New Deal In Canada

[Walter 0]

One of my first potential clients revealed to me that:

his house is for sale @ $ 149,9 k, it is 3/2 with well equiped work shop

he paid for it originally 134k

still owes 85k

has ~49k equity

his mortgage is @ 3,8%

his personal debt is ~ $40k on credit cards @ 9%

has expectations that someone will dish out 50k as for downpayment...?

 

He is open to my sugestions, although I mentioned that I have not had clients who would pay that much upfront with lease purchase. He said "see what you can do".

 

Do you have any suggestions as I have not had a client ...yet.

 

Walter

[Gary (MO) 0]

Hi Walter,

 

Could you give a little more information? What do your comps say is fair market value on the house. Is he setting his price based on a recent appraisal? What kind of shape is the house in - how much is needed to repair it? (if any?) or is it vacant and ready to go? Is he really motivated or just "testing the market"?

 

Assuming the fmv is $149,9 and he has $64,900 equity you might be able to talk him into re-financing for his cash out and then proceed with your deal.

 

Just a thought....

Gary

[Walter 0]

Hi! Gary!

I didn't have enough time to check comps, he mentioned that he might be asking a little too much and it is obvious why...he built a larger garage with his tools (toys) and etc. I think he sees it as more valuable than buyers do because HE did it. I think it is a typical story with guys who have hobbies and value them above and beyond.

Thanks for your tip about re-financing it as well as appraising it. I will see what he says.

 

Walter

 

Hi Walter,

 

Could you give a little more information?  What do your comps say is fair market value on the house.  Is he setting his price based on a recent appraisal?  What kind of shape is the house in - how much is needed to repair it? (if any?) or is it vacant and ready to go?  Is he really motivated or just "testing the market"?

 

Assuming the fmv is $149,9 and he has $64,900 equity you might be able to talk him into re-financing for his cash out and then proceed with your deal.

 

Just a thought....

Gary

<{POST_SNAPBACK}>

[Kimberly 0]

Walter,

 

MAKE the time to check the comps. You'll never know what it's worth until you do. If he mentioned he *might* be asking a little too much, he's probably asking way too much.

 

A larger garage will add value up to a certain point, unless his house was overbuilt for the neighborhood.

 

Kim

[Gary (MO) 0]

Walter, if he re-fi's he'll have to have an appraisal done anyway... it still wouldn't hurt for you to pull your own comps.

 

Be careful too that you don't get so caught up in the process that you lose sight of the fact that he may really not be too motivated.

 

Gary

[MichaelC 160]

Hi, Walter. You've already received some good advice. But since I don't charge by the word here I'm going to add some more.

Gary hit the nail on the head. If he needs to pull forty grand out of his property, a lease purchase won't do it. He either needs a straight out sale, or he can refi the property and pull out his cash that way.

So, where does this leave you? Hard to say without an accurate FMV to work with. If you can do that and come back here with that number, we can see what approach is best to take, or whether you should just move on.

[Walter 0]

Thanks for your advice. I think he has been hiding something else because he said the bank didn't let him refi his place....?

Since I have many other leads available at this moment I chose to leave him for few days and get comps from RE agent meantime to have a better idea. He just wants to get his equity on hand, which is rather unlikely to happen.

 

Walter

[MichaelC 160]

Agreed, Walter. Leave him your business card. When he gets serious, he'll have a way to contact you. In the meantime, expend your time and efforts elsewhere.