We had a pretty crazy coaching session last week - couple of my members are hitting some major homeruns doing Short Sales. Part of the reason is that they know what the heck they are doing. Part of the reason is banks are SWAMPED with foreclosures and willing to take bigger discounts that ever before.

The amusing thing is these guys are very "Unqualified" to do Short Sales - they are getting major discounts on their rookie deals.

There are reasons for this….

3 years ago, it took some serious set of skills and a really banged up house to get a $50,000 discount on a Short Sale in Michigan.

Now it is so common that it is not even a big gulp to fax it in to a bank.

How things change in a matter of months.

"I have been in real estate for over 15 years. I have been involved in more short sales the past 8 months then the previous 14 years all together. Now it isn't uncommon for a seller to bring money to closing." - Chris Dowell, Realtor

Chris is a realtor in a Kansas City and he posted the above comment to my blog recently. He is not exaggerating.

I can tell you on a personal note that I never thought that I would see banks discount 40% to 50% on first mortgages. That is just incredible.

I think that the thing that impresses me most about Rodeny is he is done what most real estate investors never bother doing:

1. Implement what he learned from me.

2. Did not wait to become "perfect".

3. Launched his Short Sale business with a complete understanding that he does not know everything but he will get better with every deal.

4. Doing some great “word of mouth” advertising. I mean you would think that with around 10,000 houses in foreclosure in Michigan – some of these people would have relatives, co-workers, friends etc. It helps to let people know what you do and could do.

5. I liked his style of actually overdoing it. He did not had to put that fence up in his first deal. His buyer was not that particular about it. But he did it anyway. And that has paid very handsomely for him. You wont know why
on this call but suffice to say that $3,000 fence turned into a very profitable goodwill for him.

I predict that the the “amount” of discounts in Michigan will only get higher. As banks pile up more inventory it will be tougher for them to justify sitting on these houses for months (11-13 months in Michigan for redemption even before they get the keys) and do nothing.

I don’t know about your property taxes but majority of suburbs in Michigan have high property taxes – going higher every year. Banks don’t pay Homstead rates but rather non-homestead at a mucho higher rate.

The number of foreclosures rises which means more “inventory” for the Loss Mitigation Departments to liquidate. The more agitated they become to sell these houses as quickly as possible.

One of the interesting thing that we keep hearing over and over again is the banks calling my members and asking what they could do to make the deal happen?

Huh!

Banks playing nice..

What is this world coming to?

Nora is doing couple of commerical Short Sale right now. She has this whole side business going on consulting on Short Sale Deals. More on that some other day. Talk about a perfect stay At Home Mother business. :-)

And the Attorney who is foreclosing for the bank called her and said – Hey we want whatever your buyer could pay. Come one and lets play ball. Call us we want to talk.

Lawyers calling investors.

This is the dawn of a new age. :- )

It is pretty exciting time to be in Michigan real estate. Kind makes me wish I was starting out in 2006 rather than 2000. Writing all those hand written letters to homeowners in foreclosure nearly broke my wrist back then.