Time management and the Indianapolis real estate investor!

Lee’s notes: Jon and I were talking the other day about Pareto’s 80/20 rule, and motivation etc.. Not sure if that was his motivation for this post, but it’s all good….

Jon Zorrer takes a Cuzz, and talks about time, and how to manage it. Talks about Greg Clement from realeflow.com, and Jack Walker who are creators of the Smart Internet Marketing Solution System(SIMS). Talks about finding 40 new buyers a week with little to no effort. All the deals you can handle while buying, selling, and investing in homes in Indianapolis, or wherever.

Three types of days: focus days, buffer days, and freetime days. Focus days are where you concentrate on the 20% of things that produce revenue(Pareto Principle).  Buffer days are where you catch up, and do the 80% things that need to get done, but don’t necessarily produce revenue. Freetime days are where you do your best to complete no work whatsoever. Basically you take 24 hours to rejuvenate, rest, and regenerate.

Full time investors should be using a schedule of: Mondays are focus days. Tuesday is a buffer day. Wednesday and Thursday are focus days. Friday is a buffer day. Saturday and Sunday are freetime days(try to avoid work at all costs).

How to get Fannie Mae financing on an investment property!

My real estate investing lawyer, Matt Griffith, hit me up last night about a new Fannie Mae program that allows investors to get financing on some of their REO properties… This comes from a local mortgage broker, Mickey Brooks (317 218.0283), who has the contacts to get deals done in a couple of states nationwide, so give him a call, and if he can’t help you, he can prolly refer you to someone who can!

“Dear Valued Partner,

As we enter 2009, the crisis in the financial markets seems to be the top story on every news channel. But many of the reporters and so-called pundits don’t understand what really happened, what’s happening today…and what may happen next.
That’s why I’m excited to tell you about a series of articles I’m creating to put an end to the confusion once and for all! In these easy-to-understand articles, with help from many resources, I explain in layman’s terms exactly what caused the current financial crisis, what the almost daily news reports really mean – and what to be watching for in the near future.  The content for these articles comes from various services that I have invested in to stay up to date and educated, in order to always best serve as your trusted advisor. It’s important to me to stay on the leading edge as a professional, and when I saw these resources, I wanted to make them available to you as well.   I’ll attach basic stories behind the crisis for your review, to help you better understand what happened, why, and where we’re going from here. The few minutes you spend reading them will open your eyes to what very few experts truly understand.

As your trusted advisor, I’m committed to doing whatever I can to help you understand what the current economic situation means for you going forward in 2009.
Give me a call if you want to discuss strategies for strengthening your financial future in the weeks and months ahead.

Fannie Mae HomePath Financing Program
Fannie Mae has just released a new program called HomePath to help consumers buy and finance many of their REO properties.  All FNMA REO properties are not eligible for HomePath financing.  Only those properties listed at the following web site http://www.homepath.com  with the HomePath logo qualify for this program.

Mortgage Financing  The benefits include:
•  Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
•  You may qualify even if your credit is less than perfect
•  Available to both owner occupiers and investors (Primary, Secondary, Investment)
•  Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer (2% Seller Maximum)
•  No mortgage insurance
•  No appraisal fees
•  Also eligible for HomePath Renovation Mortgage (see details below) (Primary Residence Only)

Available only on homes you make your primary residence  and offers these benefits:
•  Financing to fund both your purchase and light renovation.
•  Low down payment and flexible mortgage terms (fixed-rate or adjustable-rate).
•  Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit, state or local government, or employer.
•  No mortgage insurance.
•  Renovation funds are borrowed as part of the purchase financing and held in escrow until the renovations are completed.
•  Renovation Costs limited to 20% of the “as repaired or completed” value or $30,000, whichever is less, and renovations must be completed within 3 months of closing.

About Fannie Mae Homes

•  Why does Fannie Mae have properties for sale?  Fannie Mae works with all of its partners to help homeowners prevent and avoid foreclosure; however, sometimes it is unavoidable. When foreclosures occur on mortgages in which Fannie Mae is the investor, our goal is to sell properties in a timely manner in order to minimize the impact on the community.

•  What kinds of properties are available in the Fannie Mae HomePath database?  Fannie Mae’s HomePath database includes only properties that are owned by Fannie Mae. There is a wide selection of homes, including single-family homes, condominiums, and town houses — located in a variety of neighborhoods. The number, types and the sales prices of the homes that are offered for sale may vary substantially. Many of these homes are relatively new; however, older homes are offered in some areas. Some homes may require repairs.

•  How is buying a home owned or managed by Fannie Mae different from other home purchases? Usually, when you buy a home, you deal with a seller who lives in the home. Fannie Mae has acquired these properties through foreclosure, deed in lieu of foreclosure, or forfeiture.  When buying a Fannie Mae-owned home, you should know the condition of the property, as explained in more detail below, the cost of any needed repairs, and the steps in the loan qualification and closing process before you enter into a purchase and sales agreement.•  Has Fannie Mae fixed everything in the house? Fannie Mae may make some repairs to properties to increase their marketability; however, the buyer should be aware that other repairs may be needed. Fannie Mae sells each property “as is,” which means that the buyer accepts the property “as is.” Fannie Mae is not responsible for fixing any problems after settlement. Even if the house has fresh paint, brand new carpet, new appliances, perhaps even a new roof or siding, it doesn’t mean everything in the house is new, or even works. Fannie Mae does not warrant or guarantee any work that may have been done on the property, whether as part of its efforts to sell the home or pursuant to conditions in the purchase contract. Where a home warranty is available, you may wish to buy it at your own expense. You should also consider hiring a qualified professional to inspect the property, whether it has been repaired or not. Hiring a home inspector is a recommended practice, no matter what type of home you buy.

•  What can you tell me about this house? If Fannie Mae knows of any hazards on properties we own or market, we disclose this information through our real estate listing agents. However, we may not have been informed by the previous owner of all hazards. We encourage you to have the property inspected by a professional before you buy.

•  What type of sales contract does Fannie Mae use? Fannie Mae uses a state-specific real estate purchase contract and a real estate purchase addendum for our properties. If there is anything in the document you don’t understand or aren’t comfortable with, you may want to contact a real estate attorney, the real estate sales professional who has listed the property, or any real estate professional of your choice to review these documents with you.

•  Do I have to use Fannie Mae’s selected title, settlement, or escrow companies? No. You may designate the title, settlement, or escrow company of your choice, subject to the terms of the contract.

•  Will Fannie Mae accept an offer contingent on the sale of my house? No, Fannie Mae will not accept offers contingent on the sale of your current home. Other types of contingencies will be considered on a case-by-case basis.

•  Why does Fannie Mae require a lender’s prequalification statement before negotiating a home purchase offer? Fannie Mae wants to be sure that prospective buyers will be able to complete the sales transaction, including obtaining financing when needed. Prequalification allows you to see how much house you can afford and the mortgage amount you may be able to qualify for before you make an offer on a home. It also helps you focus on homes in an affordable price range. A loan prequalification doesn’t mean your loan is approved. You must apply for a loan separately, after you are prequalified and your purchase offer is accepted.

•  Does Fannie Mae provide special financing? Special financing is available on many properties through HomePath Renovation Mortgage.

•  Can I buy a house directly from Fannie Mae without going through a real estate sales professional? No. Fannie Mae depends on the expertise of local real estate sales professionals and accepts offers only through our real estate listing agents. You may work with any real estate sales professional to submit an offer to the real estate agent who has listed the property.What happens if Fannie Mae gets more than one offer? All interested parties may be asked to submit their best offer in writing though the listing agent no later than a specified date and time. Fannie Mae may accept or provide a counteroffer that we determine to be in our best interest. Fannie Mae is not obligated to accept any offer submitted.

General Mortgage Lending Terms
(Underwriting conditions may change on a per transaction basis)

30 Year Fixed & 30 Year Fixed with 10 Year Interest-Only Option
3/1 and 5/1 LIBOR ARM & 3/1 and 5/1 ARM with Interest-Only Option
Property Type	Max LTV	Max CLTV	Min Credit Score	Notes
1-2 Unit Primary Residence	95%	95%	660	1 Unit Warrantable Condo Pud
	80%	95%	580	1 Unit Warrantable Condo Pud
1 Unit Second home	90%	95%	660	1 Unit Warrantable Condo Pud
	80%	95%	580	1 Unit Warrantable Condo Pud
1-2 Unit Investment property	90%	90%	660	1 Unit Warrantable Condo Pud
	80%	90%	580	1 Unit Warrantable Condo Pud
30 Year Fixed & 30 Year Fixed with 10 Year Interest-Only Option
5/1 LIBOR ARM & 5/1 ARM with Interest-Only Option
Property Type	Max LTV	Max CLTV	Min Credit Score	Notes
1-2 Primary Residence ONLY	97%	105%	660	1 Unit Warrantable Condo Pud

Slow weekend for real estate info!

I am kicking off a new expired listing campaign. I ramped that up starting last Thursday, and have been systemetizing my expired listing system so it is easy to maintain over the long haul. EVEN SO, I still managed to catch up with about 3 weeks worth of IBJ(Indiana Business Journal), and 2 other magazines… What did I learn and feel like sharing? Not a whole heck of a lot….

Basically most of the articles I read in/on IBJ, or NAR(National Association of Realtors) all state the same thing… 2007 was in the top 5 for real estate sales(existing homes), but paled in comparison to 2006. They all seemed to say that 2008 will be the recovery year, and we will probably not see sales numbers higher than 2007 this year, BUT they look for 2009 to start climbing again. Far cry from the doom and gloom we normally hear!

Lot of investor articles cited “NOW IS THE TIME TO BUY!” over and over.. But they all stress you need to research homes before you buy.

Had the family over last eve for dinner, and my sister(in the event planning field), and I did a bunch of k’bitzing about all the people who are thinking about selling their home, but want to wait til spring(March 1 or later) to list… These people don’t seem to realize that there is going to be a ton of houses coming onto the market then, and it’s going to be VERY easy to get lost in the shuffle….

Sis and I were also laughing at the number of people who are pipe dreaming on what price they will get for their house. She just recently sold her home, and houses that are on par with hers, are asking 400-800k more than she asked for and received… Guess that’s why she sold, and they haven’t yet…

I have had a couple of listing appointments with people that I ended up turning down because the sellers had unrealistic expectations.. I don’t blame them for wanting the most money they can get, I want them to get all the money they can get as well. I do work on commission remember?!? /tease Some agents will over promise and under produce. I prefer to show the client the facts of the matter and not waste their time.  Who wants to keep their home spotless for 6 months to only expire, and not sell?!?

That said, I am glad I have a 190 step marketing strategy for all the homes I list. My listings will have the greatest chance of not being overlooked. I dont believe in the 3-P’s of real estate(Place a sign in the yard, place it in the mls, and pray is sells). I am ALL about the active marketing.. Side Note: I decided on a domain name for my mobile listings. IR4SALE.mobi… People can dial that up on their cell phones as they pass my listings to get better views of the interior of the home.

What else is going on… Oh, I am trying to abuse one of my investor clients to make him pay for me to go to a property management class.. hehe  I do sooo much research for him on properties, that I am playing the U OWE ME card.. hehe We’ll see if he falls for it though.. hehe

Oh well, if you like what I write, and want to refer a friend or family member to me(Even if you live out of state), then send me a note and I will do my best to make a recommendation of a good Realtor. Who knows, maybe Ill get a referral fee!

Should you buy a home in this market?

This is a great time to buy a home, but let’s put a caveat on that statement… DO YOUR RESEARCH ON WHAT YOU ARE BUYING!!! I know this is tough, but DO NOT get emotional towards the purchase of a new home.

When I am working with buyers, and we have narrowed it down to 1-5 houses, I pull a bunch of stats on the house(s)..

1) Taxes – Are there any exemptions we do or do not qualify for that could affect our taxes?

2) CMA – in the CMA I look for average price for the neighborhood, based on numerous criteria(e.g.-Sq Ft, Bedrooms, bathrooms, yard size, etc). I pull stats for the past 3-12 months. Anything else is to old in this market. Ideally you want 3+ homes for comparison in each of your categories. If you are having trouble finding 3+ comparable properties then that means your SnD is going to be skewed.

3) SnD(Supply and Demand) Analysis – I look at how how many houses are selling a month in this neighborhood/area. What their average DOM(Days On Market) is. Is there a lot of foreclosures/bank-owned homes. What’s the competition to this house. Don’t buy the Specialty houses of the neighborhood unless you are fully aware that it’s going to be tough to sell on the back side.

4) Find out if any major changes to the area are going to affect property values, zoning, etc in the near future. You don’t want to move into a house and 3 months later the city is telling you they are going to take your back yard to widen a street, or extend the local airport….

You need to do your research on homes. I try to think worst case scenarios: If I need to sell this house in a week, am I going to be able to get my money back out of it with minimal loss?

Other things I encourage:

1) I try to convince people to not get emotional about a house.. If the facts are telling you the house is only worth 100k, dont pay 125k for it.. That being said, dont be afraid to pay a “little” more if it’s what you want! Just make sure you realize that “I am paying more for this home than I should, so I might have to eat that extra money at a later date!”.

2) Don’t go for a house that needs a ton of repairs, unless your price on the home is going to cover said repairs(and then some). Inspections do wonders for making you realize the problems a home may have. Banks don’t generally like homes that need repairs. Be aware that in some cases, they might require that the home be fixed before closing.

3) Realize that small things can be major.. One of my clients who completes flips bought a house on a highway. There is a 20′ sound wall, that can not be seen through the 30-40′ evergreens, and you can’t hear it when you’re inside the house, but he is having a heck of a time selling the house….

4) Ill say it again, consider the worst case scenario of having to sell the house in a week. Will you be able to sell the house with minimal loss in money, time, and hassle?

Hope some of this helps! Personally, I think it’s a great time to buy real estate. If you REALLY read the doom and gloom, you find holes in the articles. I read an article talking about how bad my market is, and then they said “Average sale prices have fallen 1-2%”.. Ummm, So if I had a 100k house a year ago, it’s only worth 98k this year?!? Oh the HUMANITY!!!! /sarcasm off. Now granted that doesn’t meet the 5% appreciation we are supposed to normally gain, but IMHO give it a year or so, and it’s going to turn around… No offense, but if you follow my rules above, you are still way ahead of the game…

Like some of the information I write(or shamelessly steal) and want to donate to the cause? Have a friend or family member looking to buy, sell, or invest in real estate? Then refer them to me. Even if you are in another state, I can find a good real estate agent to help them and I might get a referral fee! Free to them, and I might get to put food on the ole table and fatten my kid up!

Don’t believe all the bad press.. Make your own INFORMED decisions.

I am hyper-alert to news about real estate. When some piece of news comes out and talks about real estate, my ears tend to perk up. Recently I(and you) am constantly being bombarded with what I feel is doom and gloom about real estate.  Nine times out of ten, I can pick the story apart before they even get to the end of it…

I live in Indianapolis, and we were rated #1 least over-priced major city in the country. I want to say that was in a Fortune or CNN Money Article.. I was sure I had blogged about it before, with linky goodness, but cant find the article now… Regardless, my point is, we are constantly being given facts that the market is horrible. Yet when you listen/read to the full article, you can hear that most of the data is pertinent to other parts of the country which are having problems….

I am not trying to bad mouth certain parts of the country, but I almost moved to the san francisco bay area, and I just couldnt understand how someone making 30k a year could live in a $1600.00 a month studio apartment, until I found out he had room mates.. hehe San francisco is great, I loved it, but I decided I didnt want to be house poor, so I didnt take the job. I can easily see how that area could be having some serious price shifting. Correct me if I am wrong, I pay more attention to the midwest pricing.. hehe

This is a pretty detailed example, but it gets to what I am talking about.. You have to look at the facts, and not skim read and assume…. It’s like a neighborhood I went to look at yesterday for a listing appointment.  This neighborhood sells 12 homes a year. The homes range in price from $209,000 – 745,000. Can you already see a problem when it comes time to average out a price to sell your home for? The average sale price for a 4 bedroom home was 376k, but when you look, the cheapest 4 bedroom was 250k and the most expensive was 509k.. WHAT?!?!?!? No wonder the averages are screwed up..  When it boils down to it, I actually only find 3 of those 12 properties that are worth using as a comparison.. so now we are down to 3 homes sell a year, and it’s no wonder this house has been on the market for a while..

Sorry for the mumbo jumbo…  Basically, PERCEIVE the news for what it is… Understand that people(reporters) can be biased, and headlines sell papers… It’s like a car accident you just cant turn away from.. Doom and Gloom sells!! hehe READ the articles, and dont put a lot of faith in the headline…  I know I know.. tough to do, and we all have the best intentions and are always in a hurry.. hehe

Houses are always going to be selling.. People get relocated, people downsize, people just get tired of living where they are living… Do you remember when interest rates on mortgages were 10+%, and you had to pay massive amounts of points($$$$$) to buy or sell a home? I barely do, but people were buying and selling then…. This is a great time to buy.. DO YOUR HOMEWORK, or have your agent do their homework, and you will be ok!

Like some of the information I write(or shamelessly steal) and want to donate to the cause? Have a friend or family member looking to buy, sell, or invest in real estate? Then refer them to me. Even if you are in another state, I can find a good real estate agent to help them and I might get a referral fee! Free to them, and I might get to put food on the ole table and fatten my kid up!

Real Estate Auctions – Are they a deal?

Disclaimer: I have been delaying writing this article, because I was looking for my source article. I cant find it, so A) we are going from memory here(which aint always that great) and B) Take what I write with a grain of salt because of A.

Few weeks/month ago I was reading the IBJ(Indianapolis Business Journal) and I read an article where they talked about sherriff’s sales and or lender auctions. I forget the exact numbers, but it was like 800+ real estate properties go to auction each month, but only 7 of those actually sell.  The reason being the banks dont want to let them go that cheap, so they put a reserve on the auctions, or pull the auction at the last second. The article talked about seasoned auction buyers saying “You can spot a lenders hidden bidder because they bid in increments of thousands or 10’s of thousands, instead of lower amounts”.

Another thing this article mentioned was that a lot of houses are sitting vacant and not being offered because lenders dont want to flood the market with properties. I dont know if this is true or not, because everytime I have seen a property that was vacant, when we asked about said property it generally was a property the lender “forgot” about. Within 1-3 months said property was on the market. Generally, within days you would start to see activity on the properties(winterizing, inspections, etc). Now some people could say that the lender conveniently forgot about it, but I would tend to think it got lost in the paper shuffle, and only when we called on it did it surface. Believe me, most of the people working at these lenders arent too worried about one more property selling or not selling.. hehe My experiences have been most lenders are extremely slow to respond to any inquiries into their properties. Heck, it can take 1-2 weeks just to get a yes/no on a cash offer.

In my past experiences, it takes 85-92% of list price in order to secure a property when a lender is involved. When I say “secure” I mean in order to get the lender to accept your offer and for you to be able to go ahead with the inspection/etc… We have all heard these stories about 50 cents on the dollar, etc.. I have not seen those deals, only heard about them. Most of the time you need to play the waiting game for the lender to reduce the price enough so you can secure it in the 85-92% range, and over the past month, I have had multiple instances of multiple offers for lender owned properties… What does that mean? Welp, there is a lot of people looking to buy those lender owned properties and when they get low enough in list price, a lot of people are making offers.. hehe

I did find one article about west coast properties. It basically shows what I am talking about above… “664 foreclosed homes went to auction, but only eight were sold to bidders. Lenders took back 656 houses with unpaid debts of more than $245 million. “

How much would you be losing currently if you were a real estate investor?

Lee’s Notes: I found this article interesting and wanted to share. 

(SNIP)

“How much have real estate investors lost due to the housing market bust?”

That was the question posed to me by a major evening news producer, who wanted to depict the pains in the housing market during a nationally broadcast show.

Hmm. An investor who bought a property in Las Vegas five years ago would be ahead by $150,000 today. The gain would be $200,000 in Miami, and $54,000 on average in the United States as a whole.

Only people who bought in a few markets that experienced extreme overheating during the boom and who are trying to sell quickly face a potential loss. And that loss on average would be 1 percent to 2 percent.

Lenders and hedge funds with large exposure to subprime loans have lost big. Investors in homebuilder stocks also have lost.

But real estate investors who plan to hold for a reasonable period of time are doing fine.

To be sure, buyers who entered the market during the height of the boom might see a modest retreat in appreciation as a loss. That’s the nature of the human mind. A gain of $190,000 in Miami will feel like a loss if two years ago their property could have fetched a gain of $200,000.

Yes, there is pain out there. Foreclosures are rising and construction workers are getting laid off. Income of the typical real estate professional has been falling as transaction volume slows.

But consumers who are in housing for the long term are poised to come out well ahead. That $10,000 they invested as a down payment on their typically priced home for the typical 5 percent annual appreciation will net them $110,000 over 10 years. That’s what the power of leveraging means to them.

That same $10,000 invested in stocks appreciating 10 percent annually will return $23,600. No wonder the Federal Reserve Board consistently finds a staggering difference in average net worth between home owners and renters: $184,400 vs. $4,000.

As it has always been, housing is our bedrock investment. It will continue to generate a nest egg for us long after we’ve turned off the television and forgotten what was said in the sensation-seeking story of the moment.
(/SNIP)

Original Article

What are my options if I owe to much on my home.

I see a lot of people who got caught up in the refinance craze. They owe way too much on their home. I end up having to turn them down on listing their home because it is not a win-win situation for both of us.. Sure I would get to put a sign in their yard and get the free advertising, but this really isnt doing the right thing by the client.

Here are some of the options available to people who owe to much but want out of their house. 

1) Put it on the market at the price that is going to net you the amounts you need. – Unfortunately, the odds are that you will be on the market for a while, and this will have a negative impact on your property.

2a) You could go for an option contract – Option contracts usually work on the principle of the person putting money down(ideally 10%) and then paying you a monthly fee for X years(ideally 1 year). Then at the end of the term, they come up with financing for the remainder of the loan. This is pretty much where you are their lender for the term until they can get better financing. 

2b) You agree to a sale price on the home and rent/lease them the house for 1-2 years. At the end of the 1-2 years they have to come up with financing to buy the home. You keep the rent/lease payments they made over the past 1-2 years, and they come up with a loan for the full amount at the end of the term. Good for them, because they will hopefully take advantage of the appreciation of the property. Good for you if at the end of the term they decide to go elsewhere, you get to reap the benefits of the appreciation and you hopefully got a bit of extra cash each month over the term. 

Side note: in both 2a and 2b, you could raise the rents and create a downpayment fund for the buyer. Say if you would normally lease for $1000 p/month. You increase the rent to $1200 p/mnth and at the end of the term you would give them the money back towards a downpayment(1 year = $2400, etc). You could keep the interest, and this helps people who could never build up a downpayment on their own.

2c) You rent the house out. This is the least favorable of the 3 options, because your tenants really have no interest in the home, nor do they have an investment in it.

Depending on where your home is, you may be able to apply for section 8 housing, which is a qualification where the govt guarantees rent for low income housing.  I am not versed in how section 8 works. You would need to go to the source to find out how section 8 works. I have heard a rumor that if the tenant causes damage to the house, then the govt will pay for repairs, but I dont know how true that rumor is.

3) Stay in the house and put as much money as is possible each month towards your principal.

4) Try and work a short sale with the bank, or go into foreclosure on the house – Unfortunately, This can hurt your credit rating for 3+ years depending on the lender.  Be aware, some lenders consider a short sale the same thing as a foreclosure.

As to what lenders think about renting/leasing: If you have a signed documented lease, most mortgage companies will consider that as income, and loan accordingly. The lender I spoke with stated that if you were renting/leasing the house then they would consider that when it came time to finance your next home.. Basically, they take 75% of the monthly payment you are collecting and put that against your first and second mortgage payments. So if 75% of what you are charging for rent is equal to what your existing first and second mortgage payments are, you would have nullified that payment out of your budget..

There is one caveat, and that is if you currently have a FHA or VA loan on your home, you would not be able to get another FHA or VA loan on the new home.. Hope that makes sense.

Hopefully the above info is helpful. Obviously each situation is different. You will need to analyze your own situation and come up with the best solution.

What do you do if you owe more than your house is worth?

What do you do if you owe more than your home is worth? Sometimes your bank will work with you to sell your home for less than you owe on it. These types of sales are called a “Short Sale”. Each lender is different in how it qualifies/works with short sales. Here is a short checklist to see if you might qualify for a short sale.

Step One – Verify the value of your property. If you are selling the property through a real estate broker, your broker will provide you with an estimate of market value. If you are selling the property yourself, do your own market analysis of the area and your property.

Step Two – Add up all the costs of selling the property. If you are using the services of a real estate broker, the broker will provide an estimate of closing costs. If you are selling the property on your own (for sale by owner), call a local title company or real estate attorney and ask, as a seller, what the closing costs will be.

Step Three – Determine the amount owed against the property. This will be the total of all loans against the property.

Step Four – Do the calculations. Subtract the total amount owing against the property from the estimated proceeds of the sale. On a short sale, this will be a negative number.

Step Five – Contact the lender or lenders. Talk to someone in the customer service department and tell them the situation. They may direct you to a specific department. Talk to a supervisor or manager if possible; this person will have more authority.

Step Six – Ask the lender what its procedures are for a short sale. Some lenders are willing to work with you by reducing the amount owed or making other arrangements. Others will look to the agents involved (if any) or anyone else who’s making money off the transaction to see if they are willing to make concessions to make the transaction happen. Still other lenders will tell you that your debt is your responsibility, one way or the other.
Step Seven – Sell the property.

Original article

4 Types of buyers when selling FSBO(For Sale By Owner)

Thinking about selling for sale by owner? Hey, nothing wrong with trying to sell it yourself, and yes, I am a realtor, and no, not all realtor’s eat their young! Although mine would prolly be good with a zest of orange, but I digress… I was at a seminar and heard this statement: There are basically four types of buyers in the market currently.

First type of buyers is The Relocation. These people are being relocated to Indianapolis, and are in a hurry to find a house.

Second type of buyer is The Just-Sold-Their-Home types.. These people just sold their home(Yes it happens currently!) and need to find a new home in a short amount of time. They do not want to complete a double move or pay enormous rates to stay in their current place.

Third type of buyer is The Invester.. These people want to buy your house for pennies on the dollar. I work with a few investors, and they will write you a low-ball offer and walk away if they don’t get the house. It’s a numbers game to them, and it isn’t meant to be offensive.

Fourth type of buyer is The Lookie-Lou’s or Tire Kickers.. They just want to see whats in the market and if they are interested in your place, they generally have to sell their own home, or aren’t really in a position to buy.

Now looking at the 4 types above, which do you think use a real estate consultant and which are interested in For Sale By Owners. The first two are predominately going to use a real estate agent. They are in a hurry, and don’t have time to wander Fishers, Geist, Carmel, Greenwood, etc looking for a home.. The investor might use an agent, or they might not use an agent. The Lookie-Lou’s, well they are going to waste your and a realtors time. Most realtors try to weed these out the quickest…

Just as an FYI, I try to keep For Sale By Owner homes in my list of options. I like to preview FSBO’s and take notes of said home, so that if my clients have a specific need, then I can point them in the right direction. Someday soon, I hope to have an online list of FSBO’s just to help people out. Why would I do that? Well, quite honestly, I am trying to help my buyers get the home they want. Also, maybe the person selling their own home will use me to buy their next home, or will recommend me to someone else. It’s a win-win in my mind.

Couple of tips you might want to consider. Find a realtor you like and ask them if they will help you while you try and sell FSBO. Ask them if you can give them a list of people who come through your home(showing,openhouse, etc) and have that agent call those people to get feedback on your home.. You get honest feedback, and the agent possibly gets a new client. It’s a win-win for both you. You will need to try and figure out how you want to handle compensation should one of those people actually want to make an offer on your home. I generally offer to stay out of the way if the buyer wants to make an offer, or offer a discounted rate to the seller(where the buyer wants me to represent them because they dont feel comfortable with all the paperwork,etc).