Posted by JohnBoy on November 15, 2000 at 12:13:58:
Because they are “MOTIVATED” and they “NEED” out from under their mortgage payment. If they could have found a buyer on their own then chances are that I would have never ended up meeting with them in the first place. In most cases, by the time I enter the picture, they have already tried selling on their own and a lot of times have tried selling by listing with a realtor. They weren’t able to sell and now they are “MOTIVATED”! They don’t have many options left and are willing to do anything to get out from under the property. On a “subject to” deal, they are stuck on the loan until I pay it off. I agree to take the loan over starting in 60 days from the contract date, but they will remain liable on the loan until it’s paid off. The loan remains in their name.
If you aren’t in a position to financially take over their payments unless you have someone to put in the property, then you make the deal subject to you finding a suitable teanant/buyer first, within 60 days. That way if you can’t find someone to put in the property you can either walk away or get the seller to extend the contract for another 30 - 60 days while you continue to find someone. If the seller is worried about you not finding someone, you can always set the deal up to where IF they find someone else to buy it before you find someone, they can sell it to that person. Under that arrangement, what do they have to lose?
To figure out what the home is actually worth you need to run comps (comparable homes that have sold in that neighborhood within the last six months). Don’t go by what homes are being listed at, you go by what they actually SOLD for within the last 6 months.