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Shane1989

Listing is about to expire

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Hi,

My sister referred a man to me who has a 3bed 1bath. The price has already been reduced. Haven't got the official comps yet, but the Zestimate is around $66,500, but he is willing to negotiation. It's turn-key. The owner is 76 y.o. with diabetes, and he is tired of being bothered with it so he is wanting to sell it. The listing will expire in just a few days. This just doesn't seem like a L.O. deal, maybe a wholesale deal. I don't have enough info because I don't have the comps yet. I also forgot his asking price :blush: , but i'll get it again. Once I get the comps I will update the info and keep you guys posted.

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You can ignore Zillow's Zestimate. They are often way off the mark. So, first things first, you need to know the true value of the property. Then, you need to know the owner's asking price and degree of motivation and what he might be willing to do as far as a deal goes. With that info in hand you can then make your offer.

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If the property is listed, then the seller pays the Agent. But keep in mind the Agent has a responsibility to represent the seller's best interest, not yours, unless you sign on with a buyer's Agent.

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But does it necesarrily have to be listed. The current listing that is in place is due to expire in 3 days, and I don't know that agent at all; only the homeowner. My question is, what do the negotiation fees look like if I get MY Agent to handle the negotiations with the seller? How do I pay him or how does he get paid for helping me?

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I'm going to assume that if the listing expires, your Agent is going to be required to get the homeowner to sign another listing agreement, even if it's just for a week while she puts the deal together. But your best source of info is your Agent himself. Tell him what you need and ask him his fee. Mystery solved. B)

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Okay he just got back to me and informed me that The seller pays the commission of both realtors which is generally 3% to each side. He said "So my negotiations for you cost you nothing as the buyer." He asked me "Do you plan on renting this out or reselling it?" and to be honest, I wont be sure until I get the CMA.

 

Update: He just informed me that the seller Looks as if he is offering $4500 towards closing as well.

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i only had an opportunity once to try it with a realtor, and he went along with the option, but wanted to have contract written so he would get listing to sell at expire of option, seller was not agreeable

 

 

needless to say it didn't work out

 

some things I have been advised to were to make sure is to try to use your own lawn sign, as a lot of folks shy away from realtor signs due to credit worries,.and to make sure contract is for only the one specified property

 

so far I have not tried using a realtor again, but it could be good if you have a mutual understanding and agreed approach to the deal..

finding the right realtor is the key

Tom

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Negotiate for yourself, don't bother with an agent. If you're trying to do something creative like a lease option, or even just a wholesale assignment of contract, the agent is only going to make the transaction more confusing unless the agent is also a wholesaler as well, and understands your intentions and the strategies.

It sounds like you're new to investing, the last thing you want to be doing is learning as you go, trying to communicate clearly what you're doing to a real estate agent, and then have one other variable involved in the negotiation (agent(s) commission(s)).

 

If the value of the house (based on the Zillow number) is realistically 60k and the house needs no work (to be worth the 60k), find out if the seller would rent the house instead, and if so, for how much per month? Is that number equal to or less than what similar houses in the area are renting for?

Let the seller know that if you do a rent to own, he won't be paying 6% in commission when the house sells, but he will have to rent the house for a year or two first.

 

On the other hand if the house needs repairs to be marketable, or the seller is desperate to get out from under it, if it's worth $60k as it sits, would he be willing to sell for around $50k or less if you close quick?

 

By now I think you said the listing is expired, so if your only contact is with the seller, keep it that way and use it as a learning experience to negotiate for yourself.

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You don't know the fair value and you forgot his asking price, how serious are you? Getting an agent to negotiate for you? What!? That's just laziness.

 

It may be scarry to go out and negotiate and you may suck at it, but if you want to get something done, get out of your comfort zone. There are many investors starts out sick with nervousness and butterflies in their stomach, but the ones pull through will succeed.

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^^^ Agreed, Daniel... though I wouldn't be as quick to say "How serious are you? That's just laziness" because I'm guessing Shane's new to real estate investing and if I were to guess by his user name, he's probably a younger guy like myself and may be venturing in to the world of business and entrepreneurship for the first time.

 

And if you think about it, one of the duties of a real estate agent is negotiating a transaction on behalf of the party they represent (buyer or seller).

I think the trouble with having an agent negotiate a wholesale deal on your behalf is in that most agents won't understand, agree with, or know how to negotiate the type of deal you're trying to do here and if they do, they're probably an investor themselves or might be hesitant to get involved with an inexperienced investor who (I'm guessing) doesn't have tons of cash or funding available at the moment.

 

There are agents out there who only work with investors and are NOT investors themselves, so they won't be taking the cream of the crop for themselves and passing along the table scraps to you. Network at your local REIA and if you don't find someone AT the REIA, talk with more experienced investors and see if they can recommend an agent who could help you with your goals. You may find the right person and be able to do something together after all.

 

That being said... I would encourage you to follow Daniel's advice about getting out of your comfort zone and being the small percentage of investors who push through the uncomfortable process of learning the sales and negotiation aspect of the business. If you're in this for the long haul and not just for a chance to make a quick buck, learn to get uncomfortable, work on constantly improving your communication skills, and learn sales and negotiation! You may fall flat on your face at first, but as long as you keep getting up and trying again, you'll eventually start putting deals together. The skills you develop will help you in other areas of your life as well, and are applicable to other businesses or situations as well... Once you learn it, then it'll be more appropriate and much easier to outsource and have someone else do the 'dirty work' for you.

(by dirty work, I mean whatever it is that you'd prefer not to be doing but is necessary for your business to run)

 

Any update on this lead Shane?

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