How many contracts do you think these "Asset Managers" are kicking back on a daily basis??? Hmmm? Would anyone believe about 90%? Those numbers seem to run true based on the various interviews I personally have conducted with even the Managers of Loss Mitigation departments. Considering some of these guys are putting in 12 hour days now and some are handling a pipeline of over 300 properties, one could interpolate the figure to be somewhere in the neighborhood of 400 contracts... PER DAY!
So why choose yours? Your buyers are super qualified. Their ratios are 19/19 (hell, they don't have ANY debt), they have over $150,000 in their 401K since it rebounded... The issue is, when the previous homeowner left the house, he was going bankrupt. As a survival mechanism, perhaps he sold off the Stove, tore out the Convection and venting microwave and the new wonderful glass cooktop he installed in the island in the new kitchen just last year. ALSO... since the property has been vacant for the last year, no one was in or around the place and because of the inventory overload, these "ASS et Managers" didn't have anyone winterize the property or even secure it. Kids played in it all winter as an amazing fort, pipes burst and leaked water for months only to grow some MOLD SPORES Dr. Frankenstein would be proud of. IF your lucky, before they list the property for sale, Mr. "ASS et Manager" sends in his "contracted contractors" and they RIP everything out, right down to the studs.
Meanwhile, back at the Ranch... your buyers ADORE this creampuff and want to buy it. Its priced right, you bring out your licensed HUD Consultant, get a licensed Contractor's opinion and have the Appraiser give his nod to the value being there at the end of the project... YOU DO THE DUE, and your ready to submit your amazing offer.
Seeing as though it was listed at $280,000.00 and comparables in the area RECENTLY sold for and are currently under contract for the mid 400's, (your renovation cost is only $50,000), You offer MORE than the asking to ensure you will get that property, and offer $320,000.00. WHAT! Wait a minute. It was listed for $280,000.00, why go over so much? Well you know that these "ASS et Managers" turn their cheek at EC's, so you "Put your best foot Forward" and broght your hightest and best offer... After all, Your client will likely have about $50,000 + in equity when all is said and done.... With this equity position, you decide to make sure you are going to submit with an "As-Is" Addendum and let that seller know that these inspections you are doing are for INFORMATIONAL PURPOSES ONLY... ha ha ha. You don't need an environmental or a well or septic ... If something is wrong, we'll put it in the K! Oh! But the lender said, "Don't forget the FEASIBILITY STUDY". We really could get it done in two weeks so make sure you get the Feasibility Study period in there. ASS et Managers deal with this every day, don't they? They will certainly know this is needed!... With all this said... YOU SUBMIT YOUR CONTRACT!
The broken record continues... They accepted some other offer. You in being curious follow after the settlement and note that they took a contract $15,000.00 UNDER YOURS!!! Well RAISE MY TAXES! How could they do that?
SIMPLE... Your contract called for not just an inspection... a 2 WEEK ANYTHING INSPECTION!
You can do all the inspections you want BUT, they don't want to see or even allow it, if possible. This is their training. They LOOK for contracts that are without "Outs"! .... But remember... You have the financing clause in the contract. Should the 203K Consultant's inspection yield that there was too much work to repair the home, the loan amount went up, the value wasn't there, the property is not eligible for this financing... Loss of financing, return the Earnest Money Deposit.
The 203K will call for "Required Repairs", yes. These are repairs that between the Consultant and the Appraiser, MUST be done in order to bring the property to HUD Miniumum Property Standards. If this list turned out to be larger than anticipated... the loan does not qualify, your Financing Fell through.
This is the exception, as we don't go around spending money to inspect properties, involving Realtor's time and efforts writing contracts and getting our own hopes up to get a buy on our home. The long and short of it is this... Give yourself the best chance with the "ASS et Managers" and send in a contract they won't IGNORE. If you call for that 203K Feasibility Study, as we always have in the past... you lose.
Kluge out!
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