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My House Just Won’t Sell!

My House Just Won’t Sell!. Sell in 16 – 60 days or less! . 5 Options for Sellers Who Can’t Sell. Drop the price, drop the price, drop the price and lose money Wait, Wait, Wait Short Sale Rent = “4 letter” word Sell NOW using a creative exit strategy . Scenario: Retail Sale .

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My House Just Won’t Sell!

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  1. My House Just Won’t Sell! Sell in 16 – 60 days or less!

  2. 5 Options for Sellers Who Can’t Sell • Drop the price, drop the price, drop the price and lose money • Wait, Wait, Wait • Short Sale • Rent = “4 letter” word • Sell NOW using a creative exit strategy

  3. Scenario: Retail Sale • $150,000 – List Price • Drop price, drop price, drop price! • $132,000 – Sale Price • -$8,100 – 6% Commission to both agents • -$4,000 – seller closing costs • -$4,050 – seller concession 3% • ($16,150 – seller costs) • $115,850 Net Check from Title Company • Remember this number because we will come back to it. • What’s owed? • Is this a short sale?

  4. Scenario: Rental • $150,000 – List Price • Drop Price, Drop Price, Drop Price! • Decision To Rent It • Market For Sale • Craigslist, Mls, Post, Repost Ads Daily • Show Property Over And Over • Deal With No Shows And Time Wasters • 30 -90 Day Vacancy Looking For A Tenant • Screening: Credit Verification, Job Verification, Criminal History, Reference Checks • Then Collect The Rent And Chase People Down • And Hope They Don’t Destroy Your House.

  5. Seller {Landlord} Expenses When Renting • 8% Vacancy Fee • One Month Vacancy • At Least 1 Mo Out Of 12 House Will Be Vacant • Every Month Vacant Is Money Lost • 5-10% Management Fee • Stark Property Management Company Example • $100 A Mo Per Unit • 5-10% Maintenance Fee • Including • Water/Sewer/Grass/Snow/ Garbage Pick Up • Appliances

  6. What if you could sell now for top dollar… • Forget the hassles of selling and / or renting…. • And get multiple tax breaks? • Interested?

  7. What is a lease with option? • Rental Agreement • Plus A “Pre-agreed Upon” Sale Of The Property In The Next 6 To 24 Months • Buyers Put Non-refundable Option Money Down That They Don’t Want To Lose • Buyers Are Responsible For All Upkeep And Utilities • Buyers Get Approved For Mortgage And Buy ASAP.

  8. Why Are Lease Options Working? • Home prices are bottoming out, sellers are getting realistic that they won’t get the price they want today, opening a big market for home sellers. • Sellers who can’t sell are more open to creative selling strategies • The house is vacant • Carrying 2 mortgages • House is not selling • Seller maintains on time mortgage payments and good credit • Banks are still tight with lending criteria, so there’s an abundance of buyers who want the rent to own option

  9. Top 3 Seller Questions • What is major damage occurs? • Mindset – “Ownership” not renters • Improve property • Why would I purposely damage my own house • Large down payment • Hazard Insurance – landlord and renters policy • Midnight move out • They move out with notice • Just re-sell it • Seller keeps the option deposit • Money collection {Rent and Monthly rent} • Angelo Russo, Avalon Escrow Company ($50 a mo) • Title company can collect

  10. 5 Parts of a Lease Option Contract • Rental Agreement • 1 Year, With 1 Year Option To Continue • Utilities Included And Paid By The Buyer • 10% Late Fee If Rent Paid After 5th Of Month • Option Money A. 1-2% Of Purchase Price • Future Purchase Price • Seller Typically Gets Full Asking Price • Rent Credits A. 10% Of The Rent Rate B. Incentive For Tenant Buyer To Pay Rent On Time And Eventually Buy Property Outright • Assignment Fee/ Commission A. Paid By The Buyer

  11. Tenant Buyer Writes 2 Checks All Checks Paid “Avalon Escrow” • Option Deposit • Applied • 3% Buyer’s Agent / Assignment Fee • Sellers Option Consideration Fee • First month’s rent - $1,250 • Rent Credit - 10% • Applied • Reduces the Sales Price • ~OR~ • Down payment

  12. The Closing • The title company handles the payment collection. • Protects the seller and buyer • Makes buyer pay on time • Makes sure seller pays the mortgage and doesn’t go into foreclosure • The title company charges $50 month. • Buyers pays for this service

  13. The Sharp Success Process • The Seller Now Has Options. • A Buyer Is Ready To Buy And Move In Now. • We Only Work With Qualified Buyers • We Handle All The Screening: Job, Credit, Criminal • We Show The Property By Appointment • No Long Term Vacancy • No Inconveniences • Property Is Sold For A Higher Net Profit!

  14. The Hook “If you want to tie up this property, you need to put down $1,000 in earnest money to lock it up. Are you ready to lock up this property?”

  15. Scenario: Lease Option Sale • $150,000 – Future Sale Price – FULL ASKING PRICE • -$3,500 Now – Option Deposit Non- Refundable • -$9,000 Seller Concession 6% To The Buyer • -$4,000 Seller Closing Costs • -$4,500 Sellers Agent Commission (3% Of $150k) • $129,000 NET PROCEEDS From The Sale • +$3500 TODAY From Buyer • $132,500 – NET PROCEEDS In Their Pocket • + “Margin Over Payment” $150 /Mo For 2 Years = $3,600 Cash Flow Proceeds • + Principal Pay down = $200 / Mo = $4,800 PrinPaydown • + Depreciation = 3.5% Value = $5250 BENEFIT!!!!! Per Year!!!!!!! • $3500 Tax Savings - $10,500 - 35% Tax Bracket (Includes Fed, State And Local) • +$144,400 Net Net Over Course Of Agreement • **All number are approximate and projected. Not Guaranteed!

  16. Next Steps • Seller Agrees to Allow Sharp to Market Their Property • Sign either the: • Listing Agreement • ~OR~ • Letter of Understanding Then we begin immediately to find a buyer!

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