My phone rings. I say "Hello, this is Denny Stanz."The caller says he received a letter from me, or a friend gave him my name. He has a note he wants to sell. He wants to know "how much you guys typically discount the notes you buy"? Sometimes the caller identifies himself, sometimes he doesn't. About 15 seconds has gone by.
The above conversation happens a lot, too often in fact. It is pretty obvious to me that we in the note business have done a terrible job of educating people who would like to sell their notes. If someone wanted to sell their home, would the first question be " How much will you offer me for my house"? Of course not, none of us would do that. Why? Because real estate agents and brokers have educated us that there is a process to determine the market value of our home. What is that process? The broker will come to our home and sit down with us. He/she will fact find - how long did we own the home, what improvements did we make, what do we like/dislike about living in the home, why do we want to move, etc., etc. The broker will walk through the home and property making note of the strong selling points and perhaps obvious weaknesses. He/she will do a comparative analysis of similar homes that sold recently in the neighborhood, along with the attractive aspects of the neighborhood. Then, the broker will compile this information, present it to us , and suggest an appropriate price range to list the home. Depending on the desirability of our home and neighborhood and current market conditions, we could be elated or devastated by the news.
The note business also has a process. There is no "typical discount".
What is our process? Well, minimally in the beginning, we want to see a copy of the note and the closing statement. We want to ask questions about the property, the buyer and the note. The current value of the property, credit worthiness of the buyer, and payment history are vital. We want to know why you want to sell. We want to know your expectations and how realistic they are. We want to have as good a feel as possible for all the circumstances surrounding your particular note. Based on that feel and information provided, an offer can be made if the note is marketable.
We understand that certain areas of the country have been hit very hard by the real estate downturn, other areas less so. But, reality is reality. Last week in the Los Angeles Times, an article appeared about the "current reality" for luxury homes in the area. Normally, the top of the market can attract top dollar pretty much regardless of happenings in the rest of the marketplace. The article pointed out many homes with a list price in the $20-30 million dollar range that sold at 50%-60% of asking price! Imagine the "reality shock" for these folks !
The basic precept always applies - when we have something to sell - the marketplace will tell us the "true current value" of our note, home or anything else of value we offer for sale. We all feel that "ours" is better than "theirs" - believe me I understand, I sold my home 2 years ago, I get it! But the marketplace does not whisper, it shouts.
Denny Stanz
California NoteBuyer LLC
760-245-5366
760-245-5367 fax
dennystanz@verizon.net
www.CaliforniaNoteBuyerLLC.com
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