Bad Rap on Land Trusts

Land trusts have existed since the Roman times with their clearest history being from the time of King Henry VIII.

While real estate demand as of now seems to buoyant in the residential space and is likely to gather momentum, is it significant? Says Sanjay Dutt, CEO, Business Jones Lang LaSalle Meghraj, a realty consulting firm, ?The slowdown hit the property market shortly after the Navratri-Diwaly season in 2008 after registering the usual 30-35 per cent upsurge in real estate project sales typical

With current economic conditions, real estate investing is a precarious venture. Between skyrocketing unemployment rates, foreclosure and bankruptcy filings, few people can afford to take the risk of investing in real estate.

Previously, real estate investing was considered one of the most secure and profitable investment practices. Today, there is a gigantic question mark above real estate and financial investing opportunities. In order to profit, investors need to thoroughly understand market conditions and become savvy with financing options.

As real estate prices continue to decline there are numerous opportunities for profit. The best way to uncover hidden gems is by taking time to conduct research and attend real estate investing seminars.

Educational seminars are offered in most cities and towns across the country. The Internet provides a wealth of learning opportunities where classes can be attended in the comfort of your home via webcasts or by purchasing seminars presented on DVDs, CDs or audio files.

Investing seminars can help participants determine which type of real estate is best suited for their financial situation and management ability. Investment properties can range from single family dwellings to commercial endeavors such as retail outlets or office buildings.

Many real estate investors engage in joint ventures to purchase commercial real estate. Newbie investors would do best to engage in small joint venture projects until they obtain sufficient experience. Investing in commercial real estate is an entirely different ballgame and involves a wide range of legal procedures not typically associated with residential properties.

One popular investment technique is purchasing real estate for the purpose of house flipping. Flipping houses involves buying distressed properties below market value, rehabbing the home, and selling it quickly for profit.

Distressed properties can include foreclosure or bank owned homes, short sale real estate, and probate properties. Rehabbing distressed real estate oftentimes creates numerous unexpected expenses. It is imperative to conduct due diligence and obtain a professional property inspection prior to presenting a purchase offer.

Short sales are rapidly becoming a popular investment choice. Mortgage lenders engage in short sale transactions when borrowers are facing foreclosure and owe more than the appraised property value. Banks will accept less than is owed on the loan if the borrower is able to sell the property quickly.

Short sale properties are sold through the loss mitigation department of the originating mortgage lender. Buying short sale real estate can be complicated and time-consuming. It is best to work with a realtor or investor experienced with the short sale process.

Wholesale real estate is one of easiest and most profitable forms of real estate investing. Investors purchase properties at wholesale cost and resell in “as-is” condition. Investors who engage in wholesaling typically purchase bank portfolios consisting of multiple properties. Oftentimes, these properties can be bought for as little as sixty cents on the dollar.

Real estate investing offers an abundance of opportunities to profit. However, investors must develop a solid plan which includes short and long term goals. Investors can improve their chance of success by networking with real estate professionals including attorneys, lenders, brokers, real estate agents and other investors.

It is undisputed that the real estate company is a thriving industry in the world. It opens up new opportunities to succeed than it is more suitable for beginners and experienced real estate investors. When the current economic situation in the housing market is a big part of investors interested in buying the technology investment property short sales. And if to be located, and I would like to make the name of the real estate market, it is necessary to know the short sale software — the final real estate investing system ever created. But first, let us know what is a short sale and what makes it a win-win-win strategy for real estate?

In real estate, simply, a short sale is when a bank or mortgage lender agrees to discount a loan balance due to economic or financial difficulties are part of the lender. Banks often have a short sale if they believe that they lead to less loss and not to leave the property or resort to foreclosure. The owner or the debtor’s estate passes under the balance of the loan, and the proceeds of the sale to the lender to give full satisfaction of debt. In such cases, the creditor the right to accept or reject the proposed sale. In short, the short sale is nothing more than negotiating the lien holders of the final solution is less than what they are owed, or rather a sale of the debt, usually a piece of real estate, short of the full amount of the debt. As the closure is high, the short-selling is still a popular real estate investing strategy.

Short sales technique may be the quickest and easiest way to start, if the objective is on the way Real Estate Investing for prosperity, but it gives a lot to learn, hard work and time that can be profitable investments in the success. This means that to know the right techniques and strategies used to build a successful business is very important.

Real estate investing is relatively straightforward and you can easily make a fortune if you hit it on target. Moreover, real estate provides a bigger profit potential but some risks are involved which calls for careful research and knowledge about the business. There are actually various methods and real estate investing strategies that thousands of real estate investors have tried to use just to succeed and get ahead in the business and doing short sales is just one of them. Some investors have never go about working on a short sale and they are those who have probably had a bad experience which may include declined offers, trouble getting the seller to correspond, and delays with the mortgage companies. It may be because everything they know about short sales is absolutely untimely and incorrect.

Some of the strategies introduced by real estate gurus simply don’t work. Most of the lessons they taught on short sales may be ineffective and out-of-date. But you are about to learn how to do short sales the right way. The techniques that you are about to know are proven to work in our present real estate market. On the other hand, finding out the correct methods and following them through are significant in any business. In order for you to achieve your ends, you must know and understand how to do it properly. This is where the short sale system comes handy for every investor especially the newbie. So let us first understand the basics of short sales.

What is a Short Sale?

A short sale takes place when a bank or mortgage lender agrees to discount a loan balance due to financial or economic difficulties on the mortgager’s part. The current facts presented are quite alarming…9% of 45 million mortgages are delinquent, over 4 million people are in foreclosure and RealtyTrac says 861,664 families lost their homes in 2008, delinquencies won?t decline until at least mid 2010. A significant reduction in foreclosures will happen when and only when housing prices stop falling and unemployment stops rising. It seems that we?ve got a long, hard road ahead of us. That is unless you know how to use today?s market to your advantage. Doing short sales is nothing more than negotiating with lien holders a payoff for less than what they are owed, or sort of a sale of a debt, in general on a piece of real estate, short of the full debt amount.

As the foreclosure rate remains high, short sale continues to be a popular real estate investing strategy. That is why a lot of aspiring investors grab the opportunity on how to earn using an effective short sale system. Fortunately, there is an easy way to recession-proof real estate investing using a proven system short sale in real estate even without money, without credit, without previous experience, without dealing with banks, without talking with sellers, without talking with buyers, and without leaving your home and you are about to discover that system.

Home Foreclosures-shortsaleonlyus.com

Home foreclosures refer to the legally-supported process of re-possessing a capital investment such as a home of an individual in a case where the home or house was presented as collateral for a financial institutional loan.

In the unfortunate circumstance where the home buyer is unable to service the loan, the bank or other financial outfit may re-possess the property with a view to selling it and recovering any monies owed to unto it.

Foreclosure is a process composed of some three distinct stages.

The first stage in the process is referred to as the pre-foreclosure stage. At this stage, the bank files a foreclosure lawsuit. The stage has different names in different states; in some states, it is referred to as ?Notice of Default?, while in others, it?s called as a Lis Pendis. This is the stage when the bank gets to file a foreclosure lawsuit when a borrower falls back or defaults in payment three consecutive times.

During the foreclosure stage, the defaulting borrower has a number of options to save the situation and maintain ownership of the property:

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It is important to note that this stage is occur rent only in judicial states and not otherwise

The second stage in home foreclosure is the Trustee Sale or the Auction process. In this stage:

The third and final stage in home foreclosure is the REO stage.

REO is an acronym for Real Estate Owned. The REO stage is the third and final part of the (home) foreclosure process as obtains in a judicial state. It is the stage where the property becomes REO should it fail to sell on auction to a 3rd party bidder.

Home foreclosure is expensive business for banks. The process of home foreclosure or repossession to a bank on average costs anything from $35,000 to $50,000. A digression from core business, yet inevitable a consequence or process for a bank, you could say.

The Five Steps to a Successful Short Sale

Regardless of whether you are a home owner attempting to get out from under a crushing mortgage payment, or a Realtor attempting to assist that home owner, you’ll need to understand all the steps necessary to get a short sale accomplished.

The short sale process can be long and complicated. The following steps are the most common steps required by most lenders to facilitate a short sale. The length of time to obtain an approval on a short sale request has risen significantly over the past twelve months. Some lenders are actively telling us that they need ninety days to review a short sale request.

One of the challenges of putting a short sale together, whether you are a property owner or a Realtor, is that many buyers are unwilling to wait sixty or ninety days to find out whether or not they’ve been able to purchase a home. There are many properties on the market for sale for a buyer to choose from without having to wait, so we have to entice a buyer to hang in on the transaction.

An additional complication occurs when the home owner has more than one mortgage against the property. There may be a second mortgage that the home owner took out at the time of purchase, or there may be a home equity loan or line of credit the owner used to make some improvement, or any other lien against the property.

Requesting a short sale, in a nut shell, is finding a buyer, negotiating an offer on the home, contacting the lender, obtaining all the documents the lender requires for approval, and then staying in contact with the lender until they approve, deny or counter your proposal.

As I stress in every article I write about short sales, have an expert assist you with this process. Seek the advice of an attorney, Realtor, accountant and any other professional you might require to insure the process is done correctly, and to insure you’re making the appropriate decision for your situation.

Step 1: Contact Your Lender for Information

Most lenders will not approve a short sale until there is an actual offer to negotiate. Banks and mortgage services are typically understaffed and very busy trying to work out situations with other clients who already have offers on their properties. They don’t have the time and resources to analyze every possibility.

However, since short sale approvals are taking considerable periods of time, it makes sense to find out who you need to speak with and what the lender requires the owner or Realtor to supply. In most cases, the lender has a “short sale” package that includes a list of all the forms the lender requires.

Step 2: Market Your Property and Find a Buyer

Marketing a property that requires a short sale may also be a challenge for several reasons. First, you must notify any potential buyers that any offer must be approved by your lender. This will scare some buyers away from your home because they don’t want to wait for someone else to approve the sale. This will attract some investors who believe they can “steal” the home, because they’ve seen on late night television that banks will accept almost any offer. This is simply not true. Although they may get a very good price, they are not likely to “steal” the home in the current environment.

The components of marketing any property successfully include pricing, staging and marketing. Staging is simply presenting your property in the best possible light in order to attract buyers to offer on your property rather than competing properties. Pricing entails carefully selecting the correct asking price in order to attract potential buyers. There are methods to selecting correct price positions based on recent sales and competing properties for sale.

Step 3: Negotiating an Agreement

The typical home requiring a short sale sells for a bit less than other properties. The primary reason for this anomaly is that the buyer must have a reason to go through the pain of purchasing a home through a short sale. Historically, short sale properties sold to investors because they were the few with the fortitude to wait weeks to months to find out whether or not the sale would actually go through.

Imagine the stress of moving to a new home and perhaps a new school district. Consider the stress on your family. Now add to that stress the idea that unlike most real estate transactions, where a buyer knows within a day or two whether or not the owner will accept the offer, the buyer may have to wait several months for an answer. Worse, if the lender accepts the buyers offer, the buyer needs to be prepared to settle and move quickly.

Most buyers who are selling another home need to plan their move very carefully. They can’t rely on the hope that this transaction will settle. They need to be out of their home by a certain date and need a place to move. If they have a sixty day window to move from their home and they won’t find out a response about the short sale from the lender for forty-five days, that gives them little or no time to find another home should this transaction fall through.

Because short sale transactions are typically limited to investors and those who do not “have” to move by a certain date, the pool of potential buyers is smaller than for that of other homes. Enticing buyers to purchase a short sale home over one that doesn’t have the same challenges often requires some consideration in price.

If you’re an owner is this situation, you may be offended at selling your property slightly below market, but please consider that the lender won’t allow you to receive any proceeds anyway, so you’re not taking that direct loss.

An added complication is that many of the owners of homes requiring a short sale are in default on their mortgage or at risk of default. That means that the owner may have to get the home sold more quickly than the typical home in the area. If the Sheriff is locking the doors and auctioning the home in ninety days and the typical market time in a slow market in your area is six months, you need to be priced below the market in order to attract buyers to your property first.

Step 4: Put Together a Short Sale Package for Your Lender

Hopefully, by the time you receive an offer on your property, you’ll already have the full short sale package and you’ll have started filling it out. It is imperative to get this package to the lender as quickly as possible and then to follow up with the lender to make sure they received it and that they are processing it.

Whether you are the home owner, negotiating with the lender directly, or a Realtor or attorney attempting to work on behalf of the home owner, there is a lot of information that needs to be provided to the lender. Some of the information will have to be filled out by the home owner, because it directly involves the home owner’s financial situation. Some of the forms are better prepared by a Realtor, title insurance agent or attorney.

Although every lender is slightly different, the typical documents required in a short sale package include:

1. A Cover Letter

2. An authorization for the Realtor or attorney to speak with the lender

3. Seller’s Hardship Letter

4. Hardship Documentation – Copies of documentation related to owner’s hardship

5. Seller’s Financial Statement or Income, Expense and Asset Worksheet

6. W-2 forms for past two years

7. Two months pay stubs

8. Two to three months bank statements

9. Repair estimate for any necessary repairs to property

10. Agreement of Sale or Contract to purchase the property

11. Realtor’s competitive market analysis

12. Photos of the home (interior and exterior)

13. Seller Net Sheet

14. Payoff statements from any other lenders or liens against the property

15. Preliminary HUD 1 settlement sheet

Other forms that the lender may ask for include:

1. Title search of the property

2. Special forms

Step 5: Start Calling the Lender!

Remember that there are many people in the same situation across the nation. Lenders are swamped with phone calls and packages. When you complete the package, call and email the lender to determine the best method to get the package to the lender. My suggestion is to send it to them in two forms.

If the lender tells you they’d like the physical package by mail, then I would express the package in order to insure the package gets to the lender quickly and in order to insure it is delivered and can be tracked by who signed for it. I would additionally scan the entire package and email it to the same person to whom you expressed the package.

My goal is to insure they have the package and can begin working on it. If the lender asks the information to be faxed, which some are now doing, I would again both fax it and email it.

Expect a Counter Proposal

Hopefully the lender will simply accept the short sale proposal as written and allow the sale to be consummated. Don’t be surprised if the lender refuses the initial offer and makes a counter proposal. Should this happen, you may have to go back to the buyer and ask for more money in order to settle the transaction.

If you are a Realtor, you should be preparing your buyers to understand that this is a negotiation. The lender may accept the deal, or may counter.

Getting to Settlement

As with any transaction, title insurance must be ordered and settlement must be scheduled. In instances where an owner may be behind on their mortgage or may be considering a short sale, a wise move for either the Realtor or home owner would be to contact an attorney, title agent or escrow company to run a preliminary title search of the property. Make sure there are no other liens against the property.

Once a lender agrees to accept a short payoff, the owner needs to be ready to move quickly to complete the transaction.

Loren Keim is the author of several books including “Short Sales: Step by Step” and “How to Sell Your Home in ANY Market”.

Loren Keim Author of “How to Sell Your Home in Any Market” Author of “The Fundamentals of Commercial Real Estate” Author of “Short Sales: Step by Step”

Visit Loren Keim on Amazon.com or at http://www.realestatesnextlevel.com

Copyright (c) 2008 Cory Boatright
A “short sale” has certainly been a buzz word with all the foreclosures taking place in today’s real estate market. Distressed homeowners are looking for creative ways to sell their homes quickly. However many Realtors and investors are still unclear on how to get a lender to accept a short sale offer. Here is how you do it.
The following steps are to be used as guidelines on determining what to offer the lender to get a short sale acceptance. It is recommended that you consult a legal adviser before involving yourself in any real estate transactions.
All the steps you need to know:
1. Determine Fair Market Value (FMV)
2. Evaluate Sold Comps Systematically
3. Reveal the ARV (After Repair Value)
4. Figuring out the Lenders BPO
5. What is The House Type?
6. Learning the Loan Types
7. Memorizing the Percentages
8. How to Deal with Junior Lien Holders
9. In Closing
The FMV can be determined by evaluating sold, comparable properties in a similar or close proximity to the subject property. A Realtor will have access to the MLS (Multiple Listing Service) and can create a CMA (Comparative Market Analysis) for the subject property. This analysis will identify sold comparable properties with same square footage, bedrooms, baths, garage and other similar characteristics. Request the Realtors use a sold time frame within 6-12 months when pulling properties in the immediate or surrounding areas. Usually the short sale lender will not consider any sold comparables that are older than 12 months and that are further away than 2 miles from the location of the subject property.
2. Evaluate Sold Comparables Systematically
Contrary to popular and often misguided belief; you can use a formulaic system to work in your favor when determining what to offer on the short sale property. The way this works is like this
Let’s say you have eight sold comparables. You would take out the two highest comps and the two lowest ones and average the rest.
EXAMPLE:
You have a property you think is worth $145,000.
A Realtor pulls a CMA and you find eight sold comparable properties.
The MLS (Multi Listing Service) shows the following sold property values:
$159,000 $154,000 $153,000 $161,000 $148,000 $143,000 $146,000 $151,500
When you use the formulaic approach you would take the two highest sold comparables ($159,000 and $161,000). Take out the two lowest sold comparables which is ($143K and $146K). This would leave four others comps.
$154,000 $153,000 $148,000 $151,500 ———–
You would then take an average by simply adding up the sum of all the sold comparables and dividing them by the total number of properties left. In this case, that number would be four.
Total: $606,500 divided by 4 = $151,625
You can reasonably justify the house may sell for $151,625 instead of the $145,00 you originally estimated.
3. Reveal the ARV (After Repair Value)
This terminology is jargon or slang often used with real estate investors. FMV (Fair Market Value) is similar. The ARV is made up by the amount of repairs the investor thinks the property needs in order to sell quickly on the open market using FSBO (for sale by owner) techniques and not using the MLS.
It can be argued the ARV is more of a guess or suggested value derived by using sold comparables from houses that were NOT sold by a Realtor. One way to explain the difference is a Realtor will typically use a FMV (Fair Market Value) evaluation method. A real estate investor may elect to use an ARV. An appraiser can use both value methods, but generally sticks to the ones that come from off the MLS. The ARV is a less accurate and dependable value than what come off the MLS. It doesn’t hurt to know both.
(continue reading.. How to Short Sale Real Estate and Get Your Offer Approved – Part 2 of 3)

Many of the homes on the market today, and homes going into foreclosure are not worth what they have outstanding loans for. Now we have an expected 1 in 500 homes (national average)expected to go into foreclosure due to adjustable rate mortgages in the next year. How do you sell a home for less than you owe?

Short Sales! While we have purchased homes via a short sale, I would not recommend it. It was a very long drawn out process each time and consumed weeks of time and a flurry of faxes, conversations and numerous voice mails.

I found National Short Sale Center, Inc. a national company which assists homeowners and mortgage services on a nationwide basis in negotiating down the amount owed on a home loan. It creates a win-win situation for both parties by providing the homeowner an option before their property is foreclosed upon, and by achieving maximum yield for the servicer.

National Short Sale Center has been the national leader in conducting short sales since 2004. This is a result of our commitment to the homeowner and conducting each negotiation with excellence. We are effective because many of our employees have worked in the lender?s loss mitigation departments and have been trained in short sales as their specialty.

They list the following success stories on their website:

1. Negotiated a 2nd lien owed $63,000 to $2,000

2. Negotiated a 2nd lien owed $212,000 to $5,000

3. Negotiated a 1st lien owed $107,000 to $71,000

4. Successfully negotiated the complete removal of an IRS lien for approximately $25,000

If you are a homeowner, lender or realtor, it might be in your interest to contact them if you or a client owes more on their home than it is worth. I was not able to find any negative information on them and they are a member of the BBB (Better Business Bureau).

If you are heading down the road to foreclosure, you may wish to consider a short sale. This can and will at least protect you from having a foreclosure listed on your credit report, but it still may not completely clear you from all of the money owed to the lending company. The most important part of the entire process of selling your home in a short sale is the negotiation that is done with the lending company.

All lending companies have a department that works with sellers for negotiating all short sales. In the majority of cases, the department is known as loss mitigation. If you begin to talk with your lending company before you receive a notice of default, they may just ignore you totally. All lending companies are in the business to make money and if at all possible, they normally want you to repay the total amount of your loan so the do not lose money.

On the other hand, after a notice of default has been issued and records with the courthouse you can then begin the negotiation process. In most cases, you will not have much to do as most companies have pre-determined criteria for these types of transactions. All banks, lending companies, and mortgage companies have the right to deny or accept a short sale. Due to this fact, they are still going to want as much as they can get for the home so they do not lose more money from the loan that is in arrears. Some lending companies will take any reasonable offer.

A short sale may save you from having a foreclosure on your credit report; however, this does not mean your credit rating will stay excellent. Short sales are considered a type of settlement whereas you worked with bank in order to repay a loan that you were unable to pay. This does not look favorable on your credit report; however, it does look much better than a foreclosure. A short sale will stay in your credit history for seven years. In the majority of cases, you will be able to reapply for another mortgage loan within 1 to 3 years after a short sale.

The mortgage company in most cases, will work with the homeowner during a short sale and forgive the remainder of the loan, however, companies that have a lien on the property most generally will not forgive the money owed to them.

Before contacting the lending company, it would be in your best interest to talk with experts on short sales. Selling your home and saving your credit is the number one reason for short sales of homes, if you are still going to be stuck with a huge debt, and then you will not be any better off than before. Instead of trying to do it alone, talk with experts to ensure you are doing everything possible to save your credit and learn the process of short sales.