Possible Golden Goose - Posted by JeffM

import · July 18, 2001, 2:22pm

Posted by Chuck (AZ) on July 20, 2001 at 01:09:08:

This is going to be a long answer to a short question.

Let’s say that I decided I want a big screen tv. So I go down to the store, pick one out and they finance it in-house. It’s delivered and I toss my 27" into the den (or wherever).

Did I -need- a big screen tv? No, the 27" worked just fine. Did I -want- a big screen tv? Obviously I did.

Now let’s move this up a notch.

Let’s say I’m tired of renting and want to own my own home. After looking around, I decide that a mobile home (as opposed to a house) would be easier on my budget.

I look at several and find one that that I like. It’s $50k. I jump thru the hoops to get into the home, and some months later something happens that causes me a financial hardship… the “dream home” is now a monster.

Now obviously, I need to get out from under this burden, but that’s not the real point here. The point is that a $5-10k mobile would have served the same purpose, and I wouldn’t be scrambling financially if I had bought it, instead of the $50k one.

Did I -really- need a $50k mobile to provide a roof over my head? No, no more so than I needed a big screen tv to watch my favorite show. Unfortunately, I didn’t realize that at the time.

Now you can change these numbers and items to fit any purchase that you’ll ever make… a tv, a home, a car, and so on… the point being you should only buy what you can afford. Failure to do this has resulted in more financial hardship for people than you can shake a stick at.

Proof of this is evident all over this website. I can’t count the number of posts that go…" we bought this home for $100k and now we can’t afford the payments. What do we do?"… or words to that effect.

How many of these $100k homes would have been sold, IF the buyer had been required to pay $10k in non-refundable ernest money up front?

Damm few.

If you’ve been in “sales” for any length of time, you know that you get ALOT of tire-kickers. People that WANT but don’t truly NEED, what your selling.

How do you weed them out? Ernest money. If they can’t afford to pay it/or aren’t willing to, then they can’t afford to buy it, or truly aren’t interested in buying.

Now, as to having 5 buyers for the same mobile… obviously he can’t sell this home 5 times to 5 different people. But he CAN secure their WILLINGNESS to buy via the ernest money, and thus has 5 (almost) guaranteed buyers, 4 of which will be his next 4 deals.

Assuming they pass “muster” that is.

One more comment…

If you look at mobile home dealer ads, you’ll see alot of them offer things like free credit checks, and the like.

Did you know it’s illegal to take a credit application and charge a processing fee for doing so? Did you know that it’s illegal to REFUSE to take a credit application? …even from the tire-kickers.

It’s NOT illegal to ask for a reasonable amount of non-refundable ernest money. I did it 3 times alone this week ($1,000/$1,000/$500), on 3 seperate deals. All of which I closed. I also dealt with just as many tire-kickers.

I recently took bids for tree-trimming and structure cutting in my MHP. Like all good businessmen, I went with the lowest bid. (NASA does the same thing, kinda scarry huh?).

I waited 6 weeks thru numberous delays about “why we can’t get there today”, before I hired the next highest bidder. He showed up on time, when promised, and did a excellant job. He also referred me to a landscaper that I retained for another project… he also showed up on time, and did a excellant job.

Now I would have been happy with JUST this, but something else happened this week BECAUSE they were here.

I sold a mobile to the tree guy, and the landscaper is on my list for the next good deal I come across.

import · July 18, 2001, 2:22pm

Possible Golden Goose - Posted by JeffM

Posted by JeffM on July 18, 2001 at 14:22:27:

Just wanted to share this with everybody. I bought a MH in April from a very motivated couple. They just bought a new house, had two car payments, and the husband had child support from a prior marriage. Plus, they had another month’s rent due to the park. They were asking $9500 for their trailer and eventually sold it to me for $3500. I then had it sold ‘as is’ to a couple 8 days later for $8500 with $1000 down. This couple then spent $1500 putting in new cabinets and new ceilings on throughout the inside. They now need to leave and call me wanting to know if they can just “get out”. I inquire a little more, and they don’t want to sell it, they don’t want any money out of it, they just want to leave. The gal is now pregnant and wants to be closer to her home. I told them that I’d have to look at the contract and get back with them. I then remind them that if they leave, I get two additional month’s payments to cover the period while I am without a buyer, or one month’s payments if they have a buyer and they actually buy (I would reimburse the second month), all of which was in our contract. They tell me, we have five people already intereted, friends and family. I am still new to this, but this looks like one of those instances that Lonnie wrote about where he turned the same MH over several times.

Now let me ask those of you who are experienced, what do I do from here? I’ll let them out if that is what they want, but what is the best way to do this?

Thanks for your advice.

JeffM

import · July 18, 2001, 8:08pm

Re: Possible Golden Goose - Posted by lyal

Posted by lyal on July 18, 2001 at 20:08:40:

Jeff,
Be sure to CYA with the present owner. Get some kind of documentation from them to release the home plus the signed title if they got it when they bought it.
In my state we get a “Surrender of Premises and General Release”. May be different in your locale. It sounds like BS but it may just save you major headaches later. Many times people develop “amnesia” after the fact and you wind up paying for it.
All the best, Lyal

import · July 18, 2001, 5:06pm

Re: Possible Golden Goose - Posted by Chuck (AZ)

Posted by Chuck (AZ) on July 18, 2001 at 17:06:26:

Ok… here’s what you do.

Call each of the 5 potential buyers, and verify that they ARE interested, AND can make the down payment.
Tell each one of them that you have 4 others that want it also.
Collect $100 non-refundable ernest money from all 5 prospects, and run your pre-screening process.

Someone won’t pass muster… someone will. Put that person into the home, at $8500 w/$(whatever) down.

You’ll collect $500 for the time involved to sort it all out. If NONE of them pass muster, you’ve bought yourself 60 days of free lot rent while you find a qualified buyer.

import · July 18, 2001, 8:12pm

Re: Possible Golden Goose - Posted by lyal

Posted by lyal on July 18, 2001 at 20:12:00:

Chuck,
Just FYI…in my state you can collect a “non-refundable deposit” but if the potential buyer is refused entry by the park, the state statutes explicitly require that you return it. May be similar legalities in other areas.
All the best, Lyal

import · July 18, 2001, 8:46pm

Re: Possible Golden Goose - Posted by Chuck (AZ)

Posted by Chuck (AZ) on July 18, 2001 at 20:46:11:

Gotcha.

In AZ, you can collect non-refundable ernest money on the sale of a mobile, if it’s already set-up in a park. The 3 deals that I posted about the other day were all done this way… $1,000/$1,000/$500 respectively ($2,500).

Sometimes I just assume to much…

import · July 19, 2001, 5:36pm

Re: Say that again Chuck. - Posted by Hal (AL)

Posted by Hal (AL) on July 19, 2001 at 17:36:06:

In AZ you can have five buyers for the same mobile home and collect non-refundable earnest money from all five. If all five past “muster” as you say you can keep the earnest money from the other four that don’t get the mobile home? It seems to me that if I was the buyer, whats the point of putting down any earnest money if that doesn’t bind the seller to sell it to me. I think I’d just buy a lottery ticket. I must be missing something?