Here’s what I know.
1st Mortgage - 160,000
Monthly payment - 1400
Tax Appraisal - 257,000
Asking - 210,000 (down from 240,000)
Comps - 270,000
Repairs needed - None
Seller is willing to do some owner financing.
Reason for sell - She is building a new custom built home that will be ready in August. She is impatient to get out of this one. Said can move out tomorrow if I need her to.
What would you do? I’ve talked to her on the phone twice and am meeting her at the house Wednesday morning.
Kristi,
What do you want to do with this?
Are you only in the wholesale mode?
Would you want to keep it?
How did the seller come up with 210k?
What are her plans if it doesn’t sell?
Will she build the new home anyway and rent it out?
What’s the interest rate on the first? ($1,400 seems low, low rate or taxes messed up?)
Are the comps good?
What’s the market like for that price range?
Does she need all the cash now to get into the new home?
Or is it just a want?
Can you buy it if you need to and sell later?
August is a long way away, can you option the property and sell it?
What discussions did you have regarding owner financing?
Exit strategies, in my opinion, can only be formulated after gathering a ton of info. The primary info is uncovering needs versus wants. The secondary info is your personal situation and goals and analyzing potential exits based on that. In other words, once you know the needs, then you determine potential strategies by meshing the needs with your goals and resources. Add to that the awareness of “worst case scenario” and you’ve got something.
Sorry for not being helpful, but there’s much more to “making offers” than meets the eye when dealing directly with sellers. If you’re just out making shotgun offers, then yes, the additional info is not as important.
It’s been my experience that cash or some certain number is NEVER as important to a seller as knowing their core problem is resolved, they can get what they need, and they like you. On several occasions I’ve had sellers turn down offers for significantly higher amounts because the seller and I happened to hit it off. Perhaps it was on those appointments where I was smart enough to keep my big mouth shut so it appeared I was a good listener… :zzz
Kristi,
It is also VERY important to drive the comps. I’m assuming you got them from your realtor.
You’ll learn a lot by driving the comps. For one, you’ll quickly learn if your agent knows how to pull comps.
I’ve had agents pull comps for me that were on the opposite side of town from the subject property. :doh
I’ve seen agents try to use properties that were on slab for a comp when the subject property was pier and beem. Obviously, that’s not a comp. :flush
Be sure to do your homework.
Thanks guys. I’m going to get more info from the seller tomorrow. I’m thinking, even once I get more info, I’m still going to totally low ball the offer or just option it because the 0’s scare me too!!! :eyes
Thanks for all the good input.
Kristi
It’s been said that if you’re offer doesn’t embarrass you when you make it, then you offered too much. :oops:
There’s a lot of truth to that.
Good Luck,
Stacy
How does one go about gathering COMPS ? What is the best way to get them ?
Hello Joem:
Several methods are available to get comps. The easy way is to ask realtor for sold properties in area and also what is currently for sale too. You want to check your asking price vrs selling price. Driving the neighborhood and just writing down numbers on signs is also a good way if you do not have a friendly realtor. You can ask neighbors who love to talk about their house and the deal they got. There are several on line companies that will give you a value on your home too. Realtor.com is one that comes to mind. Getting the tax appraisals for a bunch of the houses in the area will also help. Sunday’s newspaper may be a source as well as the re mags at the grocery store. I hope I have helped a little.
Thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737
512-301-9171