At least 200K in equity deal (need URGENT advice )

[Miguel]

Hi,

I need urgent advice on this one.

A house 6 bedroom/4 bath is for sale in Surrey. It was listed by the owner but recently got listed with a realtor. Initially priced at 500K, now listed for 470K. I talked with the owner and is desperate to move to Alberta. Basically selling the house is the only thing holding them.

ARV: $500,000 (That`s what the owner told me, need due diligence here)
Asking price: $470,000
Mortgage owed to the bank (they didn`t know for sure but think is around 270, although initially she told me 203K)
Payments: $2000 a month
Pretty house, a few years old no repairs

I asked twice if they would sell the house for what they owed to the bank, and they said yes... but they want to talk with the realtor. Basically I am going to do an appointment on Sunday to go to see the house and talk with the owner and the realtor.

I am still digesting Legrand techniques but I think I have two options here:

1. I buy cash for 270 with a Private Lender plus some cash to his Realtor, or

2. Lease option for their payments, and put a tenant buyer with a lease option ( I was thinking to ask for 3000? )

What do you guys think? I am super stressed! I never bought a property before!

I told her that I would probably call her before the meeting for more details Am I missing something here?

Miguel

 

[Thomas Beyer]

call or e-mail me .. if you can get this for 270K more or less and it is indeed worth 500K perhaps we can do 50/50 on a quick flip ..

IF ..

 

[cmattric]

Heart beat boom boom boom.

I think you should get the deed, make his payments (get a private loan or if you have money thats fine) until the place is sold. That way realtor cannot argue, let him list place for a month, if you cannot sell it for under market value, put a tenant/buyer in.

There you go you have two exit in case the first one doesn`t work.

very good deal don`t let it go

 

[lanedry77]

QUOTE (Miguel @ Oct 29 2009, 09:17 PM) I asked twice if they would sell the house for what they owed to the bank, and they said yes... but they want to talk with the realtor. Basically I am going to do an appointment on Sunday to go to see the house and talk with the owner and the realtor.
Miguel,

If the house is currently listed, you should not buy it until the listing expires. If you do, the realtor will want to get paid from someone, and hat someone will likely be you.

or at least account for the extra $ you will have to come up with.


David.

 

[JasonEtheridge]

QUOTE (Miguel @ Oct 29 2009, 11:17 PM) Hi,

I need urgent advice on this one.

A house 6 bedroom/4 bath is for sale in Surrey. It was listed by the owner but recently got listed with a realtor. Initially priced at 500K, now listed for 470K. I talked with the owner and is desperate to move to Alberta. Basically selling the house is the only thing holding them.

ARV: $500,000 (That`s what the owner told me, need due diligence here)
Asking price: $470,000
Mortgage owed to the bank (they didn`t know for sure but think is around 270, although initially she told me 203K)
Payments: $2000 a month
Pretty house, a few years old no repairs

I asked twice if they would sell the house for what they owed to the bank, and they said yes... but they want to talk with the realtor. Basically I am going to do an appointment on Sunday to go to see the house and talk with the owner and the realtor.

I am still digesting Legrand techniques but I think I have two options here:

1. I buy cash for 270 with a Private Lender plus some cash to his Realtor, or

2. Lease option for their payments, and put a tenant buyer with a lease option ( I was thinking to ask for 3000? )

What do you guys think? I am super stressed! I never bought a property before!

I told her that I would probably call her before the meeting for more details Am I missing something here?

Miguel

If they re willing to sell for what they owe, why hasn`t the realtor just dropped the price to 400k? Or 350k?
They would come out much further ahead than they would giving it to you for what they owe.
Who would give up 150-200k in equity?
There s more to this, or the sellers and their realtor are not too bright.
Or you re about to be taken for a ride...a hidden defect in the house...
Be careful.

 

[tbarcier]

QUOTE (Miguel @ Oct 29 2009, 11:17 PM) I asked twice if they would sell the house for what they owed to the bank, and they said yes... but they want to talk with the realtor.

Don`t be surprised when the realtor talks them out of it.

 

[RedlineBrett]

QUOTE (tbarcier @ Oct 30 2009, 08:51 AM) Don`t be surprised when the realtor talks them out of it.

Definitely. If there is a realtor involved it will be very difficult to get such a deep discount. Why wouldn`t they just put it on the market for 100k less and sell it that way? The realtor will get paid more for finding a better deal for his client than he would by selling it to you so there is motivation there for his agent to get a better price for his client.

Or perhaps they owe way more than 300k on it. have you pulled title?

 

[Dejavu]

QUOTE (RedlineBrett @ Oct 30 2009, 12:13 PM) Definitely. If there is a realtor involved it will be very difficult to get such a deep discount. Why wouldn`t they just put it on the market for 100k less and sell it that way? The realtor will get paid more for finding a better deal for his client than he would by selling it to you so there is motivation there for his agent to get a better price for his client.

Or perhaps they owe way more than 300k on it. have you pulled title?


Ron`s teaching is to never try to think for others..his words - "you are not qualified". Why do people do stupid things and give away free equity? Why hasn`t the realtor already reduced it by $100K and got it sold?

 

[tbarcier]

I`m sure if you offer the realtor some cash, as you mentioned, it would be fine with them.

You know the whole WIIFM.

 

[RedlineBrett]

QUOTE (Dejavu @ Oct 30 2009, 10:33 AM) Ron`s teaching is to never try to think for others..his words - "you are not qualified". Why do people do stupid things and give away free equity? Why hasn`t the realtor already reduced it by $100K and got it sold?

I`m just playing the numbers... There is a third party with a vested interest in seeing this house sell for a good dollar which is a major hurdle for the buyer to overcome. The buyer is going to have to get the realtor on his side in order to get this deal done.

 

[WJW]

QUOTE (DavidSandbrand @ Oct 30 2009, 08:21 AM) Miguel,

If the house is currently listed, you should not buy it until the listing expires. If you do, the realtor will want to get paid from someone, and hat someone will likely be you.


David.

I`m not sure about the laws in BC but in Ontario there is a holdover period for the listing agent. If you wait for the listing to expire and try to work a deal with the owner, you still have to pay the listing agent the commission.


Try to work out a deal with the seller and realtor so that there is a win-win-win for everyone. If you look after everyone`s interests then you could possibly have a great deal. Do your due diligence, make the offer, if its works great if not move on to the next one. Your job is not to think for the seller but how to make it work for everyone involved. Good luck. I hope it works out for you. If not, atleast it will be a great learning experience. So you really can`t lose.

Walter

 

[tbarcier]

Andif you take care of the realtor now they make bring you future deals like it. Good bird dog opportunity.

 

[Miguel]

QUOTE (RedlineBrett @ Oct 30 2009, 09:13 AM) Or perhaps they owe way more than 300k on it. have you pulled title?

Thanks a lot for the advices! Really appreciated! I am going to happily pay a lot of beer!

I pulled the title and I found out two things:

Their mortgage is for $298350 and they started making payments in October 2006 ($1787 payments I am assuming monthly?) So they must have paid around 64K. Basically they owe 233K aprox.

But there is something in the Title saying "PENDING APPLICATION: FREEHOLD TRANSFER". I guess I should contact a Lawyer to decipher all this for me.

 

[Miguel]

Update on this case:

I went to see the property. It is a pretty house and fairly new. I met the Realtor and the Owner. I left the house with the Realtor and I started negotiating with him. Basically he told me that the owner has the power to sell (I guess because of a divorce as she is not the original owner). But the offers have to be approved by a lawyer (I am assuming he is a lawyer assigned by the court). I brought up the fact that I pulled the title and I saw some things that I needed to clarify with my lawyer. He said that there is some money to be paid to creditors and to the husband.

I mentioned that I would like to make the bank payments and then he could sell the house for me. He said that he would talk with the owner. Next day he told me that the owner just wants a "normal offer with standard subjects and completion date".

On Monday I replied that I might consider doing a cash purchase but I need to know how much she owes to the bank, to creditors and to the "husband".

Is it normal that is taking him more than two days to answer? Do you think he is going to do this for me?

I was considering send him a low cash offer as he has to give that information to the owner. As a last resort, I was considering talking directly with the owner but I don`t want to do anything unethical.

What is your gut feeling? Is he going to help? Should I forget about the deal? (Maybe I am being unpatient)

 

[JasonEtheridge]

You re wasting your time. Move on to the next.

 

[RedlineBrett]

QUOTE (JasonEtheridge @ Nov 5 2009, 07:48 AM) You re wasting your time. Move on to the next.

Definitely.

If this place was such a hot deal how come it isn`t sold already? Once it`s on the MLS the word is out.

How are you going to make any money by buying it from this guy and then changing the list price on MLS? What are you going to say to a potential buyer that asks what the heck has been going on with this property?

 

[Miguel]

QUOTE (RedlineBrett @ Nov 5 2009, 10:12 AM) Definitely.

If this place was such a hot deal how come it isn`t sold already? Once it`s on the MLS the word is out.

How are you going to make any money by buying it from this guy and then changing the list price on MLS? What are you going to say to a potential buyer that asks what the heck has been going on with this property?

Thanks for the advices guys... I will move on and forget about it. Maybe call in a week or two just to see if they are more open...

Thanks again for all the advices!