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Hi folks. Short Sales. Why do I spend so much of my time messing with these things? Isn’t it true most people are just doing them to avoid honoring their promissory note? They borrowed the money they should pay the mortgage. Deadbeats!

I closed on a Short Sale a few months ago. The Seller had owned the house for 27 years. It was the retirement home for him and his wife of many years. After 30 years of hard work they were finally able to retire and move to Florida, pay cash for a home and enjoy their twilight years together.

All went according to plan for 20+ years. Then one day Mrs. Seller was diagnosed with cancer. After several years of surgeries and treatments she finally had to be sent to a nursing home. Her husband, now almost 80, could no longer take care of her.

Mr. Seller was forced, by high medical bills, to place a mortgage on their home for $175,000. Less than 2 years later the money was gone and tragedy struck again……Mrs. Seller died.

Seeing his wife of 55 years suffer was just too much to handle. Mr. Seller, distraught, had a stroke. He too had to be admitted to a nursing home. He was 82.

Through all of this Mr. Seller still hung on and continued making mortgage payments. By the time I was contacted to help sell the property the value had dropped to $73,000. Instead of continuing to throw good money after bad he decided to go forward with a Short Sale. Deadbeat!!

I mess with Short Sales because real people need me.

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more? www.CentralFloridaShortSales.com

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Recently I was asked “How will property values ever come back up if the appraisers keep discounting values for the declining market and the cash Buyers want the lowest price possible?”

The answer of course is…..get the Lender out of the equation. No Lender. No appraisal needed. Higher sales price. What you talkin’ bout Willis?

Let me explain. REOs and short sales still dominate the market in my area and are still bringing values down. What’s strange about this is the fact that inventory is very low and sales are at an all time high but values are still being depressed by…….Lenders. 

So…the “No Qualifying Owner Financing” is making a comeback. Investors are realizing that Buyers will pay a premium not to have to deal with Lenders. And the Investor can get a much better return on their money by holding a mortgage than they can renting the property out.

In fact, in my market, you can expect to get 10% to 15% more for your property if you’re willing to “hold paper”. How do I know this? Because my sellers are doing it.

Here’s an example of how this works out for a Seller.

Seller paid $85,000 cash 4 months ago. The intent was to rent it out for $1,100 a month. After expenses he would net about $750 a month. After 5 years the property may be worth…….well we don’t know do we? We do know if it were rented with no vacancies and no repairs (like that will ever happen) he would have received $45,120 in income. Roughly a return of 53% over 5 years.

Instead, what if he sold it for $120,000 with $25,000 down @ 8.75 with a 5 year balloon? By the way this property would appraise for $110,000 to $115,000 right now. It was purchased right because my buyer made offers on 14 properties at the same time. He ended up getting a deal on this one,

OK back to my example. With Owner Financing the payment would be $750 a month (same as the Net rent). After 5 years the balloon payment is $91,000 AND he would have received $41,500 in interest payments. $25,000 + 91,000 + 41,500=$157,500!! This a profit of $72,500 or a return of 85%. Roughly 30% better than renting AND he doesn’t own the property which means no maintenance or management.

Now folks these figures are not exact but they give you a real good idea of how owner financing works for the Seller.

And the Buyer? Well they can get a good house with a non qualifying mortgage and very minimal closing costs. It’s a win all the way around. The only loser? …Lenders!!

What say you? 

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