"Flipping" Question
Hi everyone,
Not sure if this is the right forum for this question but here it goes: While out looking for junkers I came across a few listed properties in great shape that both had VERY MOTIVATED sellers...I would like to know if large earnest money is always required to submit an offer thru the agent? And, what is the best way to market this property assuming my low offer is accepted? How do you get buyers who may have traditional financing to look at the property? (or other investors?) I know this is a lot but maybe somebody can point me in the right direction at least.
Thanks for any and all help.
With great care.
First assume that the listing Broker has a full exposure of the Buyers needs and pressures. He is also, (I assume) trying to sell the property.
There is your partner on the flip/flop. Talk to him. Is it truly under market. What other buyers are interested. etc. etc. etc.
How about a token deposit (very small) into escrow to hold while you do research, say 60 day nonrefundable. I used to even authorize an imediate dispersal of the funds to the Seller if he is in a big time jam. Risky, but thats life. if you are certain that it will sell, fast and for more. You can of course offer additional profits to the Broker if he really really helps you do this transaction. Besides you will now have a broker as a friend and thats a plus, or,,,,is it? Lucius
The owner said they have not had any offers since listing 6 weeks ago...which tells me the price is too high, but the area is nice and the home is totally rehabed inside and outside looks good as well. The surrounding area has expensive homes mixed with low-cost ones so realtive value is hard for me to determine with my limited experience. I just know detatils of their financial situation they shared with me and i know they NEED this home to sell to move into their new one which is so far a vacant lot.
The second part of my question dealt with how does one sell a home that is occupied and you are under contract w/the owners? assuming the agent goes for the low earnest $ deposit?
Thanks, (please somebody shoot holes in this and tell me what i am missing so i can learn!!!)
It's my understanding that the seller has the greatest say about earnest money - whether it's required and how much. The agent can recommend a figure, but it's up to the seller. The logic behind earnest money is that there is a direct correlation between how much you put up and how serious you are about closing the deal.
What area are you in? It sounds like research can answer a lot of your questions. If you can find some solid comps and get a feel for how long houses have been on the market, you might have a crdebilde flip on your hands. If you have any questions as to how to go about this, e-mail and I will be more than willing to share what I know. Good luck!!!
Matt
Make your offer subject to an independent appraisal paid for by you, or just have the peoperty appraised for 250 first. Or get a competant re broker who will represent you, not seller and have them do the comps, its worht 3% to save thousands, 20 year real estate vetern
If you don't mind putting out the $, an appraisal would not only clarify what kind of deal you are getting, but you could then use that to support your end sales price when you flip.
A good Realtor is a great person to have on your team. He / She can pull comparable sales for you, as well as market the property.