Posted by JohnBoy on November 08, 2000 at 17:50:32:
You say it’s worth $155k. Have you VERIFIED this with recent comps in the area? Assuming it is worth $155k, if she had to list it with a realtor the commission would be 6% - 7% of the sales price. If the listing price was for $155k, figure about $150k as the actual selling price after buyers make offers on it.
If the selling price ended up at $150k (realistic) the commission for the realtor will cost $10,500 (assuming 7%) or $9k (assuming 6%). That leaves her with $139,500 - $141,000 MINUS closing costs! That pretty much eats up any equity she had in the property selling the property for RETAIL on the open market listing with a realtor. She wants $10k, huh? If she sells it FSBO and can manage to find a retail buyer on her own then she might get her $10k, otherwise she’ll be lucky to cover to pay off the mortgage once all of her costs are taken out and paid.
You could tie up the property for 60 - 90 days “subject to YOU finding a suitable tenant/buyer”. Then if you find someone with at least the $7k to put down you could do the deal and collect the spread on any cash flow you can make and wait for you profit on the back end. Of course I would want something on the front end for my trouble and risk involved for doing a deal like this.
If you find someone with $10k or more to put down then you can make something from it. You could probably get more up front by selling on contract for deed vs. a L/O. Depending on how much you can get a buyer to put down, you can renegotiate from their and offer less if needed, otherwise she’s stuck with the home and you walk away. You’ll have 60 - 90 days to market the property without having to commit to anything unless you first find a tenant/buyer or someone to sell to on contract that has enough to put down to justify doing the deal.