I advertised looking for houses, need house before jan1st 2013, well someone replied say her husband is sick therefore they must sell their 2 bd 1 bath 900 sq ft lake area cottage,she said that she rents all year round, how do I RESPOND TO HER, SHE SOUNDS MOTIIVATED…She is a for sale by owner, house is 45 miles away from me. She wants $130.000 any suggestions help me make my first purchase…
What do you want to know?
Ok palmquist here goes. I have a potential lead from one of my ads… a lady replied to me to fond out if I’m interested in buying her lakefront property as a lease. 2 bedroom 1 bath nestled near a large tree in the woods… proplem is don’t have much money butwant to place it under contract and do a 3 year lease with option to buy. She says that it rents throughout the year. I wont have a problem renting it.
LOL :biggrin
So, we’re goin’ with the 'no money whatsoever route, correct?
OK. Before I go further, the fact is there’s a ton of approaches, and they each depend on what the seller tells us that she wants vs. what she needs, and most importantly what the comps show.
I’m gonna list a bunch of questions you might consider asking. I do as much probing as I think I need to in order to come up with something the seller can accept. Of course I start at the bottom of my ladder, and force the seller to make me buy at a bargain.
But if I start at the price I want, I can only go up. That’s no good.
The seller needs to feel satisfaction in the negotiations, so that they’ll actually close at the price you need. So, I start in the basement and move up.
I’m not at all concerned about the seller being insulted. They must be forced to ‘work’ for the deal (and you, too), in order to cement the final numbers in everyone’s heart and head.
That all said: She’s already expressed interest in a lease/option. That means she’s open to something beside a straight sale.
Is she interested in this, because nobody will make an offer; she’s experienced one, or more, failed escrows, or what? Maybe she knows that l/o’s are the way to get over-retail, and you happen to be the next sucker she’s called?
Meantime, your goal is to give her what she wants and take the rest (if the deal makes sense). If she wants $130,000, then offer her that, in 3 years. She wants money up front? Ask how much. If you can get this, plus enough to cover your assignment fee, you agree. If not, you continue negotiating. Meantime again, try to give her what she wants. If you can harness your trust and credibility hormones, she won’t need money to feel ‘secure’ about the deal. In the end, you get the money the seller wants, if any, from your new tenant/buyer.
I would do an assignment on this deal, from how you’ve described this deal so far.
Collect your assignment fee, and put a tenant buyer in the house. I don’t offer seller’s money in these deal. Me working to get them a buyer is enough compensation (including the interim involvement in getting the buyer financed, etc.). So, in this case, forget giving the seller any money. You’re solving her overhead problem and providing her with a buyer that she can’t seem to find, besides you, on Craigslist, at full retail.
The question I still have, “Is a 2/1 Hobbit house on the lake attractive enough to anyone to give you enough money to make it worth your time?”
As an aside, one way to induce the seller into letting you take ‘all’ the money down, as an assignment fee, is that you’ll babysit the tenant buyer all the way to getting new financing, including monitoring payments. You’ll set up a note servicing account with notecollection.com and everyone will know where/when the payments have been made. And you’ll put the tenant/buyer in touch with a mortgage broker and begin looking to get a new loan.
You’ll get all your money up front in return for facilitating the transaction over say three years, or whatever time frame to which you agree.
Here’s some things I assume you’re doing, will do, or have done, in no particular order:
You’ve asked a lot of questions of the seller so that there’s no surprises, or hiccups in your negotiations, or after you’ve signed on.
You know what she needs vs. what she wants.
You know her timeline.
You know what her price expectations are.
You know if she’s delirious, or not.
You know what the sales activity has been around the lake for similar 2/1’s.
You’ve seen the 2/1 to figure out if it’s an uninhabitable hell-hole, or not.
You’ve studied the rental rates for long and short terms to know what to expect as far as actual lease/option rates and terms.
You have your lease/option contracts with you, when you meet the seller the first and every time.
You’ve checked the title to make sure it’s clean, before you close on the paperwork.
You asked why she’s interested in a lease/option in the first place.
You develop a clear idea of how to go forward, based on the answers the seller gives you.
You make an offer based on the real numbers.
You’ve given the seller what she ‘has’ to have and taken everything else.
You explained just exactly what she would receive if she sold her house conventionally through an agent.
You move forward.
So, why does she “really” want to sell?
I would get the house under contract and flip the contract to an investor.
I agree with Bluemoon. Better do it that way to be on the safest side. Good luck!
I am so happy for you. This seller sounds very motivated and apparently, liked your business ad. I think that there is two ways to go about selling her home. First you could contact a realtor and have them sell it for you and split the commission with them or second, you could put the house under contract and and flip the contact to a real estate investor. Best of Luck