Frankly Speaking

For nearly 20 years now, I have been a faithful attendee of the Thursday morning breakfast meeting held at The Inland Gateway Association of Realtors. Over these past two decades I have built many strong friendships. And, I have secured many transactions that might otherwise have been missed. But the main reason that I have religiously attended these meetings is that on this one day every week I am forced to focus on my craft. And, I am given access to information that I might not otherwise receive because of the speakers that they invite to enlighten us. This past week I sat in pure awe as Bruce Norris, a man whose opinions I respect greatly spoke to us at great length about the current real estate market. And, the challenges and opportunities that this market offers those willing to participate. There is no way that I can possibly cover in any detail all that he shared with us in such a limited space. I will however do my best. First it starts with our current interest rates. I have ...

Over the past couple of weeks we have been examining the some of the benefits and risk associated with creative alternatives to conventional financing. And, I hope that you have found the information helpful. Today, we will explore two more methods to complete an otherwise difficult sale. They are the seller financing options of holding a first or second note on the property. First you might wonder why anyone would want to carry the note on a home that they intend to sell. Great question. And the answer is more common than you might think. Let us assume that our seller is older and he holds title to his home free and clear. And, that he has sufficient assets to retire comfortably. Selling his home will provide him with cash he may not need at the time and expose him to tax liabilities that he does not want to pay at the moment. In this scenario, if the seller decided to carry the note, he could structure the loan over thirty years, with an interest only payment and require that the not...

Last week we spoke of two “creative” methods of transacting the sale of your home when you have insufficient equity to do so through traditional means. They were the Land Contract and AITD (wrap around mortgage). Each of these methods can be useful “tools” and a skilled professional should be well versed as to when to pull them out of their “Toolbox”.   That being said, each of them do have their own risk and benefits for both the buyer and the seller. And, they should only be used when traditional methods are not an option. Today, I thought we should all talk about the five hundred pound gorilla in the room. We all know he is there. And yet we refuse to discuss his presence for fear of dire consequences. That is the Short Sale. I actually did my first short sale in 1993 shortly after receiving my license to conduct real estate. It truly was a fluke. While attending a breakfast meeting at the then Corona Norco Association of Realtors, a gentleman got up and started promoting his bo...

Back in 1993 when I began my real estate career, we had many options to sell a home (few of which were conventional).   At the time interest rates were higher than FHA limits would allow. Many of the best houses offered for sale were upside down in value.   And, selling a house was a real challenge. We had a number of alternative methods to overcome the hurdles we had to cross all effective. And, all of them had risk or benefits for the principals involved in the transaction. First there was the wrap around (All Inclusive Trust Deed): This simply stated allowed the buyer to take title to the loan while the sellers name remained on the loan for the term of the contract. It worked something like this. Your home might have been worth ninety thousand dollars. But you might have owed one hundred and twenty five. The buyer with the full understanding of the value might offer the seller five thousand in cash in return for being deeded to the house. The upside for the buyer in this...