Residential Real Estate Agent · Bothell, WA · Member since 2014 · 14 posts · 1 vote
Hi,
So here's what is going on: I am working with a seller who has a home in an equity position but needs to sell the home very soon. The problem is that the seller would rather let it go and lose the equity than allow a showing prior to closing because it is occupied by family and they don't want stress on the relationship. I have seen the outside and it needs work without a doubt. I won't be purchasing the home but would like to facilitate a deal.
The house has plenty of equity but my question is this, what kind of discount would it take for you to consider purchasing a home without seeing the inside? Would you do it at all?
I would love to hear from fellow Seattle and Snohomish investors especially. My estimate on the exterior repairs is around 25-30k and my assumption would be the inside is probably about the same too but the ARV would be up to 340k depending on the quality of the flip.
Well without know a lot more details it is hard to say. Yes i hove bought houses without seeing inside. Most of my properties today are tax foreclosures so I don't see the inside before I bid. I just assume the worst regarding condition and it is a bonus if it is in decent condition.
I would think if it needs that much on the outside, it probably needs more work inside then you have estimated.
Well without know a lot more details it is hard to say. Yes i hove bought houses without seeing inside. Most of my properties today are tax foreclosures so I don't see the inside before I bid. I just assume the worst regarding condition and it is a bonus if it is in decent condition.
I would think if it needs that much on the outside, it probably needs more work inside then you have estimated.
I would assume the worse if the seller refuse to show the interior of the property. I will knock off five thousands at minimum depends on the size of the house. I will try to knock off to an amount that is big enough for the seller to reconsider their option. If they are really want to sell it and do not want to have someone knocking off a ridiculous amount , they should show the interior. This is just my way to handle it.
Sounds kind of hinky to me. I see a lot of listings that say "no showings until a contract has been accepted," and I assume that's because they don't want to freak out the tenants.
But once you have a contract in place, you have every right to do your due diligence, and that includes inspecting the interior of the house.
I would be uncomfortable with this situation unless the price is so low that you can afford to rebuild the house in a worst case scenario.
Do you know and trust this seller really well? If not, this smells very fishy to me.
The excuse doesn't hold water: If the seller doesn't "want stress on the relationship" with relatives by warning them that the house house they're living in is being offered for sale, how are they going to respond when they find out that it's suddenly been sold out from under them without warning? That's pretty short-sighted, to say the least, which is a big red flag in itself.
And, what kind of person would do that to family and not even consider it way outside of the bounds of civilized behavior? I've know whole local cultures of people who think like this, though PC-ness prevents me from naming names. Do they sell a lot of used cars and RV's, usually with florescent signs, parked along a busy road? Do they do driveway "resealing?" "Honor among thieves" doesn't apply with these people: They'll cheat anyone, even close acquaintances, if they think that they can get away with it. I've seen it happen. That's just the way that they think the world works. To them, the only purpose for words is to get what they want at the moment, with no thought about consequences. It's too easy to just disappear.
And, in the unlikely event that the seller actually holds title to the home that you buy, who exactly is going to be breaking the bad news to the tenants? How will you get them to leave? How can you prevent them from destroying/stripping the interior out of anger?
This could be a variation on the current con game of someone leasing out a vacant house that doesn't belong to them, especially at a sub-market price that blinds victims to the red flags. Their goal is to collect first/last month's rent and a damage deposit, then do this as many times as possible before tossing out the burner phone and disappearing. A new phone and number is only $50.
If you're in Snohomish county, you can at least do a quick title search online:
Try entering the address here: http://snohomishcountywa.gov/2934/Assessor
Or use the SCOPI interactive map to zoom in on the lot and find the tax parcel number, which you can then enter in the previous page's form. You'll find that here: http://gis.snoco.org/maps/property/
Even better, go to a title company and spend a few bucks to have them run a title search.
Even if ownership all checks out, this still sounds like a lame excuse to keep a buyer from knowing what they're signing on for inside the house. I've seen listings that didn't look bad from the outside, but that were so infested with black mold inside that you had to sign a waiver just to tour it. If that's the case, you may find yourself stripping the entire structure down to the bare studs and rebuilding it from there. Or, are there roof leaks that have the ceiling sheet rock so water-logged that it's on the verge of collapsing? I've seen that, too. Or, is it being used as a meth lab? The list of what could be seriously wrong is endless.
For starters, I wouldn't give the seller a dime directly. Put it in escrow, with both of you visiting the title company. If you get a lot of excuses, you'll know you're being scammed.
If it was me, I'd just keep looking for another opportunity. There's always another deal out there, even on the MLS.
Thanks everyone for the input so far, I really appreciate you taking the time. I plan on speaking with the seller a bit more about it this week to explain the best way for me to get the most money is to tour the inside, even if this is after the contract has been signed with a contingency on the inspection of inside. We haven't met in person yet so I am hoping I can explain in person and get a better idea of what the concern is. I have seen the tax records to see whose name its in already. I will keep this updated.
I've gone in houses that I wish I hadn't. In one occupied house the smell was so bad that I nearly gaged. Another house I did lose my lunch and could get out of the house fast enough.
Yet another house had serious hording issues, trash was compacted by walking on it in the pathways inside the house. The non-pathways were stacked to the ceiling. After removing all the trash, the house was so bad it needed to be demoed.
And another hoarders house, after family took the valuables, and furniture people took the furniture, and scrap people took the metals, we still had THREE 40 yard dumpsters of trash.
And at another place the outside looked fairly good, but inside the finished basement was submersed in 2 feet of water for 2 years, yuck!
Hey Nick. Many people have already recommended something similar to what ill say. I think that you will ultimately be able to get inside though if the seller is serious. We have dealt with this a bunch of times when marketing. Most sellers that state this need to trust you first and/or understand that you aren't going to walk in there and start telling the people there your going to buy the place and kick them out.
When you meet the seller, ask her "did you buy this house without seeing it first?" And also suggest that if its a large concern that the people living there are not made aware that they are selling, then suggest that you "inspect the house as an insurance adjuster." We have done this a ton of times, Ive played the part of Mr Home owner insurance adjuster, plumber, contractor, appraiser, etc. All in the process of not letting the tenants know the landlord is selling.
Oh yeah, and be certain to take a ton of photos once you get your shot to get in the house. This is so that investors like me can make a decision off the 75 plus pics youll take of the layout. Insurance adjusters are known to take pics, so its all good. Then when you send me the deal later, I can make a decision based off the pics and calculate rehab that way better then not seeing the house. Most solid house flippers can analyze rehabs from pics with tax records and a margin of error thrown in.