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Shortsale: Tips for Selling Your Home to Prevent Foreclosure

short sale

 

A shortsale refers to real estate that is being sold for less than is owed on the mortgage loan. Lenders engage in short sales for various reasons. The primary reason is short sales make more financial sense than foreclosure. Mortgage financier, Freddie Mac, states the average cost of foreclosure is between $60.000 and $80,000.

The shortsale process typically takes four to six months to complete. Foreclosure can take up to eighteen months. Although the lender accepts less than is owed, short sales are less detrimental to their bottom line than foreclosure.

 

Another reason banks engage in short sales is because they are limited on the number of real estate owned (REO) properties they can hold. Many are rapidly approaching their limit due to the constant influx of foreclosure homes.

 

Thirdly, banks receive money from the Federal Treasury based on their performance. If they are holding too many non-performing loans, the Feds will limit or cease their line of credit. Banks are in business to make money, not manage properties. They have no choice but to engage in short sales to liquidate their inventory.

 

The first step to entering into a shortsale agreement is to contact your lender. This process can be tedious, so be prepared to be patient and persistent. Banks aren’t jumping for joy to take a loss on loans. In most cases, banks will first attempt to modify your loan so you can prevent foreclosure.

 

Borrowers must prove they are financially insolvent and do not possess the financial means to repay their debt. Mortgage lenders require homeowners to provide a packet of information consisting of financial records, income and expenses, a short sale hardship letter, and various legal and real estate documents.

 

Some lenders will not engage in conversation regarding short sales unless the borrower has a qualified buyer in place. Others will grant borrowers’ time to list their property through a realtor. Occasionally, banks will allow property to be listed as “For Sale by Owner.”

 

Two types of short sale agreements exist: Deficiency Judgment and Payment in Full without Pursuit of Deficiency Judgment. If your lender issues deficiency judgments, it is imperative to understand the consequences. In some cases, it is less detrimental to allow the property to fall into foreclosure.

 

Deficiency judgments are issued in the amount between the sale price and balance of the loan. If the borrower has a second mortgage, the amount can be staggering. For instance, if you owe $150,000 on your loan and the property sells for $125,000, the bank will issue a judgment for $25,000.

 

Judgments remain on your credit report until paid in full. Foreclosure will haunt you for ten years. A shortsale will stick around for seven years. However, if borrowers are able to get back on track financially, they can obtain another mortgage loan within two years.

 

If the property does fall into foreclosure, it is important to obtain a Deed in Lieu of Foreclosure. This option allows borrowers to give the property back to the bank and walk away without owing additional monies. Without a deed in lieu, the property will be placed for sale through public auction and the borrower held responsible for the difference between the sale price and loan balance.

 

When structured properly, short sales can be a win-win solution for all parties involved. It is important to become educated about the process and weigh the pros and cons. When necessary consult with a real estate lawyer, realtor or real estate investor who possesses experience in orchestrating short sale transactions.

Explanation of a Short Sale

sale

 

Homeowners that have fallen behind in their mortgage payments find little comfort in knowing they are not alone. RealtyTrac reports that foreclosure activity was up 32 percent in April when compared to a year ago, increasing the foreclosure activity rate to 1 for every 374 homes. Not wanting to become another statistic, many homeowners are seeking an explanation of a short sale to determine its feasibility as an alternative to foreclosure.

Brief Explanation of a Short Sale

 

In simple terms, a short sale is when the lender for a home agrees to sell a property for less money than the assessed market value for the home. Real estate professional George Kiefer, GRI points out that “many times the owner may owe $200,000 on a home valued at the same amount, but when you add in the cost of selling the home, say $10,000, then you have a possible short sale situation.” The cost of selling the home is often overlooked by distressed homeowners, but the expenses are never overlooked by a lender.

 

Qualifying for a Short Sale

 

A homeowner needs the lending bank’s approval to complete a short sale and not everyone will qualify. “A bank wants proof of your insolvency before agreeing to a short sale,” George explains. “The lender is going to want to look at your bank statements, paychecks, 401(k) – everything – to determine your financial situation. If they see that you’re not exactly solvent, but diminished, then they will usually look for other options.”

 

Not All Short Sales Are Created Equal

 

Should a homeowner be able to prove an economic hardship that diminishes her ability to pay her mortgage on time, but is determined by the lending bank to be “somewhat solvent”, the bank might offer a short sale with a side loan to mitigate its loss as a possible solution. Returning to the previous example, if the amount owed on a home is equal to the market value, but the extra $10,000 cannot be covered by the borrower, the bank might short sale the home for the market value and open a $10,000 loan to the homeowner to cover the selling expenses. This is just one of a myriad of ways a creative lender might help the borrower out of a bad situation while still covering their own costs.

 

Banking Institutions Have a Long Memory

 

Some homeowners are under the misconception that if their house is foreclosed upon, they can avoid paying the bank the difference between their note and the home’s selling price (plus selling costs) by filing for bankruptcy. This is not always the case. “Banks want their money and they are very patient,” George explains, “so they will wait to see if a homeowner files for bankruptcy, or if they have filed, will wait for the homeowner to come out of bankruptcy, knowing they cannot file for bankruptcy again for seven years, and then they will come after them for the money they lost.” George is quick to note that this method is not the rule, but the actions are hardly the exception, either.

 

Seek Advice From Experts

 

Anyone that is facing the harsh reality of falling behind in his or her mortgage payments should seek a short sale explanation from professionals. George recommends that the first question a person or family in this situation needs to do is “ask themselves one question: do I want this house off my back or do I want to stay in my home?” The answer to this question will dictate the next steps the homeowner should take. If the answer is stay in the home, the person should open discussions with the bank to see if they will work with them in fixing the problem. If the bank is not compliant or refuses to halt the foreclosure proceedings, the next step is to talk to a real estate agent. “Many times I have been contacted by clients that have told me they talked to the bank seven or eight different times and the bank would not budge,” George relates, “but once we started the short sale process, guess what? The bank suddenly started negotiating. This is a very common occurrence.”

 

Not All Experts Are Created Equal, Either

 

It’s important for a homeowner to do their research and find an agent that can provide an educated explanation of a short sale. “Many agents,” George admits, “avoid short sales because of all the things that can go wrong [from a buyer’s viewpoint] and because of that, they are not as educated about the process as they should be.” George, whose background is in accounting, points to a common misconception held by some experts that the monies lost in a short sale are taxable against the seller. “IRS form 544 states, in no uncertain terms, if you have a loan forgiven and are insolvent or bankrupt, you do not have to pay taxes” on the difference. Since a bank, under most circumstances, will not agree to a short sale unless they have determined a borrower is insolvent, a tax cannot be levied. A Certified Public Accountant is another expert whose advice should be sought and will be able to answer any tax related questions involved in the process.

 

Avoid Foreclosure at All Costs

 

George mentions that any time an application for credit is submitted, one of the questions is “Have you ever been foreclosed upon?” There is no time frame set in the question, suggesting that if a credit seeker is to answer this question honestly, then there is no time limit to the damage foreclosure can cause to a person’s credit. When a short sale is agreed to by the bank, the lender will have paperwork stating the loan was ‘paid as agreed’. This does not mean the borrower is free and clear immediately following this procedure – quite the opposite. The initial damage to one’s credit is about equal to the damage done by foreclosure, but the time frame in returning to future home ownership is significantly lessened. A person having to short sale her property can reasonably be expected to return to the home buying market in as little as four years from the credit blemish. Four years may seem a long time to some, but everyone can agree it’s much sooner than never.

 

RealtyTrac Staff, “Foreclosure Activity Remains At Record Levels In April.” RealtyTrac

Taking Advantage of Real Estate Foreclosures

bargain

 

Despite the economic downturn and all of the hand wringing in the real estate foreclosures market, there are all manner of valuable savings to be had for those who are in a position to take advantage of the current condition of the real estate foreclosures market. Naturally, anyone with the opportunity to invest in real estate has become somewhat skittish due to the massive downturn not only in the economy but in the real estate market as well. This downturn has spelled doom for many families and investors who were hoping to purchase homes and real estate on the cheap. Unfortunately, the bottoming out of the real estate market has had a terrible effect on these types of investors.

With all the people losing their money on the real estate foreclosure market, it seems that there is no end in sight and no light at the end of the tunnel. In fact, nothing could be further from the truth. In any economic downturn, there is a fortune to be made for those who are in a position to take advantage of the sudden drop in real estate prices and the tremendous increase in foreclosures. By jumping on some of the more viable real estate foreclosure properties, investors can ensure that they have bought their real estate at well below fair market. This type of investing ensures that they are in a position that enables them to leverage their equity well into the future.

 

While it is true that the real estate market is in a downturn at the moment, it is important to keep in mind that people always need a place to live and real estate foreclosures, even a multitude of them, are only indicators that people have made foolish investments and they are unable to keep up with their overall cost of living. The simple fact is, many people make foolish investments and real estate foreclosures are the fruits of these types of investments.

 

For those who are able to take advantage of these bargains, it is a windfall situation, as they are basically shooting fish in a barrel. While this seems like something of a frivolous attitude, it is the truth, those who are more responsible with their money will be able to take advantage of real estate foreclosures that were caused by those who were not quite as responsible. This is not a slight on those who have lost their homes due to real estate foreclosures, rather it is a general statement on the condition of the real estate market as it stands today.

 

Despite all of the optimistic advice in this article, it is important to keep in mind that any real estate investor must do their due diligence and ensure that the home they are purchasing is worth dealing with. Purchasing a home that is not worth the money that they are investing is simply another example of bad business that will cause difficulties in the long run. This is the same vicious cycle that other investors and families have been involved in that has caused the real estate foreclosure market situation that currently exists.

The Beginner’s Guide to Investing in Home Foreclosures

home forclosure

If you have decided that buying a foreclosure is the best opportunity for you to get into the real estate market then you will want to learn as much about the process as possible before you take the plunge. It can certainly be said that learning how to buy foreclosure properties is an interesting and rewarding experience as the knowledge you gain now can be put to use again and again in the future if you ever plan to purchase more foreclosure homes.

One thing to keep in mind when you are planning to buy a foreclosure is the location of the property. Many first time buyers get caught up in the excitement of the low prices of properties, and then fail to follow the simple rules of buying any type of real estate. Location is highly important so check if there are schools nearby, check what the shopping is like and take a good hard look at the neighbourhood.

 

Is it a pleasant place to live? Think for the long term as well as the short term, because you may wish to resell or rent out the house in future so you will want to get the best possible return on investment by buying a property located in a desirable area now.

 

To find foreclosure listings you can start by using the internet. There are many websites, such as foreclosures.com, that offer free and paid foreclosure listings services. These sties provide an excellent and convenient way to get the most up to date foreclosure property lists for your state, city or town.

 

You must do all that you can to learn how to buy foreclosure properties. The more you know about the process, the better position you will be in to buy the best property at the best price. You will also discover places to access foreclosure listings that other buyers may not be aware of. This gives you a distinct advantage in the market.

 

Remember, like anything in life, if you surround yourself with expert and people who can help you, you will have a greater chance of being successful Purchasing foreclosure properties is no different, so make sure you strike up friendships with lenders, real estate agents and everyone else that is involved in the foreclosure buying process: you never know what valuable information they may be able to share with you along the way.

 

Foreclosure houses may be the perfect choice for families who think they can’t afford a home. Foreclosure listings also provide a great investment opportunity for those looking to flip houses. Visit my Foreclosures Real Estate blog to learn the secrets to Buying a Foreclosure !!

A Second Home as a Mixed-Used Property

open house

 

Investing in Real Estate by purchasing a second home is one of the cleverest movements you can do at the current period. This is not because second homes are cheaper than the prime residencies but due to the fact that a vacation home can be a mixed – used property.

In this article you will find how a second home can be your favourite destination for your vacations and a profitable investment at the same time.

 

Your personal paradise

 

By purchasing a vacation home, like a villa in a Greek Ionian Island could be the ideal and lifetime solution for your vacations. The acquisition of a second home demands an important amount of money at first but finally it excuses you from the vacation expenses for as long as you desire. Also, it offers you the desired hospitality as it has all those characteristics that you choose for yourself and your beloved ones. Owning a vacation home means that you don’t have to make plans every year for your holidays, you don’t have to spend your money for residency in hotels, for eating out and for travel agencies. You can create your own private paradise, in the location you love most and with all the facilities that you want for your ideal holidays. Also, in this way you ensure a comfortable and always hospitable home for any time of the year. You don’t have to worry for making early reservations as your own home will always be at your disposal! Finally, by purchasing a second home you ensure a potential residency for the years of your retirement and it is often helpful to buy it when you are financially active in order to enjoy it in those late years without the anxiety for its cost.

 

A source of income

 

A vacation home can also work as an important source of income as you can rent it for long or shorter periods and use this money for your financial needs. Most people are not able to be away from their main home and away from work more than two months in a year. This means that a second home will be out of use for most of time and this gives you the opportunity to lease it for long periods or to rent it even per night or week. This is not something simple of course, but with the right strategy and with the right guidance of a professional you can ensure an important amount of money in this way. This means that even if you have used a loan for the purchase at first, you can use the money from the rent in order to pay it off. This is a unique possibility that a second home has to offer and you cannot find it in other investing movements in real estate.

 

Suppose that you buy a villa in Lefkada, which is a famous and picturesque island of Greece and it is also a wished destination of many wealthy Europeans during the half part of the year, from spring to autumn. It is as if you kill two birds with one stone. You have a lovely home in an idyllic place which fits exactly to your needs and taste and you can use it during your holiday and you can also rent it to other visitors of the island or even to a local resident for the time you are away. The only thing that you have to pay attention to, is the tenants that you will choose in order to ensure a good conciliation.

 

Conclusion

 

A second home is an ideal proposal for someone who wants to involve in Real Estate investments, as it is the only property that you can easily use it in two different ways. A vacation home provides you with an ideal residency for your holidays and also can be used as a property that you rent and you earn money.

What is a Real Estate Open House?

open house

For some, the real estate market is a completely new country with its own language and culture. People are not quite sure what a Real Estate Open House is. Certainly, if you have been invited to a holiday Open House, you remember a gigantic cocktail party at a neighbor’s house or a homey buffet where friends and family are all trying to talk and hold plastic plates piled with a concoction of edibles, at the same time.

Well, Real Estate Open Houses are quite different. They are held for the purpose of showing a house for sale to potential buyers. Sometimes there is food on hand but the purpose of this outing is not social conviviality, but business. Here are some types.

 

Category 1. The Open House for Realtors

 

Let’s say, you have selected a particular real estate agent and you want her to handle the sale of your house. If the agency belongs to a multiple listing organization (and most of them do) they will thereupon hold an open house for the other agents in the area. These may include agents from their own broker’s office and agents from other offices.

 

Your agent will ask you to get your house in ship-shape. That means she wants you to have everything cleaned (windows, carpets, etc.) and have all the clutter put out of the way. She will probably ask you to leave the house, and to take your dog, cat, and children with you. She may choose to provide some finger food and coffee for the prospective agents (and ask you to foot part of the bill) or not, according to the customs of the area.

 

She will show agents around your house, and point out all the virtues. She will also have brochures or flyers on hand to give out to the prospective agents. These flyers will be based on the information you have provided as well as her own research of the area. Of course, she will have looked around your home and decided what the most salable features are. Does the house have an updated kitchen? Does it sport a fantastic view? Maybe you never made much of your outside deck, but once it is fitted out with pots of geraniums and some crisp new lounge chairs it will look like it came out of a magazine. And that’s the photo that will land up in the flyer or the online house tour.

 

The house will also be written up in the large multi-listing book where it will get a picture and a short write-up (about the size of 1/8 of a page or smaller.) This information will also go onto the database on the Internet usually under the name of the realty company and the general listing under www.Realtor.com (assuming the agency is a member of the National Association of Realtors.) All the pictures and brochures will go up online also. This makes it easy for agents in other parts of the country to send clients who are moving from their area to associated agencies in your town.

 

This Open House for local agents takes about an hour or two and the other agents leave with the promise that they will show your home to clients who they think it might interest. Some of course, come for the free lunch and the chance to network. But the main feature of the Realtor Open House is to give the local agents a chance to see the house first hand and to be able to talk about it to their clients in a knowledgeable way.

 

Category 2. The Public Open House

 

Here, the listing realtor sets up a time-usually a two or three hour period-for prospective buyers to look at the house. These are not clients brought in by other realtors; they are strangers who are attracted by an ad in the newspaper or a sign in the yard. (Potential customers brought in by other real estate agents usually make an appointment with your listing agent and have a chance to give the house a full look-see.)

 

Your agent will tell you to make the house spic and span, put personal items and jewelry away and then get the heck out of there. She will bring a stack of flyers to hand out and a guest book for house-seekers to sign. That way, even if she doesn’t sell your house, she has the names of potential clients for other houses she has in inventory.

 

Category 3: Your own Open House.

 

This is much the same, only this time you have to handle everything yourself. Of course the cleaning, and uncluttering was your job anyway. Since you don’t have an agent to help you, you might ask a friend to come in and decide how to re-align your furniture, and maybe remove a chair or two to the garage to increase the spaciousness of your rooms. Some people go so far as to hire interior decorators to “dress” the house for sale. There is a television program on House and Garden Channel which actually does “room makeovers” with the precise idea in mind of selling the home, not making the family more comfortable. There is also a book or two out on this subject.

 

However, for the average homeowner, it is simply a matter of getting the newspapers off the coffee table, re-arranging and neatening your kitchen pantry shelves (this is the time to throw out all those moldy oldies) wash the windows, clean the draperies (or even buy new cheap curtains to brighten up the place), add flowers and all that stuff. You will have already done major fix-ups such as painting, wallpapering and repairing the roof in the months before the Open House (unless you have decided to sell the house “as is”).

 

You should then print up about 30 Open House Flyers. Attached to each flyer put a spec sheet with all the exact room measurements, size of acreage, and other relevant data. Keep one of these flyers by the telephone so that when people call and ask questions about taxes, the square footage of your kitchen, the nearest public school and so forth, you have a ready answer. This flyer should have you name, address and telephone number (and/or e-mail address) on it so that potential buyers can contact you if and when they decide this might be the house for them.

5 Myths of Real Estate Investing

invest

 

Misconception #1: You must have money in order to make money in real estate.

Truth

This is most likely the biggest myth of all. Most of the time it does “take money to make money,” but not always so in real estate. There are many creative ways to get around this common misconception. All it takes to succeed in real estate is careful research and lots of planning. The first thing I would recommend is to start reading as many books on the subject as possible.

 

Misconception #2: Stay away from big deals when starting out because they are too risky, stick to the small deals instead.

 

Truth

When starting out many people feel most comfortable starting small but there have been plenty of stories of big deal success, all it takes again is lots of careful planning and make sure you do your research. Don’t shy away from the big deals if they happen to come your way, you never know that one deal might set you up for life financially!

 

Misconception #3: Anyone can get rich “flipping” their way to success.

 

Truth

This approach has been compared to day trading in the stock market by some experts. With every transaction you take a risk with no guarantees of ever making a profit. Another thing to consider is if you are financing one hundred percent of the property cost, you will more than likely be paying a higher interest rate which means less profit for you. However, there are many good deals to be found which in the end can net you a nice profit even after paying a higher interest rate. Just make sure you do your homework first.

 

Misconception #4: You never have to be concerned when investing in real estate.

 

Truth

This statement is unfortunately far from the truth, especially now days. Just about everyone who invests money in one thing or another, be it real estate or stocks will be somewhat concerned about their investments. To help make confident investments and lessen the worry factor just make sure to use common sense and also do your homework before making a single move on a deal. A word of advice, don’t let worry keep you from going after potential opportunities.

 

Misconception #5: To make money in real estate takes a lot of time.

 

Truth

The truth is that some people do spend a lot of their time on real estate deals simply because this is all they do. One thing to keep in mind is that we all have the same 24 hours in our day, it is how each of us spends this time that will determine what we will individually accomplish in life. If you don’t think that you have the time it takes to invest in real estate then I challenge you to sit down and look closely at your schedule and how you are spending your time. Chance are you will find the extra time that you need. You could be giving up a fortune by just sleeping in an extra 30 minutes a day. That extra half an hour per day equals a full 15 hours per month!

Little-Known Real Estate Secret to Sell Your House Fast

real es

 

I recently saw a man wearing a “buy my home” sandwich board outside a local Internet café. He had photos of his house plastered on both sides of the board. As he handed flyers to passers-by, many of them stopped to view his walking billboard. It was one of the most clever real estate marketing strategies I have ever seen.

I have witnessed a lot of crazy ‘buy my home’ marketing schemes throughout my career as an investor. Recently, I boarded a charter bus and traveled to Las Vegas, Nevada. This wasn’t your typical gambling trip. Instead, it was a road show for investors and buyers to visit multiple homes for sale.

 

It’s rather surreal to pull up in the middle of a cul de sac and witness homeowners parading around in their front yard carrying picket signs and shouting, “Buy my home, buy my home.” These people work it too. They have their children manning lemonade stands and offering freshly baked cookies.

 

Homeowners are going to great lengths to sell their house fast. Some offer pairs of tickets to sporting events and concerts. Others are willing to leave their household furnishings, big screen TVs, and even their pets. As they say, desperate times call for desperate measures.

 

Are homeowners being forced to go to extremes in order to sell their house below market value? The answer depends on how desperate they are to sell their home.

 

Many sellers are willing to sell real estate under market value in order to obtain financial relief. Others have obtained short sale approval and need to sell their house fast or face foreclosure. Some sellers need to move immediately due to job transfers or aging parents who require additional care.

 

With the massive number of foreclosure houses many homeowners find they cannot sell their property. Between the housing slump, skyrocketing unemployment and credit crisis few people qualify for a mortgage loan. Those that do must possess a high FICO score and the financial means to produce a large down payment.

 

Every homeowner is painfully aware of the stiff competition in the real estate market. They realize they must either sell their house considerably under market value or possess valuable real estate that buyers are willing to pay full purchase price for.

 

One little known secret for selling a house fast is to seek out private real estate investors. Nearly every state has investor networks which can easily be found via the Internet or through realtors and real estate brokers.

 

Most private investors buy houses with cash. There is no need to enlist the services of a realtor; however, experts recommend hiring a real estate attorney to ensure legal documents and title transfers are properly executed. Selling house for cash expedites closing and saves both parties money in closing costs and escrow fees.

 

There is no need to walk around town advertising your home. Nor, should you have to endure a busload of people walking through your house. Instead, seek out credible real estate investors and leave the marketing antics to your neighbors.

Ron Lovett, Founder of Source Security (Halifax): Halifax Businessman Wins Olympic Entrepreneurial Gold

olympic

On February 12, when the Olympic Torch was lit and opening ceremonies were on their way, over one hundred Source Security protectors radiated across Surrey’s Holland Park, an Olympic Celebration site housing a 25,000 square foot entertainment tent and an Outdoor Concert Stage. The Halifax security company guaranteed protection to the tens of thousands of visitors, cultural performers, RCMP musical riders and big name musicians for the duration of the International Games.

Source Security and Vancouver Olympics

This was not Source’s first intimate connection with the Vancouver Olympics, as a band of mindful mediators and beefy brawn followed the entire Canadian lag of the Torch Relay, providing safety in caravan style. The success of winning the Surrey Celebration site contract came out of the company’s bid to supply security for the entire Olympic and Paralympic Games, a $122 million contract. Source Security’s proposal was purely strategic. “We always have punched high above the belt,” says Ron Lovett, founder, owner and president of the security company. He is very pleased they won the Surrey venue as their British Columbian offices had only been in the province for one year. “It shows that we have built a brand so quickly [out here],” he says.

Lovett’s Entrepreneurial Beginnings

So who is this man behind the ever-growing company now having offices in all four Atlantic provinces, BC and soon to be Ontario and Quebec? Like Bill Gates, Walt Disney and the gifted Google creators, Larry Page and Sergey Brin, Ron Lovett started his company in his early twenties. After high school, like most grads, he was initially pressured by society, guidance councillors and public bus advertisements to attend university. He realized true education comes from experience, thus leaving undergrad life and embarking on a world-wide soul-searching voyage. From Thailand to Morocco, Australia to South Africa and travel through various European and South American countries, he had the chance to observe and learn from security companies that outsourced bodyguards to nightclubs and bars. He realized this was an open niche area for him to enter once he got back to his hometown of Halifax.

His entrepreneurial spirit was reawakened. He tapped into the past where he was a newspaper boy for three routes at a time and operated his own haircutting business in his mother’s attic for $5 a cut. At the age of 16, he decided one day he wanted to work for himself. “I had three goals: I wanted to own a business, own real estate and have investments.”

What it Takes to be a Successful Businessperson

His youthful dreams are now a reality; besides Source Security, he owns real estate, IT and construction companies. His curriculum vitae also includes being decorated with several prestigious entrepreneurial awards and he is now a member of the International Young Presidents Organization.

His successes have not come easy, however. He says that risk taking, when starting and operating a business, is not optional. “If you’re not up for risks, you may as well get a regular job,” he adds. It has taken a lot of sacrifice. When he first started, he would often work at a Halifax nightclub until five in the morning, sleep a couple of hours, and then wake up again to perform operational duties.

Source Security’s Growth and Connection to the Community

Now that Source Security has exploded exponentially from three employees to its present day 1,500, and providing security at KISS and Paul McCartney concerts, not to mention personal service to Bill Clinton and Tiger Woods, the company is thriving. But Lovett still remains connected to birthplace Halifax. Source Security has donated funds to several organizations in the community including local hospitals, the Micmac Friendship Centre, local sports teams and the Big Buddy Program. Lovett himself volunteers as a Big Brother to children in Spryfield and is also a foster parent.

When asked where he sees himself in the next five to ten years, Lovett replies: “My goal is for [Source Security] to be the top national security company and to have offices all across the country.” In Lovett’s world, dreams are not made of pipe. It’s just a question of by what month in 2015 will Source Security span the entire nation?

Serious Games: The World of Professional Gaming

Gaming

How do you define “game”? Usually, a game is considered something fun, something that is not of importance but which one choses to do for amusement. Therefore, if you wanted to stress the seriousness of something, you would exclaim: “This is not a game!”. A game is also something that is opposed to work, something you do as a pastime.

Games and Money

Enter money. If games develop a large numbers of followers, there is a profit to be made. We know this from sports, which attract a huge number of fans and therefor sponsors. This leads to professionalization, the game enters a new dimension and suddenly becomes much more than a game to a lot of people. It can now even become a valid career option, evidently opposing the above definition of a game.

Magic: The Gathering

But could this happen outside the world of sports? It can, and it does. Chess, for example, is considered to be a kind of sport by a lot of people, is a game that has professionals. And it was only the beginning. The card game Magic: The Gathering was not only voted one of the top five mind games by Mensa in 1994, it has been so successful that to promote it, a Pro Tour with several tournaments is held every year, each tournament paying $40,000 to the winner and the overall annual prize payout of the company being several million dollars. Other card games have since followed, for example the World of Warcraft adaption that paid its world champion $100,000. That is more than most working people make in a whole year and so top players use their hobby as a means to finance their studies instead of spending money on it.

Poker and Virtual Gaming

An even better known example is tournament poker. Players can make millions, and even on the lower levels it can support a comfortable living. Computer games, too, have attracted a huge following, not only creating a whole business branch for their design but also being played at tournaments that, especially in some Asian countries like Korea, are even broadcasted on TV and thus include the whole machinery of fans, sponsors and merchandising. In the new wave of mass online games, people pay real money to purchase virtual bonuses that other players have achieved. The high demand for virtual gold in the World of Warcraft online game has created a business called gold farming. Workers are paid to play and then the gained in-game currency is traded for hard dollars via the Internet. This industry is worth billions of dollars but is a serious health risk to the hired players, many of them underage Chinese who play for 12 hours or more every day.

Why Professional Gaming Is Good for Business

For gaming companies, it remains crucial to advertise their games and the best way to do that is by giving every player the hope of fame and fortune, to make them before everybody else believe that they are not just playing a game and wasting their time but in fact have the chance to turn their hobby into their occupation and to become a professional. To create stars and pay them to be just that means is the best promotion they can wish for.

Of course, not all players aim for such a goal. Some even feel that this takes the fun out of gaming and thus are opposed to any commercialization apart from making their game available for purchase. But in a society that values entertainment as high as ours, it should be of no surprise that there can no longer be any clear distinction between gaming for fun and gaming as a career.