CRAIG’S LIST AND SHORT SALE CON ARTISTS, HUCKSTERS, AND “WE PAY CASH” FLIM FLAM

Kind of funny perusing through the myriad of “we can help” and “cash in ten days” ads that are running rampant on CL.  Notice that most of these so called help ads redirect you to their web site where they get your personal information?  Most of these are scam and con artists looking to absolutely steal the property from people with little or no mortgages on their property.  They take down your information and only have interest in you and your property if they can steal the property.  Worse yet, most of these sites are “wholesalers”, that do nothing but induce you to enter into a sales contract that is assignable.  They then try and find another buyer during the contract period.  If they don’t , they simply walk away leaving you with more misery than you had started with, and usually in more dire straights than when you had first started the process with them.

Some times, you have to sell property quickly for whatever reason.  If that’s the case, you can be proactive in finding a quick buyer.  The faster you need the cash, the deeper the discount usually will be expected from the buyer.  However, there are some things you can do to protect yourself, and not leave yourself vulnerable to these sharks and flim flam artists.  Look, everybody loves a steal, including me, but be fair to yourself.  If you need to sell fast, here’s some good advice:

PUT THE ADD YOURSELF IN CRAIG’S LIST –  If you must sell quickly, invite the sharks and snake oil salemen.  I know this sounds counterintuitive, but if you have 5 or 6 sharks responding, you’ll get a more competitive offer for your property.  Don’t be afraid to pit one against the other.  Let them know you are talking with others that do the same thing they are doing.  Anyone legitimate in the business will give you a “highest and best” offer for your property.  Don’t be pressured with the ruse that they have to move on to another deal unless they get a respons eback from you quickly.  Anyone pressuring you, means that they are trying to inhibit you from talking to other people, or they see that you’re at your weakest and want to exploit immediately.

IF THEY SAY CASH, ASK TO SEE IT – Everyone of these guys all claim that they pay cash in 7 days, etc.  Ask for a proof of funds, bank statements, etc.  If they are legitimate, they’ll be more than willing to do this.   What this will do will weed out the “wholesalers”  that have absolutely no intention of buying your house, but rather, flipping it to another buyer, who may or may not be strong enough to purchase.  If they say cash, require proof!  Listen, we do not run these type of ads, as we consider them unseemly and take advantage of vulnerable people at the worst times, but we do close on buildings quickly when we are approached by potential sellers.  The difference is that we have cash and a credit facility, and am more than willing to show the prospective seller what we have.  You should insist on it.  Be aware of the “cash in two days” hook they try and entice you with.  As a practical matter, once a deal is consummated, we do need enough time to make sure there is nothing wrong with the title and to ascertain the mortgages.  It does me no good to enter into a deal to buy your house for $50,000.00 when in fact you have a 1st, 2nd, and 3rd mortgage totalling $150,000.00.  Most reputable firms will tell you they need the time to research the title and the mortgages.

REQUIRE A NONREFUNDABLE DOWNPAYMENT – If they say they can close fast, make them put their money where their mouth is.  Require a down payment with your lawyer, real estate broker, or escrow agent.  Even if the closing is supposed to be in a short period of time (under thirty days), make them have some skin in the game.  This also separates the legitimate guys from the wholesalers looking to make a quick buck in your time of need.  Also, if its nonrefundable, there’s less chance for them to play around. Also, if there’s real money on the table, you’ll weed out the wholesalers that really have no intention of buying.

People have to sell quickly for a variety of reasons, so there’s no harm in that.  But be proactive and take measures to ensure that you’re coming out with the best deal possible under the circumstances. 

My company does buy houses for cash and close quickly, however, there are some circumstances where we won’t even offer.  If its an estate sale or a divorce, we’d love to offer.  If you’re behind on your mortgage and have a ton of equity in the house, I’d rather advice you on how to get a fair price and deal with your lender rather than steal the house from you.  But if anyone in Massachusetts wants to sell quickly we’ll listen ( that’s my shameless plug on this blog for my company!).

Usually, people that have to or desire to sell quickly are at a time of extreme emotional stress.  Talk with friends and family members to make sure you’re thinking clearly, and for God’s sake, be a bit proactive.  be wary of any site that doesn’t give their company name, or a contact person, and just has a redirected web site –  they’re fishin’!

One thing I did note was that a lot of these real estate seminars are touting people to put the word “solutions” in their title.  I guess this is supposed to psychologically get you to feel comfortable.  I can’t tell if that’s true or not, but I do know that there are a lot of “newbies” out there trying to wholesale properties that have taken these seminars, have creating a company, but have yet to buy a single piece of property.

Fellow bloggers, its favor time!  I would appreciate any feedback as to my content.  I’m new to this whole blogging shtick and am trying to write informative articles that people can really use.  Is it too dry?  Cynical?  Condescending? Pedantic?

GREAT IDEAS FOR FIRST TIME HOME BUYERS!

This dinosaur has awakened!  This is my first ever blog, and I want to direct this to first time home buyers.  As most of you probably know right now, this is the absolutely best time to buy a house; you have inordinately low interest rates, coupled with extremely low prices.  In the market I currently work in – Worcester County Massachusetts, prices have been depressed for about 4 years now.  Unfortunately, there are a number of potential buyers that are sitting on the sidelines because they’re afraid they can’t buy or aren”t qualified.

The simple fact is that if you’re paying and comfortably affording $900.00 –  $1,100.00  per month in rent in an apartment, you certainly can and should consider buying a house. One of the biggest objections I hear is that, “we don’t hav enough money saved up”.  Rubbish!!  If you have saved up 3 – 5% of the purchase price, you can buy.  Unfortunately, if you only put this low amount down, the banks hit you with what is called PMI – this essentially is insurance where the company pauys if you default on your loan. I look at it as you’re renting the rope that could ultimately hang you.  But we use an even better way of doing this:

What we do is work with you and your agent to find a home, with the right number of bedrooms, the right square footage, the right neighborhood, the right number of bathrooms, etc.  Once we find a property in the area you are looking for, we agree on a price for the property to be sold to you in a fixed up condition.  We will sell this to you always for less than its worth!  Every property that we sell has at least 15% equity in it.  For example, a foreclosed 4 bedroom single family in Shrewsbury may be worth $250, 00.00 fixed up, but the bank is selling it for $135,000.00 because it has stolen copper, a leaky roof, mold, a non working boiler, and water damage.  We’ll buy it and totally renovate it.  We’ll have an agreement with you that we will sell it to you for $210,000.00.  You pocket an instant equity of $40,000.00.  Essentially, you are buying your home for less than the appraised value!   

The best part of what we do for you is there is absolutely no risk on your part!  After we identify a house that you may want, we buy it and do all the construction and renovation work.  We have a purchase and sales agreement with you, and in it we detail the work that is to be done.  We never take any money whatsoever from you!  There are two risks here, and we absorb both of them; the first risk is that you aren’t happy with the construction that’s done.  If the work isn’t done in a workmanlike manner, or we do not do what is in the purchase and sales agreement, you have the right to end the agreement.  The second risk is that the property won’t appraise so that you have at least 15% equity.  In that case, you have the option of either buying it from us for 85% of the appraised value, or just terminating the agreement.We are guaranteeing the buyer to have at least 15% equity in the property.  If not, we’ll either reduce the price or you can just walk away.  Simple. 

Why would this be important to you?  Well, if we buy it for you and put your name on the deed and mortgage before we fix it, when you finance this out, it gets treated by most banks as a refinance, meaning that you put nothing down.  Not only that, but since we guarantee 15% equity when you buy, based upon the bank’s appraisal, you pay absolutely no PMI insurance.  Its a way for you to get the house you want, below market, and without coming up with a lot of cash.

But that’s not for everyone.  If you want a house already fixed up, I would suggest to you that you first look at all of the on line real estate sites.  That will give you a good idea as to what’s out there for real estate deals.  Work with an agent or broker that is reputable, that returns calls, that doesn’t try and pressure you into something that you don’t want, and that will present your offer, and won’t try and talk you into putting in a higher offer.  When I first started as a young man, I met a broker who told me that she did not want to embarass herself by putting in my extremely low offer.  Not only is this wrong, its illegal!

Which brings me to my next item:  Don’t be afraid to put in an offer that is substantially below what they are asking.  Just because someone lists the property for an outrageous sum, that may not be what they’re looking for.  Ask the broker how many days on the market the property has been on, how many price reductions have there been, and if it had been under agreement before that.  Usually, when I’m scoping deals, I won’t bother with property that’s been listed for a great length of time (180 days ++) that did not have a price reduction.  Usually, that usually means an intractible seller.

Buy only what you can afford.  Rule by the pocketbook, not the emotion of the house! Buy the worst house in the best area, not the palace in a war zone.  Well, that’s it for now.  Let me know how I did with my first blog.