Posted by BR on January 17, 2000 at 20:22:40:
First American Real Estate Solutions. Accessor and clerk data on disc or online. Read about it at Joe Kaisers web site www.nothingdown.com or call Tammy Gilman at 206-282-8709 for info.
Wadda-ya-think - Posted by Jim LaVerdi
Posted by Jim LaVerdi on January 17, 2000 at 06:19:04:
Fellow Investors;
I have presented numerous offers (some even crazy on my part). They are all usually asking for seller carrybacks, Wraps, Land Contracts, that sort of thing. All offers have been faxed over to the “REALTORS” and they present them, (so they say). My concern is this: Of all the offers I submitted, I got one (1) counteroffer from one realtor. It was unacceptable, but it was a response. Shows a pulse anyway!. The others however, seem like nothing was even done at all. No counteroffer, No courtesy call to respond yea or ney, no nothing!. Do my offers give these guys a heart attack and then they die? Maybe I don’t know!. One however responded to me recently through email. He said he would call me, but never did, he chose email. It said that I really can’t expect to buy property buying it creatively, the market here is so good that it “Won’t Work”. Secondly the lease agreement that I use (Bill Bronchicks) doesn’t get taken seriously by a buyer, He suggested me using his Formal 8 page Real Estate Purchase Form.(Nothing personal against Bill, just out of his comfort zone) Question: If I in fact “can’t” buy using creative finance techniques because of the market, what good would using his form do when I would be asking for the same thing on it by me simply adding an addendum? I think it’s their lack of knowledge on anything besides their form and new financing that prevents them from presenting anything out of the norm!. I have to wonder, did they ever really present my offers at all (except the one)? What do you think?.
Should I personally call the seller to confirm that the offer was presented when I get no response from the Realtor?. I would really like to know. The one offer was a Lease Option (Advertised as aLease Option no less!) I offered their asking price, even the up front money they were asking!(I now realize this is nuts) but I offered it anyway. Faxed it to the realtor and she asked me about earnest money to open escrow, I told her that opening escrow will come when I decide to exercise the option, but for now it’s a lease agreement and the “Crazy Money” I offered was all I needed. We hung up and I never heard from her again. It’s been a week and a half now! (I give up!)
Also the part about using the 8 page purchase form in a lease agreement makes no sense at all. This is a lease agreement not a sale! In a year or two or whenever I decide to buy is when I should use a purchase agreement. What is so hard to understand here? or am I missing something here?
Thanks for the help.
Jim LaVerdi (Phoenix Arizona Invvestor)
Re: Wadda-ya-think . . . I think you need a new plan! - Posted by JoeKaiser
Posted by JoeKaiser on January 17, 2000 at 20:27:58:
Jim,
Good try. Now you’ve learned what doesn’t work. So, scratch that from your list of things to do tomorrow and go to plan B.
You should also take some time and sit down and figure out why this doesn’t work. Here’s a hint . . . you’re not on the same page as everyone else. That’s kinda important with this sort of thing.
Joe
Re: Wadda-ya-think - Posted by Dawn
Posted by Dawn on January 17, 2000 at 16:40:45:
Yes, you are missing a few things in your approach. Also, listen to the other suggestions here because they are true also.
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In my experience with lease option, you are LEASING the property with the option to purchase it later. However, there is a price for tying up the property while you decide if you would like to purchase. This is your OPTION money…or the escrow account the realtor was asking about.
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You usually determine the PURCHASE price at the time that you sign the lease option, even if you don’t sign a formal purchase agreement. The option money is an incentive to the owner to accept your offer and it also lets everyone know that you are serious.
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I personally don’t prefer to use a realtor in any transactions simply because most are not familiar with creative financing techniques. I have, however, been able to find a couple that are and I use them primarily. In addition, I’ve NEVER just signed a contract and asked the realtor to present it. I usually prepare a professional looking REPORT that is to be presented to the owner and/or their attorney. It lets everyone know that you know what you’re doing and that you’re serious. A realtor can’t discount your offer when it’s obvious that you’ve done your research. Hope this helps.
Re: Wadda-ya-think - Posted by JD
Posted by JD on January 17, 2000 at 11:31:05:
Yes, you are missing something.
Re: You’re a Wheel Spinner… - Posted by Ed Garcia
Posted by Ed Garcia on January 17, 2000 at 11:01:42:
Jim,
I’m sorry to say that the reason you didn’t get the response that you hoped for, is
because you’re WHEEL SPINING. Once you start to make multiple offers in a
creative manner. The realtors don’t think that you or your offers are for real, and
don’t want to waste their time. In most cases, unless you have educated your
realtor, your going to lose CREDITABILITY.
As they see the offers being rejected, the start to identify you as wheeler dealer
who has no money. Believe it or not, there is an art to making offers and convincing
a realtor that your offers have CREDENCE.
I’m sorry to say, that I can’t teach you this in one posting. But I want you to think about it.
Your situation is a perfect example as to why I teach, (How To Have Lenders Fighting
To Give You Money). It allows you to make CASH offers.
What do you think Jim?
If you were making CASH offers, the realtors may be more responsive to your offers,
as well as the SELLERS.
Do you think you might cut better deals?
Believe it or not, in offering CASH for the property, it allows me the opportunity to get that
Creative deal that you want.
The reason is, that when I offer CASH, I already look like I have a way to go. Once I’m into
the deal and get a counter offer. I reject the offer, telling them that the only way I could accept
the counter offer is if I were given terms.
I explain to the realtor that now, this deal is no longer as profitable as it would be if they
Would have accepted my offer, and therefore does not warrant me putting up so much cash.
There are a lot of different moves and techniques I use. This is just one of them, to give you
an example.
The other problem with machine gun offers, is that you have no feel for the seller.
You don’t know their HOT button. (Motivation)
Even thought I agree that it’s important to work the numbers, meaning that you have to be
in the action all the time making offers. It’s equally important that some of the offers are
excepted and go down. If not, you will classified as a WHEEL SPINNER.
Ed Garcia
Re: Wadda-ya-think - Posted by BRnBA
Posted by BRnBA on January 17, 2000 at 08:08:59:
Jim, this is why I don’t deal with realtors. Some people have success using them but not me, I like FSBO’s. In fact, I avoid Realtors like the plague. I got them out of my life about 18 years ago and have NO regrets. Don’t get me wrong, I like them as people, my dad was one, I used to be one but they are there to provide a service which I have no use for as an investor. Simplify your life by finding motivated sellers!
Re: Wadda-ya-think - Posted by Glenn OH
Posted by Glenn OH on January 17, 2000 at 08:05:08:
I Ohio, it is law that all offers (which must be written) be presented by the real estate agent/broker. The state board seems eager to weed out bad realtors, so I have “gently reminded” a few realtors of there obligation to present the offers. I also have reminded them of their obligation to the sellers. This usually does the trick.
Re: Wadda-ya-think - Posted by chris
Posted by chris on January 17, 2000 at 06:47:25:
Hi Jim-
Would you like to present the offer you write up yourself. You could do that. Just include a clause in the contract that “buyer reserves the right to accompany broker to present offer to seller.”
As for the offers that you are curious about ever being presented at all. You could mail a letter to the seller’s address stating your intent to purchase and requesting that they give you a call if interested. It could also be that the market is hot and these sellers are getting all of the retail and above offers that they can handle.
One thing to keep in mind is that no one can ever present your offer as well as you can. Would you consider using a buyer’s broker for these houses that are in the MLS? One thing you could mention very nicely to the listing brokers that you contact is that you would like to do business with them personally, but you will bring in your broker if necessary. The thought of splitting a commission may be enough for them to be more cooperative.
The FSBO properties in your area may be a better target for you also. They do not have the exposure that an MLS listing has unless the seller really knows how to sell his property.
Just some things to consider. I’m sure you’ll get this thing done.
-Good Luck, Chris
Please Explain J.D. - Posted by Jim LaVerdi
Posted by Jim LaVerdi on January 17, 2000 at 11:44:25:
J.D.
Yes I am missing something , your helpful suggestions. Please tell us your views
Thank You
Jim LaVerdi (Phoenix Arizona Investor)
You’re not reading the message! - Posted by Jim LaVerdi
Posted by Jim LaVerdi on January 17, 2000 at 11:24:55:
Ed.
These were all offers independent of each other. There was no multiple offer on any one selected property. So actually I wasn’t “Wheel Spinning” The one specifically,
Lease Option deal where it was advertised as a lease option is the one that bothers me the most! The realtor demanded up front “Earnest Money” to open escrow! This
transaction would only be classified as a lease, so why ask for earnest money? I made no other offer but the lease option and was offering the seller exactly what they were
asking for. The Realtors are a serious problem. She should have understood how a lease option works before doing one. I think FSBOs are a better approach, and that’s
where I am focusing my attention from now on.
I make all different types of offers on different properties (depends on the situation) but not multiples on one select property. Are you saying that I should only do perhaps Lease Options or Land Contracts, or Wraps? I don’t think so.
Jim LaVerdi (Phoenix Arizona Investor)
Re: Wadda-ya-think - Posted by AEO
Posted by AEO on January 17, 2000 at 08:25:40:
Most of the investors I’ve spoken to have said they don’t deal with FSBO’s. How have you had success with them? (I am someone who is also very frustraded with Realtors)
Thanks
Re:I read it, and I understand it… - Posted by Ed Garcia
Posted by Ed Garcia on January 17, 2000 at 12:35:37:
Jim,
I read it, and I understand it.
What I mean by machine gunning. Is when you go to a broker and make offers on several
different properties. The first thing you have to realize is, that the broker likes to know that
they have a qualified buyer. As soon as they see you making several different creative offers.
They begin to feel what I told you in my last post. You’re a Wheel Spinner.
They think that you’re wasting their time, and don’t have a way to go. They consider you a
wheeler dealer, who is making offers in that manner, because you don’t have any money.
Jim, what happens is, you show your hand. Jim always put yourself on the other side of the
table. If someone came to you, and made 5 offers, on 5 different properties, and none of them
showed cash, or cash down. What would you think?
How much of your time would you want to give to a buyer that your not even sure if they are
for real.
This is what I call the PERCEPTION of a deal. I may not have the cash or money to buy the property.
But I don’t have to tell the world. By the way you have made your offers, you’ve told the world.
Once you’ve done that, they don’t want to waste their time with you or your offers.
Jim, don’t fight it. Learn to understand it and work around it. I gave you one way in my last post.
Go back and read it.
Jim, you have to convince people that you have the money. If I would have been making that offer
on the lease option, and the broker asked me for some cash down. I would have given it to her.
It doesn’t have to be much money. It could be $500., but by giving it, I now show credibility.
I’m showing her I am for real, and have a way to go. Weather my deal goes together or not,
my broker now has confidence in me, and will show me more deals.
Jim, you don’t have to have a lot of money to play this game. But you do have to know how to play
the game if you don’t have the money.
Take care Jim,
Ed Garcia
Re: Wadda-ya-think - Posted by BRnBA
Posted by BRnBA on January 17, 2000 at 09:38:00:
I keep an ad in a major circulation paper AND in the PenneySaver/Thrifty Nickel type papers. I Buy Houses!
It is well worth the cost. I was skeptical till I noticed a phone number on an I buy houses ad that I recognized. It was a guy whom I had tried to buy an apt. complex from about five years before. This ad had been in the paper continuously for all those years and I knew this guy to be a successfull investor. Not a Big Shot but a millionaire next door type guy. He owned several apt. complexes that I was aware of and did rehabs. It did not take a genius to know this ad was in the paper continuously for a reason. Still I was skeptical, I ran an ad and got some calls, and got a deal that I made over 20K on. Still I was skeptical, was it luck or did the ad work. I let it expire and started mailing postcards. A few calls but no deals. I ran the ad and got a deal two weeks later. I now keep an ad in the paper and get deals here and there from it. I have this one area that is HOT, I mean people run over you to buy in this school district. BTW, if people call when I’m in my office I pull up the property on FARES, do a comp and check out the school district map I have on the wall next to my desk. I don’t know if it is so elsewhere but here the school district is IMPERATIVE. My core area is defined by school districts. Within a couple of minutes (while I’m on the phone) I have comps and know the school district the property is in (peice of cake). I by no means depend on the paper totally though, I drive my core areas (I have 3 Sch. Dist. I like) and take down the addresses of properties that look vacant, mail letters to the owner that simply say I’m looking for houses to buy in that area and include my card. I’m starting to use bandit signs (no stats yet). I’m also working on having some park benches made (I buy houses) to strategically place at grocery stores and other high traffic areas. Starting to sound like work isn’t it, anyway I hope this helps.
how to get lenders fighting to give you money - Posted by steph in tex
Posted by steph in tex on January 17, 2000 at 18:51:56:
Hello Ed,
When and where do you teach?
Will we get a dose of this at the convention?
thanks for any info
steph in tex
Re: Wadda-ya-think - Posted by chris
Posted by chris on January 17, 2000 at 18:30:31:
Please fill me in on FARES. What is it?
-Thanks, Chris
Re: how to get lenders fighting to give you money - Posted by Jeanne
Posted by Jeanne on January 19, 2000 at 20:50:49:
Steph,
Yes, this is the topic that Ed and Terry will present at the Convention. They will have another workshop this year, but I don’t know the specifics, yet.
Jeanne