Posted by Baltimore BirdDog on January 29, 1999 at 10:48:34:
Good point, but I was assuming that he’d be able to knock the Realtor’s commission off the price if he went directly to the Seller. My fault. I should have been more clear.
-Jeremy
Here’s an interesting situation… - Posted by John (KS)
Posted by John (KS) on January 26, 1999 at 22:42:11:
I am in a situation and don’t know what to do, help me please.
2 weeks ago I ran across an abandoned property in a great neighborhood, $80-120K homes. This was probably the first one on the block, it is probably 20-30 years old. You can tell by the outside, it needs work. I “think” I tracked down the correct “Sid Seller” (same name could be different guy), but couldn’t find a phone number, so TODAY I put a letter in the mail introducing myself as a possible interested buyer asking if he would be interested in selling if he is indeed the owner. (For flipping purposes)
I am taking the Principles of Real Estate Course to prepare for the licensing exam. During break our instructor was giving us a tour of the office and pointed out the offices list of listed properties. The listings that will expire this month were highlighted. Guess what address just happened to pop out at me! And it was highlighted! And listed at only $20K! The home had no realtor sign in the yard, so I had no idea it was listed.
Here’s my delima:
Now that I know who the proper Realtor to talk to is, should I call her and discuss my interest in the property? If so, should I tell her how I came about this information?
Or,
Should I wait till the listing expires and hope my letter gets to the owner and he calls me, very motivated because the Realtor couldn’t sell it?
OK John, tell us what happened - Posted by Irwin
Posted by Irwin on January 28, 1999 at 21:47:27:
You posted this on Wed. It’s now Fri (in 1:25), so come on, tell us what you did with all of our sage advice.
Not to be Cynical, but… - Posted by Baltimore BirdDog
Posted by Baltimore BirdDog on January 28, 1999 at 16:30:45:
is it possible that the Realtor is just sitting on the listing, waiting for it to expire so they can snatch up this gem themselves? If so, they’re betting that no one else will do what you are about to do, which is present an offer. If it’s through the Realtor, you save yourself the time of finding the seller but spend $1200 on commission. If you present directly to the seller, you save $1200, but you run the risk of not finding him and/or being ignored (I hired my Realtor to do all this!).
Good luck and let us know what happens!
-Jeremy
Re: Here’s an interesting situation… - Posted by George
Posted by George on January 27, 1999 at 11:00:06:
A 6% commission on full asking price of $20,000 is only $1200. What do you plan to make on the flip? Is it worth the risk to wait and possibly lose it? Don’t be greedy.
Re: Here’s an interesting situation… - Posted by Irwin
Posted by Irwin on January 27, 1999 at 05:47:32:
Does it seem logical to you that a realtor would be sitting on a listing that’s $80-100k below fmv and not be able to sell it pretty quick to one of his/her buddies? There’s probably more to the story and in order to find out what it is, you need to go direct to the agent. You have nothing to lose. The seller pays the commission and obviously, the agent has access to the seller which is what you’ve been unable to accomplish on your own.
You don’t need anything fancy or creative. You can make a full list price cash offer with contingencies that could take 60 days to complete. (If the deal is what it appears to be, they probably won’t give you a financing contingency, but you can try.) Be sure the purchase agreement is assignable and that you can have access (for inspections and to estimate repairs)during the pre-closing period.
That ties up the property for your flip. If the deal is really a “home run” you won’t have any problem finding the $20k to close with.
Re: Here’s an interesting situation… - Posted by Darin
Posted by Darin on January 26, 1999 at 22:55:29:
Option 1- Go directly to the seller and explain to them that if the property expires, you would like to place an offer. Do not talk to the realtor or tell the sellers you found it through the realtor.
Option 2- If you want to act fast, interview the agent. Ask good questions. Are you familar with REI, have you ever written a creative contract, do you feel you are a good negotiator, … If he or she seems to be a retart agent, hammer them. Tell them you might be interested in the property (Hold a poker face) only if the commission can be cut in half. If you hav confidance in them forget the commission and just get the deal done. Dont worry about Buyer / Seller agency disclosure. Just watch what you say to the agent. Get controll and thell them how you want the deal to go down.
Use the realtor - Posted by Irwin
Posted by Irwin on January 28, 1999 at 21:40:50:
I agree with you that if he doesn’t use the Realtor, he’ll probably lose the deal; however, I disagree that it will cost him $1,200 commission. The seller pays it.