Huiting, international merger, acqusition and consulting; creative real estate service for Rhode Island.

Providence sees home prices drop by half

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 25 Apr 2009 20:48:08 -0500

A real estate companies report that in Providence, homes prices drop by half compared to the same period in 2008.

I do not quite agree with the data as my research shows a slight different result. Anyway, it is always a good idea to listen to different voices.

PBN.com: Providence sees home prices drop by half

Now offering residential real estate services for RI residents.
Powered by video marketing, research & transparency.

high end jewelry manufacturer for sale

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 25 Apr 2009 17:27:42 -0500

We have a high end jewelry manufacturer for sale now. This is a family business with over 20 years of history. The business has been designing and manufacturing high end jewelries for major jewelry retailers across the country. Average sales in the past 3 years have been well over $2million with a strong SDE (Sellers Discretionary Earnings). The business is only priced at half a million now which is very close to SDE. The business is located at New England area and can be relocated.

For more information, please contact Crebbers as below.

Crebbers is a merger and acquisition firm that helps your businesses achieve your merger and acquisition goal. We are one of the only firms that handle international transactions. contact us today to find out how we can work together.

Huiting Zhuang, CEO/Co-Owner

tell: 401-484-7322,
Crebbers LLC, international Merger, Acquisition & Consulting

The economics of SuperCoupons

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 25 Apr 2009 17:18:52 -0500

When the economy is bad, you do not need to be an economist to know the economy is bad. Everything around the corner is hinting that and you can just feel it.

Yesterday, I checked my mailbox as usual and a letter from supercoupon pops out. Usually, I can expect about 40 coupons in one mail. This time, the envelop just feels much light. Turns out that only 7 Coupons this time.

Those include coupons from: subway, dish network, directv,an air duct cleaning company,a phone company,a home security company (I guess this is in high demand now) and another air duct cleaning company.

I would assume when the economy is bad, businesses would want to do more marketing but apparently, the when the economy is bad, the first thing most businesses would cut is marketing dollar.

Real estate agents, are you also cutting your marketing dollars?

state-wide farmer's market to open from May 1

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 25 Apr 2009 17:04:06 -0500

The farmers' market is to open from next week in Rhode Island. As RI is such a big state (48 miles by 37 miles), the summer apparently does come to the state at the same time. Therefore, the farmers' market is scheduled to open from southern RI first. Farmers' Market in Northern RI will gradually open late in May.

For more information, please visit:

http://pbn.com

http://www.farmfreshri.org

http://www.dem.ri.gov/programs/bnatres/agricult/farmers.htm

A medical student charged killing a model he met on Craigslist

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 25 Apr 2009 16:47:08 -0500

I hate to relay any negative news but I have to relay this one.

I do not want to write more details about the case. In summary, the RI police has found that a medical student of Boston University might have killed a model that he met on craigslist, in a hotel in Warwick, RI.

Read more details here yourself.

Craigslist has been used by many cons to take advantage of innocent people. Whether you are a real estate agent or not, please be very careful when dealing with people you know from craigslist. Please take every step to protect yourself.

Picture from today's soccer session of The Pawtucket Youth Soccer Association

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 25 Apr 2009 16:20:02 -0500

Today is the second session of the Spring Academy by the Pawtucket Youth Soccer Association.

The weather could not be better--a whooping 83F. My daughter's session began from 11am but we arrived around 10:15am and the field is heavily populated. Below is a shot of the training session.

If you live in Pawtucket and have children and missed the spring academy, please remember to sign up for their summer academy. Lots of fun.

Finally, a flowery tree in my neighborhood

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 25 Apr 2009 16:08:57 -0500

This spring in Rhode Island seems rather long. Finally, summer seems to come. This flower tree was taken yesterday in my neighborhood. Yahooo! It is officially summer here.

This picture was taken around 6:30pm which is a little bit dark. If I have taken it around 5pm, the flower would look much better.

Location: in the Oak Hill neighborhood of Pawtucket, RI, right bordering the East Side of Providence.

TOP TEN SHORT SALE LESSONS LEARNED

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Fri, 24 Apr 2009 22:43:51 -0500

This is a nice article on short sales.

Via Karina Morgan (CENTURY 21 Regency Realty):

1. Price is usually set by the agent & seller, not bank: The agent and seller often create a very low asking price in order to attract buyers. The bank is normally unaware of the asking price; however, the bank has the final say in what an acceptable offer will be. Since the bank has the power to ultimately accept or deny offers, their lack of price awareness often leads to the process taking longer than anticipated. The bottom line is that the buyer needs to remain positive and patient throughout the entire process, sometimes even for months.

2. Loans owned by 1 bank usually better than 2: If the seller has loans owned by two different banks it is a lot more difficult to approve the short sale. This is something the agent or the buyer cannot control; it simply depends on the willingness of the bank or banks involved. While the reasons are beyond the scope of this guide, buyers should know that when the seller only has loan(s) with one bank the short sale often becomes more buyer-friendly. A savvy Realtor can let you know this type of information.

3. Lowball offers get slow or no response: Remember that the bank is typically unaware of the pricing during a short sale. When lowball offers stream into the bank they are often scoffed at and rejected, giving the prospected buyers little or no feedback. Surprisingly, it may also take painstakingly long to hear back even on good offers due to the high volume of transactions lenders are inundated with these days.

4. Agent must check comparables before submitting offer: The agent must be sure to check recent home sales in the area to give buyers a better idea of the properties that are selling. This will give the agent and the seller appropriate grounds for an asking price that will be more likely to be approved by the bank. Checking comparables will also give the buyer a better knowledge of what price homes in the neighborhood are selling for and ultimately make them a more informed homebuyer.

5. Don't hang your hat on the property: Short sales aren't necessarily "short." It can sometimes be a very long process. Don't get your hopes up for just one property, keep your options open and continue to actively look at multiple properties. Buyers must remain optimistic, the right property will come along. In most areas it is completely legal and risk-free to have multiple offers out at any given time with the proper contingencies.

6. Sellers with other properties or too strong of financials may not qualify for short sale and/or may be asked to pay the difference: Sellers that own more than a handful of properties or have an extremely large net worth will probably not be eligible for short sale. In some cases the seller will be asked to pay the difference of the sale. The seller might even need to sign a promisary note stating that they will pay back all or most of the debt. This has virtually no effect on the buyer as long as the seller cooperates.

7. "Approved" prices are quickest: It is important to remember that short sales are not always timely; however, making an offer on an "approved short sale" can be a quicker process. An "approved short sale" has a price that has already been given the green light by the bank. This could be due to the fact that another interested buyer made an offer that was approved, but didn't end up buying the property. These types of short sales are some of the most highly desirable.

8. Some banks look want strongest buyers, some want strongest offers: The bank has all the power in approving short sales. The bank can pick the most appealing buyer, which may mean different things to different banks. Some banks may prefer the buyers with large down payments while others just want the highest price regardless of down payment. Many buyers want to know if they will get a deeper discount for an all cash offer. This is very hard to predict and one will never really know until they make an offer. As long as the buyer is surrounded by a good team we would advise them to do just that.

9. Repairs are seldom done, credit is more frequent: If there are improvements that need to be made on a home, even if they are necessary to get a loan, it is often unlikely that they will be done. Typically there is some sort of credit issued and the buyer must take the responsibility of fixing anything that is broken.

10. When you get approval, must close on time: During a short sale there is no leniency with the closing escrow date as there often is in a traditional sale. During a short sale, exceptions are rarely made and the buyer must close on time. Because of this, it is important to take care of all loan paperwork immediately after opening escrow. We'd advise buyers to be extra prepared and try to have the loan finalized a few days in advance of the closing date. If there is going to be an issue that will prevent closing on time, a request for an extension will need to be made immediately. If the request is made early enough, many banks will grant an extension but don't just assume it will happen.

Are you looking for a real estate professional who knows the FORT RUCKER and Enterprise Alabama Real Estate market and can get the results you desire? Let me put my knowledge, experience, and dedication to work for you.

As you move towards a possible decision on selling your home, or purchasing a new home in the Wiregrass Area, I hope you'll contact me.

Let me know if I can be of further help in the process.
My Daleville Alabama Real Estate Website: www.DALEVILLEHOMES.COM 
VIRTUAL TOURS ON ALL MY LISTINGS, Ask me about Cyber Advertising. 
Please forward to anyone who may be moving to Fort Rucker in the future.

Click the Link Below: http://audiopostcard-003.com/Y.asp?7189970X1166

Stay in touch, feel free to call with any questions, anytime 24/7.
Sincerely,

Karina Morgan

REALTOR, ABR, GRI
CENTURY 21 Regency Realty, Inc.
(334) 477-2694
www.RuckerPCS.com

We Support Our Troops
 

It is the union or just the economy--Boston Globe (newspaper) to close?

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Fri, 24 Apr 2009 15:03:49 -0500

Associateed Press reported yesterday that NY times, the parent of Boston Blobe, asked the UNION to make a concession of 20 Mil; otherwise will shut down it.

I do not know too much about this topic other than the board of Boston Globe is fighting with the UNION. But I do know all newspapers are facing a hard time, with with the challenge of both the economy and the internet. It is hard to believe the Union wants the business as usual when the business is not as usual in reality.

As far as Merger & Acquisition is concerned, I do not think it is relevant as I think the possible shutdown does not have too much to blame on the Acquisition by New York Times in 1993.

As far as real estate is concerned, I remember once the Mass Realtor Association complained about its negative report on real estate market and threaten to not buy and ads and Boston Globe quickly conceded.

Secondly, Boston Globe does have a very decent Real Estate Section. Below is today's real estate home page.

Not every merger is profitable---yahoo to close Geocities

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Fri, 24 Apr 2009 14:31:49 -0500

Being in the merger and acquisition business, we are very sensitive to international mergers, both public and private companies.

Yesterday, Yahoo announced that it will shutdown the free webhosting service--Geocities.

Yahoo acquired Geocities for $3 Billion back in 1999 but they never figure out a make-sense business model for this acquisition. I know they will have to close down this service but I am surprised that they made the decision this late.

Merger&Acquisition is a very complicated thing. Other than emotional and ego type of M&A (companies made M&A not because of any M&A reasons), M&A is just a first step. A company will not make money for anybody unless it is taken really good care of.

From Day 1 when Geocities was purchased, its business model has stayed the same. And this very business model is NO business model. (end)

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The car that only costs $1400 to make

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Thu, 23 Apr 2009 09:17:58 -0500

Many people try to understand the second largest economy--the China market, one of the few market economies left in the world.

At Crebbers, we understand and know both the US and China economy. We keep track of all the latest trend in both countries.

The auto industry has been a mess here in the US. According to Xinhua News Agency, in the first quarter of 2009. 2.68 Million of cars were sold. In March 2009 alone, 1.11 Million were sold which makes China the biggest auto market in the world.

In the Shanghai Auto Expo today, a new concept car debuted by Geely Auto (China) inc. The car only costs $1400 to make!

Update: this car could be powered by either rechargible battery or Solar energy.. To my understanding, one congressman has already bought the exclusive right to re-assemble this model in the US and it DOES meet US safety standard.

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If you need to acquire a business in China or you need to sell a business that could be acquired by international buyers, please contact us today: 401-484-7322 or visit us at http://www.crebbers.com

if you want to know about the BRIC, this is a good article

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 18 Apr 2009 22:08:58 -0500

If you want to know about the Chinese economy or the BRIC (Brazil, Russia, India and China), you can read this article on the Apr 20, 2009 issue of Newsweek.

Power up

Rana Foroohar is an editor of Newsweek. She seems to be pretty knowledgeable. Most of what she said is pretty right. However, please be o cautious that so far most articles about the economy of China are very bipolar: the economy is either evil or paradise. The reality is it is neither evil or paradise. This article by Rana is no exception. She talks about the paradise side of the same story.

The driving force of nternational merger and acqusition--comparative advantage theory

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 18 Apr 2009 20:13:22 -0500

Many people as me why merger and acquisition. Why international. The big driving force of course is Richardo's comparative advantage theory. Comparative advantage theory mainly tries to explain why we need to do international trade even one country is significantly competitive than another country in almost EVERY aspect.

It sounds difficult to understand but in reality, we are doing it every day. Many business owners are good at almost everything. But still they would hire an office manager and even train the manager to do what she/she is told to do. Why? Because it is more time-effective for a business owner to focus on more productive stuff.

The comparative theory is actually what drove the international trade between USA and many other developing countries. And it will keep powering the international trade and M&A for years to come.

-------------------------------------------------------------------------------------------------------------------------

Huiting Zhuang, CEO/Co-Owner

tell: 401-484-7322,
Crebbers LLC, international Merger, Acquisition & Consulting

Why Merger?--the case of two RI insurance firms

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 18 Apr 2009 13:47:58 -0500

Everybody wants to be a boss. When two firms merger, apparently two bosses will become one. So why merger?

Well, there are many reasons:

economy of scale: big bargaining power, etc
cost synergy: save on overhead, marketing, PR, etc.

While I can go all day writing the benefits (and disadvantages) of mergers, it would be best to look at some real cases.

A week ago, Providence Business News published an report: Firms Brace for possible consolidation.

Two multi-decades old insurance firms are planning to consolidate (merge) to "cut down on overhead and share some employees" (direct quote).

While the reports indicates "such a merger is a going trend in the insurance industry", it is actually true in most industries. With the current economy continues going downhill, the trend will last for quite a while.

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Huiting Zhuang, CEO/Co-Owner

tell: 401-484-7322
Crebbers LLC, international Merger, Acquisition & Consulting
rain@crebbers.com
http://www.crebbers.com

Rhode Island Foreclosures increase in March 2009

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 18 Apr 2009 13:01:00 -0500

(Rhode Island) According to a report released yesterday (Apr 17) by RealtyTrac.com, RI foreclosures increased 59% over March 2008 and 54% over Feb 2009.

Nationwide, 341,180 were reported, a 17% increase than Feb 2009.

According to the report, demand is gradually picking up but the increasing demand is not enough to offset the increase of foreclosures.

To get a personal opinion of this report or how it affects your decision to either buy or sell, please contact us.

(401) 484-7322
Now offering residential real estate services for RI residents.

Houses sold below assessment on average in RI during the first quarter of 2009

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 18 Apr 2009 12:32:07 -0500

By Huiting zhuang

(Rhode Island) According to our research, Houses are on average sold below assessment statewide in the first quarter of 2009.

This research studied all 39 towns of the state of Rhode Island. 1973 houses are sold in the first quarter of Rhode Island. On average, houses were sold at 75% of town assessment. Of the 39 towns, we only observed Jamestown as an exception.

On average, houses are sold at 92% of listing price

In the period, 97 listings were expired in Rhode Island and they were on average 120% of assessment.

For more information, please contact Huiting at

(401) 484-7322
Now offering residential real estate services for RI residents.
Powered by video marketing, research & transparency.

Appendix: RI Sold Listings from Jan to March 2009.

Survey Says...Realtors Suck

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Thu, 16 Apr 2009 20:58:10 -0500

The result does surprise me at all. I joined this industry knowing this and therefore I join to change it. (hopefully).

Via Jeff Corbett (ActiveRain):

The following post is simply one non-conformists opinion, albeit a relatively educated one...Its my hope that my words, cutting as they may come across, cause an epiphany for more than a few...

This entire post is based on The California Association of Realtors 2008 Home Seller Survey (released in July 2008, I just happened upon the PowerPoint presentation a few days ago) but the statistics are just as relevant today, if not more so...Granted this survey is but a snapshot of an industry, yet pictures are worth thousands of words...You can read the entire survey here. (All statistical references in this post are derived from the aforementioned survey).

Public perception of the real estate professional and the greater industry is amongst the lowest of any on record. Consumers are looking for an alternative to the 'traditional' Agent and they're defining what this alternative is, yet relatively very few professional are heeding this demand and actually providing a tangible solution. This Survey demonstrates to me that 90% of Agents are not providing what the consumer wants...and it is ALL ABOUT THE CONSUMER.

Personally I know alot of fantastic real estate professionals. Genuinely great people, passionate, always striving to better themselves, their clients, the industry they serve and represent...they're worth every penny they command...they dont suck...I'm just a sucker for a good title (no pun intended). I could fill this page dropping names like Jay Thompson, Kris Berg, Missy Caulk, Bill Gasset and 30 others nobody has heard of as examples of who I consider to be the vanguard of where this industry should look to as ministers of positive change. Unfortunately, they're in the minority and a few good apples don't ripen the bunch.

Agent Perception: I can Has Consumer!

Talk to most any real estate professional and they will tout their expertise, knowledge and marketing prowess as the main reason you should retain their services. Most will maintain that commission rates (should) mean very little to the consumer and they're worth every penny.

Consumer Reality: You Suck!

According to the respondents:

Number One factor considered when choosing an Agent? Lowest Commission.

Last reason? Most knowledgeable. <-- If this doesn't snap you into reality, nothing will.

You'd best start putting your knowledge out there if you hope to attract a client...get a blogsite that rocks, start dropping neighborhood knowledge, get a killer IDX solution...substantiate your value!! The days of being a prude with your listings and expertise until you had an executed contract are over.

I can find out more than you know.

~70% of respondents polled on 'Information from The Internet vs Information from Agent' indicated that the Net provided information that was as useful, 'different' or more useful than an Agent. I can only surmise that 'different' means information an agent couldn't or simply didn't provide. In the Age of Information, lack thereof is akin to being useless.

The ~31% that said The Net provided less useful information than an Agent are part of a 50% declining trend over the past 5 years.

You're still (a) very necessary (evil?).

~95% of respondent sellers still used an agent, which makes perfect sense. I often state that: While technology won't replace a good real estate Agent, the Agent that properly utilizes technology will replace Agent that doesn't.

Consider- 74% of 1st time respondent sellers considered not using an Agent, up 46% from 2007.

You can't market your way out of a brown paper bag.

Of the reasons given for using an Agent only 7% said it was for 'Better Marketing Exposure'. Ummm, isn't this what an Agent's core value proposition is supposed to be, to market property? Consumers clearly do not believe Agents can effectively market their property...yet online and offline marketing is the 1st and 3rd highest reason for choosing an Agent. This is a huge disconnect and opportunity at the same time.

84% of respondent sellers are searching online and 96% Agents polled use print advertising. Helllllooo!?! Can you say poor ROI, waste of money? Newspapers and other print media are going out of business because less and less people read them. Advertising in these dinosaurs is of almost no value going forward.

Only 57% of agents use multiple photos or a virtual tour as part of an online home listing. This just blows my mind. I'd guess that 50% of the 57% that actually use multiple photos look (kinda) like these:

Proper Feng Shui can do wonders for a small space.

Extra long chain for convenient access to light.

Sweet shower curtain stays with home!

Thanks to MLS Trash Can for the pictures. Descriptions by me.

Seriously, an agent who can't manage to market a property with quality photographs should have their license suspended on principle alone.

You're being perpetually judged.

97% of respondents interviewed 3 or more Agents. 50% interviewed 6 or more Agents. Consumers are getting more and more finicky about who they hire. Agents better step up how they present themselves. Better have an impressive resume and a killer suit = a slick engaging blogsite & robust IDX solution.

Here's a scary thought (depending on who you are):

Consumers are lurking on your blog, stalking your FaceBook page, following your Twitter stream, viewing your Flickr account, reading your answers on Trulia, Zillow & ActiveRain, evaluating your IDX, the quality of your multi-media marketing, processing how you engage comment threads and otherwise perpetually judging you under the cloak of anonymity.

How are you representing yourself in public and when you don't think anyone is looking?

The silver lining in this post could be that 'The Bar' is so low in a consumers eyes, those Agents willing to set aside their perceptions and confront reality are in a great position to capture some huge marketshare. Take this information and use it to your advantage rather than deny its validity.

Many Agents are out there cleaning up despite this 'depressing' market...Find them, reach out to them, study their successes...I find the most successful people in life are more than willing to share their successes and help others get there too. Reciprocity is still live and well...

Current real estate trend--sell below assessment: my recent researching using real data of Rhode Island

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Wed, 15 Apr 2009 20:07:19 -0500

Current Real Estate Trend--A study of RI market (Jan~Mar, 2009)

Disclaimer: This research is released as is. While all information is deemed accurate, no strict academic validation has been done due to my time constraint. Readers are encouraged to duplicate this research if you need to make serious decisions based on this research.
I spent about 4 hours on researching the current Real Estate market in Rhode Island yesterday and today as a preparation for our next move in the real estate market.
I mainly want to address three questions.

What is the current overall market condition in Rhode Island.
What kinds of properties are sell-able?
whether marketing helps sell a property. I use Virtual Tour as an example.

The data were pulled from RI-MLS system in Apr 14.

Sold listings from Jan to Mar, 2009: single family homes, condo, multi-family homes.
Expired listings from Jan to Mar, 2009: single family homes, condo, multi-family homes.
Current active listings in Rhode Island (exclude timeshare, mobile homes and modular homes).

Below are partially what I found (the full report is available upon request).

from Jan 1, to Mar 31, 2009, 1973 listings were sold state-wide, with a total transaction of $375 Million. 1288 listings were closed in Providence county. 336 in Kent. 198 in Washington, 97 in Newport and 54 in Bristol.
On3 interesting result is that on overage, sale prices are 3 quarters of assessment. This is true statewide. Town wise only Jamestown is slightly over assessment.
Of all the closed listings, listing prices were also below assessment statewide. Of all the 39 towns, only Portsmouth, Newport and Jamestown were exceptions.
Among the 1973 closed listings, 248 had Virtual Tour (VT). I studied the effect of VT on sold price/listing price(SL). I divided the data into two groups: with and without VT. The mean of SL are 82% and 85%. So VT did seem to help in getting a higher price but the difference is not significant--a mere 3%.

I then studied how VT affects the DOM--days on market. The result is astounding: A mean of 98 days vs 158 days. The T-test is 0 (less than 1 billionth).

For those who understand statistics, that means the two data set definitely got different means. In plain English: VT definitely help sell a listing faster!!

See the right picture for more details.
I then studied the EXPIRED listings from Jan~March. There are 97 of them.
- On average, the listing prices are 20% above assessment.
- None of them had Virtual Tour.
Finally, I looked at the current market. There are 7418 listings that meet my data standard (I didnot include timeshare, mobile home, etc) and 2684 of them are priced over assessment.

So here are the major conclusions from this brief study:

Marketing is very important in helping selling a house faster, if not more in price.
To sell a house in a timely manner, you need to price it close or below assessment.

Appendix: statistics of Sold Houses in RI: county and town level (I have other statistics report in picture format as well. Send me an email if you want them).

(401) 484-7322
Now offering residential real estate services for RI residents.
Powered by video marketing, research & transparency.

Watch the Video and share the excitement of the rescue of Captain Richard Phillips

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sun, 12 Apr 2009 15:27:34 -0500

Happy Easter everybody. I guess by now most Activerainers know the rescue of Captain Richard Phillips. For those who do not watch TV at all, you can watch the news here. Kudo to the US Navy. Kudo to the brave Captain Richard Phillips.

click here to watch the video from AP

click here to watch the video from CNN

It is time to buy but not time to buy just EVERY house

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 11 Apr 2009 22:17:30 -0500

Many Realtors advertise "it is the best time to buy". I would tell a story to clarify what this means.

When a store closes its door, people understand the owner will just sell everything at even lower than clearance price. So in consumers mind:

Going out of business=incredible low price + once in a life time deals.

But to make this equation really work, we need to make two assumptions:

The store should be really in out-of-business condition.
The store really wants to sell everything it owns.

Unfortunately, many people would just use the equation and forget the two assumptions. And unfortunately some people would take advantage of this. See my post: want to take advantage of circuit City liquidation? Be careful. In reality, it has been reported that many store owners would bring outside stock and sell over-priced stuff.

Now the current housing market, especially the housing market, it is exactly the same thing. The "it is the best time to buy" statement makes it as if you can go out in the market and grab a house hoping it will be a deal.

Wrong.

I have to admit it is a good time to buy but buyers have to use their thinking to do their homework (due diligence). The good deals are to be found with effort, not to be grabbed randomly.

If you cannot do your own homework, find a local smart, loyal, knowledgeable and experienced Realtor probably is your best option.

Segway PUMA debuts Apr 9, 2009 in New York

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 11 Apr 2009 10:29:35 -0500

I am a big admirer of Dean Kamen who founded Segway. I even more admire him when the PUMA debuts in the New York Auto Show. It is joint effort between Segway and GM. Hopefully this might give GM a boost.

While segway has nothing to do with Housing, I do think it will make lots of marketing senses for real estate agents. I for one would get one if it is available in Rhode Island. It will be a great marketing vehicle. The potential simply will be endless.

There is a nice article in Cnet.com on PUMA.

Homeowner catches thieves via survallence webcam

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Sat, 11 Apr 2009 08:19:26 -0500

Safety is a big concern in many communities. This particular homeowner:

Homeowner watches thieves via her surveillance webcam

You can even watch the video and conversation.

So homeowners, if you are concerned about your home security, this might be a good time to invest in. According to this article, the whole system is only $250.

SHORT SALES PRIMER - BACK TO BASICS UPDATED

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Fri, 10 Apr 2009 14:39:16 -0500

Best short sale primer from a certified legal counsel. Thank you Richard.

Via Richard Zaretsky, Florida Real Estate Attorney (Richard P. Zaretsky P.A. ):

Short Sale Primer For Brokers, Sellers and Buyers

A Primer -

Since I wrote the Short Sale Primer the short sale methodology used by lenders has morphed several times. It is a different animal than it was almost 10 months ago. The passage of time requires that the original article, which was very popular (thank you) be revised to reflect new policies by the lenders. I have also added several pertinent links to more detailed discussions on the various subjects in this article.

Short sales are nothing new. When I represented a few national lenders for all of their foreclosures in the State of Florida several years ago, we negotiated "loan workouts" which are now called "short sales". Since loan workouts have been around so long, I did some digging with my old pals that were the executives I worked with in the loan workout and REO department of these national lenders (one of the lenders has since been merged into Bank of America).

I found one in Atlanta, one in Texas and another in Washington. Our discussion about short sales showed that nothing was new under the sun - the formulations and decision making processes were unchanged from 15 years ago - and only some of the terminology had changed. Another executive of that lender was found in Florida and she now works with me in the client management and lender negotiation of our client's loan workout situations.

Short Sale Defined -

First, understand that there are two elements to a mortgage. The first is a promissory note. The promissory note is a financial instrument that is an of itself an enforceable contract to repay a debt for money loaned to the borrower. A mortgage is a security instrument. It acts as the security or collateral for the promise to repay the money loaned which is described in the promissory note. Usually it cannot be enforced if the promissory note is paid off or cancelled. We are seeing 2^nd mortgage lenders that whose mortgages have no equity value in the home skip foreclosing on the mortgage and instead just sue the borrower on the promissory note. For a more detailed discussion of this process and results see link A LAWYER'S EXPLANATION OF THE FORECLOSURE PROCESS.

Short sales are a process of "shorting" the debt (the mortgages) encumbering a parcel of real estate (the house or investment property). Shorting the debt means that the person holding the debt (the lender) agrees to release its lien on the real estate for less than the amount the lender is due according to the promissory note. Last week I sent a fax to the Associated Press because they keep writing that a short sale includes the forgiveness of the deficiency on the note and mortgage. That statement is completely false. A full explanation of the various types of short sale scenarios - some with and some without forgiveness of debt - is in my article link LENDER SHORT SALE ACCEPTANCE LETTER EXAMPLES - READ WITH CAUTION!

The explanation is simple. The execution and the details of a short sale are highly complicated. The chemistry of each short sale situation is not identical and quite often the goal you want to achieve is a moving target seemingly and frustratingly impossible to reach. More detail in some of the methodology to a short sale is in a previous article (see link - What do I do? - I can't pay my mortgage).

Who Qualifies - And Why A Lender Would Want The Loan Paid Off -

You can read discussions on who qualifies for a short sale in a previous article (see this link Some Sellers Think They are Entitled to a Short Sale and Economics 101). Technically, everyone can qualify for a short sale. To understand this we need to become more, well, "technical".

Logically, a lender is not going to want to keep a secured loan on its books where it has evidence that the security has decreased in value dramatically and the loan to value ratio under which the loan was originally made is now "upside down", meaning the current market value is less than the amount of the loan. The portion of the loan that is not in compliance with the original loan to value ratio is, for bank auditing purposes (or investment valuation purposes if the loan is not a portion of a mortgage backed collateralized security) a liability and therefore is not considered secured. That is bad since it makes the lender set aside reserves of cash for the lack of value in the loan. The lender needs to do something to change that situation.

Depending on the language in your mortgage or your promissory note, the valuations being upside down could be reason to put your loan into breach and accelerate the promissory note. I have not seen this done as of yet by any residential lender. But technically, if a property is in this upside down situation, the loan could already be technically in default even if it is "current" in payments.

Often, the desire to unload the upside down property is made based on economic calculations made by the owner of the property. Those calculations usually show that it is better to take a loss now of a known amount of money rather than continue to pay interest, insurance and taxes in excess of the income from the property for an unknown period of time until rental or property values increase so the economic cash drain is reversed. I call this "quantifying the economic cost of ownership of the property".

In any event, the lender would prefer to have the loan right side up or off its books. In some cases the property owner has excess cash laying around and can just sell the property (if that is their plan) and pay the amount to the bank that they are "short" at the closing so the loan is paid off in full. This is also a "short sale" but it does not involve the lender making any concessions - the property owner has to pay the shortage at the closing.

Financial Indigestion -

In other cases, usually where the borrower has become financially distressed but also where the borrower is asset rich but presently is lacking liquidity (I call it "financial indigestion" or "real estate rich - but cash poor"), other arrangements satisfactory to the lender can be accomplished.

These other arrangements usually come in two flavors: (1) providing alternative secured collateral to the lender, such as a first or second mortgage on another borrower owned property that has equity value, or (2) having the borrower sign a new or modified promissory note that is unsecured and payable over a fixed period of time, usually 3 to 10 years from the date of the short sale. Depending on the financial circumstances and the lender -borrower relationship, interest can be at market or even at zero.

Where the borrower is experiencing extreme financial hardship and there is no horizon (projected end) to that hardship a third alternative can occur - actual forgiveness of the unpaid amount due the lender.

Short But Important Reminder On The 1099 -

This leads us to the issue of the unpaid portion of the short sale. Many lenders will not provide a release of the balance due. This causes some good and some bad issues for the borrower. The good part is that without a final disposition of the unpaid portion, the borrower has not received any phantom income (i.e.: that 1099 stuff). This good news does not last forever. Once the statute of limitations on enforcement of the promissory note expires, then the borrower has that income to report to the IRS. The bad news is that the lender very well may sell the unpaid promissory note to some investor for 5 or 10 cents on the dollar and then that investor will definitely come after the borrower for as much as they can get above that 5 or 10 cents on the dollar. The small element of good news here is that as long as they are trying to collect on the unpaid portion, that unpaid portion is not income that the borrower has to report to the IRS.

As a short reminder, the big deal about 1099's is really an illusion. 1099 or no 1099, if the debt is forgiven the borrower has income to report to the IRS. No exceptions! Too many people come to me and say they want me to negotiate with the lender so that they don't get a 1099. I ask them why? They tell me that if they don't get a 1099, they don't have to report the income they would get on the debt they did not pay. The next question is why does the bank get to decide what the IRS usually has jurisdiction to decide? The answer is of course that the lender giving a 1099 means squat - unless the borrower is intent on committing tax fraud by not reporting income. There is relief available to the borrower are two opportunities to not recognize up to all of the income. These are discussed in detail in my article called (see link) Sellers Always Have Income and include the 2007 Mortgage Debt Relief Act.

Loan Modification -

Beginning in March 2009 a new government incentive involves "financial encouragement" to lenders to reduce the principal obligation of a mortgage under certain circumstances. This reduction in principal will trigger a 1099C cancellation of debt. However, since the program targets primary homes, those whose borrowing qualify under the 2007 Mortgage Debt Relief Act will be able to use the exemptions in that Act to exclude the income generated by the debt forgiveness.

Modification of a mortgage loan is a fast developing part of the housing recession resolution solution. Not everyone is entitle to a modification and even someone with a high interest rate that cannot refinance in this current financial market may not be qualified for a loan modification. Numerous factors are in play in determing if a loan modification is justified and chief among them is ability to pay - not desire to pay. Generally speaking, if your total housing expense is more than 38% of your household income, you should speak to a professional to discuss if you are a modification candidate. Yesterday an attorney who has a housing expense of $25,000 called me to modify his mortgage. He told me the $25,000 was about 10% of his household income, but the mortgage debt was about 110% of the value of the home. That lawyer is not a modification candidate.

Short Sale "Bookends" -

Note that these are the general parameters that we have seen over several years of dealing with loan workouts. There are always exceptions where the decision of the lender is simply without logic.

Illogical example #1 - The borrower is without a job, has moved out of the house and is living with one of the spouses' parents out of state. The house is now valued at $190,000 to $210,000 and the loan is at $350,000 and has been on MLS at $200,000 for 3 months. One quarter of the homes in the neighborhood are in some kind of pre-foreclosure or distress. The lender refuses to accept a contract at $178,000.

Illogical example #2 - The borrower owns two businesses and shows annual gross income of $500,000. Borrower has 4 homes all investment and lives in another (5 altogether). Lender accepts a short sale on one investment home at 10% under value, leaving $70,000 short on the mortgage payoff. Borrower asks for a letter of release from the lender that it will not pursue the shortage on the promissory note and the bank gladly provides that letter, letting the borrower off from every having to worry about the shorted promissory note.

I call these the "bookends" to the short sale definition of what fits the parameters of the banks. As you can see, even the bookends can be moving targets, since neither makes any sense. Fitting everything else in the middle leaves a really big gray area on the fringes of the middle! For more examples of how it is impossible to reliably predict the determination of the lender on the status of the shortage, see link SHORT SALE DEFICIENCY DEMANDS AND DEFENSES - The Interstate Highway Analogy

No Science To The Short Sale -

There is no set course to the successful short sale presentations to the lender. We have seen 5 page packages and 50 page packages get approved. Sometimes it takes 12 days (we have done it twice so far) and sometimes it takes 6 months (don't ask!). It depends on the lender. It depends on the borrower's situation. It depends on the property. It depends on the contingencies and price in the purchase contract. Notwithstanding, we find that the best opportunity for a short sale to be successful is to provide a simple yet complete package to the lender - keep it simple - but back up the assertions made in the presentation.

You have probably heard about the one, two or even three months to get the bank to even start to move on a short sale application. Again, this is hit and miss. This winter we made two presentations to the same lender, one in early March and one in mid April. Same neighborhood. The April package got a BPO call from the lender in only 2 weeks. We are still waiting on the March package! (Yes, we confirmed that the lender has it and they confirm that they are working on it).

Lender Overload -

When I first wrote this article it appeared that most lender loss mitigation department personnel are carrying 500 to 600 files per person. Some lender loss mitigation departments have cut that down to 200 files per person. We feel the best opportunities for success should be on the packages that are clear cut, summarized, and organized. But each package must be accompanied by someone that will call the lender to get status reports on the package at least weekly. I was amazed with one lender when we called them to ask why the lender had not even acknowledged that they received the package. Incredibly, the answer was that they take no action on any package received until someone calls to find out the status on the file!

Short sales have a long history of being in the arsenal of lenders for loss mitigation and loan workout issues. Used properly, the short sale can be a tool to the lender and the borrower and an opportunity for a buyer with patience to obtain a relative bargain in the marketplace.

Copyright 2009 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660

RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com. See our easy to find articles at Need Short Sale Information? - These Articles Probably Answer Your Question

Are You Easy Prey?

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Fri, 10 Apr 2009 09:53:48 -0500

Home owners in pre-foreclosure state should read this to avoid being a prey of mortgage scamsters.

Via Vicky Chrisner (Keller Williams):

As a real estate professional, I get calls from people that are struggling to pay their mortgage, or concerned because they have to sell, and they owe more than their homes are worth.

Many in my profession have been recommending services from "professional negotiators". These are companies that brag about large success rates and large volumes of completed transactions - either in loan modifications or short sales, or both. But, these "professional negotiators" cost money - anywhere from a few hundred dollars to several thousand. Most of their fee is not contingency based, and it's often required to be paid up front.

Many of these companies are SCAMS. (Click here to see the CBS Articles on these scams and how the government is working to stop them.)

No, I do not believe that the agents who are referring these companies recognize they are scams... I think they've been duped like everyone else. I think these agents and loan officers want to help the consumer, but they simply don't know where to send troubled homeowners to get the assistance they need.

Here's the straight truth: There are different groups of consumers, with different needs, and each should be seeking the type of help they need from different types of professionals. So, WHO YA GONNA CALL?

Some homeowners want to stay in their homes, but are struggling to make ends meet. These people need to be talking to their lenders, particularly if the reason they are struggling financially is a temporary hardship which will be resolved in the foreseeable future. When homeowners are overwhelmed or unsuccessful they can ask for help through HUD approved loan counselors who do not charge a fee to the consumer for their services.

The reality is very few loan modifications have been done, and of those that were completed, many homeowners are delinquent, AGAIN, despite the temporary reprieve. So, they may have to find a way to sell or allow the bank to foreclose.

Some owners MUST sell - perhaps because of a job relocation, divorce, or other life change, but they owe more than their homes are worth. These people need to be talking to a real estate agent they trust and working on a short sale to avoid a foreclosure. Real estate agents will charge a commission, and the fee is usually only paid if there is a successful sale.

Some agents will require the use of a professional negotiator. If that negotiator's fee is a large, upfront, non-refundable fee to the seller... run. If the negotiator charges a fee to the seller, the buyer, the agent, the buyers agent, the title company and anyone involved in your transaction- run, run, as far as you can, as fast as you can. These are definately scam artists - and if they are going to require that everyone who is involved in the transaction pays a fee, then your house's chance of successfully selling is significantly reduced.

Some very busy real estate agents may think it makes sense to hire professional negotiators to assist them with getting the sale from contract to close. If the agent is paying for this, and it is included in their fee, then I think this is okay - it would be the same as if the agent was hiring more administrative help to support the increased work load.

I also think it is fair when agents charge more for a short sale than another type of transaction. But, commissions are negotiable, and any consumer (and agent) involved in a transaction needs to know that the bank - who is ultimately paying the commission - will have to approve the commission expense, so it must be within certain limits. [Fannie Mae issued a guideline that a maximum of 6%, with a small administrative fee is acceptable.]

Still other owners are comfortable paying their mortgage and may or may not have equity, but want to take advantage of programs that are available that may help make them more comfortable - forgiving part of the debt, lowering payments, whatever is available.

These people need to make friends with a good loan originator who stays up on the current trends and can tell them when there is an incentive or a loan program that will benefit them. Loan officers do get paid for originating any loan that is successfully closed, but again, only if they are successful.

Consumers - watch your back. Many people out there see you as vulnerable, and they will take every last dollar you have. The government has made free help available to you, and true professional loan officers and real estate agents will be skilled in helping you navigate the ins and outs of today's market - for selling or refinancing.

RI cigarette tax rised $1--its effect on housing?

Huiting Zhuang,Sell your business overseas (Crebbers LLC) — Thu, 09 Apr 2009 12:41:29 -0500

Most Rhode Islanders know by now that RI Cigarette tax rises $1.

I am an economist and always try to link policies and events to potential economic result.

Now for this $1 increase, together with the high unemployment rate, I wonder if that might give some smokers a reason to move out of Rhode Island.

I do not have any data to do research on so this is just a thought. Anybody got any data or theorectic predictions? It would be a fun research.