Central Florida Short Sales: July 2009

Smart Bears or Scamming Bears? What say Pooh?

Broker B 407-873-2747A few months back Baby Bear called Broker Bear to see about placing his home on the market as a Short Sale. Baby Bear had not made payments in about a year.

Being the good little Broker that he is Broker Bear went over and met with Baby Bear. During the meeting Baby Bear mentioned that Papa Bear lived next door and Grandma Bear lived two caves down. Baby Bear wanted to know if either Grandma Bear of Papa Bear could purchase his cave at a reduced Short Sale price.

Hmmmm......it sounded like a great idea but unfortunately the Lender, Country Cave Bank, said "No, they can't do that. It must be an Arms Length Transaction".

Oh well....Country Cave Bank sucks!!!

So Broker Bear placed the cave on the market and worked towards finding a Buyer. After a few price reductions and several months later a Buyer Bear made an offer on the cave. Country Cave Bank had a mortgage on the property for $175,000 and Buyer Bear made an offer of $50,000!

This offer was very much in line with what caves on this side of the mountain were selling for so Broker Bear suggested to Baby Bear that he should accept Buyer Bear's offer. 

BUT......Baby Bear said "NO". Baby Bear, after talking to Papa Bear, decided to take the cave off  the market and let it be foreclosed on. Then once it comes back on the market at a  foreclosure price Papa Bear will buy it back for Baby Bear.

Broker Bear gets squat. Country Cave Bank will lose more money.

Baby Bear, Grandma Bear and Papa Bear can live happily ever after on their side of the mountain.

I wish I could say this was a fairy tale....but it's not. Smart Bears or Scamming Bears? What say Pooh?

www.ShortSaleBasicsSuperStars.com

Copyright © 2009 http://www.brokerbryant.com/ | All Rights Reserved

Bryant Tutas
Broker/Owner
Tutas Towne Realty, Inc
Licensed Florida Real Estate Broker
http://www.brokerbryant.com/

***The content of this blog is solely my opinion***

90 comments • Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc • July 27 2009 07:18AM

Taking Control of the Short Sale Transaction.

You talkin to me?Hi folks. Having success with Short Sales requires being in charge of the situation from the get go. Buyers and their agents MUST have realistic expectations about Short Sales or...........well just read this.

I have attached the counter offer from the Seller. Only the pages with changes have been included. If the Buyer is agreeable have her initial the changes and then I will send the entire contract to the Seller for signatures and initials.

This is a Short Sale. It will require MINIMUM 60-90 days to get closed. If the Buyer is not prepared to wait this long then this property will not work for her. We will require the deposit to be placed once the contract is signed by the Buyer and the Seller. Once under contract the Buyer cannot just walk away. If they do the deposit will be forfeited to the Seller.

The purchase price has to be a price I can justify to the bank or we are all wasting our time. Recent sales place the value of this property in the $240-$250 range. Therefore the counter offer of $239,000 is firm. This is a very good price for this home.

If the Buyer is agreeable to these terms then the Seller and I will do everything we can to get the lender to agree to the Short Sale. The property will go into pending status and we will provide the lender with all the documentation they need to have this Short Sale approved in a timely manner.

Please let me know within 48 hours your Buyer's decision. I'm looking forward to working with you to achieve a successful closing.

If they agree chances of the Buyer lasting through the Short Sale process are very very good. If they don't........NEXT!!

Want to learn more? Our next Short Sale Basics webinar is Saturday, July 18, at 11:00 Eastern. All five sessions will be available on MP3 if you cannot attend live or miss any. Session 3 we will be covering the short sale listing, price reductions (one of my favorite subjects) and more. See you then!

 

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48 comments • Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc • July 13 2009 04:38PM

Short Sales: Dissecting The Financial Worksheet

 

OK so Wendy and I completed session 2 of Short Sale Basics today. It was awesome!!!! If you want to get in on Short Sale Basics it's not too late. All classes are being recorded and are available on MP3.

So if you have the desire to learn how to handle Short Sales come join us!! It's only $97 for the entire 5 part Webinar IF...you get in now. Once the sessions are completed....the cost WILL be going up.

Wendy and I are spending many hours putting these together and can guarantee you that at $97 we are practically giving them away.

Anyway....check out Wendy's recap of today's class. You just wouldn't figure that a financial work sheet could be so important.

 

Via Wendy Rulnick "Its Wendy!" Destin Short Sales (Rulnick Realty, Inc.):
financial worksheet 
Broker Bryant and I just finished teaching Short Sale Basics:   Session 2, part of our 5-session webinar series about short sales.   Today we covered qualifying the seller and short sale documents.   There was a lot of material, in fact we went over time!   Part of our in-depth analysis included dissecting the financial worksheet (one of my favorite things to do).  We provided a made-up example and found “errors” for discussion.  

Here are a few of the possible mistakes you might find in the financial worksheet:

  • Numbers don’t add up – that’s right, simple math mistakes adding up income and expenses.
  • Monthly gross income used, not net income
  • Annual gross income used, not monthly
  • Bonuses from last year are included in current year
  • Current year commission or P&L is based on last tax year, not recent income
  • Rental income listed when tenant is moving out
  • Gross rental income is not adjusted for expenses
  • Listing the same military base housing allowance when it is changing upon relocation
  • Incorrectly assuming property value when listing assets
  • Not including current mortgage and associated expenses for short sale property
  • Not including anticipated rent and expenses upon relocation
  • Spending money on frivolous items, like tennis lessons, skydiving, vacations, etc.
  • Not itemizing “miscellaneous"   expenses

Finally, when monthly net income is more than monthly expenses- there may not be a hardship at all!

The financial worksheet is one of the most problem-ridden parts of a short sale package.   In a questionable hardship case, you can use the financial worksheet as part of your seller pre-qualification.

Want to learn more? Our next Short Sale Basics webinar is Saturday, July 18, at 11:00 Eastern. All five sessions will be available on MP3 if you cannot attend live or miss any.   Session 3 we will be covering the short sale listing, price reductions (one of Bryant's favorite subjects) and more. See you then!

 

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22 comments • Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc • July 12 2009 07:01PM

Buying a Holiday Home in Davenport Florida.......Over the Internet!!!

Hi folks. When your specialty is selling properties over the Internet, sight unseen, you have to first: Be able to build trust quickly. And secondly: Learn how to use your camera!!!

Here’s a little video I did for one of our UK Buyers. You don’t have to be here to buy a house through Tutas Towne Realty, Inc. We will handle all aspects of the purchase from finding the right property all the way through closing and beyond. Ok check it out. Hey Richard……let me know what you think.




Hi Bryant,

Thank you very much for doing the video of the community of where our new villa is. I would like to take this opportunity to thank you for all your help finding us our vacation home in sunny Florida and making it so easy. You have been extremely patient with us and with your immense knowledge of the process of buying a property in the USA and helping us every step of the way.

Even though this has been an extremely fast process, we would have found it impossible doing this without you as we could not spend enough time in Florida to find our ideal home and stay until we exchanged contracts. You have taken wonderful photographs of several properties and describe them in detail and pointed out any potential problems. We are extremely grateful for all your help and making this an enjoyable experience.

I would not hesitate recommending you to anyone in the UK thinking of buying a property in Florida.
Once again, thank you very much.

Kind regards,
Richard

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13 comments • Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc • July 11 2009 04:57PM

Morally Wrong....OR...Financially Sound?

Dillemma?Richard Zaretsky’s recent post..........

"WALK AWAY FROM THE PROPERTY - STRATEGIC MORTGAGE DEFAULTS GROW TO 26%"

got me thinking. His post is talking about the amount of people who are making the "Strategic” decision to default on their mortgages.

TheTruthAboutMortgage.com site had this  to say about the topic.

“A new survey conducted by the Kellogg School of Management in Chicago suggests that more than a quarter of mortgage defaults are strategic, especially when negative equity exceeds 15 percent.”

Some of the comments on Richard’s post were calling this a moral issue. As in “It is morally wrong to strategically default on your mortgage”.

So…….my question is…“Is deciding to default on your mortgage, or not, a moral issue?”

Here are my thoughts: "Strategic Defaults" are rampant in my area. People are living in their houses as long as they can for free and saving their mortgage payments so they can move on with their lives and have a little bit of a nest egg.

These are people with families that have mortgage balances over $200,000 on homes that are now worth $60,000. Foreclosures and short Sales make up 90% of the market in Poinciana Florida and are still dragging prices down.

There is no chance in hell of these properties EVER being worth $200,000 again. At least not in the next 10-15 years..

These borrowers are so far underwater they will NEVER be back on top again. So…. whether they make payments or not, at some point they will have to sell, due to life circumstances i.e. job relocation, divorce, marriage, death.....it makes sense to take the hit now and start rebuilding.

To compound the issue....folks see all of the "bailouts" for the banks and start thinking "Where's mine?" So they create their own bailout.

Is this a moral issue? I don't think so. As much as I hate to say it…I think it’s a sound financial decision. What say you?

 

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215 comments • Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc • July 05 2009 03:48PM