Newbie in New England- First Call What Now? - Posted by Vicki (NH)

Posted by Randy on September 10, 2003 at 19:15:34:

She just wants someone to tell her ?she?s getting a good deal?.
So you have underlying debt of $102k, and ?Possible Comps? of $165k??? You say you have a realtor that can get comps on the property, that?s the first thing I would do. If you think the ?mortgage subsidy due to disability? has raised the 1st or 2nd debt? you need to verify that, know for a fact what the underlying debt is. Either she can call for that information or give you authorization to release information on the liens so you can know for sure (you can?t make a fair offer without knowing if it?s enough to clear her mortgage ? can you?)

Then TELL her what you can offer to help solve her problem. I suspect you brought up the ?Capitol Gains Taxes? issue if not I apologize in advance but don?t look for problems or seller concerns ? they find enough with out our help?.

One last observation, you say you got lost when she didn?t know what she wanted ? you already know more about real estate than probably 75%-80% of the population of your state. What you needed at that moment was a STALL in other words a mental break to think, so ask a question: ?How Do You Feel Your Home Compares to others in the Neighborhood?? While she?s answering you will think of where to go from there?

Newbie in New England- First Call What Now? - Posted by Vicki (NH)

Posted by Vicki (NH) on September 10, 2003 at 15:54:53:

First let me say how much I’ve gotten out of this site. I’m just starting out and green, but determined to carve out a life in rei. Done my reading of the site, and decided to start with wholesaling. Got cards, newspaper ad going, bandit signs (waiting to be put up). Committed to getting better talking with sellers. I’m not slick, and don’t have all the answers, so all I can do is be honest with folks. It’s served me well so far, so why quit.

Ok down to biz. Woman called and left message after seeing my newspaper ad. Sounded not motivated, so I didn’t hurry and call her back. Guess what? She called back again, sounding more motivated… really wanted to talk to me. Anyhow, here’s what I know so far.

Divorce - awarded home, husband quit-claimed to her already
She says she’s physically challenged, has teen son but just can’t keep up with home
Owned for 12 years
Home hasn’t been listed, and seems not to want to

3br 1 ba New Englander
143 years old - yeah that’s right, they get old up here
fam rm, dining room, kitchen
says needs cosmetics - cracked plaster in stairways, broker windows
some rooms have been redone, kitchen cherry cabinets
family room redone
1.19 acres

1st Farmer’s Home Adm balance around $76,000 at 8 3/4
receiving some kind of mortgage subsidy due to disability (I’m guessing that they’re just adding amounts onto the back end, so payoff could be lots more)

2nd - no interest rate, she think’s it’s the same around 8-9 %, balance $26,000

Town assessment $155,000
Taxes $2000 /year, current
No liens, no judgements (at least yet, she said)

She says house in neighborhood recently sold for $165,000 though not quite as old as hers. I’m familiar with the town and can get some comps from a real estate agent in town i talked to.

Things kind of untangled when I asked her what she wanted for the house… She didn’t know. talked about recent home sales above. An appraisal she had done for the divorce ($150,000 - but it was a special purpose appraisal)so i’m not counting it.

I talked to her about it really being cash today, or her price tomorrow, if she wanted some price like 165k she would have to accept less cash. I told her that something to think about would be some cash, and holding a mortgage for the balance of her equity which might lower her capital gains.

Her issue are:
Needs to sell, concerned about capital gains
Doesn’t want to wait months while prop is listed
Possibly thinks people will cheat her because of her disability.

My issues:
terrified, but figure i did pretty good for the first call
don’t know what to do with this.

I got lost when she didn’t know what she wanted. Need feedback on what I did right and what I did wrong. I froze, I know it.

What’d i do wrong.


Re: Newbie in New England- First Call What Now? - Posted by Brent_IL

Posted by Brent_IL on September 10, 2003 at 19:31:22:

1 - In that price range, she will not owe capital gains tax on the sale of her personal residence of 12 years. You solved one problem.

2 - I think worrying that someone would cheat her because of her physical disability is a little melodramatic, but I don’t know her life. Just reassure her that you will be as fair as you can.

3 - Reassure her, also, that you will close as soon as all of the ducks are in a row.

4 - Now, what really concerns me is the $76,000 first mortgage that’s guaranteed by Farmer’s Home Administration and may be subsidized due to her disability. I?m not very knowledgeable about that agency?s procedures, but I do know that Farmer’s Home has a bunch of regulations concerning the resale of property in which they have an interest. Loan interest rates can be retroactively recalibrated and fees and buy-downs recaptured. If it was a direct loan it’s even worse.

I would have the owner ask for some kind of payoff statement. When you learn what you have to work with, your offer will become clearer.