Here's a New Wrinkle for ya... - Posted by Soapymac

Posted by Cesar on December 17, 1998 at 15:17:33:

That truly is an interesting concept. It shows where the industry is going as far as being creative in order to make progress. As we know, rates are extremely low, so people are interested in buying, but (at least in Florida)the standards are getting tougher for the loans to go through. With solutions like these, we can make it possible to have the win/win/win situation soapymac is talking about.

Thanks for the conversation piece. I will keep it in my files.

Here’s a New Wrinkle for ya… - Posted by Soapymac

Posted by Soapymac on December 17, 1998 at 24:03:19:

and doggone if it doesn’t make a whole bunch of sense!

In Massachusetts, we have what is called a Title V inspection (“V” stands for the number five.) This inspection has to do with assuring that the septic tank and leeching(sp?) field to disperse the waste water in a private sewerage system will handle the expected amount of waste water, based on the number of people living in the home.

You can imagine that if the septic system fails, the home cannot be sold until repairs are made and the system can pass the test. I won’t go into the particulars of ways around this, because that’s not my point.

My point is…that there are homes which COULD BE BOUGHT/SOLD that are not because the cost is too much for the present owners to handle.


The wrinkle is that some large REAL ESTATE BROKERAGES in Massachusetts are loaning to their LISTING SELLERS the amount of money required to bring their septic system “up to code”…on an INTEREST FREE basis. The brokerage is reimbursed by the sellers AT THE CLOSING.

Two things to notice:

  1. The Real Estate firms are helping their sellers get what THEY want (a home that is sold) and the firm is getting what THEY want (a commission AND someone who will refer their friends to the firm…the BEST KIND of marketing efforts.) This is truly a win/win situation

  2. How many of you could take a CONSTANT “deal breaker” that you might have, throw some properly secured, interest free money at it…and also come out with a win/win? AND A REFERRAL?

Food for thought.


Re: Here’s a New Wrinkle for ya… - Posted by Rich

Posted by Rich on December 17, 1998 at 06:11:53:

Sounds like a great idea…but how does the agency get their money back if the property doesn’t sell? Just curious. - Rich

Re: Here’s a New Wrinkle for ya… - Posted by Jim IL.

Posted by Jim IL. on December 17, 1998 at 24:57:19:

That was great. Just shows that we here on this site did NOT corner the market on creativity.
I think I have an idea on how to implement some of this here in my state…stay tuned.

The agency gets their money back… - Posted by Soapymac

Posted by Soapymac on December 17, 1998 at 14:11:59:

by first making sure that the home is under agreement with a ready, willing, and qualified buyer.

In the Purchase and Sale agreement there would be a paragraph stating something like:

“The seller assures the buyer that the property will pass the Title V inspection prior to closing. It is estimated that reapirs to complete the requirement will be completed by (put date here.) If, because of events that the seller cannot control, the repairs cannot be completed by that date, then…” and here you would put the agreement that the seller will still be responsible for the cost of repairs even if it was after closing.

The RE company now advances the money, and PAYS THE CONTRACTOR upon completion. The contractor signs a mechanics lien release, which, combined with a satisfactory inspection report, is brought to the closing.

At the closing, the paperwork for the Title V is completed, the documentation for the no interest loan is placed as a charge to the seller’s net, credited to the broker.

Yes, the paperwork is a little more complicated than what I’ve described…but you get the idea.

Seller is happy. Buyer is happy. Broker is happy. Win/Win/Win!

Now, think about it for a minute. IF (big word) you have the money available, and you have a “deal killer” facing you, and it’s a good proposition otherwise, could you get the technique to work for you…as long as you had a note secured BY THE PROPERTY in case the sale still did not go through?

Yeah, you have to think about it. But isn’t part of being an investor having the ability to solve problems creatively?