hey guys, there’s a few listings which are going to sheriff sale in a few weeks. i’m tempted to offer jsut what is owed on the property, but the fact there’s a realtor involved might complicate things.
for example there’s a property listed for $359k and the judgement is for $243k. i’d like to offer the $243 or maybe a little more. i believe the realtor has to be paid their commision so what’s a work around (if any?). if i add the 6% on top of the judgement amount, it can still be a great deal.
It’s great that you know all the info, that helps in determining if you should make an offer. However, I’ve always felt you should stick with a formula (whatever it is, whatever your exit strategy) to tell you the max price you will pay. You know they are motivated, you don’t know how low they will go, so you need to operate with an offer that works for you.
too often, us noobs see numbers like 359,000 and 243,000 - that’s a $116,000…OH MY GOD…that’s a deal no matter what i do with it!
but investors always have their exit strategy in place before investing in anything. your exit strategy, or goal of purchase in any investment will allow you to maximize your outcomes.
the problem is, most noob investors do not understand the numbers involved in evaluating their own exit strategy or they do not have the resources or enough information on a project/investment to warrant definitive results.
lets say you bought this property for 250,000…and you put down 10,000, you then need to get a 240k mortgage…
with 1. no clear exit strategy, 2. minimal resources (such as contacts and other experienced individuals helping you), 3. little cash for operations (managing the project), and 4. some “fuzzy” numbers based on half-ass comps -
your risk ratio would be HIGH based on these 4 pillars of investing.
how?
well let’s suppose that each of these categories represents 25% of a risk factor of 100%. being a noob - you’re 100%. each pillar that you improve on - lowers that 25%. so if for example you came up with better, rock solid numbers - you’d lower that factor to 75%, improvement on 2 - 50% and so on.
the purpose of this post i guess was to address the issue of having a realtor involved. i doubt my offer would be enough to pay the comission of the agent. would that cause a problem? how could they accept that even if they wanted to by not being able to pay the comission? i’m just trying to find out how i can get my MAO to be accepted so that a realtor won’t complicate things.
If you make your offer through the listing agent so no other agent is involved, they may be willing to reduce their commission so it works for the seller. Not all agents will do this, but you never know until you try.