Due to the serious implications associated with the improper use or misunderstanding of this program, I am going to withhold offering an "opinion" and just provide the links to the information so each of you can make your own decisions of how this best suits your clients and their needs.FHA HUD Letter: 09-ML-15Using First-Time Homebuyer Tax Credits, see HOT TOPICS:IRS: Guidelines for using Tax CreditPosted by Robin S. Reed at 7:40 AM 0 comments Links to this post
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I'm getting ready to take off to Florida for three days of REO Classes at Five Star. Everything that I found online gives it great reviews and is just one of many classes I intend on taking to further educate myself for the REO niche I've created in my business. I've been fortunate so far with pipeline of properties that I've been getting thus far, but don't want to keep all my eggs in the same basket. Looking forward to learning all I can and meeting and chatting with other attendees.
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Many of you have heard about how the IRS has been targeting Real Estate Agents, and challenging the status of a "real estate professional" for an Agent.To give you a brief background without getting into the details - a "Real Estate Professional" is someone who "materially participates" in their real estate activity. As a result, they are able to deduct real estate losses from other income that is not related to real estate.The IRS had been challenging the "real estate professional" status for agents - stating that Brokers qualify, but Agents do not. And they were winning...The great news is that a Real Estate Agent just won in tax court! Read the case for yourself!The IRS tried to argue that the taxpayer needs to be a “Broker” not a just an “Agent” to meet the 750 hour per year material participation test. The Tax Court said: “The Court concludes that Congress is presumed to have defined the term “brokerage” in its common or ordinary meaning. The Court also stated that for purposes of section 469, the “business” of a real estate broker includes, but is not limited to: (1) Selling, exchanging, purchasing, renting, or leasing real property” and therefore, an “agent” is the same as a “broker” for purposes of this test.”Yippy!Congratulations, real estate agents can be "real estate professionals" again!
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The recent changes in mortgage rules are certainly helping investors get back in to the market. Fannie Mae had previously limited investors by allowing them to finance only up to four properties, regardless of whether they had money for a down payment, and perfect credit. Ever since March, the limit was increased from 4 to 10.An article in FloridaToday describes how this has changed the real estate climate. Scott Bray, vice president of residential lending for AmeriBest Mortgage in Satellite Beach, said in the article that before the limit was raised, he would take one or two calls a week from investors who wanted to refinance a property or buy a new rental house. Ever since the limit had been imposed, if an investor owned more than four properties, they couldn't add a new mortgage or refinance a current one.Dick and Ginny Pugh had begun their real estate investing career 8 years ago and Dick had worked 33 years as an airline pilot. The couple never had a problem getting a loan until December 2008 when they found a home that they liked but could not get financing. Luckily, they were able to take out a HELOC and buy the rental with cash.You may have noticed a large number of cash deals for homes under $100,000 between September and February – these were probably investors who weren't able to finance the properties, but couldn’t afford to pass up the great deals. Sales for those months probably would have been higher if the four-property limit hadn't been in effect – and not allowing investors to chomp through the backlog of foreclosures has been hurting our markets.
The current markets are an investors’ playground, and serving to the needs of this segment is the key to improving the housing market. What kind of marketing tools are you using to help grow your business with investors?
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As of Saturday May 23, 2009 it will have been one year since I sat down at my laptop and decided to start REOPro. Looking back and reflecting on what has happened I am proud to see how we have grown.
REOPro was started because I found it incredibly difficult to find reliable information about the Default Real Estate Industry and, it seemed no one wanted to help. Granted, I found all kinds of sites that made wild promises that for only $99.99 a zip code I could get hundreds of listings or for a monthly subscription fee of $299.99 I could purchase ad space with my picture on all the listings in my area. Needless to say, I lost a lot of money with absolutely no return.
I was frustrated and discouraged by what seemed to be a consorted effort to take my money and, keep me out of the real business of REO. After making several Better Business Bureau complaints against a number of companies and reading complaints on other real estate open networking sites, I realized I wasn’t alone. Instead of feeling used, abused and thrown to the curb, this insight just made me angry and more determined to blow the doors off this industry and expose the frauds from the legitimate business.
For those of you, who don’t know me personally, let me jump of topic a bit and share a personal story with you so you have a better understanding of how REOPro came into existence.
I am a gamer or in other words, I love to play internet games like World of Warcraft, GuildWars or EveOnline. Most of these Massive Multiplay Online Games have huge networking clubs you can join to learn more about the game as well as get organized to actually impact your personal game play. I had personally organized several of these gamer clubs and had seen what kind of power these social networks had on the evolution of these games and the success they could propel players to within the gaming world. I am not exactly sure how I made the connection between taking the networking side of these games and applying that knowledge and experience to the REO Default Industry but, it happened. I guess you can call it a stroke of genius or madness…depending on your point of view.
I simply asked myself, what would happen if I could organize REO Default Industry Professionals like I was able to organize several of my gaming clubs? I had several successful gaming clubs growing so why wouldn’t I be able to use the same set of skills and apply them to a professional environment? Well, I definitely didn’t see why I couldn’t, I only saw that I could….so, I did.
First, I Googled “Professional Networking Platform” and several came up, NING among them. I then asked around and quickly found that NING was going to satisfy my needs.
The next step was a catchy name. Well, I had seen several people calling themselves REO Professionals but, I wasn’t sure if that would work so, I made a beta site on a FreeWebs account, called it REO Professional Agents, slapped a Google tracking code on it and boom, it was getting hits within the hour. I had learned from gaming, that people like short, catchy, easy to remember names so, REO Professional Agent was fine but, I needed something a bit more catchy so, after about 2 days worth of thinking aloud and my partner’s invaluable insight, REOPro was born.
REOPro is and will always remain a free professional / social networking site dedicated to the people who work in the Real Estate Default Industry. Currently we have over 1850 members who take advantage of their own REOPro page, comment walls, blogs, forums, picture sharing, video sharing, online chat and most recently Ask the Asset Manager. As far as I know, we are America’s largest free networking site dedicated to REO.
I hope REOPro has been as much an asset to you as it has been to me. Thank you to each of you for your contributions and commitment to our success.
I also want to offer a special thank you to Adam Cothron, the designer who came up with our logo. Adam is a integral part of our success and I look forward to working with him in making this site better.
Good luck to each of you and thank you, once again.
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I came across a blog on another networking site and got into a bit of a debate as to what exactly a Short Sale is and isn’t.
I need to explain that I am a HRC (Housing Retention Consultant) with Titanium and I have the RDCPro (REO Default Certified Professional) Designation through RealEstateEducate.com lastly, I am working on a Short Sale training program I hope to present to NAR (National Association of Realtors) for acceptance in their Continuing Education Program. In other words, I kind of know what I am talking about, just a bit.
Ok, so back on topic, what is a Short Sale?
Per Wikipedia a Short Sale is defined as…,
“a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold.”
The above definition is absolutely correct however, I have heard, read, and had described to me that a Short Sale is more than as described above by Wikipedia.
Some define a Short Sale as…,
a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold and, where the bank forgives the remaining debt.
Let me be very clear, a Short Sale is no promise that a bank will forgive the remaining debt!
I wrote a blog back on 9/8/08 on REOPro.NING.com that highlighted the use of unsecured promissory notes by banks to secure future payment of the remaining debt before they offer an approval for the short sale. In that blog, I made it clear that some banks are using the unsecured promissory note while others aren’t.
In closing, a Short Sale approval doesn’t guarantee a forgiven debt so be careful when you discuss what a Short Sale is so that you don’t set an expectation that you simply can’t fulfill.
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Real Estate ProfessionalsTitanium Is Opening DoorsAll real estate professionals have a vested interest in preserving home ownership in the communities in which they serve. However, it can be difficult to identify homeowners who need help before it is too late. By working as a Titanium Home Retention Consultant (HRC), however, real estate professionals are able to easily identify these homeowners.Working with Titanium is a rewarding experience that provides a great opportunity to help ensure the stability of the community in which you work while expanding your network and opening the door to new leads at the same time.The Titanium SolutionSimply put, Titanium is the best at connecting homeowners to someone who can help avoid foreclosure. By becoming a Titanium Home Retention Consultant, you can become part of the solution:* Help homeowners stay in their home or relocate, instead of going into foreclosure* Assist homeowners with pre-foreclosure or short sales* Expand your real estate knowledge and contactsBenefits Of Becoming A Home Retention ConsultantThere are many long-lasting benefits to becoming a Titanium Home Retention Consultant. Some of these include:* Help people in need within your community* Build lasting relationships* Pre-foreclosure sales* Short salesCheck out their website to learn more: http://www.titaniuminc.comI have been a Home Retention Consultant for almost a year. It is very rewarding! Good luck!!!
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My listing is a short sale with Wachovia....We listed at 299k, gradually reduced price to market value of 180k in Oct 2008. Wachovia loss mitigator told me appraisal done 10/08 was 195k. I later discovered it appriased at 187k. In Oct 2008 I recieved 3 offers if approx 185k and all offers were turned down by Wachovia as not acceptable to "investor". They ordered another appraisal on my vacant listing in Mar 09 and they are telling me it came in at 223k. 40,000 appreciation in this market over less than 6 months would raise anyone's eyebrows.I have contacted Fannie Mae on 4 seperate occassions over the past month beginning 4/22/09. Today I was told that since I called to follow up, each time I call back I am put back on a new waiting list and that is why Fannie Mae has done nothing. I recall similar behavior from Countrywide recently.If anyone has any wisdom to share I would love to hear your input.This situation does not benefit any buyer,seller,mortgage company, or Fannie Mae. Any Suggestions?
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My listing is a short sale with Wachovia....We listed at 299k, and gradually reduced the price to market value of 180k in Oct 2008. Wachovia loss mitigator told me appraisal done 10/08 was 195k. I later discovered it appriased at 187k.In Oct 2008 I recieved 3 offers if approx 185k and all offers were turned down by Wachovia as not acceptable to "investor". They ordered another appraisal on my vacant listing in Mar 09 and they are telling me it came in at 223k. 40,000 appreciation in this market over less than 6 months would raise anyone's eyebrows.I have contacted Fannie Mae on 4 seperate occassions over the past month beginning 4/22/09. Today I was told that since I called to follow up, each time I call back I am put back on a new waiting list and that is why Fannie Mae has done nothing. I recall similar behavior from Countrywide recently.If anyone has any wisdom to share I would love to hear your input.
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With the Banks' tightening of the money, there has been a resurgence of Lease to Own Agreements lately. Although these deals are popular with both Buyers and Sellers, they are not to be taken lightly. Here's why these instruments are potentially dangerous:Danger for the Seller: If the Buyers stop making payments under a Lease to Own Agreement, the Seller can not evict them. Instead, the Seller has to institute foreclosure action, which can take many months. In essence, the Owner could potentially have tenants who don't pay rent for a very long time (foreclosure action may take over a year), without the recourse of evicting them.Danger for the Buyer: If the Seller is foreclosed on, the Tenant has very little recourse. Once the Foreclosure is implemented against the Seller, the Tenant is evicted by the Bank. The only recourse the Tenant has is to sue the Seller for the money in civil court. Good luck in recouping it! With Sellers getting 5%-10% of the sales price up front and better than market rent on these types of agreements, the amount lost by the Tenant Buyer is sizable.Land Sales Agreements (Contracts of Sale) present the same dangers. The SCAR (South Carolina Association of Realtors) does not endorse Lease To Own Agreements. What is your experience with Lease To Own Agreements? Please share!Mirela Monte, Your Myrtle Beach Real Estate Connection Proud Optimist
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My recent articles on this very subject have initiated a firestorm and, I am sure this next article will only throw nitro glycerin on the flames.
Before you read this blog, understand that I have not been appointed as some ethical, moral guardian and, I know that. By no means, do I believe I am going to change your opinion or win you over, that is not my intention. Take what I have written and do with it as you please, I really don’t care if you think I am wrong, right or anything else for that matter. This is my opinion and if you don’t want to know it, then stop now and don’t read any further.
Know this, I feel I am right not because of some statutory legislation or common practice but because I believe in a certain way of doing business and that is what I hope is exemplified in this blog.
First let me explain what I believe a lie is. This will be important to keep in mind when you read the rest of this article. I believe a lie is when someone makes a statement or presentation that they know is false with the intent to deceive.
I believe a lie takes place when an “investor”; as it pertains to Short Sale Option Contracts, tells the bank they will offer them “X” amount of dollars for a property, passing it off as true market value, when they are holding behind their backs higher and better offers with no intention to disclose them to the bank.
I have heard others contend, that as long as you disclose the fact that the “investor” is going to resell the property expeditiously after the closing with the bank, then it’s not a lie but, in fact it’s full disclosure.
My problem with this argument is that it’s based on the premise that the bank knows and agrees to the investor promptly selling the property for a profit from bids that were legitimately the banks but, the bank never had the option to consider. The bank was never able to consider the other higher and better offers because the investor intentionally withheld them. In many ways, I see this as equivalent to a bank heist.
The investor stole money directly from the bank not because of what he said however, because of what he intentionally failed to mention. The investor engages in deception when he misleads the bank into believing the only offer on the table is the investor’s offer and it was the only offer received therefore it must be true market value.
This is a lie of omission. Let me explain, for the investor to remain silent and withhold from the bank vital information such as the additional higher better offers, is deceptive in that it gives a false impression to the bank. Basically, this lie subverts the truth with the hope to manipulate the banks decision to the benefit of the investor and not the bank who is already coming up short on the sale of the home.
If we really wanted to have a serious moral and ethical discussion about this type of lie, we need to understand that a lie of omission infringes or maybe even violates the banks right to self determination but, that is a totally different conversation for a different time.
This is also a lie based on misinformation or in other words, the investor is perpetuating a falsehood with the intent to mislead the bank into believing something that just isn’t true. The investor is misinforming the bank by claiming they only received one offer and that offer is the one presented by the “investor”. This is a falsehood because the investor knows he has higher and better offers but is concealing them.
In closing, I think I have made my points loud and clear. I really don’t think any educated counter argument can be presented. I do believe however many “spin doctors” or “investors” are going to come out of the wood work and speak only on bits and pieces of the truth with the purpose to get support for their seriously questionable and in my opinion illegal business practice however, be that as it may.
The truth is, each and every one of you reading this far have to make a decision. I only hope that each of you make the right decision.
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First off, thanks to Steve Adkins for spuring me to provide more detail on this subject and providing insight on the details of how exactly this scam works!
I recently wrote a blog titled, “Short Sale Scams Dupes Un-Suspecting Realtor…Are You One?” which created such a stir that now I am prompted to write this blog specifically concerning Short Sale Option Contracts.
So, here is how this happens.
You’re in the office making calls or whatever else you do and you get a call from a “investor” who sees you have that short sale listed on 666 Money Pitt Lane and, wants to know if you would write up his Option Offer with no terms or conditions.
You’re all excited because by all intents and purposes this is a really good offer, no conditions, no terms, no contingencies…..right,……wrong!
He has one condition and that is, he has the “option” to purchase the home at any time before the foreclosure sale date. He doesn’t outline any price or contingencies at this time but, who cares….your seller surely isn’t going to mind because they really don’t have any skin in the game because they aren’t getting any money in return for the sale anyways.
Now, here is where it gets even more interesting. As a part of the investors “option” to buy he mandates that he negotiate the Short Sale with the bank. He makes it all sound great because he has a guy who is on hold with the bank right now just waiting to get this negotiated and sealed for you, because he wants to make you BIG money on the deal. In fact, he has such good relationships with this bank he promises you (the Realtor) don’t have to do anything, he can do it all for you! To make you more confident that this is good for you, he offers you a cooperative agreement for both the Listing Side Commission on your original listing and the Buyer’s Side Commission when he turns right around and re-sells it to his “firm”….DOUBLE COMMISSION…WOO HOO!!
All he needs is your client to withdraw their listing from you, agree to have him (the investor) represent them, list the property with his firm and, sign a limited Power of Attorney saying that he (the investor) is representing them so he can negotiate with the bank.
Once all this is done, the “investor” receives all the offers from the general public, negotiates all the offers and behind the scenes is negotiating a much lower sales price with the bank for the purchase of the property by his firm.
In other words, all these offers from the general public are being held back…they aren’t being submitted to the bank. Instead, the “investor” is negotiating his own offer trying to get the price 20% or more less than his highest received bid from the public.
So once the “investor” gets a high enough offer to satisfy his greed he then exercises his own option to buy the property. Keep in mind, he is purchasing the property at the bargain basement price he negotiated with the lender directly.
Now he works the offer to close and, you get the commission for the listing side, your seller walks away from the home happy to be out from under the debt burden and what do you know, the investor has found a buyer who needs representation who wants to make a great offer and the investor wants you to be the selling agent, because you were so good to work with before.
The offer “your” buyer wants to make is $35,000.00 more than what you just sold it for to the “investor”….wow, he is making out like a bandit! When in actuality he is involving you in mortgage fraud!
Just to make this a bit more clear….watch the money.
1. You list the Short Sale for $50,000.00
2. Investor comes in, takes the property over and list it for $30,000.00
3. Investor negotiates with the bank and gets approval for $25,000.00
4. Investor receives an offer from general public for $55,000.00
5. Investor exercises his option to buy and closes for $25,000.00
6. Investor instantly sells the property to the general public offer for $55,000.00 making a profit of $30,000.00 off of an offer that should have gone to the bank.
In other words, the investor made off with $30,000.00 of the banks money! You profited twice from the deal so, you are involved in a scam if you knew it or not!
THIS IS MORTGAGE FRAUD AND THE FBI DOES INVESTIGATE.
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">Agents,How much have you utilized this program? Many clients are not aware of this Government insured loan. I invite you to watch this video that contains valuable information to help you educate your clients.
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Be very careful with who you do business with.
Here lately, many Realtors are be contacted by people who claim they can expedite the Short Sale process or offer you double commission on your Short Sales. Be careful!
These 3rd parties (typically investors or an investment firm) offers to negotiate the Short Sale on behalf of the homeowner and, all you (the original Realtor) have to do is set back and let them run the show. Sounds great...right? Well, it's not and let me explain why.
First off, only 4 people are allowed to represent a homeowner when selling their home and they are....
1. A licensed Realtor
2. A licensed Mortgage Broker or Loan Officer (available only in some states)
3. A qualified housing counselor by a government agency
4. An Attorney
Because these "investors" are not one of the above but, you allow them to work the deal (because their recent advertisement to you said, they do it all and, well.....you let them) then you (the Realtor) just became negligent in your fiduciary duty to the client and they are involved in illegal representation.
Ok, so the Realtor (original Realtor) got the bank to agree to a price of $100,000.00 for the Short Sale. The “investor / 3rd party ”, who wants to “help” the Realtor sell those horrible Short Sales, negotiates a deal with a buyer for $125,000.00. When the buyer goes to close, the bank is shown a closed deal for only $100,000.00 and the “investor / 3rd party” walks away with the additional $25,000.00. The really sad part is the original Realtor is none the wise and all he knows is he got double commission because the “investor / 3rd party” offered him the buyer’s side commission and he got the listing side commission from the bank. So, now the un-suspecting Realtor has broken his fiduciary responsibilities, mortgage fraud, un-ethical behavior and whatever else they can throw at you.
I am really surprised to see some of those similar companies advertising in this group but, I guess scam bags can be anywhere.
Realtors, if it sounds too good to be true, it most likely is.
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Here are some recent stat's I wanted to share about the Real Estate Market in Stanislaus County.Buyers are for sure buying in Stanislaus County and what a difference a year makes. Single family home closed transactions rose 30.5% in April 2009 compared to April 2008. Active listings have decreased 56.2% from 3836 in April 2008 to 1679 in April 2009 which has started to stabilze prices where currently the Median home price is $132,000.00. Home prices have now become affordable again in our area. Inventory is down causing multiple offer situations on almost all listings but depending on what happens with the foreclosures in the next couple of months no one can predict what will happen!!!All we can say Real Estate is a solid investment and its a great time to buy!
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Read the following article and thought it was worth sharing:In case you lost track, the $3 trillion Troubled Asset Relief Program has become a hydra-headed, public-private endeavor that is operating with no clear leadership.That's the conclusion of a new report by the Office of the Special Inspector General for TARP, which said the program is "12 separate, but often interrelated, programs" involving "unprecedented scope, scale, and complexity."Using the report as a starting place, a foundation-funded operation called Real Time Investigations decided to find out who was managing it all. Their discovery, at least so far: It's hard as heck to pin down."We continue to find that even some of the most elementary details about the program -- like who is actually managing distribution of the bailout money to financial institutions -- is still shrouded in secrecy," said the group, part of the Sunlight Foundation.Writers describe how they reached out to a variety of agencies with something to do with TARP, seeking names of people involved in with program. They received decidedly mixed responses."The FDIC was actually more forthcoming with information than other agencies that review bank applications for TARP funds. For example, the one person I was able to contact at OTS (by no means the only person I tried to contact) agreed to speak, strictly on background, about the process and detailed information that banks have to submit, but declined to name people involved and said that most of the decisions were made by 'senior management.'"Meanwhile, the composition of the TARP Investment Committee -- the body at Treasury that makes final determinations on TARP funds -- is changing. The Obama administration appointed Herbert M. Allison Jr. -- who ran Fannie Mae for the Bush administration after the government seized the troubled institution in 2008 -- to replace Neel Kashkari as assistant secretary for financial stability. Kashkari has been in that position since November 2008."Several of our calls and e-mails to Treasury's press offices remain unanswered and according to their Web site several of the positions in the public affairs office are still vacant. During one of my myriad attempts to get someone with the Office of Financial Stability to speak to, one of the operators said, 'there's no office yet, it's only a Web site.' And surely enough six months after the office was set up the Web site doesn't list any contact phone number but directs calls to Treasury's press office."By Robert O'Harrow
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I've prepared this blog with the hope that it will educate and streamline the process for First Time FHA Buyers and their agents when writing offers on Fannie Mae REO's; of which we should see a large supply in the near future.Our market has changed and is not a traditional market any longer. As Realtors/Brokers & buyer's we all must adjust. Adjust to the fact that FANNIE Mae’s reo RPA supercedes all State RPAs (Residential Purchase Agreements). Fannie is also exempt from normal closing cost that a seller would be required to pay, Such as Title, Escrow, City/County X-Fer Taxes.1). So what does this mean to you as the buyer or buyers agent? It means you cannot assume that Fannie is going to pay for it even if you put it in your state RPA. You have to ask for it to be paid, and expect that total amount to be included as a portion of the total max of closing cost that the seller, Fannie will pay.It's an art to writing the perfect offer; however what is more of an art and much needed in this market, is educating your buyers. Sellers normally take the best offer, and Fannie Mae is no different. The best offer may not always be the highest offer and I have seen a lot of this lately. Buyers and their agents often question or wonder why their higher priced offer are rejected and lower offers accepted by the banks. The pecking order is CASH (We all know is King), Conventional, FHA, and Then VA. Why? It doesn't take rocket scientist to figure this out. We all know cash offers can usually close in 15 days and they are less likely to fall out. Conventional buyers usually have more money to put down and the lender guidelines/requirements for financing aren't deal breakers. FHA, less money down, and lender required repairs could be deal a breaker for a seller selling a property AS IS. VA, will just multiply FHA x 2 or 3 with no money down... If you were selling your property, what would your pecking order be in a declining, unstable market? Time is money, and if a property is tied up for 30-60, 90 days and falls out of escrow, a lot of money is loss. These days the banks are currently in the business of minimizing losses. We may see this change in an appreciating market, but not in a declining unstable market.2) So does this mean that FHA buyers won't get a chance to buy Fannie REO's at or near Rock Bottom Prices?No absolutely not. It means that buyers agents have to put together solid offers. Writing a contract 10 to 15K over list price on a Fannie Mae REO so that closing cost can be paid by the seller is an example of a poor offer, (Agents are u looking at comps when u do this, is this really in the best interest for your buyers?) Every Fannie Mae REO property has an extensive Broker Price Opinion (BPO) also know as a CMA, completed the listing agent as well as an appraisal. When the price is set, they are well aware of the value a property will appraise. Fannie Mae is also provided a monthly marketing update in which they are given statics to support lowing, increasing or mainting list price of the property. Writing an offer over the appraised value means the FHA deal is more likely to fall out should the appraisal come in low.When you see HomePath Financing! That’s a good thing it means the property will not have to be appraised (Fannie Has an Appraisal On File) and can be sold at list / offer price should you come to terms; however you have to use an approved Home Path Lender. A good way to go should this opportunity present itself.3) How do I present my best offer the First Time?Buyer's make sure you are Pre-Approved (preferably an institutional lender) Not Pre qualified. It’s also a good idea to show good faith by putting down a healthy Earnest Money Deposit (EMD). $1000.00 deposit with 3.5% down on a 150K is a poor example. I would recommend $2,500 to $5,000 if you want your offer to appear strong. When you read a RPA you can tell a lot about a buyer by their EMD. Cash offers are required to put 10% down as a EMD. As an REO listing agent I can only present to my client what you give me.If your a buyer or buyers agent that is doing FHA financing because you don't want to exhaust your savings account, show me!! Along with your offer and EMD your agent should be also including POF in your accounts. If you don’t tell me this I have no way of expressing or showing my client why your offer is just as strong as the next or maybe even better!! By doing this you increase your chances of direct competition with conventional offers, and you make it easy to select the best FHA offer.In closing I have just a few words of advice for agents writing offers.If listing agent instructions say preferred method to submit an offer is via Email. DO IT (In the subject line Enter Property Street & Buyers last name)Stack your Fannie offer as follows prior to emailing1) PRE APPROVAL LETTER2) EMD OR POF3) STATE CONRTACT4) FANNIE RPA (Signed/Initialed)If there is a Bank Addendum Attached in MLS. Have your buyer initial and sign it. Should your offer be excepted with the counter the terms can be written in and this streamlines the time it takes.Know that any lender required repairs after an agreement has been reached will be added to the top of the purchase price. Therefore do a complete initial walk through with your client before writing an offer, and ask for know repairs credits up-front if your comps don’t reflect the asking price with needed repairs. Remember the first offer received is not always the best offer so don't think you have to be first. Never write an offer without seeing the property, I actually check MLS and will request agents update their Dis Key's if an offer comes in too fast.This article is exclusive to Fannie Mae REO's; however the principals are universal and can be applied to all fields. Agents and buyers do your home work , comparable sales don't lie, so use them. My team of agents are trained to complete a CMA for buyer clients whenever their writing an offer. I would encourage others to do the same.Jonathan Burgess Broker/OwnerCode 3 Real EstateBroker/SAR/ IVAR/NARNFSTI Reo CertifedRes Net CertifiedReo Trans Certifiedwww.code3realty.comCode 3 Realty & Mortgage Inc.777 Campus Commons Drive Ste 200Sacramento CA. 95825Branch Offices In Tracey CA & Riverside CA.
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From the newsletter I received from The California Assocation of Realtors."C.A.R. Achieves Compromise in AB 957,Choice of Escrow BillC.A.R. achieved a compromise in AB 957, “Choice of Escrow Bill.” In multiple discussions with the author, C.A.R. worked with Assemblywoman Galgiani to come up with compromise language that will require fair treatment for real estate owned (REO) buyers in the choice of title and escrow providers.The new language now protects fair negotiation over settlement services, and has removed C.A.R.'s opposition.The new language will codify in California law the federal RESPA rules for selection of title insurance, and extend the same rules to protect buyers in the selection of escrow services. In a nutshell, the sellers will have to negotiate the selection of title and escrow. Under the new language, if an REO seller wants to try and direct choice of escrow, the seller will have to pay for the privilege.AB 957 will also impose new penalties on REO sellers that violate the law, and will empower state regulators to go after both RESPA and "steering" violations."Great news for buyers, but possibly bad news for REO sellers and escrow companies.
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