All Forum Posts by: Clifton Jones

Is this agent representing both the buyer and you? If so, they can provide the Listing Agreement that they signed with the Seller. That is not the same as the MLS Listing. These are two separate entities, at least in Florida.

As part of your contract, do you have an addendum that states the seller gives you the right to market for sale, negotiate, and enter into contract to sell immediately? If not, then you should probably add that to your contract, unless prohibited by state law.

Another addendum you can add is that the homeowner agrees to have their realtor remove the listing from the MLS once you have a signed contract. Again, this is only valid if it does not violate state law. If legal, then per these two addendums, you would have the rights to have it posted on the MLS through your realtor and he can market it just like any other property.

One caveat to that is that there are some realtor regulations in each state that might preclude the marketing on the MLS without stating that there needs to be third party approval, which can then cause other realtors to not bother showing the property.

Your realtor should also be posting this property on Craigslist, Kijiji, and other sites, if they are an aggressive realtor.

You should be able to market to both cash and financed buyers. There are ways to market this that do not require listing on the MLS and as long as you fully disclose to the end buyer AND HIS LENDER what you are doing, then you would normally not have a problem (unless it is an FHA loan).

I put that last in there, as it is still unclear whether they will require your name to be on the deed before they will underwrite the policy, which means they will not underwrite until after you have closed and the public records have been update.

I would tell you to see your real estate lawyer on this. Who is doing the negotiations with the lender(s)? Is your contract an option contract? What are the rules in Virginia regarding the listing and marketing of a property under contract?

In Florida, the realtors must get an addendum signed by all parties that allow for the marketing. As an investor, I do not sign that addendum, but with the realtors I work with, I still allow them to continue to market the property. I want what is best for the homeowner.

Here is the caveat to the previous paragraph. I require the realtor to sign a negotiation contract that states that as long as my company purchases the property, there will not be a negotiation fee charged, but if they find another buyer while I am negotiating the property, I will submit it, as long as it is a higher offer, but a negotiation fee will then be applied.

All of this is spelled out in the negotiation contract. On another thread somebody asked how the fee can be tacked on to the HUD-1 after it has already been submitted, so I will address that, also. If a new contract comes in, then a new HUD-1 must be submitted with the new contract. Since the price has changed, the lenders will require a new HUD-1 to identify their net proceeds, based on the new contract. Hence, you are no longer using the original HUD-1, so new fees and/or expenses are allowed to be included.

Kristian, I haven't dealt with these online programs, but I have looked at them. I would recommend looking at as many of these programs as you can and make a list of your likes. Once that is done, go to a web developer and provide them with what you want on your website.

Ask them to give you a quote to build the site, including the ability to make it scalable, meaning providing the website with the means to add new content.

It is much better to have the software under your control than in the control of somebody else. It also gives you the ability to have the software changed or updated, if you find that your original needs change.

Again, I would recommend making the software web-based, as it provides the maximum flexibility and accessibility. It would also give you the ability to have your team (i.e. realtors and other investors) have their own access to upload new short sale properties for you to negotiate. Built correctly, it will allow you to provide the required paperwork to the realtors/investors automatically.

I do not recommend sending the lender the entire package in just one PDF form. It is better to fax with a cover sheet that clearly identifies what page of the fax contains which document. You can also email the documents, but that is usually sent to the negotiator, after they already have the initial package.

Daniel, don't be so quick to dismiss short sales. If you do not feel that you are qualified to perform the negotiations, then utilize a negotiator. There are plenty of people on this site who negotiate for others. Two such people are Scott Hubbard and my mentor, James Ward (i.e. Crosswind_).

Speak with a negotiator and find out their rates, then factor that in to the highest price you are willing to offer on a property.

The main difference between a short sale and a house with equity is that the short sale will take much longer to close on the A-B side. You will also have more come back at a price that will be too high for you to profit from. But, in that scenario, it is best to step out of the way and let the property close as A-C. It does not bring you a profit, but it does position you to receive referrals from both the Seller and the end buyer, as it shows that not only do you want to make money, but you are willing to step out of the way to ensure the property can close.

Most negotiators on here will do everything they ethically can to ensure that your numbers will come in from the lenders, but there are times when the lenders will not settle for your highest offer.

Actually, many people are mis-informed. You do NOT have to be behind on your payments to initiate a short sale. You just have to show that you have a genuine hardship. If you are moving out of the area, but have been able to meet your payments to date, it is still a hardship. It is a given that you will have to rent or purchase a place where you are moving to, so if you have to pay two mortgages/rents, that would be a hardship.

That is not the only scenario, but it does illustrate that it depends on the hardship, not the payment history.

If you have comps, tell them you have pulled some comps. If you have repair estimates, let them know. Let them know what is happening in the neighborhood with regards to crime. Pull police reports, sex offenders lists, etc.

Not every property will need all of these documents, and if you can, I would suggest more than the normal three comps most people recommend, as long as they are all on the low side. The more comps you provide, the more it looks like you are not cherry picking to get a low number, although that is still what you are really doing.

Provide them to the agent at the end of the BPO/appraisal, after developing the rapport. Check out my blog for Getting the BPO to Come In Lower.

Caleb, I agree with Justin. If you are not wanting to go through the process and understand it inside and out without relying on some software package, then the best way to go about the negotiations is to outsource it.

While software can be a resource, what happens if and when the laws change? You would be relying on somebody else to ensure you are following the laws in your area. Are you sure you want to do that.

If you are going to do the negotiations for yourself, it is best to do it without using any "software program" until you fully understand the process. The program, when used, should be a tool and guide, not an instruction manual.

Not meaning to sound harsh in this post, but there is no "software program" out there that will tell you what needs to be submitted and when. That is property specific.

There are programs that might be able to help you, but if you want something to meet your specific requirements, then you should hire a website builder to build to your specifications. I do recommend that it be web-based so that you can access it from more than one computer. That will allow you much more flexibility to take trips, vacations, etc.

Good luck with your search. By the way, you can look up another web-based short sale application. It is at www.managemyshortsale.com. It might meet your needs or not. I am not affiliated in any way with them and have not used the program, so I can not comment other than to tell you that it is there.

Brett, your best bet when dealing with realtors is to meet quite a few of them and just be honest with them. State that you are an investor who is interested in working with them on purchasing properties.

We work with realtors in our business. One of our requirements when working with the realtor that we state right up front is that we handle the negotiations. We will not allow somebody else to handle the negotiations on our deals, for the most part, because most of the negotiators are not conversant with how to negotiate the deals we submit.

As an investor, you submit offers that are significantly lower the fair market value. Due to this, you would also submit reasons justifying the offer, such as repair lists, crime rate, sexual offender lists, police reports, anything that can cause the lender to accept your offer. Do you think that the typical negotiator, who is usually a title agency or the realtor themselves, would understand or even think it was worth it to submit your offer?

If the realtor is comfortable with this, then that is a realtor that is a potential candidate for your team. That does not mean that you should work with them. Once you have established that they accept the requirements you have (not necessarily the negotiation issue, but all issues), then you need to ask them about the properties they closed in the last year, 9 months, 6 months, month, etc. Establish whether they are go-getters, or if they wait for deals to come to them.

If they wait for the deals, then I would not want them on my team. I want active go-getters, somebody who actively markets properties, hold open houses, etc. Those are the realtors you want to work with.