Mother & Daughter Blog: May 2007

Is the water muddy?

I am ready now to bloom out into approaching banks to sell REOs (A REO is a bank owned property.  A property that has already been foreclosed on by the bank). But first, I want to know what some of the pitfalls and success stories are on this.  I have the confidence that I can do it, it is just another branch of being an agent.  However, I am not sure of the right approach to getting my foot in the door with the banks. 

I wonder if the banks are as rude, and non caring about the property once they have it back as they most of times are when you are trying to get a short sale approval???  Is it a clear line of communication with the person that is in charge of inventory or is the same run around you usually get from the bank?  Are they clear on what they want from the house and are they up on the FMV or do they leave that up to the agent?  Does the agent have much to say about listing price or are the banks just out to get all their money back no matter what?

The good points that I have heard about selling REOs:  (stop me if I am wrong)

1. Banks will pay the liens on the property
2. Banks will pay the title insurance
3. Banks sometimes will offer creative/good financing and interest rates to qualified buyers

  Some of the points that seemed would be great issues or hinderance in REOs:

• As is - buying bank owned home usually are "As IS" since it was taken from the owner, the ones I have viewed are not in good shape - usually.  From what I understand the bank does not go in and do the repairs, because some of the defects they are not even aware of. Probably the cost of repair, painting and other needs would out weigh the deal of purchasing an AS IS home.  The question would be if the banks are willing to negotiate.
• Is the process so involved and drawn out that you lose buyer's interest or confidence in purchase?
• Counters and delays are assured to happen with REOs
• Lack of /limited disclosures since the bank is not legally bound to disclose defects.  Usually a house that has been sitting for months have no utilities on which makes it hard to know the condition of items that run off utilties, such as electrical, gas, heat, air, plumbing, etc. This could cause the buyer some major problem once moved in.
• Do the bank only deal with a few agents or are they open to adding agent to their list?
• other.....

Also, I have read some wild stories about doing BPOs as a side job, working with Asset Management companies and expecting to get to the banks to get their listings and still get left out.  I have heard that being a BPO is the first step. So I'd like to hear some positive & negative (if there are any) stories of how you got into the REOs business and how is working for you? Or even what you have heard or know about selling REOs.  War stories.

I feel this is a great time to venture out into this market, since banks are now piling up the inventory with all the foreclosures coming and very few going anywhere but back to the banks. I try to be up on all aspects of this field. With the market the way it is, we have to be creative and flexible and this is a part of my effort be both.   However, I am being careful to not add something on my plate that might cause my hair to fall out with more stress and headaches! I want to get my feet wet but I don't want to step in mud!

Please feel free to comment here if you have experiences that you like to share with REOs, how you got into that area  of real estate and how it is going for you.  Share how you went about it and hints, tips, dos and don't is what I am looking for. What and how do you become a BPO? Is there value in working for an Asset Management Company?

RATE! RATE! Thanks

After reading several posts on short sale and what the bank wants and how it all works, I thought I would share with you how to present a worksheet to show just what fees and how much each are.  Hoping that this might help you in your negotiations with the lender/bank. And its broken down in good fashion to share with the seller for a simplified version of all the numbers that the lender/bank will be considering.

Before you get to the point of receiving a counter back from the lender you will need to send in the required paperwork to request consideration for a short sale approval.  These papers may include all or most of the following or something in addition depending on the lender.

What documentation will a lender typically require?

A  Lenders will typically require a distressed borrower to furnish a variety of documents, which could include the following:  (this is not guaranteed to be a complete list and it is compliments of a compilation of other posts)

• Written explanation (and proof) of the hardship the borrower is experiencing; Letter of Hardship
• Copy of the purchase contract signed by both the buyer and seller (borrower);
• Estimated net/closing statement certified by an escrow officer acceptable to the lender (HUD statement);
• Completed and signed IRS Form 4506, "Request for Copy of Tax Form;"  (if you cannot provide the copy yourself) ** in consideration of time, you should try to provide this.  They usually want previous two years tax returns
• Employment paycheck stubs for the past two months;
• Past three months' bank statements.
• Professional report on any repairs needed to show why deduction was made (HOT)! However, the lender will not require this information!!!
• Copy of the TDS; (Transfer Disclosure )
• Proof of the buyer's ability to purchase the property, i.e., a completed loan application, pre-approval by another lender, or evidence of cash on hand (bank statement);
• Copy of the certified escrow instructions; 
• Preliminary title report;
• Completed and signed personal financial worksheet;
• Profit and loss statement (if the borrower is self-employed);
• CMA information

The most popular ones are in bold.

EXAMPLE - of a lender approved for short sale agreed upon.  The lender accepted the counter #2 received from the seller.  This should show how the bank figures how much they will be losing in this offer presented to them. 

Details of example: 

Amount owned on the mortgage: $190,000 (which is the original price of the property)

Amount for foreclosure fees etc, have long dropped from the numbers!

This example offer was for $185,000 with a $5,000 credit back to the buyer and with Seller paying 0 at close.

This is a condo with HOA dues and the property taxes were not paid.

Closing date request:  21 days after lender approval

Other requests from Seller:  Request in writing that lender forgive debt not covered in this agreement and that lender does not report negative information on seller's credit history (good luck on this!) But put it in there, if it flyes you have something in writing.

***Commission asked for was 6% but the lender countered it to 5%.  5% is the highest one I have heard about and is considered the standard, but it is wise to ask for 6% at the offset. (Let them think you think you are going to get the 6%).

In this example, both liens were owned by the same lender (makes it so much easier) if separate, then you would need to do a workout like this one for both lenders.

                                                                            Approval Work Sheet between lender and Seller

Once this comes back signed, the lender will send you other papers that are sent to escrow (these are the instructions on how to pay the proceeds and to verify the closing date).

From this point, its business as usual as far as escrow closing goes.

Hope this helps and I welcome your comments.  Please bookmark for future reference.

Rosemary

Lathrop, CA is growing!  Located south of Stockton, CA and while some parts of Lathrop is a bit too close to Stockton and does experience some of the fast pace, Lathrop is growing and expanding.  Check out the far south Lathrop!  A while community with schools, shops, banks and many fine communities to raise  your children and make a fine live for your family.

Some of the builders that are helping build up Lathrop:

KB Homes, Meritage Homes, Pulte, Richmond American, Shea Homes, Pacific Mountain, and more. The planning for Lathrop is endless.

Population (year 2000): 10,445. Estimated population in July 2005: 13,116 (+25.6% change)

Males: 5,300	(50.7%)
Females: 5,145	(49.3%)

San Joaquin County

Median resident age:	30.0 years
California median age:	33.3 years

Zip codes: 95330.

Estimated median household income in 2005: $65,800 (it was $55,037 in 2000)

Lathrop	$65,800
California:	$53,629

Lathrop	$401,500
California:	$477,700

                                                 Seven Main Ingredients that Make up a Sell / Purchase.

                                        When all of the following ingredients are in agreement...

Location:

To coin the favorite phrase of appraisers: "Location, Location, Location."  The pricing of your property must reflect its location.

Condition:

The upkeep and presentation of your property is crucial to obtain the highest value for your home in any given market at any given time.

Price:

Price is the number one factor in the sale of a home.  A property is really only worth what one person is willing to pay another to gain ownership of it.  Price must be in direct relationship to the other 4 ingredients and it is the most important of all!

Terms:

The more terms available on your property the more potential purchasers you reach.  The pricing of your property must reflect the kinds of terms available to purchase it.

The Market:

I.E. Interest rates, competition, and the economy all make up and influence the state of the Market when you sell your home.  The pricing of your property must reflect the current status of the Market.

A Good Loan Officer :

Financing can be time consuming and stressful.  When the buyer is pre-approved it makes the process run smoothly. 

A Good Realtor:

An agent that cares about what your goals are and is willing to work towards getting the best deal in a timely manner is exactly what you will need.

©            ©           ©            ©           ©           ©           ©           ©            ©        ©            ©©©©©

~Recipe for Quick Cheesecake~

1 gram cracker pie crust

1 package of soft Cream Cheese

1/3 cup of Lemon Juice

1 can of Eagle Brand Milk

  Mix together with beater until solid, pour into pie crust, put in refrigerator until ready to eat!

Try it and let me know if you like it!  Its easy enough.

Yet another cost effective and useful suggestion.

I have an toll free number that is a "follow me" number.  Anywhere I am I can get my calls.  If I put my office number or cell number on my business card, get a follow me number and route all my calls from the business card to this follow me number, I will get my calls whereever I am.  I don't have my cell with me and want my calls to go a certain other phone, I just reroute the calls to that phone!

I use http://www.kall8.com/, it is so so effective.  They office several services including

On line management, voicemail, calling cards, faxes, conference calling, call blocking, call forwarding, Caller ID, call details and more.  No phones to buy, nothing extra, just the monthly fee and small set up and I do mean SMALL!

Check them out!

I have mine set up to a special ring in tone so I know that it is real estate.  I can set my phone to ID the caller as my Kall8 number or it can come in direct with the caller's number.  If not, I can check the call details and get the caller's number and address. Payphones and collect can be blocked, no extra charges.

And I can get as many toll free numbers as I or my office needs. Fees start at $2.00 per month.

I wanted to share this with and would like to know if you have something like this in place or if you find this information useful.  This is not an ad and I am affiliated with this company except I do use the service and I love it.  I am not getting any discounts for spreading the word.

Losing the house

I did some research on what other options a seller has in being successful in obtaining a short sale in the case where either they simply ran out of time and the auction was set or the lender was sitting on the request for short sale and the time ran out.

The other option I found was filing Chapter 13 - bankruptcy.  Here is what I found:

Under bankruptcy law, filing for bankruptcy can temporarily delay a foreclosure. The lender must file a motion asking for the foreclosure to proceed.One of the myths about filing for bankruptcy protection is that it can prevent someone from losing their home. It's not necessarily so.

If a homeowner is simply behind on the payments and needs relief from other debts to get caught up, he may be able to save his home through bankruptcy. But if the owner can't make the payments or if has equity in the home that can be used to pay off other creditors, he could lose the house.

"The problem with bankruptcy for clients struggling with mortgage default is that it is only a temporary fix unless getting rid of all their unsecured debt leaves them plenty to pay the regular mortgage," says Lohrenz, the credit counselor. "They will still face foreclosure and the filing only postpones the inevitable."

If this chapter 13 fails, is there time or opportunity for seller to go back to lender or the court and request a Short Sale or is the term something else and if yes, how does it work and what are steps an agent must use to help this seller continue on with the short sale?

Do you know this answer or any other information regarding how bankruptcy can either help or hinder the seller from not having the house taken from them.

Blogging can help your business!

In my search to figure out how blogging really can help me as a real estate agent.  Since it does take up allot of time I wanted to make sure I wasn't just getting into another hobby and something to relax me but might not be something that will help me generate business. 

These are some of the reasons that got my attention and I wanted to share/refresh/remind you of these reasons and ask you to tell me why blogging is good for you.

• lead generation (i.e., meeting prospective buyers and sellers)
• Alternative income source
• Free marketing
• Increases credibility
• brand awareness
• competitive advantage over competing agents
• competitive intelligence and increased knowledge base 

Added benefits

1. when you link your blog to your website. 
2. frequently provide quality local content to your market on hot button issues

You build your credibility as an expert in the field.  People like to do business with experts, therefore you generate more leads than non blogging competitors.

You can clearly watch your traffic statistics and comments increase with frequent blog posts, but if you stop or become inconsistent with your posts, your traffic will drop off rather quickly.  You need to flex your blogging muscle frequently to drive and maintain the results you are looing for..."

Tell me how blogging has helped your business!

In my search to figure out how blogging really can help me as a real estate agent.  Since it does take up allot of time I wanted to make sure I wasn't just getting into another hobby and something to relax me but might not be something that will help me generate business. 

These are some of the reasons that got my attention and I wanted to share/refresh/remind you of these reasons and ask you to tell me why blogging is good for you.

• lead generation (i.e., meeting prospective buyers and sellers)
• Alternative income source
• Free marketing
• Increases credibility
• brand awareness
• competitive advantage over competing agents
• competitive intelligence and increased knowledge base 

Added benefits

1. when you link your blog to your website. 
2. frequently provide quality local content to your market on hot button issues

You build your credibility as an expert in the field.  People like to do business with experts, therefore you generate more leads than non blogging competitors.

You can clearly watch your traffic statistics and comments increase with frequent blog posts, but if you stop or become inconsistent with your posts, your traffic will drop off rather quickly.  You need to flex your blogging muscle frequently to drive and maintain the results you are looing for..."

Tell me how blogging has helped your business!

Be Safe, Be Alert!