Browsing Category Short Sale Questions

Linda Landman asked:


It was a real estate boom like no other. Interest rates were dropping incredibly, homes were garnishing appreciation by the week, the stock market wasn’t moving and first time home buyers were getting their piece of the American dream. Mortgage brokers, Real Estate Agents and New Home builders were raking in the cash. It seemed like it would never end. Month after month, year after year the sales of new and existing homes climbed. Investors threw their money into the housing market and then as fast as it came it went thud.

The thud started around November of 2006. It started incrementally with a slower than expected August, a quiet November and the news articles started to reflect which was inevitably going to commence. In January of 2007 the Real Estate Taxes were due and crash it went. What seems to be happening now is a rush to unload. From the outside looking in you can see the stock market rise as the housing market falls. New home builders with still a glimmer of hope increase the price of new homes yet offering larger than expected home incentives. Upgrades galore, creative financing, buyers agents bonuses and yet they continue to build on the land they have allocated for future expansion. If it seems familiar, it is. It has an uncanny sense of 1983 all over again.

How did this happen and what makes this housing thud different from the last? There are some minor differences that make this more unique than the last housing crash. Back in the 80’s interest rates were at sometimes 16%. At that point it made sense to try to assume a mortgage that was a lower interest rate and throw your cash into their equity. But it wasn’t realized equity. It was an inflated sense of a market share. As prices dropped home owners found they were in an over valued situation and as the job market suffered they could no longer pull their money out of their house to move on with their lives. It caused a ripple affect of people walking away from thousands of dollars just to save what they had left. Real estate was sold at auction in a manner that you would buy livestock or sheriff’s sales and the late night infomercials were non-stop. “No Money Down” was the catch phrase. You can still find those publications that cite 20% interest rates and how finding a home with a 10% interest rate was a real steal.

So what happened in the last decade? Feeding on that premise that no money down is something of a desired situation and interest rates dropping most people would assume the best investment was their home. Out the window went the premise of paying down your note and having a secure position in your most valued asset. For some time it was just a matter of the educated investor refinancing a higher note and gaining equity in their home just by dropping their interest rate. It was a normal progression of an intelligent move. Refinancing could shorten the length of your home loan in some instances by 15 years and also lower your monthly payment. And then arose the hungry new home builder, the starving loan officer competing in a new market and the incredible increase of Real Estate Agents flooding the market.

Here’s how it worked. In most instances this was a first time home buyer. They were to purchase a house no money down. There would be two loans. The 80% back loan that was a fixed rate of sometimes as low as 5% and then the front loan. The front loan represented the 20% down that was typically the homeowner’s down payment. That 20% loan was an adjustable rate mortgage that was incrementally to increase over 5 years and then a balloon was to sit waiting at the end. The buyer confused by all this new jargon would ask, and then what? It was explained with the advent of interest rates dropping it was standard practice at that point to refinance that loan with another fixed rate loan or refinance the entire note at one fixed rate. It became such a standard practice that the next step made even less sense. Why not just incorporate your closing costs as well? And they did. Up to 6% of your closing costs could be rolled back into your loan. The buyer would ask what their monthly payment was and assumed that was an affordable note and there you have it. It was a disaster waiting to happen.

The second victim was the investor. The investor that in most instances was watching their money sit either in CD’s that showed a dropping interest rate or a stock market that refused to move. The investor would buy these new homes with incredible incentives and it was explained that the home had these upgrades to the standard built home, the home would ofcourse appreciate to where they could sell in 5 years and realize the equity of a moving home market, and then reinvest. They even came with appliances so that they could rent them immediately. Could there be a catch?

So here’s where it all plays out now. The new home buyer is in the home of their dreams. And the interest rates instead of dropping are now increasing. So incrementally their payment increases. Then to add insult to injury the home they purchased had an estimated tax base of an empty lot. So the taxes figured at closing were estimated on a fraction of the value of completed construction. Here comes the new appraisal on completed construction and your tax base increases by 150%. These new home buyers revisit that 20% loan and notice that the note is coming due. Struggling to understand the increase in their monthly mortgage payment, coming up with the added cash for their balloon, compounded with the increase in gas and consumable goods is overwhelming. So, as suggested by their loan officer they search to refinance.

What was not explained to them is with the rush of foreclosures on the market and millions of people in the same situation, you must have equity to refinance. You must show the ability to be able to support your note. And they are turned away.

The investor finds themselves in a new subdivision competing with new home sales and no equity. The builder has built in their contract that they can not erect a sign in their yard advertising the property for sale until the subdivision is completed. There are not to hang a lock box on the door. So basically they must rely on the local MLS to market their property. To add insult to injury now the new homes are selling the exact same house they purchased 2 to 5 years earlier for less than they purchased it and adding more upgrades and incentives to new home buyers.

This created a flood of foreclosures on the market. People frustrated are electing to walk away from the home and their good credit rating. Lenders are found at the court house steps now purchasing these homes, fixing them up and reselling them. In some instances the homes are not even rehabbed but placed back on the market sold “as-is, where-is”. That would be the new catch phrase.

In order to circumvent the costs of the foreclosure the lending market created an alternative for a homeowner to stop their foreclosure. This system has now been name a “short sale” or a “pre-foreclosure”. The short sale is handled this way. The homeowner without any equity in their home approaches the mortgage company and requests a short sale. They are to fill out financial information substantiating that they are no longer able to pay the note. Upon acceptable of the package the home is then listed by a real estate agent on the local MLS and marketing as a “short-sale” or “pre-foreclosure”. The offers are then submitted directly to the lender and the lender will make the decisive move as to whether to accept the offer or renegotiate. The homeowner at this point is nothing more than a signature on the listing agreement or the closing statement.

Once the lender comes to an agreement with a prospective buyer the closing date is set and the house changes hands. In most instances the loan is reported as being satisfied and the homeowner now can relax and move to a more comfortable situation. There are floods of new seminars on purchasing property in this type of distressed situation and even though it is a reliable way to purchase property the best case scenario is ofcourse an end user. This is a particularly good way for a home buyer to purchase a property in relatively good condition for a discounted price.

As a real estate agent in the Houston area I have found it difficult to find documentation to send my sellers to to educate them in the process. Most websites are about buying real estate in a short sale situation but I have been limited in finding documentation to support how you would sell such home. Henceforth the publication of this article.

clint asked:


Amazing Chicken Soup Recipe For… Short Sales. National Expert Spills His Guts and Reveals The Secret Weapons Used By Savvy Top Real Estate Investors. One Method Gets An Extra 20% Discount From Every Bank. Get All Deals Accepted Quickly. #1 Free Site Exposes Select Strategies.

 

Discover why lenders will take less than what is owed and forgive the balance of the mortgage. Multiple loans and the more upside-down the property the easier it is to do a short sale, and the bigger the discounts.  A positive and guaranteed foreclosure resolution for all parties, and I will explain why.

 

Learn how a beginner can get a complete package sent in the same day and an offer accepted within 30 days wiping out all outstanding obligations. I know this may sound silly, but stay with me and I can explain how.

 

Realize insane profits for real estate investors and unheard of super buys for families looking to realize a lifetime dream to buy a new primary or secondary home and or for retirement investments. A total enlightening of short sales.

 

An honest and treasured collection of trusted and protected secrets that some underground ex-bank mitigators have shared with me under secrecy.

 

Gain valuable knowledge and appreciate why our competitors think I use methods that some may believe are “illegal”. Rather it’s merely using an unfair disadvantage gained by a very diligent pursuit to uncover the underlying mystery.

 

Proven methods demonstrate sheer simplicity and straightforward truth. This guy really knows what he is talking about. No dilly-dallying or sugar coating.

 

Gain access to many loss mitigators with their private fax and phone lines along with personal e-mails. Get immediate access.

 

Discover how to covert these highly prized discounted properties into gold mines.

 

Understand how to get the bank to call you back and share other profitable deals with you. Tips the bank will openly share that will help increase your profits every time. The bank wants you to successfully complete the short sale and come back for more. Know why they want to work with you.

 

Anyway that you slice it, a sure fired winner for all involved parties. A true win-win and everyone gets what they want. A real eye opener.

 

All the rage today is mainly about a sluggish real estate market and also about foreclosures, but very little about short sales. Apprentice by a renowned master.

 

You are thinking…yea, I heard about them, but really didn’t want to act dumb and ask. Well, you are not alone. Even many real estate agents don’t know either, until…the short sale deal completes and they get their commission check, and they are “all ears”. How did that happen so quickly?

 

My name is Clint Cohen and I am an active real estate investor, author and educator. I have been active in creative real estate investing for over ten years and have spent thousands of hard earned dollars learning and mastering a system of securing foreclosures. I then create unheard of profits out of “thin air” by reselling these hugely discounted properties to a never-ending list of buyers.

 

Up until then I was savvy about being creative, but when I heard the term foreclosure or bankruptcy, I said, “I’ll pass”. I knew just enough to be ignorant and sense enough to “pass on it”. I admit that I knew very little at that time.

 

As one of my first rent to own deals started “going south,” I thought that it was best to call the sellers bank and see “what the heck is going on”?

 

That was my first brush with a foreclosure. The lady at the bank (a “gruff” lady) proceeded in setting me straight. After she calmed me down and explained just exactly what she wanted and what I needed to do if I wanted a “good deal”.

 

She explained that the bank was not interested in being in the real estate business. It was in the bank’s best interest to get me a good payoff discount on what was owed by the property seller (I only had an option to buy the property).

 

I heeded her advice and was able to do my first short sale option transfer (i.e. “flip”) and not only salvaged the $15,000 of profit that I thought that I was about to lose to a foreclosure, but actually was able to raise the profit to $25,000.

 

Not bad for stumbling unguided through a dark and cloudy maze of unknown.

 

At the time there were very few books and tapes, and I never heard of a “boot camp” other than in my military days. I kind of “hob knobbed” and slowly made sense of it. I was a slow learner, but very persistent and determined.

 

Since that time of wonder, I have attended many seminars, bought a few courses and read everything I could get my hands on. In the interim I have successfully completed hundreds of short sales and saved many homeowners from the brink of foreclosure and realized thousands of dollars of profits for my efforts.

 

I actually completed four short sale deals in one day. I should say, a very busy but very profitable one, I profited over $150,000 in one day. Smiling brightly.

 

The one thing that I found to be very enlightening was the fact that as I learned a piece here and there, I truly believe that most of the gurus and book writers have never actually completed a short sale transaction? All textbook theory that reads well but really doesn’t work. Believe me, I read them all.

 

Describe how to swim, but you can’t tell me what the water feels like.

 

I asked a well-known guru several questions at an event and he admitted that he didn’t have the answers and has really never completed many sales and his income is from speaking. He laughed and said that he would call me when he actually ready to do a short sale deals. “I like your way better”.

 

Enough story telling. Getting back to the short sale business.

 

Let me explain what a short sale is. First I will start with a typical sale.

 

When a property owner decides to sell a property, the closing attorney calls the bank and requests a payoff amount to satisfy the mortgage. That amount is included as line item on the settlement sheet, HUD-1.

 

That payoff number is subtracted from the selling price less any other normal and reasonable expenses and the seller typically leaves with a check for the difference. A happy day for the seller with money in hand and the property sold.

 

This is the scenario that most of us are familiar with and typically happens.

 

Now this is where the “rubber meets the road,” and where my invaluable experience separate the go-getters from the wannabes, plain and simple.

 

However when the property owner wants to sell the property and now for a combination of reasons owes more than the property is worth, what options does the seller have now? Under typical circumstances, many if they act quickly.

 

In most cases like this, the seller believes that there is no hope and generally walks away from the property, and by default the bank takes it back by a foreclosure action.

 

 It becomes a REO property (real estate owned by the bank) and resold at a fraction of the original loan value. If only the seller had been diligent?

 

Stands to reason that if you cannot payoff the exact amount of the mortgage, what other options may be available for the seller? Let’s see???

 

One relatively unknown option is to negotiate a SHORT SALE.

 

A short sale is a term used by the bank whereby they will grant to the borrower a lesser payoff amount than what is actually owed. That’s correct, for less than what’s owed including closing costs and real estate commissions.

 

Example… if they owe $100,000, the bank would accept $85,000? That’s exactly right…a mere $15,000 of savings, enough to get it sold now.

 

If that were the case, then a property owner that owes more than the property is worth would then be able to complete the sale of the property with a short sale. The revised sale price would now be at or below market value.

 

Why in the world would a bank want to even consider this discount?

              

·     Eliminates future carrying costs till the property would sell.

·     The longer a property is unsold, it continues to decline in value.

·     The bank realizes there is a buyer ready to close now.

·     The bank is not and doesn’t want to be in the real estate business.

·     The bank is not earning any money on non-performing loans.

·     The bank only earns money when borrowers are repaying loans.

·      It’s the best of a worst-case scenario. No other choices.

·     Looks better on the report to the stockholders.

·     Stop chasing good money after bad. Stop the bleeding.

 

Now coupling this with the current economic situation, the numbers of foreclosures have absolutely multiplied. Some counties are averaging over 100+ foreclosures daily combined with a decrease in property values by 25%, a 3+year backlog of property inventory and minimal monthly sales.

 

All these situations are creating tremendous opportunities for real estate investors and buyers. A 3-4 year supply to pick from and prices at a huge reduced savings lead to a true “buyers market.

 

A buyer can find a super super value on a new home of up to a 50% discount of market value. A real estate investor can flip, option or fix up and rent it, then resell it at a hefty profit later when the market rebounds.

 

As you can see, a short sale can open up a “log jam” for many sellers that would otherwise lose their homes to foreclosure. Additionally it becomes a golden opportunity for buyers, real estate agents, and related service industries and for people like you and me.

 

Meeeee… You are saying, what do I know about short sales?

 

This national expert is spilling his guts and is revealing many secrets. I am willing to show you how to negotiate these highly profitable short sale deals that will be a win-win-win for all parties.

 

Learn how to complete these highly profitable deals quickly so you can start helping these sellers and buyers while earning thousands of dollars for applying your new found efforts.

 

I had an associate a few years ago that asked if I could teach his friend so she could learn to do short sale deals? I agreed to coach her on a 50-50 split. On her first deal the total profit was $79,750. Beginners luck!

 

 

I have compiled all my many years of successful short sale deals including all the necessary forms, scripts and all that you need to get started and have a highly profitable business in a short period of time.

 

You can start out part time working a few hours a week and increase to full time. One hour a week can easily earn you $10,000 a month.

 

Learn how to find the sellers and buyers and what to say and do. Copies of many ads and compelling scripts. Paint by the numbers.

 

 

Everything is written that even a seventh grader can understand it. Detailed instructions show how to do and say everything correctly. Every sheet of paperwork has been time tested and legally checked.

 

No boot camps, tapes, videos or graduate manuals written in “Greek” by an **** PHD that had formally edited insurance policies.

 

Free, Easy and Understandable SHORT SALE Techniques that “jump off the page” immediately into action and quickly followed by your 1st profit check. Better warn your bank to get ready for your frequency of deposits.

 

There has never been a better to time in history to get involved in this unlimited opportunity. There is no greater joy in life than helping others.

 

These sellers are begging for help in getting out of these foreclosure situations. The banks are anxious to get these defaulted mortgages resolved quickly and the buyers are truly looking for a super savings in the purchase of their new home. And you…are looking for…? Thought so.

 

My wife thinks that I’m crazy for telling everyone my hard earned secrets and that I should just let well enough alone. You know how well men listen? 

 

I’ve done so many things in life and the best things that continue to overflow into my memory bank are those services that one does to help others. And that my friend delivers to my heart its greatest joy.

 

Well, for now all this super stuff is available. But…if I were a smart man and listened to my wife… You better get it before I start to listen.

 

To learn more about this exciting and profitable business and to get your Free copy of Successful Short Sale Secrets, please visit our website