As I did some research for one of my repeat client, I was faced with the question “How can you run a business like this and survive for the long term?”
Here’s a bit of background. My buyer is a disabled Afghanistan War Veteran, and many of you know that I have always been partial towards helping Veterans in any way that I can. When we originally worked together it took a great deal of effort to find him a home for a few reasons. Here in the greater Los Angeles area, most sellers would prefer to not sell their homes to a veteran, a primary reason being because VA loans are a bit more stringent than traditional loans and require sellers to fix things before transferring a Grant Deed. Nevertheless, after six months of searching and writing offers, one seller was indeed a true patriot and chose my client to be the buyer of his home.
Since that purchase, my client also inherited a Condominium from his parents that he uses as a rental income property. Just the other day, he reached out to me and said that he is ready to start the search to upgrade to a new home. He plans to refinance the two properties in order to then buy another home with a 20-25% down payment vs. a VA loan.
I digress as I sometimes do! So now the new search begins, and I found a property for my client. As is my routine practice, I pulled the public records, property history and did some background on the listing agents. This last step gives me some insight on who I may be dealing with and what to expect. I almost fell out of my chair as you may expect when you read these bullet points:
1. The property was sold this past December for $697,000.
2. The owner’s name is “Zillow Homes Property Trust”.
3. The property is listed for $702,200.00.
4. The commission to buyer’s agent is 2.25%.
5. In the Private Remarks to Agents: FHA offer will only be considered after 60 days.
6. Also in Private Remarks to Agents: Custom Zillow Purchase Agreement to be sent back as a counter or acceptance.
There were more, but I think you get the idea!
Looking at points 1 through 4, in December Seller paid closing costs. Now they will have to pay California Transfer Taxes, City and County Taxes, provide Title Insurance and again pay Escrow Closing Costs. If you do the numbers, this is not what I would consider a wise business decision. Am going wrong with this line of thinking?
Resale of existing homes has increased dramatically; there is virtually no inventory hence point 5, in my humble opinion, is clearly discriminatory to FHA buyers. I can’t even imagine any property staying on the market for 60 days or more if it is priced correctly. Hence, I consider this strategy discrimination to economically challenged buyers who can only put down 3.5%.
These private remarks had me running my fingers over the computer to research the listing Brokers and Agents. Are you ready for this? The listing Broker and the listing Agents have three sets of Complaints against them that are about seven or eight pages long. Reference as to how they have been listing and selling properties to the tune of about 22-25 properties all over California all while their license was suspended!
On a side note, why would a well-known seller list their property with a brokerage and agents like this in the first place? Oh, and I almost failed to mention that nowhere was it disclosed that the Seller is a licensed California Broker.
Back to my original question of how can they stay in business when this is how they are buying and selling properties? I imagine it is because the money came from investors, so they do not need to be concerned as to how they conduct business. After all, the leadership has lots of money and bought some ultra-luxury homes for themselves.
Wishing all who read this post a very productive week no matter what your business may be.
Wishing you a safe and healthy life and I look forward to your comments. If you are looking for a knowledgeable, focused and goal-oriented Realtor in the Beverly Hills area who will help you achieve your Real Estate goals, please reach out to me directly! If you are looking for a pet friendly Beverly Hills Realtor who can handle and sell the most difficult properties that no one else could, please reach out to me directly!! If you are considering buying or selling a home, a luxury home, luxury investment real estate, luxury vacation homes, or luxury beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Marina Del Rey, Venice or Malibu, feel free to contact me at 310.486.1002 ( m) email@example.com or visit one of my websites at https://www.endrebarath.com I contribute a portion of my commission to local animal rescue organizations. Endre Barath, Jr. Realtor at Berkshire Hathaway HomeServices California Properties DRE#01238708