Very nice home. Desirable area. Appraised at $357K, but that is probably a little high, as you will see.
Been on market for six months at $339K. No takers.
Seller getting desperate. Will take $305K, which is what is owed.
I am thinking that someone out there will buy this house for $310K or $315K. It’s a nice house.
Option agreement, then market on my own?
My first thoughts are:
What is the True CMA of this property?..closed prices & market times.
Being listed with the wrong realtor could be a problem…ie over priced, no marketing, no co-op, etc…
…now, to answer your question, with a few questions.
Yes, there are several ways to make some money. Easiest is wholesaling it…put it under contract and get an assignment fee to an end buyer.
Now for the questions:
If you answered the above questions:
Priced right, and you market it better than the agent?
Can you handle the closing and holding costs if you need to close?
Do you have a buyers list?
You are on the right track, this is not to discurage, you just need to really know the deal then put it in action.
Best of luck, happy investing.
Dave
I have not done a full CMA, but I live in the immediate area and know that this house should sell very quickly for $310K to $315K.
The market here is slightly soft, so I think $339K might be a little high. There is no way the house is worth $357K, and I never trust an appraisal that is done for financing purposes, anyway (unless I’m the one borrowing the money, of course!).
However, at $310K, this one should sell fast. It’s a nice home in a great location.
I am apprehensive to put a contract on it because I do not want to go to closing, and I am somewhat opposed to going into contracts knowing that, if I can’t assign them, I won’t close on them by using an escape clause. That is why I thought about an option, although I know for a seller an “option” does not seem like the same amount of relief as a contract.
Thanks for the feedback.
If it will only sell for $310-$315 and the seller wants $305 it’s not a deal. Where’s the profit after closing costs and realtor commissions since he has it listed?
I would assign the contract to the end buyer, keeping $5-10K as my profit. There is no commission as the listing burns off today. At that price, I would expect buyer to pay closing.
Okay, let’s assume that the sellers will take an option on the property. One of the original questions posed to you is can you market the property better/faster than the realtor did/can, especially if the seller’s drop their price any on the list? In other words, do you have buyers’ lined up?
As to making money, you still don’t know what it’s really worth. It’s NOT worth $357K and it will sale FAST at $315K. Somewhere in the middle SHOULD be FMV. However, it’s been listed at $340K and didn’t sale. Now, that could be because of bad marketing, but was it, or was the property overpriced, or something else altogether? Hard to say if you can make money on it if you’re not reasonably sure of it’s value.
Don’t know your market, but here, it’s VERY common for the buyer’s to include closing costs into the offer. On a $315K price, that could be 8-10K. If so, no profit for you.
If it could sell FAST for $320-330K, then you may have some $$$ IF, again, IF, you can find a buyer quicker than the seller.
Raj
You could easily find an investor who would be interested in a short sale. They would pay you atleast a couple grand. But, this depends on the lender. Ask the owner to talk to lender and see if they are in a good position for a short sale.