X and Best - BUYER style…

When you’re thinking of X and Best with a Buyer, you’re thinking of HIGHEST and Best offer.  This is the "I want to buy your house, not come on and let me" move.  It establishes the final word on what the Buyer is willing to offer to the Seller and says "There is too much inventory to keep going back and forth - accept or I’ll find another house to buy"

Scenario… Buyer offers $100,000 on a Listing of $120,000.  The Seller thinks "We’ll meet in the middle at $112,000 or so"… The Buyer says, "The house is worth $108,000 at most".  We’re $4,000 apart.  The Seller counters the $100,000 with $119,000 thinking they will draw up the big in bigger increments.  The Buyer says, "$108,000 Highest and Best Offer"…

Whoa!! I thought I was going to get $112,000!!!

The Buyer has drawn the line in the sand and said, "Don’t play games, this is what the comps indicate the house is worth thanks to my trusty Buyer’s Agent David Podgursky @ Boca Executive Realty… so let’s close this puppy at $108,000."

So what’s a seller to do??

1) Say no and move on.  In this market, not necessarily the best choice.  This is not a market where you’re going to see a sales record for a property so if $108K is what it comps for, then that’s what the Appraiser is going to say and no one will pay more than appraised value in a Buyer’s Market.  Also, if this is the first or only offer - how much is it costing them to say no and pay carrying costs for a few more months??  By that time it has eaten up the $4K difference in where they wanted to be in the first place!!

2) Say "Lowest and Best" of $112K- an interesting move… but it is a move that would probably backfire.  The negotiating "gurus" think you should always let the other side kill the deal… so countering the Highest and Best with a Lowest and Best is not a strong move… unless they are VERY close together… then it is "I can’t take $108K - $110K is breakeven for me and that’s the best I can offer… in which case $2K shouldn’t blow the deal.

3) Say yes… if the number works, right now actually getting a deal is a rarity so if the deal makes sense, waiting for the next one may not make sense.

X and Best - Seller Style…

Well… the Buyer side really shows how the whole idea works… but for a Seller, Lowest and Best might be "I know what it is worth and I don’t HAVE to move so don’t I am going to let you steal it"

Seriously… some sellers don’t NEED to move - they WANT to but when the economy is what it is, Wants and Needs have to be carefully calculated.

Lowest and Best for a Seller is a concession.  I have seen a transaction recently where the Buyer put in a great and logical offer. The seller needed to be rid of the property so they wrote a "Lowest and Best" offer to try to wrap everything up without the back and forth.  It worked and the price that they offered was more than fair.

Sellers sometimes do "Highest and Best"… really, really!

Banks often do this strategy.  They have 4 offers and they pick the top two.  They are slightly different - one is a higher dollar with more contingencies and one is a lower offer but not with out its own weaknesses in structure.  They tell the listing agent to inform the top two bidders to submit their Highest and Best offers… whoever comes out on top gets the house.

This shows that banks realize that sometimes they really are below the market and they want to get the house off the books ASAP.  Distressed properties are not great comps to conventional properties… so they know that when they’re under market that they can just end the speculation in a hurry and move on.

X and Best - Tenant Style…

So you’re looking for a great rental property and you see the house you want to rent.  It IS the best on the block and the landlord knows it.  Unfortunately, the landlord thinks that his various upgrades mean his property is worth an additional $300/mo!

I tell my landlords that having a nicer place or changing the carpet out for tile may get their property rented FASTER but that doesn’t mean it is worth more money per month than Market Rent dictates!!

So a Tenant may write a Contract for Lease at $100 over Market Rent… say $2000/mo.  The Landlord might counter $50 off of his original price… $2250.  The Tenant may think they’d really like to have Granite Counters but it is just for a year so they can deal without them.  So they’ll say $2050 Highest and Best.  They know they’re paying $150 over the other units but getting a much nicer place.  The landlord then needs to realize whether it is worth it to him or not to take $200 LESS or sit empty and cost him X per month until he gets another rental offer.

X and Best - Landlord Style…

This is most common with Apartment complexes… there’s really no flex there.  They hit a certain occupancy rate and they’re content to wait for those last few people that will pay full boat…  Sometimes they drop below where they want to be thanks to signing 50% of their leases in a 2 month period (which means 50% of their leases expire simultaneously) and they’ll offer incentives to get people into those units and get back to their magic occupancy rate that corporate wants them to maintain.  Otherwise they’re ALWAYS saying "This is our Lowest and Best Offer… there’s someone else there waiting for that unit so make up your mind before they sign on the line"

In a private owner scenario…someone may just lowball the rent or offer something that doesn’t make sense.  For instance - someone comes in and says "I want to pay you $400 under your rent AND I don’t want to pay for the first month"… the Landlord might want or NEED to clear a particular number to pay the mortgage… so they say "Look - I can do it for $200 under my asking price but I won’t budge on the first month"… there’s a concession but then a take-it-or-leave-it.  Believe it or not … in this market you WANT to pay a little higher to make sure your landlord CAN cover the mortgage or else you could both be out of a property!

With a listed rental property, most Landlords want 1st month, Last month and Security deposit… and they may flex on the rent rate - but if you can’t pony up the advance monies, then don’t bother them.  Lowest and Best offer on that is firm from the get-go.

Why did I feel the need to spread this love?  Because in this market, this negotiating strategy is not only commonplace - but it is widespread.  It is something that we need to recognize as happening out there so we know what to do when it happens to us in our transaction.

If you have any questions or need help in your Florida Real Estate transaction, please contact me at
davidp@bocaexecutive.com or my cell phone at (561) 504-6949

For More Information on Boynton Beach & Lake Worth Florida Real Estate and Mortgages, please contact

David Podgursky Broker Associate & Licensed Mortgage Broker Boca Executive Realty  & Boca Executive Mortgage 561-504-6949 cell DavidP@BocaExecutive.com Your Full Service Source for Residential and Commercial Real Estate and Mortgage Loans in Florida

]]> http://themortgagegotoguy.com/real-estate-negotiating-x-and-best-offers/feed/ http://themortgagegotoguy.com/obama-shows-colors-on-meet-the-press/ http://themortgagegotoguy.com/obama-shows-colors-on-meet-the-press/#comments Mon, 28 Jul 2008 02:47:00 +0000 David A. Podgursky, MBA http://themortgagegotoguy.com/obama-shows-colors-on-meet-the-press/ OK… so the knock on Obama is that he is naive and inexperienced.  Well, his commentary on the real estate and mortgage market issues proved it.  His comments could not have been more canned… plus he did the one thing that should earn him a flame by every NAMB member… he blamed the mess on Mortgage Brokers!!

Ok Senator - let’s get this straight… the person that buys wholesale and sells retail is the person at fault in this mess??

Not the banks that wrote the loans… their underwriters that overlooked glaring errors… their investors that wanted risky loans to get higher returns?

Not the untrained bank employees who would close any loan that any customer would ask for walking off the street???

It has nothing to do with the borrowers themselves, eh?  Democratic nonsense!

Funny - Sen McCain sees a little different view on how to fix this mess because he thinks that if you can prove that you did not lie on your application then you could be innocent - but if you can’t then why should the taxpayers foot the bill for your bail-out?

Yes - Sen Obama is right - there is still a large part of the homeowner population that is in peril of losing their house and thereby adding more distressed inventory to the already flooded market.  But maybe those are just the spoils of a real estate boom??  What goes up must go down?

I don’t like getting late night calls from people looking for a way out of financial ruin.  It is bad karma for my nightly rest…  I can only help my karma by trying to provide the best service and knowing in my heart that I never wrote a loan that put someone in such a bad place.

On the flip side… I’m not at fault.  I, the MORTGAGE BROKER, did not add to this mess.  Senator Obama - how many banks offered you money for your campaign?  How much did you accept?  is this why you’re blaming the independent Broker instead of the bank?

Mortgage Brokers don’t function without the banks!  We can’t write a bad loan if a Bank doesn’t offer the program!  We can’t pre-approve a loan unless the bank gives us the green light…

But crap floats downstream and so it is just so much easier for the blame to float down to Brokers as well, right Senator Obama??

Your wife is an attorney, right?  Where’s the burden of proof?   Do you even know the difference in a Broker and a Banker? A Mortgage Broker and a Loan Officer?  Or does "Mortgage Broker" just slide out of your mouth easily because it is an easy target?

The mass population does not need a bail-out.  Government funds are for infrastructure, defense and other major programs.  Earmarking billions to bail out everyone in this mess is myopic and naive.  There are many people who got into trouble - over their head and deserve an opportunity to fix their problems.  There are a lot of people though that aren’t and there is no reason that aid should be extended so broadly. 

Just like any other government handout, there are people just waiting for the money to come so they can take their shares whether they deserve them or not.  Think about this - maybe there are truly people who did the right thing, did not overstate their income, did not over-buy or over-improve their homes, that need the money to fix their lives… and maybe there are people who vastly overstated their income and assets and got house greedy… that worked the system for every angle possible.  Those people should be clustered in with the ones that truly need help??

No… and ignorance is no defense if I make a mistake as a Mortgage Broker… why is it one for the borrower?  It isn’t that complicated when someone asks them how much they earn a year and to testify to it prior to signing loan papers.  If the number has an extra Zero, is it an error of ignorance still?

If so… there’s a bridge in Manhattan you might want to buy from me.  I’ll even cut my commissions cause you seem like such a nice guy.

For More Information on Boynton Beach & Lake Worth Florida Real Estate and Mortgages, please contact

David Podgursky Broker Associate & Licensed Mortgage Broker Boca Executive Realty  & Boca Executive Mortgage 561-504-6949 cell DavidP@BocaExecutive.com Your Full Service Source for Residential and Commercial Real Estate and Mortgage Loans in Florida

]]> http://themortgagegotoguy.com/obama-shows-colors-on-meet-the-press/feed/ http://themortgagegotoguy.com/mccains-foreclosure-bailout-plan-makes-borrowers-take-more-responsibility/ http://themortgagegotoguy.com/mccains-foreclosure-bailout-plan-makes-borrowers-take-more-responsibility/#comments Wed, 16 Jul 2008 15:19:38 +0000 David A. Podgursky, MBA http://themortgagegotoguy.com/mccains-foreclosure-bailout-plan-makes-borrowers-take-more-responsibility/ So by now everyone knows that there are hundreds of thousands of people who are facing foreclosure for any number of reasons.  Of course, this has become a hot topic on the campaign trail as we wind down to the Presidential Elections in November.

The current regime (The White House as well as the House and Senate) is weighing in with huge plans for stimulus, bailouts, and slate-cleaning.  With huge multi-billion dollar Bills in front of the House and Senate, you have to wonder how many homeowners $1B can help… then just multiply that by how ever many billions they ratify.  The latest package is supposed to help an estimated 400,000 people… that is all!

"So taxpayer dollars are being spent to just band-aid the issue" is what many people are thinking.

Now don’t take this as a ringing endorsement of a candidate - I have promised myself that I won’t reveal my stripes lest I offend someone … but just read on without focusing on the WHO and think more about the WHY.

Senator John McCain (R AZ - well, a Liberal R) has proposed something very interesting that I think should merit more discussion.  While others just want to fix the problems of those who are in trouble… Senator McCain, the Republican Nominee for President, has proposed that people need to QUALIFY for their newly fixed loans!

Amazing!!! Someone wants people to QUALIFY for a Loan!!  Who would have EVER thought of THAT!!?!??!  Not only that… Senator McCain would like people to RE-QUALIFY for their old loans!  Huh??  It isn’t as weird as you think.

You see… everyone that got a loan in the height of the market signed an IRS Form 4506-T for the lenders to actually pull the borrowers’ tax forms should they default on the loan.  Typically the form is only good for 6-12 months.  So if they got their loan in 2004-2006, it is too late for the Lenders to go back and say, "Hey!! You lied, you were making $25,000 not $250,000!!!"

Sen. McCain has thought of that… and he wants to make sure that people that receive government aid to straighten out their current financial mess are worthy of help.  Meaning - he wants to help the INNOCENT.  Sen. McCain has proposed that a borrower who seeks government aid monies to bail them out of this mess must prove that back when they got their original loan, that they qualified for it THEN.  He wants them to bring documentation!!

But wait… Countrywide, Greenpoint, and all the other big lenders said they didn’t NEED Documentation back then…so why should they need it now??  Because THEN they overstated income or assets or BOTH!

"Wait!! but the Loan Officer at the Bank told me it was ok!"…Did he encourage you to pay off your loan with future lottery winnings as well??

How could massive overstatements of income and assets NOT catch up with so many people??

The simple truth is that Sen. McCain is saying that no matter how bad you were conned or how ignorant you were to the process or how wrong the loan fit your financial needs… it was still and IS still partly the responsibility of the BORROWER to a) pay their bills and b) not just sign contracts without understanding them.

WHOA THERE MISTER!!!  What did I just say!?

The United States Legal system is based substantially upon CONTRACT LAW.  There are people who spend their whole lives nitpicking the minutiae of even the most simple contract.  They are called Lawyers - note LAW is in their title that they earned by spending inordinate amounts of time studying and memorizing Cases built on breaches of contracts.  When you signed that Note and the Mortgage Loan documents you were signing a contract and swearing that all the information YOU provided to the Lender via their Loan Officer was TRUE…

True… so if it wasn’t then it was FALSE??  If when you closed the loan and the title closer had you sign your loan application AGAIN for the 3rd or 4th time asked you to "Sign here if everything on this page is CORRECT" and it WAS NOT true… whose fault is that?

And that is what Senator McCain wants to prove before he helps borrowers.  I think you can infer my opinion about the matter at this point.

For More Information on Boynton Beach & Lake Worth Florida Real Estate and Mortgages, please contact

David Podgursky Broker Associate & Licensed Mortgage Broker Boca Executive Realty  & Boca Executive Mortgage 561-504-6949 cell DavidP@BocaExecutive.com Your Full Service Source for Residential and Commercial Real Estate and Mortgage Loans in Florida

]]> http://themortgagegotoguy.com/mccains-foreclosure-bailout-plan-makes-borrowers-take-more-responsibility/feed/ http://themortgagegotoguy.com/buyers-need-to-pre-qualify-themselves/ http://themortgagegotoguy.com/buyers-need-to-pre-qualify-themselves/#comments Tue, 15 Jul 2008 03:15:18 +0000 David A. Podgursky, MBA http://themortgagegotoguy.com/buyers-need-to-pre-qualify-themselves/ I know… I know… PreQualifications are part of my job as both a Realtor AND a Mortgage Broker - especially when I am acting as both in a transaction.

The point isn’t that I don’t want to do my job… the point is more about practicality.  It is a GREAT TIME TO BUY! and that is not just a sales line.

Here is a simple step by step guide to PreQualifying YOURSELF so you can be better informed as a buyer and proceed into a real estate transaction with some level of comfort.

Step 1

CREDIT… go pull a FULL and COMPREHENSIVE credit report with scores.  You need the middle score.   “Beacon” means nothing.  You need to go to a quality provider of credit reports.

I don’t usually recommend anyone in particular but what the banks and credit card companies provide is NOT adequate.  Try www.privacyguard.com and they can also put up alerts for you.  www.lifelock.com is also good.

DEBT… your credit report shows how much DEBT you are carrying!

Step 2

Assets… start looking at how much you can put down on a property.

The days or the TRUE 100% financing are gone.  Also, prequalifying for a loan over 80% is harder than ever.

What a lender wants to see:

• A Pattern of Savings - if you are making $100,000/yr you theoretically should have more than $10.17 in your checking accounts… you should have saved something
• Deposits - you need to prove that you have the money to put down in the first place!
• Escrows - yes they will want to know up front that you can pay the escrows at the table
• Closing Costs - same
• Reserves - unless you are getting an FHA or USDA loan, you really need to show that you have a little cushion

Step 3

Income … gone are the days that a $25,000/yr bank teller can buy a $250,000 house.  10 times income does not work no matter how you push it.

1. The bank will call your employer to make sure you are employed or verify with an accountant if you are self employed.
2. Tax returns are the key these days as Full Documentation reigns.
3. Just think of it this way…most qualifications work out that you can afford to spend 1 week of your monthly salary on your house payment - note I said HOUSE - which includes Mortgage - Interest and Principle, Taxes, Insurance, Homeowners Association and PMI (if you get a high LTV loan)
4. Down and Dirty - another calculation is that you can afford 2.5 times your salary in a house.  A $50K per year worker can afford $125,000 in a house.

Step 4

Run all those numbers - tabulate them in Excel or however you do math best…. BEFORE you start shopping!

Then when you do go log on your favorite real estate website - like www.bocaexecutiverealty.com then you can start searching in your price range.

Having these numbers ready for your professional and Licensed Mortgage Broker (like me!!) will help speed up the prequalification and preapproval process that you should proceed with prior to meeting with your Realtor.

You can then call your friendly neighborhood Realtor with the information you have collected and let them point you into the right neighborhood for your needs and negotiate the best deal for you!

For More Information on Boynton Beach & Lake Worth Florida Real Estate and Mortgages, please contact

David Podgursky Broker Associate & Licensed Mortgage Broker Boca Executive Realty  & Boca Executive Mortgage 561-504-6949 cell DavidP@BocaExecutive.com Your Full Service Source for Residential and Commercial Real Estate and Mortgage Loans in Florida

In an effort to educate the Foreign National Investor as to which Visas are available for travel, stay and investment purposes in the US, I have asked the assistance of an expert - Visa/Immigration Attorney Mark Carmel.  I will follow his article with his contact information.

L-1 - Temporary Work Visas

Employees of an international company who are being temporarily transferred to a parent branch, affiliate, or subsidiary of the same company in the United States require Intra Company transfer (L-1) visas. The international company may be either a U.S. or foreign organization. To qualify, the employee must be at the managerial or executive level (L-1A), or have specialized knowledge (L-1B), and be destined to a position within the U.S. company at either of these levels, although not necessarily in the same position as held previously. In addition, the employee must have been employed outside the U.S. with the international company continuously for one year within the three years preceding the application for admission into the United States.

An L-1 visa is also the appropriate visa classification for a qualified employee of an international company who is coming to the United States to establish a parent, branch, affiliate or subsidiary in the United States, i.e. commence business. When filing the petition, the international company will be required to show that sufficient physical premises to house the new office have been secured and that within one year of the approval of the petition, the intended U.S. operation will support an executive or managerial position. In the case of a person with specialized knowledge, the petitioner will be required to show that it has the financial ability to remunerate the beneficiary and to commence doing business in the United States. A petition for a qualified employee of a new office will be approved for a period not to exceed one year, after which the petitioner must demonstrate that it is doing business as described above in order for the petition and alien’s stay to be extended beyond one year. The maximum period of authorized stay for an L-1A visa is seven (7) years. While the maximum period of authorized stay for an L-1B visa holder is five (5) years.

Individual vs. Blanket Petition

The employment must be approved in advance by the United States Citizenship and Immigration Services (USCIS) in the United States on the basis of a petition, form I-129 L, filed by the employer with the USCIS Service Center. Companies seeking the classification of multiple aliens as intra company transferees may file a blanket petition with USCIS. The blanket petition provision is meant to serve only relatively large, established companies having multi-layered structures and numerous related business entities. The blanket petition provision is available only to managers, executives and specialized knowledge professional that are destined to work in an established office. Any questions which you may have concerning this process should be addressed to the appropriate USCIS office in the United States.

Once the L petition has been approved in your name you will be required to apply for a visa before traveling to the United States. The Notice of Action, form I-797A or B, is not valid for travel unless accompanied by the appropriate visa. Spouses and/or children under the age of 21 who wish to accompany or join the principal visa holder in the United States for the duration of his/her stay require derivative L-2 visas.

Treaty Traders & Investors (E Visas)

Treaty Trader visas (E-1) and Treaty Investor visas (E-2) are non-immigrant visas for nationals of a country with which the United States maintains a treaty of friendship, commerce and navigation who wish to go to the United States for one of two purposes: to carry on substantial trade, principally between the United States and the treaty country (E-1); or to develop and direct the operations of an enterprise in which the national has invested or is in the process of investing a substantial amount of capital (E-2).

Requirements for the E-2 visa issuance are as follows: Majority ownership or control of the U.S. business is held by nationals of the treaty country of the applicant The business must be real and active - not passive The investment cannot be solely for purposes of earning a living for the applicant, but must also provide job opportunities or generate income or some economic benefit for others. The issue of whether an investment is “substantial” is complex and proportional. It’s generally defined as the amount invested, weighed against the total value of the enterprise for established businesses, or the amount normally considered necessary to establish a viable enterprise for a new business.

Examples might help clarify the difference between the E-1 and E-2.

An E-2 treaty investor might purchase 75% of a restaurant located in the United States. The restaurant operates at a profit and employs over 40 people, most of whom are American citizens. If all the other conditions for the visa are met, the investor could obtain an E-2 visa to enter the United States in order to operate his business and oversee his investment. He would also be able to send qualified employees who are treaty citizens to work in his business if they meet certain specific requirements

Alternatively, a business located in the a treaty country such as Canada, and the United Kingdom, that designs and manufactures shoes might sell many of its products in the United States. However, it has no retail stores of its own nor any plant there. If the volume of its foreign trade with the United States is significant and continuous and if its Treaty Country-US trade makes up more than 50% of its total international trade, then the business could qualify for Treaty Trader status and the owner of the business or some of its employees might be eligible for E-1 visas.

Employees of registered companies, on the other hand, need only make a non-immigrant visa appointment at a U.S. Consulate or Embassy in the treaty country. They do not need to submit any documents in advance; however, at the interview they should present a copy of the E-2/E-2 approval notice letter given to the qualifying E-2/E-1 company by the U.S. Embassy or Consulate.

Length of Visa. The maximum length for which an E-1 or E-2 visa can be issued to a citizen of the United Kingdom is 5 years. However, whether or not to issue for that length of time is solely the judgment of the consular officer deciding the case. In the U.K., the London Embassy, typically issues the first E-1 or E-2 for only two years. This is due to the fact that most E-2 applications are for relatively small businesses, with small capital investments (under $150,000), are volatile and often do not succeed. However, renewal of E-1 or E-2 visas, are generally for the maximum five years although not always. In the case of large companies with high turnover and employing many Americans, Consular officials routinely issue the first visas for five years.
Change of Status. Investors who have changed status in the United States with USCIS must follow the steps for all first-time investors. Such a change of status remains valid only while the applicant remains in the United States. Once the applicant has left the United States, he or she requires an E-visa to return and resume the running of his or her business. Change of status does not guarantee the issuance of a visa at a the treaty national’s country of residence.
Dependents. The spouse and unmarried children (under 21 years of age) of treaty traders, treaty investors, or employees of qualifying enterprises may also receive E visas in order to accompany or follow to join their spouse or parent. They are not required to have the same nationality as the principal applicant. Spouses may work in the United States if they have obtained an Employee Authorization Card from the Department of Homeland Security. They may apply for this card after they enter the United States. Dependent children may not work in the United States although they may attend school.

His contact information is:

Mark Carmel
Attorney at Law
Practice Limited to Immigration Law
301 Clematis St., Suite 3000
West Palm Beach, Florida 33401
Tel: (561) 459-7207
Fax:(888) 273-1033
www.USLAWYER.com

Tell him David Podgursky, The Mortgage Go To Guy! sent you!

For more Foreign National and Foreign Investor information, follow this link to the Foreign National Archive
for links to all my articles -o-> http://themortgagegotoguy.com/category/foreign-national/

David Podgursky - Realtor and Mortgage Broker - can assist Foreign National Investors
with all of their Real Estate and Mortgage needs in Florida from buying to financing and beyond
** CALL OR EMAIL TODAY for the best possible service for all your real estate needs **

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