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MR. SELLER, YOU HAVE NOT SOLD YOUR HOME YET. AS YOU KNOW MARKETING IS THE BIGGEST KEY IN SELLING HOMES. THAT IS WHAT I DO BEST. WHAT I WOULD LIKE TO DO IS HOLD A MARKETING EVENT TO MOVE THIS HOME. I HAVE SPECIAL FINANCING PROGRAMS AVAILABLE THAT CAN HELP ME TO DO THIS. I WOULD TWO DAYS ABOUT 2 HRS A PIECE. WOULD THAT WORK FOR YOU.

 

Do you recommend holding the open houses on consecutive days or one per weekend? Do you go into detail with the homeowner about the auction process or do you just do your thing and let them know when closing is? I really like the idea of getting a signed purchase agreement upfront.

 

At that point when the homeowner says yes, you then negotiate your option price correct? Is there generally a minimum value that you shoot for (ie. 90% or less of fmv)?

 

Thanks for all of your help, Jonathan!

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Brian,

 

I do not go into detail with the seller at all. Depending on the type of home it would depend on the marketing plan.

 

Again it depends on the home. But I like a min of 20% spreads

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I do not go into detail with the seller at all. Depending on the type of home it would depend on the marketing plan.

 

That's what I was thinking. I can imagine that if most sellers knew that you were going to auction their house, they'd immediately think of the government auctions where it could be sold for pennies on the dollar.

 

So you just basically tell them you're going to market their house, hold a couple of open houses, and sell it within 14 days right?

 

How would this work if the house is still occupied?

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Movie tickets work good

 

Good idea. Just something to get them out of the house for a while. Do you hold your open houses on consecutive days or one per weekend?

 

I use buyers money. My seller and buyer go onto contract. I cancel my agreement for the 20K. Of course there are costs involved.

 

What costs are involved if you cancel your option and have your buyer and seller go to closing?

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I prefer to have one open house. It depends again on the property. The one I did last sunday was just one open house from 2-4pm.

 

Costs are related to recording the Release of my meomorandum of option. Here its 10.00 first page and 6.00 per additional page. The release is one page and my Memorandum is 1 page. So 20 bucks.

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Costs are related to recording the Release of my meomorandum of option. Here its 10.00 first page and 6.00 per additional page. The release is one page and my Memorandum is 1 page. So 20 bucks.

 

:ninja: Big money. I think I can deal with that.

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Very nice concept. My skin is crwling with excitement! I have a couple of questions for you please:

 

1. Can you post a copy of your release of memorandum?

 

2. How do you explain what is going on to the seller once you find your buyer and you want the seller to accept your fee for the release? What do you say to the seller at this point?

 

3. Do you mention anything a bout the release or release fee and memorandum in the option agreement you have with the seller?

 

4. Have you ever thought of writing a report on how to do real estate options? This would be a great e-book! You already have you first buyer and that will be me.

 

Thanks,

 

Lonnie Turner

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1. Can you post a copy of your release of memorandum?

 

LONNIE I WOULD BE VIOLATING A COPYRIGHT ISSUE IF I DID.

 

2. How do you explain what is going on to the seller once you find your buyer and you want the seller to accept your fee for the release? What do you say to the seller at this point?

 

YOU WANNA SELL AND I WANNA BUY. SIGN THIS.

 

3. Do you mention anything a bout the release or release fee and memorandum in the option agreement you have with the seller?

 

THE SELLER SIGNS THE MEMORANDUM UP FRONT.

 

4. Have you ever thought of writing a report on how to do real estate options? This would be a great e-book! You already have you first buyer and that will be me.

 

IN THE WORKS IF I CAN GET AN AGREEMENT WITH SOME ELSE.

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3. Do you mention anything a bout the release or release fee and memorandum in the option agreement you have with the seller?

 

THE SELLER SIGNS THE MEMORANDUM UP FRONT.

 

The memorandum has to be notorized so how do you deal with that upfront? Just go to a notory at the same time you're signing the option?

 

1. Can you post a copy of your release of memorandum?

 

I'm not completely sure, but I'd imagine that it doesn't need to be anything fancy. Wouldn't it just be something saying that you're canceling your option on the property located at XXX address based on the option you filed on whatever date? Probably could draw something up yourself. Again, I'd assume that it needs to be notorized.

 

Simple question on pure options: In MC's pure option contract, there's a space where the closing costs are laid out. What do you put for the buyers and sellers closing costs (who's responsible for what?)?

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Brian,

 

We have a traveling notary in our area I have also used Mail Box Etc and I have had them meet me at the title company. The option agreement sets the details on who pays for what. Some times I have had to make concessions in closing costs.....

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The option agreement sets the details on who pays for what. Some times I have had to make concessions in closing costs.....

 

You mean something like your option price is $xxx,xxx but to get that price, you also have to pay for some of the sellers closing costs? If that's the case, that makes sense.

 

On the option to purchase agreement, what do you usually put for how closing costs will be paid? Is it something like, "Buyer and seller agree to pay own closing costs (or something like that)" or is it more specific like, " seller will pay for appraisal, transfer tax, ect."?

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Closing Costs: Seller will pay all closing costs to include; Recording Fees, Title Insurance Policy, Transfer Tax , Satisfaction and Recording Fees, Buyer will pay all additional monies. All taxes, rentals, condominium or association fees, monthly mortgage insurance premiums and interest on loans will be prorated as of the date of closing.

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I like the way that's worded. The funny thing is when it comes to real estate, I new when it comes to purchasing traditionally. Other than my family doing a couple of HUD rehabs, my first experience with creative RE is when I was 21 and looking to by my first house. The problem was at the time that even though I had the $ for a down payment and closing costs, I was a bartender so I couldn't prove 90% my income on paper. The owners didn't want the purchase to fall through, so we did it on a contract for deed.

 

When you sell a house that you have a pure option on, does it affect the homeowners tax liability (you have an option at $325k and sell for $340k, the homeowner isn't going to have to pay any more capital gains due to your profit, right?)?

 

I've been dealing with a guy who owns a couple of houses here in Vegas, but lives in LA (so it's not his primary residence). He realizes that I'm going to try and get more than my option price, but is worried about him having to pay additional capital gains due to my inflated price. I would assume my $15k cancellation fee would be tax deductible and wouldn't cause him any more tax liability, right?

 

How would you explain this to a homeowner (he's from Bosnia and while he speaks really good english, he doesn't seem to completely understand what I'm trying to say)?

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