More mistakes agents make when selling income property

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The biggest thing is the most investors are not really sophisticated.  And,  unless they have a professional propety manager (and that isn't always the case),  it is very difficult to get the documents you need to property analyze a property.  One of the mistakes is to wait until the seller provides the information to realize what you don't have.  So,  I suggest two things:

1)  Add a clause that states that the Buyer due diligence period  (what it is called on the commercial side) begins upon reciept of the seller disclosures.  So,  if the seller is slow in dribbling the discloures to you,  the clock doesn't begin until you have recieved the LAST one. 

2)  But, the real secret is adding a phrase something like this:  "Seller shall provide any information about the property reasonably requested by the buyer."  Seems innocent enough but it is a powerful tool because the minute you get into contract,  the buyers agent will send the Listing agent a list of questions about all or some of the following:

  • Crime in the complex
  • TEnant complaints about other tenants or managment
  • 2 year rent analsis by unit
  • List of deliquencies by unit
  • List of contract with current vendors if any  (laundry, vending machines, landscaping, etc
  • Tenant estoppels
  • Any rent concessions given to tenants
  • List of secruity deposts on hand
  • Contract with any offside and onsite managers
  • Defects to the property
    • Repairs made within last 12 months
    • Copies of any receipts
    • Known defects but not repaired yet
    • Any bids received but work not done
    • Any work requiring a permit but one was not obtained
    • Requested repairs from tenants
    • Any existing seller inspections
  • Any formal evictions pending or contemplated
  • Any insurance claims within last 2 years
  • Current Insurance agent
  • Current lender and contact
  • List of personal property (refigs, stoves, etc) including condition
  • Warranty information still in effect
  • Copy of utility bills for last 2 years
  • Any appraisal within last 2 years
  • Any legal action in past, current, threatened or contemplated
  • Any gorespondence to or from govermnental agency
  • Etc, etc, etc

As you can see,  this can be an extensive list and if considered,  are all reasonable.  I would create a Request for Documents form and just check off the ones that work for each property.

 

 

 

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Guy Berry

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Rainmaker
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Christina Cavins
Irongate Inc. REALTORS - Centerville, OH
www.BuySellOH.com Search Ohio Homes For Sale

Good points, Guy. And love the profile photo!

Christina Asad Edwards, REALTOR
2006 & 2007 Sales Masters Top Agent
Christina.AsadEdwards@RealLiving.com
www.teamedwards.info
mobile or text 937-205-4741 office 937-573-0082 
Real Living Realty - #1 in OHIO!
Realty, Mortgage, Title, Relocation

 

Jun 02, 2008 01:51 PM #1
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Guy Berry

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