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What's In It For You-A Realtor? - IF...You Work with Me A Short Sale Investor

Hi All ~

Kenny here...

I am looking for 2-3 key Realtor partners in the following states - WA, OR, CO, CA, NV, AZ & FL. With that said, I have written this to give you an overview of what I do and how I work with Realtor partners and most importantly...What's In It For You by working with me.

What I do, in a nutshell, is I buy pre-foreclosures, foreclosures & short sales with the sole intention of reselling the home immediately to an end buyer for profit. I only make money when I can create equity from the short sale. And how I find these short sales to buy & sell, is by exclusively partnering with Realtors. By working with me...you make your full commission (3%-6%) with an opportunity to make an additional bonus and you work less.

My Short Sale Criteria & How I Work Short Sales

My short sale criteria for consideration are as follows:
• Market value of $300,000 minimum, no maximum
• Higher End Preferred - ie min. $200K above Median Price Range
• Pretty House / Desirable Area - No Ugly Homes/Rehabs
• Multiple mortgages/1st & 2nd with a large 2nd mortgage - preferably same lender
• The seller must be in imminent default
• Sellers must want to sell their home and move on.
• Sellers must be cooperative on the collection of the short sale info required.

In addition, if the above criteria is met than the next part of the evaluation is:
1. What are the comps?
2. What in your gut do you feel the house will sell for in 90 days?
3. Can you sell it?

After looking at a few deals you will really to get to know what fits, however, I will initially look at ALL (i.e. less than $400K) of your or anyone's short sales so you can get a feel for what kind of short sales I want and how I evaluate them.

My Process:
I will purchase the property directly from the homeowner. I will start the negotiations immediately. You will immediately list the property for me. And since you are listing the property for me, I can guarantee you a full commission because it isn't subject to the short sale & the lender discounting it. I will have you start the listing at the top end of the market to show the lender good faith that we are trying to get as much money as possible. Moreover, to develop a listing history, I will then want you to drop the price by 3-5% every 2 weeks until we find that end buyer. The market determines what the house is worth and the listing history will help the lender see this. By the time we find that end buyer, because of me sending an offer in immediately, a BPO or appraisal has already been ordered by the lender, my offer has been assigned to a negotiator and we're close to getting mutual acceptance. It's all in the timing. This significantly shortens the time line on closing the short sale with our end buyer which is a great selling point to an end buyer and buyers agent. And if we still have no end buyer but we know what the lender/investor wants, the listing can change to "lender verbally approved just need full price offer to move forward for quick closing"

How I finance:
I have several sources that I use. I primarily use private money and a warehouse line of credit which is used as transactional funding for quick turns.

When I purchase:
I will close on the property when I have an end buyer regardless if there is any profit or not. I realize as an investor not every deal will have a spread and my primary purpose is to stop the foreclosure for the homeowner & close the deal. i.e. If the banks BPO is too high or the investor who owns the loans is unreasonable regardless of the stats we have to justify my offer and we have an end buyer with a price they will accept, I will close directly from seller to new buyer and you still get paid. Typically I get paid directly by the lender or through seller concessions or a combination of both. If in the slim chance neither of these options happen, I will then ask the agents involved for a small consideration ($500 ea) for working hard to close the transaction. This would be the only time I would ask for this. If I am able to make a profit via a resell the agents will get their full commission and depending on the spread I will give a bonus which potentially could be an extra 1-3% for a total of 7-9% commission. I don't ask for a submission fee or a portion of your commission to negotiate as you are finding with "negotiation service companies". I find a lot of these companies are glorified "loan processors" with no finance & negotiating skills and they don't know how to justify offers hence the poor success rate.

And Did You Know That Most Short Sale Agents who "do short sales" Have A 90%+ FAILURE Rate When Negotiating Short Sales According to the National Association of Realtors? That Means The Average Agent Will Only Get 1 Or 2 (at best) Out Of Every 10 Short Sales To Work. I Have A 90%+ Success Rate When Closing Short Sales Transactions. See A Sample of My Short Sale Approval Letters Above. If Considering Another Agent or Negotiation company, I Advise Asking Them For Their Most Recent Approval Letters From The Banks Showing They Can Get The Job Done... Most Can Not.

My Success Rate Is So High Because I Have Been Specifically Trained On Short Sales by THREE of the Most Well Known Top Loss Mitigators in the Country & A Top Short Sale Attorney - (Jerami King - KK Consulting; Suzanne Erickson - American Loss Mitigation; lee Honish - Short Sale Genius & Jeff Watson - Top Short Sale Attorney) On How To Negotiate A Settlement With Your Current Lenders So You Can Sell The Property, And Get Out From Under This Burden. Best Of All, My Commission Will Be Paid By The Bank, So You Won’t Have Any Out-Of-Pocket Expense!

And again, Best Of All, My Compensation Is Usually Paid By The Bank, So You Won’t Have Any Out-Of-Pocket Expense & You Keep Your Full commission.

My spending cap:
I don't have one. Regardless of the price point a short sale is a short sale and I find that lenders seem to be more willing to get the higher loan amounts off the books. I not only do Residential but also Commercial.

Who is the buyer:
I, or an Investor, is the purchaser of these homes. I am affiliated with a group of professional short sale investors. We don't buy short sales together per se. We meet regularly via teleconference (as we're throughout the U.S.) on strategies and best practices to complete successful transactions as the landscape is constantly changing and this is why I am good at what I do. I am not interested in holding any property (especially in this market) so I am not interested in holding any notes et al. I first started investing in 1989 in the Seattle area with "The Investors Edge", a foreclosure newsletter group, and I have done the rehab & landlord thing and it's not for me.

What is my market:
My market is WA, OR, CO, CA, NV, AZ & FL although I am always open to other markets provided I have a GREAT Realtor partner who knows their market. I currently have active short sales under contract in NV, WA, & CA with "pendings" in AZ & FL.

To wrap it up:

·   No fees or costs of any kind to you the Realtor or the seller in default
·   We will purchase the home & start the negotiations immediately
·   You get your full listing commission when we resell
·   We negotiate with our offer - it saves time; increases success rate
·   You as the Realtor will retain the listing and your client
·   No more long phone calls and frustrations dealing with loss mitigation

In other words…
- We will purchase the property.
- We do the short sale negotiations.
- You list and sell the property.

What's In It For You:
You have the potential for more commissions - up to 9% total including a bonus

It’s that simple!

You get to do what you do best:
·   Find Sellers
·   Find Buyers
·   Market and List properties

I make money when I buy distressed short sales, create equity with the lender and then resell to an end buyer.

It's win-win for everyone.

Another way to look at this is in this way:
If it takes you 25 hours to sell a home for a $12,000 commission, then your hourly rate is $480 per hour. If you were to also handle all the other aspects of the short sale including the negotiations and that took an additional 25 hours, your hourly rate would then drop by 50% to $240 per hour not to mention that you've taken time away from marketing and getting more listings which is hard to put a price on. I'm looking for a Realtor partner who understands the value of individual expertise, segmentation of duties and equitable partnerships to accomplish more.

Should we work together, I will provide you with all my short sale documents for you to use when contracting the homeowner/seller. I will give you an online "RSS Feed" (Online Link to a Webpage) that will keep you up to date on your short sales in progress so you can check it anytime to see the latest notes & updates from negotiations.

I hope I've answered your questions and that this email helps you understand a little more about how we would work together.

Here's to good things for the rest of 2009 & coming 2010!

Best,

Kenny

Kenny Wagner
Short Sale Specialist
Foreclosure Mitigation Specialist
The Foreclosure Mitigation Company

1-702-483-0890 Direct
1-206-971-5003 Fax

kenny@tfmcpartners.com

Kenny Wagner

The Foreclosure Mitigation Company

Posted by Kenny Wagner on 05/03/2009 06:59 PM

Comments (4)

short sale, short sales, foreclosure

This post has been included in Washington Information King County, WA Information
Post is included in group: Short Sale
Post is included in group: Nevada/Las Vegas REO, Fourclosure, Short Sale Specialist
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Post is included in group: Foreclosures & Short Sales
Post is included in group: California Loan Modifications, Short Sales, & REOs

4 Comments on What's In It For You-A Realtor? - IF...You Work with Me A Short Sale Investor

MAY

Ken

best wishes i\I hope you find some and make some$$$$$

Kenny, I wonder if you would be interested in expanding to acros the state line from Spokane into Coeur d'Alene, ID. If you would, I would LOVE to work with you!

The only problem real estate agents will have is to see how we can bypass the fiduciary responsibilities to the original owner/seller. Assignable purchase option contracts won't fly. The only way I see that you can gain ownership is to get the deed to the property and not record. Then there has to be a system in place in which the sellers understand that they have sold their home to you and that we, as agents, are working for you and not them. Maybe some type of legal letter of understanding. How do you handle this?

A couple of points:

1. "Multiple mortgages/1st & 2nd with a large 2nd mortgage - preferably same lender" - To me, it really doesn't matter how much is owed and how many lenders are involved. Having a huge or small 2nd lien does not interfere with the spread on a flip. Ideally one lender is great as they have no recourse and you only have to deal with one negotiator. Is there a reason you think otherwise?

2. "Sellers must be cooperative on the collection of the short sale info required." - Again, we have to be careful on our approach with the sellers as to not to create a fiduciary relationship with them. Maybe we can do your marketing where you will be the point of contact and they call you and you get us involved at a later point.

You realize, you could get your license and charge a 10% commission (or whatever) and lowball the lender and have the buyer pay you the difference (depending on the spread) and still be legal, ethical and profitable. Since you are good at raising capital, I would look into pooling money from people who need tax shelters, such as doctors, and using a REIT or whatever to purchase short sales and flip. Also my clients need to rent afterwards and can afford to do so. It will be a win win situation if you can short sale their home to a doctor who is looking for tenant occupied rentals. Just a few ideas that work for me.

MAY

JOE

Thanks for the best wishes! I'll take it!

JANA

I will give you a call tomorrow to see how I can be of help and to discuss how to best work with you in Idaho.

SATAR

My response is in parenthesis.

"The only problem real estate agents will have is to see how we can bypass the fiduciary responsibilities to the original owner/seller. Assignable purchase option contracts won't fly."

(First off, I have different contracts that I can use to address any issues with the type of contract that is used depending on the state laws, mls rules & individual Agent & Broker preferences. In regards to fiduciary responsibility, I understand the concern as I was an agent in AZ in 1990. Scenario - If you meet a homeowner who needs to short sell via a listing appointment, this isn't an issue because you can NOW say that you have a buyer that you represent who wants to buy the property vs. every other agent wanting to list the property. When you work with me, you are a buyers agent AND you have a USP - Unique Selling Proposition. You will definitely close more appts. for short sales. You obviously would still explain the short sale process, but this time you are also explaining how having an immediate buyer (an investor - your buyer) is beneficial as opposed to how other agents do it, which is, wanting to list their home & just sticking it on the market with poor listing comments until a buyer comes hopefully before the auction and then starting the short sale process 30, 60, 90 days later.)

"Then there has to be a system in place in which the sellers understand that they have sold their home to you and that we, as agents, are working for you and not them. Maybe some type of legal letter of understanding. How do you handle this?"

(The paperwork I have "Purchase Contract" & "Affidavit of Understanding" fully discloses everything and then some. In addition, you can have the buyer sign a "Non-Brokerage Relationship" form that your MLS most likely has stating that the agent is only representing the buyer.)

"1. "Multiple mortgages/1st & 2nd with a large 2nd mortgage - preferably same lender" - To me, it really doesn't matter how much is owed and how many lenders are involved. Having a huge or small 2nd lien does not interfere with the spread on a flip. Ideally one lender is great as they have no recourse and you only have to deal with one negotiator. Is there a reason you think otherwise?"

(I agree with your statement. The reasoning is if the 2nd is large enough there's a possibility that the 2nd would only be needed to short sell.)

"2. "Sellers must be cooperative on the collection of the short sale info required." - Again, we have to be careful on our approach with the sellers as to not to create a fiduciary relationship with them. Maybe we can do your marketing where you will be the point of contact and they call you and you get us involved at a later point."

(I can & do work directly with the homeowner in collecting the necessary documents which as you mentioned helps with any issues with fiduciary responsibility if that is a concern. And your suggestion about me being the point of contact is how I work with some of my Realtor partners. What I'm asking for is a "prescreen" if you will of the homeonwers willingness to cooperate throughout the process...no need wasting any of our time, right?)

Thanks for stopping by Satar and I appreciate your insightful questions & comments. I hope I've helped clarify a few things for you. It's refreshing to work with someone who has made it a priority to understand as much as they can about short sales.

I look forward to possibly working together in the near future.

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