Negotiating your short sale is not for the weak at heart. I hear a lot of new investors who spend months getting their short sale package in front of the decision maker and seconds backing up their offer when it is rejected. Here is a little secret for everyone. A Loss Mitagators job is to negotiate the highest price possible for the bank. If they feel your initial offer is fair they will still reject it. They do this to justify why the bank pays them in the first place. If they accepted every fair offer right away then they would serve little purpose. So expect your first offer to be denied. It is not a big deal. Keep in mind that the price of a property is whatever someone will buy it for. If the house was worth $200,000 in 2006 and it was recently appraised for $160,000 the bank thinks they are giving you a deal at $160,000. But what they don’t see from behind their computer is what will help you negotiate a lower price. Don’t be afraid to challenge them on every issue. If there are 10 other houses in foreclosure on the same street and the police have reported an increase in violence, nobody’s going to pay $160,000 for that house. What a house is appraised for and what a comp recently sold for means nothing to me or my offer price. I try paint in a picture, while negotiating, of a house worth $120,000 because that is what I believe the house is worth. A lot of new investors don’t know how to play the game with the banks. Do you think a Loss Mitagator cares about the house at all? His job is to negotiate and as long as he can prove to his supervisor that he has done that, his job is safe. So don’t be scared to challenge them if they say your offer is way too low, because it is only the first step in the negotiation process.
It’s a new day, new deal, new opportunity
Mike Sebeniecher, Texo Properties (TexoNC.com)
Thursday, July 17, 2008
Tuesday, July 15, 2008
Bank of America and Wachovia could be next
Are BofA, Wachovia readyto weather financial crisis?
Banks say they are prepared; financial stocks sink amid fear of failures
By Rick Rothacker
Investors pummeled bank stocks on Monday as new jitters about the health of the financial system erupted ahead of another round of miserable earnings reports.
The latest slide came despite regulators' efforts over the weekend to calm roiled financial markets as well as rattled bank customers.
At Charlotte's big banks, Wachovia shares plunged nearly 15 percent to $9.84, a level last seen in 1991. Bank of America shares dropped about 7 percent to $20.15, around an eight-year low. Both are scheduled to disclose dismal second-quarter earnings next week, making it four straight ugly reports.
Continue Story: http://www.charlotte.com/business/story/713238.html
The recent decline in Bank of America and Wachovia stocks should have all real estate professionals in the Charlotte area nervous. Although I have an account with Wachovia, I am not so worried about them collapsing, but rather with the possibility of more layoffs. Charlotte is a city that greatly depends on the banking industry for its growth. The recent collapse of Indy Mac, as well as the steady decline of bank profits over the past year, is very frightening to Charlotte’s future. If Bank of America and Wachovia seek federal protection in the future, it will still greatly hurt the real estate market in Charlotte, because layoffs and cutbacks would soon follow. Whatever the Fed decides to do will hurt our city either way, and I hope that everyone is prepared for the fallout that could take place. I personally believe that we have not seen the worst of the fallout that has taken place due to the subprime meltdown. I just hope and pray that people are prepared to weather the storm for another two years.
I realize that in my first few posts, I have been really only stating my personal opinion. Please look for my next post where I will explain in greater detail why I feel the economy will not rebound until 2010.
Thanks,
Mike S. - Texo Properties (www.texonc.com)
Banks say they are prepared; financial stocks sink amid fear of failures
By Rick Rothacker
Investors pummeled bank stocks on Monday as new jitters about the health of the financial system erupted ahead of another round of miserable earnings reports.
The latest slide came despite regulators' efforts over the weekend to calm roiled financial markets as well as rattled bank customers.
At Charlotte's big banks, Wachovia shares plunged nearly 15 percent to $9.84, a level last seen in 1991. Bank of America shares dropped about 7 percent to $20.15, around an eight-year low. Both are scheduled to disclose dismal second-quarter earnings next week, making it four straight ugly reports.
Continue Story: http://www.charlotte.com/business/story/713238.html
The recent decline in Bank of America and Wachovia stocks should have all real estate professionals in the Charlotte area nervous. Although I have an account with Wachovia, I am not so worried about them collapsing, but rather with the possibility of more layoffs. Charlotte is a city that greatly depends on the banking industry for its growth. The recent collapse of Indy Mac, as well as the steady decline of bank profits over the past year, is very frightening to Charlotte’s future. If Bank of America and Wachovia seek federal protection in the future, it will still greatly hurt the real estate market in Charlotte, because layoffs and cutbacks would soon follow. Whatever the Fed decides to do will hurt our city either way, and I hope that everyone is prepared for the fallout that could take place. I personally believe that we have not seen the worst of the fallout that has taken place due to the subprime meltdown. I just hope and pray that people are prepared to weather the storm for another two years.
I realize that in my first few posts, I have been really only stating my personal opinion. Please look for my next post where I will explain in greater detail why I feel the economy will not rebound until 2010.
Thanks,
Mike S. - Texo Properties (www.texonc.com)
Thursday, July 10, 2008
Why Getting the Deed is Important
Many homeowners are reluctant to deed me the property on their foreclosed properties and I can see why they might be reluctant. A property deed shows ownership of the real property. So why would anybody deed their property to a total stranger?
Why the homeowners are hesitant:
·They think you are going to steal their house
·This is a fairly new concept and they are not familiar with it
·They have heard horror stories of people being taken advantage by investors
·They are in denial and think they will make up their missed payments
·Their lawyer/ friend thinks it is a bad idea
·Other investors said they can do the same thing without the deed
Why the homeowner should not be hesitant:
·I put in writing what I intent to do with the deed and recommend their lawyer look it over
·In my contract I state that if a “short sale” is not accepted by the bank I will deed to the
property back to the homeowner
·The homeowner needs to be more aggressive than other people in foreclosure if they want to
save their credit
·If the property is foreclosed on, the property is deeded to the bank anyway, so why not try to
avoid the foreclosure process all together.
·The banks are more likely to seriously considered my offer if they know I hold the deed to the
property
When I explain to the homeowner the benefits of deeding me the property and recommend they have their lawyer look over the contract, they are a lot more likely to work with me. It is really all about educating the homeowners on the process and making them feel comfortable. Now please keep in mind that I only recommend that a homeowner deed me their property if they are several months behind on their payments and have no intent of making them up. Only motivated sellers will work with investors on such a new concept, but once they are informed of the benefits, it usually is their best option. I hope this helps both homeowners and investors understand the concept of “getting the deed” a little better. In my next blog I will talk about why the banks view the deed so highly in working with investors on short sales.
It’s a new day, new deal, new opportunity
Mike S. - Texo Properties (www.texonc.com)
Why the homeowners are hesitant:
·They think you are going to steal their house
·This is a fairly new concept and they are not familiar with it
·They have heard horror stories of people being taken advantage by investors
·They are in denial and think they will make up their missed payments
·Their lawyer/ friend thinks it is a bad idea
·Other investors said they can do the same thing without the deed
Why the homeowner should not be hesitant:
·I put in writing what I intent to do with the deed and recommend their lawyer look it over
·In my contract I state that if a “short sale” is not accepted by the bank I will deed to the
property back to the homeowner
·The homeowner needs to be more aggressive than other people in foreclosure if they want to
save their credit
·If the property is foreclosed on, the property is deeded to the bank anyway, so why not try to
avoid the foreclosure process all together.
·The banks are more likely to seriously considered my offer if they know I hold the deed to the
property
When I explain to the homeowner the benefits of deeding me the property and recommend they have their lawyer look over the contract, they are a lot more likely to work with me. It is really all about educating the homeowners on the process and making them feel comfortable. Now please keep in mind that I only recommend that a homeowner deed me their property if they are several months behind on their payments and have no intent of making them up. Only motivated sellers will work with investors on such a new concept, but once they are informed of the benefits, it usually is their best option. I hope this helps both homeowners and investors understand the concept of “getting the deed” a little better. In my next blog I will talk about why the banks view the deed so highly in working with investors on short sales.
It’s a new day, new deal, new opportunity
Mike S. - Texo Properties (www.texonc.com)
Foreclosures are Up!!!!!
Foreclosure filings surged 53 percent in June
Nevada, California, Arizona, Florida and Michigan still leading nation
WASHINGTON - The number of homeowners stung by the rout in the U.S. housing market jumped last month as foreclosure filings grew by more than 50 percent compared with June a year ago, according to data released Thursday.
Continue Story: http://www.msnbc.msn.com/id/25612487/
This article is not very shocking or informative to anyone who has not been living in a cave for the past year. We are going to continue to see a steady rise of fore closured properties in the future as ARM’s reset and the economy continues to struggle. The government really is not doing much to help these people, but rather are issuing new policy’s, like Maryland, to slow down the process. The unemployment rate and foreclosure files are directly correlated, so until we start seeing the unemployment rate going down, we will continue to see a rise in foreclosure. As more properties head to foreclosure, every homeowner is affected. If your street has three foreclosures on it and they sell at auction for 70% of their value 12 months ago, your property has also decreased in value. It really is a shame what is happing to the housing market, but I can’t say I am shocked, because I think we all knew what was coming after the over exaggerated housing boom in the early part of the decade.
It’s a new day, new deal, new opportunity
Mike Sebeniecher, Texo Properties (www.TexoNC.com)
Nevada, California, Arizona, Florida and Michigan still leading nation
WASHINGTON - The number of homeowners stung by the rout in the U.S. housing market jumped last month as foreclosure filings grew by more than 50 percent compared with June a year ago, according to data released Thursday.
Continue Story: http://www.msnbc.msn.com/id/25612487/
This article is not very shocking or informative to anyone who has not been living in a cave for the past year. We are going to continue to see a steady rise of fore closured properties in the future as ARM’s reset and the economy continues to struggle. The government really is not doing much to help these people, but rather are issuing new policy’s, like Maryland, to slow down the process. The unemployment rate and foreclosure files are directly correlated, so until we start seeing the unemployment rate going down, we will continue to see a rise in foreclosure. As more properties head to foreclosure, every homeowner is affected. If your street has three foreclosures on it and they sell at auction for 70% of their value 12 months ago, your property has also decreased in value. It really is a shame what is happing to the housing market, but I can’t say I am shocked, because I think we all knew what was coming after the over exaggerated housing boom in the early part of the decade.
It’s a new day, new deal, new opportunity
Mike Sebeniecher, Texo Properties (www.TexoNC.com)
Wednesday, July 9, 2008
Getting the Deed
Getting the property deeded to the investor is not as bad as many homeowner think and can even help in the short sale process. I understand that many homeowners might be hesitant to give their deed to someone they hardly know, but the benefits do outweigh the negatives. If a homeowner is in foreclosure and does not have the money to pay their loan, than what do they have to lose? If you let the house go into foreclosure, the bank takes the property back and has the deed anyway. What I do as an investor is take the deed to the property strictly for the purpose of having better leverage to deal with the bank. Rather than giving the deed directly to the bank and having a foreclosure on your credit, it’s in the best interest of the homeowner to deed me the property and let me conduct a short sale, so that their credit is saved. If the short sale does not work, I will deed the property back to the homeowner and let them turn it over the bank. If the banks decide to accept my offer then I already have the deed and the homeowner is no longer needed and is free and clear of all responsibilities. I understand that it is a very hard concept for homeowners to grasp, but with so many investors conducting short sales, it really does help in negotiating with the bank.
It’s a new day, new deal, new opportunity
Mike Sebeniecher, Texo Properties (TexoNC.com)
It’s a new day, new deal, new opportunity
Mike Sebeniecher, Texo Properties (TexoNC.com)
Tuesday, July 8, 2008
The American Dream
Why you might never own a home
Houses used to be an essential part of the American dream. But for many middle-class families, a home of one's own now seems out of reach
By Lauren Barack, MSN Money
Cathy Mano, 44, works at a nonprofit in San Francisco. Her husband is an acupuncturist. The two pull in a little less than $100,000 a year together. Mano knows she's nowhere near the poverty level, but she's not sure home ownership is in the cards.
"We can't afford to buy a home," she says. "Housing costs are so high that we haven't really thought about it -- although I do more often now that I have a daughter."
They don't have a yard, which means her daughter can't have a dog, Mano says. "So she has a guinea pig."
Continue Article: http://articles.moneycentral.msn.com/Investing/HomeMortgageSavings/WhyYouWillNeverOwnAHome.aspx
This is a very interesting article that touches on why the real estate industry has collapsed. It is every American’s dream to own a home with a yard where there kids can play. It makes more financial sense as well. We are taught from a very young age that our home is our nest egg and over time the equity that is built up will one day help us through retirement. This is simply not the case anymore. Steadily we have arbritraley increased our home values for far too long and we are finally seeing the market correct itself. How a home in 2002 worth $200,000 was sold for $420,000 in 2006 is beyond me. I could talk all day about inflated home values, but what I really want to touch on is the people who are suffering the most. Home prices have gotten so out of control that middle class families, who are in search of the “American Dream”, are forced to stretch themselves to thin financially in order to provide a safe environment for their children. These people where not buying million dollars home and living above their means, like you hear some many people talking about today. Homeownership shifted away from the lower middle class to exclusively the upper middle class and they were trying to keep up. The creative loan packages that are no longer available, such as “no money down” and interest only’ were a way for the lower middle class to achieve their American Dream. I think sometimes we, myself included, need to have a little more sympathy for those people who are currently in foreclosure. I know sometimes I say that it’s their own fault for buying a house they could not afford, but they were just doing what they were taught as kids. Buy a house, don’t rent, you will be throwing your money away. I do not have an answer or a timeline for when and how the real estate industry will turn around, but the one thing I do know is that we need the lower middle class to do it.
It’s a new day, new deal, new opportunity
Mike Sebeniecher, Texo Properties ( TexoNC.com)
Houses used to be an essential part of the American dream. But for many middle-class families, a home of one's own now seems out of reach
By Lauren Barack, MSN Money
Cathy Mano, 44, works at a nonprofit in San Francisco. Her husband is an acupuncturist. The two pull in a little less than $100,000 a year together. Mano knows she's nowhere near the poverty level, but she's not sure home ownership is in the cards.
"We can't afford to buy a home," she says. "Housing costs are so high that we haven't really thought about it -- although I do more often now that I have a daughter."
They don't have a yard, which means her daughter can't have a dog, Mano says. "So she has a guinea pig."
Continue Article: http://articles.moneycentral.msn.com/Investing/HomeMortgageSavings/WhyYouWillNeverOwnAHome.aspx
This is a very interesting article that touches on why the real estate industry has collapsed. It is every American’s dream to own a home with a yard where there kids can play. It makes more financial sense as well. We are taught from a very young age that our home is our nest egg and over time the equity that is built up will one day help us through retirement. This is simply not the case anymore. Steadily we have arbritraley increased our home values for far too long and we are finally seeing the market correct itself. How a home in 2002 worth $200,000 was sold for $420,000 in 2006 is beyond me. I could talk all day about inflated home values, but what I really want to touch on is the people who are suffering the most. Home prices have gotten so out of control that middle class families, who are in search of the “American Dream”, are forced to stretch themselves to thin financially in order to provide a safe environment for their children. These people where not buying million dollars home and living above their means, like you hear some many people talking about today. Homeownership shifted away from the lower middle class to exclusively the upper middle class and they were trying to keep up. The creative loan packages that are no longer available, such as “no money down” and interest only’ were a way for the lower middle class to achieve their American Dream. I think sometimes we, myself included, need to have a little more sympathy for those people who are currently in foreclosure. I know sometimes I say that it’s their own fault for buying a house they could not afford, but they were just doing what they were taught as kids. Buy a house, don’t rent, you will be throwing your money away. I do not have an answer or a timeline for when and how the real estate industry will turn around, but the one thing I do know is that we need the lower middle class to do it.
It’s a new day, new deal, new opportunity
Mike Sebeniecher, Texo Properties ( TexoNC.com)
Monday, July 7, 2008
A Weak Dollar Could Be A Good Thing
The buck doesn’t stop here; it just keeps falling
Crumbling value of the dollar resonates through slumping economy
WASHINGTON - Things in the U.S. sure are tough. Brother, can you spare a euro? Signs saying "We accept euros" are cropping up in the windows of some Manhattan retailers. A Belgium company is trying to gobble up St. Louis-based Anheuser-Busch, the nation's largest brewer and iconic Super Bowl advertiser.
The almighty dollar is mighty no more. It has been declining steadily for six years against other major currencies, undercutting its role as the leading international banking currency. The long slide is fanning inflation at home and playing a major role in the run-up of oil and gasoline prices everywhere.
Continue Story: http://www.msnbc.msn.com/id/25556072/
The current exchange rate for the American dollar is not favorable, but that does not mean it is a bad thing. If you are traveling abroad or buying foreign products then the weak dollar is bad. For those people who produce products in the U.S. and sell them abroad, they say the current exchange rate is great. For the first time in years, U.S. producer can compete with foreign countries on prices and this is a good thing. How does the weak U.S. dollar befit the American housing market? I hear a lot of people saying that there are too many properties for sale and not enough buyers out there. Foreigners are buying U.S. homes in record numbers and it is niche industry that will only continue to grow. If I am a homeowner looking to sell my home, I would definitely market my home to foreign investors. There are people all over the world, who are looking to invest their money in the United States. As most people already know, real estate yields the greatest return on investment, so that is why I am marketing my properties to foreign investors. There is some good in every situation. It is really important, now more than ever, to take the good with the bad and adapt to the ever changing world. We live in a global economy today, and it drives me nuts when people say there are no homebuyers out there. The larger you open up your market base, the more interest you will generator from buyers. It is such a simple concept to me and its articles like this that drive me crazy.
It’s a new day, new deal, new opportunity
Mike Sebeniecher, Texo Properties (TexoNC.com)
Crumbling value of the dollar resonates through slumping economy
WASHINGTON - Things in the U.S. sure are tough. Brother, can you spare a euro? Signs saying "We accept euros" are cropping up in the windows of some Manhattan retailers. A Belgium company is trying to gobble up St. Louis-based Anheuser-Busch, the nation's largest brewer and iconic Super Bowl advertiser.
The almighty dollar is mighty no more. It has been declining steadily for six years against other major currencies, undercutting its role as the leading international banking currency. The long slide is fanning inflation at home and playing a major role in the run-up of oil and gasoline prices everywhere.
Continue Story: http://www.msnbc.msn.com/id/25556072/
The current exchange rate for the American dollar is not favorable, but that does not mean it is a bad thing. If you are traveling abroad or buying foreign products then the weak dollar is bad. For those people who produce products in the U.S. and sell them abroad, they say the current exchange rate is great. For the first time in years, U.S. producer can compete with foreign countries on prices and this is a good thing. How does the weak U.S. dollar befit the American housing market? I hear a lot of people saying that there are too many properties for sale and not enough buyers out there. Foreigners are buying U.S. homes in record numbers and it is niche industry that will only continue to grow. If I am a homeowner looking to sell my home, I would definitely market my home to foreign investors. There are people all over the world, who are looking to invest their money in the United States. As most people already know, real estate yields the greatest return on investment, so that is why I am marketing my properties to foreign investors. There is some good in every situation. It is really important, now more than ever, to take the good with the bad and adapt to the ever changing world. We live in a global economy today, and it drives me nuts when people say there are no homebuyers out there. The larger you open up your market base, the more interest you will generator from buyers. It is such a simple concept to me and its articles like this that drive me crazy.
It’s a new day, new deal, new opportunity
Mike Sebeniecher, Texo Properties (TexoNC.com)
Tuesday, July 1, 2008
Where have all the home buyers gone?????
Ladies and gentlemen I hate to be the bearer of bad news, but the real estate market and economy are in the tank, with no sign of a quick turnaround. So why am I so excited? I am happy because now is the time to buy and hold properties. The house flippers and speculators are gone now. Savvy real estate investor can now buy properties at 70% of ARV and build up their inventory. Why are people not pulling money out of their 401K’s and IRA’s that are only earning 5% and invest in real estate? I guarantee you that in 10 years the return on buying and holding a property will be vastly greater than letting your money sit in an IRA. To me it is a no brainer. I am constantly looking for and finding deals all over the place. Foreclosures at an all time high and the banks are practically giving properties away to get them off their books. I mean they are losing $0.50 on the $1.00 to dump these homes as quick as possible. When people tell me that they don’t want to buy anything because the market is down, I want to slap them. Here is a simple economic lesson. You want to buy low and sell high. The people who say “now is not a good time to buy real estate” are the same people who buy into a stock after it has already gone up and wait until it drops to sell it. Get out there and start buying some properties. If you want to retire before the age of 65, you can’t afford not to.
It’s a new day, new deal, new opportunity
Mike Sebeniecher, Texo Properties (TexoNC.com)
It’s a new day, new deal, new opportunity
Mike Sebeniecher, Texo Properties (TexoNC.com)
Fleckenstein is to blame for the housing bubble
The end of the Superbubble
That sound you hear is the popping of a financial bubble in housing, the economy and the market. And you can trace it all to Alan Greenspan's Federal Reserve.
By Bill Fleckenstein
Reading the papers, it's quite clear that the enormity of the problems facing Americans (and the world, for that matter) has emerged to the fore. Consequently, I decided a quick recap of our troubles might be useful.
There is a budding realization that the housing bubble's collapse will be more difficult than the masses and Wall Street had believed. You could see this last week as the market moved back toward the lowest levels since the collapse began last fall.
It's now obvious that this is a problem not only for the consumer but for the financial system itself, which is in dire straits as it tries to deleverage, thereby compounding the problem.
In addition, it has become common to see stories about runaway inflation somewhere around the globe, with riots and protests against high food prices being a binding theme.
Continue Article: http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/TheEndOfTheSuperbubble.aspx
To place blame on Alan Greenspan for the housing bubble is as absurd as placing blame on you. It is the Feds job to keep the U.S economy running and that is exactly what he did. With the Dot Com meltdown at the turn of century, the economy was stalling and access to money was tightening. Mr. Greenspan did exactly what the Fed chairmen should have done. He lowered the interest to encourage the banks to lend money and in turn rejuvenate the economy. "It was our job to unfreeze the American banking system if we wanted the economy to function. This required that we keep rates modestly low," Greenspan explains. Was he aware of greedy banks and lenders making loans to people who should not have qualified in the first place? I think he must have known something, given the fact of the increased number of first time homebuyers qualify for loans. At this time the economy was strong and everybody was happy. If he would have started raising rates back then, then critics would have said he raised the rates to high and too fast and put the working class out of reach for owning a home. There are so many factors and people to blame for the housing meltdown that it is very unfair to place blame on Alan Greenspan, who up to recently was considered one of the best Federal Reserve chiefs of all times.
It’s a new day, new deal, new opportunity
Mike Sebeniecher, Texo Properties (TexoNC.com)
That sound you hear is the popping of a financial bubble in housing, the economy and the market. And you can trace it all to Alan Greenspan's Federal Reserve.
By Bill Fleckenstein
Reading the papers, it's quite clear that the enormity of the problems facing Americans (and the world, for that matter) has emerged to the fore. Consequently, I decided a quick recap of our troubles might be useful.
There is a budding realization that the housing bubble's collapse will be more difficult than the masses and Wall Street had believed. You could see this last week as the market moved back toward the lowest levels since the collapse began last fall.
It's now obvious that this is a problem not only for the consumer but for the financial system itself, which is in dire straits as it tries to deleverage, thereby compounding the problem.
In addition, it has become common to see stories about runaway inflation somewhere around the globe, with riots and protests against high food prices being a binding theme.
Continue Article: http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/TheEndOfTheSuperbubble.aspx
To place blame on Alan Greenspan for the housing bubble is as absurd as placing blame on you. It is the Feds job to keep the U.S economy running and that is exactly what he did. With the Dot Com meltdown at the turn of century, the economy was stalling and access to money was tightening. Mr. Greenspan did exactly what the Fed chairmen should have done. He lowered the interest to encourage the banks to lend money and in turn rejuvenate the economy. "It was our job to unfreeze the American banking system if we wanted the economy to function. This required that we keep rates modestly low," Greenspan explains. Was he aware of greedy banks and lenders making loans to people who should not have qualified in the first place? I think he must have known something, given the fact of the increased number of first time homebuyers qualify for loans. At this time the economy was strong and everybody was happy. If he would have started raising rates back then, then critics would have said he raised the rates to high and too fast and put the working class out of reach for owning a home. There are so many factors and people to blame for the housing meltdown that it is very unfair to place blame on Alan Greenspan, who up to recently was considered one of the best Federal Reserve chiefs of all times.
It’s a new day, new deal, new opportunity
Mike Sebeniecher, Texo Properties (TexoNC.com)
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