CREATIVE REAL ESTATE STRATEGIES FOR SELLING PROPERTIES AT FULL PRICE LEX LEVINRAD
since FHA buyers often do not have enough
When contemplating a purchase, investigate what
money for both the down payment and the closing
the lowest amount the house could appraise for
costs. The seller should expect to lose 10% to 12%
then plug in your numbers to see if the investment
of the sales price just to commissions and closing
makes sense. Being conservative in your buying
costs.
decision will mean waiting for the right opportunity
to buy at the right price.
The two most critical components are the appraisal
and pre-approved buyers. If the appraisal comes in
You should network with as many mortgage
low (say $80,000 instead of $100,000), then after
brokers as possible. Investors need pre-approved
deducting realtor’s commissions and closing costs,
buyers. Mortgage brokers may have pre-approved
the investor may be looking at a very small profit,
buyers looking for a house and may help you find a
or even a loss. Remember, while the investor is
buyer in exchange for doing the mortgage with
repairing and marketing the property, they are still
them. Ask these mortgage brokers to screen their
paying interest, property taxes and insurance,
pre-approved buyers to ask what they are looking
which also needs to be deducted from the net
for and then go and find them a house.
profit. The HVCC law makes getting an appraisal
close to the sales price, even more difficult, since
If you find them a house that’s a good fit, be ready
the appraiser may not be familiar with the local
to draw up a purchase contract and to meet with
market and there may not be many retail comps.
them to show the house. If they like the house,
For this reason, it is imperative to use very
have them sign the purchase contract and get a
conservative estimates of the home value, before
deposit from them.
entering into any transaction to purchase a house.