Realtor Commission Saver

SHORT SALE PROGRAM - FAQ’S

What real estate strategy do you specialize in?
(Distressed Properties)
What your definition of Distressed Properties?
2 types – Financially (upside down) and/or physically (can’t be sold or financed in its current condition with a standard Bank qualified end-buy buyer – (3 reasons a house won’t sell, price, condition and/or location.
What got you interested in distressed properties?– (Righteous Indignation – Some Background)
In 2008 when the market collapsed I had many homeowners coming to me saying they were not getting qualified/approved for a modification, or for a short sales for that matter, when according to the bank rules I researched I knew if they were qualified, or not, and why. In October of 2008 the Banks were paid $700 Billion TARP to assist homeowners to avoid foreclosure with doing a Modification or Short Sale. (Troubed Asset Recovery Program) BUT only 47% were actually approved for a short sale and only 6% requesting a modification received such. This was according to their numbers at that time. BUT the Bank are incentivized and paid much more to foreclose via the insurance claims (all public debt is insured) these claims would have took down AIG, the largest Insurance Company in the world, but the taxpayers bailed them out – Remember the – “TO BIG TO FAIL”. Banks put the largest national foreclosure defense firms on retainer, so there was a conflict of interest with homeowners. Doing my due diligence I studied the legality of these mortgages and found out about 87% are fraudulent. (The explanation of such is not part of this presentation) Because of the use of this knowledge, I was able to get clients loans modified, even when they were not originally approved by the lender, or get their short sales completed. Interesting Information: A quarterly letter from my State’s DRE stated that Real Estate Agent could not assist homeowners in modifying mortgages, even for free. (This was absurd) I challenged the DRE about that. (I beat them – Story for another other time)
Why do you believe we are entering a market correction?
All the signs are here now – Statistics such as Bankruptcies, Divorces, Foreclosures, Higher Interest Rates, and Inventory are up big time and rising. Real Estate is cyclical and this has been the longest bull market in US history. And what goes up must come down (law of physics) as history has shown. Each economic cycle so far has had higher highs and conversely lower lows. This downturn could be the worst ever experienced. We are entering a Buyer’s Market and the price corrections will eventually cause an explosion of Short Sale/Short Pay properties on the market and this debt must be assimilated and investors are by far the best way to solve that problem, or the Banks will just foreclose and give the properties to their favorite Hedge Fund buddies. Short Sales circumvent Bank to HF process. Disclosure: We are working with a Government that is prone to changing the rules of the game at anytime, and have proved that they can and will interfere with private contracts.
What if the homeowner is only days away from foreclosure and has equity?
Short Answer: Emergency/Skeleton Chapter 13 Bankruptcy. (Our Attorneys facilitate BK) Here is why: Generally speaking if the foreclosure auction date is within 37 calendar days, the Lender does not have to accept an offer to purchase, which in and of itself would stop the foreclosure. If it’s inside 37 calendar days the homeowner may have only one option left, besides coming up with the arrearages (back payments), which is to file an Emergency Skeleton Chapter 13 as this maybe their only quick and most least expensive remedy at this point. Then that gives the time necessary to put the property into whatever strategy funnel that works for that investor. (e.g., Purchase and Sale, Seller Financing, Sub-to, Wrap, Lease Option, Novation, List for sale, Wholetail, Wholesale, Sub-to, Fix & Flip, Note Purchase, Land Purchase & Sales, ect…)
What if the Homeowners owe more than the property itself is worth?
To sell an upside down pre-foreclosure property, the homeowners must first receive approval by the Servicer/Lender. This is called a Short Sale or Short Pay. (I will explain the difference and consequences thereof later as there is a major difference in consequences to the Sellers)
(5) Five basic things that qualify Homeowners for a Short Sale/Short Pay: 1). Upside Down (This will Include the market value, cost of sale, repairs and arrearages) 2). True hardship (Loss of Job, Under-employment, Death of Spouse, Divorce, ect…) 3). Complete the Servicer/Lenders Short Sale Paperwork. (Financials & Hardship) 4).No assets to pay the short fall with. (Beware of Mortgage Fraud) 4). All parties on the note and/or title must be onboard to do the Short Sale. 5). Must be Listed on the Property on the MLS.
We use a Law Firm for all the required Short Sale Paperwork and for all the Negotiations. The Law Firm uses very specific legal paperwork and disclosures that are needed for this proprietary process. Realtors are protective of their clients, and of any new processes not taught by their brokers, I get it. But off market properties are always the best as we are in the driver’s seat from the get-go and then we choose and train the Listing Agent on the process. BONUS: Realtors do not have to complete the Short Sale Package with the Sellers, or Negotiate with the Lenders and a BPO is not required. (Not a typo).
For full disclosure we do require a 30% referral commission with the listing Brokerage, as we are paying the Attorneys retainer fees and the Law Firm 1).Completes the Short Sale Package with the clients. 2). Negotiates with the Servicer/Lender to final approval 3). And we are the bona-fide Buyer. (Offer is required to initiate the short sale process)
In standard short sales the agent either has to do the negotiations themselves, which are not usually productive to receiving a discount beyond market value, or the Realtor can pay a negotiating firm out of their pocket, but the Servicer/Lender will not pay for any negotiations. Think of the cost of time and lost opportunity for the Realtor alone.
In our system the Realtor can ‘set it and forget it’. Realtor can double dip, if we purchase the property, or in the case where we decide to flip the deal. (Yes you can “wholesale” short sales) The Listing Agent will know the verbal approval price before the rest of the market and can already have a buyers list ready to purchase, including investors.
Why would a Homeowners want to work with us?x
1). Stop Foreclosure and Subsequent Eviction. 2). More “free time” in the property, while we negotiate to approval and they can save for their eventual Moving Expenses, First, Last and Security Deposit. 3). No deficiency Judgment (waived) or a taxable 1099c. (If insolvent – Seller to verify with their CPA or Accountant) 4).Seller can purchase another property sooner when financially ready to do so for assisting in the Short Sale process. 5). Possible Relocation Money
What about existing Short Sales properties already on the MLS?
Yes we can do those too. Look for the short sale and for pre-foreclosures that have been on the market way over the average DOM, as those agents would be more likely be motivated to work with us, since they may lose their entire commission through foreclosure. And last time we had this kind market when there were no offers on the short sale property within 4-12 months, the lenders generally took the property back through foreclosure and the Agent lost their commission. (Commission Saver Program) So let’s give the Lenders and the Sellers what they want, an offer, and get the ball rolling. Sometimes just shorting the 2nd Mortgage or other liens (voluntary or un-voluntary) makes it a great deal as well and the second mortgages are easier to short sale, except in the case of a HELOC.
Can we Short Sale Commercial Properies and Land?
Yes!
What’s the benefit of the investors working with TRN on short sales?
#1: Make money on leads you might otherwise be throwing away. #2: Nothing out of pocket not even Earnest Money Deposit. #3: The Bank ends up paying for the services, the Attorneys and Realtors Commissions. #4: We take care of all the Servicer/Lenders requirements in this process. This includes the offer, required paperwork, and listing on the MLS. Another words we do all the heavy lifting. Once negotiated with a Lender Approval and we don’t buy, we can legally flip, or “wholesale” the short sale to the investor, or an end-buyer. This proprietary process is found nowhere else in the industry that we are aware of. If you want to thrive, not just survive, especially in this coming several year market “reset”, you are going to need to have this strategy in your tool box. After the 2008 crash at one time around 67% of MLS were Short Sales. Average Short Sale Negotiations process takes 3 – 6 months or longer. Our Law Firm averages between take 1-3 months to get the Short Sale Approval. Law Firm negotiates the short sales. These Attorneys we use have worked inside the Largest Banks doing short sales and know how to “cut to the chase” and receive the approval usually within 30-90 days unlike the standard 90-180 days or more. Again no BPO’s are required making it 3X faster with less negotiations. Generally speaking, with a conventional short sale, using a Realtor you will not be able to receive much of a discount, especially if it’s a pretty house. Our “system” will allow the investors another exit strategy on tight deals, which is to legally “flip” the short sale, (Wholesaling Short Sales) especially if it makes more sense and more profit then to outright purchase and the costs thereof and resell. This is why investors need to also have this strategy in their toolbox during a market downturn.
What’s the difference between our Investor Offer vs Standard Buyers Offer?
Great news for Realtors is that our offer stays the full duration of the negotiations until final approval. Standard buyers usually do not stick around and wait 3-6 months or more to find out if they can buy the house or not and if they leave and you don’t find a Buyer within their guidelines you and your clients may lose the house to foreclosure. Talk about the Realtor’s
Basically How Does Your Process Work for Distressed Property Owners?
We do a free 15 minute initial consultation with the homeowner(s) and/or their Realtor or the investor as well. We have a Questionnaire/Intake Sheet that’s completed with the homeowners and/or Realtor or investor. Therefore I can quickly give them all their options and set their expectations upfront. And if and as needed we stop the imminent foreclosure action. Property is then put in the short sale funnel (if it’s a short sale and has no equity – otherwise it’s pretty much a standard purchase and sale or an investor alternative that makes sense). We immediately prepare and tender an offer and get the property listed on the MLS, if not previously listed as required for the Short Sales and to get the ball rolling. And our Law Firm takes it from there. (if it previously listed we may terminate and have the Realtor create a new listing according to the Law Firms directions) Once there is a Short Sale approval and the buyers (TRN), or investor buyer, are ready, willing and able we proceed to closing. But if the discount is not enough to purchase we have the ability to “wholesale” the Short Sale.
What are some other things to be aware of in a short sale?
1).Sometimes only a 2nd mortgage needs to be short sold to make it a great Investor deal. 2). Generally speaking, if there are more than two liens to negotiate besides the mortgages, like Judgments, Tax Liens, Child Support, ect… the Servicer/Lender may not consider the short sale, because a foreclosure will wipe out all the junior liens and make it free, clear and marketable title for the Servicer/Lender to list, market and sell the property. (Attorney’s whose clients have put involuntary liens on properties many times will not accept a discount and will go after the Seller personally after the foreclosure.
What if the homeowner(s) want to and qualify for a Modification, or some other program the Bank program that allows them to keep their home?
If it’s already listed to sell on the MLS, or an Investor has an offer on the property, then that choice was already determined by the homeowners and we will not pursue the modification option. If for some agreed upon reason we only end up assisting the homeowner on a modification, or some other option, TRN can share some of the fees charged to the homeowner and this can help the Investor defray some of their marketing costs.
Other Information about the TRN Pre-Foreclosure/Short Sale/Agent Commission Saver Program
TR Network is a multi-faceted consortium of Real Estate and Legal professionals that can provide assistance and relief to Homeowners and Real Estate Agents/Brokers through various Real Estate based solutions.
Our specialty is preserving or “Saving the Deal” by utilizing bona-fide solution based techniques in order to settle mortgage debts for over leveraged property and providing Homeowners with a clean start moving forward.
Some things we may be able to provide are as follows:
• A “Seller First” solution based system – Understanding and addressing the Homeowners needs in order to obtain or maintain the Listing.
• Free Consultation.
• Stop Foreclosure; The Cancellation, or Postponement of an imminent Foreclosure Auction Sale.
• Securing additional time in the property as well securing additional time for the implementation and processing of a solution that will lead to a transaction/closing. (i.e. Short Sale or other solutions and therefore no foreclosure on Sellers credit)
• An immediate Purchase Contract on the property as time is of the essence – No need to search for Buyers, conduct Open Houses, ect…
• Short Sale negotiation and processing conducted by an experienced Law Firm. (5k+ completed)
• Law Firm takes care of all management and communication of the short sale process between all related parties to the transaction.
• Law Firm completes the Short Sale Lender Package with the Sellers.
• Agents do not have to negotiate with the Lenders.
• No BPO is required in our process. (NOT A TYPO)
• Possible relocation money for the sellers.
• Deficiency Judgment waived – 1099c (Phantom Equity) forgiven in almost all cases.
• Double Dip on Commissions. (if we purchase or you find the end-buyers)
• Agents just list the property – (“set it and forget it”).
TR Network and its associates are compensated via the following methods:
• A negotiated Referral Fee from the Listing Brokerage for participating in the transaction. (We pay the Law Firm’s retainer fee for each and every property for starters)
• A Buyer paid cash contribution fee at closing for Short Sale processing and negotiation (among potential other items). This fee is customary in many locations and is fully documented and disclosed on the Closing Statement.
• All processes that may be implemented are legal, ethical and moral and have been reviewed by the Law Firm and endorsed by National Policy decision makers.
• TRN is a Licensed Real Estate Agent, Licensed Contractor (1980-2008), Certified Private Money Lender, Certified Bankruptcy Preparer, Paralegal (Honorary Juris Doctor), and a Certified Reverse Reo Specialist.
TRN Required Short Sale Documents
1. CMA for the subject property. (Realtor Supplies)
2. Option to Purchase Real Estate – Signed/Initialed by Seller & Buyer (4) pages including Legal Description Exhibit “A” (TRN Supplies)
3. Your State Short Sale Addendum to the Purchase Option Agreement (Agent Supplies)
4. Notice of Real Estate Option Agreement (TRN Supplies) (3) pages including Legal Description Exhibit “A” Notarized by both Parties. (This Document to be recorded at the County Recorder or equivalent) (Don’t Forget a Filing Cover Sheet maybe required with a Fee to Record)
5. Authorization to Release Loan Information (TRN Supplies) (1) Page – Signed/Dated by Seller(s) with their Social Security Number (Attorneys will complete the rest of the document)
6. “What is a Short Sale” Document – Signed/Dated by Seller(s) (TRN Supplies) (Check off one of the two appropriate declarations) (1) Page.
7. Disclosure Regarding Real Estate Transaction – Document (TRN Supplies) Notarized by the Seller(s) (2) Pages.
8. Listing Agreement signed and all pictures and everything prepared to list. (Agent Supplies) (In the Listing Agreement put – “Active Listing date subject to the Law Firms approval”)
9. Before actually listing on the MLS, will we give you the Listing Price along with any pertinent MLS Remarks. (If currently listed, listing must be withdrawn for 2 weeks or until Attorneys approves when to re-list.
10. We will need a copy of the Listing Agreement and the MLS Printout when actually listed.
11. There may be other documentation needed like a contractors bid for repairs and such.
12. There will also be a 30% minimum B-B referral commission with our Broker. (Agent or TRN Supplies)
Seven (7) Reasons why there is a 30% minimum B-B Referral Commission?
1). Bona-fide Buyer with an immediate offer –
2). Realtors do not have to complete the Lender Short Sale Package with the Sellers –
3). Realtor does not have to negotiate with the Lender –
4). No BPO’s are required – (many times this is a deal breaker)
5).Double Dip –
6). TR Network pays the Law Firms retainer fee
7). Set it and forget it