What's the order of how things go in a deal?

Question

I'm worried about how things should go. Let's say I find a potential deal and I set an appointment to see the house. Before that date, should I get info on the comps/potential worth before then? After I find out the repairs needed, Do I call later that day/meet with them the next day to give them my offer? I wouldn't know right of the top of my head what price to offer unless I had a contractor come through, but if that's not the case, it would be wise to meet with them with a offer and contract the following day or so right? After that I get the seller to sign the assignment contract and I contact a cash buyer, and of course they wants to check out the property for themselves. Should I have asked for keys to let an associate take a look or let seller know an associate is coming by to see the property, and set up an appointment for him or just go with the buyer? Now, the buyer agrees with the repairs and is willing to take my offer and signs the contract. The contract requires a deposit of XX amount of money upfront. Do I tell him know about the deposit before he sees the property or do we meet at a later date for the deposit/signing of the contract? now that most of the work is over I bring the contracts to a title company, but I don't know how to, or rather understand what to do after getting both contracts signed.

The more I start to understand the bigger picture, the more the little details start to confuse me.

Preston Bahrik · Answer

@Stephon Walker i feel like I am in the same spot as you.

Stefhon Walker · Answer

@Kevin Wang, Thank you for all the help. There was a lot of things I was uncertain about, and you clarified a lot of them.

@Roland Paicely, Your right I feel that a lot of these question could have been answered by going with the flow, I just need to get in the water first!

Roland Paicely · Answer

Stefhon............you are like me.  At least the way I was.  The answers that I got.  The more questions that I had.  I'm a very detailed person.  Don't overthink the process.  It will come to you as you take action.

If need be.....PM me and we can talk sometime.

Kevin Wang · Answer

Yes, both the contractors contract and the offering letter contract is received between you and the buyer. Also just the contractors contract between the buyer and contractor

Buyer pays title search

You don’t need to give the buyer’s contact info to seller since you have signed contract. Unless seller request. Seller has your contact info since you’re intermediary.

If buyer is getting a mortgage usually the lender will the have date/time for closing from the title company and give to the buyer. Or you can contact the title company.If buyer pays cash number 7 is fine.

Stefhon Walker · Answer

@Kevin Wang, Ok. Let's start from the top and see if I got it.

1. I receive a potential deal through direct marketing phone call or driving for dollars.

2. I call back, and discuss over the phone a raw offer, and about the contract, and about seeing the home with a contractor. They agree.

3. We see the home, and come up with a repair estimate, and then I calculate a more accurate offer.

4.* The seller is ok with new offer, and signs the contract and during the period stated in the contract I can tour the property with the buyer (of course with the seller knowing before hand when the tour takes place.)

5. I contact and email the buyer the ARV, Contractors quote of the repair estimate, Asking price (my offer which is the Seller's Asking Price + My Assignment Fee), and non-refundable deposit and a image of the contract he will sign  (Should I email both contracts or just the one between me and buyer? Also should I mention the )

6. The buyer may or may not tour the property*, and if he/she agrees to the offer, and contract, they sign it, and hand me the deposit and the contract states they must close within a certain frame of time.

7. Now having both contracts, I go to a title company, and hand over both contracts and the earnest money, and have them search for the title (Do I pay for all of this?) I contact the buyer about what title company I gave the contracts to and leave the rest to him/her and the seller (Do I give the buyer the sellers contact info? Of course letting them know I found an associate who will purchase the property)

Lastly if the buyer takes over, how do I know when they are closing so that I can collect my fee from the title company? Will the buyer give me the details, or Is this set by the title company? (I just thought about that possibility.)

I really appreciate all the help so far!

Kevin Wang · Answer

Yes, all at once if that works for you and other parties. The contractor will give an accurate quote once he/she sees the inside of the property. But I think pictures also work but not as accurate. You can schedule with the associate if he/she wants to tour the property. Usually investors want to know the numbers more than anything else. If you opt for the pictures route to show the contractor then an inspector is absolutely needed pre-inspection or after the property goes into contract. The contract is mostly what the buyer needs to know so the contractor quote as well as contract needs to be shown to the associate. The seller has to agree to your contract first, always. Once seller agrees to contract, then you have a period where you can do inspection, tours, contractor quote, back out, etc. As for the title company, the seller’s agent and lender communicate as well as the title company communicate back and forth. Yes, with the earnest money being sent to the title company as long as there is nothing in the contract that stipulates being liable or otherwise, shouldn’t be anything other than the earnest money, then the buyer takes over from here. Hope this helps. Correct me if I'm wrong

Stefhon Walker · Answer

@Matt Katsaris, that was really helpful. What your saying is from the phone calls I receive from marketing, I get info on what they know needs repairs. I come up with a quick rough estimate based on comps and info given over the phone. I call back with the rough offer and if they accept, we schedule to have a look at the property with or with out a contractor, when the true estimate of repairs is known, I'll be able to calculate a more accurate offer to comeback with. If the seller agrees with the offer and signs the contract, I then contact/find a buyer and discuss the info such as ARV, Asking Price, Repair Estimate, What those repairs are, the contract and non refundable deposit. I communicate with seller about seeing the house once more with buyer/associate. He takes a look and agrees, and signs the assignment contract that says he must close within 30 days and hands over the deposit.

Now that I have both contracts what do I do?

Stefhon Walker · Answer

@Kevin Wang, Thanks the response. I'm a little confused, are you saying that I should communicate with seller, associate, and contractor to see the property on one one day at separate times, or all at once? How should I let them know the contract? Are you saying I just while, speaking with them over the phone or in person, let them know what the contract is about and does, and that a contractor and I will be looking at the home on X date, and if they agree do just that? Lastly once the cash buyer/associate signs it it's out of my hands? So the buyer sets up everything with the title company? Do I just send the document and earnest money over to said title company without paying anything (other than earnest fee)? It's mainly the last leg of the race that confuses me

Matt K. · Answer

You should define what you're looking for and what you need out of this property first. You need to understand how the numbers work and what effect they have on your goals. You can use rough numbers to exclude properties that just wont work... then set aside ones that do. Of those you set aside you take a deeper look at the numbers and go from there.Once you understand what you need for a deal to make sense then you can submit an offer, once the offer is accepted you do the inspection, you make a counter offer based on repairs need, then either you close on the house or walk depending on how the numbers work. But I can't stress this enough... if you don't understand how the numbers work or how they impact each other you'll have no way to make smart offer.

Kevin Wang · Answer

Hi @Stefhon Walker

Communicate with the buyer, associate, and contractor as well as yourself on a agreed upon date to schedule an appointment to go see the house, but get seller's permission first. That way you don't have to schedule multiple days with the seller to go see the house. And let the buyer know about the contract before it is signed. Once buyer agrees, contractor goes to town on the house. On closing date, once the contract is sign buyer takes over from here unless the contract specifies being involved. Hope this helps.