Can someone walk me through the process of closing a deal?

Question

Hi all, I'm a first-time homebuyer and planning to reach out directly to homeowners to find a deal in this crazy market.

I've driven around and found around 50 properties that look like they are vacant and/or in disrepair. I plan to send letters that say something like:

My name is Ray and I'm looking to buy my first house in ________ area. Is your property for sale? If so, I may be interested in buying it. If you are interested, I'd like to set up a time with you and discuss how to proceed. etc.

However, I'm stuck trying to figure out what comes next if an owner responds. I'm assuming you need a certain type of contract. Do you then take the contract to a real estate lawyer or title company and they handle the rest?

I plan to use a 203k loan to cover the price as well as any repairs needed.

Raymond Zhao · Answer

thanks for the tips on talking with the seller. much appreciated as I haven't done this before. what are your thoughts on having a real estate license for credibility? I'm 26 and I'm afraid I will come across as inexperienced.

Matthew Porcaro · Answer

I'm literally about to do this for my home I'm searching for now for my wife and I!

I did a 203k a few years ago to start my portfolio, now am going to use it again, only this time to help build my forever home with my wife and growing family.

I think your strategy is awesome! I'm in the process of doing the same and already have a lead I'm looking at tomorrow afternoon!

Here's what I'm going to do:

1. build rapport with the seller. Just be friendly and cordial! Find common ground on things, maybe things in their house that are interesting or conversation starters.

2. learn a little more about their motivation for selling? Ask questions like - so what are your plans after you sell? is there a time you want to get this sold by?

3. learn more about the house itself. Get as much information as you can. How old is the roof? furnace? look around for water damage, leaks, etc.

4. look to see what theyre looking to get for the property. Ask them how they came up with that number?

5. start to tell them your concerns, where you feel you're at price wise. then begin to negotiate.

Ultimately, this is a people business. People only sell to people that they like.

Don't look at the person as someone you're going to take advantage of to get a deal.

Look at the person as someone that has a problem they're looking to solve (trying to sell their house) and find the best way you can help them with that that benefits both of you!

Good luck!

Raymond Zhao · Answer

That's a good point about the commission, I will absolutely add that to my letter.

Taylor L. · Answer

Always think about trying to solve the problem the other person is facing. Some folks may want to sell but will not want to pay realtor commissions. So can you point that out in your letter, that you're not planning on using a realtor and can save them that 6%?

Your loan is going to require you to have an inspection done as well, so keep that in mind.