Question: What would I tell a motivated seller that has their property listed with an agent?
Let the seller know you are a buyer and that you do not circumvent contracts (to do so is known as Tortious Interference and it is illegal) that the agent can facilitate the transaction and as a professional he has listed the property to help you get to the settlement table, use state and local forms and disclosures and will screen you from rip-off artist and dishonest wholesales from taking advantage of you. You have an agreement with the agent and should honor it.
Talk to the agent – ask questions – read the listing – do your comps – understand what you want to accomplish:
- How long has it been listed (the longest on the market the more motivated the seller)?
- How many times has the listed price been reduced (gives an idea of motivation)?
- The balance of the mortgage, interest rate and terms and the amount of the mortgage payments (helps to determine the equity)?
- Vacant/occupied – by whom – rental – lease – how long?
- Who is on the deed – can you buy part interest in the building?
- Code violations – back on taxes or other liens?
- What repairs necessary immediately – estimated cost?
- How much will the seller contribute to the buyer at settlement?
- Has the seller been cooperative – reasonable – easy to show?
- Current or back in payments (how long and how much)?
- Why hasn’t the property sold (over-priced – seller not cooperative – area – condition – ALL
PROPERTIES SELL AT THE RIGHT PRICE!)?
- Why is the property on the market (need for cash, moved – down-sizing – family)
- Has it been previously listed – how much and for how long – why didn’t it sell?
- Will the seller consider – lease with option with possession – seller take back – a delayed settlement – 1031 exchange – joint venture with hybrid auction marketing?
- Days on the market?
- Always read the remark section of the listing?
- Ask the agent for some inside information (off the record) about the property?
- You want some fast cash flow (you have the skills and expertise in assignments).
- You want to Buy and Hold.
- You only want to assign your contract (assuming you have the skills to control the property).
- You know exactly how much you might make on the transaction because you understand that local market – the comps help and your gut says GO FOR IT!
- You want to do an Auction Flip (the absolute fastest way to to get a bundle of cash – provided you have the skill to pull it off – cash in hand within 7 weeks – as is- all cash and no contingencies).
- Use a Skinny easy to understand contract offer with full profit disclosures.
- Have you Assignment Agreement in order.
- Do a “Bring to Date” title and lien report.
- Start your marketing immediately.
- Always ask the seller if they have any other properties for sale.
- Always ask ….”Is that the best you can do?” (never stop negotiating – ask for buyer incentives – the furniture, car in the garage, money back at settlement, possession – delayed settlement – subject to existing financing – offer a hybrid arrangement, financing secured by other property, no interest mortgage – split note financing – re-fi for take over/assumption).
- Always consider second stage negotiations for a price reduction (give good reasons – exposed repairs after inspection – other issues found).
- Use safety contingent clauses in the event 3rd party assignee is not located.
- Since you are doing your due diligence this target building – you should look for an expired listing in the area and make offers on them also. You are going to buy one – why not two?
Always be ready to W A L K from the deal if your nemesis is pushing too hard! There are just too many deals out there to be pushed too hard!
When getting all this intel – you will be in a better position to control real estate at a great profit and will be able to make large sums of money all the time.