Home › Forums › General › EHTrust/EHT Topics and Creative Real Estate Financing › What’s in it for me?
February 22, 2008 at 6:49 pm #4497
I oftenly hear the same question from sellers “what’s in it for me?”. To tell you the truth, I have no problem telling the guy who is OTB (over the barrel) that he would get nothing. I’m just helping him with his trouble. How about seller with equity in the house? what can I tell him? Thanks in advance for anyone advise.February 22, 2008 at 8:03 pm #24704
Compare what they would have received after all closing costs and the MAV that you are offering them.
Closing costs include: Realtor fees and normal closing costs -(paying property taxes for the rest of the year at closing, state taxes/stamps, title insurance, etc..).
Also, figure out what discount they would have to take off their listing price to actually get it sold (in my area the average discount from original listing price is 7%).
Here is an example:
Listing Price: 200k
Discount: (7%) 14k (186k -selling price)
Realtor: (5% of 186k) ~9k
Closing Costs (1-2%) ~2k
186k-9k-2k = 175k would be the net on a 200k listed house
If they owed 150k on their house, they might think that they have 50k equity, when they actually only have 25k in equity.
So, compare the 175k to your MAV that you are offering them.
If you offered them 190k as the MAV you would be asking them to hold off getting 25k now and get 40k later.
So they have a simple choice 25k now or 40k later.
Remember you have to hurt them “find the pain,” before you can help them.February 22, 2008 at 10:23 pm #24705
I don’t know what’s your real name is, but thank you so much for the advise. At least, I dont have to pause and think what I have to say next to the seller.February 22, 2008 at 10:45 pm #24706
One more thing….
They can also take the passive tax deductions (depreciation). Refer them to their own accountant/tax person.
Tell them that their accountant can show them how to take the depreciation deduction on the property (since they would no longer will live there, and basically can be considered an investment property).
Unless, you would rather take the depreciation deduction instead. Again, consult your accountant.
NeilFebruary 22, 2008 at 11:37 pm #24707
Full Price!February 22, 2008 at 11:43 pm #24708
That is what I like about you Scott you are right to the point. That is why you are successful -no room for confusion.February 23, 2008 at 1:20 am #24709
That is what I like about you Scott you are right to the point. That is why you are successful -no room for confusion.
Nope! That not why Scott is successful. He successful because he has a gorgeous wife with the patience of Job and, I suspect, several more brain cells than Scott was fortunate enough to inherit.February 23, 2008 at 3:21 am #24710
It’s his clown suit. (That’s what he told me is the reason he has no trouble finding RBs). He tells me he’ll rent it out!February 24, 2008 at 10:06 pm #24711
How much? I could use a steady stream of RB’s.February 25, 2008 at 3:36 am #24712
How much? I could use a steady stream of RB’s.
I rent my Clown Suit out for a 50/50 split of the deal. It’ll be the the best 50% you’ve ever spent.February 25, 2008 at 5:45 am #24713
I’ll be calling soon!February 27, 2008 at 3:14 am #24714
I’ll be calling soon!
Soon is a lot like ‘someday’: it’s just around the corner
And ‘just around the corner’ is pretty doggone soon,
possibly tomorrow or maybe ‘eventually,’ but definitely
But in any event I’ll get her done someday
…um, oh yeah…’someday soon.’
A liddel pome by Billy Gatten, age (noyb)
Miss Wagner’s class
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