Need Help on FSBO!

Here are some ideas related to your questions

1. You do not need to bring in your agent. However if you do the deal and then pay her a fee from your proceeds you will win her loyalty. A consulting fee agreement will work. OR just hand her a grand?!? When agents see money they start to work with you.

2. Call several contractors and ask them to give you a bid. You must know what you want done (scope of work) and give the same scope to the contractors for a bid. The scope of work among other things ensures all your contractors are bidding on the same thing. Average the estimates for your rehab cost.

3. Don't bring him in unless you trust him. You really need to learn how to do this yourself. This deal will be a great learning experience for you. You have to take action, get over the fear and learn. Each deal will become easier to figure your offer price. The only way to actually learn this process (comps and rehab costs) is to do it!!

Good luck!!
Michael

Congrats on taking a different route. Make this aHABIT and you will start to find many more opportunities just like this one. First question I have is HOW motivated is the owner ? It may be a good idea to talk and LISTEN to HIM also as he prob may be the vital decision maker ultimately. Next you absolutely do not have to use the realtor in a for sale by owner situation. Later on when your realtor PROVES themselves to be working with and for you,!then u can GIVE them some freebies that they will no doubt deserve. You. You need to do the comparable sales / SOLDS on this to find out the true value and the ARV. Then you will need to know the repairs. So, you could have another contractor do a walk through of this house with you to get the repair list. OR you could just lock it up on contract and then use your buyer contractor. Your escape clauses or contingencies will safeguard you if your buyers do not come through. Don't forget to ask the owner if you cannot come to a cash buy agreement then would he seller finance it. So doing the comps are the first step you need to take. Either yourself or a realtor can do this immediate step. Good luck Sara, you can make this happen !!

I am trying to go and see the house inside. In the meantime I will be finding houses with similar comps.
Before I fly off the deep end with excitement I will take it step by step and see how it goes!
I will keep you posted!!

Sara

Way to take action !!!

I have an appointment to go see the house tomorrow. I'm calling the guy who did my inspection to see if he can come with me and give me a ballpark of everything the house needs to get done. I know there's electrical work needed already, so we'll see what else there is!

I think I will bring my RE agent in and ask her to give me comps and do the contract for me. That way she can be working at it while I'm working on something else!

Let's cross our fingers!

Using OPT (other peoples time) is essential. Remember to work out the commission details with your agent BEFORE you start the process on this Fsbo. That way there will be NO surprises and you can factor in your expenses all the way through each step. Nice work !!

I spoke with someone who did the inspection of my duplex last year. Very thorough and highly recommended.
He is also doing investing. He suggested to get a full inspection, because there are surprises that can cost a lot and if I'm going to be making an offer I want to make sure that I (or my investor) don't lose money on it.

His inspection is $335. I don't really have the money, but it would give me a clear understanding of what the house needs and it'd be perfect for getting quotes.

Should I do an inspection or not?
Part of me feels if I brought my buyer in he can take a look at it and tell me what it needs (he's a contractor). But then again, I don't want to bring him in until the house is locked up!

ugh! So nerve racking!

Sara

Sara,
Maybe instead of getting an inspection done. call a few local contractors that remodel homes and get an estimate of work you need done to get the house into move in ready condition. Usually contractors can give you an estimate for FREE. Which is nice instead of shelling out for an inspection. And maybe you can use one of the contractors either on this house or one down the road to do you fix up's.

Sara

What about a non circumvent with your contractor
You would just have to tweak the wording and have it viewed and approved by an attorney

non-circumvent

NON-CIRCUMVENT AGREEMENT

NON-CIRCUMVENTION, NON-DISCLOSURE AND CONFIDENTIALITY AGREEMENT

THIS AGREEMENT entered into on this______________day of____________________,
20_____ is for the Professional Association and arrangement of Non-Circumvention,
Non-Disclosure and Confidentiality between_____________________________________
whose office is at______________________________________________________________
and ___________________________________whose principal place of business is at
____________________________________________________________________________
Hereinafter, called the “The Parties,” The Parties with this agree to respect the integrity and tangible value of this agreement between them.

THIS AGREEMENT is a perpetuating guarantee for five (5) years from the date of execution and is to be applied to any and all transactions present and future, of the introducing party, including subsequent follow-up, repeat, extended, renegotiated, and new transactions regardless of the success of the project.

Because of THIS AGREEMENT, the Parties involved in this transaction may learn from one another, or from principals, the names and telephone numbers of note buyers, borrowers, lenders, agents, finders, banks, lending corporations, individuals and/or trusts, or Buyers and Sellers hereinafter called contacts. The Parties with this acknowledge, accept and agree that the identities of the contacts will be recognized by the other Party as exclusive and valuable contacts of the introducing Party and will remain so for the duration of this agreement.

The Parties agree to keep confidential the names of any contacts introduced or revealed to the other party, and that their firm, company, associates, corporations, joint ventures, partnerships, divisions, subsidiaries, employees, agents, heirs, assigns, designees, or consultants will not contact, deal with, negotiate or participate in any transactions with any of the contacts without first entering a written agreement with the Party who provided such contact unless that Party gives prior written permission. Such confidentiality will include any names, addresses, telephone, telex, facsimile numbers, email addresses and /or other pertinent information disclosed or revealed to either Party.

The Parties agree not to disclose, reveal or make use of any information during discussion or observation regarding methods, concepts, ideas, product/service, or proposed new products or services. Nor to do business with any of the revealed contacts without the written consent of the introducing party or parties.

The Parties agree that due to the many variables surrounding each Business/Financial Transaction that will occur because of this agreement, the commission to be paid and/or the fee structure between the Parties can vary. A separate pay out agreement is attached here to outline compensation for each Business/Financial Transaction. The pay out agreement must be drafted and acknowledged by signature before all Business/Financial Transactions.

In case of circumvention, the Parties agree and guarantee that they will pay a legal monetary penalty that is equal to the commission or fee the circumvented Party should have realized in such transactions, by the person(s) engaged on the circumvention for each occurrence. If either party commences legal proceedings to interpret or enforce the terms of THIS AGREEMENT, the prevailing Party will be entitled to recover court costs and reasonable attorney fees.

The parties will construe THIS AGREEMENT in accordance with the laws of the State of
( ), County of ( ). If any provision of this agreement is found to be void by any court of competent jurisdiction, the remaining provisions will remain in force and effect.

THIS AGREEMENT contains the entire understanding between the Parties and any waivers, amendments or modifications to THIS AGREEMENT will be subject to the above conditions and must be attached hereto.

Upon execution of THIS AGREEMENT by signature below, the Parties agree that any individual, firm, company, associates, corporations, joint ventures, partnerships, divisions, subsidiaries, employees, agents, heirs, assigns, designees or consultants of which the signee is an agent, officer, heir, successor, assign, or designee is bound by the terms of THIS AGREEMENT.

A facsimile copy of this Non- Circumvention, Non- Disclosure and Confidentiality Agreement shall constitute a legal and binding instrument. By setting forth my hand below I warrant that I have complete authority to enter into THIS AGREEMENT.

For:

Buyer’s Signature: _______________________________ Date: ___________

Thank you!!

Use a contractor to get free estimate on repairs, maybe even throw him 50.00 for his time.
best of luck
Richie
Never EVER give up!!!

Hey guys!

I went to see the house today!
The house looks alright from the outside. A few upkeep fixes, but roof looks pretty good.
The house inside is a gut job. Everything is outdated, dirty or destroyed. However!! The house was originally two apartments, and as the family grew they converted the upstairs into 4 bedrooms and one (very gross) bathroom! It is also in the middle of the city sitting on a double lot!

I'm hoping to bring the contractor in this weekend so we can start talking numbers!
I've never done this before. Well... outside from the duplex my husband and I own. So I'm excited and nervous. I'm so afraid I'll say all the wrong things, but at the end of the day, whatever happens it'll be a good learning experience.

Let's keep our fingers crossed!!

Btw, the non-circumvent agreement is actually perfect, but how do I ask someone to sign it? and what if they say no?

Welcome to the DG Family!

Use all the forms to gather needed info to analyze each deal, seller, buyer, max offer, repair cost etc.

Using the forms, you'll say and ask the right things.

Get bids on the same repairs from 3 contractors. Get references from contractors along with copy of license and insurance. Finishing on time and on budget is key.

Get the bids, run the numbers and make offer and get it under contract, THEN call your buyer.

Using the NCND with your buyer/contractor should not be a problem.

Best,