BigBenRE 0 Report post Posted November 9, 2006 Hello All, I have a seller who has a house in an area where the comps are about 1,000,000. He has had it listed with a broker for a while for 1.3mil then dropped it to 1.2mil, now it 1.1mil. He called my "We Buy Houses" add oviously because he wants to get out of his situation. I am meeting him on Friday to discuss his situation and wanted to know how you guys would structure the deal. Things that confuse me are: 1) How do I handle the listing agent. 2) I am a CA RE Broker and dont want to do anything illegal with respect to listing agent, 3) I know the owner cant directly benefit from the transaction, but how much do I give him to sell him on working with me. Any and all advice would be greatly appretiated. PLEASE respond ASAP.Thanks -BEN Share this post Link to post Share on other sites
realestateremedies 0 Report post Posted November 9, 2006 Hello All, I have a seller who has a house in an area where the comps are about 1,000,000. He has had it listed with a broker for a while for 1.3mil then dropped it to 1.2mil, now it 1.1mil. He called my "We Buy Houses" add oviously because he wants to get out of his situation. I am meeting him on Friday to discuss his situation and wanted to know how you guys would structure the deal. Things that confuse me are: 1) How do I handle the listing agent. 2) I am a CA RE Broker and dont want to do anything illegal with respect to listing agent, 3) I know the owner cant directly benefit from the transaction, but how much do I give him to sell him on working with me. Any and all advice would be greatly appretiated. PLEASE respond ASAP.Thanks -BEN Hi Ben ... I noticed your post on several other investment boards. Honestly, in this situation I would pass on the deal completely and just keep checking in with the seller on a periodic basis until he is no longer under contract. Why? Several reasons, yes there are ways to do the deal but it just gets really complicated with an agent/broker involved. 1) First of all, if you do in fact need to short sale this property (which I cant tell from your post, not enough info) then its going to be a little complicated with the listing agents involvement. Most dont have any clue as to what a short sale even is, and good luck getting them to cooperate. Now, if the seller has enough equity in the property to where you can payoff the loan amount or pay a little above the loan amount and still have room to profit .... then just make an offer through the listing agent. How much does the seller owe on the property? If its well below market value then just buy the property through the listing agent so he can recieve his commision and be done with it. If the seller owes right at or more than what the property is worth you will need to do a short sale. Its hit or miss but at that point you are STILL going to have to work through the listing agent. You will have to explain to the agent what it is you want to do, as well as the homeowner ... its doubtful your going to get him to agree just because most listing agents arent used to, and dont like ..... anything out of the ordinary. You never know though .... 2) Since you are licensed as well ... it is unethical for you to even be speaking with the homeowner when he is under contract with another agent/broker! You didnt mention if you are licensed in the same state as where this is taking place but if you are .... STEER CLEAR! Now, if its in another state OTHER than the one you are licensed in ... there might be a way to get around it but personally, I wouldnt push it. Ild give him your number since you already are in contact with him, and ask him to get ahold of you once his contract comes up IF the property doesnt sell. By then he will be more motivated, and you dont have to worry about violating any regulations set by your local real estate commision. I have a really bad cold right now and am having a hard time thinking straight so take it for what its worth ... I could be wrong on a few things but from the info you provided ... and what Im seeing .... in your shoes .. I would pass and look for another deal .... theres plenty out there. Share this post Link to post Share on other sites
realestateremedies 0 Report post Posted November 9, 2006 By the way, the reason your going to have to work through the listing agent is because your licensed. Some listing agents will allow the homeowners to sell the property themselves, and if they find the buyer the agent will release the contract. However .... your licensed, I would seriously reconsider your meeting on friday. All this is assuming that you live in CA, and found this deal in CA, and are licensed in CA. Being licensed has its advantages and I love it, however, this is a situation where it has its downfalls. If you werent licensed there would be no issues with meeting with the homeowner. At least in my state, and I would strongly believe its the same in CA, its against the real estate commisions rules and regulations to solicit a homeowner under contract with another agent/broker. You can get in big trouble by doing so. Your state may be different ......... Hello All, I have a seller who has a house in an area where the comps are about 1,000,000. He has had it listed with a broker for a while for 1.3mil then dropped it to 1.2mil, now it 1.1mil. He called my "We Buy Houses" add oviously because he wants to get out of his situation. I am meeting him on Friday to discuss his situation and wanted to know how you guys would structure the deal. Things that confuse me are: 1) How do I handle the listing agent. 2) I am a CA RE Broker and dont want to do anything illegal with respect to listing agent, 3) I know the owner cant directly benefit from the transaction, but how much do I give him to sell him on working with me. Any and all advice would be greatly appretiated. PLEASE respond ASAP.Thanks -BEN Hi Ben ... I noticed your post on several other investment boards. Honestly, in this situation I would pass on the deal completely and just keep checking in with the seller on a periodic basis until he is no longer under contract. Why? Several reasons, yes there are ways to do the deal but it just gets really complicated with an agent/broker involved. 1) First of all, if you do in fact need to short sale this property (which I cant tell from your post, not enough info) then its going to be a little complicated with the listing agents involvement. Most dont have any clue as to what a short sale even is, and good luck getting them to cooperate. Now, if the seller has enough equity in the property to where you can payoff the loan amount or pay a little above the loan amount and still have room to profit .... then just make an offer through the listing agent. How much does the seller owe on the property? If its well below market value then just buy the property through the listing agent so he can recieve his commision and be done with it. If the seller owes right at or more than what the property is worth you will need to do a short sale. Its hit or miss but at that point you are STILL going to have to work through the listing agent. You will have to explain to the agent what it is you want to do, as well as the homeowner ... its doubtful your going to get him to agree just because most listing agents arent used to, and dont like ..... anything out of the ordinary. You never know though .... 2) Since you are licensed as well ... it is unethical for you to even be speaking with the homeowner when he is under contract with another agent/broker! You didnt mention if you are licensed in the same state as where this is taking place but if you are .... STEER CLEAR! Now, if its in another state OTHER than the one you are licensed in ... there might be a way to get around it but personally, I wouldnt push it. Ild give him your number since you already are in contact with him, and ask him to get ahold of you once his contract comes up IF the property doesnt sell. By then he will be more motivated, and you dont have to worry about violating any regulations set by your local real estate commision. I have a really bad cold right now and am having a hard time thinking straight so take it for what its worth ... I could be wrong on a few things but from the info you provided ... and what Im seeing .... in your shoes .. I would pass and look for another deal .... theres plenty out there. Share this post Link to post Share on other sites
BigBenRE 0 Report post Posted November 10, 2006 Thanks for the response. I am trying to get in contact with him again today, and Ill find out how many months late he is on his payments, because I pretty sure he is not in foreclosure. Ill also get back to you with what his monthly payments are (what type of loan), and any and all liens that still may be on the property. Any other information I can get from this guy that would help any investors to help me creativley make this deal happen? Whether it be taking property subject to, then lease option, or wrap around mortgage. etc... P.S. I am not attached to this deal but its kinda fun to try to make a deal work. I like puzzles : ) Share this post Link to post Share on other sites
BigBenRE 0 Report post Posted November 10, 2006 Here are some additional details: -Mortgage: $7,000-3 months late on payments-No other liens or back taxes (as far as I know)- Has 6 month listing with 4 months left If you see any light at the end of the tunnel let me know? Share this post Link to post Share on other sites
realestateremedies 0 Report post Posted November 10, 2006 Here are some additional details: -Mortgage: $7,000-3 months late on payments-No other liens or back taxes (as far as I know)- Has 6 month listing with 4 months left If you see any light at the end of the tunnel let me know? Ummm thats got to be a typo right ... lol!?? The comps come in at a million and he owes 7K?? You mean 700K right?? Why dont you just make an offer through the listing agent at say 750K, flip it for 950K and be happy?? LOL ... Im sure theres something Im missing here, like I said Im sicker than a dog so my head isnt exactly clear. Once again though, and I have to repeat myself..... he is under contract, and your are licensed .. you can get in trouble for soliciting him. Although if you end up making an offer through the agent Im sure you wont get any resistance Have you asked the owner "what is the least amount you would accept"?? Share this post Link to post Share on other sites
BigBenRE 0 Report post Posted November 10, 2006 mortgage payment is $7000. Sorry bout that lol. Meaning he is $21,000 in the hole. I havent asked the owner what is the least he would accept, although i should have. I am sure he is not going to take less than what is owed. I am not going to solicit him by any means and like you said if I figure out a way to make this work I am going to make it clear to the homeowner that I have to work with his broker. Another reason I want to keep the meeting is to gain experience with homeowners. I have yet to close a deal and all my investing knowledge is through books, seminars, and websites. I am very thankful that after only one week of advertising myself (pennysaver ad, and "we buy houses" sign) I have managed to get about 4 appointments, some investors, and brokers who agreed to refer deals. Once again thanks for the help Share this post Link to post Share on other sites
realestateremedies 0 Report post Posted November 10, 2006 That makes more sense In that case ya your only option is going through the broker. So now your obsticle becomes not only convincing the homeowner to let you purchase the house and short sale the lender, but getting the broker to agree to do it as well. Gaining experience is a good thing, but if this one doesnt pan out for you dont get discouraged .. as I mentioned getting the broker to cooperate might not be easy. You said yourself in only a week you've set 4 appointments .. just keep marketing and find a homeowner that isnt listed with a broker ... mortgage payment is $7000. Sorry bout that lol. Meaning he is $21,000 in the hole. I havent asked the owner what is the least he would accept, although i should have. I am sure he is not going to take less than what is owed. I am not going to solicit him by any means and like you said if I figure out a way to make this work I am going to make it clear to the homeowner that I have to work with his broker. Another reason I want to keep the meeting is to gain experience with homeowners. I have yet to close a deal and all my investing knowledge is through books, seminars, and websites. I am very thankful that after only one week of advertising myself (pennysaver ad, and "we buy houses" sign) I have managed to get about 4 appointments, some investors, and brokers who agreed to refer deals. Once again thanks for the help Share this post Link to post Share on other sites
BigBenRE 0 Report post Posted November 11, 2006 Okay so I took your advice and called the seller and was blunt. I told him that if I made a cash offer it would be below what he even owes on the propperty. Oviously he didnt like the sound of that, so I said that I can also help him get the get the burden of the loan off his shoulders by negotiating with the bank. He wanst interesed in that either at this point in time. So we cancelled the meeting. It is ovious now that he is not as motivated as I need him to be. He has not got his NOD yet so the pressure has not really kicked in for him. Just to keep this and other deals similar to these alive I think I will give him a call every month just to see if he solved his problems. IF there is anything else you advise i do let me know. Thanks Again -BEN Share this post Link to post Share on other sites
MichaelC 160 Report post Posted November 13, 2006 Ben, one thing you did very well was not allow the homeowner to waste your time. Prequalify homeowners to the best of your ability to determine their motivation, or lack thereof. In this case, driving out to look at his kitchen would have proven a complete waste of time and gas. Lesson learned. You're a wiser investor today as a result. Share this post Link to post Share on other sites
realestateremedies 0 Report post Posted November 16, 2006 Ben, one thing you did very well was not allow the homeowner to waste your time. Prequalify homeowners to the best of your ability to determine their motivation, or lack thereof. In this case, driving out to look at his kitchen would have proven a complete waste of time and gas. Lesson learned. You're a wiser investor today as a result. Yup, check in with him in another month ... then you wil have a new obsticle to overcome, competition. Once that NOD hits the public records he will be getting HOUNDED by other investors. At least around here. However, you are in a position to establish a good relationship with him so try to do so. Give him a call back and see if he's ready to work with you. If not ... move on Share this post Link to post Share on other sites
BigBenRE 0 Report post Posted November 16, 2006 I agree completly. Right now he is not ready and in about a month I already have him sceduled in my calender to give a call, back. Thanks for the replies. -BEN Share this post Link to post Share on other sites
