Real Estate Radio USA

Short Sale Tip #4

Short Sale Tip # 4: Property Improvement & Repair Estimate Report.

When things go bad...they usually go real bad. If a homeowner has not paid his mortgage in many months, it is likely that the house has been neglected.

If funds were not on hand to pay the mortgage, then it is probably safe to say that they have not been able to perform proper maintenance and repair and the property may not in the best of shape. Especially if it is vacant or has been vacant for some period of time.

It is most probable that the mortgage lender does not know this. Unless the lender is local, it is quite hard for them to have an accurate assessment of the property from their desks in California, New York, Chicago, Texas or some other distant location.

With the advent of automated valuation models (AVM's), many banks are using the former appraisal together with an AVM to perform a "desktop valuation" of the property.

The number they have in mind can be tens of thousands of dollars higher than it's true value.

We'll talk about the BPO and comparables later, but before either of them can be properly completed, you are going to have to justify your estimation of value and substantiate your offer in order for the bank to look at your deal.

Having an extensive repair and improvement report performed by a local and licensed general contractor will significantly enhance your repair report.

You are going to want to take extensive pictures of both the interior and exterior to add substance to your corresponding repair estimate.

At our seminar, we show you how a Property Improvement & Repair Report is to be written and what information must be contained in the report.

We will also show you how to direct your contractor to fill it out the actual form we utilize on our own short sale deals that goes into great detail and really makes the mortgage lender take notice when it is submitted as a part of the overall short sale package.

If you are ready to take the next step in your real estate career and want to learn how to profit from foreclosures, make sure you enroll in one of our upcoming seminar workshops.

Short Sale Tip # 4: Property Improvement & Repair Estimate Report.

When things go bad...they usually go real bad. If a homeowner has not paid his mortgage in many months, it is likely that the house has been neglected.

If funds were not on hand to pay the mortgage, then it is probably safe to say that they have not been able to perform proper maintenance and repair and the property may not in the best of shape. Especially if it is vacant or has been vacant for some period of time.

It is most probable that the mortgage lender does not know this. Unless the lender is local, it is quite hard for them to have an accurate assessment of the property from their desks in California, New York, Chicago, Texas or some other distant location.

With the advent of automated valuation models (AVM's), many banks are using the former appraisal together with an AVM to perform a "desktop valuation" of the property.

The number they have in mind can be tens of thousands of dollars higher than it's true value.

We'll talk about the BPO and comparables later, but before either of them can be properly completed, you are going to have to justify your estimation of value and substantiate your offer in order for the bank to look at your deal.

Having an extensive repair and improvement report performed by a local and licensed general contractor will significantly enhance your repair report.

You are going to want to take extensive pictures of both the interior and exterior to add substance to your corresponding repair estimate.

At our seminar, we show you how a Property Improvement & Repair Report is to be written and what information must be contained in the report.

We will also show you how to direct your contractor to fill it out the actual form we utilize on our own short sale deals that goes into great detail and really makes the mortgage lender take notice when it is submitted as a part of the overall short sale package.

If you are ready to take the next step in your real estate career and want to learn how to profit from foreclosures, make sure you enroll in one of our upcoming seminar workshops.

If I was a Real Estate Broker...

"Investing in a buggy whip after Henry Ford created the Model T was not going to be fruitful no mater how good a buggy whip it was."

""I'm sure that the last buggy whip company in America made the best damn buggy whips in the world" Larry "the Liquidator" Garfield from the 1991 movie "Other People's Money".

It's nearly 2008 and it's absolutely amazing how the bulk of real estate agents and brokers conduct business in the same way and fashion as it was conducted so many years ago. Before there was an Internet, Real estate agents were the crypt keepers of the ancient binder of listings that only the privileged could ever see. That big, 3 ring binder guarded by gargoyles..the MLS book.

Control of property listings made the agent necessary and somewhat essential to home sellers and buyers. But then Al Gore went and screwed things up for them and invented the Internet and things have not been, nor ever will be the same.

Mere mortals without a real estate license embraced this new technology and became empowered consumers with access to INFORMATION!

Oh my...the masses now could see things for themselves, they could search neighborhoods, school districts, shop for mortgages, see pictures, comparables and event addresses. Instead of being walking dead the masses could now be armed with the same information that the agent had...maybe and likely more than what the agent had.

Agents it seems would be require to re-tool, go back and change the game plan, after all you could no longer be victorious if the other team had your playbook? Could you?

Well most recently with the advent of rapidly escalating appreciation in certain real estate market, a new lottery was unveiled and the gold rush was on. This gold rush, unlike that which the 49ers were forced to endure, did not require any real mining. Simply put up a stake, attach a sign and make a million became the modus operandi.

The rush was on schools filled with the millionaires to be. High School Diplomas or GED's in hand they were knighted as being qualified..bona fide if you will...and set loose with the week's knowledge of how to be an expectant millionaire.

The creed was simple, rehearsed and memorized. "Defend always the commission". Like true real estate kamikaze pilots, they bombarded lowly earthlings called Sellers and invaded them with their empirical ideology that they and only they...would be able to manifest a buyer.

While of course tongue in cheek..am I far off? Of course not!

Here is an industry with which minimal training needed...riches can be obtained. In any other advertisment, commercial..etc...this would be called a scheme and would be laughed off as a scam and many would be calling for investigations.

Let's highlight this scheme:

1. No money down needed

2. Make millions and get rich

3. No experience necessary

4. Work from Home

5. Be your own boss

6. Set your own hours

Get the picture here???  But now, the landscape is a changing really, really fast. That darn Internet! The Internet is here to stay and with it, millions of people can now have all the information at their finger tips to do everything a real estate agent can do. 

Agents expecting to be successful in this business need to learn a new business model ..FAST.

1. Investment required (marketing alone should be budgeted at 10-20% of gross revenue

2. You can indeed make millions and get rich but you are going to have to work hard, continually educate yourself, and possibly avail yourself of true opportunities

3. Yes, you will need experience. There are quite a large number of successful agents out there who have adapted, and realize what it takes to run a BUSINESS.

4. While you can indeed work from home, you had better make sure that you have a virtual infrastructure in place to run your work from home empire. Here's a hint..an autoresponder is not a technologically advanced component of a virtual infrastructure.

5. yes you can be your own boss but it may behoove you to outsource a bevy of tasks to virtual assistants, virtual pbx operators, website developer..etc...yes you will have many people working for you if you are to be successful in 2008.

6. Yes, you can set your own hours as long as someone can get a hold of somebody who knows what the gig is. Want to lose money? have someone call on a listing and have them get voicemail time after time...no one is that busy.

I often have Sellers call their own agent's number as shown on the MLS and when they can't get a hold of them it's easy to blow the agent out of the water.

But...the biggest problem for agents in 2008 is the rise of virtual investing by the Real Estate investor. With so many foreclosures and motivated Sellers, investors are spending a lot of money seeking these people out. They are getting responses, they are getting the deals, they are creating auctions..they are closing!!

Investors know how to negotiate, agents don't, have never been trained and even if they are the very nature of their contract system precludes them from negotiating with a loss mitigator. Most do not even realize they are in a negotiation.

Why would any Seller hire someone, pay them 6% of their sales price, who was not a skilled negotiator.

You see the headline of this posting? If I was a Real Estate Broker... Well if I was a real estate broker, here is the kind of DAILY morning meeting I would have with my associates.

Offensive? who cares. If they don't like it..hit the friggin bricks. I want closers. I want people who want to make some money.

Like the story goes..on every call someone is going to get sold. My people better be prepared, educated, technologically superior and advanced negotiators otherwise they can get the f^*k out.

Sound harsh...good! Then you're not cut out to be successful in this business and 2008 might be it for you. You're a buggywhipper!

But hey..this is just my opinion.

Gepetto spoke...and you had better listen!

...from the AP this morning.....The Federal Reserve Board on Tuesday considered new protections for high-cost mortgage borrowers to avoid a repeat of the loose lending standards that have put many Americans at risk of losing their homes.

U.S. lenders would have to determine that such a borrower can afford a mortgage before making the loan, under a Fed staff proposal.  (duh!!)

The proposed rules would also promise that borrowers will get details on their brokers' compensation and be billed monthly for annual charges like property tax and insurance. (uh oh..no more hidden Yield Spread Premiums)

It does not take a crystal ball to see where this is headed. Tighter loan restrictions mean less mortgages..meaning further decline in sales. Tighter YSP disclosure..less money for mortgage brokers, less brokers, less programs to choose from...equals less mortgages written and therefore, less sales.

That is of course you come from the inner city where groups like NACA can still get you the low interest, low down payment credit flexible home loan because..well they're entitled to it???

So what's an Investor to do...RENTALS BABY!!!  Read the writing on the wall...less people being able to qualify for mortgages does not mean less people needing housing. Better brush up on your cap rate analysis and virtual investing capability. You heard it here first...rentals will be huge in 2008!

"Give me your tired, your poor, your...."

Except from "The New Colossus" engraved on the base of the Statue of Liberty:

"Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!"
- Emma Lazarus, 1883

Forgive me for posturing here, but does anyone believe that they meant for us to take care of the tired, the poor, and huddled masses? I believe NOT! I believe that they wanted to those that wanted the OPPORTUNITY to be free to come and experience it. As far as I have heard they did not give out checks to those that came off of the boat at Ellis Island.

Do not misconstrue what I am saying here. I believe we should ALL be generous and give to those in need. Anyone can have problems and need assistance or help overcoming difficulties. I am a true believer that to Give is Divine and to Give Freely is the very Mark of our Humanity. What I do NOT believe in is the thought that we should "take care of" everyone in society that does not care for themselves.

I still cannot for the life of me understand the thought that people want to be "taken care of" by someone else. Has a whole segment of the population just "given up" on themselves and their lives? What about their children and what those thoughts teach them about life, accomplishment, and personal dignity? Maybe that is the problem. Maybe a whole generation has been taught that there is no hope, no need to better themselves, their families, and the community. How have we gotten so low? What in the world can we do about it?

All good questions my friends... Oh, I am sorry, you were asking me? Well, it is a good think that I do have an opinion on the subject. How about this... If people are going to act like children and want to have no personal responsibility, we treat them as children. For instance, OK Mr. Broke Homeowner that wants the government to bail them out of the mortgage that they could never afford, you are going to be foreclosed on, your credit will be shot for 7 - 10 years, and you will be a renter in a place you can afford. You will have that amount of time to learn how to spend what you can afford and learn that every document you sign your name to has consequences involved.

OK, not as impactful as taking them into another room and spanking them, but you get the picture. If you have never heard of Darwinism and the "Survival of the Fittest" you need to start doing some research. The lesser among us are constantly being weeded out through natural progression. If you are not at the top of the "Industrious" food chain, or are not even aware that there is one, I would start looking over my shoulder because you are dinner my friend.

Do you really...really..want to succeed?

One of our online community members, Mary Ellen wrote me an email today. Here is what her email said:

Check out this video…it will put a smile on your face and definitely get you started off with the right attitude this week. 

This is a story about a guy, a guy like most of us, common, questioning his existences, measuring himself to others, never believing in his abilities or his worth. Then one day, his passion outgrew his fears as he stepped onto a stage, a stage that took him to a place beyond his self imposed prison.

Watch the faces of the judges as this guy walks out on the stage. You can almost see what they're thinking as they pre-judge this guy based on his looks and the fact that he's a cell phone salesman.

Maybe this guy stopped believing in what people told him for so many years and ultimately started listening to his passion."

                        

Make it a GREAT week!!!!!"

To avoid criticism...say nothing, do nothing, be nothing. If you want to get ahead in the world, you'll have to do all three. So expect to be criticized."

Mary Ellen..thanks for a great email and FYI..Paul Potts went on to win the competition and this video has been viewed over 18 Million times on Youtube alone!

If you want it bad enough you can make it happen!