Jakie, I missed you at davids Tilney’s. I am a new member and first time forum user–Good day all. Suppose a house was worth 100,000 what would you in the real world option the house for and what would a be a great way you could justify this spred to the seller(fsbo or Expired Listing). Then what would your opening bid be ( may be at 50%) for your flyers to attract buyers.
In the scenario you present, if “as is” retail price is $100k, you better get a strike price of $45-55k, even lower is better. Open the advertised bidding at $39500 or $41000 (at most). Your justification to the seller is that the house will be sold this or next weekend and the cash buyer will close withing a week later, and the buyers will bid the house up to the “real” cash price – not the sellers perceived and emotional value. The seller gets cash in 2-4 wks from you getting the option depending on when you can conduct the HBS.
I’ve got the scars to show for having attempted higher strike price HBSs. It ain’t worth it to you if you’re going for a cash sale.