[5-DayForum] harsh reality
Bill Effros
bill at effros.com
Sat Sep 1 11:41:27 EDT 2007
David,
This is not necessarily good advice. If the value of the home continues
to go down, the owner might be better off selling now and taking a
smaller loss.
I don't know what the market will do, but those who didn't sell 6 months
ago, when market values were higher, regret that decision today.
Bill Effros
capndave2k at netscape.net wrote:
>
> Harlin,
>
> Based on what you've said. If you're able to get a decent rate,
> refinance. After all you have to have a place to live anyway and if
> you rent, you can't deduct interest from your taxes which will then go
> up (At least that's the way it works for most of us.) Compare what
> you'd pay for rent with the amount of you potential new payment less
> the tax differences and you can decide which is the more best way to go.
>
> Don't buy trouble from tomorrow if you don't have to.
>
> Hope this helps.
>
> David Cron
>
> -----Original Message-----
> From: Bill Effros <bill at effros.com>
> To: How To Sell Your Home in 5-Days
> <5-dayforum at mailman.howtosellyourhomein5days.com>
> Sent: Fri, 31 Aug 2007 9:21 am
> Subject: Re: [5-DayForum] harsh reality
>
> Harlin,
>
> Our e-mail has crossed again. But that's okay, what we're talking
> about is exactly what I want to be talking about.
>
> I can't tell you whether to hold or sell. I can't predict the future
> any better than you. Sometimes what I think works out, sometimes it
> doesn't.
>
> But I've really been involved in a lot of 5-Day Sales, and what I'm
> trying to do with this forum is to pass along information to people
> who have seen fewer 5-Day Sales than I have.
>
> If you think you are likely to get less than you owe, then I think
> you're probably right. You can make the decision about whether or not
> to sell before running your 5-Day Sale. If you decide to run a 5-Day
> Sale, play it straight. If you decide not to run a 5-Day Sale, go to
> your bank and ask them what they'd like you to do. They may offer you
> a great deal to stay where you are for a couple of years. They may
> tell you to sell your home and take what you can get -- they may offer
> to make up the difference, or part of the difference.
>
> Explain to your bank that you know how to get the current market price
> for your home, without paying any commission, at any time. Show them
> your copy of the book. Tell them to join this forum.
>
> People are basically honest. We are really all in the same boat.
> Nobody really knows what to do next. The 5-Day Method gives you
> something most people don't have -- the ability to determine the
> current market value of your home, and to sell it for that amount, in
> exactly 5 days. This knowledge is a powerful negotiating tool.
>
> First use it to negotiate with yourself. What do you want to do? The
> Method can't change the market. Nothing can. Where does that leave
> you? When you know the answer to that question you can go to buyers,
> or banks, from a strong negotiating position. You know exactly what
> you're going to do. You want banks, or buyers to choose what they're
> going to do. And then you follow through, and move on with your life.
>
> It sounds simple because it is simple. The hard part is the
> negotiation with yourself. Keep us posted, we all care about the outcome.
>
> Bill Effros
>
> Harlin Seritt wrote:
>> That's what I thought the real answer is... basically be willing to
>> do everything possible to sell your home to the high bidder even it
>> will be a short sale.
>>
>> Pretty much my situation: my home was appraised at 117k three years
>> ago. I owe about 98,000 on it. It was financed as an ARM. My payments
>> have gone up on it by about $50/month in the last couple of months. I
>> want to sell it and rent -- I am divorced with one child. I want more
>> cash to get closer out of debt. I feel the house will probably only
>> sell for about $85-90k at this point. I can make the house payments
>> (for now but what happens when the rate goes up farther? or worse, I
>> lose my job?). I am wondering if it may instead make better sense to
>> get it refinanced with a fixed rate and hold on to it until better
>> times come -- maybe 2 to 3 years down the road.
>>
>> Thanks,
>>
>> Harlin
>>
>>
>> */Bill Effros <bill at effros.com>/* wrote:
>>
>> Harlin,
>>
>> Our e-mail crossed, so let me speak directly to your point.
>>
>> Properly run 5-Day Sales will get you a price at the high end of
>> the current market value every time. If you don't believe this
>> is true, you shouldn't run a 5-Day Sale. If you do believe it's
>> true, you must understand that you can't ever "put your thumb on
>> the scale" by bidding against your buyers. Reserves, whether
>> disclosed or not, are bids below which you refuse to sell.
>> Essentially, you are bidding against your buyers, whether you
>> understand it or not.
>>
>> Most people's consciences give them away. Buyers can tell the
>> seller isn't really going to sell to the high bidder
>> notwithstanding what was said in the ad. Buyers know they
>> shouldn't reveal the highest price they are willing to pay
>> because the seller isn't really going to take it. They know the
>> seller is going to try to sell the home some other way, so it's
>> smart for them to make the seller think the home is worth even
>> less than it's really worth.
>>
>> If the high bid is less than you owe, and you honestly believe
>> it's the most you can get -- what are you going to do?
>>
>> Instead of telling the buyer that you're going to renege on the
>> deal, why not tell the buyer that the offered price is less than
>> you owe, and that you and the buyer together will go to the
>> mortgage holder to see if a deal can be worked out. Often it
>> can. This is not the same thing as telling the buyer you had a
>> hidden reserve. This is part of selling your home in 5-days.
>>
>> Sometimes the buyer may say they will pay half the difference if
>> the bank pays the other half. Sometimes a different deal is
>> offered. None of this should matter to you. If you sell your
>> home to the high bidder, you will consistently get the highest
>> possible price on the weekend you select whether the deal goes
>> through or not. Don't try to weasel out. Don't start by saying
>> you won't really take the high bid.
>>
>> Bill Effros
>>
>>
>>
>>
>>
>> Harlin Seritt wrote:
>>> This sounds like: If you're not willing to sell the house at a
>>> price that is below what you owe, then you shouldn't run a 5 day
>>> sale. According to *your* post, this is either wrong or right
>>> with no in-betweens.
>>>
>>> Harlin
>>>
>>> */Mark Conway <sanford5daysale at yahoo.com>/* wrote:
>>>
>>> Folks, I'm going to stir the pot a bit with this note.
>>> You've been warned.
>>>
>>> The forum has become pretty discouraging reading for me. It
>>> seems common for people to run 5-Day Sales with an
>>> undisclosed reserve, a bidding threshold below which they
>>> will not sell their home. In and of itself, I don't see this
>>> as a problem. It's the real world. Homeowners have mortgages
>>> for which the banks hold them financially responsible. What
>>> I find disturbing is when I see a 5-Day Seller making a
>>> conscious decision not to inform prospective buyers of the
>>> existence of the undisclosed reserve at the outset. It's a
>>> deceptive practice. It's misleading to bidders who believe
>>> their bids are taken seriously, not conditionally, by the
>>> seller.
>>>
>>> Sure, many 5-Day Sellers list a rule that says that bids
>>> aren't binding on the buyer or seller until a contract is
>>> signed. It's a comfortable escape clause that, as much as
>>> anything, can be a platform for negotiation. As much
>>> discussion as there is about this issue, however, that rule
>>> ought to be in over-sized type, bold, underlined and listed
>>> as the very first rule on the Bidding Rules document so
>>> bidders fully understand how seriously the seller takes this
>>> provision. List the rule that way and see what kind of
>>> questions it prompts from potential bidders. It's better
>>> that discussion happens before and not after bidding.
>>>
>>> Clearly stating the minimum bid that will be accepted is one
>>> approach that has been mentioned in the Forum. That seems
>>> straightforwardly honest to me. Phrases like "Highest/Best
>>> Bidder" and "Best Reasonable Offer" are just seller's weasel
>>> words used to ease the seller's conscience and reduce his or
>>> her anxiety while still concealing the complete truth from
>>> prospective buyers.
>>>
>>> When a seller has a "hidden" undisclosed reserve and a
>>> prospective buyer comes to inspect a 5-Day Seller's home and
>>> asks the seller, "What's the minimum amount you'll take for
>>> your home?", the seller's answer will be indicative of his
>>> or her character. One answer could be, "I can't tell you
>>> what the reserve is." That's evasive but truthful. Denying
>>> the existence of the undisclosed reserve at that point would
>>> be lying. Period. Rationalization doesn't change that.
>>>
>>> There's a fair amount of talk on the Forum about having to
>>> make that difficult phone call after the round-robin bidding
>>> is over to tell the highest bidder that the seller is
>>> reneging on the commitment to sell the home to the highest
>>> bidder. That phone call is difficult because the seller has
>>> been disingenuous with the bidders. That's a seller's
>>> conscience kicking in, albeit too late.
>>>
>>> 5-Day Sellers who want their bidders and prospective buyers
>>> to treat them with integrity should be modeling that
>>> behavior themselves. What goes around, comes around. If a
>>> 5-Day Seller is not truly prepared to take the highest bid,
>>> then they should NEVER make that claim.
>>>
>>> Here's to 5-Day Sales run in a manner that respects the
>>> integrity of buyers and sellers.
>>>
>>> Mark Conway
>>>
>>>
>>>
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