Originally posted by Jon Holdman:
Is "your agent" really your buyer's agent or are you talking about the listing agent? I don't get the feeling this agent is really working for you.
What's the real value of this property? The tax assessments are meaningless in the best of times, but with all the fluctuation, and dropping tax revenues, they're really useless now. Ask "your agent" for ALL the sales within, say, one mile, within the last six months. You don't want just a few, because its easy to cherry pick three to show any story you want.
Look for other, similar properties that are currently listed. That will give you some idea of retail prices. You don't make money in this business buying at retail. If the agents and the bank insist on a retail price for this one, NEXT!
Do a public records search and see if you can tell what liens are on the property. That might give you an idea of how much is owed. The loans may have been taking out during the boom period, so don't put too much stock into current lending practices. If they took out a 90% or 100% loan in 2005, they would almost certainly be underwater.
If you're planning on buying multiple properties quickly, you need to find some more and get offers on those. This is a numbers game. If this is the only property you have under consideration right now, you're not going to make your goals.
No earnest money on short sales. I don't care what any of these agents say, if bank approval is required, don't give them ANY money until you have that bank approval in writing. Put in your offer, "earnest money to be provided by certified funds within 72 hours of lender approval" or some such. You don't want any money tied up waiting for the bank to move.
OTOH, if it takes doing a short sale to get a good deal, do it. Your agent is really not looking out for you with that talk of "pay more so we can avoid a short sale". Sorry, but that's just BS. Its always easier to buy if you overpay. It just doesn't make for a profitable business.
Hi Jon,
Thanks for the input. The agent we are using is not the listing agent but not someone I paid to be my agent. She is the agent that we used to find our house that we live in who also deals with rental properties. I guess I am confused at the two types of agents.
As far as the "real value" of the property, I have looked at comparable sales in the last year of homes in the same area and they range between $32k and $46k so I don't think that I am off in my bid. You are right, we definitely wouldn't make money in this business if we give them full value of the property I totally agree with that. I think that it is bogus that he listed it for $40k then tries to upsell it....that just doesn't make sense to me and would probably explain why it has been on the market for 127 days now and not sold.
I have not given them any money on this property and don't plan to until we have that bank approval in writing if we choose to move forward with that, thanks for the advice on that.
We are evaluating other properties as well, this one looked the most promising for the price but as we have now learned, sometimes things are just smoke and mirrors. I am still unsure if I want to persue this further because of the time it could take to close if they should decide to take the $40k and try for the short sale. I was pretty irritated and wanted to tell them that since the current events changed the playing field that I withdraw my $40k bid and go back to the $35k original offer. Since it's a short sale I guess it shouldn't matter. I have not done that as of yet but was pretty irritated since they seem to be playing games on their end.
Not sure what I am going to do.....
