Straw Offers Just Make More Work for Everyone
May 27, 2010 / /
Fred Weaver and Kevin Kauffman talk about straw offers or fake offers and why you shouldn’t submit them to the bank.
Also, Matt Vernon – you got some guts standing in front of 1000+ agents and taking questions. Keep it up.
HOW TO CLOSE AT LEAST 3 DEALS IN THE NEXT 90 DAYS
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HOW TO CLOSE AT LEAST 3 DEALS IN YOUR NEXT 90 DAYS
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About the Authors
Kevin Kauffman & Fred Weaver
Kevin and Fred the founders of Group 46:10. Over the last 10 years Kevin and Fred, and their team have closed tens of millions in real estate all over the country and have created some of the best training for agents in the market. Kevin and Fred are also highly sought after teachers whose work has helped agents all over the country build their own next level real estate business.
This has always been a no brainer for this simple truth:
Its not about us! – its about the distressed homeowners. Playing the straw buyer game delays their financial nightmare and causes them more grief. They patiently wait, hoping and believing in their agent while not sleeping at night worrying about their children.
Getting them out of financial distress is the noble goal, here, making money is secondary in this particular market. Being a Real Estate agent is based on helping people find their dream home, in this climate we are rescuing them from their dream home and saving them from foreclosure.
Matt Vernon showed more than guts – he took questions straight up and fixed troubled files for agents on the spot. He wasn’t speaking to just local agents, but to 1000 assembled CDPE agents who also want to make a difference in their communities.
Its a new day and the times – well, “they are a changing”…seize the day is the word of wisdom for those who get it.
My only dilemma is when a seller comes to me late in the foreclosure process and my options are let it foreclose or have an investor submit an offer since the policy of most lenders is no offer no foreclosure date extension.
Any ideas to handle this better?
I love saving homes from foreclosure days before auction. Actually, its easier to work with the banks.
If a homeowner comes to you late in the process, price it to sell immediately. Look at the last 5 sold comps, take out expenses and get it in the MLS and email blast to all agents.
Then find the right fax numbers for the banks and fax to them all.
Also, get the attorney info and fax them the contract as well. You always have to tell the left hand what the right hand is doing and keep everyone in the loop.
Hey Guys,
I think you guys were pretty off base with today’s video post. It’s disappointing really because I really like what you guys are about. You guys have the right mental attitude and work ethic.
But now when you start:
1) Praising Matt Vernon’s efforts after a single meeting with him, it seems you are doing his bidding by downing investor buyer offers. Of course they don’t want lower offers from sharp skilled investors who know what properties are REALLY worth. They want to deal with Agents because they know its all about the commission no matter what the REAL value of a home is. AND they know YOU as Realtors only see 1/32nd of the REAL game being played.
Do you realize that if ALL BUYERS analyzed properties and bought at 65-75% of the inflated asking price, that there would be no housing bubble and no short sale business. Think about that.
2) Who’s to say what a “low” offer is? Certainly NOT you? Do YOU have a vested interest in any particular deal? Do you own the money? Do YOU own the home? What do you have to gain or lose? What are your financial considerations? In a traditional sale or a short sale, the offer that is MOST certain to close IS the best offer for the seller. In the case of a short sale, a Realtor needs to be certain a deal will close or the lender loses money and the seller loses the house. What do you lose?…a commission? Please.
3) So lets be clear about what a fake offer is. A fake offer is an offer from a fictitious person that does not exist, has no financials, and has no capability or will to close the deal. A straw buyer is a buyer placed into the deal who is representing themselves as the pricipal but in reality, someone else has put up the money and is using the straw buyer for credit purposes only.
You seemed to indicate that an investor buyer who is looking to flip the property after purchasing it is a fake or straw buyer because A) they want a good deal on the home or B) because if they don’t get their price, they allow the pre-negotiated short sale to be sold directly to an end buyer.
Where is the harm in this case?
Did you really mean it that way?
4) Lastly, did you mean it when you suggested that a low offer is a ridiculous offer even if its a cash offer? Cash offers deserve a discount just like any other time you pay cash for something. CASH IS KING!
Did you really mean it when you inferred that, submitting a low offer to a lender, whose policies and portfolio status are not public knowledge, is a bad idea because these types of deals never close and that homeowners are hurt by those that practice the Investor Short Sale Method? I hope not.
But I think you are right about this method of closing short sales not being for everyone.
Keep up the good work. But please be careful about telling Agents which offers to take and don’t take. Many Agnets are confused as it is.
This is about the seller in trouble. If you can have a competent, well funded investor to assist you as the Realtor to close deals, where is the harm in that?
Again, I think your show is great. But it seems as though you guys are a little sweet on Matt Vernon.
He reminds me of the VP of BP right now trying to contain the oil spill in the Gulf of Mexico. I don’t care if thier system IS getting better. Look at all the problems they cause Agents and Homeowners everyday. They are not to be trusted. Sorry. Please stay on our side of the fence. His efforts to appease you are for HIS own behind and HIS shareholders not us.
By the way, I’m a Realtor and Broker licensed.
@Harold – Dude you missed the point…
Harold – good points on the investor issues. And the banks have a point too on the A to B – B to C deals. They are losing money, willing to pay commission and don’t want anyone to be enriched by a bad situation. Unfortunately, the sharks who screwed over sellers with POA’s and took money from sellers and didn’t close escrow are to blame for the bad reputation of investors.
On Matt V – you had to be there to hear. Six months into this position he began the process of changing things for the better. At least, he has that over BP.
67 thousand short sales were sent to B of A in March 2010!!! April’s numbers, not out yet but think about how many new people you have to hire and train to keep up with this onslaught.
I’m on the side of the distressed seller and from my vantage point, its getting easier to get the shorts closed. Averaging an approval a week in 21 to 45 days. That’s a clue as to the banks wanting to clear the decks and bring market stabilization back. They are in the lending business, not the loss mitigation business and working with agents to stabilize the market goes a long way to being back in the lending business.
Thanks for the reply. I do get your point(s). I just wanted you to get mine as well.
The information you provide to the real estate community that makes a living providing short sale services is invaluable. I am learning new stuff from you guys all the time.
I also appreciate the fact that the training materials you sell are affordable which is an indication that you care and are really in this business to help people.
Please keep doing what you are doing. Thanks for keeping it real.
I agree with this video. At this stage of the game, honesty upfront is extremely important and vital to the whole short sale process. Dealing with genuine agents is a must. If a bank finds out that an agent or negotiator is being mischievous and/or misleading, they will often kill the deal right then and there. Any subsequent offers submitted by the agent will be scrutinized to the utmost extent. Or possibly worse, they may choose to never work with you or your company again. Like Fred and Kevin said, only submit real and reasonable offers and save all parties an unneeded headache.