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#455045 - 10/20/16 08:00 PM Another question
Thawk86 Offline
Member

Registered: 08/11/16
Posts: 23
Loc: Colorado Springs, CO
When approached by a buyer, should I advise them that they should speak to a lender before meeting with me, or is it smarter to meet with them first, then discuss everything? What's the common practice?

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#455048 - 10/20/16 11:57 PM Re: Another question [Re: Thawk86]
pastmember Offline
Member

Registered: 01/22/06
Posts: 411
Loc: USA
"common practice" is probably going to vary by area. I sell mostly second/third homes and condos and I don't even ask potential Buyers if they have a job and in over 16 years I have had zero Buyers not qualify for a loan. This is the common practice in my area.
I other areas there are Realtors who won't even show property unless the potential Buyers have been to a lender. In visiting with Realtors from other areas I think that this might be the more common practice.

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#455050 - 10/21/16 12:35 AM Re: Another question [Re: Thawk86]
JohnN Offline
Member

Registered: 11/21/13
Posts: 224
Loc: Minnesota
When I get a call asking to see a property I will use the first meeting to do "discovery" about the buyer.
You're going to be running around in circles until their prequalified and you know what type of loan they can get.

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#455063 - 10/21/16 09:39 PM Re: Another question [Re: JohnN]
Thawk86 Offline
Member

Registered: 08/11/16
Posts: 23
Loc: Colorado Springs, CO
Thanks for your reply. I should be meeting with them soon, what is the essential information you try and gather during your "discovery" meeting?

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#455064 - 10/22/16 02:19 AM Re: Another question [Re: Thawk86]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7659
Loc: Vermont's North-East Kingdom
Originally Posted By: Thawk86
". . . should I advise them that they should speak to a lender before meeting with me . . ."

That's a dangerous juncture because if you haven't already developed a rapport with them, they may be offended as when you send them away; and then that's the last you'll see of them, and they won't even remember you.

_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#455065 - 10/22/16 03:27 AM Re: Another question [Re: Thawk86]
JohnN Offline
Member

Registered: 11/21/13
Posts: 224
Loc: Minnesota
Originally Posted By: Thawk86
Thanks for your reply. I should be meeting with them soon, what is the essential information you try and gather during your "discovery" meeting?

The first question is- Are you prequalified?
If yes- What type of financing.
It amazes me how many people want a fixer upper type of house but are using FHA financing.
Then we discuss house styles, parts of the city they want to look in, price ranges, etc..
I also like to have a conversation with their lender before we start looking.If the buyer needs closing cost help or down payment assistance I need to know that before we put an offer in.

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#455096 - 10/24/16 02:29 PM Re: Another question [Re: Thawk86]
David Hunter Offline
Major Contributor

Registered: 09/27/05
Posts: 1614
Loc: Cleveland, Ohio
Just meet with them first and go over everything. Share with them how the process of buying a house works, etc. Then you can encourage them to speak with a lender if they haven't already because they won't want to find a house they love only to have to wait for the lender to get them a preapproval, because sellers want to see a preapproval or proof of funds before they respond to offers... at least that's how it's always worked around here.
_________________________
David Hunter | Retired RE Agent |Direct-Response Marketer
www.DukeOfMarketing.com/7-Real-Estate-Marketing-Strategies/
www.TheSaviorsMinistry.org


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#455128 - 10/25/16 06:29 PM Another question.. [Re: Thawk86]
Thawk86 Offline
Member

Registered: 08/11/16
Posts: 23
Loc: Colorado Springs, CO
I have a guy who is wanting to sell a fixer-upper as is, I am scheduled to meet with him this week, and I want to try and get as far as I can without too much help from my firm. What are some things I need to learn about him and the property before we can go ahead and list it. He has mentioned he wants to do a seller-carry, at 4% with 25K down. He also doesn't want to get it appraised, so what's the best way to come up with a listing price.

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#455132 - 10/26/16 01:15 AM Re: Another question.. [Re: Thawk86]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7659
Loc: Vermont's North-East Kingdom
Originally Posted By: Thawk86
". . . so what's the best way to come up with a listing price . . ."

I'd bet that this guy already has a Listing Price in mind and he'll probably tell you exactly what he wants . . . . which will probably be way too much. And his property has probably been listed before and/or has been a known FSBO or OPEN Listing for several years.

The prospective Buyer will determine whether the Fixer Upper needs to be appraised or not (an Appraiser's Nightmare).

How'd this guy come into possession of the property . . . . did he think he'd be doing the fixing and got in over his head; or did he inherit some Relative's prized domicile? Does he own it outright . . . . or does he need the $25,000 up front to discharge his own purchase money mortgage from when he bought the fixer ?

Of all those people who might be interested (oodles and oodles of penniless lookers), investors and low scale developers will be the only ones with $25,000 jingling around in their pockets . . . . but they're very tight-fisted (like your guy), and most will know more about this aspect of the business than he does. There'll be more interest "if" the fixer is on a larger parcel which can be sub-divided, where it might even be worthwhile to demolish the fixer.

He'll probably want a Balloon Payment on the mortgage balance after 5 years. That $25,000 is probably 20 or 25% of about $100,000.

I've done a lot of these, and they're always fun . . . . but they take up way, way, way too much time !

But this is still good experience; Good Luck !
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#455162 - 10/26/16 06:33 PM Re: Another question.. [Re: Vermont]
Thawk86 Offline
Member

Registered: 08/11/16
Posts: 23
Loc: Colorado Springs, CO
He bought the property in Jan for $18,500. He planned on fixing it up, then flipping it. He put some money into it, but he said it needs about $10k worth of work left. It looks like it needs a lot more than that. He has other properties he is working on, and sais he spread himself too thin, so he is trying to sell this quickly, so he can take that money to invest in another property he has. It's also about a 2 hour drive. I know I wont make much money on this, but I would like the experience. I should also mention, I haven't even started my training yet with my firm, I start that next Monday. Should I forget about this property, and just focus on my training for now, or if you were in my shoes, brand new to real estate, continue to pursue this? I meet the guy and the property for the first time in the morning, and we have not made any agreements on me listing the property. I'm just trying to see if the experience is worth the time and work for such a little payday. I'm on a 50/50 split for my 1st 90 days.

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#455164 - 10/26/16 11:27 PM Re: Another question [Re: Thawk86]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7659
Loc: Vermont's North-East Kingdom
Originally Posted By: Thawk86
". . . continue to pursue this? . . ."

As a new Licensee, what activities is it competing with, or will it displace something more important ?

Go and meet the Man and seriously look at his Property . . . . look at it through your eyes; and then try to see it through his eyes. Where is reality ?

Is it really the "diamond in the rough" that he's seeing ?



How many projects has he started and not finished ?

Is this one the one that is actually closest to being marketable ?



Some people are very good at identifying viable projects (and even starting them; but they can't finish anything; and they never develop an "exit strategy" !

You'll meet up with many flippers, and attempted (failed) flippers, in your career. You may as well meet this one and develop your sense of empathy for his and similar situations. Examine the motivation; study the finances; look at the Zoning; evaluate the prospect for sub-division. How desirable is the Neighborhood; and what are the Comps that he'll be competing with ?

In this business, you can't help everyone, even when it's really interesting, and if you don't smell money (for you) you just can't get involved. You have to separate the wheat from the chaff.

So go and learn from it; evaluate the situation, and hone your skill in expressing your professional thoughts diplomatically to someone who probably has his own opinion and doesn't want to hear anything to the contrary.

Remember, straight advice is in very short supply these days, and a guy like this may still be a valuable source of Referrals in your future. One or more of his other holdings may one day be an attractive Listing for you.



I don't want to portray him as thoroughly pathetic; and there is plenty for you to learn from him . . . . "There, but for the Grace of God, go I" !

Just because you visit with him doesn't mean you must take the Listing . . . . I've walked on many a listing because of outrageous expectations, personality incompatibilities (as hard as it is to believe, some people just don't like me!), or a variety of other issues that made them a poor fit.

I have to enjoy what I'm working on and enjoy dealing with the people I'm trying to help. Life is only some 27,000 to 30,000 days long, so if it ain't fun, I don't do it; and you can't help them all.

Now I digress. Good Luck !
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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