First of all, how do you know that this is a “motivated seller” without having ever spoken to them? I get TONS of calls from people who see my advertising and still want full retail value and all cash. Even though they know I’m an investor, they somehow expect me to make them a better offer than someone who is looking to buy a house for themselves!
You need to concentrate on getting details from the seller about their situation. If they are behind in payments, then I offer to take the deed from them and bring their loan up current. My subject to offers are really simple. I will save your credit by taking the deed to the house and bring the loan current. I will then continue to make the payments on the house and keep it current. I will then be selling the house to a buyer who will get refinanced at some point and get the mortgage out of your name.
This is the only offer I have for people who are behind in payments or are in foreclosure. I make it clear to them that they stay on the loan and I will take the deed. If they have a problem with this, I tell them to feel free to pursue their other alternatives. (Which are usually none.) I never sugar coat a subject to offer. I am a lot nicer and easier to work with on my lease option offers, but I don’t try to sell someone hard on a subject to. I describe it and if they don’t like the sound of it, then I simply get off the phone.
Again, concentrate on gathering information from the sellers FIRST. This will help you determine if the seller is truly motivated and what you can offer.
Hi, I am a newbie- I just sent out letters to FSBO’s last week. I just had someone leave a message on my voice mail- What is the best way to present subj to as an option you have available to help them, without going into detail and confusing them and scaring them away- but briefly explaining thorough enough for them to be comfortable. Any help is greatly appreciated, as time is of the essence here on getting back to him to show my integrity as an investor.
Thank you in advance for help-
Lana- Joshua TX
Very simply say: The way our company works is you sign the home over to us and we will be responsible for the maintenance and getting a quality Tenant in the home. We make our money when we get the loan out of your name by having the Tenant buyer refinance the home, therefore we will work dillegently to do so. We will give you a contract to zero out your debt so you can purchase another home, qualify for a car, etc.
There are alot of things you will need to know. All the basics about info on the home. You are right, Subject to is the best way to buy becasue you are in total control.
E-mail me with the details and I can give you some ideas. Charlie
Well, there a bunch of different ways that I present an offer like that. What is their situation? What are the numbers involved? What have they said? Why do you think a subject to is the deal to offer here?
Answer these questions and we can give you a much better answer.
Charlie,
I have done mostly lease options and a couple of subject to’s. From what I understand, when a seller deeds you his house subject to, he DOES NOT get any credit for the monthly payments that you will be making on his mortgage. If you were to buy his house on a land contract, then he would get 100% credit. Even if you bought the house on a lease option, he would get at least 75% credit. But if he deeded it to you subject to, then most likely he won’t get any credit unless you can create some kind of a fake lease with the seller to help them get some credit on the monthly payments.
What kind of experiences have you had?
Tarun_Maryland
In you dealings, how do you handle the sellers question
about being able to buy a new home? Do you tell them
they will get 75% credit for their subject to sale?
Do you give them any time frame?
Hi, I am just beginning and just did my first advertising last week, which included FSBO letters. My first motivated seller called and left a message on my voice mail- asking me to call him. I am wanting to purchase Subj to (Prefer) or L/O or Contract for Deed.
I am just trying to put together a presentation on Subj to that is thorough enough to make them comfortable but not too detail, or confuse them. I have a speil for L/O- I need some help working out something on Subj to that others have found effective.
Beings I’m inexperienced, I want to sound credible.
Thanks
Lana - Joshua TX
In order for the seller to be able to qualify for another home, because the loan is still in their name when we buy with subject to we give them a land contract. This covers 100% of the debt. (A lease would only cover 75% of the debt and often times has to be seasoned) We work with alot of builders and when someone wants to build a new home and have an old one to sell we buy it subject to and also give them a land contract. The lender has this to show their debt is taken care of. They do not know of or see the transfer of the deed. And not do they care. It is just something to show someone else is making the payments on their home. If you have to much debt you cannot qualify for a loan on a home, car, etc. But since they have a land contract, that $1,000 payment is on their credit, and the contract says we are paying that $1000 payment. It is then a wash.
We belong to the better business bureau. I also have a credability kit we give them with letters from other sellers, lawyers, etc. We also offer to mail the check made out to the mortgage company to them and let them mail it in so they feel sure the payment has been made, or we give them 6 months worth of payments with POST DATED checks. That makes them feel safe.