Colin Egbert asked:


In short sale investing, one of the biggest challenges you’ll face are negotiations with the bank. Putting together a short sale deal can be lengthy and involve a lot of preparation. Plus, you’ll need to work with the bank to come to a price you can both agree on.

First Contact on the Phone

You’ll start short sale negotiations with the bank by contacting their loss mitigation department. It can be difficult to make first contact with the bank. You may luck out when you first call, if you get an automated response system. Some of these systems will have you input the homeowner’s account number and the phone tree automatically directs you to the correct department.

If you don’t get lucky, your best bet is to call customer service and ask for someone who is qualified to make sales on pre-foreclosures or just ask for the Loss Mitigation Department. If you draw a blank with the person on the phone, try asking for the ‘foreclosures department’, ‘short sale’ department or ‘loan modification’ department. If all else fails try asking for someone in charge of loans and they might be able to direct you to the right person.

Always, always remain polite and calm on the phone. These are people you’ll be dealing with on a regular basis. Once you get that initial phone call out of the way you’ll have the right phone number and name to call every time from there on out.

After you get the right person on the phone, introduce yourself and explain that you are in short sale investing. Let the bank officer know that you are interested in a particular pre-foreclosure and would like to set up a short sale deal. It’s helpful to put together a check list of points you want to cover in introductions and even a short script that you can read from to introduce yourself. Practice the script so it sounds natural.

The Short Sale Package

At this point the bank officer should let you know what materials they’ll need from you to begin negotiations. These materials are sent back to the bank in a short sale package. This package is a way of providing the bank with all the foreclosure information they’ll need, your first offer on the property and is also a way of culling the serious investors from those just expressing interest.

In short sale negotiation, the short sale package is very important. One of the best foreclosure tips you can get for negotiation is to make sure this package includes all the materials the bank has requested and more. It often includes;

a hardship letter from the homeowners,

estimates for any needed repairs to the property,

your estimate of the property’s market value,

copies of the homeowner’s income tax returns and

most importantly your cover letter with your offer price for the property.

Banks will often set aside incomplete short sale packages when they receive them. You may not even be notified by the bank if your package is missing a certain document. So, be sure to double check that package before sending it.

Down to the Figures

Short sale investing usually involves a bantering about of numbers concerning the pre-foreclosure. When the bank receives your short sale package, they will order an appraisal of the property. This is called a Broker’s Price Opinion (BPO) and gives the bank a price to aim for in negotiations. It is usually completed within 10 days of the bank ordering an appraisal, but if they are backlogged it can take longer.

When the BPO is completed and approved the bank contacts you to negotiate a price on the property. The bank won’t tell you what their estimated BPO is on the property, but they will usually talk in terms of price range when negotiating.

The bank officer in a short sale investing deal will try to get as close to their BPO as possible. This doesn’t mean that they won’t accept a price lower than the BPO, they can usually take a deal that’s at least 83% of the BPO. You can usually tell how willing the bank is to accept your offer by the way they negotiate over the phone, especially if they call you back later to continue negotiations.

Your job in a short sale deal is to provide plenty of written evidence for your low offer and back up that information in negotiations. Real estate investing can be a great way to make a high return on your money, even more so when you get involved in short sale investing. However, you’ve got to convince the bank first.

Amenda Shan asked:


Does your building have a healthy environment? Do you practice less polluting and more resource efficient methods of construction/renovation/maintenance to provide good IEQ (Indoor Environmental Quality)? How you do this can greatly affect the comfort and health of its occupants.

While the list of environmental hazards seems to keep growing everyday, here are the more common ones you should think about.

Air Quality: Poor air quality leads to a host of illnesses and complaints such as asthma, dizziness and headaches. It is usually caused by poor ventilation. Make sure your house is well ventilated. Every room must have enough windows to allow fresh air to enter.

Rooms that are sealed off because of air conditioning also need to have windows that can be opened at cleaning time or when the air conditioner is switched off.

Windows must be so set at to allow cross ventilation.

High temperatures and humidity also make for poor air quality so make sure that air conditioners, fans dehumidifiers and the like are all in good working condition and are cleaned and serviced regularly. The drain pans of dehumidifiers must be emptied out regularly and disinfected in order to prevent mold growing there.

Molds. Damp conditions encourage the proliferation of molds. They can be toxic and dangerous and can cause allergic reactions such as asthma.

To keep humidity levels low all leaks and seepage should be repaired, and exhaust fans should be installed in the bathrooms and the kitchen.

Organic, bacterial chemical and mineral pollutants also account for poor air quality.

Asbestos. Asbestos is a mineral fiber used commonly in building construction for insulation and as a fire retardant. Although there are no immediate symptoms asbestos has been connected to the long-term risks of lung diseases and chest and abdominal cancer.

If the asbestos material on your property is in good condition leave it alone because the danger arises when fibers are released through cutting it and they are inhaled into the lungs. When you need to clean up or remove asbestos it is best to employ a contractor who has been professionally trained.

Carbon monoxide. The poisonous gas, Carbon monoxide, or CO1,is produced by the incomplete burning of fuel. This sort of combustion usually takes place inside your garage .Exhaust Fumes and fumes from other sources such as oils and automotive fluids and stored gasoline can filter into living spaces. A landlord is therefore responsible to see that the connecting door between and the garage is well sealed and can be closed properly at will.

Bugs / Pests. While pests like cockroaches are unwelcome, the measures taken to control them are often as hazardous. Sprayed pesticides are inhaled and are even absorbed through the skin. Use effective non toxic methods of combating them and other pests like ants.

Check for termites regularly or they will literally ‘eat’ you out of house and home.

Landlords do not usually encourage pets because of the odor and dander that they leave behind and the possibility of flea infestation. Flea bites can cause itching and irritation. If a tenant who had a pet has just vacated an apartment the landlord must be responsible to see that no odor, dander or fleas are left behind before re leasing it.

Lead. Although lead based paints have been banned it is possible that older buildings still have traces of it.

Leaded gasoline has been phased out so there is a vast improvement in the levels of lead in the atmosphere. But it is still released into the air through the burning of solid waste (garbage) coal and oil, and tobacco smoke.

Radon. Radon is a radioactive gas that occurs naturally and is especially dangerous in that it cannot be seen, tasted or smelled. It is a proven cause of lung cancer. It is sometimes found in great quantities in the soil and in rocks.

It can seep out of the ground into the house, so it would be advisable to get a test kit that can be used to check the level in the house.

With a few precautions you can make your home / property a safer and healthier place to live in.

So, how environmentally safe is your house? That’s how safe your life is.

Cory Boatright asked:


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)