On October 23rd, 2014, we updated our
By continuing to use LinkedIn’s SlideShare service, you agree to the revised terms, so please take a few minutes to review them.
THE REAL ESTATE MARKET has shifted drastically and dramatically. Sales volume and the number of transactions have dropped significantly. Inventory has reached an all-time high. Buyers have never been more reluctant. Fear is rampant, anxiety is high, people are getting out of the business left and right. Sound familiar? Sure it does. The year was 1979 and that’s what was happening all around me. Gary Keller ~ from the book Shift How Top Real Estate Agents Tackle Tough Times
Just a short term “Bridge Loan”?
How does the BANK look at it?
The Long Term Solution
How does the LAW look at it?
The Legal and Board of Realtor Side
Not Cover Today Cover Today Real Estate Principles, Contracts, Mortgages, Credit, Law
25.5 % of Credit Reports Have a Score of 599 or below *Wall Street Journal 07/13/2010”
Most Bank FHA Overlays a minimum of a 640 Credit Score
Feeder population of “un-banked”
Not counting Self Employed that have good credit
Over supply of housing
Conventional Pricing can be very punitive
Just a blip???
Get out of the business
Prospect, lead generate and market soooo much that you have enough leads to sustain you
Learn to do business in Today’s Market
Alternative Financing What are some of the things you know about seller financing? What are the Pros? What are the Cons? Gather in Groups and discuss pros and cons Each Table give one pro and one con
Where is the resistance?
The home owner The listing agent
Visual Acuity - Test #1
Starting With The End In Mind
In order to have successful transactions and to protect the public.
We must start with the end in mind.
Like any venture a goal and plan is the best way to achieve it.
The Role of the Lender
Identify the Road Block
Prescribe the Remedy
Set time frames
Structure the final close
On the hook, and get paid LAST!
Where is Contract for Deed?
What is the 4155?
Is this something new? Will it stick around? Magna Carta What are overlays?
D y n a m i c a ll y structured seller financing
Uniform Real Estate Contract (Contract for Deed)
Can write over an FHA or a VA loan
Buyer may use combinations of cash and hard costs of improvements to satisfy down payment
Seller retains title HUD Circular Letter 7 - 90
Buyer holds enforceable “Equitable Interest”
Direct substitutes for a CA$H down payment
Solar and wind systems
Fun things you can do with FHA loans
Negotiated with other sales concessions
Carpet and decorating allowance
Plumbing and electrical fixtures
3 ways to borrow money for down payment
Fico, the big 3, and big business
In June of 2004, the Public Interest Research Group revealed that (79% or more) have significant errors in their credit profiles. These errors affected credit scores by 50+ points. 10 th Circuit Appeals Court ruled that E-Oscar is not a reasonable validation method (2010)
Government bail out for credit scores? Credit Education!!! You cannot play the seller finance game without this relationship…
How To write the Offer
May need to cross out certain sections.
Seller Finance Addendum
Select Appropriate Terms
For Contract for Deed
Write “Contract for Deed/UREC”
More items to chew on…
#1 Sales are entered on the MLS
#2 Transaction is eligible for a 1031 Exchange
Paradigm Shift – it’s the decade of the Realtor
Benefits to the Transaction?
HUD1 settlement statement
Owner’s policy of title insurance
Closed with 3 rd party legal advice
Payments made to, and “trigger” documents flow through, a 3 rd party escrow company
… Looks, feels, and acts like an institutional closing
Make a bigger net
Haul in ALL the fish
Sift and Sort Policy
Revised Sales Strategy
What is the Objective?
Share the information and educate
Set up regularly scheduled classes for:
Our peers and co-workers who
will attend this class
b. Our Sphere of Influence who will
attend a Consumer Oriented class
From Theory to Practice =
Just do it! You retain on average only 7% of what you hear. To learn, you must DO.
First thing: write it down
Legal advice must be given in each of these transactions.
You should not give it:
Every Seller Finance Transaction Requires Legal Advice
Institutional Lenders Have Attorneys
Now the Seller is the Lender
Buyer Takes Part In Creating the Contract
More or Less
Transactions to do
Then What’s the Problem
Seller Finance Options
2. Contract for Deed
Strong For Mo. Legal You Seller 2 $500 Both 2-7 $1,500 Buyer 7 $500 to $1500
In order to have a successful transaction , you must:
Customize Contracts to Meet the Specific Needs of each party to the contract
Correctly Educate all parties to ensure Creditability and Comfort
Indemnify, Indemnify, Indemnify
Close the Transaction
How do you get people into your Buyer Pool
Other Agents Buyers Pool Lending Partner Ghost Signs KSL and craigslist Past Clients Radio Webinars Business Owners Seminars 7 referrals
Three Types of People
Those that don’t get it and do it,
They will be SUCCESFULL
2. Those that get it and do it
They will be VERY SUCCESFULL
3. Those that don’t do it
Learn the script, “Would you like fries with that?”