So what do you think?

Posted by admin December - 31 - 1969 - Wednesday ADD COMMENTS

 

 

 

 

 

 

 

X-BROKER                                 TURNER                               and            HOOTCH:)

I humbly submit my 100th featured post!!

Posted by admin December - 31 - 1969 - Wednesday ADD COMMENTS

 Hi fellow Rainers. This is one of those post I have been struggling with for days. My dilemma has been whether to write it, or not. "Well, Broker Bryant, what's the big deal?" The big deal is, this is my 100th featured post!! Now I guess this is based on the assumption that it will be featured. OK, so I admit, I e-mailed a moderator and gave a "heads up". Didn't make much sense to write a post about being my 100th featured, if it didn't get featured. So I cheated. Did you know I have never done that before? I don't solicit features and I don't solicit comments. To me, all achievements have to be earned not solicited. Anything less than that is a "shallow achievement". It's cheap. It's worthless.

So how did I end up with 100 featured posts? Is my writing that good? Am I that "popular"? Well, to be honest, I don't have a clue. It's one of those things that "is what it is". I've always strived to do my best but have never consciously written with getting a featured post in mind. I don't know the "secret formula" or what it is the folks with the power to feature, are looking for. I just write and post. I write about what I know, Real Estate. I tell stories. I write stuff that I hope will help someone in their business. At the same time, I write stuff that the consumer will find interesting. My posts are written to both audiences, the consumer AND my peers. I very rarely write "members only" posts.

Is it because I'm popular? I'm sure that has something to do with it. I mean let's face it, no matter how fair a moderator tries to be, their choices will always have a bit of bias in them. But that's no different than anything else in life. All of our decisions are based on our biases, whether consciously or subconsciously. It's the way the mind works. But there is nothing I can do about that either. I am who I am. I don't bring out a different personality for ActiveRain. I write the way I talk. And I write the way I feel at any given moment. My thoughts are my own. I try to convey my thoughts by the use of words.

I joined ActiveRain back in June of 2006. I think I was member 620 or something like that. Not quite sure. I do know we didn't have featured posts back then. Features started in August.

My 1st featured post was on August 15. It was my 54th post and from what I can tell, it was the 2nd featured post on Active Rain. Here it is:

ActiveRain has helped me to grow as a REALTOR® and most importantly as a person. It helps me to unwind. It helps me to explore what it is I do and how I do it. I have made many friends. And I have learned more than I ever thought I could. I write because I enjoy it. I don't write for business. I write because it is relaxing and because I like sharing what I know.

"OK, Broker Bryant, what's the point of this post?" Well, first, I felt I needed to mention the 100th featured "thingie". Why not? It is a pretty big milestone for me on ActiveRain and I wanted to share it with my friends. Also, I thought maybe by writing this is would help someone who is just getting started with Blogging. Maybe, by reading some of my past posts it will help you establish your own voice and style. So with that in mind, here are some of my past posts, that I enjoyed writing or that struck up a good conversation or debate. Enjoy!!!!

REAL LIFE STORIES:

REAL ESTATE IS ABOUT PEOPLE NOT MONEY:

REALTOR® TIPS:

REALTOR(R) ETHICS:

HOT TOPICS:

ACTIVERAIN AND BLOGGING:

AND FINALLY, A FEW OF MY FAVORITES INCLUDING A CARNIVAL OF REAL ESTATE WINNER AND CANDYBAGS:

OK, I'm done. I sincerely want to thank all the members of ActiveRain that have supported my Blog. By the way, this is my last post on ActiveRain.

"Broker Bryant, will you list our house?"

Posted by admin December - 31 - 1969 - Wednesday ADD COMMENTS

 Today, I'm going to write about my week as a listing Broker. Not quite sure where this is going to end up but let's see what I can come up with. Maybe, it will be educational, maybe not. Either way it will be my post for today. Sometimes, I just have to start typing to get the juices flowing.

I had a pretty busy week when it comes to taking listings. I took five new ones. Several are in different stages of being made market ready so won't hit the system for a week or two. But what I thought was interesting was the diversity in the way these folks decided to do business with me. I wasn't in competition for any of them. They basically just called me and said "list my house". That's pretty normal for me but I still like it when it happens.

The first listing is a house owned by an out of State mortgage broker. I had met him in late 2005. He was the MB for a Buyer, that was purchasing one of my listings, with the help of another REALTOR®. Well, I spoke to him several times during the course of the transaction, as I always do, and after the deal closed I ended up asking him if he wanted to buy a property in Florida. Well he did, so I sold him one of my listings, sight unseen, over the Internet. His plans, for the house, have changed so he called me this week to place it on the market and sell it for him. OK, I can do that! So by taking the time to form a relationship over the phone, I will end up with two sales.

The second Seller called me off my expired letter. As you know I send them out daily to every expired and withdrawn listing in my area and have for years. His house has been on the market for three months at $240,000. I just listed at $185,000 to $195,000!!!! That's right folks. His property was overpriced by 20%!!! My goodness, I'm glad he called. He's out of State and the house is costing him money every month. So by sending out my expired letter, religiously everyday, I just got a very clean and priced to sell, listing. Yippee!!!

My third listing, came from a guy who works for the local water company. His job is driving around all day turning water service on and off. He called because he sees my signs everywhere and always notices that the "For Sale" riders are getting changed to "Sold" riders very quickly. His perception is that I am the only one selling houses. Why is that? Well, I'll tell you why. First, I am selling properties, but most importantly, I am one of the only REALTORS® in Poinciana, that changes the rider as soon as my property goes pending. I get tons of listings from doing that one simple thing.

OK, my fourth listing, was a referral from one of my current Sellers. Even though I haven't sold their house yet, they have been telling everyone about me. Why? Because I am sooooooo good looking! Oops! that's not right. Sorry, I got carried away. They tell folks about me because of my communication skills. I am in constant contact with my Sellers. I call them all the time. They are my friends. So like friends do, they refer me business.

Now, my fifth one, I really like. These folks called me because of something I used to do ten years ago!!!! When TLW and I first opened Tutas Towne Realty, Poinciana only had about 10,000 people and had one grocery store, the Winn Dixie. Everyone shopped at the Winn Dixie. At that time, I drove a green Sebring convertible and used to put my magnetic signs on the side and cruise through the Winn Dixie parking lot, with my top down, waving at people, smiling and just having a good ole' time!! I would do this several times a day and I did it for a few years. I was a happy guy, so I would have my stereo playing. I'd be singing, waving and talking to people. It was my own little, one man parade. Well, these folks saw me doing this several times, wrote my number down and knew that when the time came for them to sell, they would call me. Ten years later, they did. How cool is that?

"OK, Broker Bryant, there you go bragging again. What's your point?" My point is, I did absolutely nothing special. These things required no skill whatsoever. All that was required was doing little things, everyday, to move my business forward. Anyone can do it. But will you?

  • Be friendly when talking with others in the business.
  • Have a daily plan whether it's mailing an expired letter or making calls. The key being daily. Just do it!
  • Little things can make a big difference. Changing the sign rider is so simple but brings me lots of business.
  • Communicate, communicate, communicate. Don't have any thing good to report? Call your Sellers anyway. Let them know you are on the job.
  • Be visible in your community. Don't be a "secret agent." Put a smile on and get out there.

That's it. Broker Bryant's Real Estate Ramblings for today. Now, if I can just figure out how to get Buyers to buy I'll be back in business. What say you?

**CLICK ON THE PICTURE TO VIEW A VIDEO SHOW USING realesateshows.com Cut your sound on!

All content copyright © 2007 – Broker Bryant Real Estate Ramblings

What’s all the drama about?

Posted by admin December - 31 - 1969 - Wednesday ADD COMMENTS

While doing my daily MLS research, this morning, I noticed a new listing, that was priced very, very well. In fact it was priced "to good to be true". So I thought I best do a little more investigating on it. Well it turns out the list price was actually nothing more than a teaser. I think it's called "Drama pricing".

This is a one year old 2200 sq ft home that has a true market value of around $235,000. The listing price is $160,000! The REALTOR® only remarks disclose that this is NOT the real price but is being used to "catch your attention". Isn't that interesting? This is the first time I have seen this in my market, so I'm wondering if anyone has used this technique before?

It certainly "caught my attention" so it was effective in getting me to research the listing. I wonder how much it will sell for? Now as you may know, I use Range Pricing on my listings, so I too am looking to sell my listings for higher than the list price. But the "list price" is normally only about $10,000 less than what my properties comp out at.

I'm not sure how pricing a property 35% less than market value would work. Would it create a bidding war even though the market is so slow and Buyers are few and far between? Would it create havoc and bad will with my peers? Or would it work?

I don't know if you would get market value for it but I wonder how close you could get? One thing I do know is it did "catch my attention". I might just have to give this a try. Maybe I'll just price all my listings at $100,000 and throw them out there to see what happens. That would make a pretty good advertisement: "Come on down to Tutas Towne where ALL properties are priced at $100,000. Make us your best offer!"

I guess if nothing else it would create a buzz. And I like a good buzz. Oops…that didn't sound right. How about…I like excitement? That's better.

So what do you think? Should I give it a try? Have any of you guys used "Drama pricing" before? Inquiring minds need to know.

***Image compliments of Sally "WooHoo" Cheeseman.

All content copyright © 2007 – Broker Bryant Real Estate Ramblings

Broker Bryant has a serious ‘tude!!!

Posted by admin December - 31 - 1969 - Wednesday ADD COMMENTS

 Hi folks. OK my post today was sparked by Jennifer Allan’s post “What Your Sellers May Not Know……but need to.” If you haven’t already read it, take a minute to do so, as it is very good. Jennifer is briefly touching down on a mistake she had made by assuming that an experienced Seller knows all about the selling process. Jennifer and her partner made the decision to…..well here’s what she wrote:

“We didn’t want to insult his intelligence by boring him with all the details of having a home on the market; we figured if he had a question about the process, he’d ask.”

Well, it turned out that he was not as informed as Jennifer had assumed and it create unnecessary stress and confusion for the Seller.

By the way, Jennifer Allan is a very smart REALTOR®. She is also a trainer, consultant and a published author. In fact I just received her book “Selling with Soul” in the mail today and I’m really looking forward to reading it. One thing I have learned, in my 13 year real estate career, is that we will NEVER know everything. Real estate is a learning process. We all make mistakes. The key is to learn from our mistakes and to learn from each other. Even though I feel I’m pretty smart when it comes to real estate I’m sure I will learn something new from Jennifer’s book. Sometimes it’s something as simple as a new way of looking at things.

OK, enough of my book plug for Jennifer. Go to amazon.com and buy her book. I’ll be back in a week or two to post my book review. Jennifer, I promise to be nice.

Here is the comment I left on Jennifer’s post:

“Jennifer when I meet with experienced Sellers I tell them that I’m going to just start talking about the process and ask them to stop me if they feel they already know something. They NEVER stop me. I agree completely it is our job to make sure our customer/clients know the process. In fact the majority of my listing presentation is talking about showing procedures, contract negotiations, inspections and getting to closing. My assumption is that I already have the listing so my job is now to educate. It also keeps the Seller focused on the end result and not whether or not to hire me. I hire myself as soon as a potential seller calls me. Does that make sense?”

Folks, read my comment carefully. It contains the key to my success at taking listings. And that key…..is attitude. My attitude, from the moment a potential Seller calls me, is that I’m hired. I don’t spend time at a listing appointment selling my services. My time is spent doing my job as their Broker. And my job is to educate them on the selling process, market conditions and pricing. My entire presentation is based on the assumption that the listing is already mine. In fact, when I go to a listing appointment I’m going over to place the property on the market NOT to sit through a REALTOR® interview. This is a mindset that I’ve always had and it works.

And why shouldn’t I have that attitude? I’m very good at what I do. I know my market inside out and I’m the best person for the job. I know what your thinking, “Broker Bryant that sure is cocky.” The reality is, that it’s not cocky at all, it’s confidence. There’s a big difference. To me, I would be doing THEM a disservice if they don’t list with me. I have many years of experience and knowledge and I know that if their house can be sold then I’m the one that will get it sold. I also know that I will look out for them and make sure that things go as smoothly as possible. If I know these things to be true how could I have any other attitude? I can’t.

Folks, next time a potential Seller calls you, hire yourself. Then, don’t go over to interview for the job, go over to start working. Just jump right in and start educating your new customer/client. Then when you are done have them sign the listing agreement. If you approach your listing appointments with this attitude it WILL work. Confidence is contagious. If you exude confidence in what you are doing they will have confidence in you. Taking the listing will be nothing more than a technicality.

So, there you go, a new way of looking at things. How’s it look?

Picture is compliments of Bob Carney. Thanks Bob!!

All content copyright © 2007 – Broker Bryant Real Estate Ramblings

The Seller NET Sheet. Are you using it?

Posted by admin December - 31 - 1969 - Wednesday ADD COMMENTS

Broker Bryant is spaced outOK I need to know. How many of you guys are using Seller Net Sheets as part of your listing presentation? Did you know if used properly they can be the key to you getting the listing? Sounds to simple doesn't it? Well….it is. Let me expand on this.

First, if you are not giving your Seller a Net Sheet at time of listing you are missing the boat AND doing your Seller a disservice. Here's why they are so important. The only figure that should make any difference to your Seller is how much money is left over after all is said and done. Purchase price, commission, closing costs, Seller contributions and who pays for what should make no difference at all to your Seller. Your job is to get them to understand this.

How many times have you had your Seller tell you "I ain't paying no closing costs for the buyer!" or "I'm not paying you x% to sell my property!" My answer is always the same, "Why not? What difference does it make to you? Let me show you the figures and what your Net is. Isn't that really all you care about?"

It also important to remember that the Seller may have no clue what costs he is responsible for. We have to make sure they know this. Not when an offer is received or when we are reviewing the HUD prior to closing but at time of listing. This is very important stuff.

When I'm at a listing appointment and I've done my walk through and gone over my CMA with the Sellers the next thing I do is say, "Now let me lay out my pricing plan to get your property sold." This is when I prepare my Seller Net Sheet.

My Net Sheet is very simple and I have a preprinted form so I can just fill in the blanks while I am sitting with the Seller. It looks like this:

Estimated Net Sheet prepared for Mr. and Mrs. Need T. Sale

For 123 Callme Dr. on 8 November 2007

Recommended Range Price

$190,000 to $210,000

Target Sales Price

$ 200,000

Real Estate Com. 10%

( 20,000)

Doc. Stamps(tax

(   1,400)

Title Insurance

(   1,500)

Misc.

(     100)

 

————–

****Estimated NET

$ 177,000

 

=========

***This NET does not include payoff of any liens, mortgages, HOA dues, property taxes or repairs that may be owed or required. It may vary slightly at closing.

That's it! Short, sweet and simple. I then lay it in front of them and we start talking about the NET figure. At this time I also want to know how much they owe and whether or not they have a prepayment penalty. By doing this I now have them concentrating on what is important to them, how much money they will put in their pocket at closing. My commission, being above the NET line is now not a factor. This NET sheet needs to be signed or initialed at time of listing and attached to the top of their listing agreement copies.

Now, the NET Sheet comes into play again when we receive an offer. This is what I do. First, I am NOT an attorney and I am not required to or qualified to go over a purchase offer line by line. What I do is prepare a summary of the offer and attach another NET sheet to it. My summary usually goes like this:

Attached, please find the purchase offer received for your property. The terms in a nutshell are as follows: The Buyers are offering $195,000 and have placed a $2,000 deposit with First American Title in Kissimmee. They have been pre-approved by Countrywide Mortgage (letter attached) and the sale is subject to satisfactory inspections(within 15 days), appraisal, survey, clear title and final mortgage approval(within 21 days). The closing will be on or before 31 December 2007. The Seller will contribute $5,000 towards the Buyer's closing costs and provide a Homebuyers Warranty at a cost of $350. The Seller will be responsible for structural repairs not to exceed $1,000 and termite/wood rot repairs not to exceed $1,000.

Your estimated NET will be as follows: Insert new NET Sheet here including the costs the Buyer has requested. Please review the purchase offer and let me know how to proceed.

That's it. I have given them the information and the contract so they can take time to digest it before we get together to decide the way forward.

OK, the NET Sheet comes into play one more time. Once we have negotiated and have an accepted offer, I make copies of everything and attach another NET sheet on top. It will have all the costs just as the others did. I NEVER include tax pro-rations, HOA dues, liens and mortgage payoff data. Why? Because I cannot control these costs. I only include costs where I know the exact amounts.

Now the final NET Sheet has an additional paragraph at the bottom. This too will be signed. My final NET Sheet has this in BOLD print:

This NET is an estimate and may vary slightly at closing. This is a legally binding contract. Please feel free to have your Attorney review the paper work. It is quite normal for closings to be delayed. Please do not make any major financial decisions based on the proceeds of this sale until the transaction is closed and the check is in your hand. Do not place any deposits, on anything, that are not refundable should this transaction not close.

Now folks, as you can see, not only are my Sellers extremely informed about what's going on but I have assured that there will be no surprises that come up on the HUD statement. The Seller cannot say I didn't tell them this or that.

So that's it, Broker Bryant's crash course on the importance of the Seller Net Sheet and Transaction summary. It sure makes my life easier. I don't like surprises and neither do my Sellers. How about you?

Picture compliments of Andrew Cox.

Copyright © 2007 Broker Bryant Real Estate Ramblings | All Rights Reserved

Becoming a better "short sale" expert. A series by Broker Bryant

Posted by admin December - 31 - 1969 - Wednesday ADD COMMENTS

I’ve been spending a lot of time this week thinking about short sales. My market, Poinciana FL, is going to have a bunch of them this next year so I figure it’s time to brush up on my short sale skills to see what I can do to help some folks out.

The first thing I have decided is that I’m going to be very picky with who I work with. My last post touched on that a little. The percentage of getting short sales closed is very, very low. I hear 25% to 30%, if you’re lucky.

My goal is to up that number substantially. If I can’t close better than 1 in 4, well…..I have better things to do with my time. My target is to close 3 in 4.

So, with that in mind, I will be doing a series of posts sharing my thought process as I try to figure this out. Your suggestions are welcomed.

Here is a rough outline of my thoughts thus far:

  • The Seller has to have a legitimate hardship.
  • The Seller has to be motivated to work with me and the Lender in providing all the documentation we’ll need to get the job done.
  • The Seller will need to provide me with full financial information prior to me placing the property on the market i.e. 2 years tax returns, bank statements etc.
  • I will need a signed “authorization to release info” letter and a hardship letter at time of listing.
  • The Seller will need to sign a disclosure stating that I have suggested they seek legal advice and that they understand the negative ramifications of being granted a short sale.
  • And finally, I want to make sure the Seller did NOT purchase the property in a fraudulent manner.

Folks, this last one is very, very important and the one I want to expand upon today. Over the last few years there were many homes purchased using stated income, low doc loans. There were also many homes purchased as “second homes” that were in fact not second homes but properties bought to flip.

Sellers need to understand that even though they didn’t have to prove their income when purchasing the home they WILL have to prove it in order to apply for a short sale. If they lied on their initial loan application this can be opening up a big ole’ can of worms.

What is the Lender going to say when the Seller provides a tax return for when they bought the property and it doesn’t match up with what they “stated” on their application? Have you thought about that? Have you been counseling your potential Sellers about this? If not, you need to start. These folks do NOT qualify for a short sale and could very well be opening themselves up to a fraud investigation by applying for one. They don’t need a REALTOR® they need an Attorney.

My point is, a short sale is not for everyone. As REALTORS® we need to do our due diligence prior to taking on a short sale listing. If we can be smart in our approach, to working with short sales, we can surely do better than a 25%-30% closing percentage. I know I plan to.

OK, so that’s it for today. Did I give you any food thought? Do you have any suggestions for me? Let’s think this through together. I want to do this right so please help if you can.

First post in the series:

A “short sale” is an option, NOT an entitlement!

Copyright © 2007 Broker Bryant Real Estate Ramblings | All Rights Reserved

Being responsive in a reactive world.

Posted by admin December - 31 - 1969 - Wednesday ADD COMMENTS

You talking to me?OK, WooHoo Sally this one’s for you. I know you like this stuff and you popped into my head as soon as I started writing. Check out this link on the Bowen Theory.

This post was inspired by some recent conversations I have been having with another ActiveRain member. I will leave that member anonymous unless of course they want to chime in.

Anyway, it seems that this particular person’s message keeps getting lost because of their presentation. Their presentation is always full of harsh criticism, focus on others, blame and an unwillingness to “open their mind” to other possibilities. They are not the only one. We have all fallen into this trap before.

It happens when we disagree with someone and instead of responding we react. Responding is taking the time to think things through and then debating the topic with a calm and well thought out response. It implies listening beyond the words and reflecting the feelings. That’s why it’s important to know what perspective folks are coming from. How are they looking at this situation? Responding is most likely to create a climate where honest, frank communication can occur.

By taking the time to try and understand the other parties perspective we are in a better position to present our thoughts where they have a better chance of being received. Responding is the mature way to communicate and debate.

On the other hand is reaction. Reaction is based on strong emotions and is an immature way to communicate or debate. You will notice this when you see folks who blame others more often, criticize harshly and take offense easily. Their focus is on others. They want instant solutions instead of exploring opposing options. They don’t see how they can be contributing to the problem. They are closed minded. Unfortunately when you are in reactive mode others sense this and get defensive. It prohibits productive discourse.

The Bowen Theory states that we are all connected emotionally. Our thoughts, actions and feelings affect others around us. What this means is when someone is being reactive others around them become reactive. And from there the conversation goes down hill real quick.

So the solution is, as hard as may be, to step back and think before RESPONDING to a reactive comment. Be the calming force and the voice of reason.

This my friends is one of the steps to becoming, not only a leader, but a good communicator. By applying this to your business you will become better at what you do and also a person that people want to work with.

Being a responsive person in a reactive world is not easy. But it is achievable. Food for thought on a Sunday afternoon. These are mine….what are yours?

Copyright © 2008 http://www.brokerbryant.com/ | All Rights Reserved

Bryant Tutas
Broker/Owner
Tutas Towne Realty, Inc
Licensed Florida Real Estate Broker
http://www.brokerbryant.com/
***The content of this blog is solely my opinion*** 

Do you believe in miracles?

Posted by admin December - 31 - 1969 - Wednesday ADD COMMENTS

Miracles do happen!…..that’s what my seller asked me today. I had set an appointment to meet with my Sellers because they had just been served the “20 days to respond” foreclosure “thingie”. We knew it was coming since they hadn’t made mortgage payments in a long time. 

The reason for my appointment was to go over their options, discuss lowering the price and possibly attempt to get a short sale. I like these sellers a lot and have been trying to sell their property since January. We’ve actually had lots of showings and received, what I thought was a very good offer, within 30 days of placing the property on the market. But alas….one of the spouses was not in agreement and the buyer walked and bought another house. 

The property is now priced very near to being in a short sale situation, so, with the foreclosure looming, it is time to lower it on down and try to get a short sale approved. 

BUT……about a month ago, my Seller had to go to the emergency room, for the second time in about a month, due to stress related to this situation. They are elderly folks and their credit is already shot. After talking a bit today I started feeling that going through a short sale would be too much stress for them.  

After I had delivered my spiel, the Seller looked at me and asked, “Do you believe in miracles”. Then he proceeded to tell me how they had decided to raise the price on the property by $40,000 and pray for a miracle!! Holy moly!!!!

My Seller has been praying about this and has been inspired to raise the price and hope for a miracle. They are fully aware of the fact that they may be losing their house. They are also not willing to go through the short sale process and, in my opinion, shouldn’t. 

Fortunately, at my suggestion, they had moved out of the house a couple of weeks ago and into a rental. They needed to do this to at least ensure they had a place to live if the house didn’t sell in time. 

So…..as a Broker, my options are: 

  • Tell them there isn’t a chance in heck of their house selling for 15% more than it’s listed right now and walk away from the listing.
  • Try to convince them that they are being foolish and that a “miracle” will not get their house sold.  
  • Agree to raise the price and pray for a miracle.

My question to you is….what would you do?

A smaller downpayment may protect the home buyer.

Posted by admin December - 31 - 1969 - Wednesday ADD COMMENTS

BAM!!! Get to work!! Hi folks. My friend, Bill Archambault, put up a post earlier today expressing his dismay over “When mortgage and real estate people start talking about people with out large down payments being undeserving a home of their own…..” Take a minute and go read Bill’s post. 

Did you notice this statement? “Truthfully, big down payments protect no one except the bank! Little or no down payment may even protect the home buyer, by maintaining his liquidity and putting the bank mutually at risk with the home buyer.” 

That statement is what this post is about. This is a real life example. 

I have a Seller right now who bought her home in Poinciana in late 2006 for $179,000. She’s from NY and in early 2006 came into $100,000. You’d think that would be good thing but the money came from a lawsuit related to the wrongful death of her only son. 

The stress of her son’s death and the ensuing lawsuit placed her in a position of wanting out of NY. So, as many people do, she moved to Florida! She used every bit of her $100,000 as a down payment and took out a mortgage for $79,000. 

Everything went well for about a year and then life, being unpredictable, dealt her a hand that caused her financial hardship. She was no longer able to keep up with her mortgage payments. She fell into default with her lender.

I met her about a month ago and valued her property at $75,000!!! This means that after selling expenses she is in a short sale situation. Could you imagine putting almost 60% down on a home and still being upside down in less than 2 years? That’s incredible. 

How much better off would this lady be if she had bought with even 20% down? She would still be upside down on her home BUT she would have cash reserves to help her weather the storm. 

Now this is an extreme case but it truly illustrates how “Little or no down payment may even protect the home buyer, by maintaining his (her) liquidity…”

I wonder if her REALTOR® or mortgage broker mentioned this to her when she went to purchase? I wonder if I would have said anything to her? Should we?

About us

I am a licensed real estate Broker in the state of Florida. My opinions on real estate have been formed from my experiences and 15 years of working in the business. My opinions are in line with Florida Real Estate laws and the REALTOR(R) Code of Ethics. Your State’s laws may differ. So do your own homework before implementing any of my business practices into your business.