Real Estate questions

[Surfer]

Some of you know my business and have with quite a few that emailed and pm'd with to help out and answer questions including some that weren't really related to Real Estate but still Finance. What I want to know is any of you that own a home or friend does etc, what were the pluses and minuses in your opinion of how the deal went and well did you get along with your Realtor or Mortgage Broker etc. My partner and I are really building our business and we operate a lot differently, no cold calling, no buying leads, no bullsh!t telemarketing that tricks people etc. Pretty much just advertising and word of mouth/referral especially with our Realtors.

Too many people in this industry that don't know what their doing and has really given a tainted name, the fraud I read about is unbelievable. Today I got two large referrals for Commercial properties that went to a few other brokers before me b/c they didn't know how to structure it, one of them was referred from another broker lol. Lot of lenders have gone out of business, including huge ones like Mortgage Lenders Network which have ceased operations even with the Lehman Brothers buyout.

Also I warn every client that after pulling credit they will be bombarded with boiler room calls, if that happens to you and you don't know why it's b/c mortgage scores are scored differently and register as a "trigger" of which the credit bureaus sell your "private" info to 3rd parties over and over. I've had times where clients got 15+ calls daily. How would you feel if somebody went through your garbage and found your personal info then decided to call you to sell you something? People are generally pissed when I tell them that and now they understand why they get all those calls and junk mail. Big issue going on and their trying to push for it being illegal yet government considers it an non-issue, which is retarded b/c these "trigger leads" are generally sold to boiler room operations that are the biggest cause for fraud and bait and switch tactics (comming to closing and seeing something toally different then agreed upon with a stupid excuse for why). Takes about 5 days but to get removed from these list, go to www.OptOutPreScreen.com and sign up to Opt Out, don't Opt In or you'll get slammned with more calls and mail. This removes your name from the cycle list. Just pointing that out incasae any of you have that issue.

So shoot, give me your positives and negatives of how your Real Estate Transactions went, just curious and want to see how your own personal experience went, I've got thick skin so be honest

 

[Gary Sword]

I got a real estate license just so I can act as my own realtor and make the commissions on my real estate transactions. When I'm the buyer everything goes very smooth becuase I usually pay cash and close in about 2-3 weeks which is usually how long it's takes the title company to get it together (title search, title insurance etc). When I'm the seller and someone is financing that's were the problems always occur. It seems like the lenders and Mortgage Brokers never have the act together. I think most mortage brokers suck and lie to people about interest rates they can get and try to stick on all kinds of additional fees. It seems like the lenders have no concern about the closing date. I sold a house 2 years ago that and a long closing date. When the closing date came the lender still was not ready. When it did not close on the closing date the buyer had breached the contract. I ended up refusing to close on the house because the it's value went up a lot more then I had sold it for in just a few months. The title company's also make a lot of mistakes and you really have to double check their work.

 

[Surfer]

I got a real estate license just so I can act as my own realtor and make the commissions on my real estate transactions. When I'm the buyer everything goes very smooth becuase I usually pay cash and close in about 2-3 weeks which is usually how long it's takes the title company to get it together (title search, title insurance etc). When I'm the seller and someone is financing that's were the problems always occur. It seems like the lenders and Mortgage Brokers never have the act together. I think most mortage brokers suck and lie to people about interest rates they can get and try to stick on all kinds of additional fees. It seems like the lenders have no concern about the closing date. I sold a house 2 years ago that and a long closing date. When the closing date came the lender still was not ready. When it did not close on the closing date the buyer had breached the contract. I ended up refusing to close on the house because the it's value went up a lot more then I had sold it for in just a few months. The title company's also make a lot of mistakes and you really have to double check their work.

Agree, I see bait and switch tactics all the time with other brokers, who will quote something and then come closing it's changed. I deal with it all the time and unfortunetley most people fall for the bs, and are so rushed to sign they still sign. Most of the time they will call me back and say "you were right and walk out of their closing". And it's impossible to quote a rate over the phone, unless the person goes through the whole app and has credit pulled to review, theres too many factors, yet call somebody up and say I have good credit what rate can I get, and of course somebody will respond with a rate w/o even mentioning the APR or knowing the whole scenario.

My biggest pet peeve are the ones selling the Option Arms, and don't know anything about it, they just try to sell the 1% rate which again is bs. Unless you seriously know how to invest the extra cashflow, your screwed. Negative ammortization in a decreasing market as ours is about the worst thing you can do. Yet so many people got into it to afford housing they couldn't and now that they are adjusting and recasting, they can't afford the payments. And usually they were never explained the program, I have so many people that call me and said "well they said the 1% was fixed for 30 years etc etc" that just makes me cringe and their not very happy once I explain how it works and what the other guy did to them. Watch whats going to happen in Cali in the next year or two, high chance the market is going to collapse again b/c of the majority of people out there have neg-am loans, their gonna see a repeat of the late 80s early 90s.

Retail Banks are just as bad, had two more referrals one another Commercial property and another purchasing a home in GA. Realtor has this lady call her LO at Wachovia to get qualified, they send her a GFE and papers stating she can qualify for 100% witha 486 mid score, I about fell outta my chair when I saw that. That isn't even close to true, her only choice is to put 40% down and go hard money or wait to fix somethings on credit of which I'm doing right now. She found me online and called. My Commercial guy had the proposal from Bank United which was somehow offering a rate way below prime with no cost, I tore into that deal. Explained how they set it up, what they didn't tell him etc. Calls me up yesterday "f$$k the bank I don't have time for their sh!t, I know you can close this, charge whatever you want" lol, but Commercial is a different animal from Residential.

Luckily I have two great title companies and we've never had issues. The biggest things that arise from extended closings, are borrowers that fail to mention certain things or broker that can't clear a deal up if life depended on it lol. I just had two purchases, one closed in 8 days, the other 6 days but I know how to get everything in advance and submitt which saves so much time yet most don't do. I already know what type of conditions the banks will ask for which makes deals flow smooth.

Problem in this industry has too many people with "get rich quick" attitude and are now realizing just how tough this business is right now. Nevermind companies like Ameriquest and others that completley f'd people. My old office there was a company across us that had one tiny room with 15 people crammed into it, and hearing them all day was like watching the movie Boiler Room with the things they'd say. Or the "Senior Loan Officer" that doesn't even know what a 1008 is.

 

[Gary Sword]

So many mortage brokers just tell their clients what they want to hear. I have been to a lot of closings as seller where the buyer's go to sign the papers and their interest rate is more then was quoted. At this point they have no choice but to close or loose the property so they go ahead and close. I also see a lot of unbelievable fees from mortgage brokers on the buyers side of closing statements. A lot of buyers just don't know any better. By the time they get to closing they have a lot invested in application fees, appraisels, home inspections and they rarely walk away.

Negitive Amortization loans are very bad for the average person. Also, If I needed a loan I would never get a variable rate loan unless interest rates were at an historical high. I can't believe how many people got variable rate loans when the interest rates were at a 30 low.

I have a good Title Company that I use but the seller ususally get's to pick the title company so I don't always get to use it.

To me honesty is the best policy. The way some people operate they should really be in jail. The bottom line is just like anything else. Know what your getting into before you get into it.

I sold off most of my real estate investments about 18 months ago and got into the stock market. I recently sold have most of my stock market investments and I'm back looking at real estate. There are some good real estates deals out there right now that are tempting. I'm not sure if I sould hold out a little longer or go for it. Timing is everything.

 

[Surfer]

So many mortage brokers just tell their clients what they want to hear. I have been to a lot of closings as seller where the buyer's go to sign the papers and their interest rate is more then was quoted. At this point they have no choice but to close or loose the property so they go ahead and close. I also see a lot of unbelievable fees from mortgage brokers on the buyers side of closing statements. A lot of buyers just don't know any better. By the time they get to closing they have a lot invested in application fees, appraisels, home inspections and they rarely walk away.

Negitive Amortization loans are very bad for the average person. Also, If I needed a loan I would never get a variable rate loan unless interest rates were at an historical high. I can't believe how many people got variable rate loans when the interest rates were at a 30 low.

I have a good Title Company that I use but the seller ususally get's to pick the title company so I don't always get to use it.

To me honesty is the best policy. The way some people operate they should really be in jail. The bottom line is just like anything else. Know what your getting into before you get into it.

I sold off most of my real estate investments about 18 months ago and got into the stock market. I recently sold have most of my stock market investments and I'm back looking at real estate. There are some good real estates deals out there right now that are tempting. I'm not sure if I sould hold out a little longer or go for it. Timing is everything.

Agree again in full. Whats unfortunate is theres a saying "people want to believe what they know isn't true" and they'll go to closing and see eveything changed but like you said already be pressured to close and figure they just did all that paper work and just sing anyway. And unless these guys are reported, nothing will be done.

I just turned in a broker and their company in Cali. Had a deal here that more I got into, I told them this isn't possible and no way to make it work, his business income was way off what he told me and he was still W2'd by Brinks at the same time, had one property rented out with 3 liens on it at 250K and it's not worth more then 190K as the past broker had an inflated appraisal and they closed another loan ontop of the 1st and 2nd right after since it wasn't recorded yet and that lender didn't know they took it too. But of course some guy he called in Cali gave him a fake job, fake CPA letters etc. Sellers agent called me freaking out as they were making the buyer and seller sign in different rooms LOL, I mean com'on. And of course he was talking sh!t abut me saying I didn't know what I was doing etc, so the selling agent gave me the info after closing. I tracked down this other company and know their being investigated, and he's going to have his property pulled from him for fraud. I'm a Taurus, mess / the bull you get the horns

I tell everyone how it is upfront, no bs junk fees or app fees etc, always credit the appraisal back etc. I've had quite a few times where clients told me I should have charged more, but I was comfortable and not greedy. And thats the big difference, they know they can reach me anytime, and they know I can close the toughest of deals, my Realtors don't send me deals for no reason lol. I just got a hand written letter from a listing agent for a deal I just closed saying in 10 years she's never met a broker that was like me, I kept her up to date the whole time, cleared up some big issues that popped up before closing, and made everything go smoothly and on time. I have it hung up in my office as to get a letter like that from the listing agent is pretty damn rare lol.

That's the toughest part, making people understand the bs their being told. I've talked almost every single person out of a neg-am loan, only ones I did were for reason they could actually us eit for, one need cashflow for her business start up etc. I also set it up witha max 1 year PPP so once the business is going she can get back on tracks since overall APR is always higher on those loans then normal. Most guy who have banged her out on the back, locked into a 3 year PPP and made twice the money I did.

 

[Gary Sword]

That's good Surfer, be honest. There's nothing wrong with making a money if you are honest and straght forward in you dealings. I hear stories all the time of mortgage broker's who falsifly papers to get people loans. My wife also has a real estate broker's license and well as a real estate license. She has had mortgage brokers tell her they will falsify papers so that someone can get a loan. She don't go for that but I know it happens all the time. The broker's charge them outrageous closing costs and the people don't know any better and go ahead and get the loan. The problem is the people can't really afford the loan so they get and can't afford to make the payments. At that point their in big trouble especially if housing market has droppod.

I truly believe in what goes around comes around. Be honest and treat people fairly is always the best policy.

 

[abrcrombe]

BE HONEST!! My GF, her family had to move, but then it fell through. They asked the realtor to contact the buyer and see if they would be willing to let them keep the house. Realtor said there was nothing they could do... couple months later my GF's family talked to them and they said if they knew the situation, they would've let them keep the house!! They said the realtor never contacted them.

Honesty is the best policy

 

[Surfer]

That's good Surfer, be honest. There's nothing wrong with making a money if you are honest and straght forward in you dealings. I hear stories all the time of mortgage broker's who falsifly papers to get people loans. My wife also has a real estate broker's license and well as a real estate license. She has had mortgage brokers tell her they will falsify papers so that someone can get a loan. She don't go for that but I know it happens all the time. The broker's charge them outrageous closing costs and the people don't know any better and go ahead and get the loan. The problem is the people can't really afford the loan so they get and can't afford to make the payments. At that point their in big trouble especially if housing market has droppod.

I truly believe in what goes around comes around. Be honest and treat people fairly is always the best policy.

You have a smart wife there to avoid those guys, b/c now with any type of fraud their comming after the broker, Realtor, and borrower(s). Fed's aren't playing games anymore.

One major issue, stated deals. Stated was originally started for self-employeed individuals that really can't prove accurate income. But they offer it on W2 which is completley pointless as if your W2 plain and simple you can prove income lol. Only exception would be waiter/waitress for example where it's small salary and then commission, stuff long those lines. B/c now their pulling the 4506t form and if they find out your "claimed' income is over what you have reporting, ummmm not good....

Soon your going to see stated W2 earner go bye bye. And it will be either full doc or no doc/no ratio for W2'd people. Lenders were taking on deals where teachers and secretaries etc were "stating" they made 10K+ a month. Can't overstate income, better to pay a slightly higher rate going no doc then to risk it.

 

[Gary Sword]

BE HONEST!! My GF, her family had to move, but then it fell through. They asked the realtor to contact the buyer and see if they would be willing to let them keep the house. Realtor said there was nothing they could do... couple months later my GF's family talked to them and they said if they knew the situation, they would've let them keep the house!! They said the realtor never contacted them.

Honesty is the best policy

That's terrible. In that case in most states the realtor would have been intitled to their commission since they completed their part of the contract and the seller was backing out. It's pretty bad if the realtor did not even contract the buyer or buyer's agent about it. Usually if you have 2 realtors involved (one representing the seller and one representing the buyer) nether realtor would talk directly to the other realtor's client. It could have been that your GF family's realtor (Seller's Agent) did ask the other realtor (Buyer's Agent) about it and the the other realtor did not even ask their client (the buyer) about it. Which ever realtor is was it's pretty sad.

 

[ScottB]

Most of my people are closing 750k to 1 million monthly in lending. Most of it is cold calling and warm calling. You'd be surprised when you have one of the best names in the industry just how many people will talk. Problem .. we cut out the broker and thus your commision by coming straight to the lender. With the recent World Savings purchase .... we can do ALL paper and our Pick A Pay Mortgage (4 payment options monthly) was a great reason in buying them.

Honesty and taking the time to show them the complete financial picture is how we win monthly. Very few walk away when given options and the ability to see more than 1 year ahead. With insurance increases and property increases in Florida, it is apparent that we do so to keep the industry from buckling.

 

[Surfer]

Most of my people are closing 750k to 1 million monthly in lending. Most of it is cold calling and warm calling. You'd be surprised when you have one of the best names in the industry just how many people will talk. Problem .. we cut out the broker and thus your commision by coming straight to the lender. With the recent World Savings purchase .... we can do ALL paper and our Pick A Pay Mortgage (4 payment options monthly) was a great reason in buying them.

Honesty and taking the time to show them the complete financial picture is how we win monthly. Very few walk away when given options and the ability to see more than 1 year ahead. With insurance increases and property increases in Florida, it is apparent that we do so to keep the industry from buckling.

Your a rep with Wachovia? World I've used before and they have great products, whenever I got somebody who could use an Option Arm/Pick A Pay etc I've used them even though their indexes are higher then normal so the real APR is higher however much more stable then a regular MTA or Libor based product. Problem with those programs is too many people want them for the minimum payment, and nothing else which is one of the biggest causes of the surge in forclosures right now, most are in neg-am loans. Plus 99% of the people selling that product don't even know how it works, they just sell that minimum payment and don't know how to explain deferred interest, recasting periods, payment increases, the index its tied to etc, very sad as I get calls all the time from people who want to get out of it as it wasn't explained properly. They do it b/c on those products if you put somebody in a 3 year ppp, you can make 3-5 points on the back and they look at it as an easy quick buck.

World also had a very cool setup where if somebody wanted 100% financing but couldn't really qualify for it or put much money down. You could use a gift from a family or borrower against your IRA etc, and put that 20% into their fuunds of which they'll hold and pay you interest on. And then you qualify for an 80ltv loan, no other lender I'm aware of does that. Or even if you could put 20% down, go with them and make money on your 20% especially when your talking home values like here in Boca.

Luckily for us I have great relationships with the handful of lenders I deal with, we're signed with 300, but you really only need 5-6 good ones. Wells Fargo kills it on A-Paper and we get pricing incentives and rebates that retail divisions don't which is how I can compete against somebody shopping me at a Retail Bank. Samething for Commercial, one of my projects right now for a Warehouse I almost lost b/c Bank United is running a crazy special right now for deals up to 2 mill on the Commercial side, they offering a rate well below Prime. So I finally looked at the papers an d went over it with my client and explained how it had to be structured and to call them and check, sure enough I was right, it was full documention with tax returns (which almost no self employeed person will want to release) and buying the rate down etc etc. He pretty much knew it and was just testing me, I passed LOL. Actually he would have stayed with me anyway, I'm very personable and have a way with clients that makes them feel comfortable. I've had times where once everything was setup and GFE was provided etc, they would call back and say so and so offered this at this cost but would still stay with me b/c of my personality. Hell I had a closing at a bar b/c that's where the client wanted to be and bought everyone drinks durring the closing LOL, my title guys were like "well, whatever floats his boat, we'll see ya at the bar".

My main goal right now is building up my Commercial side, have two fairly large ones right now, and might have another that was another referral today for a guy buying a whole mobile home park. Commercial is much, much harder but very profitable. Have a buddy who does 3-5 pretty large deals a year and makes a very nice income, made just under 3 million last year. However he bust his ass off and some of those can take the whole year to finally closed with how complex they are.