Good 2 Go Realtor Presentation

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This presentation illustrates some of the things we do to help Realtors with Short Sales.

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  • Good morning/afternoon. I’d like to thank everyone for taking time out of your busy schedules to learn how to use short sales to increase your business. (Use one-on-one conversation style, and avoid commercials).
  • Good 2 Go Realtor Presentation

    1. 1. Selling Real Estate in Foreclosure Using “Short Sales” <ul><li>Adam Teece </li></ul><ul><li>Good 2 Go Home Investors, Inc </li></ul><ul><li>www.good2gobuyshouses.com </li></ul><ul><li>March 2008 </li></ul>
    2. 2. Only Three Goals For Today <ul><li>1) Educate Agents on how to capitalize on the “pre-foreclosure” market & make additional commissions thru short sales. </li></ul><ul><li>2) Educate Agents on how to help homeowners in foreclosure who are desperately looking for help by understanding their options. </li></ul><ul><li>3) Show Agents additional marketing and revenue streams in pre-foreclosures. </li></ul>
    3. 3. Important Information! <ul><li>Who is Good 2 Go Home Investors, Inc? </li></ul><ul><li>A short sale OUTSOURCE business partner </li></ul><ul><li>A short sale negotiation & consulting service </li></ul><ul><li>A business that does NOT subscribe to Equity Skimming </li></ul><ul><li>Here to assist real estate agents with short sales. </li></ul><ul><li>Here to provide real solutions and answer questions. </li></ul><ul><li>Partnered with one the most successful full-time short sale negotiation teams in the U.S. </li></ul>
    4. 4. What is a Short Sale? <ul><li>Occurs when a lender accepts less than full payoff on the mortgage(s) to allow transfer of a property to a new buyer. </li></ul><ul><li>Only available on houses in pre-foreclosure. </li></ul><ul><li>Can be negotiated on all mortgages </li></ul><ul><li>plus junior liens. </li></ul><ul><li>Not available on bank owned houses (REO) after foreclosure auction. </li></ul>
    5. 5. Typical Case - where we help <ul><li>Payoffs are at or more than the house FMV </li></ul><ul><li>There is no equity in property when closing costs and commissions are factored in. </li></ul><ul><li>Homeowner is in foreclosure. </li></ul><ul><li>Homeowner wants to get out of situation. </li></ul><ul><li>Realtor wants to outsource the </li></ul><ul><li>extreme amount of work involved in negotiating the short sale with lenders. </li></ul>
    6. 6. What if you could…….? <ul><li>Outsource all your short sale negotiations to a full time team of experts. </li></ul><ul><li>Pay NO fees (Seller, Buyer or Agent). </li></ul><ul><li>Check your “case” status online 24/7. </li></ul><ul><li>Title and Escrow with a proven expert team </li></ul><ul><li>EARN FULL COMMISSIONS </li></ul><ul><li>when properties transfer. </li></ul>
    7. 7. What We Will Cover <ul><li>Case Study </li></ul><ul><li>The Foreclosure Crisis </li></ul><ul><li>Market Size </li></ul><ul><li>Working the Foreclosure Market </li></ul><ul><li>Short Sales: What, When and Why </li></ul><ul><li>Steps in a Short Sale – Flow Charts </li></ul><ul><li>How Short Sales Can Benefit You </li></ul>
    8. 8. 3384 Faulkner – Case Study
    9. 9. 3384 Faulkner – Case Study <ul><li>Dated Submitted: May 11, 2007 </li></ul><ul><li>Date of BPO: May 23, 2007 </li></ul><ul><li>Date Closed: October 8, 2007 </li></ul><ul><li>Total Payoff: $ 163,976.00 </li></ul><ul><li>Re-Sale price: $ 149,000.00 </li></ul><ul><li>Commission : $ 8,940.00 </li></ul><ul><li>NOTE: Realtor listed at $169,900 for 4 months - no offers </li></ul><ul><li>NOTE: BPO completed and lender made counter offer. </li></ul><ul><li>Carpet and paint added. </li></ul><ul><ul><ul><ul><ul><li>List price dropped to $159,000. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>*** 2 offers in 6 days *** </li></ul></ul></ul></ul></ul>
    10. 10. The Foreclosure Crisis <ul><li>Prime loans drop from 66% to 45% of the market from 2002-2006. </li></ul><ul><ul><li>Sub-prime, Alt-A, piggybacks (80/20’s), ARM’s, interest only and other “exotic” mortgages take over the majority of market (51%) for 1 st time ever in 2006. </li></ul></ul><ul><ul><ul><ul><li>Credit Suisse Mortgage Report 2007 </li></ul></ul></ul></ul>
    11. 11. The Foreclosure Crisis <ul><li>Increase in the number of ARMs </li></ul><ul><li>and rising interest rates: </li></ul><ul><li>Nearly 25% of all mortgages - 10 million carry adjustable interest rates. </li></ul><ul><li>Source: Mortgage Bankers Association </li></ul><ul><li>1 in 8 households with ARMs that originated in 2004 and 2005 </li></ul><ul><li>will default on those loans. </li></ul><ul><ul><li> Source: Moody’s Economy. com </li></ul></ul>
    12. 12. The Foreclosure Crisis <ul><li>1/8 of all mortgages are considered </li></ul><ul><li>SUB PRIME </li></ul><ul><li>BUT </li></ul><ul><ul><li>60% of all new foreclosures are </li></ul></ul><ul><ul><ul><ul><ul><li>SUB PRIME LOANS </li></ul></ul></ul></ul></ul><ul><ul><ul><li>Source: Center for Responsible Lending </li></ul></ul></ul>
    13. 13. Sub-prime Mortgage Statistics <ul><li>3 rd Qtr 2007 -16.68% of all Sub-prime loans were delinquent </li></ul><ul><li>3 rd Qtr 2007 – only 3.25% of Prime loans were delinquent </li></ul><ul><li>3 rd Qtr 2007 – 5.87% of All loans </li></ul><ul><li>were delinquent </li></ul><ul><li>4 th Qtr 2007 stats not out yet but are projected to be much worse than 3 rd Qtr </li></ul>
    14. 14. The Foreclosure Crisis <ul><li>The crisis isn’t limited to conventional, </li></ul><ul><li>sub-prime loans: </li></ul><ul><ul><li>12% of FHA loans are either in foreclosure </li></ul></ul><ul><ul><li>or delinquent. </li></ul></ul><ul><ul><li> Source: Mortgage Banking Association </li></ul></ul><ul><li>As one advocate put it – </li></ul><ul><li>“ This is the worst time of foreclosures, basically, since the Great Depression.&quot; </li></ul>
    15. 15. The Foreclosure Crisis <ul><li>&quot;The biggest growth department </li></ul><ul><li>in all of the mortgage-lending servicing departments over the last year has been the loss-mitigation department . </li></ul><ul><ul><li>That is the department dedicated to finding solutions to defaulted loans </li></ul></ul><ul><li>other than foreclosure” . </li></ul><ul><li>Source: Bruce Juenger, President of the Association of Real Estate Owned </li></ul><ul><ul><ul><ul><ul><li>Managers in Los Angeles </li></ul></ul></ul></ul></ul>
    16. 16. Chicago Federal Reserve Study <ul><li>Lenders lost about $50k per foreclosure in 2003 </li></ul><ul><li>Lenders re-coup an average of only 59% of the original loan amount per foreclosure </li></ul>
    17. 17. Fox News <ul><li>Lenders lost about $80k </li></ul><ul><li>per foreclosure in 2006 </li></ul>
    18. 18. Center for Economic and Policy Research <ul><li>&quot;At this point we're seeing a quick meltdown in the housing market.“ </li></ul><ul><li>&quot;People still haven't caught up with the fact that this is a larger issue for the mortgage market as a whole rather than just sub-prime.” - CEPR Co–Director Dean Baker </li></ul>
    19. 19. National Association of Realtors <ul><li>The NAR was far more optimistic than many other economists. </li></ul><ul><li>The NAR expected only a 1 percent drop in the pace of existing home sales, and a 1 percent gain in median prices. </li></ul><ul><li>2007 ended with a 12.5 percent plunge in the pace of sales, and nearly a 2 percent drop in prices </li></ul><ul><li>The first such decline on record (ever). </li></ul>
    20. 20. Federal Reserve <ul><li>Lowered their forecast for economic growth in 2008 </li></ul><ul><li>Weaker consumer spending </li></ul><ul><li>Deeper housing recession </li></ul><ul><li>-Minutes of their Dec. 11 meeting </li></ul>
    21. 21. Market Size - Nationally <ul><li>Nationally 5.87% of all homes were delinquent – at least 30 days behind </li></ul><ul><li>Nationally 1.69% of all homes were in the foreclosure process in varying stages. </li></ul><ul><li>Sub-prime and FHA had highest % </li></ul>
    22. 22. www.ml-implode.com <ul><li>More than 210 Lenders and Banks </li></ul><ul><li> have imploded and filed for </li></ul><ul><li> Bankruptcy since late 2006 </li></ul><ul><li>due directly to the mortgage crisis. </li></ul>
    23. 23. Market Size - FLORIDA <ul><li>Second worst state for number of Foreclosures as of Nov. 2007 </li></ul><ul><li>Over 200% increase in the number of Foreclosures since Nov. 2006 </li></ul><ul><li>29,238 FL filings in Nov. 2007 alone </li></ul><ul><ul><ul><ul><li>Realtytrac </li></ul></ul></ul></ul>
    24. 24. Lee County, Florida <ul><li>Nearly 9,000 foreclosures filed </li></ul><ul><li>in the last year </li></ul><ul><li>1,463 Foreclosure Auctions over </li></ul><ul><li>the past 12 months </li></ul><ul><li>275 Foreclosures in September of 2006 </li></ul><ul><li>1,433 Foreclosures in September of 2007 </li></ul><ul><li>Over 8,000 people currently unemployed and growing due to the downturn in the economy </li></ul>
    25. 25. Local Real Estate Market <ul><li>More and more foreclosures every day </li></ul><ul><li>Most foreclosures have no equity </li></ul><ul><li>Most homeowners are leveraged 100% or more of value </li></ul><ul><li>Tougher and tougher to find listing opportunities with any equity </li></ul><ul><li>Enormous opportunity </li></ul><ul><li>in pre-foreclosures and short sales </li></ul>
    26. 26. Working the Foreclosure Market <ul><li>Working with People in Foreclosure </li></ul><ul><ul><li>Homeowner reliance on advice imposes an obligation on Agents to maintain highest standards of technical competence and integrity. </li></ul></ul><ul><ul><li>Always place the best interests of the homeowner above all else, and disclose fully the facts representing the true costs, benefits and limitations of any option or recommendation. </li></ul></ul>
    27. 27. Working the Pre-foreclosure Market <ul><li>Stages of the Foreclosure Process </li></ul><ul><ul><li>Collections – 1 st 90 days delinquent </li></ul></ul><ul><ul><li>Pre-foreclosure – 90 days - 12 months </li></ul></ul><ul><ul><ul><ul><li>Short Sale Potential in this stage!!!! </li></ul></ul></ul></ul><ul><ul><li>Foreclosure Sale – Sheriff’s auction </li></ul></ul><ul><ul><li>Redemption Period – 30 days or less </li></ul></ul><ul><ul><li>REO Department – until liquidated </li></ul></ul>
    28. 28. Working the Pre-foreclosure Market <ul><li>Options for Homeowners </li></ul><ul><li> in Foreclosure – www.hud.gov </li></ul><ul><ul><li>Refinance </li></ul></ul><ul><ul><li>Loan Modification </li></ul></ul><ul><ul><li>Forbearance / Repayment Plan </li></ul></ul><ul><ul><li>Partial Claim (FHA Insurance) </li></ul></ul><ul><ul><li>Bankruptcy </li></ul></ul><ul><ul><li>Deed in Lieu (voluntary foreclosure) </li></ul></ul><ul><ul><li>Sell the House </li></ul></ul>
    29. 29. Working the Pre-foreclosure Market <ul><li>Options for Lenders with loans </li></ul><ul><li>in Foreclosure </li></ul><ul><ul><li>Workout Plan / Repayment plan </li></ul></ul><ul><ul><li>Deed In Lieu (voluntary foreclosure) </li></ul></ul><ul><ul><li>Short Sale </li></ul></ul><ul><ul><li>Sheriff’s Sale / Auction </li></ul></ul><ul><ul><li>REO </li></ul></ul>
    30. 30. When Will a Lender Consider a Short Sale? <ul><li>Only on loans in default, or where </li></ul><ul><li>default is imminent. </li></ul><ul><li>When a Lender receives an offer </li></ul><ul><li>that is higher than what it expects </li></ul><ul><li>to get by foreclosing. </li></ul><ul><li>When the type of loan, status of the foreclosure and Lender are conducive. </li></ul>
    31. 31. Why Would a Lender Consider a Short Sale? <ul><li>Lenders are in the business of loaning </li></ul><ul><li> money, not managing and selling </li></ul><ul><li>real estate. </li></ul><ul><li>Non-performing loans reduce what can be </li></ul><ul><li> loaned by 2-8X the amount of bad debt. </li></ul><ul><li>Lenders have Loss Mitigation Departments </li></ul><ul><li> responsible for mitigating , or </li></ul><ul><li> minimizing , losses from defaulted </li></ul><ul><li> mortgage loans. </li></ul>
    32. 32. Steps In a Short Sale <ul><li>Agent refers an Owner in foreclosure, or </li></ul><ul><li> expects to be, who is both interested </li></ul><ul><li>in selling and participating. </li></ul><ul><li>We determine the likelihood of success </li></ul><ul><li> based on the ability to negotiate a </li></ul><ul><li> discount and the ability to resell the </li></ul><ul><li> property (not all will qualify). </li></ul><ul><li>We confer with the Sellers and Listing </li></ul><ul><li> Agent to explain the process and </li></ul><ul><li> coordinate required documents. </li></ul>
    33. 33. Steps In a Short Sale <ul><li>We prepare, submit and negotiate the </li></ul><ul><li> short sale package, driving the entire </li></ul><ul><li> process for all lien holders. </li></ul><ul><li>We prepare a repair estimate. </li></ul><ul><li>We make an investor offer to start the </li></ul><ul><li> process. </li></ul><ul><li>We request the Lender to postpone auction </li></ul><ul><li> (if needed). </li></ul><ul><li>We follow up on offer & request an interior </li></ul><ul><li> BPO (Broker Price Opinion). </li></ul>
    34. 34. Steps In a Short Sale <ul><li>A BPO is ordered by the Lender to obtain </li></ul><ul><li> the “as is” value, which is used to </li></ul><ul><li> determine if the loan can be discounted </li></ul><ul><li> and by how much. </li></ul><ul><li>If our offer is accepted by the Lender we </li></ul><ul><li> will buy it with a quick cash close. </li></ul><ul><li>If our offer is declined the Agent lists or </li></ul><ul><li>re-lists at a conservative CMA price, </li></ul><ul><li> subject to Lender approval, and reduces </li></ul><ul><li> the price as necessary until sold. </li></ul>
    35. 35. Steps In a Short Sale <ul><li>Once an offer from an End Buyer is accepted we will negotiate a small spread from the Lender and sell it to the End Buyer through the Agents involved. </li></ul><ul><li>Our negotiated settlement will stipulate the Lender is to pay all Seller closing costs, including real estate commissions. </li></ul><ul><li>Proven expert team with experience handles Title and Escrow </li></ul>
    36. 36. The Interior BPO <ul><li>The most critical point of the entire short sale process. </li></ul><ul><li>Opportunity to validate the offer. </li></ul><ul><li>Whatever the BPO comes in at, the Lender views that # as the FMV. </li></ul><ul><li>Lenders want approximately </li></ul><ul><li>85-100% of new BPO. </li></ul>
    37. 37. Risks for Agents <ul><li>Waste time and energy on listings when an acceptable discount could not be negotiated. </li></ul><ul><li>Upset Agents and Brokers when they lose a Buyer because the process took too long or the commission was reduced by the Lender. </li></ul><ul><li>Unable to find a Buyer in time. </li></ul><ul><li>Negotiate a discount and then have the Buyer not close. </li></ul>
    38. 38. Risks for Sellers <ul><li>The lender may choose to either: </li></ul><ul><ul><li>Seek a deficiency judgment against the seller for the shortfall (HSBC) </li></ul></ul><ul><ul><li>Send a 1099C for the shortfall, creating a tax liability for the seller. </li></ul></ul><ul><ul><li>IRS Pub 523 </li></ul></ul><ul><ul><li>Internal Revenue Code Form 982 Sec 121 </li></ul></ul>
    39. 39. 1099’s <ul><li>Mortgage Debt Forgiveness Act </li></ul><ul><ul><li>HR 3648 </li></ul></ul><ul><li>Debt Forgiven will not be income to defaulted borrower </li></ul><ul><li>Primary residence only </li></ul><ul><li>Short sales, refinances, repayment plans </li></ul>
    40. 40. 1099’s <ul><ul><li>Debt Forgiveness Income </li></ul></ul><ul><ul><li>IRS Pub 523 </li></ul></ul><ul><ul><li>Internal Revenue Code Form 982 Sec 121 </li></ul></ul><ul><ul><li>Insolvency </li></ul></ul>
    41. 41. Deficiency Judgments <ul><li>HSBC </li></ul><ul><li>Wilshire </li></ul><ul><li>Irwin </li></ul><ul><li>Regional Banks </li></ul><ul><li>Credit Unions </li></ul><ul><li>Potential when PMI does not cover the loss </li></ul>
    42. 42. Real Estate Agent Mistakes <ul><li>Send P&S agreement to Lender with no hardship package </li></ul><ul><li>Short Sale / Hardship package incomplete </li></ul><ul><li>Approach short sale Lenders with no Buyer </li></ul><ul><li>Do not understand the importance and purpose of Short Sale Interior BPO’s </li></ul>
    43. 43. Real Estate Agent Mistakes <ul><li>Think process completed overnight </li></ul><ul><li>Waiting for Hardship Package from Lender </li></ul><ul><li>Listing property above market value to cover full payoff </li></ul>
    44. 44. Rewards to Agents <ul><li>Allows properties with no equity to be sold at attractive prices in a short time . </li></ul><ul><li>There is less competition among Agents for properties that have little or no equity. </li></ul><ul><li>Allows you to earn full commissions on sales that would have been lost </li></ul><ul><li>without a short sale. </li></ul><ul><li>Provides a way to help people in financial difficulty who couldn’t otherwise be helped. </li></ul>
    45. 45. Rewards to Agents <ul><li>Easy to demonstrate benefits to Sellers in need. </li></ul><ul><li>Creates new opportunity in a growing market with little competition. </li></ul><ul><li>You set the price where it will sell quickly , since it is a forced sale, earning commissions on sales you would </li></ul><ul><li>not otherwise make. </li></ul><ul><li>Receive strong testimonials and referrals from people who couldn’t be helped </li></ul><ul><li>by anyone else. </li></ul>
    46. 46. How Short Sales Benefit Homeowners <ul><li>Homeowners don’t pay for anything . </li></ul><ul><li>Sellers avoid a foreclosure on their </li></ul><ul><li>credit report . </li></ul><ul><li>Most Lenders will waive their right to a deficiency judgment as part of settlement. </li></ul><ul><li>Short sales minimize the loss , and there-fore any shortfall reflected on a 1099C. </li></ul><ul><li>Homeowners can often avoid paying income tax on the shortfall when professionally advised. </li></ul><ul><li>Allows Sellers to get on with their lives ! </li></ul>
    47. 47. Key Points Covered <ul><li>The Foreclosure Crisis </li></ul><ul><li>Market Size </li></ul><ul><li>Working the Foreclosure Market </li></ul><ul><li>Short Sales: What, When and Why </li></ul><ul><li>Steps in a Short Sale </li></ul><ul><li>How Short Sales Benefit You </li></ul>
    48. 48. Questions? <ul><li>To get help with your short sale opportunities, please contact: </li></ul><ul><li>Adam Teece </li></ul><ul><li>Good 2 Go Home Investors, Inc. </li></ul><ul><li>www.good2gobuyshouses.com </li></ul><ul><li>Office: (239) 243-0630 </li></ul><ul><li>Fax: (239) 243-0580 </li></ul><ul><li>Cell: (239) 247-5624 </li></ul><ul><li>24 Hr: (866) 857-3918 </li></ul><ul><li>Message Line </li></ul>

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