So Frustrated I Could Cry
I bought a pre-foreclosure that needed very little repair (paint, carpet and a good cleaning) and have been trying to sell for the last 3 going on 4 months. It's in perfect condition as I've updated the whole place, it's in a nice neighborhood, great school district and so on. I've tried lease options, seller financing, offering realtors 3% plus a bonus to find a buyer and 1 auction.
We have gotten tons of calls from buyers, all with no money or only $1k who can afford $700 a month and who have very bad credit. This is a $95k home! I've had one offer of $81k from a qualified buyer which is well under market for the house and no realtors have given any offers.
I just don't know what else to do.
Can anyone give me some suggestions on how I can get rid of this place? 
go ahead and list is with an aggressive realtor, you will be suprised.
they tend not to really work for you when you offer them the 3percent 1 time showing.
i dont really like to use a realtor, unless i find myself in a situation you are experienceing.
just a suggestion.
When a listed property does not sell within 90 days, the asking price is almost always too high.
You say this is a 95K property, but you don't say what you are asking. How did you arrive at your selling price? If you are asking a fair price, then maybe your marketing approach needs to be reworked.
Thats good advise, Realtor or no realtor houses usually wont sell if they are overpriced. Where ever you got your 95K figure it sounds incorrect. The only way to determine a market value is between the buyer and seller. Even morgage appraisals follow suit. Ive had 15k spreads in appraisals on the same property based on What the buyer will spend.
Don't cry. Do a open listing with an agent. Get the property on the m.l.s with the option to sell by owner. If it seems to be a 95K house list for 110K In two weeks time all of the active buyers will have seen it. Drop 5K this will bring a new set of buyers. Repeat this step untill you sell it yourself, or it's sold. Then you will have you market value. If you have a loss that means you bought wrong, 10k spreads are risky. If you don't make as much as you hoped , you still bought wrong, join the club my worst deal was 5k profit the broker collected 7500 . Don't cry don't quite ,don't let that happen again
I'm asking market of $95k and no one has complained of the price, they just can't afford it and seem to think that because we are FSBO that they are going to be able to get it for a discount.
2 questions,
Exactly how are you marketing the property, and what was wrong with the tenant/buyer who had $1K and $700/month?
What are you trying to get out of the property?
Roger
As far as marketing goes, I'm got several signs in the yard and pointers in the area. I've also advertised in the paper and called down my buyers list. My leads have been mostly from signs, but those are also the people with no money. Ad calls have been better quality people but so far I've had only the one low offer from that.
I also think that my price is fair. There aren't any comps less than $87k and they've been as high as $101k. We actually started the house at $101k but never got a single response so we lowered to $99k and that went okay but still no offers so now we are at $95k and in reality I'd be happy with $90k.
The payment on the house is $775 PITI and I paid $8k total to get into the house. So someone with $1k and only $700 a month just doesn't cut it. I want the down to be $3-5k and the payment at $950 or they can always get their own financing which is what I'd prefer at this point. I've also spent time researching the area and even a 3 bed apartment goes for $850. Other 3 bed homes in the area, and I've even checked surrounding areas, are renting for a min of $950. I've talked to maybe 75 people and I'm thinking that all I'm attracting are bargain hunters.
I think I've got a marketing problem. My ads and yard signs must somehow reflect that this house can be bought at a deal. Any suggestions on how to advertise to get people who may need or appreciate financial assistance in buying a home but who aren't trying to get a steal?
I know this may sound greedy but I hate to list a home with a realtor and pay the selling and buyers agents. I'll pay 1 but not both, and I actually have a noble reason.
Jandkinvestments,
Here what I did to move a unit somewhat like yours: I list several options that the client could think about. I posted a list at the house. The first option gave price for all cash deal. Second option I help with purchase by taking back a second mortgage. Third option I took back a second and paid closing cost. Lastly I gave a rental amount / with a option to buy.
I got many persons that had great interest in the home. Within a few days the house was lease/optioned. It really does not matter if the renter ever purchase because they are paying the mortgage, taxes and insurance and I am getting positive cash flow and equity build-up.
I just listed these option inside the glass door (yes, it was locked) Good luck[ Edited by Vern on Date 07/10/2003 ]
I am doing almost exactly like Vern just mentioned. Multiple deals. My ads won't even hit the papers until tomorrow, and I've had 5 people look at the house already, just from the sign. We're also a bit behind schedule on the rehab and it's not completely finished yet. Still needs some touchups, back deck painted, and carpet.
Just curious but how much did you pay for this property, or what type of financing did you get?
We've got $67K in a loan on this one, and my PITI is only $475/month.
BTW, we've got it listed at $85K all cash (or own financing), $90K + closing costs w/seller 2nd, or $95K L/O w/$2-3K down and $750/month ($150 option payment credit).
Roger
Hello j&k,
First thing you need to remember when running your own business is that TIME IS MONEY! Good time management skills constitutes a BIGGER bank account.
Ask yourself this question ,why would I hold on to a problem property for a large profit , when I can settle for a $3,000 -$5,000 profit!!!
It's pure economics. Sooner or later
the holding cost is going to put you in the negative. I don't know what your profit margin is but it's likely that its too high if you have'nt sold the property yet.
I strongly believe that if your lower the price that you will sell the property. And besides don't you think peace of mind and a nice profit is better than a great profit and a massive headache !!
Hope this helps!!!$$$$
P.S. I never invested in real estate but I have had a very profitable service business of the same caliber.
All of the above is very good information and covers enough for you to proceed. The only advantage in this situation of using a Real Estate Agent is heavy exposure to the market. Lots of brokers have a buyer in the pocket and they are working for the full commission. Also if they are in a large company they may be tied into an escrow company and can reduce your closing costs. And now here it comes, like me, they know how to structure a deal to get you out and a profit. They have investors who would like to buy your Purchase Money Trust Deed or take back second mortgage at a discount, but of course you have gone for top price plus so any offered discount is already covered in the high selling price of the home. If concerned that your Buyer cannot make the payments it pays to discount out your second and get clear. I know it sounds terrible but I have seen some properties sold slightly over market to absorb the discount on the take back second and the title and escrow costs. I have also seen the same properties within a short period of time go back into foreclosure as the new Buyer could not make the payments.
Out here in LaLa Land a film type gets a five picture deal and figures he is set for life so he buys the million dollar house and the big special car with the silver lady on the hood and his first picture crashes. They cancel his five picture deal and he is tap city. The house is sold for top top dollar after all some of the trashiest people in the world are neighbors. So once again he gets a few bucks out to try try again and the brokers, sell the take back paper at a discount. Go double loan to achieve 100% financing on the lst and away it goes for the second, third and fourth time around. There is a lesson to be learned here. In letters of fire. Never pay over one fourth of your income for housing and always have at least six months reserve for payments and expenses. I think this is applicable to all levels of income. Cheers Lucius
Some Ideas... Take 'em or Leave 'em...
Find a reputable mortgage banker that will work with you (not some company that nobody's ever heard of).
Tell them your situation and tell them that you would like some brochures of no money down programs that they offer, along with rate info and a payment scenerio of a target $700\mth. This might be with you paying some closing costs, some down pmt money, or with an adjustable or balloon rate to get to that pmt with little or no down. Have them print it out so that you can give it away.
Good mortgage companies will be more than happy to use you for free advertising. Get some business cards and brochures on new home buyer incentives, etc... Anything they can give you. Give these materials to prospective buyers along with a name and contact number so they can get approved.
Also, with so many programs you are offering, it sounds (to many buyers) that you are desparate. This is why they are trying to get a steal. I say "relax" with all of the offers. Keep in mind that every area is different. Yours might not like creative financing - especially if they don't understand or trust it.
You can ask this mortgage company who they have for their appraisals. Get it appraised and "prove" to people it's worth what you are offering, then go a little under, so that you can say "below appraised value."
Some areas of the country are offering free down payment money (gov. grants) for people who qualify if they take some courses in home ownership. If your area has something like this, find out where they are and give them your home info. Tell them they can all go and see it as a class (for a learning experience). Who knows, your buyer might be in the class.
If you are afraid of a 6% real estate fee, then negotiate it. Find an aggressive office that will sign you up for 4-5%.
Good luck always,
OHhouse
[addsig]
You can also find realtors who will list your property on MLS for a fee (maybe $200) which will give you the exposure. You will be required to pay a commission for the buyer's side (half of the otherwise 6% total) if a contract results from your listing but, since you are already willing to do that it shouldn't be a problem.
It's common that buyers feel fsbo properties will be discounted. I sold my own home fsbo and offered the buyer the 3% I would have paid to a buyer's broker as a discount off the list price...that closed the deal!
Steve
Lease options and seller financing both works.
You just need to re-adjust your Lease Options and seller financing agreements to make them more attractive to your buyers.
In such a way that you'll still make a profit.
A good way to get more exposure where your phone will be ringing off the hook, is to restucture your ad in the paper , and place it in the renters section of the paper saying something like "rent to own program", or "stop making YOur landlord rich" or something along those lines.
I go along with the renter deal. Many renters just get stuck thinking they cannot buy a house, or they haven't been hit on the side of the head with a good deal yet.
Advertising in the rental section should bring you a whole new caliber of people, some who can actually afford to buy into your house.