We Read This Crap So You Don’t Have To: Nathan Jurewicz

May 27, 2009

“We Read This Crap So You Don’t Have To” features claims–primarily by e-mail–from real estate promoters. Note: We’re not evaluating the actual programs, though we may have some comments on the programs as described in the e-mails and sales pages. Rather, we’re examining the claims and pitches of these promoters and real estate gurus.

In the future, we’ll present some that are honest, straightforward, and actually full of good information. (Yes, Virginia, there is a Santa Claus!) But since it seems that about 90% of everything is crap–exceeding that old 80/20 rule–most of what you’ll read here deals with questionable claims and over-hyped pitches. And so it is with this posting.

I received an e-mail (a portion appears below) from another real estate promoter, Larry Goins. I’ve provided the emphasis in red.

Your whole short sales business works by itself…on automatic! That’s right, just crank it up, then stand back, and let it rip! Find out how right here.

And for good measure:

I STILL don’t know why Nathan’s letting out his secrets. If you’ve seen his “Short Sales Riches” course, he sells everything he’s talking about on this fr-ee DVD for $497. So why would he be giving it away for free? I’m not sure, but if I were you, I’d hustle over there now before he realizes what he’s doing.”

So ol’ Nathan is giving away a free DVD containing his short sale secrets? What a wonderful guy! Gotta love him.  

Except, of course, there’s no information on the sales page. Just the requisite overwritten hype, along with some amazingly low-quality videos. Plus the opportunity to buy his program for $1,497 . . . or $1,694 for two payments, the second just 15 days after the first. Except, of course, it really costs more, as you find out when you get to the order page. It’s $1,497  (or $1,694) plus a month of coaching for $1, followed by continued coaching at $197 a month. That’s a 1-year investment of either $3,861 or $4,058. That’s sure a far cry from “fr-ee.” (Hmmm. Maybe the definition of “fr-ee” in the real estate promotor’s dictionary is: “Four gRand-Each and Every.” 

Again, the program may or may not be worth it. You can be the judge of that. What I’m addressing is the crap . . . the hype . . . the claims versus the facts of the promotion.

This rates a 9 out of 10 on the Crap-O-Meter.

Larry Goins email pitching Nathan Jurewicz's short sale package. Note the reference at the bottom to the

Larry Goins email pitching Nathan Jurewicz's short sale package. Note his claim at the bottom that the information offered on a "fr-ee DVD."

Top of Nathan Jurewicz's pitch page for his short sale program

Top of Nathan Jurewicz's pitch page for his short sale program

 

Bottom of Jurewicz's Pitch Page. Here's the real price . . . sort of

Bottom of Jurewicz's Pitch Page. Note the price, but no mention of additional monthly payments for coaching.

Purchase page for Nathan Jurewicz's short sale package. Notice the $197 additional charge for coaching after the first month.

Purchase page for Nathan Jurewicz's short sale package. Note the additional $197 per month for coaching.

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Foreclosures and Short Sales: Are They Good Buys?

June 6, 2008

There’s a general belief that foreclosures and short sales represent good values. Especially in today’s market, a growing number of buyers are asking their Realtors to find foreclosures or short sales for them. Even–perhaps even particularly–first-time buyers assume that a short sale or foreclosure must be a bargain.

But are they the bargains many assume them to be?

Sometimes yes. Often no.

Let me get very specific. There’s a house that’s active right now in Woodbridge, Virginia. I ran across it when checking comps on a property recommended by an investor. (More about that in another post. That lesson, in brief: Always, always, verify claims as to value.)

The house that I ran across is a 3 bedroom, 1.5 bath townhouse. It was bought on January 18, 2006 for $285,000. In early 2007, it was on the market as a short sale at $198,900. Was that a good deal? Well, gee, that’s a 30% discount, right?

The bank foreclosed and took it back on July 3, 2007. It’s now an REO (“real estate owned,” or bank-owned), listed at $186,900. Now, THAT must be a bargain, right? That’s a 34% discount from the $285,000 purchase price. Ready to write a check? I hope not.

I ran the comps on that neighborhood today. There were 34 comps–3 bedroom, 1.5 bath townhouses in that subdivision–properties that had been listed for sale within the past 180 days. Of those 34, 4 had sold. Here’s the information on those 4…the only 4 to have sold. (Note the downward price trend):

4610 Whitaker Place
Close Price: $130,000
Seller Subsidy: $3,900
Close Date: April 14, 2008
Days on Market: 278

4747 Hedrick Lane
Close Price: $140,000
Seller Subsidy: $5,600
Close Date: March 26, 2008
Days on Market: 230

4682 Hercules Lane
Close Price: $172,000
Seller Subsidy: $13,760
Close Date: March 15, 2008
Days on Market: 71

4666 Prather Place
Close Price: $180,000
Seller Subsidy: $5,400
Close Date: December 10, 2007
Days on Market: 113

There are two houses in the subdivision under contract. Because they’re under contract, we don’t know the sale price or whether any seller subsidy was involved. However, we can assume that the effective sales price is below what the properties were listed for:

4646 Charlton Ct.
List Price: $134,900
Days on Market: 6

4728 Still Place
List Price: $94,000
Days on Market: 344

Among the active listings:

4667 Charlton Court
List Price: $120,000
Days on Market: 143

4645 Charlton Court
List Price: $125,000
Days on Market: 167

4675 Whitaker Pl.
List Price: $125,910
Days on Market: 65

So what’s that tell us? The fair market value of that REO at $186,900…that had been a short sale at $198,900…is probably in the neighborhood of $110,000.

And notice the “days on market.” Even the houses that are selling are taking months to sell.

Now, most of the other REOs in the neighborhood aren’t as badly overpriced. But others are priced at $139,000, $135,900, $129,900, and another at $129,900.

Are those good deals? Well, maybe when compared to what they sold for a few years ago. Maybe when compared to what they’ll sell for 5 years from now. But not when they’re compared to what’s selling…and not when you taken the downward price slide into consideration.

So: Don’t assume that just because a property is a foreclosure or a short sale, that it’s a good value. It may not be. Always check the comps.


How Will The Real Estate Market Be Affected By The Presidential Elections?

June 1, 2008

The residential real estate market has slumped across the country. Some areas have been hit worse than others.

In the search for solutions, some are looking to the presidential elections. There’s a hope that, somehow, the election of a new president will re-energize the markets. But will it?

First, any effect will be psychological. Now, that’s not to discount psychology. A lot of what’s affecting the current market is buyer (and seller) psychology. And that was certainly the case a couple of years ago, before the real estate bubble burst. People were buying on emotion, not facts and reality. The market was soaring; their friends were making fortunes in a matter of months, and they wanted in on the action. The facts suggested that the growth rate was unsustainable. And reality suggested that soon, with continued escalation of prices, no one would be able to afford a home.

So, what might the psychological effect of the presidential election be? Considering that many people blame the current Bush Administration and its policies for the position we’re in now, the election of someone who supports the current policies probably would have very little effect. The election of someone who represents a break with the past could have a significant psychological effect.

Note: I know it sounds as if I’m saying Obama would help the real estate market and McCain wouldn’t. Again, we’re talking psychology, not actual policy. From that perspective, then, an Obama victory might help, and probably more than a McCain victory.

But it could be possible for McCain to stake out a far different economic position than Bush has. Or he might select someone as his vice presidential running mate who would do that. Or announce people he’d like to appoint to his Cabinet.

On the other side, while Obama in general reflects change, he’d still have to articulate a position of change as it applies to the economy in general and to real estate in particular. And, yes, if Clinton somehow got the nomination, the same conditions would apply.

Obama’s website, at the moment, doesn’t have much detail on the subject. He does say:

“Obama will crack down on fraudulent brokers and lenders. He will also make sure homebuyers have honest and complete information about their mortgage options, and he will give a tax credit to all middle-class homeowners.”

But that’s not the root of the problem.

Obama’s site also says:

“Obama will create a fund to help people refinance their mortgages and provide comprehensive supports to innocent homeowners. The fund will be partially paid for by Obama’s increased penalties on lenders who act irresponsibly and commit fraud.”

That might help a small portion of those in trouble. But it won’t help anyone who’s already lost their home, either via a foreclosure or short sale. And it doesn’t appear to help people whose homes have lost substantial value. If someone bought a home in 2006 for $500,000 and it’s now worth $350,000, refinancing that $500,000 mortgage, while lowering payments slightly, still leaves the homeowner “upside down” by $150,000. And all the other homes in that neighborhood are still only worth $350,000…versus $500,000 a couple of years ago.

Meanwhile, McCain does have a proposal, but when you consider the paperwork, the hoops homeowners would have to jump through, and the bureaucracy it’s sure to spawn, there’s a real question of whether it would benefit many homeowners.

McCain’s website says:

John McCain Is Proposing A New “HOME Plan” To Provide Robust, Timely And Targeted Help To Those Hurt By The Housing Crisis. Under his HOME Plan, every deserving American family or homeowner will be afforded the opportunity to trade a burdensome mortgage for a manageable loan that reflects their home’s market value.

Eligibility: Holders of a non-conventional mortgage taken after 2005 who live in their home (primary residence only); can prove creditworthiness at the time of the original loan; are either delinquent, in arrears on payments, facing a reset or otherwise demonstrate that they will be unable to continue to meet their mortgage obligations; and can meet the terms of a new 30-year fixed-rate mortgage on the existing home.

How It Works: An individual picks up a form at any Post Office and apply for a HOME loan. The FHA HOME Office certifies that the individual is qualified and contacts the individual’s mortgage servicer. The mortgage servicer writes down and retires the existing loan, which is replaced by an FHA guaranteed HOME loan from a lender.

So, under McCain’s plan the homeowner had to be creditworthy after 2005…but nevertheless have accepted an “unconventional loan”…and must be in trouble now…but still must be able to qualify for a 30 year conventional loan. That eliminates a huge chunk of the population in trouble.

And then there’s the fact–as with Obama’s plan–that you’d still be refinancing a $500,000 mortgage on a $350,000 property. When Harry Homeowner wants to sell in a year or two, and his property is still worth under $500,000, what then? Are we just postponing tens of thousands of short sales?

If any of the candidates came in with a “Marshall Plan for Housing,” a major program, well laid-out, with some freshness and creativity, that could have a positive effect. Otherwise, I wouldn’t expect much.

One exception: The housing market around Washington, D.C. Every time there’s a presidential election, housing activity increases simply because a lot of people (administration officials, staffers on the Hill, congressmen and representatives, and so on) leave, and others come to replace them. I think it’s safe to say that there might be a greater turnover in all those categories than in past years. So, it’ll help the DC area. As for the rest of the country? Highly unlikely.

Don Tepper,
www.Solutions3DHome.com
www.WeBuyFairfaxHouses.com

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Realtor with Long & Foster licensed in Virginia