HELP! Last Min. Panic! Showing first house today and still have????'s - Posted by Jenna

Real Estate Investing
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Posted by B.L.Renfrow on May 02, 2000 at 13:29:16:

Jenna,

Sure, you can renegotiate. Just tell them you took another look at the numbers and you feel another approach may be more beneficial for them (and for you)…which is true, because the sooner YOU get paid, the sooner THEIR problem goes away.

About the lender having a problem with unseasoned title: Well, that is another whole bag of worms. When you have some time, do an archive search for those topics here and read some of the posts about it. Depending on where you are located, it may or may not be a problem. It’s almost always an issue with subprime lenders, but not necessarily with a good-credit buyer. And rarely with note-buyers.

For your prospects today, just act like you do it all the time! If they ask questions which you can’t answer, just say, “Well, I am not sure right now, but I will find out for you.” The absolute worst-case scenario is that they are unqualified or won’t be interested, in which case you can chalk it up to a learning experience and you’ll be more confident next time around.

I’m sure you will do fine. If you have more questions, just post them here and someone will have ideas. That’s what the site is all about!

Brian

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HELP! Last Min. Panic! Showing first house today and still have???'s - Posted by Jenna

Posted by Jenna on May 02, 2000 at 11:23:52:

I am showing my first house today, on which I have signed a purchase agreement with the seller as a contract for deed. The couple I am showing the house to is very nosy about what my ownership status is, as they understand this is an investment property for me. I will be able to deliver clear title at closing, however, how do I handle ownership questions from them in the meantime?

Additionally, I have second guessed myself to death and now am unsure about my contract for deed. Is it not correct that in this sort of agreement, the seller retains title and deed until I pay him the balance owed? In that case, if I further sign a contract for deed to my sellers, how can I explain to them that they will not hold title until they pay the balance, yet they do own the home while making payments? I think that this couple plans to qualify and pay cash, but I need to be prepared for their questions. As it is, they don’t like it that the power has been turned off b/c the husband wants to listen to the CHA.

Really, I think I’m going to run into issues with this couple b/c they don’t seem to understand that I have the right to sell this home, even if all I have done so far is come to an agreement with the seller to buy it and manage the property in the meantime.

Can someone please help? ASAP, as showing is this afternoon.
Thanks.

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Showing is over… total DISASTER!!! Could it have gone worse?? - Posted by Jenna

Posted by Jenna on May 02, 2000 at 18:51:33:

How could this have gone any worse? I swallowed the lump in my throat that I whined about all day on this site and went ahead to meet the buyers to show the house. What all went wrong? Allow me to make a list:

  1. The seller shows up before the buyers for no apparent reason.
  2. A buyer I’ve never spoken to shows up right behind the seller, apparently a friend of the family but still in response to my ad.
  3. The pain in the neck buyers I wrote about initially show up immediately after.
  4. My seller starts showing the house himself and talking about his back payments.
  5. My seller quotes what he owes and has me paying him to the first stranger buyer.
  6. My original buyers now have no idea what I’m doing there and start talking to my seller directly.

I could go on, but you get the picture. Basically, the first buyer goes away thinking the asking price is $10k less than what it is, but I never even got a chance to talk to her and she said she would be calling my seller directly. My buyers who were there on appointment finally get the point that they would be buying the home from me as I am managing the sale, but clearly have intentions to try to go around me. Through all of this, my seller seems panicky and confused, but still wouldn’t get out of my way or let me do the talking. Obviously, the buyers were more concerned with talking to him, anyway.

After it was all over, I explained the situation to my very confused and sorry seller, who wished he had never shown up and complicated the matter. He understands where my profit comes in (he also was right there when I had to quote my terms, prices, etc. so knows what I could make) and says it’s what he expected for me to do the job, but still, it is such a compromise.

My question is: could this have gone any worse? I don’t know myself, as this was my first showing. I’m starting to lose sight of why I am doing this, as so far, it has been rather complicated. Have I ever mentioned that the first time I met with a seller, they brought a Realtor with them? Yeah, this has not been an easy ride so far, by any standard. Ugh.

Regardless, I thank all of you for your time in attempting to help me today. Who could have known it would have ended like this?

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Fake it, till you make it - Posted by Bud Branstetter

Posted by Bud Branstetter on May 02, 2000 at 15:27:47:

So what if they grill you? You are in control. You are selling the house. You have something they may want. If they don’t want then wait for someone else. If you panic you only lose one prospect. Their are more fish in the sea. Use it as a learning experience. You will have to get over the panic attacks to be successful.

You have already been told to renegotiate. A CFD is not much better than a L/O. The back payments are propably more than you should be paying unless to are buying more than 2-3 times that payment in true equity. Another way to protect yourself is a performance mortgage. The former owners get mad at each other and don’t want to sign the deed then you foreclose to gain title.

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Forget “Showings”, do this instead. - Posted by Jim IL

Posted by Jim IL on May 02, 2000 at 14:01:21:

Jenna,
I NEVER just “Show” a house to one interested party anymore. When you do, you are faced with being cornered and grilled for info.
Forget that routine.
Now, when I sell a home, I will give certain info on the phone, or with my flyer for the home.
But, when people ask to see it, I say, “Well, I’m showing the home on such and such day at this time.”
What I am doing is scheduling several prospects to look at the same time.
This saves me time, and also creates a competitive atmosphere for the buyers.
As they all arrive to view the home, I have a stack of flyers with the homes stats, and the terms for the purchase.
I also have a stack of apps ready with some pens.
I tell anyone who is intersted to fill out an application and to pay me the fee.
Then, after we run them and see who is a good prospect, we talk further.
I will even tell applicants when several have the CASH I want to get out NOW that the first one to get me the funds gets the house. This is of course AFTER I have screened them.
I can usually move a house in a couple of weeks with a few flyers posted around town, a newspaper ad, and some signs placed in the yard of the home as well as at the major intersections pointing to the home.

HTH,
Jim IL

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Re: HELP! Last Min. Panic! Showing first house today and still have???'s - Posted by B.L.Renfrow

Posted by B.L.Renfrow on May 02, 2000 at 12:38:11:

First, just tell them if they ask that you have the house under contract, which gives you the legal right to sell it. Anything more specific than that will probably just confuse them. It’s not an unusual question from potential buyers. If they don’t ask, I don’t bring it up, but when they do, that’s my answer.

A more significant concern is this: Buying AND selling on a contract for deed DOES place both you and your buyer at risk. For example, what if you sell on CFD, then your buyer decides to refi down the road, but in the meantime either your seller, or you, get a judgment filed against you, have marital troubles, have financial problems, a tax lien, etc.? The result could be an encumbered title which you could not deliver to your buyer…not a pretty picture.

A better solution would be to buy by taking title subject-to any existing financing in a land trust, then sell on a contract for deed. That way, the title is much better protected from attachment.

You can tell your buyer it (buying on a land contract/CFD) is just like buying a car on credit…they will own the property, but you will hold onto the title until it is paid off. Most people can understand and accept that analogy (except here in NY, where car lenders DON’T hold the title!).

Finally, if they want to make an offer but want to check out the appliances with the power on, just let them make their purchase offer contingent upon the appliances being in working order.

Brian (NY)

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Why I dont show houses - Posted by PBoone

Posted by PBoone on May 02, 2000 at 12:32:46:

We used to sell houses with the tour and all the garbage attached, but people got on my nerves with all of their petty questions and differences, gosh I have no idea how a realtor can do it day in and out. We started putting lock boxes on the door gave the combo to the potential buyer and have them fax any questions. When they are interested in putting CASH into an ernest money then we meet.
Pat

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Re: HELP! Last Min. Panic! Showing first house today and still have???'s - Posted by d.henderson

Posted by d.henderson on May 02, 2000 at 11:47:32:

There are many more qualified to answer your question here and they will in time. I’m posting because you do seem very unsure.

  1. You are in control, the buyers are not.
  2. You will have MANY look, so be calm and tell them what you think they NEED to know at this time.
  3. It’s none of their business how you got the house, what you paid for it, etc. They will have clear title when they buy it. That’s all they need to know.
  4. Congrats! you’ve taken the first step, you will get better each time that you do this. Go out and set the world on fire.
    Keep us posted and others will answer, if not ask the question again.
    Dee-Texas
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Re: Showing is over… total DISASTER!!! Could it have gone worse?? - Posted by Greta

Posted by Greta on May 02, 2000 at 20:54:32:

Sounds like you pulled a Leo. Better luck next time.

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Re: Not the end, Just a pretty good opening position… - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on May 02, 2000 at 20:41:23:

Jenna,
What did you learn? Write it down, and then use it next time. You still have a product to sell. That is how you will get your profit. My suggestion is next time get rid of the seller, YOU ARE THE SELLER. Get some rest and start again tomorrow. Good luck…ED

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Re: a little tip - Posted by eric

Posted by eric on May 02, 2000 at 20:39:51:

If I were you, right now, I would be going down to the courthouse to record an “affidavit of contract”. This is a form that basically requires only your signature, and you swear that you have a contract with the seller. this creates a cloud on the title, and prevents the seller from selling the property out from underneath you, since, with the cloud, they will not be able to furnish title insurance. It’s a dirty little trick, but it’s created for situations just like this, and paybacks are hell. Then, go to the seller, tell them what you have done, and gently remind them, a la Gordon Gekko, “we have an agreement, and I expect you to honor it”. You worked hard to find that deal and get that contract, it’s only fair that you should collect some profit from it. Let people know you will not be toyed with, stick your chin up and get them to start reacting to you, not the other way around. This is an unpleasant way to do business, but some people can’t be reasoned with. Also remind the seller that you are providing a service, and they are preventing you from doing your job - tell them to leave it to you, after all, you are the expert here. And trust me, you are - as shaky as you may feel right now, I guarantee just by your presence on this board, you know a ton more than these sellers and buyers about this stuff at this point. Now go kick some A**!!!

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All well and good, but for today… - Posted by Jenna

Posted by Jenna on May 02, 2000 at 14:52:06:

Thank you, Jim. I like that plan much better and will do that next time, however, it doesn’t help me a bit for today. I still have to show this house today to buyers who are apparently prepared to grill me. Not good, as I’m still not sure I can address their concerns sufficiently.

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So now what? - Posted by Jenna

Posted by Jenna on May 02, 2000 at 12:55:46:

Okay, now I see that I should have pushed for subject-to, however, I had to come to an agreement with him and his ex, who did not want to deed the property but did want the CFD. So now what can I do? I have it under a purchase contract laid out for CFD. How else can I handle this? Should I just back out of the whole thing and forfeit my earnest money (not big deal, obviously)?
At this point, I feel worse than when I asked the question.

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Re: Why I dont show houses - Posted by B.L.Renfrow

Posted by B.L.Renfrow on May 02, 2000 at 12:50:31:

Pat,

One thing I’ve always wondered about with the lock box approach: how do you prevent them from going back in the middle of the night and lifting anything removeable (like appliances) if they are unscroupulous folks? Or going there on the weekend to have a beer party with all their friends? Do you screen them by having them fax applications first? Seems like it would be tough to judge character via the fax.

Brian

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Call me stupid… What’s a “Leo”? (nt) - Posted by Jenna

Posted by Jenna on May 03, 2000 at 24:24:00:

nt

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Re: Not the end, Just a pretty good opening position… - Posted by Jenna

Posted by Jenna on May 03, 2000 at 24:29:08:

Ed,

I would have loved to have gotten rid of the seller, but what was I supposed to do? Escort him to his car and say stay out of my business? He felt bad enough after I explained to him the potential damage his presence could do, but it was a little late then, anyway. Again, I had absolutely no idea he would just be showing up, nor did he know I would be showing the house at that time (open door agreement). I don’t know how I could have prevented his appearance.

I am asking myself what I could have done differently and what I can learn, as well as if I could have prevented the situation. I’m stuck on that “how I could have prevented it” part.

Thanks.

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Do what sellers do to us all the time… - Posted by Jim IL

Posted by Jim IL on May 02, 2000 at 15:19:38:

Jenna,
When this buyer wants more info, or starts to “grill” you, tell them, if they are making an offer, you may divulge more info, but until you see they are serious, nothing other than your terms (and of course basic info on the home)will be disclosed.
You are the seller here, stay in control.
If this buyer gives you hoops to jump thru, find a new buyer.
This is why we all got started in REI in the first place right?
To be the boss, the one in charge of our business!
Imagine if this buyer gives you this much hassle now, what will it be like delaing with them as a T/B’er, renter, or payor on a note?
YUCK!!

Good luck to you, and remember, you are in charge,
Jim IL

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Re: So now what? - Posted by B.L.Renfrow

Posted by B.L.Renfrow on May 02, 2000 at 13:04:16:

Jenna,

OK…don’t get all discouraged. I only wanted to point out what I see as real risks doing the transaction as you outlined:-)

Can you go back and renegotiate with the seller? Maybe offer more money, in exchange for subject-to?

If the ex won’t go for that, then what I would do is look for a buyer who can either come in with their own financing, or with whom you can do a note deal and sell the note at closing to pay off the original sellers. That way, you can still advertise it with owner financing, which will get you tons of calls.

If you want to throw out the numbers, we’ll be happy to give you some opinions on what might work best for you. But don’t give up quite yet!

Brian

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Re: Why I dont show houses - Posted by PBoone

Posted by PBoone on May 02, 2000 at 23:14:49:

I always get thier phone number and call them back first before giving the combo. We have yet to have any problems.
Pat

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Re: I’ve had the same questions…(nt) - Posted by Stacy (AZ)

Posted by Stacy (AZ) on May 02, 2000 at 17:51:12:

.