Short Sale Academy – The Most In-Depth And Impactful Short Sale Course:https://bit.ly/3TKntWA
Save 20% off using this promo code: “bounds” In this episode, I talk with Bob Vieira.
Bob is a real estate investor and founder of Universal Short Sales.
He partners with investors and realtors across the country to convert short sale leads into closed deals.
Bob was born and raised in the small town of Old Forge, PA and currently resides with his wife in Tampa, FL.
Bob shares what is a short sale, how short sales are qualified and approved.
He also discussed about the things you need to consider before starting a short sale transaction and how realtors and investors can help homeowners that need short sales.
Find out more in this video. Don’t forget to subscribe!
Transcript:
Bob Vieira 00:00
pick a niche earlier because it took me so much trial and error to realize that when you don’t have a powerful of enough niche, you’re almost irrelevant like you just said you’re just existing in the middle.
Chris Bounds 00:12
In this episode, I talked with Bob Vieira, Bob is a real estate investor and founder of universal short sales. he partners with investors and realtors across the country to convert short sale leads into close deals. Bob was born and raised in the small town of old Orange, Pennsylvania, and currently resides with his wife in Tampa, Florida. In this episode, we cover what is a short sale? What does the process look like? And how long does it take what to consider before starting that process? And how realtors and investors can help homeowners that need to go through the short sale process. I hope you enjoy. Now here’s the show. How’s it going, Bob?
Bob Vieira 00:52
Good, good. Great. How are you?
Chris Bounds 00:54
Good. Good to have you on. We got connected through a buddy of mine. Brenton Brant Phillips and I was asking him I was like, Hey, do you know anyone who knows anything about short sales because I got this thing. And I really want to help them out. But it’s, I didn’t want to deal with it. I didn’t want to learn it. And beyond that, I probably wouldn’t do a good job anyway. And I’d be doing a disservice. So your name is really the only name that popped up, get you plugged in that transaction. And, man, you you, you saved the day for them like you did a good job. So I’m excited to have you on and talk a little bit more about short sales.
Bob Vieira 01:37
I remember that deal. Yeah. Yeah, short sales are an interesting niche. Typically, you know, whenever they come up, you don’t really see a ton of them. So a lot of people, they’re not really sure how to handle them. So yeah, yeah, especially
Chris Bounds 01:49
over the last several years. I mean, 2008 through 12. You know, I’m sure the volume is drastically different than it would have been over the last five years. And who knows, maybe we will see an uptick in that going forward over the next couple of years. Maybe we’ll get into that in a minute. But to back up a little bit for those who are new, or maybe they just don’t quite understand exactly what a short sale is because they haven’t had to do why it hasn’t been prominent in the market over the last over years. What is a short sale? Can you can you break
Bob Vieira 02:25
that down? Yeah, short sale in its simplest definition is you need two things to happen. Number one, the seller needs to be at least 30 days behind on their payment. So first component component is mortgage delinquency. Second component is negative equity, that means the as is value of the property is worth less than what they owe on the mortgage statement.
So quick example, let’s say I own a property and I’m falling behind on the mortgage payments, property’s worth half a million bucks, but I owe $550,000 to my mortgage company. That means I’m underwater, I’m behind on payments, so the bank is going to let me sell for the 500k that it’s worth. And they’re going to forgive the debt, they’re going to forgive the 50 Grand balance, and it does not get recorded as a foreclosure on my credit.
Chris Bounds 03:20
Okay, so that does something like that could be very, very good avenue to get their home sold. If they bought over the last say, like nine months, 12 months peek at the market where some markets, not all. But some markets have seen negative year over year growth. This is nothing like 2008. But, you know, that is a fact that we are seeing them on a very small scale.
So those kinds of folks that yeah, they bought some reason or another. They’ve hung on the payments year later, maybe they worked for they’re part of like the big tech layoffs. Yeah. And now they’ve got a house that’s worth a little bit less than what they paid. So that puts them as a potential candidate for a short sale. Right. Yeah. And
Bob Vieira 04:13
that’s actually a really interesting example you just brought up because we’re starting to see that a lot. Right, right now, Chris, I mean, I have three to four deals that we’ve gotten in the past two months. That’s that exact situation that you just described. They bought when things were, you know, really high, low interest rates, chaos, pandemonium bidding wars.
And now unfortunately, they’re in a situation where they have negative equity because they paid so much for the property just just recently, and like you said, job layoff, you know, divorce, whatever the case is, is making them behind on their mortgage payments. So they’re in a short sale situation.
Chris Bounds 04:51
Does that mean that the bank will even approve it or, or how does that work is that I would think some banks may just be like, sorry. But then again, maybe after 2008, they’re a bit more open to at least having a discussion.
Bob Vieira 05:15
Bingo, they’re definitely going to be open to it. The big thing is they’re going to want to see on paper, they need to see the mortgage delinquency, they need to do an appraisal, make sure there’s negative equity, and then ask the question, as long as you have a good enough hardship, you know, divorce, job loss, something that you could prove,
Chris Bounds 05:33
they’re gonna let you do a short sale. Okay. Now, short can be, at least the way I perceived it before really learning what it is. It can be a deceiving word on understanding how the prot how long the process is. So how the hell long does this process take? I know there’s it can walk me very wildly. But on average, what would you say the process? Duration is?
Bob Vieira 06:04
Yeah, there’s nothing short about a short sale. So let’s just get that out there. You’re absolutely right. There’s so many factors. I hate even answering this question. But on average, I’d say four to six months is a good rule of thumb. But it depends on how cooperative the sellers are going to be getting us financial documents. It depends on the loan type.
A lot of people, Chris, they focus on who the bank is, Oh, I heard Wells Fargo’s easier to deal with in SPS Bank of America. That’s not necessarily the case. One of the biggest factors in determining how long it’s going to take is the actual loan product that you’re doing a short sale on. For example, an FHA loan takes way longer to do a short sale on compared to a traditional conventional.
Chris Bounds 06:49
What why is that? Is that the underwriting guidelines that they’re because I mean, these banks, they package them up, that they’re adhering to certain standard, just so they can pack them, package them up and sell them. But by the time they’re actually going through this, it’s probably already in the hands of the environment of the note, right? Not always, but I would imagine all the times it is. So what makes a FHA loan different than maybe a straight conventional or some of the type of loan products.
Bob Vieira 07:23
The government man, so a lot more red tape, yeah, but there’s more. There’s more steps, more red tape, for example. And FHA, the bank has to put you through what’s called the financial waterfall, the financial waterfall, they’re gonna come, they’re gonna say, Okay, before we even look at Chris’s short sale offer, we’re gonna review the seller’s financials. So you open up the short sale, you have to do a modification, even if the seller wants to sell. So what that means is 30 to 60 days of document collection, Chris, before they’ll even look at the short sale offer. And that’s really they’re doing what
Chris Bounds 08:01
they can to save, you know, at least initially, is that right, at least in that case.
Bob Vieira 08:08
Yeah. I mean, absolutely. Think of it from their perspective. Do they? Would they rather just from a business perspective, would a bank rather take a loss on their investment or make it so you know, Chris Kidd as every month?
Chris Bounds 08:21
Clearly? Yeah. And, of course, the seller cooperating is a pretty big variable, too. Can you short, sell pretty much any type of loan like like a VA? Can you short sell VA?
Bob Vieira 08:33
Yep, reverse mortgages, VAs conventionals. Anything?
Chris Bounds 08:38
How’d you end up finding your way to specialize in in short sales? And maybe if you if you want to run into that, backing up a little bit further hedge again, real estate to begin with?
Bob Vieira 08:50
Yeah, so when I graduated college, I was selling tires. I was a corporate tire salesman. I was probably the Yeah, I was miserable everyday waking up. I knew I wanted to be an entrepreneur, I was always interested in real estate. I was probably the worst employee on the face of the planet.
Chris Bounds 09:12
I retired of being the Michelin man.
Bob Vieira 09:14
I just, I just can’t do it. I was bad at it too, because my heart wasn’t in it. You know, I’m just an entrepreneur at heart. So I got my real estate license while I was selling tires. And then the second I passed the exam, I just quit. I jumped cold turkey into real estate. Just as an agent, not necessarily like I always knew I wanted to be an investor and get involved on the investment side. But just to start, I was an agent. You know, like any new agent, I was running around chicken with my head cut off just trying to start my business.
And I started randomly landing on short sale listings. I had no idea how it was just random. So I learned how to do it Chris, just through trial and error. And then I realized this is a huge pain point. I need a niche anyway, because I didn’t have like an actual niche that I was noted For Sale, it was kind of just a perfect storm. You know, I specialize at a local level and short sales 2019 rolls around and I rolled it out nationally. Yeah,
Chris Bounds 10:11
there’s the same riches in the niches, the middle is crowded. So the, if you can find that pain point, it’s almost this cross section is high value, but also high pain. So it’s not that people won’t go there. It’s just, they don’t like to, and you’re gonna find fewer folks there. So if you can absolutely own it, and be an expert in it, which you have. It creates a huge business opportunity. And and, yeah, you’ve done well with that.
Bob Vieira 10:43
Yeah, yeah, for sure. riches in the niches. I love it.
Chris Bounds 10:46
So from homeowners and agents that are representing homeowners, what should they consider before ever even going down the short sale process?
Bob Vieira 10:57
And that’s a great question. So you need to consider what is. So what I like to say to sellers, I love to ask the question, in a perfect scenario. What is the end result? If you could have your way? And if the answer to that question is I’m just out from under this mortgage, I don’t care about making money, I could just move on with my life and avoid foreclosure. If that’s the answer, then a short sale is for you. If that’s not the answer, for example, maybe you don’t really care that much. If you have a foreclosure, maybe your main motivation is to make a couple bucks. If that’s the case, I’d say don’t do a short sale
Chris Bounds 11:36
yet. And the first example you gave that was the situation with my client, like he was just like, get me out of this, like, get out? Yeah, do not have a bag, I don’t care what what else happens after that, like, just give me out? And you’re able to do that. So in those kinds of situations where you do get them out? And obviously it’s below what they owed, does that impact their credit going forward? Or is there something that’s going to? Do they still owe that balance? So saying the example you had before there’s a $50 $50,000 gap? Do they have to pay that back? Is that on their credit as a loss? How does it work?
Bob Vieira 12:21
So what you’re referring to is a deficiency just to get back, go back to my example I gave before to paint the picture, I owe 550,000, I sell my house for 500 via short sale, the $50,000 balance is a deficiency in a short sale, if the short sale is done correctly, in that short sale approval letter, you need to the first thing you need to do the first thing I train my staff to do, we open it up, and we look for the lender to put in writing that they’re waiving their right to collect the deficiency, which again is that 50k In that example, as long as that’s in writing, you are not on the hook for that $50,000.
Chris Bounds 13:00
So if that is not in writing, then by by default, they can go after you for that extra 50. It’s not that they would, but then it’d be safe to assume that they’re probably going to,
Bob Vieira 13:14
they can absolutely come and sue you for that deficiency that balance.
Chris Bounds 13:19
And worst case, you really record credit for quite a long time.
Bob Vieira 13:24
So that’s another question. The credit is a little bit different. There’s a lot of people that want to convince people to do short sales, and they’ll say save your credit, do a short sale, I see this all the time. It’s just not true. There’s no perfect situation where you could do a short sale and save your credit. A short sale does have a negative effect on your credit. Okay, so that shows up on there. Absolutely. But the biggest benefit is the way it’s recorded.
So obviously, if you foreclose, it’s going to say on your credit report is going to show as a foreclosure. In a short sale, if you complete a short sale, it shows as debt settled for less than amount owed. What that does, Chris, let’s say I do a short sale, a year or two later, I want to go buy another house. So then my new bank pulls my credit history, that’s going to send a message to my new creditor that Hey, Bob, you know, slipped up fell on a short term hardship a year or two ago, but he made it right.
He figured out a way to get his old lender as much money as possible. And then he didn’t just let the property foreclose. So it just makes you look like a much better borrower. Having done a short sale compared to a foreclosure. Okay,
Chris Bounds 14:33
and what about the other situation like the the not so good way it shows up on your credit.
Bob Vieira 14:39
Um, so it’s gonna deduct points from you, you know, there’s no situation where you do a short sale and it doesn’t ding your credit. So if you have a perfect 800 credit score, you know, it’s you know, it’s gonna bring it down a couple of 100 points. Absolutely. Yeah.
Chris Bounds 14:53
I mean, being delinquent on your mortgage alone. Doing it, but absolutely, I imagine it’s far less than impactful than a foreclosure
Bob Vieira 15:01
a great ingredient, it’s actually I get the question a lot, especially from homeowners, it’s tough for me to do, there’s no exact science, the best way to look at it is if you have a really high credit score and you do a short sale, it’s going to bring it down a ton. If you have a low credit score to begin with, it’s going to ding it a little bit less. That’s, that’s the best rule of thumb you could use.
Chris Bounds 15:21
Is there a percentage of files that qualify, meaning they’re delinquent, and they are underwater, and they do just want to get out? There a rough percentage of success rate on getting a short sale approved?
Bob Vieira 15:36
I don’t have it broken down into exact percentage, the best answer I could give to that is if on paper, the short sale is approved by the bank as an option. And as long as the appraisal doesn’t come back at like a million dollars over what the property’s valued, we can get it done 100% of the time.
Chris Bounds 15:54
So basically, if the bank says, Hey, we’re willing to talk about it and work with you on this, then at that point long as you’re doing what you’re supposed to be doing and the right things are lined up. It’s pretty much a for sure deal.
Bob Vieira 16:08
Yeah, yeah. Now, let me actually give you an example of a situation where there’s nothing we could do. We’re working on a short sale right now in western Pennsylvania. Really nice property, really nice neighborhood. On paper, he is absolutely qualified. The appraisal came in, we did a great job, you know, you know, streamlining everything.
However, when the title came back, the gentleman has hundreds of 1000s of dollars worth of IRS liens. The problem is, the IRS refuses to do anything about them. There’s nothing this guy’s attorney can do. And the bank is saying there’s no way we’re covering this, a situation like that we’re not going to be able to get the short sale done. So there’s definitely factors that come up that allow us not to be able to do the short sale.
Chris Bounds 16:53
Yeah, because the IRS will be superior to all other liens, right? Bingo. Yeah. All right. Let’s get some money. So
Bob Vieira 17:00
here do the IRS does or nobody does.
Chris Bounds 17:03
Yeah, um, agents that are that are working with homeowners, or maybe they’re trying to buy a property that’s for the short sale and the other agents not really proficient on that. Is there a way like do agents get paid in this transaction? Is there a way that they can still earn commission with with a short sale transaction? Short sale transaction?
Bob Vieira 17:24
Yeah, yeah, the bank actually pays six, the full the full 6%. Commission,
Chris Bounds 17:29
okay. So they just have to be willing and patient to see the process out and either do it themselves, or work with someone like you that basically can take that load off of them so they can go out? And, you know, keep your client in the loop and also take care of other business, right?
Bob Vieira 17:47
Yep. So for the real estate agent, and a short sale for the listing agent, everything is exactly the same as you would do in a traditional listing. The only difference is your commission is coming from the bank. And then obviously, it’s a hell of a lot longer process. But yeah, everything stays the same.
Chris Bounds 18:02
It’s good, good. So um, what, at least from an agent standpoint, and any any advice on say they would actually like to work with you? At what point would they want to bring you into into the fold? What information? Do you really need to make a decision if it’s going to be worthwhile on pursuing?
Bob Vieira 18:24
Yeah, when I set up my company, my main goal was to make it as easy as humanly possible for agents. So we don’t need anything. All we need is a literal introduction to the seller. And then we run them through a qualification process. That’s it. So get us involved in the very beginning, as soon as you think that there’s a possibility that a short sale is the best exit strategy for the seller. get us involved from the get go.
Chris Bounds 18:49
Love it. Love it. Um, we’ve got a couple of questions that I asked everyone that we get on the show, and at the end, I know you get something you want to share, too. But um, if you could go back and give advice to your 20 year old self, what would it be? Your entire business, right?
Bob Vieira 19:14
Go go ahead and to selling tires. That’s not I’m kidding. I would say pick a niche earlier. Because because it took me so much trial and error to realize that when you don’t have a powerful have enough niche, you’re almost irrelevant. Like you just said, You’re just existing in the middle. Yeah. I mean, there’s so much you know, amazing advice. And you know, not to be cliche. I don’t want to give the cliche advice. I would say business strategy, pick a niche early and just go with it. Alright,
Chris Bounds 19:46
what book or books have greatly influenced your life.
Bob Vieira 19:50
Rich Dad, Poor Dad, but everyone probably says that. I love 10x by Grant Cardone. See grits of a Millionaire Mind is amazing. That’s actually one I’m going to reread after this book I’m reading now, which is the autobiography of Ben Franklin awesome book. And probably every biography I ever read. I know what it is Chris about biographies.
But I’m like a nerd when it comes to those. I love reading those. Because it’s almost like, you know, it’s almost like someone who’s successful is is writing a book about their life, and they’re telling you step by step what to do. So pretty much every, you know, biography book I ever read was super impactful.
Chris Bounds 20:33
Yeah, reading biographies or autobiographies, it’s like, when you ask the question that most people hate to receive, can I pick your brain? Well, yeah, you can do that for eight to $15. It’s,
Bob Vieira 20:48
like, it’s especially the autobiographies. I mean, they’re, they’re really cool.
Chris Bounds 20:54
And the last five years, what new belief behavior or habit is most improved your life?
Bob Vieira 21:00
Last Five Years, I would say time blocking. That changed everything for me. So I would always use a to do list. And I would make the list the night before. But something felt off. I’m like, Okay, I’m checking everything off. But I’m still like, I don’t feel efficient enough. I still, you know, there’s so many gaps throughout my day, time blocking changed everything for me, I actually learned that what book talks about there was a deep work. I think it might have been a couple of No, it was the effective executive. That book made me realize I am not being effective or efficient enough. And I need to time block my whole day. And that changed everything.
Chris Bounds 21:43
I love it. Love it. Yeah, that’s been huge, very impactful for me. Because like you said, the task list, you’re just chasing tasks. That’s it. Yeah. So much. In a burning a lot of time.
Bob Vieira 21:55
Also, Chris, if I could add something else, it’s literally within the past, like year or two, I started using a power list. I got that idea from Andy for Sella on his podcast. You know, you just make five, five tasks that are non negotiable, they have to get done. And I just started doing that less than a year, maybe within a year. And that’s, that’s been super impactful to
Chris Bounds 22:18
that’s on a daily basis, or weekly basis or
Bob Vieira 22:21
daily basis, daily powerless, because I was doing it on a weekly basis. And again, you know, I was getting my stuff done, but I’m like, it just you don’t feel as effective.
Chris Bounds 22:31
Yeah, no, no, I know exactly. I know exactly how that is
Bob Vieira 22:35
powerless daily. Do you have like a list that you have to get done?
Chris Bounds 22:38
We do. So we follow EOS. So we do the weekly attends, which then gives me my list for the week. And then I time block specific activities and they vary from day to day. I’m like, am I going to contact you know, operators and like, I’m gonna talk contact investors like passive investors. Am I gonna do my follow up? So I timed like that. And we’re gonna work on accounting and whatnot. But imagine that coupled with the new task list.
So it’s kind of a hybrid method. Gotcha. It probably could, she could use some improvement, but the the time blocking, which I’ve done, and then fell away from I did that after the one thing. So the one thing really put that into place for me. And then atomic habits, I think, just reinforced, I needed to get back to that. But for some reason, it just fell out. And I went to the Tony Robbins business mastery, and then I put it back in place, and it’s permanently on my Google Calendar.
Bob Vieira 23:42
I never read atomic habits, but you’re not the first person to bring that up. I think I have to read that one. I have to add that to the list.
Chris Bounds 23:48
No fluff aside, it’s one of the most tactically impactful books across life. And I was able to so Tony talked about this kind of a kind of a gross habit I had but to my nails. So I remember Tony talking about a way that you know, he stopped to in his nails. And he had a habit to have Patterson’s ticket and atomic habits talked about a very similar methodology on how to it didn’t I don’t think it mentioned Jr. Nails, but it was a similar method methodology of how to limit what Tony used to actually do it. And I was like, Oh, I did it. Could you not day after 24 hours, and they were juvenile again. It was just the worst thing. So that 30 plus year old habits gone 24 hours.
Bob Vieira 24:44
That is literally my exact one of my worst habits that you my nails. I think I have to read this book and just skip to that part.
Chris Bounds 24:50
Yeah. The whole thing. You’ll you’ll love it. Wow. How can people reach out to you and I think you You get something to share to write?
Bob Vieira 25:03
Yeah. Reach out to me on social media, I’m really active Facebook, pm me on Facebook, reach out via universal short sales Facebook page. And then my email, which I don’t know if you could share my email because because the spelling of my last name is tricky, but it’s just Vieira companies@gmail.com. That’s vie Ira companies plural@gmail.com. But I mean, really Facebook, you know, shoot me shoot me a friend request, I have a really good short sale group. You know, we’ll talk you could join that and just keep in touch that way.
Chris Bounds 25:39
Awesome. And what’s the what’s the event you have coming up? Or? Yeah,
Bob Vieira 25:45
of course, short sale course short sales accelerated it’s created. We’re actually completing the sales page. Now we’re getting the pricing in line, the pricing strategy, but the course is for investors and agents. It is a deep dive. It’s not, you know, one of these courses that kind of gives you the fluff. But hey, after you do this course, I want you to take this course and pay me but then you still need me afterwards. Yeah, it is absolutely not one of those courses.
It’s broken down into three phases. We do short sale fundamentals. So so if you’ve never done a short tip before, you don’t know what it is, you know, it’s a course for you. Or if you’re an expert, it’s still a course for you. Second thing we talk about lead generation how to get pre foreclosures, short sale listings and leads coming in. And then the third phase is a 12 step system. A science that I use in my own company breaks down how to do a short sale, A to Z, every single step
Chris Bounds 26:41
is just like a certification course. It’s not more of a full suite education to to equip yourself to really run short sales for your business.
Bob Vieira 26:53
That’s all yeah, that’s all it is. There’s no certification, maybe I’ll create one you could put like a badge at the bottom of your email or something. But I mean, really, this course is going to make you money and it’s an absolute, knowing short sales is an absolute necessity coming into the market that we’re shifting into now. Especially within the next couple years.
Chris Bounds 27:13
Awesome. Awesome. Thanks for tuning in. If you got any value out of this at all, please like comment, subscribe, follow, I’d love to hear from you. And for more real estate related content, market observations, upcoming events, you can go to invested x.com And subscribe to our weekly newsletter. I promise you won’t regret it. Thanks again.