Real estate problems (Orlando: mortgage approval, credit rating, lawyer)

[AONE]

Hey I am a real estate broker, if you didnt guess. As I drive though town like everyone else I see a myriad of disposable signs advertising all sorts of things. Here is an example, it was talking about an investment home for sale. I work to stay knowledgeable and see what's going on and validate to see if there is something useful for one of my clients. Here is what they told me. They are a group (LLC) that sells real estate, they are unlicensed , don't have a web page and won't send emails of what they have. The woman told me an address which was near so I drove by. She also told me the properties were not listed. What I found was a home that indeed was listed. I went tot he MLS and found it is in pending status. What they are doing is contracting the home for a small amount of money and then selling it (or trying to) for the list price. In other words they are flipping, the pre-sale it and have a dual close at the same moment in time and they get to walk away with a profit.

For an investment it isnt a bad way to do it, other than sellign RE without a license is a rather serious offense. Here is the issue you as an unsuspecting buyer may let them show you the house and you don't realize they don't even own it. If you want a house why not buy it and you get the discount?

Another sign talks about "stop foreclosure" or they will buy your house for cash... These aren't too different than the other. they try to presale the housoe and get you to agree to a very lower price where they take your equity.... some realtors do this and I find it is a little dishonest and not looking out for th e clients best interest.

Here is my concern people that are in the market are rarely savy enough to know how they are being taken advantage of. I'm sure people call on these signs all the time because they look like such a good solution.... but they never are.

I can't speak for what other agents do but for me I want to find the best deals possible and make them better. if I save you 10k on a property the amount of good will created will far exceed the $300 that reduction cost... It is always better to do right for the client, your income will take care of it's self.

I feel for people especially now when they try to get out of a mortgage issue and call one of these theives instead of someone that will have their best interests at heart. There are many things someone facing foreclosure can do and speaking with agents, loan experts or attorneys may yield better results than people that jsut want to take your equity.

Short Sales are an option but the loan must be forgiven otherwise the bank will stay on you.... (not good) Mitigation is a really great option as well.

As a broker I see many ways to help people and want to do it but I cringe when I see these signs and think about all the unsuspecting people that have no idea.

If you have a foreclosure issue, need to sell, want to buy a bargain home... contact a realtor you trust and give them the goal and let them help you. It is what we aim to do. If you try the go it your own way, then be aware. there are some people out there that will take advantage of you.

This is my simple effort to educate the masses to a problem I know exists. I hope it at least makes you aware. Good Luck.
Ken

[cfIfan]

Nice advert sorry meant post....;-) What alot of people dont realize and its simply because it has been drummed into them is that short sales and foreclosures are not the best deals, and i have been saying this for along time. These homes are not always in great condition especially if they have a pool. If people have got into this situation then they will have a whole litany of liens against the property which the buyer will need to pay to transfer title, and when you take all this into account, there are alot of motivated buyers out there who are flexible and will come in alot lower than what would be paid for those homes. The only time you will get a good deal realistically is at one of the huge auctions where banks sell off properties as although they are as is, you can inspect them but they come with a clear title. However, with the proposed bail out plan you wont seen banks writing off homes because that is why the Fed is holding them so that they can in the future sell them at a profit to get the tax payers money back.

Realistically however i do agree with AONE (even though we have disagrees in the past alot and that was only about investors still making money because reallly that isnt true), but i would suggest to people considering selling that you can either get a realtor who is going to work his socks off for you, or alternatively, if at all possible financially for you, stay in the home, maintain your payments and wait. Alot of people may not be able to do this but there are a number who can.

Good luck

[Parrotrosie]

Well, maybe this is the place where I can ask/get some clarification then...

We are considering a move to the Orlando area, and it seems all the on line listings (or at least 80 percent-ish) are short sales, bank owned, or pre-forclosures. I am not one to mind waiting for the bank to OK a deal...and it was my impression that a short sale, was when a buyer made an offer on a property and it was the sellers bank's perogotive to approve the offer or reject it, but that if it was approved , then it came with clear title.....

You are saying then, that this is not, or not necessarily the case? Are there time where this may be the case?

My personal situation is about 100k equity in my current home, no credit card debt, small balance left on one car load, and excellent credit rating, so I don't feel mortgage approval is at all an issue,...so I am a little confused about how the short sale/ other stuff works...thanks!

[cfIfan]

A short sale is as you think it is, but this only deals with the debt for the mortgage. A bank may accept an offer for full and final settlement of the mortgage. But regardless of what most realtors tell you 9/10 times if people are not paying their mortgage then there will be other debts against the property. If they are so far in debt to sell their property through a short sale then they cant afford all the other debts attached to the homes such as taxes, HOA etc. This isnt in all cases but in the majority of the cases. There are a great many motivated sellers who are not in short or foreclosure. In fact, you will find that most builders are offering competetive pricing on brand new homes. As a realtor who has worked on many shorts and foreclosures and refuses to do it anymore i would recommend shopping around. Also keep in mind searching online will not find every property out there. For example my website which offers a search like all others out there will not show you every home. The reason for this is as realtors we spend a small fortune to subscribe to the MLS. The MLS only publish a small percentage of homes online. People complain about realtors but we make a large investment ourselves each year to be able to have access to almost 100% of homes on the market. the only homes we dont have access to are FSBO's. If you are looking for a deal the best way is still to use a realtor. It costs you nothing to use our services and we work to get you the best deal. If anyone else tells you differently its because wither they didnt do their homework and interview realtors first, or thought they could do our job and ended up getting cheated. I cant tell you the number of people i have searched for properties for, they have cut me out of the deal, used the listing agent and got screwed and came back to me to complain, and i have to tell them im sorry, you didnt use my services, thought you were saving money but the realty of the situation is it cost them alot more for no saving.

Good luck

Originally Posted by Parrotrosie

Well, maybe this is the place where I can ask/get some clarification then...

We are considering a move to the Orlando area, and it seems all the on line listings (or at least 80 percent-ish) are short sales, bank owned, or pre-forclosures. I am not one to mind waiting for the bank to OK a deal...and it was my impression that a short sale, was when a buyer made an offer on a property and it was the sellers bank's perogotive to approve the offer or reject it, but that if it was approved , then it came with clear title.....

You are saying then, that this is not, or not necessarily the case? Are there time where this may be the case?

My personal situation is about 100k equity in my current home, no credit card debt, small balance left on one car load, and excellent credit rating, so I don't feel mortgage approval is at all an issue,...so I am a little confused about how the short sale/ other stuff works...thanks!

[Parrotrosie]

Thanks for that clarification...and I agree with you. I have a real estate agent myself here, and I am well aware of the benefits of having a 'buyer's agent'. It is many! I want someone in MY corner working and looking out for my best interest, and I do have your name (along with several others...lol) - aparently this message board is rich with real estate agents, that I do plan on contacting when I am ready to do some serious work and finding someone to be in my corner should the time come that I know I will be moving Thanks for the heads up there, I didn't actually think about the fact that there could be other leins on a home...I should have , actually tho.... Title searches should reveal that, but I suppose you are well into the process by then and may have lost substantial monies at that point also....

[cfIfan]

This is half the problem and you are right. By the time a title search has been run, you already have invested deposit money, various inspections. A title search is only run when the property is in the hands of the title company, you can pay to have this done, but it is not cheap.

I can only stress to people reading these threads that regardless of what people say shorts and foreclosures are not a good investment, and also consider, if the bank is happy to sell at a great loss to themselves, then why are they happy to do this. its usually because there are other issues which will cost them alot in the long term.

[tworent]

Even though I do not I think if you are selling your house a good agent has a place the problem is finding a good one not someone that jumped on the band wagon when the market was hot

I myself would not use an agent to buy a house how can they help negotiate price when they work on commission it is a conflict of interest. If you do use an agent ask to be in the room when they present the offer if they say no get a new agent because that one is hiding something. The best thing to do is find a real estate attorney they work on a fixed price some have a Title Agency in house someone that went to school to study contracts and law for 8 years not an agent that went to school for 5 days. No I’m not a lawyer or an agent just a landlord that buys and sells more houses then most full time agent could hope to.

Buy the way all the signs you see are from people that are called wholesales some are bottom feeders some are good people that can help when someone needs that extreme help.

bob

[Parrotrosie]

I don't think the fact that a buyer's agent gets paid for the work they do is a conflict of interest....don't we all get paid? Some of us even get paid a bonus...more money for better work...

An agent gets paid ONLY if a deal is struck. Seller's agent only if a sale is made and the seller is happy, and buyer's agent, only if the buyer is happy. If both parties cannot agree (translate -both parties are NOT happy, or disagree) then no one get paid at all....why would an agent want to work and not get paid?

Therefore, the agent's job is to strike a deal that is fair, legal, honest, resaonable, and agreeable to BOTH parties in order to get the papers signed and the house transferred. As a buyer, my agent' s job is to search for a house that fits my criteria first , and then, to strike an agreeable deal. First to find such a home, and then to protect my legal interests, and lastly, get me into said house. Just my two cents. I don't really feel there is a conflict. Of course, one should interview and talk to several agents, just like any other person you hire, there are many levels of ethics and professional behavior out there

[AONE]

Originally Posted by tworent

Even though I do not I think if you are selling your house a good agent has a place the problem is finding a good one not someone that jumped on the band wagon when the market was hot

I myself would not use an agent to buy a house how can they help negotiate price when they work on commission it is a conflict of interest. If you do use an agent ask to be in the room when they present the offer if they say no get a new agent because that one is hiding something. The best thing to do is find a real estate attorney they work on a fixed price some have a Title Agency in house someone that went to school to study contracts and law for 8 years not an agent that went to school for 5 days. No I’m not a lawyer or an agent just a landlord that buys and sells more houses then most full time agent could hope to.

Buy the way all the signs you see are from people that are called wholesales some are bottom feeders some are good people that can help when someone needs that extreme help.

bob

Bob,
I can't speak for all agents but here is the way I look at it. say a house is an ask price of 200k and they pay 3% commission. that would be $6k now, I come in and get you that house for 175k and save you 25k... I lose $900 but I gain a $25,000 client. and you will tell your friends I treated you well. That is always worth way more than the "lost" commission because I did my job.

Not using an agent doesn't save you money but not using one can certainly cost you, in terms of negotiations, inspections and assessment of the deal. I have a buyer/ investor like yourself that had his formula as to what he looked for. When he used my eyes we were able to increase the number of offers from 3 to a few hundred. There are many reasons as to how agents can help... even investors.

[cfIfan]

I have had this discussion with two rent on numerous occassion but there is very little point as he/she is anti realtors. Why no one can possibly fathom, perhaps they had a bad experience in the past who knows. All i know which is what i have said in the past and that is if you take into account what AONE said and then consider using a real estate attorney as two rent suggests on the other side you pay out of pocket per hour for the attorney who realistically cant and wont offer the same level of service as the are real estate attorneys who dont specialize in specific geographical areas and who make their money by charging you by the hour and so will string out the whole process.