Squat for Savvy Sam!

By
Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

Earlier today I got a call from Savvy Sam. Savvy Sam lives down in south Florida but owns a property in Poinciana that he purchased back in July of 2005 and has been trying to sell ever since. He bought this new construction home, sight unseen, with the good intention of selling it for a profit after it was completed. Why not? Everyone else was and heck he only needed to put down $11,000(5% of $220,000). Even though he had never heard of or seen Poinciana, the builder and affiliated Real Estate company assured him that $220,000 was a good deal and that he would be able to sell it as soon as construction was completed for $265,000.

So, based on what they had told him, he figured he could easily turn his $11,000 "investment" into a cool $28,000 profit! Savvy Sam had just immigrated to Florida a few years ago, from Pakistan, so this really sounded like the American dream to him. What a great country! Work hard, make a few sound Real Estate investments and voila....the easy life.

Anyway, when I spoke to Savvy Sam this morning, he didn't sound so excited about this house any more. His house has been on the market since August of 2005 and the price has been reduced numerous times. He started at $285,000 (why not try to get a little extra?) and the listing finally expired three weeks ago at a price $235,000. Savvy Sam is an honorable man and has been making the payments, twenty days early, every month. Today he finally broke. He was very upset and had made the decision to stop making payments and to just let the bank take the house back. Savvy Sam is now Sad Sam.

Sad Sam had called me off of one of my expired letters just hoping that I would have some better news for him. He knew his situation but needed a professional REALTOR® to be honest with him and confirm his dire straights. And dire they are. He owes $210,000 and the house is probably worth $205,000. He has already spent $45,000 on it, with the 5% down and the 20 months worth of payments. He has no money left and his perfect credit is getting ready to be ruined. Sad Sam is very upset about the bad decision that he made but blames no one but himself.

Sad Sam and I spoke for awhile this morning and we have devised a way forward. It's not perfect but it may help him to salvage some of his credit. Sad Sam is contacting my South Florida short sale attorney for advice and we are placing his property back on the market, priced right, at $199,000 to $209,000. Hopefully, I will be able to find an interested Buyer over the next few months. By that time, Sad Sam will be 90 days behind on his payments and the lien holder will consider a short sale. He has two liens but fortunately they are both with GMAC. That should make negotiating the short sale fairly easy. Sad Sam's credit will still be affected but at least he can avoid having a foreclosure. The better of two evils.

Days like this are bitter sweet for me. I mean, I'm a Real Estate broker and my job is to take listings, sell houses and get paid. I'll get a nice check, the buyer's agent will get a nice check, the buyer will get a below market value new home and Sad Sam.....well Sad Sam will get squat. I truly hope we can avoid the foreclosure and I truly hope Sad Sam learns from this experience and it helps to make him a stronger person. I'll do my job and I'll get paid. But I don't have to like it. And that's all I have to say about that. What say you?

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 Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales,  Orlando Florida Short Sales, Celebration Florida Short Sales, Windermere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.

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Location:
Florida Polk County Poinciana
Tags:
investing
flipping
opinion
short sale
real life

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Rainmaker
659,518
Randy Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645
I am sure that he is not an isolated case.  Those who sold him that deal was most likely selling to others the same way.
Apr 17, 2007 08:33 PM #16
Rainer
133,274
Boomer Jack Boardman & Carl McIntyre, the Codgers
Noted Curmudgeons - Saint Paul, MN

UCBB: I usually have something witty to say—today I seem to be witless (oops), and can only utter a “wow!”active rain|active codgers, your active fans image

 

Jay

Apr 17, 2007 09:45 PM #17
Rainer
137,413
Rich Kruse
Gryphon USA, Ltd. - Columbus, OH

Bryant - You need to keep the chin up and take another step.

F.I.D.O. - Find a Jar Head and aks him what that means if you don't already know.  Go Army !!  

Every day I tell myself that I didn't get the client in the position, I am getting them out of it.  You can feel bad for Sam, but you are not the reason he is where he is.

R

Apr 17, 2007 10:16 PM #18
Rainmaker
1,142,060
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Hey good morning everyone! I've been getting a lot of these short sale deals lately. Some I take and some I turn down. Really depends on the numbers and if I think I have a good chance of getting it done. One advantage of these type of listings is that pricing is no longer a factor. The seller will not be allowed to get any funds at closing so yo are able to price them right below market value and get them sold. If the banks are agreeable and easy to work with they can be pretty quick and smooth deals. So if you are not doing them yo may want to look into this side of the business. In my area it's going to be big business over the next couple of years. I feel bad for the sellers but the reality is a short sale is much better than a foreclosure.  
Apr 18, 2007 01:44 AM #19
Anonymous
Caligal

BB,

So this is what is happening in our market....I knew that we had a lot of investors in Poinciana, but I did not realize it was this bad. I learn something new every time I read one of your posts.

I guess I will start planning my next visist......

Apr 18, 2007 03:27 AM #20
Rainmaker
1,142,060
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Hi CaliGal,

I pulled some stats on Poinciana last Friday to find that there have been 137 closings from 1-1 to 4-13. last year same time frame there were 327! That's a 42% decrease. 1750 properties on the market as of this morning. We have close to a 2 year supply of inventory on the market. Foreclosures are rampant and values are continuing to drop. BUT you look sooooooooooo lovely today:)

Most of the investor activity was on the Polk county side. Sam's house has never been lived in and is a 3 bedroom with 2046 sq ft of living space. There are recent sales of similar properties for as low as $189,000!!! Compare his sq footage with yours and you see where the problem is. Luckily its in Polk county. There are hundreds of them out there just like this. It's going to get worse before it gets better. In my opinion values will drop another 10-15% before things start leveling off. I just hope that you and my other 22 sellers can get out while the gettin's good.

OK, that's it, this comment is depressing me. I'm getting ready to head out and make it happen!!!

Apr 18, 2007 03:43 AM #21
Rainer
118,729
Bob Sloop, Consultant, Indianapolis, IN
RS Mortgage Consulting - Indianapolis, IN
Broker Bryant, neat post, Good luck on making it happen...let us know.  Thanks.
Apr 18, 2007 07:33 AM #22
Rainer
98,203
Danny Smith
DISCOVER TEXAS HOMES - Round Rock, TX
 BB it sounds like Sam is going to take it in the shorts! Too bad! But if anyone can help you will be the one to do so!
Apr 18, 2007 07:40 AM #23
Rainer
29,660
Theresa Cavanaugh
Global Realty Marketing - Appleton, WI
Stories like sad Sam's are all to common.  Sorry for him, at least he made one sound decision...calling you.
Apr 18, 2007 09:58 AM #24
Rainmaker
1,142,060
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

I made it by to look at Sam's house today and it should be fairly easy to sell at the right price. I've never negotiated a short sale with GMAC before but I've heard they were pretty easy to deal with. So will see.

I'm in the process of negotiating another short sale right now. I submitted an offer to the 2nd lien holder for approval on January 14th and still have not received a response! They sent an Email yesterday saying they just switched the file to another representative, the 3rd one. Unfortunatley she is on vacation until late next week, They are driving me crazy!!!!!

Apr 18, 2007 10:37 AM #25
Anonymous
James Klobasa
Wow...great post and blog...very informative. I'll be staying tuned...
Apr 18, 2007 01:59 PM #26
Rainmaker
453,651
Allison Stewart
St.Cloud Homes - Saint Cloud, FL
St. Cloud Fl Realtor, Osceola County Real Estate 407-616-9904

It is the sign of the times BB

Foreclosures are happening everywhere in record numbers. Waiting to hear from the bank on one I have going short. Life is never boring that is for sure.

Apr 19, 2007 12:28 AM #27
Rainmaker
337,464
Thesa Chambers
Fred Real Estate Group - Bend, OR
Principal Broker - Licensed in Oregon
Sounds like Sad Sam has made the right call - although he will not get squat - he does at least have the possibility of not falling completely down the ladder... as always - good job Bryant
Apr 19, 2007 05:03 AM #28
Rainmaker
147,121
Kaye Thomas
Real Estate West - Manhattan Beach, CA
e-PRO, Manhattan Beach CA
It will be interesting to see if new programs that a few lenders are floating will help desperate sellers who are living in the property.  Problem with people like Savvy Sam is they are looking to make a quick buck  and while you can make money flipping if you know what you are doing most people lose.  What they are doing is gambling.. if Sam had taken the money to Vegas he would have had a better time..at least  they would have comped him to a nice room and bought him a few drinks while they took his money..
Apr 19, 2007 07:10 PM #29
Rainmaker
720,287
Teri Eckholm
Boardman Realty - White Bear Lake, MN
REALTOR Serving Mpls/St Paul North & East Metro

What a sad situation...The worst part is is that it probably isn't an isolated incident. Shame on all of those who made "flipping" seem like such an easy way to make money. There are too many Sad Sam's out there.

Good for you for taking care of him and assisting him!

Thanks for the interesting, well written post!

Apr 21, 2007 11:33 AM #30
Rainer
58,330
Ralph Nudi
Success Realtors brokered by eXp Realty - Kenosha, WI
"YOUR success IS our success"
There are plenty of Savy Sam's in my market as well. It's unfortunate.
Apr 23, 2007 02:11 PM #31
Rainer
4,151
Jeff Schneider
Schneider Group Consulting & Investments Ltd. - Edmonton, AB
This is a great example of where a Realtor can learn to feed deals or opportunities to an Investor. Some Investors are greedy and work under the premise that someone needs to get screwed in the process, but many are honourable and caring people. It's obvious that SAM needed to sell immediately for top dollar. As an Investor, I do everything I can to help people out and if I can make a deal work, AND pay full asking price, then that is what we strive for. People's reactions towards Investors needs to change. We're not all bad folks!
May 11, 2007 05:28 AM #32
Ambassador
566,489
Rosemary Brooks
BMC Real Estate - 209-910-3706 - Stockton, CA
The Mother & Daughter Realty Team

Speaking of getting screwed! A little off the subject, but I figured this is good enough place to vent, since you mentioned it!!!  I just finished putting together my birthday gift - A recumbent bike 4755 and it was easy to put together except for a couple of screws.  Once I figured where they went I was home free.  Now I just have to get the energy and will power to use it daily.

Thanks for listening!  Oh great  post, Investors are human too.  Short sales make you think that everything is going to the dogs.  They are never easy.  Investors can sometimes do a good deal too.

Aug 14, 2007 06:15 PM #33
Rainmaker
224,121
Laurie Mindnich
Centennial, CO
I got it- bittersweet gets the cartoon with the tongue.  You guys are WAY ahead of the rest of us with this short sale stuff.  Hell, if I were in Colorado, my comfort zone in foreclosures would likely carry me.  But the SHORT SALE stuff is a nightmare- NOTHING is definitive.  Just doing some back reading.
Sep 12, 2007 10:09 AM #34
Rainmaker
1,142,060
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Hi Laurie, Are you going back into my past today? I hope you enjoy the read. 
Sep 12, 2007 10:38 AM #35
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