You Want To Buy A Bargain / Talking To A REALTOR®

You want to buy a bargain! You know all about the real estate crises, you watch the TV news.

Maybe you even took a ride on the "Foreclosure Express" bus where the REALTOR® on the loud speaker pointed out a nice looking house with brown grass, and told you, "it sold for a Billion Five, 3 years ago, but you could buy it today for $163,535.00!" (They don't tell you what today's comparables are selling for!)

You watch the REALTOR® adds, you know that it's a buyer's market!

The remaining (The news would have you believe these vile institutions all failed.) lender's adds remind you of "Frosted Flakes"* because like Tony T. Tiger, said "They're Greattt!!"

*(Mr. Tiger, and Frosted Flakes, are a reference to Kellogg's fine breakfast food, not to suger coated mountebankcos! There was no punn intended.)

Remembering your Grandfather taught that opportunities and problems are like heads and tails on a coin. You know that amongst all those problems there must be opportunities.

So here you are sitting across from a REALTOR® and you ask: "What's your best buy?" "What's your biggest opportunity?"

What you're likely to get are a list of reasonable buys, many with the seller providing incentives to you the buyer and separately to your REALTOR®! Good properties, but hardly great bargains! You try another REALTOR® or two with the same unproductive results. You assume the news was right, it can't be done!

Well it can be done! Those REALTORS® could have helped you! You asked the wrong question!

Like your Grandfather's coins you and your REALTORS® went looking for the "heads!" Like Grandpa's coins, all coins, the heads side shows the dollars!

While your goal maybe to make the most dollars by putting the dollars first you never find them.

To find the biggest bargain, look not to the dollars, but to the problem! Ask not "What's your best buy?" "What's your biggest opportunity?" they are the most often asked questions and the least productive!

To find the biggest bargain ask: "What's your biggest problem?" The bigger the problem the bigger the potential bargin!

When you ask a traditional question you'll get a traditional answer and predictable results! Ask an exceptional question if you want exceptional results!

Bill

William J Archambault Jr

The Real Estate Investment Institute

  (10) COMMENTS
TAGS: bargains, foreclosures, buys, opportunity, reii, william j archambault jr, the real estate investment institute

How Much Can You Save / A Short Sale Primer

I just read Lenn Hardly's blog: WHAT ARE THE BUZZ WORDS? TRANSPARENCY? CONSUMER'S RIGHT TO KNOW? NONSENSE!

People have a major misunderstanding of what they can except purchasing a short sale. Just what sort of discount will a bank to accept?

If you're hoping for a number, you can stop reading. If you are hoping to steal the property, you can stop reading. If you're hopping to buy the property for 50% of market value, you can stop reading. If you're hopping to wait and buy the property for less direct from the bank you can stop reading.

The first thing you need to understand, is that banks only accept short sales when they believe it is in their best interest! Banks do not voluntarily accept losses. Banks will try to limit their losses.

So what can you expect, what should you offer. The answer is simple! Except to pay current market value, less the cost of foreclosure and sale by the bank (these items can be accurately estimated) and a "fudge factor!" It's this "fudge factor" that covers the cost that will accrue if the bank has to take the property, that gives you room to negociate, a pre-foreclosure short sale.

If you attempt a purchase requiring a short sale at ridiculously low prices your chances of success are unlikely. If a seller accepts an unrealistically low offer for submission to the bank, they may well lose the house and incur considerably more expense and credit problems. With the banks taking so long to rule on short sale offers the seller may not have time to find another buyer.

There is a perverted school of thought that says wait until the "auction" or until the bank owns the property to buy it and you'll save money, this is a fallacy! A bank with an REO (Real Estate Owned, non-business property owned by the bank) has already incurred both the cost of foreclosure and the previously unknown "fudge factor" that they might have discounted in a short sale. Once a bank is in title you can now expect to pay current market value!

Historically, it was possible to get banks to discount their REO's, but not today. With so many foreclosures banks with many mortgages in any given subdivision and several REO's, can't discount them. If the bank accepts an offer below current market value, that sale becomes a comparable for the rest of their REO's in that market lowering the property values of the remaining properties and those similar homes of their other customers!

One final thought on what to offer. To you, today's buyer, the value of the properly you are considering has nothing to do with what the seller paid for it 1,2,3,4, or 5 years ago!

Bill

William J Archambault Jr

The Real Estate Investment Institute

  (8) COMMENTS
TAGS: short sales, offers, low offers, discounts, bargains, reii, william j archambault jr, the real estate investment institute, reo, reos