Owe More on Property Than it is Worth? - Ideas to Sell Rather Than Lose It
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I went to school in Churchill County schools in Fallon, NV.
Those who know me well, know that I am a small town guy with big dreams.
I believe in fairness to all and have an affinity for honest, hardworking Americans, who are struggling with today's economic challenges.
We depended on each others hard work and honesty.
If someone had a barn fire, we helped rebuild it.
In some ways, the big cities have some of the same characteristics.
I believe that my small town experiences led to my successes and my failures in the big city.
My AFSC was a 90250 which is a surgical assistant and PA.
During this time period I became proficient at OB-Gyn and birthing.
I witnessed many living births as well as had the unfortunate experience of watching death.
After leaving BYU, I returned to Las Vegas, NV.
I was a single father raising my two sons (Leland and Adam).
They both turned out to be excellent American citizens.
I started investing in real estate while in my early 20s and did quite well for a young man with no father in his life.
He was not a part of my life since I was about 8 years old.
My first real estate purchase was a Las Vegas rambler about 2100 square foot VA foreclosure that I picked up for $42,700.
Most people would have loved to make that kind of money, as I did! There was only one problem that I had with the transaction.
I felt guilty for the people who lost their home and felt guilty that I had just "Made a Killing" on the new owners.
I realized that the new owner actually ended up with equity and that the lender got rid of "Bad Debt".
One thing that stands out the most to me in my career is the lessons of "Life's Hard Knocks!" I have experienced many failures and many successes and have watched others make many of the same mistakes that I have made.
One of the greatest assets that I feel that God has blessed me with is the love of numbers and a good vision of problem solving.
I bring this up to share with you that what I am about to tell you is credible and it is true.
I do not have all the answers, nor; do I pretend to have them.
I am not giving legal advice or financial council.
Let me begin by talking about a real estate or a vehicle purchase and tell you a few things regarding these transactions that you may or may not be aware of.
What this means in simple terms is that the seller is represented by the listing agent and the agents loyalty is bound to the seller, not you as the buyer.
They are 100% committed to selling you a car and getting as much profit as is possible from you, the buyer.
When you are negotiating to purchase real property, everything is NEGOTIABLE! Just remember that the name of the agent that is on the sign is the seller's agent, not yours! His or her job is to sell the property for the seller and sell it for the most amount of money possible and with the least amount of contingencies (conditions) on the offer to purchase contract.
Too many times the listing agent bumps the buyer up or refuses to take an offer to the seller.
The law requires that a listing agent presents your offer to the seller.
It is possible for a BUYER to negotiate part of the commission out of the deal in order to get what he needs to complete the transaction.
They are usually aware of these, as well as other items, that can be negotiated out of or into the deal.
Contingencies are things like furniture, big screen tv, swingsets, or other items that are considered personal property and are not permanently attached to the structure or the land.
Everyone is willing to take a small cut if it means the difference between a deal closing or falling apart.
The wrong time to find out that you could have gotten a better deal is after you have closed your deal.
By negotiating a skilled deal (a fair price and terms transaction) you have set yourself up to be in a more liquid position when you do sell.
What I mean by this is what happens if you have to sell at a future period of time? For example if you buy at the top of the market's value today and the property declines in value by 10% more in the next two years and you are forced to sell, what is your exit strategy? Compare this scenario to buying your property at a 90% of fair market value today and then having to liquidate in two years for a 10% reduction off market value, your position would be good.
There are do it yourself training kits available for short sales and loan modification.
A short sale is selling a property or vehicle for less than the loan balance in order to obtain a lien release and a free and clear title.
A lender reduces a negative portfolio by negotiating a settlement offer with you as the seller in order for you to dispose or liquidate your property in the event of a financial hardship.
Now let's address automobiles briefly and then summarize both real and personal property liquidation and acquisition techniques.
Many times I would know what the customer was thinking before he or she ever responded.
We are commissioned to work for the dealer, not the customer.
We are paid to get the most amount of money from you the buyer.
Even if he sells you a vehicle at invoice, there are many other profit centers available to him.
Things like custom tires and wheels, desert protection packages, custom paint, alarm systems, paint or fabric protectors, and many other things that are added as dealer options.
When I am buying a new car, I do not add to MSRP for aftermarket items.
If you pay for these items upfront you will be in a worse position than if you had negotiated them out before closing and taking delivery of your new vehicle.
Dealers establish an ACV for your trade in and then show you a different value for trade allowance.
He in essence buys your vehicle for $3500 less than what you thought you were getting.
Just remember, I am not against a dealer making a profit, I just want it to be a fair profit.
Be fair to the dealer, while being fair to your future at the same time.
The title on real estate can pass from owner to owner without ever paying off existing loans and liens.
When you sell your home you can sell it own owner finance terms by executing a deed of some sort (this transfers title).
A potential buyer may be willing to pay more than fair market value for your home just for the availability of full or partial owner financing or lease-option terms.
Doing this transaction could trigger what is known as a due on sale clause that could cause your lender to call your full balance due.
If you are the buyer in a owner financed transaction make sure that you have not only had a title search done, have consulted legal advice, but; that you have also setup a contract collection company to fund the payments that you have scheduled.
Owner financing is just one element of liquidating this type of asset.
Many people that owe more on their property than it is worth do not know how to obtain other equity in order to pay down their existing mortgages and financed loans.
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