What are some of the questions one would ask cash buyers who are interested in purchasing property. Newbie :biggrin
Cash buyers to a property already found?
I would want proof of funds, and a non-refundable earnest money.
You need to know if they have the funds to close on the deals and not just other newbies or someone who is trying to double flip the property. They have much higher risk of not closing.
Ask them how many deals they have done, ask them questions about their last deal to find out if they are making it up. In the end however, it comes down to funding and their willingness to put some earnest money down. $1000 or so. I expect them to close within 2 weeks or less specially that it is a cash deal and no banks to go through.
If they tell me they want to hire an inspector, they are off my list. Investors don’t hire inspectors (unless we’re talking about foundation). They may get contractors to get estimates and such, but inspectors reports are useful for end buyers. If they want inspectors, then they are most likely new and not sure.
What is a foundation?
I don’t like boilerplate questions since they may not apply to everyone.
Are you dealing with investor buyers or retailing it to buyers directly? I assume investor buyers… I am also assuming you do not have the property under contract and building a buyerlist:
- What is the price range you are looking for?
a. Keep that in mind for the funding question
b. If they don’t have specific range, they are most likely newbies. Majority of established investors have a price range they work in - Which area of town?
- What type of properties?
a. Min rooms
b. Min sqft
c. Conditions - What is their exit strategy
a. If they do not know the term, they are very new
b. If they are landlords, and the payments on the purchase price/price range in first question above the average rent in your area then somehting not right… How do they plan on renting it? You care because they may not know what they are doing
c. I’m not going into every investing strategy but try to understand them - How are they going to fund it?
a. Majority of the time will be using Hard Money…
i. Do they have an arrangement with one? who is it?
ii. Will the price range fit in today’s market hard money params? they no longer lend on $30k houses for example…
b. Private money
i. Have they done deals with that private lender before?
ii. How reliable is he to go through with the deal?
c. Conventional
i. Huh? why conventional?
ii. Are they pre-approved? Did the mortgage broker pull their credit and verify their income and all or just unstated touchy feely type of pre-approval
iii. I want more cash upfront on the property - How long do they need to close?
a. If they are using private money, hard money, or cash then they shouldn’t need more than 2-3 weeks really… if they want longer, then I would be concerned and I would want more cash upfront in the form of earnest money on the property they want to tie down
b. If they are going conventional, they will need 4-6 weeks to close, if they say shorter than that, then something is not right - What do they need to know or what process do they have to review any property you find to decide if they want it or not?
The main idea is to prescreen them to know who is serious and who is not. Who can close and who cannot.
Hope this helps
But be care full with your proofs.