Archive for 'short sale'

Short Sales Still Sailing Strong!

short sale floridaRight now, in my office, I am receiving short sales from sellers who decided to do a loan modification which was only valid for 3-5 years. In my opinion, this is the second wave of short sales that you will be coming across. Many Investors stay away from short sales because they say it takes “too long” or they do not want to the negotiate the short sale itself. After speaking with them, I find out that they really don’t understand the short sale process. So they miss out on BIG profits that are available by making offers on short sales that are listed and/or controlling the whole deal by finding the seller that needs to do a short sale, list it and have a title company process the short sale. When you close and make your $thousands$, that would get you real excited about short sales! The key to a successful short sale is making sure that the Short Sale Lender has the correct value on the property and this is where so many Investors and Realtors fail!

Many title companies will agree to negotiate the short sale on the property for the cost of title work so all they need is the financial package from the Seller and a Purchase Agreement from YOU! In fact, title companies are contacting the Seller directly, so you do not even have to obtain the information from the Seller when it is needed. Why, then, are Investors not making offers??? I believe it is due to a lack of knowledge. You have to know what to tell the title company’s negotiator to say to the short sale lender’s negotiator if you want to create a great discount. My Home Study Course teaches you what to say and ask, in order to create your great discount.

I believe that every Investor should have the knowledge of how a short sale works so that when they make an offer on the house, they make sure that the Realtor knows the key to a successful short sale which is the value of the home! The process of the Short Sale is very simple, you need a HUD, Purchase Agreement, Financial Package, Proof of Funds letter from the Buyer and an Authorization. Once the Short Sale Lender receives this information, they will schedule someone to come out and obtain the value on the property. That someone could be a Realtor or Broker which performs a BPO (Broker Price Opinion) or an Appraiser who completes a full appraisal. I always recommend the following:

  1. Make sure that the lock box code to the house is not on the MLS or they will sneak in without you.
  2. Make sure that there is not an electronic lockbox on the home.
  3. Make sure that YOU as the Buyer are able to meet the Appraiser or Realtor.
  4. Make sure that you bring a copy of the Purchase Agreement.
  5. Make sure you have 3 Sold Comparables, no more than .5 miles away, that have closed within 3 to 6 months.
  6. Make sure you have a Rehab Estimate, or two, including all the major problems with the house with pictures of what needs to be repaired
  7. Make sure that YOU are at the house 30 minutes prior to appointment time, they often show up early and you’ll miss them.

groupMany Investors/Buyers will allow the listing agent to control the BPO/Appraisal and they don’t even meet that person there to provide them with the information of the house. Therefore all parties, Buyer, Seller, listing agent and selling agent are always confused as to why the value did not come in at a reasonable value for the house. Many Realtors/Appraisers will not even consider any of the repairs and they are left to guess because it takes extra time for them to figure out the cost of the repairs, which they are not willing to do. Also, the Short Sale Lender does not consider any cosmetic repairs as a “qualified” repair. What are cosmetic repairs? Carpet, paint, appliances, landscaping, and updating the kitchen and bathrooms. What are qualified repairs? Air conditioner, plumbing, roof, electrical, drywall damage, missing cabinet doors where the cabinets will need to be replaced, mold, and major damages, etc. On the Rehab/Repair Estimate, should you still include the cosmetic items that the Short Sale Lender does not consider? Definitely yes; however remember you must have other qualified items included on the Rehab/Repair Estimate as well, or the BPO Agent/Appraiser will state there are no repairs needed in the home.

An Appraisal value is good for 4-6 months on a Fannie Mae, Freddie Mac, and FHA file. A BPO value is good for 90 days. So … if your Rehab/Repair Estimate is considered along with comparables, you should be able to purchase the short sale at a great discount!! Remember, if you are in a Seller’s market and you are seeing the values increasing monthly, you should have a slam dunk!

Please keep sending me your questions and topics that you would like to hear about, so I can be sure to keep feeding you with the information that you need in order to move confidently through 2016 and bring your Real Estate Dreams to Life!

Happy Negotiating!

Kimberlee Frank

www.ForeclosuresGoneWild.com

www.RealEstateJunkie.com

www.ShortSaleNegotiating.com

www.SellFastRealty.com

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Happy Valentine’s Day Everyone  the facts about loan modifications!!

Today is a great day to tell anyone and everyone you see and know Happy Valentine’s Day. Many of the Sellers that are upside down on their home are stressed out and don’t know what to do.  First off, I want all Sellers to know that when they got a loan from the bank their money was given to the bank from an investor.  This investor could be a trust, reit, or maybe the government.  The bank guaranteed the investor or group of investors a set interest rate.  Many Sellers are attempting a loan modification hoping to keep their house.  I always ask my Sellers if could wave my wand what do you want from the bank.  Most of them will answer that they want the bank to reduce their balance on their loan or they want a certain amount for their monthly payment.  Here are some facts I want to share this Valentine’s Day with the Sellers:

1.  During a loan modification the bank is still continuing with the foreclosure.

2.  I have not spoken with a Seller yet that got a reduction in the value of their home on a homesteaded property and I have done over 500 short sales.

3. The monthly payment the Seller wants makes no sense.  They are not considering how much their taxes and insurance is on the property nor are they considering the interest that will be charged for the loan amount.  Example:  Seller owes $300,00,000 on the loan at 4% for 30 years is $1,432.25  – Yearly Taxes are $3,000 per year $250.00 a month – Insurance is $1,500 per year – $125.00 per month –  Total monthly payment NOT INCLUDING HOA (homeowners association dues) would be $1,807.25.  Many Sellers want a lower payment than this amount because they can’t afford it.

4.  I have only seen the bank take the monthly payments that they are behind plus interest, late fees and attorney fees and add it to the end of the mortgage and/or change it to a 40 year mortgage.  Which would make their monthly payment $1,253.82 on the loan plus taxes and insurance would be $1,628.82.

So on Valentine’s Day I just want to let all the Sellers going through this difficult time that your home is where your heart is and may God Bless you during this difficult time.

So should a Seller do a short sale? First you need a good negotiator working on your file.  Benefits of a short sale:

1.  The Forgiveness of Debt Act which expires on December 31, 2013 allows Sellers who own their properties as homestead to waive the tax ramifications should the bank forgive the debt.  Up to 1 Million Dollars for a Single Individual and $2 Million Dollars for a married couple.

2.  The Bank will report the short sale on their credit report as being settled for less.

3.  The Sellers may receive some money to relocate.

4.  The Sellers may not have to pay a cash contribution or a promissory note.  Again this depends on your negotiator/realtor.

5.  The Bank will not go after the Seller for the difference if you get a full satisfaction otherwise they have the right to collect on the Seller for up to 25 years.

6.  The stress is gone and they have relocated into a bigger and better home most of the time.

I would recommend on this Valentine’s Day that a Seller give their family and themselves the gift of decision.  Please read my Special Report on Foreclosure which talks about all your options.  www.FreeFactsAboutForeclosure.com

 

Again your home is where your HEART IS and your family will go wherever you go.

May this Valentine’s Day you find peace.

Kimberlee Frank – Broker

www.SellFastRealty.com

 

 

 

 

 

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Homeowner Associations Getting Out of Control in Florida

Wow – What a crazy week I had.  I am writing this article to let everyone know what is going on with Homeowner Associations during a short sale.  First off, I want everyone to understand that Homeowner Associations have the right to personally go after each and every Seller regarding their dues and it can become a personal judgment against the Seller.

Many homeowners are behind on their houses payments are being forced into foreclosure.  When it comes to a short sale, all liens or amounts due on the property for potential liens will need to be discounted and/or paid off in full.  Florida has many properties that have homeowner associations dues.  Some have more than one homeowner association.

It use to be so easy to negotiate with the homeowner association regarding the dues owed on a property.  A couple of years ago Florida passed a law that guaranteed the homeowner associations one year worth of dues should the house go into foreclosure.  This law did not take into consideration what if the homeowner needed to do a short sale.  When the law first past, many homeowner associations would  not even consider negotiating on the balance due to them during a short sale because they knew that the Bank would have to pay them at least one year worth of dues should the property go to foreclosure.

Recently, I had not just one deal but three deals where the homeowner associations would not agree to accept the short sale discount that the Bank offered.  All three properties were under $60,000 and were getting more than 1 year worth of homeowner association dues.  The worst part of negotiating with the homeowner associations they request an estoppel fee to be paid upfront  for providing the homeowner with the total amount due for homeowner associations fees.  The estoppel fee is either paid to the management company and/or an attorney.  The price ranges from $100 to $500.  This is totally crazy because if you contacted your mortgage company for a payoff their would be a nominal fee of $15 for the payoff figure.  Who do you think is paying the fee prior to finding out of they will NOT agree to the discount? We have to guess at the amount due based on what the homeowner informs us and when we know we are getting close to a short sale approval, the estoppel fee is paid by the title company and/or the homeowner.   I am now requesting my sellers to pay for the estoppel if they are more than 1 year behind on their homeowner associations dues.  In addition, after reviewing the amount due to the homeowner associations, they are including late fees, interest fees, attorney fees, broken blind fees, non-approved tenant fees and more.  A homeowner association bill that was originally $900 for late dues is now $21,000 based on the above junk fees.  $1,000 for broken blinds, give me a break they can only see the blinds from outside the unit.  I do understand they don’t want junky properties however, how would they like boarded up properties or broken windows like there are in many states.

I totally understand that right now it is tough for the homeowner associations as they are taking a big hit due to the non-payers.  In addition I feel sorry for all the homeowners whose dues are being raised to cover the homeowners in foreclosure.  However, do the homeowners who are current really know what is going on.  Do they know that many houses could be sold if the homeowners association would agree to a discount versus allowing the house go to foreclosure which decrease the value of their properties more?  I kind of doubt it!  If they did, they would be in agreement that having some monies being paid now and a new neighbor paying their homeowner dues is better than waiting the 749 days which is the time line for many foreclosure actions in Florida.

I am still working on two of the three properties dealing with the attorneys from the homeowner associations to get them to accept $4,000 now and a new buyer which would avoid the homeowner going into foreclosure.  The last negotiation I had with the attorney for the homeowner associations refused to talk to me and would only speak through her secretary.  We were off by $1,800 which the attorney said “have the buyer, realtors and title company take a discount”.  It is bad enough that the short sale lender is reducing commissions to realtors to 5% or 4% if you a good enough agent to list the property and find a buyer, now the homeowner associations are working against the people who are helping them stabilize their community by selling their homes.  This is totally wrong!

If you are a homeowner and you are going through foreclosure, I would recommend to do your best to keep up your homeowner associations dues or they can come after you personally.  If you are a realtor, I would highly recommend that you find out from your homeowner how far behind they are on their dues.  If you are a homeowner paying your dues, attend your board meetings and find out what are they doing on short sales.  You do have the right to speak at a board meeting.

We are all working together to improve the economy, can we all play nice?  I would sure hope so.  I did close one of the three deals but had to pay $300 towards the homeowner associations dues.  I didn’t like it at all, however, it was the only way to get the deal through.  I would have loved to walk away from the deal and tell them forget it.  However, there were circumstances that stopped me from doing so.  The short sale approval letter was expiring and the bpo value on the property would be expiring too so that would mean another bpo value from the bank and more paperwork from the homeowners plus my homeowner would still have the same problem next time.  The buyer had to be out of their place and had given notice so that would mean possibly a new buyer.  I am a great negotiator when in comes to playing poker (that is what I call negotiating), however, I knew when to fold and close the deal for the benefit of all parties including the homeowner associations.

Receive Great Short Sale Tips from FREE SHORT SALE MANIFESTO FOR REALTORS – CLICK THE LINK:

 

https://vw942.infusionsoft.com/app/form/short-sale-manifesto-for-realtors

 

Kimberlee Frank

www.SellFastRealty.com

407-888-3433

 

 

 

 

 

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