PO Box 969  Byron, MN 55920

507-319-5788 – cell          248-598-0004 –  fax

I currently am looking for Short Sale deals to work on.  I have a team in place to handle over 100 deals at a time.  I will adjust the process as needed to handle more.  My team and I have been specializing in short sales for more than ten years.  I buy houses in any location.  I prefer commercial properties, luxury homes and houses that are above median price for the area.  I will consider working on any overleveraged property.  I’m not buying and holding at this time, so properties that we can market and resell make sense.  Bank of America is currently the most difficult bank to work with.

I’ve been receiving tons of emails asking me to explain how my process works.

If you have an overleveraged property in mind and the seller is headed toward foreclosure I can often help.  My team will write an agreement with the seller to purchase the property.  We use our own negotiators to talk with the bank so you don’t have to spend your valuable time on hold with the bank.  You can focus on what you do best; finding and getting more houses SOLD!  We work with you or your Realtor to list the property and take it to closing.  Our agreement with the property owner specifically gives us permission to negotiate with the bank and the right to market the property so an end buyer can be found.  We fully disclose everything to the bank and our legal team makes sure we do everything right. 

You might have another kind of deal, perhaps one that doesn’t require a short sale.  If you have a discounted property and need to find a buyer call me directly at 507-319-5788.  It’s the best way to reach me.  Let’s review the scenario together, and put a plan together to take the deal to the closing table!

The end buyer CANNOT use FHA financing for most types of deals because there is a 3 month SEASONING requirement that will kill the deal at the closing table.  This is something that we need to AVOID.  The end buyer will have to use conventional financing or cash.  If they are getting financing, the bank they use must NOT require seasoning.  We need to verify this before closing on every deal.  This is VERY IMPORTANT.

We have a Title Company that will close in all fifty States.  They are familiar with our process!!

We can fund Short Sales, REO’s, foreclosures, multi-family and some commercial properties.  We do NOT buy and hold property at this time.  The end buyer needs to be approved and ready to be contracted on a discounted property before we will fund and close a deal.

When we have reviewed the deal we will let you know if this is a deal we can help you with.  If the deal makes sense and needs Proof of Funds, we will have a Proof of Funds Letter emailed to you within 48 hours to get the process started (We submit documents for Short Sale deals directly to the lenders and include the needed Proof of Funds letter).

NEVER give up on deals too quickly.  Getting some deals to close takes time and patience.  Once we have put a system in place, we can repeat the process.  We fully expect to make a lot of money together!

Check out some cool stuff at my blog www.ByronWatts.com/blog  and website www.ByronWatts.com.  Also check out www.ByronLeads.com.

          

Happy New Year!  At the beginning of each New Year we seem to have a need to redress how things are going in our life.  We review the results of our previous year and move forward to a cheerier and better year ahead.  With this in mind, I repeat, Happy New Year I pray that you had the Merriest Christmas ever and are looking forward to the most amazing year of your life!  Take Action on your commitments and make it so!

In my personal review of the previous year and planning for a better New Year, I reviewed some material by Chris Widener.  The title of this article came directly from one of the topics Chris covered.

Hunting vs. Fishing.  What’s the difference?  In any situation where leads are being generated and processed, there are two ways to approach people.  Hunting for a deal or a prospect to present your opportunity, even the best deal in the whole world, leaves the person feeling pursued.  Hunted animals are being killed.  Hunted people also feel like they are going to be killed.  You might have the best opportunity in the whole world.  It might solve all of their problems.  It might give them unlimited potential for income, completely repair their credit or stop the foreclosure; but if they feel hunted, they will not be interested.  Their goal is to stop feeling hunted, so they dismiss you and your presentation quickly and coldly and continue on without your assistance; perhaps to their own ruin.

When you’re fishing, the fish is brought into the boat after being attracted to your bait.  You have the opportunity to catch and release when it’s appropriate, you aren’t shooting and killing.

When you’re hunting people run.  When you’re fishing people come.

The key to success in working with people depends on four things.

1.  There are lots of fish (people)
2. The fish are hungry.  They might not be hungry right now, but later they will be hungry, possibly for exactly what you offer and can do for them.
3. Certain fish require specific kinds of bait.  When you’re trying to sell something, YOU are the bait.  If you are not the right kind of bait, they won’t bite.
4. You have to make the right kind of presentation.  Are you polished?  Are you low pressure instead of high pressure?  Is the presentation credible and compelling?

This partly explains why hungry investors and marketers struggle more than successful presenters.  When the person you’re working with feels hunted, they do not want what you have to offer.  When you are hungriest, you’re most likely hunting rather than fishing.  Give people what they need in the way they need to hear it and they will be more than happy to hear you and work with you…if you’re the right person to help them.

Real Estate Tip:  Marketing

There are millions of real estate opportunities available.  This makes the first criteria above simple.  Lots of opportunities are available.  Many of those millions of opportunities come from people who are having a great deal of stress in their lives right now.  This satisfies the second criteria – they’re hungry and need a solution.  All that remains are the third and fourth criteria.  Do you have the right kind of bait to help these people?  If they are facing foreclosure, can you help them?  If they need a job, can you offer one?  Maybe it’s not a job you offer, but a different kind of income opportunity.  And the fourth criteria; are you credible and compelling?  Do you use high pressure tactics when much lower would work?   If you need help with a problem contact me so I can help you work through the situation. 

Check out some cool stuff at my blog www.ByronWatts.com/blog  and website www.ByronWatts.com.  Also check out www.ByronLeads.com.

          

She noted:

“I went to a class today put on by the Minnesota Realtor Association on Short Sales.  They had a representative from the FBI and IRS there.  They said short sale flips are illegal and they are starting to prosecute.  I asked if it is illegal if there is full disclosure to all parties and they said it is.”

But there is one detail that was overlooked.

Just because an Investor is involved doesn’t make it a FLIP.

Yes indeed, I buy and sell short sale properties.  I place a contract on the property with the homeowner.   With the homeowner’s approval, I negotiate with the banks.  I tell the banks that I’m an Investor and fully intend to buy the property and sell it for a profit.  I also close the first sale transaction with CASH.  If I were to skip any of these points (FULL DISCLOSURE and CASH), I would be in serious danger of doing an illegal transaction.

There are times that a short sale can be done without a second closing.  When I sell the property to a CASH buyer, there is often no need for a second closing.  I just need to FULLY DISCLOSE that the buyer’s CASH is being used to close my transaction – and they need to agree that this is OKAY.

If you’re working with an Investor, make certain that they are FULLY DISCLOSING the details of the transaction.  Also, be CERTAIN that the stipulations of your title company and the banks involved DO NOT prohibit anything you are doing.  If the bank specifically says you must hold the property for 90 days before you can sell it:

1. The Investor might be able to negotiate that requirement out of the closing documents.
2. The Investor might need to purchase the property and hold it for 90 days to fulfill the requirement.
3. If the buyer’s bank is the one making this requirement, then the buyer might have to switch to a different bank.

FHA is one of the most difficult to work with when an Investor is involved.  Either the buyer will need to not use FHA, or the Investor might need to step out of the way to get the transaction closed.

If the terms of the deal are being followed and the transaction is closed with CASH, there is no problem with buying and selling short sale properties in ANY of the United States. 

I buy houses that are becoming a burden and payments are hard. Tell your friend to contact me. I talk to banks and buy with CASH.  I FULLY DISCLOSE to the banks that I am an Investor and FULLY intend to buy the property and resell it for a profit.  I make CERTAIN that the details of the closing are done correctly. 

Call me:  507-319-5788                www.PropertyProblemSolver.com

          

I need to find some kind of way that I can make a profit from buying any property.  The properties I specialize in are getting behind on payments and often are over leveraged.  When the property is over leveraged, my partners and I write a contract with the property owner and get their permission to negotiate directly with the bank. 

My team includes expert negotiators and lawyers to make sure we do everything legally and the best way we can; always with full disclosure.  We list the property with a local Realtor (this is a GREAT way that Realtors can handle more short sale listings!) who doesn’t need to worry about the details of doing a short sale (though sometimes they help collect the short sale package since they often closer to the homeowner).  All of the negotiations with the bank are taken care of by my partners and I.

Once we get the bank approvals we know what the property can sell for and we move forward to sell the property.  Generally we are not buying and holding right now.  We close the transaction with CASH and hope to sell it to a qualified buyer very shortly after the purchase.

Do you have a property that needs to sell?

Byron
507-319-5788

          

The reason I started thinking about this is related to the housing crisis in the United States.  Many families have lost significant income during the last couple years. With 401k declines into 201k territory and income decreases, some people are getting behind on their mortgage and credit card payments.  Some have amassed huge credit card bills.  The problem of low income has started to catch up with them.  When the credit card payments are missed, the bank becomes a bit adversarial and starts raising minimum payments and jacking up interest rates.  What was a “barely manageable” situation quickly becomes impossible.

If you were to talk with a bankruptcy attorney, they would naturally suggest that you file bankruptcy to solve the problem.  But what are the other options?  Many people really don’t know.

Bankruptcy – a not so great idea.  The bankruptcy damages your credit for 7 to 10 years.

Credit Counseling – this was set up by the credit card companies to maximize their cash recovery…

Debt Resolution – a sensible solution

Why is Debt Resolution a better alternative? 

1. Reduces your unsecured debt by 60%
2. Eliminates most or all of the incessant phone calls from creditors
3. Allows you to pay off the remaining 40% balance at ZERO PERCENT (0%) interest.  Compare that to the alternatives and you’ll find that you’re paying significantly LESS money.
4. Your credit report is much less damaged using Debt Resolution than the alternatives.
5. After you’ve completed the process of Debt Resolution, you are ready for Credit Repair that can remove many if not most of the blemishes on your credit report.

If you are struggling with a mortgage that is higher than the value of your home, there is a solution you need to know about.  If you are getting behind on your mortgage payments and want to keep your home, Loan Modification is an option that might resolve the problem of a too high mortgage balance, or mortgage payments that are too high.

If Loan Modification doesn’t work for you, or you’ve decided not to keep your home, there are several things to consider. 

Foreclosure – giving the house back to the bank is not the best solution.  Foreclosure damages your credit much like a bankruptcy for 7-10 years.  You will end up with larger deficiencies with a foreclosure than you might with other options.

Deed in Lieu – voluntarily giving the house back to the bank is some better than a foreclosure, but not the best solution if other options are available.

Short Sale – the best solution…if the bank cooperates.  A short sale dings your credit for 2-4 years.  If you combine the short sale process with Credit Repair, the damage to your credit report can be minimized.

What is a short sale?

A short sale is paying the bank less than the amount of the mortgage to settle the account.  Any sale that pays the bank less than they are owed requires their agreement.  This is the part that makes some short sales difficult.  The bank is attempting to recover the maximum amount for the asset.  Sometimes the bank chooses to take a property through a full foreclosure believing they will recover more cash that way than by approving a short sale.  Remember:  the bank’s goal is to recover as much cash as possible.

Do I qualify for a short sale?

If the house has become a problem and you’re getting behind in payments…and Loan Modification doesn’t seem to be the solution for you…  You will have to work with the bank to prepare some documents to show the bank that you are having a hardship.  Making the payments is not only difficult, but has become impossible for a period of time.  This might be due to health issues, loss of a job, increased mortgage payments (due to Adjustable Rate Mortgages in many cases) or too much credit card debt that caused you to run out of resources.

Once the hardship is documented to the bank, the bank spends some time reviewing the value of your home and whether it is in the bank’s best interest to approve a short sale.

Some banks don’t cooperate

At the time of this writing, the worst bank to work with on a short sale is Bank of America / Countrywide.  If you have a mortgage with this company, you probably won’t have a successful short sale.  The rules surrounding short sales and responses of banks to short sale requests change daily so the “worst” or “best” bank to work with could be completely different when you read this.

The other major cause of banks not approving any particular short sale is their belief that the property value is higher than it really is.  A BPO (Brokers Price Opinion) or appraisal is done by the bank to determine the approximate value of the property they are reviewing.  If the estimated value of the property comes in too high, the bank might approve a short sale for a price much higher than the property will actually sell for.  For example, one property that I have personally been involved with has an approximate maximum value of $50,000.  The bank was told by the BPO agent (a Realtor hired to estimate the value of the property) that the property is “worth” $70,000.  After all the numbers are crunched, most banks would accept a price of approximately 80% (the exact percentage varies based on what kind of loan is involved, or which bank is involved) of the BPO or appraised value.  80% of $70,000 comes to $56,000.  However, if the property will not sell for more than $50,000 the bank approval to accept $56,000 is meaningless.  Nobody who is willing to pay $50,000 is going to satisfy the bank’s demand for $56,000.  The BPO or appraisal value of a short sale property is essential.  If the number comes back low enough a successful short sale can be completed in most cases.

You are not alone

Isolation exaggerates the problems that we face.  People facing difficulty often respond in denial.  Believing the problem will fix itself, we sometimes choose to do nothing at all.  In the case of a foreclosure, or exploding credit card debt doing nothing is the worst possible response.  The first step to solving the problem and moving on with your life is to acknowledge that there really is a problem.  The problem might be too many bills that wipe out all available cash resources.  For some people the problem might take another form.  An addiction to gambling might cause bills to pile up.  An addiction to almost anything can snowball out of control leaving you powerless to overcome it.  Acknowledging there is a problem is the first step.

There is help

Working with a close friend or counselor to deal with the problem can bring significant progress.  If Debt Resolution is needed as part of the process, finding a Debt Resolution expert to work with will bring help.  If the mortgage needs Loan Modification, then finding a Loan Modification expert to work with will be very helpful.  If the answer is to sell the house, then working with a Short Sale expert to sell it and move on with your life will be very helpful.  Experts are available to assist you with the problems you face.  Depression is one of the results many people struggle with when faced with an overwhelming situation.  If the problem goes on too long, the result can be a complete disconnection with reality.  Take Action today to deal with the situation you are facing.  Imagine being debt free.  No longer struggling with the particular problem you are currently facing.  Free at last.

Change your results – change your beliefs

Our beliefs bring about our actions.  For example, if you believe that you have no power to effect change in a situation, you take no action.  If on the other hand, you believe that you can make a difference, you take action based on those beliefs.  Action brings results.  Nothing happens without action.  Action is required to breathe.  Action is required to do the work we’ve been assigned.  When we believe that what we do makes a difference, our actions take on purpose.  We begin to act on purpose.  We work like we matter.  When this happens, the result of our action reflects exactly what our beliefs really are.  Changing the results – overwhelming circumstances in our lives – requires a change in our beliefs.  When we change what we believe, we see the effect in the output of our efforts.

Sometimes it is necessary to work though our beliefs with someone trained to help us.  Beliefs that we have held for a long time begin to appear normal to us.  To adjust beliefs that are off balance, we often need someone who is more objective that we can be by ourselves or with our immediate family.

Fixing the broken

It might take some time, but repairing things we have broken is essential to our recovery.  Just getting rid of too much debt does not solve the problem of how we got into debt in the first place.  Repaying our debts is necessary to achieve full restoration.  Stopping the patterns that caused the pain will lead to both progress and success in our future.  If you borrowed money from a personal friend, repay them in full.  Assuming that your friend or family member should accept a smaller amount in repayment is a bad idea.

Nothing is the same

Debt free.  Addiction free.  Beliefs changed.  Results changed.  After going through an overwhelming situation, nothing is the same.   You have grown through the situation.  You learned new things.  You discovered more accurately who you are.  You responded to things you’d rather have skipped over.  But, you survived.  Now it’s time to thrive!  Make the changes required to do things differently in the future.  Whatever it takes.

Heal the hurting

Now that you know so much more than you did before, you can help others who are going through the same struggles you yourself faced.  You understand.  You can lend a helping hand to those who are struggling.  If the thing you struggled with was debt, you know how to advise those still struggling.  You can direct them to resources that you know about.  They haven’t been down this path and are probably still dealing with denial and depression.  You are now qualified to guide others through the path you’ve traveled.

Real Estate Tip:

There are many people in the United States who are buried in debt.  The economy has made it difficult for some of these people to recover.  Many investors have lost millions of dollars in cash, investments and equity leaving their balance sheets in the red.  Net worth has suffered a great deal for some long time investors.

Debt Resolution can help you.  Loan Modification can help you.  Credit Repair can help you.

Take action.  Avoid foreclosure.  Choose a Short Sale instead. 

Use the resources you have available to have a fantastic future!  2010 is just around the corner and it’s going to be amazing!

If you have questions, please contact me.  See how I can help you.

Yes!

          

I understand there are some concerns about representation with your clients.  Under normal circumstances, representing the seller and getting the highest and best price is the goal.  In an imminent foreclosure situation, the primary goal is to get the house SOLD and avoid foreclosure.  Anything less is a failure of fiduciary representation.  My team is very good at negotiating away all deficiency issues.  We cannot guarantee this, because we can’t control what the bank does, but very often we are completely successful in negotiating a full satisfaction of mortgage on behalf of our sellers.  With this in mind, the actual purchase price with the bank is not a significant issue with a short sale.  The amount that the bank accepts is still disclosed to the seller and they sign off on the final HUD.

Normally I would ask you to introduce me to the seller in person.  Since I’m currently not able to travel to every market that I work in, it is more difficult for this step to take place.  As you know, the information required to submit a short sale is very private.  I will probably never meet the seller[s].  The information they provide to me is private, but since I don’t know them, they don’t have to be embarrassed that someone on their street has all their private information.  I honestly don’t personally need to see a short sale package.  However, the bank is notorious for losing documents and requiring submitting the short sale package numerous times.  It is essential that this information is available for resubmission so that the bank negotiations are not delayed.

My team requires that we do our own negotiation.  We put the house under contract directly with the seller.  We always relist the property with you, unless there is a reason that you choose not to be or are unable to be the listing agent.  In this way, we can give you a full commission.  Since the agreement you have on the property is with us, you aren’t dependent on what the bank will provide as the commission.  They try to negotiate away the commission.  We always offer a full commission and that commission does not depend on the amount authorized by the bank.  We have done thousands of short sales on luxury homes in all 50 states and are looking for excellent agents to work with in your market.

I’m building a relationship with you that will include multiple transactions.  The incentive for me to do a good job and get the house sold is very high.  If things go poorly, it is very unlikely that we will be able to do multiple deals.

Looking forward to doing multiple transactions with you!

Byron

507-319-5788

          

What does it mean to be committed?  Have you ever met anyone who stuck it out, no matter what that decision cost?  The Father committed to providing for his family, even though the work he has committed to do is killing him?  The Mother who hangs on in her fight with cancer until her baby is born; and then dies?  People who are committed do amazing things, even when the rewards might seem small.

Is commitment necessary?

How far do you think Thomas Edison would have made it in the process of inventing the light bulb if he wasn’t committed to succeed?  He might have said, “I’ve tried hundreds of methods to generate light.  It’s impossible.”  But he didn’t.  He was committed to see the project through to completion; no matter what it cost him.  And guess what:  he succeeded.  How far do you think you will go in your quest without commitment to complete the journey?  I suggest, not far enough.

How big are your goals?

It’s said that with a big enough WHY, there is no HOW that is too difficult.  The goals we set for ourselves are many times far too small.  We hedge our bets trying to, “succeed.”   We fail to realize that without a bit of (or perhaps a LOT of) stretch, we don’t grow.  If we aren’t growing, we’re dying.  There are only two choices.  Grow or Die.  A tree that is not growing is dying.  A child that is not growing is seriously sick and is dying.  Thank God for medicine.  An adult that is not growing is also dying.  Once you reach the age of 40 (or so), are your challenges bigger, or smaller than they were when you were younger?  If you haven’t yet reached the age of 40, think about what your BIG GOAL is up to that age, and beyond.  Can you find the cure for cancer?  How about cure AIDS?  What about feeding the world’s hungry children?

If you don’t have a BIG GOAL, set one.

My big goal is to help solve the housing problem for 1,000,000 people.  A big part of that goal is keeping many many families out of foreclosure.  It’s painful enough to be forced to leave your home.  Having a foreclosure on your record is much worse than selling the home and avoiding foreclosure.  I work with a team of Investors and Realtors to get houses SOLD.

Real Estate Tip:

There are many houses in the United States that are owned with no mortgage.  This is often called “free and clear.”  Some of the people who own these houses need to sell them and don’t need and often don’t want a big wad of cash right away.  Perhaps you know someone who needs some cash flow, rather than a big wad of cash.  If the homeowner is willing to accept payments for a period of time to help cover their bills, the house is a bit like a savings account or Annuity.  It is much easier to purchase a house and make payments over a period of time.  This seller financing makes it possible to pay more for the house than if an Investor had to raise a big chunk of cash.

          

Have you ever found yourself in a position that forced you to make decisions you might not have made at another time?  Maybe you run out of gas on the way to an important meeting causing you to adjust your commute.  Perhaps there is a slow train blocking your normal route.  When an inconvenience causes your normal plans to be thwarted, you have the option to 1.  Wait for the inconvenience to disappear (ie, the passing train is gone), or 2.  Choose an alternate path.

When we wait for inconveniences to pass, there is less action and the responsibility for solving the problem remains outside ourselves.  Once the train passes, or the tow truck brings some gas, we continue on our way. 

On the other hand, choosing an alternate path gives us the responsibility for the new chosen solution.  For example, since we know the train is going slowly and there are several places we can turn to cross the tracks, we might alter our route and avoid the train all together.  Maybe we also choose to buy gas before the last second and our tank never runs empty.  With a full tank of gas and an alternate route to the meeting, everything goes smoothly and we are on time.

There is another example that many home owners and investors are experiencing.  The recent decline in property values and the number of less than perfect loans written during the past seven years, many people are finding their sure-fire investment in Real Estate worth considerably less than they planned.  Those who have also experienced a decrease in earnings might find themselves getting a little behind on the mortgage payments.  The banks and their investors expect borrowers to continue to pay even if you lose income.  If you don’t pay, the bank wants to protect their cash investment and will take back the collateral that secures the mortgage…usually your home.

Foreclosure seems like the nasty ole bank coming after an innocent homeowner to steal their house and all the equity.  However, foreclosure is a legal process that is used to protect the investment made by the bank when they believed you would honor your commitments to pay them back.  When you cannot pay them back the money owed, they have very few options but to take the house instead.  They might offer loan modification as an alternate way for you to keep the home.  This enables them to lose less money than if they take the house back in foreclosure.  Foreclosure is a mechanism that forces the homeowner to relinquish their rights to a property, whether or not they prefer to do so.

Are there any other options?

There is another way.  A bank can accept less than the amount owed to them in the mortgage.  They are not obligated to do this, but it is normally in their best interest to allow the homeowner to sell their house for less than the mortgage amount because this amount is still more than they would receive if they take the house to a full foreclosure.  Selling a house for less than the amount owed is normally called a “short sale”.  The bank chooses to accept a payoff amount that is less.  Less expensive for them, and much more beneficial for the homeowner who is voluntarily (though not necessarily happily) relinquishing their rights to the property by selling it to someone else.  Since the homeowner is leaving the property voluntarily, there is normally less damage to the home than a disgruntled owner who sometimes tries to “get back at the bank.”  Doing damage to a property is still vandalism – not a recommended solution to anger management issues – and can be prosecuted.

Tell me about Short Sale options

Offering a property for sale for less than the mortgage amount is fairly straight forward.  Listing the property in MLS is required by the bank; this helps to determine the market value of the property.  In the listing there are a couple of contingencies listed stating that the sale has conditions.  Third-party lender approval of the sale is one common contingency.  Some MLS systems offer an explicit “Short Sale” category telling other Realtors and potential buyers that this sale is a little bit special.

The Problem

The biggest problem with a short sale is the amount of time they take.  Once the property is listed in MLS, the property could theoretically be sold right away.  The only thing is, the bank has to review all offers on the property.  This can take almost forever.  Since banks are processing so many short sale requests right now, the file will sit on their desk for an average of 30 days before anyone even looks at it.  The first part of the short sale process is waiting for a bank employee to be assigned to review the offer.  The next thing that happens is waiting for the bank to hire someone to go out to the house and tell them how much the property is worth.  Before any action has happened, we have waited at least 35-45 days.  At this point the bank can consider the offer that was submitted.  Reviewing the offer in comparison to the perceived value of the property, the bank could in theory decide in 5 minutes that the offer is or is not good enough to accept.  In many cases, this process does not take 5 minutes.  This process might take 5 months and can take even longer.  While all of this waiting is taking place, the buyer who made the original offer gets extremely tired of waiting.  They don’t really need to wait for this offer to be accepted because they can walk down the street and buy a different house for possibly less than their offer to the bank 90 or so days earlier.  They cancel their offer on the property and leave the homeowner with no buyer.  This process can be extraordinarily frustrating.

The Solution

There is a very good solution to this problem!  Let me summarize a short sale briefly for you here.  I write an agreement with the property owner.  The agreement includes the information about the mortgages and authorization to speak with all lenders for the property.  A member of my team begins negotiating with the lenders to justify a price they will accept so we can buy and sell the property.  At the same time that the negotiations are taking place, the property is listed in MLS.  Every couple weeks the listing price for the property is reduced.  Eventually the market price of the property will be determined because buyers will start being interested and making offers.

This Really Works

The main advantage this solution provides is that an offer is made to the lenders very early in the sale process.  There is no waiting for a buyer to take interest in the property that is listed for a price that is too high.  As the negotiations are taking place, the price is adjusting so buyers will begin to take interest as the process nears completion.  We help another family avoid foreclosure.  We give the bank more money than they would receive through foreclosure.  We hopefully make some money for solving the problem for all parties.

There is a solution.

Real Estate Tidbit:

I can help you as a Realtor to get more houses sold.  My current focus is on luxury homes.  I can consider lower priced homes on a case by case basis.  Visit www.SecretWeaponForRealtors.com to learn how I can help you.  If you’re not a Realtor, the site www.FriendlyHouseBuyer.com might be more helpful for you.  Contact me and let me know about your situation.

          

The nationwide credit crisis has turned the “American Dream” into a nightmare for many home buyers and sellers.

Banks and mortgage companies have seriously tightened up their lending requirements.  People who were ready to buy the home of their dreams no longer qualify for a mortgage.

Record foreclosures, rising unemployment, losses in the financial markets and the current credit crunch have not only reduced the number of buyers who can buy, but have also increased the number of houses that sellers need to sell.

Prices are under pressure as home sellers lower their asking price to attract a buyer, and as lenders resell their foreclosed homes below market value.

It’s turning into a vicious cycle.  Many buyers need to sell their current home first.  Many sellers (unless they plan to rent for a while) need new financing to get into their next home.  As a result many real estate agents, mortgage brokers and home builders are going out of business.  These professionals are in the business of serving buyers and sellers.  Their services are no longer needed with the credit crisis blocking the buying and selling of many homes.

President Obama says today’s economy is the worst since the Great Depression and it may take many years to recover.

What options are there?

If you really need to sell your home, it is possible that this difficult economy makes it impossible to sell your house for enough money to both pay off the mortgage amount and cover Realtor and closing costs.  Consider these options.

1.       Keep paying the mortgage until the amount owed is low enough to sell your house and pay off the mortgage and all selling fees.

2.       Refinance to pay off the old mortgage and get new terms on a new mortgage.  Refinancing might be a way to improve the situation and adjust your cash flow.

3.       Currently unable to refinance?  You might talk with your bank and make arrangements to change the terms of your existing mortgage.  This process, called loan modification, can help to adjust your monthly expenses and bring your mortgage in line with the current value of your home.

4.       If you can no longer afford your mortgage and are behind on your payments the following section discusses some choices available.

When you just can’t pay.

You just can’t pay your mortgage.  You have lost your income or it was severely reduced.  Life has thrown you a bump and you don’t know what to do.  Here are several things you should consider.

1.       Foreclosure – If you stop making your mortgage payments and do nothing, the bank will foreclose on your mortgage and take your house.  On a scale of 1-10, the amount of pain and damage to your credit is 9.5.  It takes many years to rebuild your credit after a foreclosure.  You can never again say, “I have never had a foreclosure.”  The final outcome will be a visit from a law enforcement officer who will physically remove you from the property and lock you out.  End Result:  1. Loss of Credit.  2. Loss of Home.   3. Police Eviction.

2.       Deed in Lieu (sometimes called cash for keys) – You give the bank your keys and walk away from your house.  On a scale of 1-10, the amount of pain and damage to your credit is 8.  You still have serious damage to your credit and it takes several years to reestablish your good credit.

3.       Settled Account – Another option to consider is selling your house for less than you owe the bank.  This requires negotiation with the bank to get their approval for the sale.  On a scale of 1-10, the amount of pain and damage to your credit is 3.  Clearly some damage to your credit, but much less than a foreclosure.  Many houses on the market are in this position and require bank approval to complete the sale.

Waiting for the bank.

Many people including some Realtors are confused by the complex and time consuming process of negotiating with the bank to sell a house for less than the mortgage amount.  Many Realtors refuse to deal with this kind of transaction.  The process involves several specialized documents and sometimes long periods of time waiting for a response from the bank.

One of the most frustrating parts of negotiating with the bank is waiting for their approval on an offer.  Many buyers are not interested in making an offer and waiting several months to find out if their offer is accepted.  They make an offer to the bank in a traditional transaction and get tired of waiting.  They let their offer expire and move on to a house that does not require bank approval.  There are enough houses for sale right now to choose from.

Solution:  settled account.

I work with homeowners who are behind on their payments with no equity who can’t sell their house for enough to pay off the mortgage and Realtor fees.  I don’t charge them anything.  No commissions.  No fees.  I make money when I can buy the house and later sell it for a conservative profit.  I do all of the negotiation with banks to make the transaction as convenient and pain free as possible.

I always work with competent Realtors to get houses listed in MLS and SOLD SOLD SOLD!

The homeowner WINS!  There is no foreclosure on their credit.  They no longer have to deal with a house they cannot afford to keep.  They can also move on with their life.

The bank WINS!  They do not take the house back into their inventory.  The amount they lose in a full foreclosure is higher than the settled amount in almost every case.

The Realtor WINS!  The house is for sale and the negotiation is being taken care of.  The Realtor focuses on their area of expertise and markets and sells property instead of being distracted with bank details.  As the bank approval is received, MLS is updated and the property becomes more marketable.

The buyer WINS!  They no longer have to wait and wonder if their offer is acceptable to the bank.  The process of buying the house is greatly improved.

Do you qualify?

Will the bank accept less than the mortgage amount for anyone who asks?  Probably not.  If you have millions of dollars in your retirement fund the bank will be very unlikely to approve a settlement.  The bank needs to see a hardship situation.

Maybe you lost your job and can’t find another one.  Perhaps you have more than one house and the extra payments have eaten up your savings.  Sometimes there is a death, divorce or other loss of significant income that changed the financial structure of the family.

Byron Watts is a Real Estate Investor living in Southeast Minnesota helping people who are behind on their house payments.  Contact him at 507-319-5788, email: help@AvoidForeclosureStress.com or www.AvoidForeclosureStress.com