707-573-9273 | 866-524-0442 Fax |  info@rpadvisors.com
Q. What’s a Short Sale?

A. A Short sale occurs when the market price for a property is less than the amount the Seller/Debtor owes their lenders, and the lenders are willing to accept a lesser amount than what is owed.  The lender is under no obligation to accept a short sale, but if the Seller is unable or unwilling to make their mortgage payment, the lender may find approving a short sale preferable to a foreclosure or other option.

Q. How does the RPA short sale plan differ from the short sale scams reported in the media?

 

A. Our approach involves only safe, fully-disclosed investments that are fair and advantageous for all parties involved. The short sale scams mostly revolve around claims of fraud due to misrepresentation to, or concealing information from, the short sale lenders. In response to these and other acts, the legal and regulatory agencies have prosecuted several people and issued warnings to the public and real estate professionals. We believe there is simply no reason to take any unnecessary legal or regulatory risk to make substantial profits on short sale investments.
Q. Why would a Lender accept less than the amount owed?

A. Some of the advantages to the lenders are they don’t have to: (a) take title to the property and pay taxes, insurance, management, maintenance costs or (b) assume other liens,  liabilities and other obligations associated with ownership; and (c) pay legal fees to complete a foreclose.

Q. How much of a discount to the amount owed are lenders willing to accept?

A. There is no set formula. Lenders set their criteria depending on several factors:

 

(a) Net to Lender. On short sales, this is the difference between the net after a short sale vs. foreclosing.

 

(b) Type of loan. Lenders may give a larger discount for a riskier loan than they would for a fixed rate, conventional loan.

 

(c) Loan position. Lenders typically give a larger discount for loans subordinated, such as a 2nd deed of trust, which could be wiped out entirely in a foreclosure.

 

(d) Who owns the loan? If a lender holds the loan in their own portfolio, they can decide more quickly if, and how much, they are willing to discount the loan. If they are merely servicing the loan for a trust or other entity, they may have to get permission from that entity. Loan servicers usually have ‘delegated authority’ to accept a certain amount of discount without having to get permission.

 

(e) Number of loans. If there are several loans on a property, all of the lenders must agree on how much of a discount, if any, they are willing to take. Generally, the lender in 1st position will only allow a junior lender a minimal amount, but the junior lender may be able to get more in a foreclosure because they have mortgage insurance. It is illegal for a Buyer to pay a junior lender outside of escrow, so this situation may scuttle a Short Sale deal.
Q. What if I want to buy and hold a property instead of selling for a quick profit?

A. Not a problem. Real Property Advisors, Inc. can manage the property for you at a competitive rate. We are fully licensed and insured. Moreover, our Agents have substantial experience at every level of asset and property management. However, we do not do property management for properties other than those of our investment clients.
Q. What if the market is going up?

A. Good! Our goal is to make a margin between the discount the lenders will accept and the amount for which we can sell it. Although the amount the lender may accept may rise with the market, the amount for which we can sell it later should also increase.
Q. What if the market is going down?

A. Again, our goal is to make a margin between the discount the lenders will accept and the amount for which we can sell it. If the market is going down, the lenders will be aware of this and should accept a larger discount.
Q. What if the market is going up when we buy and down when we sell?

A. The real estate market may be volatile, but prices don’t usually change as quickly as stocks, bonds or commodities markets Because we immediately re-sell the property once our Investors take title, it is unlikely the prices would change within the 60 – 90 day period our Accelerated Marketing Plan© anticipates finding a Buyer. Moreover, because we are buying at a discount to full fair market value, we have a built in cushion to the amount of capital at risk. Of course, all investing involves some risk, but we believe our plan offers a superior balance of risk and reward.
Q. What is the Accelerated Marketing Plan© all about?

A. Our Accelerated Marketing Plan© uses techniques from conventional and auction marketing to effect the quick sale of a property. As with any conventional marketing, the property is listed on the Multiple Listing Service and other real estate internet web sites (Great Homes.org, Realtor.com, Google, Trulia, Zillow, etc.), has its own web site, open houses, Broker cooperation and email campaign. In addition, contingencies are minimized by providing disclosures and other due diligence reports in advance, verification of Buyers’ ability to pay, a set date to accept offers, incentives for Buyers’ Brokers and other marketing techniques.

CalBRE #01904379

NMLS/MLO #355855

Bond #92-F3-8975-7


Real Property Advisors, Inc. Sonoma County
6570 Oakmont Dr. Suite 110
Santa Rosa, CA 95409
707-573-9273 Office | 866-524-0442 Fax

Real Property Advisors, Inc. Napa County
PO Box 4018, Napa, CA 94558
707-235-6615 Office | 866-524-0442 Fax