listings and they are typically 70 % or more BELOW what the bank wants to net. All cash offers with the assumption the investor can close quickly is not as favorable as it may have been at one time.
There are alot of factors the lender will take into consideration when approving a short sale as we have discussed before and they are as follows:
1. Was the property marketed for a substantial amount of time?
2. Is the home owner a true candidate for a short sale?
3. How much of a loss is the lender going to take on the transaction?
Investors need to drive the price down for the transaction to pencil out for them at the end of the day and the lender is trying to net as much as possible to minimize their loss. You can see how this can pose as a problem. Now, lets add the flippers. We are all aware that lenders are not fond of flippers in a short sale. There are also alot of legal issues attached to flipping.
I can appreciate investors looking for deals but the bottom line is if we want to get a lender to approve a short sale we are going to have to slow down and have a strategic and ethical plan in place to get the lender to play ball. The goal is to bring the seller, buyer and lender together and create a win win situation. It has been my experience that investor offers are not very effective in achieving that goal.
Here is a scenario I would like you to consider:
I had a call today from an investor out of state who has not viewed my property but would like me to write up his offer significantly less than what it is listed at. My listing is at a good price that will cause it to sell with no problem. Here is the issue; I have 3 liens I have to satisfy with the lenders. I have a strong listing history on the property, a qualified candidate for a short sale and buyers willing to pay list price. Though it sounds nice to double end a deal, I am not going to try to drive the price down with the knowledge that I have on this transaction. My duty is to help my seller avoid foreclosure and show the bank that I have done my due diligence. If I went down that road I could open myself up to alot of legal issues and potentially lose my license not to mention the respect of my client. What would you do?
The problem is this is happening with investors all day long. This is just one scenario. It is not a situation to take lightly when you have this type of responsibility on your hands.
I believe there are certain situations in a short sale where an investor offer would be helpful. Here are two circumstances:tor offers can be useful for the following 2 circumstances:
1. Your property is a condo with the following issues:
a) Low occupancy rate
b) The building is in litigation
c) Flood issues
In this case it would be hard to get a lender to lend money with these types of issues and a cash offer would be the only option.
2. Any property that has insurmountable damages such as foundation issues.
These are the only two reasons I would accept an investor offer on one of my short sale listings and typically it is after I have created a strong listing history to submit with the offer.
As the market changes I feel we must change with it with ease and grace to do the best we can for all parties involved. One deal at a time.
(Quote) It is through cooperation, rather than conflict, that your greatest successes will be derived.
- Ralph Charell
http://money.cnn.com/2011/09/29/real_estate/flip_this_house/index.htm
"Lotus Realty Group is hiring REALTORS. For more information please give me a call."
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
400 S. Sierra Ave. Ste.102 Solana Beach, CA 92075
858-764-7300
http://www.lotusrealtygroup.com
With a majority of the homes for sale on the market being short sales I can see why the number of investor sales have declined. I have a lot of phone calls from agents who want to put offers in on my listings and they are typically 70 % or more BELOW what the bank wants to net. All cash offers with the assumption the investor can close quickly is not as favorable as it may have been at one time.
There are alot of factors the lender will take into consideration when approving a short sale as we have discussed before and they are as follows:
1. Was the property marketed for a substantial amount of time?
2. Is the home owner a true candidate for a short sale?
3. How much of a loss is the lender going to take on the transaction?
Investors need to drive the price down for the transaction to pencil out for them at the end of the day and the lender is trying to net as much as possible to minimize their loss. You can see how this can pose as a problem. Now, lets add the flippers. We are all aware that lenders are not fond of flippers in a short sale. There are also alot of legal issues attached to flipping.
I can appreciate investors looking for deals but the bottom line is if we want to get a lender to approve a short sale we are going to have to slow down and have a strategic and ethical plan in place to get the lender to play ball. The goal is to bring the seller, buyer and lender together and create a win win situation. It has been my experience that investor offers are not very effective in achieving that goal.
Here is a scenario I would like you to consider:
I had a call today from an investor out of state who has not viewed my property but would like me to write up his offer significantly less than what it is listed at. My listing is at a good price that will cause it to sell with no problem. Here is the issue; I have 3 liens I have to satisfy with the lenders. I have a strong listing history on the property, a qualified candidate for a short sale and buyers willing to pay list price. Though it sounds nice to double end a deal, I am not going to try to drive the price down with the knowledge that I have on this transaction. My duty is to help my seller avoid foreclosure and show the bank that I have done my due diligence. If I went down that road I could open myself up to alot of legal issues and potentially lose my license not to mention the respect of my client. What would you do?
The problem is this is happening with investors all day long. This is just one scenario. It is not a situation to take lightly when you have this type of responsibility on your hands.
I believe there are certain situations in a short sale where an investor offer would be helpful. Here are two circumstances:tor offers can be useful for the following 2 circumstances:
1. Your property is a condo with the following issues:
a) Low occupancy rate
b) The building is in litigation
c) Flood issues
In this case it would be hard to get a lender to lend money with these types of issues and a cash offer would be the only option.
2. Any property that has insurmountable damages such as foundation issues.
These are the only two reasons I would accept an investor offer on one of my short sale listings and typically it is after I have created a strong listing history to submit with the offer.
As the market changes I feel we must change with it with ease and grace to do the best we can for all parties involved. One deal at a time.
(Quote) It is through cooperation, rather than conflict, that your greatest successes will be derived.
- Ralph Charell
http://money.cnn.com/2011/09/29/real_estate/flip_this_house/index.htm
"Lotus Realty Group is hiring REALTORS. For more information please give me a call."
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
400 S. Sierra Ave. Ste.102 Solana Beach, CA 92075
858-764-7300
http://www.lotusrealtygroup.com
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