OfflineHello everyone,
I am sorry if this is in the wrong post or if the title is misleading. I have been meaning to finally take action into real estate investing, but fear of the unknown seems to always overpower my desire and questions I cannot seem to answer myself.
Anyway, the question I wanted to ask was....could someone please explain to me how negoiating a price with a seller works. I mean I am confused because I would think if that seller still owes a lot of money to the bank, how do you get them or the bank to agree to a lower price? I hope that makes sense.
Basically what I am asking is...if a person owes $100,000 mortage to a bank...how would it be possible for them to sell it to you for cheaper without it being a short sale? I read a lot of these negoiating price topics but is that only for people that own the house?
I appreciate any answers that help clear me of my confusion. Thank you.
Depends what the current value of the property is. And whether it needs repairs. Do your due diligence on the property by getting the comps in the area. Go view the property, find out exactly what the owner owes. Also find out what is motivating the seller. All these factors and more will determine if it's a good deal.
Hope this helps.
Linda
"...be; not greedy for money....but eager to serve"
1 Peter 5:2
Thanks for the response LaCorte; but I think I should try to reword my question. Once again sorry for the confusion.
The thing that is not making sense to me after reading Dean's books, DG postings, and journals is how they find a motivated seller that is willing to sell the house cheaper than what it is worth. The confusing part to me is lets say they bought the house through a loan from the bank for $100,000 and want to get rid of it. Now I see a lot of people saying "find their magic button" but, the confusing part is wouldn't they still owe the bank the full loan? So how are they able to sell it for lower than its worth? That is what is confusing me.
I hope that makes more sense. Thanks again.
Unless they do a short sale...Not everyone owes more than the property is worth. Some properties are free and clear, maybe they need to settle an estate. Not everyone that responds per say is a motivated seller, or they could be very motivated but like you are asking...they can not take a lower amount than they owe the bank...lease/option would work in that case or possible "subject to". Again their are lots of properties with lower balances owed than what the property is worth. Getting comps to see what the properties are selling for is a good way to figure that out. Getting an idea of how much repair work is needed also...Some properties just won't work, if they owe more than it's worth and it needs a ton of work. There are way too many properties out there to pick from...hence a buyers market!
Motivated seller is someone who wants to sell their house, not give it away.
And there are no other options than a short sale.
A person who needs to get rid of their house is normally not going to just take anything or be swept away by some magical speech; common sense and time are two factors that make things come into reality.
In a situation like this, perhaps bringing in someone who has more knowledge, like someone on here who could have a more hands-on approach to making this deal or future deals rather than killing it yourself.
Hope it helps.