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I’ve written a lot of posts with leads on HBS’, but for one reason or another they didn’t work out. Recently I received a call from an ex co-worker who moved to Colorado. She had to move quickly because her husband got a job in Denver.
Trouble is, they can’t sell their house here in Minnesota. Their realtor is doing a bad job, and she called me to see if I have any ideas. She seems pretty much open to anything.
I told her about the HBS and she liked it. She is willing to sell it either with owner financing or out right. I just have to wait until her realtor’s contract is up at the end of the month.
I looked at the house during a realtor’s open house. They have it listed for around $400k and it is in a nice location (dead end street, on a lake, easy commute to Minneapolis). It’s a nice house but dated. The kitchen cabinets could be painted, new tile put down, and some updates to the bathrooms.
My question is – what might be the best way to do the HBS? Owner financing or sell out right? Obviously they want the best deal. Also should I recommend she update the house or should we try to sell ‘as is’ with the HBS? Thanks for any help. Maybe this one will work?
Sounds like a motivated seller. That’s the secret sauce to getting an option on a house you can do a HBS on.
It will be much easier and faster is you will with seller financing to the person who has the most down payment.
Tell us about the underlying loan. What is the balance? What interest rate? If it fixed? How many years left? What is the payment? Does it include taxes and insurance?
These are all important things to know.
It is not good that you viewed the house during a realtor open house. The listing agreement usually says that the realtor gets a commission if anyone they showed it to buys the house 6 months after the listing agreement. Hopefully you did not give the realtor your name or contact info. If they find out you buy it after the listing agreement, they will want a commission.
I think she bought it for above market value in 2005 when the market was really hot. I will have to get the loan information. Will let you know.
As for the realtor at the open house, she heard my first name but nothing else. But I am not planning to purchase the house? I would just have an option to purchase and then sell the option? I also have a buddy who is a mortgage broker and wants to do these with me. I’m thinking worst case we can put the option agreement in his name.
Two other questions. They are really looking to get market rate on their house because I don’t think there is much equity there. The seller is a friend of mine and I am not looking for a huge score on this first one. So I want to help her out. The house needs updating – mostly to get rid of some ugly tile in the kitchen/dining room area. Should I have her change out the tile, or sell ‘as is’?
I have to wait until the Realtor’s contract runs out at the end of November. Then I am thinking we will run this in January after the holidays. Believe it or not January is a good month to sell – even in Minneapolis (or that’s what I hear from a lot of realtors around here)! I will update this as I get closer to the time.
I’m back on this house. The realtor’s contract actually runs out at the end of the year. I can also have a friend make the sale in his name so there is no concerns about the realtor finding out I sold it.
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, I will be talking to the seller on Monday. They are willing to put some money into fixing it up. It doesn’t need much – mostly new tile on the kitchen floor and some paint.
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, I will update this thread as we go.
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