Comments for Free Real Estate Education

Comment on Mortgage Underwriters: Evil or Just Plain Stupid? by Marty Boardman

Marty Boardman — Fri, 03 Feb 2012 17:35:51 +0000

Dear Go Blow Me, using the email address Underwritersaregeniuses@yahoo.com – Thanks for taking the time to comment on my post. I guess I’ll assume that you are a mortgage underwriter. Why else would you chose to respond anonymously? Not surprising as I wrote here mortgage underwriters don’t want anyone to know who they really are. How’s the weather in Siberia today?

Here’s the thing, I’m on your side. I don’t believe you’re the problem. I blame the system (and it looks like you agree with me based on your remarks about loan officers and upper management). However, mortgage underwriters are part of that system and the whole thing needs to change.

Comment on Mortgage Underwriters: Evil or Just Plain Stupid? by Go Blow Me

Go Blow Me — Fri, 03 Feb 2012 02:04:06 +0000

If it wasn’t for underwriters, there would no longer be a mortgage industry. The greed of loan officers and upper management is what lead to the situation we’re in now.
If you want an honest opinion, you would have to provide information on your home, the comps in the original appraisal, and the additional comp you’re mentioning so there can be a fair analysis. Maybe, that other comp you’re including doesn’t really compare to your home. There are a lot of factors that go into how and why a comp is used.
Just because one underwriter accepts a comp and one doesn’t doesn’t mean anything. Just as one appraiser may include a comp and another will not.
It’s subjective. Everyone thinks they’re house is worth more than it is, and the home they’re purchasing is worth less than it is. Someone has to decide.

Comment on How Not to Spend Too Much (or too little) on Your Next Fix and Flip by Marty Boardman

Marty Boardman — Tue, 27 Dec 2011 21:19:02 +0000

Keith, house is done and still active on the MLS. Demand isn’t as strong at this price point as we thought. Go figure. I’ll post an update after it goes into escrow. Thanks for reading!

Comment on How Not to Spend Too Much (or too little) on Your Next Fix and Flip by Keith

Keith — Mon, 26 Dec 2011 04:39:31 +0000

Hi Marty,

Followed you over from BP. Seems like this deal should be all re-habbed by now. Any updates?

Best,
Keith

Comment on How Not to Spend Too Much (or too little) on Your Next Fix and Flip by Marty Boardman

Marty Boardman — Mon, 31 Oct 2011 20:51:01 +0000

Eric, the trick is finding an appraiser that is educated enough to know the difference between a normal sale and an REO/short sale. REO and short sales are “distress” sales and therefore sell for less. Most professionals will acknowledge this fact. As a fix and flipper I need to make sure that there are comparable normal sales in the area I purchase in AND that the appraiser gets this information. As you know this can be difficult because the buyer/seller/broker/lender aren’t allowed any contact with the appraiser under the HVCC.

A simple way to get an appraiser the information without breaking any laws is to make sure the appraiser contacts the listing agent for your flip. Most of the time the appraiser will contact the listing agent for access to the house. When this happens the listing agent has an opportunity to ask the appraiser for their contact info so they can send them a list of improvements to the home. In the same email include the comps. If you’re concerned that the appraiser won’t contact your listing agent then take the lock box off the house as soon as escrow is opened. The appraiser will have to call your listing agent then to figure out how to get inside the home.

Comment on Dealing with the Real Estate “They-Sayers” by Eric C. Fahrner

Eric C. Fahrner — Sun, 30 Oct 2011 09:02:42 +0000

The same “they” who say all these things are – apparently – the same “they” who are given a rather inordinate amount of credit for all the amazing inventions & scientific break-throughs of recent times.

“Wow! A solar-powered turnip-twaddler! What will They think of next?!?”

Comment on How Not to Spend Too Much (or too little) on Your Next Fix and Flip by Eric C. Fahrner

Eric C. Fahrner — Sun, 30 Oct 2011 08:53:19 +0000

Marty, I noticed your advice to avoid comps that are short-sales or bank-owned (REOs?) I am curious about that, as I hear pros and cons about using them as comps for traditional sales all the time.

(Although…. I note your approach seems to be one where you find a recently sold comp in the condition you find desirable, then run numbers based on the goal of replicating that comp with your subject property. Intriguing.)

My approach for valuing a property is different, as I was trained as a listing agent handling REO properties for Wells Fargo. Naturally, I tend to evaluate properties using BPO (broker price opinion) techniques: 3 recently sold homes meeting basic criteria, and 3 actively-listed homes – to gage the competition and beat it.

I use short sales and REOs (in addition to traditional sales) as comps on grounds that, in this current market, they define the market and are the competition, and are therefore legitimate comparables.

However… I find very persuasive and compelling the arguments against using short sales and REOs as comps, because they note such statistically significant differences between sales prices, terms, days on market, etc. compared to “traditional sales” that they must be considered – even in today’s economy – a different market altogether (the “short sale & REO market”) and thus, not valid comparables to traditional sales.

I’d love to learn more about your thoughts on this topic!

Comment on How Not to Spend Too Much (or too little) on Your Next Fix and Flip by Marty Boardman

Marty Boardman — Fri, 14 Oct 2011 05:34:02 +0000

Vito, I often have to stop myself from over improving a house. I like granite, travertine and oil rubbed bronze fixtures. That stuff isn’t always necessary. Thanks for reading, and the feedback.

Comment on How Not to Spend Too Much (or too little) on Your Next Fix and Flip by Vito Boscaino

Vito Boscaino — Thu, 13 Oct 2011 22:42:45 +0000

Marty – I enjoyed your piece. I run through a similar drill when I am in the process of rehabbing a flip. It’s very easy to fall in the trap of not doing enough, and sometimes you have to be careful not to let your emotions take over and you end up over-improving the property. As a Realtor I have easy access to comparable data and I also use my time in the field working with clients to my advantage by noting what materials and finishes work best and seem to be good alternatives from an investment/return perspective. I really enjoy the creative process of managing the decisions on which properties to buy, what to do with the properties from a rehab perspective, and then pricing the property to move in a targeted time frame. It’s all good, and it’s even better when you get that check at the closing table. Thanks for taking the time to put your perspective out there – It’s always great to read and learn from those who are actually executing in the real world and not just providing theory in the virtual world. Best of luck on your future deals!

Vito Boscaino
New Perspective Realty
Dublin, Ohio
614.571.9054

Comment on Games Realtors Play with their REO Listings by Marty Boardman

Marty Boardman — Thu, 29 Sep 2011 21:11:58 +0000

Aaron, I think that is what’s going on here too. My offer is for 20K below list and this guy is too lazy or stubborn to submit.