Posted by John Behle on November 28, 2006 at 14:31:32:
Sounds great to me. Have a great holiday season.
How to get rid of a house? - Posted by GL(ON)
Posted by GL(ON) on November 26, 2006 at 18:59:42:
Did a deal recently that maybe I shouldn’t have. Usually I am a long term investor. I don’t usually try to do quick flips. But I saw a property I thought I could make some money on.
It is a pair of semi detached houses in a very good, older neighborhood. The property was being sold as a duplex and I thought I could sever it and sell it as 2 semi detached houses. I got the severance all right but they aren’t selling.
They are 3 bedroom semis, one has 1 bath the other has 2. The one with 2 baths also has a detached garage. But the other one was recently decorated, the one with 2 baths and a garage was last redone in the 60s or 70s. But is in good condition.
Had them listed with a real estate agent for the last 3 months, have had some lookers but no offers. The listing runs out next week. Now I want to sell them myself.
So far have thought of rent to own or lease option, but I understand in these days of easy cheap financing that doesn’t work so well. Also thought of holding an auction and getting what I can.
Any good suggestions? Anybody?
Choosing a good Realtor - Posted by John Behle
Posted by John Behle on November 28, 2006 at 05:42:25:
Even though I have been an agent and then broker since 1978, I learned it usually served me to choose the best agent for the job and most of the time that wasn’t me because I was not focused in that area or type of property. It shocks other agents when a broker calls them to list a property, but it sure has worked well for me in many cases.
You mentioned “some lookers but no offers” and that usually sounds like it is the wrong agent for the deal rather than a bad property or lack of interest. I know you mentioned selling yourself and maybe some of the ideas and discussion will be just what you need, but if you think about a Realtor again, here is what has worked very well for me.
I look for an agent and brokerage that has a great deal of exposure in the area. Sometimes I have used a ?concentric circle driveby? where I just start at the property and drive in a widening circle writing down all the agents and brokerages. I look for an agent that is farming an area or brokerage that has established a good presence.
The first time I tried it, I had a house I wanted to sell quickly. I ended up with a new agent named Teri that was farming the area. She and her brokerage came up the most of anyone. She had the property sold and closed in one week at full price.
Then I learned to use the MLS to search. I would just put in the geographical coordinates and a price range and most of the time there is a predominant agent. I had learned in my first real estate brokerage that 2/3 of property sales came in from another ad. People call the ad on the property on “Pine Street” and end up buying another property the brokerage has listed over on “Spruce”. So, if the brokerage or agent has multiple listings in the same area or of the same property type, their potential buyers are exponentially greater. That all sounds simple, but it sure has worked well.
Even when a property does not have a large number of similar properties in the area, it has worked with a wider area of properties in the same price range.
I had a friend I found out was in foreclosure and about to lose her home. She had tried to sell with one or more agents for several years. I had to search a wide area because it was a higher end home with few similar listings nearby. The search criteria ended up being most of the county.
Two agents came up the most. I called both and introduced myself as a broker looking for the best agent I could find to sell the home. I asked them if they were interested to write up a proposal as to how they would market the home. One agent was too proud to “audition” for another broker as they looked at it. The other presented a nice looking, aggressive plan and we went with her. After trying to sell for years, this agent had it sold and closed within thirty days.
As you know, many - maybe most - agents tend to just try and list all the properties they can and hope someone else sells them. But, I’ve had good success with the ones out there that will still serve a client. It’s hard at times, like when I am looking for a property or selling one and a friend or relative has just gotten their real estate license. They have an attitude of “of course you’ll list with me” and they are usually the very worst person to consider listing that particular property with. I have a relative right now that thinks she is going to get a listing on a $600,000 property even though she has moved to another state. She thinks I?ll place financial trust and a $36,000 commission to her partner that has a few months experience in real estate and doesn?t have any listings or even live in the same city as the listing. That would be a horrible decision.
I’m not saying you listed with a bad or the wrong agent. Even a real good agent with good skills may not be the best one for a particular property. Exposure through their advertising, brokerage, networking and other similar listings is one of the greatest things an agent can bring to the table. A new agent farming an area can be a better choice than a very experienced and capable agent with no presence in the area.
There’s nothing worse than a bad agent and few things better than a good agent.
Hope that might be valuable to you or someone else reading it.
drop the price - Posted by Gene
Posted by Gene on November 27, 2006 at 18:29:19:
I am not sure what you holding costs are/what your local market is doing/ and what your pricing is like compared to the comps…but usually if a house dosn’t sell its because its priced too high.
Re: How to get rid of a house? - Posted by luke@reproblemsolvers.com
Posted by luke@reproblemsolvers.com on November 27, 2006 at 07:46:40:
I use the nothing down technique the most.
There are programs out there like AmeriDream who “gifts” the downpayment and closings costs to the buyer.
You of course “donate” the gift + $500 back to the non-profit charity but this way you have a buyer who qualifies for FHA financing but doesn’t have the 3% + closing costs.
Here you can get a buyer in for truly no money down.
If there is room, I would tack the cost of the downpayment and closings on the price but you have to ensure it appraises.
Also if you link up with a good sub-prime broker, you can qualify people with 500+ credit scores for very close to 100% or 100% if you work creatively.
My take on selling houses is sell to people who don’t think they can own. They generally never negotiate on the price and aren’t really to picky about where they live, all in moderation of course.
Good Luck,
Luke
Re: How to get rid of a house? - Posted by David Krulac
Posted by David Krulac on November 27, 2006 at 06:19:06:
Glen,
Good to hear from you and see that you’re alive and well and continuing to invest.
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One option would be to get an appraisal doen and line up permanent financing with and institutional lender (not HML). There are a multitute of mortgages available for 100% financing or more, and A,B, C, & D credit. Then advertise fiancing available at $xxx per month. Many people are buying the payment. If the payment is less than rent advetise that too.
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I’d consider seller financed second mortgage also. It kind of a hybrid between owner fiancing and institutitonal financing as you are instituttional financing 80% and seller finanncing 15-20%. You get 80% of your money and only have 20% tied up in the property.
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Contract for Deed, Lease Option, or sale and mortgage are several different paths, one or more might suit you.
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Don’t know the Canadian tax situation but in US if you rented property for a year, you would probably qualify for long term capital gains 15% Federal versus up to 35% Federal for short term gains, ordinary income and dealer income.
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Renting could also help to get someody in the property to pay the heat/utilitiy bills during the winter and reduce vandelism on a vacant proeprty.
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Adverise every where, daily newspaper, weekly nespaper, internet, yard sign, bandit signs, bulletin board, HR dept. of big compnaies, church bullitens, school newspapers, company newsletters etc. etc. etc.
Re: How to get rid of a house? - Posted by Gerald-NC
Posted by Gerald-NC on November 26, 2006 at 19:39:44:
What’s the location?
Re: How to get rid of a house? - Posted by speednxs
Posted by speednxs on November 26, 2006 at 19:32:02:
I assume you had some ideal buyer in mind when you bought these properties. They must be perfect for someone. What is your marketing plan to reach these buyers?
Believe it or not, the American dream is still to be a homeowner.
Putting up notices in lunch rooms and laundromats is better than sitting by the phone waiting for it to ring. Grandma moneybags might think it’s nicer for the grandkids than the apartment they are living in. Put your mind to it!
Good Luck
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Re: Choosing a good Realtor - Posted by GL(ON)
Posted by GL(ON) on November 28, 2006 at 13:30:36:
Words to live by.
Wish I could find a good agent or even a competent one. The closest I ever came was a woman who was kind of scatterbrained. She didn’t do much to put a deal thru but she didn’t stop me either which is all I really need. I soon learned not to depend on her for information on zoning or anything else but we did a lot of business. The one holdup was that she was away so much - 4 to 6 week vacation trips to Ireland, Tahiti, who knows where else, 3 or 4 times a year. Yes she sold a lot of property and made a lot of money. Then she quit real estate to open a tea room.
The rest of them around here do everyhing to avoid work but have an unlisted phone number. They don’t answer the phone, they don’t answer pages, they don’t return calls. When you do get them, they will do anything to stop you from listing or selling a property.
Here is a good laugh. I actually stopped buying in my home town because prices are way too high. Every rental property I looked at had a cap rate of 5 or 6 percent - negative cash flow territory and I don’t buy negative cash flow. So I started buying in a town 40 miles away where prices are cheaper.
It occurred to me that at the prices they want in my home town I should be selling not buying. So I called a few agents and told them I wanted to list a property. 3 of them gave me a price, all $360,000 $380,000 $390,000 representing a cap rate of around 10%. Compared to what else was on the market, mine should have been about $575,000 but they thought maybe they could sell it for $360,000 to $390,000 LOL.
I told them if they had any good rentals for sale with a 10% cap rate I would buy them on the spot. I would sign an offer without looking at them, without even leaving their office. None took me up on this because there are no properties for sale here with a 10% cap rate or anywhere near it. By the way I was dead serious. I would have signed an offer conditional on inspection, conditional on financing, and conditional on getting insurance which are standard clauses these days. Of course there are no such properties but if I was fool enought to list with them there would have been one - mine.
I thought I had a good agent ( in the town 40 miles away) I told him I was an investor, was planning on buying a couple of million dollars worth of rental property over the next year or 2 and that I wanted him to get commission check after commission check after commission check. He seemed OK at first, and I did buy one property thru him. Since then all he has done is pet the dog and I don’t mean pet. Now he has fobbed me off with an assistant and I get the impression he has washed his hands of the whole deal.
To get back to the original subject of this thread, I have pretty well decided to take that property off the market for the winter and do some renovations. Put $5000 or so into the place and increase the value $30,000. I used to do this all the time. Nowdays I would sooner not bother but what the heck.
Hoped there would be something new in creative real estate to help me sell quick but there doesn’t seem to be. Now with interest rates rising and lenders turning sour maybe we will revive some of the classic ploys of the 70s and 80s. What the heck it’s all in the game.
Great advice (NT) - Posted by Don (VA)
Posted by Don (VA) on November 28, 2006 at 10:28:59:
Great advice!
Re: drop the price - Posted by GL(ON)
Posted by GL(ON) on November 27, 2006 at 18:50:20:
Already tried that. Got no offers the first 2 months. The agent (who set the price in the first place) suggested dropping it from $139,000 per unit to $134,000. I said the hell with that. Give them a drop they can see, and make it $129,000. I now have the cheapest houses on the street and still no action. This is in an older neighborhood where houses go for $200,000 to $250,000. That’s for detached houses bigger than mine of course. But still, mine are not overpriced.
I see 2 ways to go. One is to renovate, and modernise, and raise the price. The other is to advertise like crazy and try to lease option them.
When the listing runs out next week I mean to try both of those options. Advertise the heck out of 1 unit and fix up the other.
Re: How to get rid of a house? - Posted by GL(ON)
Posted by GL(ON) on November 27, 2006 at 15:40:27:
Thanks for the kind words. It’s nice to know I was missed.
I’ve got a pretty good idea what to do. What I was thinking was that some of the old, tried and true techniques wouldn’t work anymore because the easy mortgage lenders had skimmed the cream off the rent to own, etc. market. Was wondering if there were any new techniques I didn’t know about but there don’t seem to be.
Now that interest rates are on the rise it may be a good time to do some creative deals.
I actually got thrown off this site for getting in a fight with some jerk who came on here and started throwing his weight around. Some guy selling courses of some kind. Wonder what happened to him?
Re: How to get rid of a house? - Posted by GL(ON)
Posted by GL(ON) on November 26, 2006 at 20:29:43:
Charles St. Belleville Ontario Canada.
Re: How to get rid of a house? - Posted by GL(ON)
Posted by GL(ON) on November 26, 2006 at 20:38:52:
The ideal buyer would be willing to pay full price, all cash and a quick closing.
I left the marketing up to the real estate agent. He muffed the deal. Now I need to figure out what to do.
Re: Choosing a good Realtor - Posted by John Behle
Posted by John Behle on November 28, 2006 at 14:52:32:
Sounds like a good plan to take the property off the market right now. Late November and all of December are always rotten times to try to sell down here. The Realtors just go from office party to office party all December.
Interesting the agent you mention. My best agents were usually the rogue agents that didn’t fit the “mold” (an appropriate term for average Realtorhood). One of my favorites was a 22 year old bubbly blonde girl. She had only had a few months training at another brokerage and was open minded. I trained her what to look for her and taught her enough finance that she could overcome some severe stereotyping and prejudice thrown her way because of being young, blonde, etc. Some of the other good agents didn’t like listing and like to work with investors. One of my best was a young man putting his way through medical school. He sold more part time than most average agents and had a bit of a racial prejudice to fight against in the marketplace. At the time he was one of only two agents with his skin tone in the whole state. He was bright, a hard worker and probably my best agent ever. He loved creative deals and was good at presenting offers. He also liked taking notes back for his commission to build his cash flow. I usually don’t push agents to take notes, but he liked to.
These were two of about ten agents I had out writing offers for me full time. I pulled leads off the MLS, gave them blank signed offers subject to inspection and sent them out. We picked up about a million a month in property. Most of them we just resold again in a one day sale. Not an auction, but similar in some ways. We would offer very little or no down on a contract and we could just pick the best of a half dozen or more offers.
I gave the agents a full 100% commission split an office to work out of, phone, desk, supplies, etc. and extensive training in how to spot deals. I also had a computer program where they could just enter the numbers and it would give them a “go” or “no go” decision on an offer for that property. We one loan officer working full time just on our deals.
It might be nice to “revive some of the classic ploys of the 70s and 80s”. In some ways it was easier then. Creative financing is much more fun than the more standard deals and if it isn’t fun and creative, it doesn’t interest me much.
Re: drop the price - Posted by Gene
Posted by Gene on November 27, 2006 at 19:38:52:
Are sales in your area low right now for this time of the year? What is the market doing?
I would be carefull about putting more $$ into houses if the market is weak. I personally would sell without upgrading.
Gene
Re: How to get rid of a house? - Posted by John Behle
Posted by John Behle on November 27, 2006 at 21:23:16:
I’m right here. I was not selling courses - you know that isn’t true, but as with all your posts, that didn’t matter.
Bottom line is you caused a ruckus with erroneous advice about mortgage and trust deed law and someone who knew better corrected you. Then you called names, just as you do now, insulted people, ignored the facts and just caused trouble.
Your advice was wrong, though I am sure well meaning. Applying the law from one province in Canada to all 50 states in the US might seem no big deal to you, but it was incorrect. If I wanted to know the law in Ontario, a long term investor like you would be one of the first people I would ask, but not about US law.
It was about the lack of civility of the whole matter. An adult needs to be able to be corrected in business matters without throwing a tantrum and calling names. I see you are still at it.
Mr. Big - Posted by Archive Arty
Posted by Archive Arty on November 27, 2006 at 19:07:42:
It’s all coming back to me now…
Re: How to get rid of a house? - Posted by IB (NJ)
Posted by IB (NJ) on November 26, 2006 at 23:55:31:
Are you looking for a retail buyer to come in and pay all cash?
Ib