Posted by Kristine-CA on July 02, 2007 at 14:58:58:
Hi IB. I understand your frustration with having to submit an offer in a
formal way to an attorney’s office. However not all administrator’s
have the right to just accept an offer. Some have limited powers.
Some props have to be sold out of court to pay debts. Also, I meet a
lot of executors and admins who don’t understand what they are
doing.
Some administrators will do whatever their attorney says, even if they
prefer to make a deal with you on their own. So it’s not always the
attorney killing the deal–it’s the personality of the administrator. It
could have been their spouse or sibling…or whoever puts doubt in
their mind.
I got calls from 2 adminstrators last week. Both had listed properties
and gave me details regarding the estatea and the property. We talked
price. They begged me to call their agent and make an offer–make
any offer they said. I called one agent and he was really confused. The
property is in escrow with funding in place–the only thing holding up
the deal is the court order. He couldn’t believe the admin had called
me. What were they thinking? I called the other agent on the other
deal and I couldn’t believe it…the property was also in escrow. To
make the week even better, I got one more call…again an estate with a
listed property. When I look up the property. It’s not there. They
accepted an offer that same day. Sigh.
In answer to your question about the MLS. Some of my competitors do
nothing but wholesale off the MLS. Some rehabbers just don’t do the
work of getting a better deal (for example making lowball offers on the
mls). They leave that to wholesalers. Many rehabbers where I am are
volume operations and they are busy with crews. And some are pretty
unorganized. If they get a call with a number that fits their formula
they’ll take it.
Don’t lose hope on your offer yet. You really have no way of knowing if
there are other offers, etc. Yours may be the only on. Kristine
I just started flipping properties and I’ve got 2 deals going here. (Talk about begnners’ luck!) A few questions here as I don’t want to lose either deal:
I’m thinking I should present a formal “offer” or “agreement” sheet to the seller to sign. Or do I only need to present the contract?
Should my contract state ONLY my purchase price or should I combine the purchase price + my assignment fee for putting the deal together?
Conerning the ‘Assignment of Contract’ form, should it state my assignment fee + earnest money fee, or, assignment fee only and simply tell the rehabber, “That’ll be $500.00(or whatever)earnest money up front to seal the deal,Mr. Rehabber?” Furthermore, should I collect both amounts from the rehabber up front or only the earnest money now,and my assignment fee at closing? Which is better or more standard?
Just trying to get these amounts and when to collect 'n all in line and not blunder. Sorry to be so wordy, but this site and everyone’s contributions have been so helpful in the past - especially bringing me to this point.
First do you really have a ‘deal’ or just a motivated seller of a property with no equity or where the numbers (purch. price, renovation costs, etc.) don’t work. There’s plenty of the latter out there so know which one you have. Please post the numbers so we can see what you got.
Forget playing games like submitting ‘formal offers’. Talk to the seller and come up with a price that makes both of you happy (and that allows you to make a few dollars). Verbally reach an agreement and get them to sign the contract.
Your contract to buy the property should only mention your purchase price.
Your assignment contract should state the purchase price of the contract, your assignment fee AND what you require for an earnest money deposit. make sure your AC states that the contract is NOT in effect until you receive the EMD.
Posted by Kristine-CA on June 30, 2007 at 10:27:21:
Hi IB. Interesting that you should advise forgetting the formal offer
routine. I have never made a formal offer. Either we have a price and I
write a contract or we don’t. That is why it is hard to work with listed
properties because agents have systems in place to make paper go
back and forth when the seller and buyer are not on the same page at
all.
That being said, I am finding that agents are a lot easier work with
these days, now that we have so much on the market. I find that they
are presenting my verbal offers and getting back to me most of the
time. Of course I make offers on a listings for which there is no
interest and zero other offers…Kristine
Hi Kristine. I agree with you on written offers and only submit them when the seller has a ‘representative’ who they insist I deal with. I guess it makes them more comfortable. But my point to the original poster was that the formality is not necessary when you’re dealing directly with the seller (as you obviously know).
Interstingly, about 2 mos. ago I was dealing with a seller, the admin. of an estate who lived in GA. She and I had a nice conversation on the phone and I was able to establish rapport. But then I called her maybe a couple of weeks later as a follow up (she stated in our 1st convo. that she would soon be traveling up here and would like to meet me) and she wasn’t as ‘warm’. Still nice but not as if we were just vibing weeks before. The next thing I know I get a call from her attorney looking for me to submit an offer in writing along with other written offers that are allegedly coming in.
Now it’s all about the price and has nothing to do with my personality or ability to empahize and sympathize with the seller’s problems. Oh well. So far, I’m the highest bidder. I suspect that the offers are all from wholesalers like myself and not from rehabbers willing to pay more (I rehab but not in the areas in which the property is located).