Short Sales in 2013 ….and Beyond! How to profit from one of the BIGGEST trends in Real Estate History How to profit from one of the BIGGEST trends in Real Estate History.

Why Short Sales? Experts NAR and Corelogic are predicting that 2013 will be the “YEAR OF THE SHORT SALE” Past Due Mortgages = 6,298,000 Home Price Declines consistent nationwide Close to 48% of ALL Florida homes are “UNDERWATER” Most agents still run the other way- Less Competition for you if you are smart enough to see the opportunity. Become your “LOCAL AREA EXPERT” and Cash In! We will show you how, simply plug yourself into our system.

CORE LOGIC Florida Foreclosure starts in February showed some pick-up in activity month-over-month, while REOs fell to their lowest level since September 2007, according to Realty Trac's foreclosure market report for February. 46.1% of all home purchase transactions in Florida are made up of distressed properties. (Short Sales and REO’s) The volume of serious delinquencies and pre-foreclosures homes overshadows the number of actual foreclosures by 50:1 Over 5 Million Properties are in shadow inventory now (Bank owned but not yet on the market) 90% of them are not yet on the market as an REO- This is an attempt by the lenders to keep property values from dipping while they are still trying to unload their short sales. 1.2 Million Foreclosures have happened in 2012 that should have happened in 2011

Core Logic "At a high level the U.S. foreclosure inferno has been effectively contained and should be reduced to a slow burn in the next two years," said Daren Blomquist, VP at RealtyTrac. "But dangerous foreclosure flare-ups are still popping up in states where foreclosures have been delayed by a lengthy court process or by new legislation making it more difficult to foreclose outside of the court system. Foreclosure starts have been steadily building in those states over the last several months and likely will end up as bank repossessions or short sales later this year." According to the report, 32 states saw a month-over-month increase in foreclosure starts. Florida continued to lead as the state with the highest foreclosure rate for the sixth consecutive month, with one in every 282 housing units receiving a foreclosure filing in February. The national average is one in every 849 housing units. Florida also contained seven of the top 10 metros with the highest foreclosure rates. Miami ranked No. 1 and was followed by Orlando (No. 2), Ocala (No. 3), Tampa (No. 4), Palm Bay (No. 5), Jacksonville (No. 8), and Naples (No. 9). Other metros ranked among the top 10 included two in Illinois-Rockford and Chicago at No. 7 and No. 10, respectively, as well as Las Vegas, which ranked No. 6.

Why YOU should be Targeting the Pre-Foreclosure Market in 2013 Over 1.8 Million new Foreclosures are expected in Million properties are seriously delinquent, but have not filed a foreclosure yet. Banks are not starting foreclosures until homeowners are 365 days late 11 Million Homeowners have Negative Equity in their homes- Corelogic 16 Million Homeowners have less than 10% equity in their home- Corelogic

Common Agent Objections It’s hard to find a buyer for a short sale They take too long By the time we get the approval, the buyer walks because they are unfamiliar with the process or the find a property they can buy now. The bank wants too much money and we don’t know how to dispute their values. I don’t have the time to become a negotiator and sit on-hold all day with the bank. They cut my commission anyway.

Common Agent Objections I don’t know how to negotiate a short sale properly – What is the difference when negotiating an FHA loan vs. conventional? – What about a Jumbo loan, or a VA loan? – How do I handle 2 nd mortgages, lines of credit, etc.? – What do I do about other judgments and liens that come up such as mechanic liens, HOA liens, child support judgments, alimony judgments, credit card or other debt instrument judgments?

Common Agent Objections What do I do when: – They want a cash contribution from the seller and they don’t have it – They want the seller to sign a promissory note – They won’t give a full-satisfaction and will only “release the lien” How do I handle the tax ramification/1099-C issue should it arise?

Investor Based Solution The GOOD NEWS is that you NEVER have to worry about any of that ever again! You don’t need to learn every possible thing there is to know and every way to negotiate the hundreds of different scenarios out there when dealing with short sales! Your investor team will handle all of this for you….at NO CHARGE ever to either the agent or the homeowner!

Investor Based Solution Investor puts in “cash” offer as soon as you get the listing so that negotiations with the bank can begin immediately….a great selling point for your prospects to bring a buyer upfront! Investor’s experienced negotiating team will handle all bank negotiations….NEVER have to talk to the banks again! Average short sale closing average for agents nationwide is around 30%. Our team closes 90%+ of every deal we work on.

Investor Based Solution Property is actively marketed only after the bank counter-offers Property can now be marketed as a “Bank Approved Short Sale” Buyers that are identified later in the process are much less likely to “walk” as their wait time is normally less than 30 days. When negotiated properly, commissions are almost always a full 6%.

Process Homeowner = Party A Investor Buyer = Party B End Buyer = Party C Initial contract is the A>B. The homeowner grants the investor an “Equitable Interest” in the property allowing them to negotiate with their bank, lien-holders, etc. In addition, they are granted the right to list, market for sale, and sell the property while negotiating and prior to purchasing from owner of record.

Process Entire process and each possible scenario is fully disclosed in writing to ALL parties…including the banks Any offers that come in are presented to the investor/buyer as they are now the ones legally selling the property (B>C). Once the approval letter is in-hand the decision is made whether to purchase (A>B) and re-sell (B>C) or to use one of the following exit strategies

Process (A>B, B>C Exit Strategies) …and Realtor Compensation A>B, B>C…Immediate buy/sell (Realtor is paid on both transactions on same day….earning double commission) A>B, B>C…Buy/Hold/Rehab (Realtor is paid on 2 nd transaction no matter how much time goes by during the waiting and/or rehab period)

Process (A>C) More and more bank short sale approval letters are including language that prohibits the re-sale of the property for 30, 60, or even 90 days If there is already a “C” buyer lined up and ready to go, it normally makes more sense for the investor to “release” their interest and consequent contract with the owner of record so that the “C” buyer can purchase direct from the owner of record.

Process (A>C) The Realtor is compensated by getting their full commission (whatever the bank agreed to pay) The investor is compensated from the buyer by getting a “Release of Contract” fee. This fee is the difference between what the bank accepted and what the “C” buyer was under contract to pay while buying from the investor.

Process (A>C) Example For example: If the B>C contract was for $160k And the bank approval was for $150k The amount of the release would be $10k The buyer would then contract in place of the investor for the $150k that the bank approved The total price therefore did not change and was still the same $160k

Process (A>C) The possibility of the transaction going A>C is fully disclosed to the bank as well as to the buyer once the offer comes in. They know upfront that this could go A>B, B>C or simply A>C, but regardless their end price will not change or be increased 1 penny due to the investor involvement

Process (A>C) The release fee is a separate transaction and has nothing legally to do with the new contract between the owner of record and the buyer Therefore this fee does not and frankly should not be on the HUD-1 and this complies with RESPA and ALL bank approval letters If in the event the buyer needs to “mortgage” that amount as they do not have the cash on hand, it can be added on the HUD-1 as a buyer side closing cost as long as it is OK with their lender

Conclusion Realtors working side-by-side with investors in this model will: Increase their amount of listings as they can attract more sellers; bringing not only a buyer but a proven team of negotiators to help them Close more deals and focus on the things that make them money…which is buying and selling homes NEVER have to talk to or deal with the banks ever again letting you do what you do best- Sign new Listings and Close more Deals.

Conclusion Stop worrying about the buyers “WALKING” Stop worrying about the bank BPO/Appraisal coming in too high. Start making more $$$ than ever before and take advantage of what truly is a once-in-a- lifetime opportunity for those smart enough to “see it”!!!!!

Let’s Get Started Today! Give us a call at and let’s get started. Douglas Heise President & Property Acquisition Manager Real Estate Liquidators Inc. Phone (386) For Realtors who are tired of dealing with Banks! Realtors Help your sellers!Realtors Help your sellers! Or Submit HereSubmit Here Sellers who need to sell now! Sellers Stop Your Foreclosure Today We can Help! 3 Ways To Sell Your Problem Property Now Buyers do you want Discounted Properties in Daytona Beach Investors Do You Want to Earn Better Returns than the Stock Market