Help - realtor called me from my flyer to seller - Posted by Matt MI

Posted by John (Rome) on June 30, 2003 at 04:07:24:

JB - just curious - today what % of L/O’s do you do on all your deals respect to - let’s say - 2 years ago?

Cheers.

J.

Help - realtor called me from my flyer to seller - Posted by Matt MI

Posted by Matt MI on June 29, 2003 at 09:55:45:

I’ve been doing flyers/letters to find motivated
sellers. Now, a realtor has called me back (she
is calling for the seller)
I am interested in doing a L/O on the property.

Any advice on dealing with the realtor? I know this
is very difficult. She wants to know what I have in
mind…

I would like to work directly with the seller, so I
can find out all of the details - amount owed, monthly
payments, etc. - so that I could try to work my first
deal - but my guess is that it will be difficult with
the realtor in the middle.

I’m also guessing this home may be about to expire in the
RE listings…it’s been about 5 weeks since I sent out the note.

I’m thinking of trying to push to talk directly to the owner when I call the realtor back (I only have the owner’s address - and it may be empty now - and only have the RE agents cell phone)

Any advice would be appreicated. I have learned a huge
amount on CREO. Thanks.

Matt in Mich

Thanks all *** - Posted by Matt in Mich

Posted by Matt in Mich on June 30, 2003 at 11:15:55:

Thanks all. Some good info here from some of you.

Matt in Michigan

Thanks - for the input - Posted by Matt Mich

Posted by Matt Mich on June 30, 2003 at 10:37:59:

Thanks for the input. Amazing the discussion that you can produce here. I was wrong about DOSC, but I learned this, which I believe is the reason for the existence of this site.

I will talk to the realtor, but if there is a problem, I’m moving on to the next deal.

I’m new at this, but don’t plan to be long. Thanks.
Matt in Michigan

Re: Help - Don’t assume *ss-u-me - Posted by shane AMP

Posted by shane AMP on June 29, 2003 at 21:43:35:

I am sure everyone know what happens when you assume. Matt ask the questions that need to be asked. Why are you calling me as opposed to the sell? What is in it for you? What we’re you hoping I could do for you? You get what I’m saying. Remember, “it’s not what you say, it’s how you say it”

Unconditional release from listing… - Posted by Paul

Posted by Paul on June 29, 2003 at 17:32:32:

Talk to seller direct and show them how to save paying a real estate agent anything by doing business with you. Have them ask the agent and broker(if necessary) to release them from the listing agreement. They just may…
Paul

Re: Help - realtor called me from my flyer - Posted by Greg - Syr

Posted by Greg - Syr on June 29, 2003 at 17:06:36:

Convince the REALTOR and he/she will convince the seller.

If you can sell your idea to the REALTOR (like Ed, who the sellers trust) and that realtor can see how he/she can get paid, have a listing sold, and satisfy his/her sellers all at the same time then thats the person you need to work with.

Greg

Re: So, the Realtor called you - Posted by Ed Copp

Posted by Ed Copp on June 29, 2003 at 15:39:53:

and that triggered a seemingly endless discussion about the due on sale clause. Go figure.

There is a reason that the Realtor called you. The reason is that the seller asked the Realtor to call. The seller wants some professional help, and is willing to pay for it. So what’s the problem? Deal with the Realtor. Give it your best shot, and the Realtor will do thier best to get a deal to happen (that’s when they get paid you know).

Now you might ask yourself why the seller did not call you in the first place. It just might be that your meterials did not convince the seller that you are a pro. Could be that your meterials are not clear. I have not seen your meterial so it is hard to say, but it seems that the seller trusts the Realtor, more than you at this point. So go with the Realtor, that is where a deal can be made to happen.
“My guess is that it would be difficult with the Realtor in the middle”, is just plain garbage. You are wrong here. The realtor is in the business of getting proerty sold. The main difficulty may lie in attempting to do something that you have not done before, and are unclear on just how to get done. The Realtor can get all the info that you seek, and probably can get it easier than you can. The seller trusts the Realtor, so use that fact to your advantge.

Re: Help - realtor called me - Posted by Andy Light

Posted by Andy Light on June 29, 2003 at 10:44:14:

Realtors don’t like to think outside the box. I am a realtor and I know I would NEVER advise a client to sell their home subject 2. And me as an investor I would never buy with a lease option. (not enough control)

Realtors are trained in conventional realestate. They are told violating the due on sale clause is illegal and in the state of michigan they “can” lose their lic. My broker told me NEVER buy subject to and since he is my boss I listen to him. (I don’t want to upset him)

What I would do is either purchase the prop outright or pay the realtor $500 for marketing expenses and ask them to walk away.

Andy

Where in michigan are you?

looking at doing a L/O if they are open to it - Posted by Matt in Mich

Posted by Matt in Mich on June 29, 2003 at 11:41:22:

Andy,
I’m in the NW suburbs of Detroit - Novi area.

I disagree on the Lease Option issue. That’s how I plan
to control my first properties, and I have talked to
a lot of people here and at other sites who have been very successful this way with L/Os.

L/Os don’t violate DOS, so this wouldn’t be an issue for me.

My guess is that if they are about to have an expired listing, they would be open to receiving a future
amount - say $ 1000 to $ 2000 - if the property is ultimately sold when the option is excercised, but I guess this would depend.

A possible $ 1000-2000 in a year sounds better to me than a sure zero - but who knows…

Where are you in Michigan? I do appreciate the reply
Andy - and would be interested in what anyone else thinks. This could be a deal - we’ll see. Thanks,

Matt in Mich

Re: looking at doing a L/O if they are open to it - Posted by JohnBoy

Posted by JohnBoy on June 29, 2003 at 11:46:24:

L/Os don’t violate DOS, so this wouldn’t be an issue for me.

Nope! L/O’s DO violate the DOSC. Any lease containg an option to buy violates the DOSC.

L/O violating DOS clause - Bronchick others? - Posted by Matt in Mich

Posted by Matt in Mich on June 29, 2003 at 12:25:26:

Johnboy, thanks for the response. From reading here on CREO, I think I may have opened up a hornet’s nest
on this topic - which was not my intention.

I have the Bronchick L/O course, and I have never heard
this before - that L/Os violate DOS (until excercised, of course - but not during the lease term - which is what I’m talking about - since the seller still retains ownership to the property during the lease period)

Maybe my original post was a little confusing, sorry if that is so.

JohnBoy - you mainly like sub2’s correct?

Thanks,
Matt in Mich

Bronchick VS. Reed - Posted by Gary (WA)

Posted by Gary (WA) on June 29, 2003 at 20:20:00:

I got this from a thread way below, enjoy.

I read Reed’s input first.

Re: L/O violating DOS clause - Bronchick others? - Posted by William Bronchick

Posted by William Bronchick on June 29, 2003 at 16:05:45:

Actually my Lease/Option course DOES say that ANY L/O of ANY term triggers the due on sale. But, being unrecorded, the chances of the lender finding out (or caring, for that matter), is slim to none. And, most people you talk with at a bank wouldn’t even know that a lease/option triggers the DOS, so it isn’t likely to sound off any alarms if they do find out.

it’s in Bronchick’s Land Trust course! - Posted by gerald(tx)

Posted by gerald(tx) on June 29, 2003 at 15:59:54:

It does violate the DOS – but in reality, how many times is DOS invoked as long as the payments are current? Almost never! The mortgage cos don’t care if Mickey Mouse is making the payments, as long as the payments are there on time.

My 2c.

Re: L/O violating DOS clause - Bronchick others? - Posted by JohnBoy

Posted by JohnBoy on June 29, 2003 at 14:00:36:

Until exercised? That makes absolutely no sense at all. Once an option is exercised then the lender would get paid off and the DOSC would be moot.

ANY lease that contains an option to buy violates the DOSC, period. This does not apply only unless the option is exercised. It applies during the lease and option period.

So if you enter into ANY lease, containing an option to buy, that violates the DOSC from the time the lease containing the option is entered into.

ANY type of agreement that allows a transfer at a future date, violates the DOSC. Whether it be deeding the property over as is buying subject to the existing mortgage, or a contract for deed, or a bond for deed, or a lease containing an option to buy, or a lease of longer than 3 years, etc. ALL of these violate the DOSC.

A lease of 3 years or less, that does NOT contain an option to buy, does not violate the DOSC.

So you can give a LEASE of 1, 2 or 3 years NOT containing an option to buy. This does not violate the DOSC. But if the lease contains an option to buy, then that DOES violate the DOSC. It violates the DOSC from the minute you enter into the lease/option agreement. NOT unless the option is exercised.

Re: L/O violating DOS clause - Bronchick others? - Posted by B.L.Renfrow

Posted by B.L.Renfrow on June 29, 2003 at 13:09:42:

Of course it does. Go read any standard mortgage document. It will say something to the effect of a lease of less than 36 months does not violate DOS, but ANY lease longer than that or any option to purchase does.

I’m pretty sure I remember Bronchick mentioning this in his L/O course…which I have, but I don’t have time now to go pull it out and read it.

Of course, it doesn’t mean that the deal can’t be done, but this isn’t even a questionable issue – it’s black and white.

Brian (NY)

Mea Culpa - thanks Bill - Posted by Matt Mich

Posted by Matt Mich on June 30, 2003 at 10:31:23:

Bill, thanks for clarifying. Since I followed your
good advice, and will do this through an LLC, I am not going to worry about the DOSC, just as you have said
here.

Thanks for clarifying.

Matt in Mich

Re: L/O violating DOS clause - Bronchick others? - Posted by jorge

Posted by jorge on June 29, 2003 at 22:20:54:

You are in Denver right? I am a beginning Investor here in NM and I am going to be moving to back to Denver. I will be needing to buy a house out there. I don’t have much cash. So I was wondering if you might have something that you might be able to do owner financing with no down or spread the down out in 3 payments over 12 to 24 months.

Sorry for getting off subject. I just saw your name and thought I would reply here…:slight_smile:

Thanks

Jorge

Re: L/O violating DOS clause - Bronchick others? - Posted by John (Rome)

Posted by John (Rome) on June 29, 2003 at 15:06:31:

how many times in your experience has a bank actually invoked the dosc if the loan is current? Also having 2 separate documents (option not recorded) should help…or have matters changed?