Hard Times In Real Estate Because of Government Regulations

I haven't been posting in a while, because my industry is stuck in the clutches of a menace: The government. There is no money to be made for most of us. The few that do have listings get them from the banks, and clear 1% to .5% of a profit after expenses generally. Business is slow, to say the least.
Here is a letter I recently sent to another Realtor who was seeking help with closing a deal. I was able to close mine because I am very good at what I do, am very proactive, have a great team of people helping me, and I got a little lucky. She will not be able to close the deal, the investors who are selling the home will lose money, and the banks will not profit. All of the parties agree to the terms and price. Everyone wants this deal to happen. This economic travesty is all because somebody in government decided that they new better than the people running their own businesses.
"Hi,
Here is the report you requested. I hope it helps. Unfortunately, the government has mandated that our markets continue to decline so long as there is a single distressed sale of a dilapidated home within 1 mile of the subject property. This only creates gridlock. And it destroys our means of making a living.
If you are tired of the government telling you, your clients, and the banks how to run their businesses I recommend this course of action:
1) Contact your representatives regarding repealing the Home Valuation Code of Conduct.
2) Vote Libertarian in all issues.
3) Recall/vote out anyone who creates new regulations and new taxes. "Progressive" policy is bad economic policy dressed up in new age, politically correct clothes. Democrats and Republicans are the same party on this issue.
The appraisers who your client pays for are now government employees, but your client still pays the bills. The appraisals you get are not an accurate representation of market value, and have no value to your clients. Why should your client be required to pay for this? Would you like to work for the government also? Enough is enough.
Best regards,
M. S. Gentile
Broker
(818) 726-5982
http://RealVana.com
http://BlackAndWhiteRealEstate.blogspot.com
Refer me to your family and friends.
I will provide your referrals with the same impeccable service that I give to you."
Whats next? The government is taking away a Realtor's choice of title and escrow companies, the very team of people we work so hard to put together that allows us to negotiate this turbulent market through a rewrite of another intrusive set of laws: the Real Estate Settlement and Procedures Act.
VOTE LIBERTARIAN before we reward our politicians again for acting in our worst interests. Repeal nearly everything possible. It will hurt, but it will also clean away the rotting flesh from the wounds our nation is suffering from.

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What is a Short Sale and How Do You Profit From It?

I have had MANY people asking me, "What is a short sale?". To save everyone some time, here is a concise description of what a short sale is and what you need to know about them.
A short sale is ideally a "pre-foreclosure". This means that if the listing agent is educated, the property will be "distressed", the seller will have not been paying his mortgage, a Notice of Default has been filed on the property (NOD), and the seller should have a good reason why he has not been paying!
(on a side note, I have access you HUGE consistently updated lists of NODs, NOTs, and other preforeclosure info available, just ask)
Once the owner of the "distressed" property realizes that they may lose the property, they decide that they want to sell it before it goes to foreclosure.
The problems?
1: They owe more on the mortgage than the property is worth
2: Even a competitively priced property will not sell quickly in this market
The solutions?
1: Have a Realtor put the property up for sale at less than market value
2: Attract a large amount of attention and offers, usually above your very low asking price
3: Go to the bank whom you owe money to, show them the offers, and ask them to accept one and forgive the rest of the debt
The problems with the solutions?
1: Banks have a huge deluge of these types of offers coming in, and they may take months to respond to the offer, if they do at all
2: The seller gets to spend less time in control of the property in contrast to a foreclosure
An example:
You owe $100,000 on a home. In the recent downturn, the homes value slips to $50,000. You lose your job and cannot pay the mortgage. You call me and tell me your problem. I say, "I have the solution for you! Instead of letting the bank foreclose on you, let me sell your home first."
So we put the property on the market for $40,000. This is below market value, because we need to sell fast and you won't get any of the profit anyways. We show the home 30 times in 10 days, and get 10 offers. The highest offer is $45,000.
I submit a lower offer to the bank, one at the asking price of $40,000 because I don't want the bank to counter the $45,000 offer with a $50,000 price! The bank doesn't say anything to me, the listing agent. I call them, email them, hound them from all sides. Finally, 2 1/2 months later, the bank calls me and says they want to counter the $40,000 offer with $45,000.
I call the person who wrote the offer, but they already bought a house. So, I counter the $40,000 offer with $45,000. They decline because the price of the home has dipped to $40,000 during the time they were waiting, and we all just wasted 3 months of our lives trying to save the bank some money. By the way, the house gets foreclosed the next day.
How do you profit from it?
1: Write a full priced offer on every well priced short sale that you see.
2: Be patient
3: Do not become attached to the idea of owning ANY of these properties because the likelyhood that you will actually close escrow on one is exceedingly low
4: Be persistent by following up
5: Be patient
6: Submit piles of supporting documentation with your offer to verify your strength as a buyer such as your FICO score, proof of funds, preapproval letter, letters from relatives with back up funds, ect.
Realistically, short sales are not an easy way for anyone to make money. Not for the listing agent, not for the buyer, and certainly not for the seller. Everyone involved will feel short changed by the end of the transaction. You will have spent way too much of your own time looking at properties and writing offers by the time you close escrow.
In my own recent housing search, I wrote seven offers on short sales over six months ago. I still have not heard back on a single offer! In the end, all you are doing is saving the bank a couple of bucks which they apparently don't care enough about to respond promptly to your offers. Easier money is to be made with true foreclosures and traditionally marketed homes.

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