It’s all about their mistaken belief that the best and surest way to a big payday is by identifying a seller, listing his property and then finding someone to buy that property at a price that will generate the highest commission. Even better if the agent happens to represent both the buyer and seller and won’t have to split that commission with someone else (although such dual representation is not legal in all states).

The quicker the transaction happens the better, so the agent can identify another home for sale with a potential big commission, and the cycle repeats itself. Again and again.

What’s Wrong With This Picture?

First of all, it’s about selling homes first and serving people second, all the while trying to maximize commissions. It totally disregards the potentially bigger commissions that an agent can make by understanding and serving the investor-buyer.

Investors require a different degree and depth of attention from an agent than does an owner-occupier. The investor represents problems for many real estate agents who “don’t do (investor) math”. Many agents also assume that investors want deep discounts and take too much time to make up their minds. This due diligence is often mistaken for indecision, and it is something most real estate agents are not trained to support.

This is not to say, however, that there are no expert real estate professionals who serve investors effectively. They do exist; it is just that they are the exception.

Relationships or Transactions?

So where do the potentially bigger commissions come in? It’s all in the math. Most homebuyers buy or trade up homes once every five to seven years, which makes repeat business distant.

A relationship with a serious investor, on the other hand, can be recurring and generate three to four times the commission revenue that an agent recieves from that one homebuyer transaction over the time that the average owner-occupier holds one house. The active investor does 10 to 15 times the number of transactions in the same period.

Then the relationship gets more interesting because most successful investors are connected to a network of additional prospects and investor-friendly providers. For examples of how the homebuyer and investor markets differ, see the table below.

Fundamentals & Technicals

These deals do not come from the traditional “Honey stop the car,” open house, curb-appeal sales pitch. Investors can make decisions far more rapidly than most homeowners, as they are looking at the numbers, the investment and the exit scenario.

Historic home sale trends are pretty clear. According to the National Association of Realtors 2009 Second Home and Investor Study, slightly more than 20 percent of the home sales in the United States are made to investors. Our 2008 The Invaluable Investor Study placed this number at 28 percent. The NAR held at 21 percent for that year by analyzing mortgages.

Total investor sales for 2009 is not record setting, but it is among historic lows. Going forward, sales are expected to be a constant percentage of the market. As the market grows, so will this transaction volume.

Real estate is on sale, and an investor can buy positive cash flow inexpensively. This has not been lost on sophisticated investors or investment managers.

Maybe the house needs repairs, or is behind on payments. Where are you going to get the money to bring everything current? Often, the most frustrating piece of settling an estate is selling the house. And you carry the responsibility for it in the mean time.

Contact Us Now! We’ll help you through this difficult time.

We Can Help Settle An Estate

The fact is you already had a life before all these extra “estate” responsibilities came along. If they could all be solved quickly, that would be one thing…but unfortunately, the probate process for estates can drag on for months.

Let us help, by giving you real estate options. We’re expert at solving real estate problems quickly and fairly. That way, you can put these sudden complications behind you now, and focus on what counts–your family.

If that’s not enough, now you have to deal with city officials, insurance adjusters, contractors that never show up.

Contact Us Now!  You’ll be pleasantly surprised at the solutions we can present to you for your damaged home.

Help For Your Damaged Home

If you’re seriously considering selling your house, you need someone who can look beyond the fire damage, and see the value that you once had in the property.

We’re professional investors that can do just that. We know how to fix damaged properties for far less money than what contractors will tell you–and we buy houses for more than you thought possible.

Contact Us    |    Complete the Seller Request Form

HUD Issues Problematic Rules Interpreting SAFE Mortgage Licensing ACT

HUD has proposed to eliminate ALL seller financing unless the seller lives in the home or becomes a licensed mortgage originator. The proposed HUD Rules interpreting the federal SAFE mortgage act can be viewed at www.regulations.gov  Use the search parameter “HUD” and the keyword “safe mortgage”.  Please review and comment regarding the impact of this broad interpretation of the law. 

“In addition to establishing HUD’s responsibilities under the SAFE Act, through this rule, HUD proposes to clarify or interpret certain statutory provisions that pertain to the scope of the SAFE Act licensing requirements, and other requirements that pertain to the implementation, oversight, and enforcement responsibilities of the States. HUD solicits comment on the proposed clarifications and on the regulations proposed to be codified.”

History:
As you may recall, we lobbied hard in North Carolina last year to maintain the right for individuals to make up to five seller financed transactions per year before being subject to mortgage originator licensing, etc…  However, that law was passed subject to the Department of Housing and Urban Development’s (HUD) approval of the law as “compliant” with the intention of the federal law.  If any state does not have a compliant law, the SAFE act allows HUD to implement licensing for the state.  HUD has since issued proposed rules.  In a nutshell, seller financing would no longer be allowed for non-owner occupied homes.

How YOU can help:
We learned about the publishing of the rules very late in the process… and the deadline for comment is upon us on February 16.  However, we desperately need for thousands of REIA members across the country to go on record with HUD on this issue.  We will be working to try to affect this law in other legislative ways, but cannot hope to gain traction unless our members have clearly communicated that they are opposed to this portion of the rules. This is your chance to be counted on this issue.
 
PLEASE SUBMIT YOUR COMMENTS TO HUD!  We have only four days left to flood this system with comments.

Follow these simple steps:

1.  Logon to www.regulations.gov   You will see two white boxes for searching

2.  On the left box labeled “Document Type”, pull the menu down and select “proposed rules”

3.  On the right box labeled “Enter keyword or ID”, enter “safe mortgage”.  Then, press search

4.  Locate the blue search result “FR-5271-P-01 Safe Mortgage Licensing Act: HUD Responsibilities…”

To read the rules:  click on the blue title FR-5271-P-01  You will be taken to another page. You will see “views”.  You can click on PDF file or another symbol which will show you the rule document online. If you want to submit a comment after reading the document, use your back button to return to the search results and then move on to #5 below.

5.  To submit a comment:  On the right of the screen, across from FR-5271-P-01, click on “submit a comment”

6.  Complete the form providing required information with blue asterisks and your comments and then submit.  (Note: you do not need to fill in the blanks for organization name, government agency type, or government agency)

What do you say?
Say what you feel, but say it politely!   The message should include that you would like the definitions in the proposed rules to be changed so that private individuals can originate and service loans on properties they personally own.  Some ideas from others:        

• The SAFE Mortgage Licensing Act was intended to regulate the mortgage industry, not private individuals.  If I own my own properties and want to sell them to someone and let them pay me, I should have the right to do this without being a licensed mortgage broker
• Many properties have special circumstances where full bank financing is not possible.  Vacant rsidential lots, investment homes, homes in flood areas, etc. may not be eligible for traditional financing. Individuals who own their own properties have always been able to offer other private parties the option to pay them directly.  These rules would prohibit that for all properties which are not owner occupied.
• bank loans are not available on some types of properties
• the tight lending climate has made bank financing “out of reach” for many
• seller financing is an “age old” tradition based on private property rights
• these rules would prohibit even partial seller financing – i.e. a “seller second”
• according to HUD’s “Residential Finance Survey” in 2001, roughly 40% of all non-farm residential properties in the US are owned free and clear
• an estimated 6 million Americans own a property other than their own primary residence
• an estimated 4.5% of Americans own three or more properties, many purchased solely as investment properties
• 40% of non-owner occupied residences are mobile homes which are more difficult to sell with bank financing
• approximately 5% of homes in US are for sale or for lease… seller financing may be key to liquidating this inventory

The continued success of our industry as we know it is threatened by these proposed regulatory changes. Please do not hesitate to follow the steps above and make your voice heard.