Special offer

Would you take this Referral? It's a "short sale flip"

By
Real Estate Agent with Hansen Real Estate Group Inc.
Would you take this Referral? It's a "short sale flip"

A majority of my business comes from referrals, so I wasn't surprised when I received the following e-mail from a potential seller who was referred to me by a very loyal past client.

short sale flipMy name is Ms. Investor, and I'm a real estate investor. I have the property at 123 Crazy Lane under contract and as the buyer, the contract allows me to re-market the property for a profit. I'm negotiating the short-sale with both lenders and the HOA, on my own.

Basically, I'm doing a short-sale flip. The original homeowner knows this info and so will the end-user and their lender. I'm all about full-disclosure in my contracts. Would you be interested in listing this property for me for a 1% list fee? I'm willing to give the buyer's agent 5% (i know the standard is 3%), but I want to incentive the all buyer's agents. My understanding is that this place is actually a challenging place to sell.

If these terms work for you, then GREAT. Please send me the listing contract via docusign or email. I've attached my contract and disclosures with the homeowner, which shows you that I have the contractual right to re-sell this property before I get the title. (if you're an investor, this is no different than a consignment deal).

If this flip transaction isn't up to your standards, or it's too creative for your comfort then...Would you kindly refer me to someone else, please I was originally thinking of enlisting a flat-rate MLS service, but Mr. Loyal Client highly recommended you.

Would you take this referral?

Posted by
About the Author:
Michelle Gibson is a full-time Realtor with the Hansen Real Estate Group Inc. She has been specializing in residential real estate throughout Palm Beach County Florida since 2001. Specific areas of expertise include; Wellington, Lake Worth, Royal Palm Beach, West Palm Beach, Boynton Beach, Loxahatchee, Greenacres, Lake Clarke Shores, Palm Beach Gardens, Jupiter, Delray Beach, and Jupiter.
 
Whether you're looking to buy, sell or rent Michelle will be able to walk you through your entire real estate transaction from start to finish.
 
Connect with Michelle:

Liz and Bill Spear
Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH
Transaction Alliance Cincinnati & Dayton suburbs

Michelle, I think I'd let him go to the flat fee people!  Seems like quite a bit of potential additional liability with little return.  Might be worth a conversation with your broker prior to proceeding.

Aug 14, 2010 09:48 AM
Louis Snitkin
Halstead Property - Manhattan, NY
"Results That Will Move You"

So, he wants to pay you 1% to list it on your MLS, deal with the buyers brokers, and manage the transaction? And all this for a deal that may never happen.

To answer your question, I would not take the listing on those terms. I would try to get him to understand what would work for you, and why.  [Maybe a 5% fee, split between you and the buyer's broker; plus a 1% bonus to an outside buyer's broker.] That way it only costs him 5% total if you do a direct sale.

That's just my opinion....... and I could be wrong.

Aug 14, 2010 10:22 AM
Chris and Maria Jeantet
Shasta Living Real Estate - Redding, CA
Top Realtors in Redding CA

Hi Michelle,

Yeah, I don't think so. I'm probably going to go with Louis idea!

Aug 14, 2010 10:53 AM
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Michelle

The person trying to sell the property doesn't have ownership in the property, and the only thing thing the person is doing is assigning a right that they may or may not have.I would pass on the listing.

Good luck and success.

Lou Ludwig

Aug 14, 2010 04:36 PM
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

Sounds like a lot of work for potentially not even making the 1%. Uh, no.  Next!

Aug 14, 2010 05:31 PM
Scott Baker
www.eHomeReports.com Coldwell Banker Realty - Liberty Township, OH
Realtor Homes for Sale Cincinnati/Dayton Ohio

I'm not sure if I would. My first instinct is no, usually those that seem are going to be simple and no trouble, end up the other way around and not worth the time or money. But I might.

Aug 15, 2010 12:51 AM
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

LOVE THIS POST!  Yea, don't have any interest in throwing someone into foreclosure - which are the odds.

Aug 15, 2010 08:29 AM
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

FYI I just sent you an invite to be a contributor on my outside blog.  Would love to include content like this.

Aug 15, 2010 08:31 AM
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Everyone seems to be on the same page as I was.  I thought about this offer for an entire second before I politely declined.

Renee - Thank you for thinking of me, I'm honored and I just added it.

Aug 15, 2010 01:17 PM
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

I can't believe you gave this an entire second of your life to think about :)

Thanks for contributing to my outside blog!

Aug 16, 2010 01:42 AM
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Renee - Me neither, but hey it was a referral, so I had to give it at least some consideration.

Aug 16, 2010 03:12 AM
Tony & Darcy Cannon
Aubrey and Associates Realty - Layton, UT
The C Team

Michelle, great post, but to answer your question, NO!  That is going to be a hard sell the banks look at "flip" properties right now.  An agent in our office is finding it very hard to get financing for a client on a house because the previous owner has owned it less than 6 months.  I would consider it at a years exclusive listing with either a normal commission or the buyers pays for every advertising cost involved until it gets sold.  The other thing that I would insist on is that it be priced right and have a "clean" title.  If those conditions aren't met, I would run, not walk away!

Aug 16, 2010 04:39 AM