No advice on the cash investor, but I would definitely interview another realtor, just to see if it's worth changing everything she suggested, since you said it was a LOT of stuff. We were in a townhouse, and were kind of surprised that our realtors said we didn't have to do half of the stuff we thought we'd have to, but we had a contract within the first weekend we were listed.
I would et another realtors opinion. The only time I've known of people selling to investors is when it's the we buy ugly houses sort of deal or an estate that doesn't care about top dollar and just wants to unload.
A couple thoughts: If he's a cash investor why would it take him two months to close? Financing is the only part that takes longer. If he's paying cash, make sure the contact says in cash and make sure he doesn't have contingencies on the contract. One tactic investors use is wholesaling. You can google it but it basically means that they put a contract on a house for a certain price, therefore locking it down so the owner quits marketing it. Then they turn around and try and assign the contract to a different buyer for a higher price. If it closes, then they get to keep the price difference. But often they can't find someone to take over the contract so they just use a contingency in the contract to get themselves out of the deal, which leaves the owner back at square one. A common contingency is inspection. As far as a contract normally the buyer submits a contract but there aren't limits as to who drafts it as long as the buyer signs it. When I sold my house I bought a packet of forms at OfficeMax. I'm an attorney so I reviewed it, but I honestly thought it was sufficient and it was easy enough for me to see what terms the buyer wanted to add beyond the basic language.
I agree to talk to another realtor and see what they say.
One of the things my parents did when they were selling there house was have an exclusion in their contract. Basically if my aunt bought the house then they weren't going to have to pay a commission. I wonder if you could do that with this guy. Then you could put it on the market (assuming you don't NEED to make the updates, per another realtor) and have a back up plan in place.
We sold to a cash investor and it was magical. I was super skeptical but he offered us a fair price - a little above where we expected to end up after a regular sale with Real Estate agent fees and negotiating, and that didn't include things that would have had to be done for showings/punch lists. We're lazy home owners so we had tons of little things that needed to be done that would have cost time and money, and were moving out of state.
Ours moved pretty quick - I'd say 6 weeks from being approached. They had to gather the money together and get the contracts ready. I'd be surprised if even cash investors had that money fully liquid somewhere.
We paid for a lawyer to help us out with contracts and it went off without a hitch. I would advise that.
“With sorrow—for this Court, but more, for the many millions of American women who have today lost a fundamental constitutional protection—we dissent,”
A couple thoughts: If he's a cash investor why would it take him two months to close? Financing is the only part that takes longer. If he's paying cash, make sure the contact says in cash and make sure he doesn't have contingencies on the contract. One tactic investors use is wholesaling. You can google it but it basically means that they put a contract on a house for a certain price, therefore locking it down so the owner quits marketing it. Then they turn around and try and assign the contract to a different buyer for a higher price. If it closes, then they get to keep the price difference. But often they can't find someone to take over the contract so they just use a contingency in the contract to get themselves out of the deal, which leaves the owner back at square one. A common contingency is inspection.
My stepson is a real estate investor. He often pays cash, but he doesn't have the money sitting around in a bank account. He has to refinance another property to get the money, and that takes some time.
I'd make sure you get earnest money if he isn't closing for 2mo. I'd try to request to sell As-Is if possible especially if you are giving him a good price. If he's paying cash is he still requiring an appraisal & inspection? I'd contact a RE lawyer to do the paperwork. I did a FSBO several times--I pay a small amount (around $1K) for a professional to check over the paperwork. It's always worked out very well for us logistically & financially.
A couple thoughts: If he's a cash investor why would it take him two months to close? Financing is the only part that takes longer. If he's paying cash, make sure the contact says in cash and make sure he doesn't have contingencies on the contract. One tactic investors use is wholesaling. You can google it but it basically means that they put a contract on a house for a certain price, therefore locking it down so the owner quits marketing it. Then they turn around and try and assign the contract to a different buyer for a higher price. If it closes, then they get to keep the price difference. But often they can't find someone to take over the contract so they just use a contingency in the contract to get themselves out of the deal, which leaves the owner back at square one. A common contingency is inspection.
My stepson is a real estate investor. He often pays cash, but he doesn't have the money sitting around in a bank account. He has to refinance another property to get the money, and that takes some time.
Yes, I am an investor too, with nearly 150 properties. I'm not sure of what level investor your stepson is, but most investors don't pay cash because of the reduced cash flow. For example if you have enough equity in a property to refinance to get enough for an all-cash purchase of a $300,000 house that would bring in $2500/month in income, an investor would take that $300,000 cash and put a 25% down payment on a $1.2M property that brings in $20,000/month.
I'd also argue that if the buyer has to refinance a property to get cash, that it's not a "true" cash purchase since it's contingent on his other property appraising for the amount he'd need to take out.
My post was only to point out some things the OP should watch out for if she is in fact dealing with a true real estate investor vs. an accidental landlord or amateur investor who owns a few houses in the neighborhood as a hobby. It very well could be a great opportunity for her though.
I'd make sure you get earnest money if he isn't closing for 2mo. I'd try to request to sell As-Is if possible especially if you are giving him a good price. If he's paying cash is he still requiring an appraisal & inspection? I'd contact a RE lawyer to do the paperwork. I did a FSBO several times--I pay a small amount (around $1K) for a professional to check over the paperwork. It's always worked out very well for us logistically & financially.
Those appraisals and inspections are exactly the sort of contingencies she needs to watch out for. They allow him to tie up her property then void the contract at the last minute. And earnest money is small consolation if she misses her opportunity to sell during peak time. If he only has to give up a couple thousand in earnest money but she loses $10,000 in increased market time without sale then it still doesn't make things right for her.
Or can you just tell the realtor no? I mean is she not going to work with you unless you do all that stuff? My house was on the market for five years so I'm sure their realtor hated them but the sellers didn't do anything to move it as far as I can tell.
Thanks, everyone, great information. I will update with how the meeting goes. To answer a few questions, sure, we are definitely meeting with another realtor and yes, we could just say no to the updates and list it for a higher price. I do trust her recommendations based on other properties online and what I have been able to dig up about recent sales. I know we just need one buyer, but I don't want our house to sit and get cursed too many days on the market. I'm a gambler, so this is all part of the process to see how much gambling we are willing to do. It would just be nice to have it taken care of at a fair price without having to update or deal with showings.
Another question for those with investment experience or knowledge. How do I find the investors? ohyouknow, dirtyred, how would I find you (or your step-son) if I wanted to discuss a sale? just, how did you find yours?
I just happened to find this guy through my neighbor, but google is failing me. Property management companies are not usually the owners, right? Should I call around to some of those companies and put out some feelers?
Haha, I will work so hard to not have to work so hard on this house!
I hear you! I hate showing houses and fixing too! As far as investors, there are lots of them on a site called Bigger Pockets but I have a feeling you'd get lots of tire kickers looking for a discount price. I don't invest in single family homes, just apartment buildings but I know lots of people do SFHs because of price point and financing since over 4 units takes commercial financing. Is your house a good investment property (good rental market) or is your target market families looking to live there? Have you thought about throwing a sign in your front yard for a week and seeing what happens? A realtor told me that's a very good way to get interested parties and that is actually how I sold my house FSBO.
Can't really help. He found us. I think my FIL mentioned that we were moving to someone who knew where we lived and they made the connection for us. I had already moved out of state so my husband was the one involved in everything.
“With sorrow—for this Court, but more, for the many millions of American women who have today lost a fundamental constitutional protection—we dissent,”
Post by ellipses84 on Mar 20, 2017 21:42:13 GMT -5
We bought our last house from an investor and it was mostly fine, except there were four owners involved which meant more paperwork and they didn't know the history of the house.
Then the first day we put the house on the market, an investor made an offer on it. The realtor pushed me to get it on the market in late May, even though I didn't feel like I was ready, as there were lots of little projects to do. The investor/realtor team started acting super shady, did the inspection, and nit-picked a lot of things. We were very reasonable, offering credits back or to fix things, as we were moving out of state suddenly and still making a good profit on the sale. They used the inspection to pull out of the sale. I was pissed as they cost us several weeks of prime selling season and we had to wait a few more weeks for an offer. In the meantime, I used their inspection report to fix the little things so we'd have no hang ups on a future sale.
Later I found out from a friend a few blocks away that the same investor had put an offer on her next door neighbors house the same weekend, and was a huge PITA to deal with. It all made sense with how the realtor was acting. I don't think they wanted to buy both houses, but didn't want anyone else to buy them until they decided.
Thanks, everyone, great information. I will update with how the meeting goes. To answer a few questions, sure, we are definitely meeting with another realtor and yes, we could just say no to the updates and list it for a higher price. I do trust her recommendations based on other properties online and what I have been able to dig up about recent sales. I know we just need one buyer, but I don't want our house to sit and get cursed too many days on the market. I'm a gambler, so this is all part of the process to see how much gambling we are willing to do. It would just be nice to have it taken care of at a fair price without having to update or deal with showings.
Another question for those with investment experience or knowledge. How do I find the investors? ohyouknow , dirtyred , how would I find you (or your step-son) if I wanted to discuss a sale? just , how did you find yours?
I just happened to find this guy through my neighbor, but google is failing me. Property management companies are not usually the owners, right? Should I call around to some of those companies and put out some feelers?
Haha, I will work so hard to not have to work so hard on this house!
Sorry for my late reply. He has a website, so if you Google "real estate investor town" it would show up, and he's been working with one real estate agent for about 7 years and she finds a lot of properties for him. He sometimes just goes up to a building and asks for the name of the owner. He also buys only multi-unit properties.