Short Sale “Flip” Realtors

Short Sale ThiefHere we go again! Now before you decide to crucify me, read the entire blog. for my point. It seems that in every Bull or Bear Market in real estate, you can always count on a few things. In a Bear Market, you can always see the late-night infomercial’s of “get rich quick buying foreclosures” programs. In the 1980’s and 1990’s, it was Dave Del Dato, today, take your pick. Consumer: those guys get wealthy selling you DVD’s not buying foreclosures! Want to make money in real estate? Hire a reputable Realtor who knows the renovation game and who is experienced themself in that process. If 2005-2007 taught you anything, it should be that in real estate and the stock market speculation business, there are risks.

Now, here is what else you can depend on: Shady Realtors slithering out from their holes to “help you” get in front of the market. In 2005, how many Realtors did I see buying houses for $500,000 and then the lender giving them $200,000 on top of that to “renovate” the home (that never seemed to get renovated). They were driving new Ferrari’s and Lambo’s and when the market went belly up, they gave the houses back to the bank, but kept the cash. Sooner or later, when this market clears up, I’m certain jail will be in order for some of them.

Now the Short Sale scam artists. They show up with “I’ll negotiate the short sale for you” plan. You list your home with this Agent and a third party negotiates your sale. Say you owe $250,000 and this “negotiator” you hired gets an approval for a sale at $150,000 (and assume the market fell 50% to 60% in your area). Then, that Realtor puts in MLS that they have an approval for $175,000. Then Realtor B from 123 Realty brings an offer for $175,000. Well, the Realtor and his buddy just put $25,000 in their pocket EXTRA without trying to disclose too much to anyone about what is going on.

Nobody got hurt right? WRONG! First of all, in my opinion, it is unethical for a Realtor to be involved with this practice. For one thing, knowing you can sell for more and selling this lower offer to the bank while KNOWING you are going to flip this house for extra money is flat out misleading the banks. I don’t care what your personal opinion is about the banks and how they screw Realtors and cut our fees at the table and that government bailed them out. What is WRONG is WRONG and two or three wrongs by the bank does not give us the right to STEAL MONEY from anyone. The people getting SCREWED are the SELLERS who hired those agents under the pretense that they were being helped. The fact is, most Sellers will have a judgement put against them for the deficiency of the sale. So instead of the seller in this example getting $75,000 judgement against them, they will now have a $100,000 judgement against them. THEY HAVE TO PAY THAT MONEY BACK THAT THE REALTOR JUST STOLE FROM THE BANK.Sooner or later, the house of cards will come down again and close all the loopholes. But for now, those Realtors who participate in this type of sale should be ashamed of themself. Before you cry “Sour Grapes” because I am not making that money, I have closed 94 sides in 2010 and will close well over 100 transactions this year. I have been selling real estate for twenty years now and the REASON I have lasted this long is because I refuse to deal from the bottom of the deck and I refuse to screw the Sellers who hire me to get them out of the scenario that they are in. If that means I take a haircut at the closing table, I’ll take it. What I refuse to do is feed my greed at the expense of others while hiding under the “it’s legal” defense. It is NOT MORALLY correct and if those Agents would get off their lazy asses, they would be able to make a nice living as a Realtor ………………….. while genuinely helping people. There are no short cuts in real estate.

http://www.headofrealestat.com

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And What Did The Banks Do With The Money?

broken house

So the government spent ONE TRILLION to bail out the banks!  I found myself thinking today, why did they not bail out the real estate market instead?  It is estimated that it would take less than 800 Billion to bring all “upside down” property owners “right-side up” and that was a better route to go.  By bailing out the real estate market, it would have bailed out the banks to a degree at the same time.  It would have been a long term, win-win for America. The economy would have been rolling by now. After all, when President Bill Clinton pressed the banks to lower lending standards, it allowed way too many unqualified buyers to buy real estate.  Suddenly there were too many buyers and not enough houses.  Did they learn nothing from the savings and loan scandal? The banks were to blame for what happened to a larger degree.  You can make a case for others as well, but the banks should carry the bulk of the blame for the meltdown.

I believe President Obama made one of the biggest blunders in America’s history by not righting the upside down real estate market and this is the reason: China, the main buyer of our U.S. mortgages is no longer going to purchase those notes effective mid 2010.  At that point, the banks will have no choice but to raise interest rates to offset the monetary loss from China and to pay for the risk of holding those once fashionable loans.

The last quarter of 2009 and the first quarter of 2010 WAS looking pretty good….. until the China announcement.   What was a recovering, but still unstable realty market could take another downturn in 2010.

Quite simply, about 10% of homeowners (those upside down) may just take a walk and send in their keys.  After all, they can RENT the same caliber home now for much less.  Those investors who buy those foreclosures are the ones winning.  Mr. Obama wanted to protect “main street” but it looks like he took care of the banks who caused this mess with the Secretary of State’s husband.  His loan modification program? Nothing.  Refinancing adjustable rate loans for borrowers? Nothing.  The government was better off letting the banks fail and doing nothing that bailing them out.  They are back to the old ways of GREED, GREED, GREED.

I’m not really certain at this point of Senator McCain would have been any different if he would have been elected.  What the country really needed was a TRUE right wing conservative that would have allowed the system to correct itself.  I really can’t see what all of this mounting debt will ever be helpful.  We have given our keys to China, and they really own the USA right now.  The banks have done NOTHING to bail out the average American yet took the bailout money to fix their own mess.  One that they created.

We were promised “Change”….. what we needed was REAL Change.  This is not a short-term fix. The President seems like he is already running for re-election and taking the short-term steps to ensure a small boost in the economy.  Not the long-term stability of our great nation.

America needs to reevaluate.

http://www.headofrealestate.com

Market Crash

The Stock Market is down 700 points already today! So much for the 700 BILLION dollar bailout plan. Consumer confidence is circling the drain! I got to thinking about this and I came to a conclusion that I bet will be the next trend in America. PAY OFF YOUR HOUSE!

If you have the cash, look at it this way. If your $100 a share stock crashes, you end up with a worthless piece of paper. If the real estate market keeps going down, you can live in your house forever! Investment? The value of the house goes down, but it WILL come back up. You have the structure, the land and the income from your rent rolls. With stocks, you have an egg if you are in this market. I still think real estate is a better investment…… now more than ever.

for more information, visit my website at: http://www.headofrealestate.com

Gordon Gekko Rises Again

Gekko Would LOVE 2008

Gekko Would LOVE 2008

The Stock Market CRASH of September 29, 2008. Gordon Gekko would be in his finest hour. Money is being lost……………… and made on Wallstreet. Funny how when the real estate market has been sucking air, Wallstreet was packaging all the bad mortgages and selling them off. It took a few years, but now everyone has their pants around their ankles.

Now Wallstreet wants the common American tax payer to “bail the out” of this jam. Everyone is pointing fingers. Obama is blaming McCain and McCain is blaming Obama. I ran across an interesting video clip today that helped me see through this mess. See it here :

http://www.youtube.com/watch?v=_MGT_cSi7Rs

In 2004, it was brought to the attention of our congressional leaders and you can see the reaction in the video. In 2005, if I had walked into one of those Wallstreet Banks, they would have called security and had me removed from the building! When everyday Joe got into trouble with a mortgage they no longer could afford, Wallstreet could give a hoot! GREED as Gordon Gekko used to say! It won Michael Douglass and Academy Award, but in 2008 it is for real.

I’m certainly not an expert in what is going on. I certainly have had and like most of America am having a rough time with the real estate market. But what I do know is that those big banks went into this mess thinking they were going to make a killing. They wanted those restrictions lifted so they could loan more and more money. GREED. Now they lost money and need to be bailed out! What about the everyday American. How is this going to trickle down and help Average Joe?

I do know that banks are not lending! That is causing a real estate (and an everything) meltdown. But I will bet you this: WHEN those lenders get bailed out by the government / U.S. Tax payer, they will not be quick to loan money again. Why? GREED. The fix only works if money is bled back out into the streets. If Wallstreet is not willing to loan money on Main street, the bailout will fail. Gordon Gekko would have made a killing!