All Forum Posts by: Jason Grote

James Crow There is no limit to the option period, but it is for inspection purposes. A 30-day inspection on a house seems a little suspect and may raise flags. 15 days is the max I have seen, but it depends on the seller's urgency.

Jon Holdman I think James Crow is saying that he has a contract on a property where 3 relatives (not his own) are the heirs. If this is correct, this is my advice:

Most attorneys will want to see the verbage "as-is, where is" on the contract. They will probably advise them to not sign any disclosures if they have not lived there.

I recommend using the TREC contract that all Texas Realtors use. It will put most attorneys at ease because they are already familiar with it. Use the option period to build in your time to look for a buyer. Whatever EM you do put in will be refunded if you terminate the contract in the option period. However you will lose your option money. More than likely the attorney will recommend that you put some skin in the game, but who knows you may get by with your $10 EM.

Haha! Sellers can be so optimistic!

I have a funny wholesaler story:

Just last week an obviously newbie wholesaler sent me a deal to my email. It had the break down of everything with comps & ARV. He showed the Realtor (pocket listing) that he got the lead from making $10k, himself being paid $3k, and how much for me? $5k

This is on a house with a $135k cost! I told him that the deal was a little skinny! He was so sincere when he said there is enough for everybody. :)

Amazing Lance! What a nice view. Almost makes you want to keep it right? Can you share how you acquired it?

Ironically, this report just came through my news feed about the value of an agent:

http://www.housingwire.com/content/homegain-home-sellers-more-successful-realtor

Man, I sound like I am promoting real estate agents... Really, I am just saying that the system is set up to where they are invaluable (good agents that is) when it comes to getting top dollar for your property.

So, here is the situation that prompted this thread:

My wife gets an out-of-the-blue call from an investor in our area who has just rehabbed a house and is interviewing listing agents. The house happens to be 5 minutes from our home and we are very acquainted with the area.

I go with my wife to help evaluate the property. It is a very nicely remodeled house (about 2500 sq ft) on a large 1 acre lot. The size of house and lot is typical for this neighborhood that was developed in the late 70's and early 80's. Few have been remodeled in this neighborhood especially to the degree that this investor did.

In addition to the main house is a large second structure that could be a 1,200 sq ft guest house with its own driveway. This second home could rent for $1000/month. Unfortunately, the building was nearly gutted and just looked like an old workshop with a kitchen.

The investor asked my wife what we thought it would bring. We told him that as-is (the second home not finished) the property should be listed around $279k. Only one property has sold for more than $235k in this neighborhood except for a nearby home on 3 acres that sold for $320. We strongly suggested that he complete the remodel in the second house before listing it, and if so, he could list the home around $310k while strongly marketing the rental income from the second home.

Well, he ended up hiring a flat fee listing agent to save a few bucks and here's what he got:

1. The agent got his money up front to spend an hour (or less) placing the property on the MLS. So, the agent not being vested in the property, allowed the seller to name his price. He did so at $339k without completing the second house.

2. In the agents remarks, there is absolutely no verbage about the second structure and it's rental potential nor any of the properties unique features.

3. There are just a few photos posted and they are not very good. They were probably taken by the seller. They do not do the property justice. Pictures should make the property look better than it is if done correctly.

4. 24 hours later the agent lowers the price $15k.... This does not look good. It will tell every buyer's agent "Look, we have this property marked up very high, so come bring a low-ball offer please!"

This property being unique and needs top dollar should have never been listed with a flat fee agent. The seller will probably lose a few dollars by not having a vested real estate agent involved in the pricing, marketing, and negotiating.

I agree J Scott, when my wife became an agent we were worried about this initially, but now I have no idea why! Kinda weird, but their seems to be some sort of stigma on investors. It is almost like we have to be incognito. Like J Scott said, the more attention the better.... especially when you are above board!

Kama Ward Nice break down of the numbers.... That $20/hr. does not include cost of doing business, ie. phone, marketing, administrative, gas in the car, professional fees, Realtor association dues, etc. that will make that $20/hr become $10/hr! Self-employed individuals have to always make lots more than the employee! That is why I ask, how can they survive?

Brian P I agree, agents work hard and should be paid accordingly. I don't understand how a flat fee agent survives. They can not give much service to their client and make money it seems. As an investor selling a nicely remodeled flip property, I need the service and am willing to pay for it

Because they are on one lot, you have to buy both if at all... so , yes you are going to want to check out both houses. Look on the tax roll to verify the information and that both structures are documented.... Pull your comps and fire!