First off, we would like to thank you for your support. We have worked with hundreds of agents on transactions over the past few years and have had mostly pleasant experiences. The few occasions where we did not have a good experience was generally from lack of knowledge or miscommunication. For this, we have set up this basic page to direct you to working with some of our “out of the box” techniques.
Regular Market Listings
Most of our regular market listings will be in MLS and look no different than any other listing. Treat them just as you would any other offer. Please accompany ALL offers with a minimum of a loan pre-qualification. We prefer to see a minimum of a loan approval and really appreciate a commitment when you can.
- We will not bring an offer to our client without at least a qualification letter
- Our clients are educated by us and we typically do not like to see offers with less than 1% of the sales price as an earnest money deposit. $1,000 earnest is the minimum on properties over $100k unless previously discussed with us and verbally approved by seller
- Seller finance deals should have a minimum of 10% down in cash or acceptable trade value
- When in doubt – call or email
Short Sale Listings
These listings will be listed in advertisements or MLS as “short sale” or “subject to bank approval”. For the most part, these contracts are pretty standard on the buyer side, but for the best chance of success, please:
- Educate your buyer – short sales, on average, take longer to close. The banks can be slow to respond. Try to give us 2 weeks to get an answer on the short sale and 3 months to close. We have closed short sales in under 2 weeks but have taken as long as 3 months.
- Contingency wording must include “Contingent on short sale approval by lender as payment in full”
- Must have at least 10 BANKING DAYS to get approval
- Must have at least 90 days to close
- Must have 2% earnest deposit (banks vary from 1% to 2% on earnest requirements – go high to be safe)
- MUST BE YOUR BEST AND FINAL OFFER – DO NOT TRY TO LOW BALL ON A SHORT SALE EXPECTING A COUNTER
Letter of Intent/Option Purchases
If you received a letter of intent from us, it means that we have identified your listing as one which meets one or more of our investors specific criteria. Since we stay very busy, we have to make our paperwork load as light as possible. If you received a letter of intent – treat it like a contract until you have an executed one in your hand!
While the letter of intent spells out the terms, it is NOT a valid contract but does need to be discussed with your seller. Depending on the terms, you should be able to explain most of it to your seller but, if not, please feel free to call or email with any questions. Your seller is also welcome to meet with me (Damion) to go into more detail on what it all means.
Commissions
We work hard for our money and expect to be paid for it. We also have referral partners who wish to be paid. If your MLS listing does not include a commission we feel is adequate, we will add this in our letter of intent. This was added here because we have had a few questions from Realtors® who want to know why we put x% when they had y% on the listing.
Many of our buyers are under buyer-brokerage agreements with us and do not like coming out of pocket to pay commissions so the offers may include a higher than MLS listed commission.
Net to Seller
This amount DOES NOT include any reductions from ANYTHING that is not on our LOI. Plain and Simple – adjust accordingly when preparing your net sheet.
Option
We actively buy and sell real estate and our investors, for the most part, want to remain anonymous until they are comfortable with the structure of the deal. For this, we write a contract with an attached option that basically allows us to exercise the option and assign the contract to the investor.
We may also use options on properties to hold them while marketing them on our various internet sites. We utilize the option as a way of assuring our efforts are not in vain.
What does the option mean to your client?
If you do not understand how an option works, please consult an attorney as your broker probably will not know either. Options are very specific and unless your broker has dealt with them on a regular basis, they probably will over or under-react to them.
An option allows us to buy the property for the term of the option at ANY time during the option period. You DO NOT have to stop marketing the property. If you get another offer on the property during our option period, you may proceed with it being noted that we may exercise our option in the interim and keep the difference of the original option and the new offer.
EXAMPLE:
If we have an option on a property for $90,000 with us paying closing costs and you get another offer of $95,000 with the seller paying $4,000 closing costs, and a total real estate commission of 6% (strictly for demonstration purposes) Here is how the numbers would work:
Our Option would be $90,000 – $5,400 (commission) = $84,600 Net to seller
New Offer would be $95,000 – $4,000 (closing) – $5,700 = $85,300 Net to Seller
There is an actual contract (or bottom line) difference of $700 which would be ours to keep. We may or may not exercise the option under this scenario but typically will to protect our interests since we generally have substantial time involvement into these deals.
You MUST let us know of other offers on properties if we hold the option. If you do not, you may be putting yourself and your client at unnecessary risk.
Lease Options
If we bring you a lease option buyer (someone who is renting with an OPTION to buy), we will have our commission written into the contract for clarification but typically is the first month’s rent to us (lease portion) and the MLS agreed upon commission upon exercising the option by the buyer and closing the deal.
If you bring us a lease option buyer on one of our properties, please negotiate your commission in the option – not in the contract and discuss your offer with us prior to submitting so we can assist with your submission.
Lease Purchase/Contract for Deed/”Rent to Own”
If you bring us ANY “rent to own” type offer, please be sure to include at least a 10% down payment in the form of an earnest money deposit written out to the title company (Please call BEFORE writing offer as some of our clients will ONLY use certain Title Agents/Attorneys).
ALWAYS call before submitting these. In most cases, we have already discussed these scenarios with our sellers and have a guideline to go by.
Referrals
We welcome agent referrals and will pay 30% on buyer referrals and 25% on seller referrals of the referred side of the commission to the referring broker. See our “Agent Referral” page for more information.
Anything Else?
If you have any questions – I am almost always available by email and phone (email is best in most cases).
