Steve Morton 0 Report post Posted March 25, 2007 Hey guys. I have an option on an old, and very unique property located just on the outskirts of the city. The property was listed at the time for 299 000 ( the tax assesment ) and I originally singed it up for 265 000. Well, to make a long story short, the listing expired, and I also was unable to secure a buyer for this property even at a steep discount. So I recently went back to my seller, and I told her that I would need to offer a price as low as possible in order to move this place. I'm also unable to offer any good terms due to the payment being well over what market rent would bare. She mentioned that during the time I was marketing for a buyer, she took out a loan on the house, so she now owes 263 000 on it, and the very least she will be able sell at would be at price. I was able to negotiate the price to 258 000 and am now offering it for 265 000 advertised as 35K bellow tax assessment (comps were too inconclusive for this place due to it being so unique, as well as it's remote location). I am getting a lot of interest from my marketing, but once I tell my prospects to take drive up there and check it out, I never hear back from them. I was wondering if anyone here could offer any suggestions on what I should do with this house. Should I just try an get an assignment fee? Or could something like maybe even an auction be a viable solution to this ? Share this post Link to post Share on other sites
MichaelC 160 Report post Posted March 25, 2007 Steve, I don't know the specifics of your local market, but with those numbers in my current market, I couldn't move that property if I was the world's greatest salesman. I suspect your market is telling you that there isn't value in the price, otherwise you'd hear back from at least of few of the lookers. Pure Options are relatively easy to understand and to get, but the problem as you are now seeing, is that unless you have a substantial discount you won't find any takers. Unless, of course, you are in a runaway sellers market. But I suspect you aren't.Is all lost? No. You actually mentioned a few possibilities yourself. Instead of trying to sell if for a higher price, try for a simple and quick assignment fee. One or two grand is a heck of a lot better than nothing. And an auction, done with the right marketing, will attract attention. Do a search on the board for auctions. One of our members, Jonathan Rexford, holds auctions with some regularity. He may have some pointers for you. Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted March 26, 2007 Seeing as we are in the same market I can confirm that it is decidedly neutral (at best) and the only way to move pure options now is to secure deep discounts. I also don't like that it's a "unique" (read: wierd) house in a remote location, that's bad news all the way around. BTW Steve, send those no-way-to-cash flow leads my way and I'll see what I can do with them. Share this post Link to post Share on other sites
Steve Morton 0 Report post Posted March 28, 2007 Seeing as we are in the same market I can confirm that it is decidedly neutral (at best) and the only way to move pure options now is to secure deep discounts. I also don't like that it's a "unique" (read: wierd) house in a remote location, that's bad news all the way around. BTW Steve, send those no-way-to-cash flow leads my way and I'll see what I can do with them. It seems like everyone who calls me has payments of at least 2K monthly. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted March 28, 2007 . . .It seems like everyone who calls me has payments of at least 2K monthly. Suggest a refi to everyone of 'em. You never know. Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted March 28, 2007 If the house is over $300k then $2k a month is about what a T/B is looking at, so those could be CAs. Of course if it's a $180k semi... Share this post Link to post Share on other sites
Steve Morton 0 Report post Posted March 29, 2007 . . .It seems like everyone who calls me has payments of at least 2K monthly. Suggest a refi to everyone of 'em. You never know. I've mentioned that to several sellers. So far I have yet to hear back from even one of them that actually went out and did it. I guess their multi thousand dollar monthly payments are their problem, and not mine though, right? If the house is over $300k then $2k a month is about what a T/B is looking at, so those could be CAs. Of course if it's a $180k semi... Have you had any success locating T/B's in our area for such a high amount, Doug? Share this post Link to post Share on other sites
MichaelC 160 Report post Posted March 29, 2007 Meaning, Steve, they're neither interested nor motivated. No problem. Don't take it personally. Just move on to the next homeowner. Share this post Link to post Share on other sites
Jonathan RexfordFL 8 Report post Posted March 29, 2007 Amen MOVE ON. Remember the song? 18 wheeler? Man that is a small spread. In my market I would be selling at 85% and I would need to buy in the 70% to make two nickles. Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted March 29, 2007 Have you had any success locating T/B's in our area for such a high amount, Doug?No problem, Steve. $250k-$325k is where everybody wants to live around here. Share this post Link to post Share on other sites
Jason (AL) 1 Report post Posted March 30, 2007 Dang....them's some big numbers! ...for the average house. ....in comparison, that is. Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted March 30, 2007 Jason, I think the actual average for a detached house is around $280-$290k (excludes townhouses and "semi's" which is sort of a side-by-side duplex) but builders are hellbent on the $300k+ range because land is becoming scarce in the county. That's why the up-to-$325k range is also VERY active. You can still get a small old (50+ years) house for around $170k but most of them aren't in the greatest areas. The good old neighborhoods are being massively revitalized so it's not uncommon for houses in those areas to be the same or more then brand new houses of the same square footage. I guess you pay for "character" Most of those 70+ year old houses do have some nice perks, 9ft ceilings, real fireplaces, hardwood floors and molding throughout, and of course very convenient locations to downtown and the older bigger parks. But I agree with you about the prices. On the one hand it's nice of course, bigger down payments, bigger cash flows, bigger payouts. But at the same time it's a scary number for any vacancies! Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted April 3, 2007 Hey Steve, thought you might like to know the latest numbers: The average price of houses in Waterloo region for Feb 2007 was down 4% from Jan 2007. So it's going to be extremely tough to move a pure option right now unless you get it at a massive discount. Share this post Link to post Share on other sites
<Steve> 82 Report post Posted April 3, 2007 Hey Doug- Don't mean to cut in here...but...I am working a PO right now and am finding it difficult for buyers to understand the assignment fee. They get 'deer eyes' and then think I am trying to do something not on the up & up. I am not sure if it is the way I am explaining the Option to Purchase or it is so simple people can't get it. I advertise the true purchase price and if a potential buyer is interested, I then explain the option and my (assignment) fee. Not sure how I can explain it any different, I mean it is what it is? Any ideas or similar experiences? Share this post Link to post Share on other sites
Jason (AL) 1 Report post Posted April 3, 2007 Hey Steve, Why do the buyers have to know your assignment fee in the 1st place?All they should know is "how much & where do I sign?". Perhaps you're throwing them off by mentioning how the deal is structured?...something they shouldn't have to know. Is this all because you're asking for the assignment fee upfront? Share this post Link to post Share on other sites
