Posted by Big Steve- Ga on September 21, 2003 at 21:30:11:
Hey guys
Easy on the gurus you might be one in the near future! Salesmanship is the key here but you also have to solve the problem. The seller is giving you an objection and now you have to overcome that objection by solving the problem. Do you think the seller is going to ask a realestate agent to provide proof of funds before they lock up his property for 3 or 6 months? I don’t see it happening, but they do it every day. You could do a first right of refusal in the contract. This way if the seller gets a better offer you are in the position to still close the deal if the numbers are still right at the higher purchase price or let the high offer close. sounds like a win win deal to me,if the seller gets a better offer he can still sell his home, if you find someone to flip it to you make some cash! Just make sure you find that buyer before he does. Everyone likes something for free,so show it to them in numbers. A realtor is going to charge you approx 10,000 to 14,000 to sell your home I/we are giving you the same service and are not going to charge you one penny to do it!
Buyer ask for my purchase price - Posted by life-is-great
Posted by life-is-great on September 19, 2003 at 17:26:14:
Hi,
Without getting into too much details. I ran into two situations in my recent potential all cash offer flipping deal–seller asks for evidence of my pre-approved financing before he is willing to sign contract, he wants me to show I am serious because the previous buyer tied up his property for 30 days. Should I walk away from this deal? FMv $250K, neogiated price $200K. Also, the potential ask how much was my purchase price, how do you handle these?
Re: Buyer ask for my purchase price - Posted by Robert Staats
Posted by Robert Staats on September 20, 2003 at 09:32:30:
A seller asking for proof of funds is not uncommon, especially if he was burned before. Despite all your salesmanship if he still demands such, you may need to get a mortgage broker to prepare a letter for the seller attesting to your ability to get financing (which the broker would do after reviewing your financial condition of course). You can always not get the financing and instead do the flip after you’ve siogned the deal.
Re. your buyer asking your purchase price, you are under no obligation to tell him/her (of course keep your salesman’s hat on and be tactful).
Re: Buyer ask for my purchase price - Posted by life-is-great
Posted by life-is-great on September 20, 2003 at 15:50:57:
Hi Robert,
But I heard so many flipping deals done by folks who didn’t have to get a pre-approval from mortgage broker, and managed to get the seller signing contract. Would it be common sense for seller to inquire such prove regardless of how motivating they are? Even in seller financing case, why wouldn’t it make practical sense for seller to ask for proof of ability in making monthly payment? Especially in my area where median home price comes in $450K plus. None of these were mentioned in any guru material I’ve read so far.
One additional thought - your offer/contract with the seller could allow him to shop your deal, and cancel it prior to close if he signed a better one (defined/documented of course). That way he would not actually be tying up his property with you alone, and would give him some comfort. In reality, he may not shop it very hard unless your close drags out. This could be a win-win for both of you. Your risk of course is that he actually does sell it to someone else in the meantime - so you would have to add a related contingency in the contract with your buyer, and of course try to close as fast as possible.
Sure you don’t necessarily need proof of funds to buy property. But it depends a bit on your selling skills, coupled with the seller’s motivation level. In your case it sounds like the seller is fairly motivated (good)t not quite enough to oversome his being burned before (not so good unless you can talk him out of it). If the seller is insistent and you cannot obtain proof of funds, then you may just have to keep looking for a more motivated seller. That’s the fine print the gurus somehow gloss over.
Re: Buyer ask for my purchase price - Posted by Lily Henderson
Posted by Lily Henderson on September 20, 2003 at 21:38:07:
Robert,
You are right, and I wonder why gurus don’t cover that topic. Is it too much challenge to solve that? It makes so much practical sense for the seller to ask for pre-approval, yet most gurus makes the structures sound so easy. A seller who is in desaprate situation facing foreclosure, who needs to sell house in a hurry can’t afford NOT to ask for buyer’s prove. Even if he doesn’t ask, his broker would. I know if I were to sell a house, I would ask because I want a willing, able buyer who doesn’t waste my time. If his only promise is the purchase agreement (which has many escape clauses) and his word, I wouldn’t put my faith into it.
You’re right. But the gurus, if pressed, will likely acknowledge this, and add that this is to some degree a numbers game. With enough calls and offers, you will eventually find a seller who is either motivated enough and/or naive enough not to require proof of funds. Without credit or cash the game is tougher - not impossible, but just much tougher - requires more persistence and a bit of salesmanship.
There is another alternative, though, which I’ll post to covariance3’s note above.