I went to put in an offer on a package deal with a real estate agent. At first I just wanted to do a LOI, but they said they don't do that. So we proceeded to talk about the purchase offer. Of course, I am nervous about it and asking questions. I just want to make sure I am covering my butt. I want to put in an offer and have contingencies to get out if needed.
So I asked about the contract and if it is assignable. The realtor didn't really know what I was talking about. I explained that I wanted the contract to be assignable in case I wanted to assign it to another investor. She said the contract did not have that in there. She said that may be only in "big cities". I told her that I would talk to my attorney and see if they could write up a contract.
I have researched and studied the past 6 months and I am ready to start investing.
I just want to know if anyone else has had this problem with contracts and purchase offers.
Big cities are you freaking kidding me?
This is a case of ready fire aim
where you need to have your ducks in a row before you start talking to sellers and making offers
The home sellers deserve all the possible information from you the real estate investor to know what their options are
There is an attorney in Ohio called Jeff Watson and he interviewed the oh real estate commission as far as the complaints from homesellers about Real Estate Investors talking to Sellers and tying up their properties with option contracts and sale and purchase agreements with the sole intention of assigning them, not buying them, ever.
Search here on Bp for Jeff Watson
In Ohio if you're not licensed you need to be able to have the ability to close on the transaction, meaning to buy the property with Hardmoney if for some reason you cannot find a buyer to flip to
I highly recommend you get your license so that you can talk to Sellers about flipping contracts or doing lease option assignments
You want to get on title with either subject to, wraparound mortgage, or buy with Hardmoney
Then you can do your exit: resell, lease, lease option, or sell on land contract
And by the way
that real estate agent doesn't know anything about contract law,
the contract can be assigned unless it's specifically written in the contract that it cannot be assigned
I appreciate the feedback. I am looking to get some buy and hold rental properties. I have not done any deals yet. I am not looking to assign it, but I wanted it to be an option if needed. This is just a small town, but I believe there is some great potential.
I have talked to banks and can go through commercial lending to get the loans needed. I told the agent that I would like to look at some more properties. There are a few in my area that I believe are great rental properties and have potential.
The agent is not familiar with investors. She didn't know what REIA was at first either. I am not downing her. She is one of the best producing agents around here. I think I scared her a little bit when I mentioned some things today.
Find the best agent from your REIA and get the name from the president of the REIA
You need a team of agents they can negotiate on your behalf. You as a new investor don't want to negotiate with elder agents especially if you're just starting. Perhaps find a buyers agent that owns and flips properties to negotiate for you
I would have to agree with @Brian Gibbons . Your whole team ( Real estate agents, title companies, Loan officers ext.) need to be people who are familiar working with investors. There is a saying 'If your the smartest person in the room your in the wrong room". This is especially true when first starting out. Surround yourself with people that you can learn and network with.
I would interview a lot of real estate brokers in your area within a 20 mile radius even if you're in a rural area of Ohio
I would play the "neophyte or the rookie" and asked them 3 or questions in person, not over the phone
what's the number one thing I should be doing to go to to get a portfolio of rentals
Who's the best agent in your agency to help me get a portfolio of rentals?
Who's the best portfolio lender who can help me get a 80% of appraised value loan?
Who's the best of FHA appraiser you know that most of the banks approve of?
Who's the best property manager that can manage tenants the best that you know?
Who is the best CPA that owns investment property that has a lot of real estate investors as clients?
which real estate attorney that helps landlords evict tenants the best that you know of?
Who's the best general contractor who can quickly and cost-effectively rehab a property?
What you want to do is to interview many re brokers that have been doing this REI business for 20 to 30 years and find out what names are in common, and use those people
I guess the Ohio real estate commission is staffed by idiots. Apparently they don't have the ability to look up the word option and if they did they didn't understand the explanation. What they have done is eliminate options and have definitely erased hundreds of years of usage and purpose. When an option is not exercised and expires both sides have gotten what they agreed to at that point. Yes the outcome is not what was hoped for, but nothing is absolute or you wouldn't be using an option, it is a big if, not a guarantee.
Complaints from sellers that didn't close, boohoo. they still have the property and they took a chance, these are the same people who if they lost a quarter in a slot machine would insist the casino give it back because the didn't win. I don't know what it is now days but did you know that at one time over 50% of executed contracts by real estate agents did not close. In Ohio they would insist the agent be required to close if they didn't get a closing buyer. If the Ohio real estate commission had more then a collective 60 IQ they could have simply required a disclosure that explained options be attached to and made part of any option contract (pertaining to real estate) and the possible outcomes and consequences. The Ohio optionor would be fully informed but the Ohio cry baby optionor would still likely insist they should be awarded a jackpot though the slot machine said no winner. They forget the optionee is a loser here too, if they want to make a buck they spend time, money and effort and end up with no point on the board.
O.K. Ohio real estate commission lets get started on that legislation that requires the buyers agent to buy the property if the buyer backs out. This law couldn't have been tested in the courts yet, so unless the Ohio judges are as brain dead as the real estate commissioners it is pure BS. Let's make it even better and even more on point, listing agents must buy the property at the list price if it doesn't sell, after all a listing is a form of an option of sorts.
Maybe this ruling doesn't bother the agent community in Ohio because it is directed at those horrible real estate investors who are stealing business away from them and if that is how limited their knowledge is, and how their brains work, then they are future candidates for a real estate commissioners job.
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