All Forum Posts by: Derek T.

Paint first and then do the floors.   Your floors should be one of the last things you do (at least for me).  There may be paint touch ups needed after staining but touch ups are always done on the final days anyway and there will always be some touch ups needed. 

I don't quite understand the reason behind your question.... Wouldn't they get the full amount with the emd from another buyer?  There's no choice..... It's not a choice that is mutually exclusive from the other. 

This is the way real estate works especially MLS deals. REOs are investments from banks or firms. Why would they want to tie up their property with someone who is not putting up an EMD. It's not practical and doesn't make financial sense. Without EMD ppl would probably be trying to lock up dozens of properties and just keep the best wasting seller's time and more importantly money. POF are a dime a dozen and anyone offering on REOs especially with cash is submitting them.

I wouldn't make it a consistent thing to offer in properties vastly over priced.   If the DOM are large then it may be more of a possibility but I wouldn't make it a habit.  Offer on the property and make it continent to your investor's review and approval. 

They want to make sure you are a serious buyer.   Without emd you could go around and put dozen of properties under contract and not necessarily be capable or willing to close on all of them.  Emd protects sellers and shows that you are serious.  In the case of non refundable emd as with many REOs it shows you're really serious.  They have to protect their investment and make sure they are only dealing with serious buyers.  I would love to do non refundable emd for my flips but I think it's too taboo. 

David pretty much every bank offers the 30 yr fixed rate product you are looking for.   Basically you want a mortgage correct? 

Most REOs that have been improved for end buyers, will assume that closing costs would be involved.   In regards to the $2k just make your offer $2k less.   The market will speak and in regards with REOs,  they will most certainly come back with best and final even with end buyers if they have multiple offers. 

So make your offer of $198k and 3% closing and if they come back with best and final you may have to come up if you really want the property.  

As one mentioned I wouldn't trust REO improvements. Every REO I've bought was improved to hide something (typically mold, busted pipes, etc). All mine have been in poor shape and not for end buyers but recently painted REOs or new drywall is always a concern for me these days.

Congrats Jamal

I understand the prime location however you have to realize you are sandwiched between the DC and Baltimore markets.  Their are thousands of contractors who are willing to drive to do the work at substantially lower prices.  Your builder is not going to hire the most expensive contractors to do the work as his goal is the bottom dollar.  He is going to hire the most professional, time efficient, quality subs that will be the most inexpensive.  Outside of the subs, the given labor rate for this area is already set at $15-$20 an hr so that's what he is probably paying his workers.  So with that info there is no way he should be at $350-400 sq ft.

For example, I have a rehab in Annapolis (top 20 county in the USA and one of the most expensive cities in that county) that I am doing now surrounding by million dollar houses on each street (albeit this is not one of them).  I initially tried to get bids from AA contractors but they were coming in too high.   So I went to my normal guys.  The HVAC technician is coming from Charles County, the plumber and electrician is coming from PG, the carpenter/drywall/painting crews are coming for Montgomery.  So my point is that people are wiling to drive to Howard Co for the job and do it at reasonable rates.   I understand retail and that you are a homeowner but anything over $200 sq ft would be insane to me, and that's retail.  I am assuming that you already knew that which is why you came on an investor board to see what would be reasonable rates for the area.  The vast majority has given their input that it is too high, so I would recommend finding a GC for a set price and let him handle the project through subs.

And just to follow up....in the four DC listings that are $10-25m, all of them have 5-6% listing fees.  You would have to check your NY market, but I think your 4.5% would send the wrong message and I don't think its worth the extra .5-1.5%.  Just hire the best agent you can find in the city and let them list it with 5-6% commission. 

Out of the 22 listings here in DC with a 5mil-10mil sales price all of them have 6% total and 3% for buyer's agent except for 2.  I think what a person needs to realize when they buy or sell at this price range is that you are hiring a professional to do a professional job.  Just because the commission is larger, I don't believe it is a reason to ask that professional to cut their fee down.  In higher priced homes, realtors often have to spend more time and resources on the property.  Often times these are appt only showings that require multiple open houses.  Many of these realtors put their own funds up to market the house which includes hosting, print outs, Internet/print marketing, staging, professional photos, etc.....all without a guarantee that their investment will be returned to them.  Can you imagine how frustrating it is to spend 3 hours just to drive to a property show it and it not sell and do that 20-30 over again?  

I mean is your seller going to ask their financial adviser or stockbroker to take less commission because they are investing more money than their other clients?  Or ask their loan officer to cut his commission down because they are buying a higher priced house?  My point is let professional do what professionals do and don't try to discount their work or discount pay because of potential commissions.  Personally I would recommend 6% but wouldn't go any less than 5%.  You get what you pay for and an established luxury listing agent isn't going to agree with your 4.5% anyway.  Just my thoughts.....