What About the Sellers?

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There’s so much to write about in the world of real estate investing, I could go on forever.  But the one aspect that we don’t talk about too much is the impact we have on the seller of a property.  Many people assume that the seller is a faceless bank and that this is just a financial transaction.

In fact, most of the property sellers that we work with nowadays are just normal folk, and their need to sell ranges from “I am desperate and need to sell NOW” through “I’m looking for a more easeful way of getting this done” and everything in between.

For example, last year we purchased from someone in Baraboo that had listed her property twice over the prior 18 months, got plenty of offers, and even got two of them accepted.  The first one fell through at the bank, then the second one did the same thing.

The problem was viability/insurability.  While it was of little or no immediate impact to her, the furnace and water heater were on their last legs, and the electric panel was all fuses.  These are things that, when the bank does its due diligence, can cause the deal to fall through during underwriting.

Clearly, she was frustrated and a little worried.  There was no way that she could afford, or even want to afford, replacing those things.  And to make matters worse, the house used to be a duplex and had two (2) electric meters.  She got two electric bills each month, one for upstairs and one for downstairs.

We did our numbers, made her an offer in March and, while she would have liked more money, she was OK with it.  However, her kids got emotional about the property and convinced her to keep it.  I told her that I understood, and that we would be here to talk again should she ever want to.

Well, come September, she wanted to talk again.  Regrettably, I had to lower the offer because of the time of year, and she would have needed to bring $2,000 to the table to close.  Again, I apologized and told her that I completely understood, but it was the best we could do, given all the circumstances.

She called back in a day and said that she could make it work if my offer was still on the table.  When you have someone over the barrel like this, you can either take advantage or be straight.  We teach all our coaching students to be 100% on the up-and-up and to NEVER take advantage of anyone, no matter how “plausible” or how easy it would be.  Of course, I chose the high road and honored my offer.

We closed about 10 days later and, even though she had to bring 2-large to the closing table, she was so extremely grateful to just be done with that property.  She had purchased something better outside of town and couldn’t be happier.  She sent a thank-you card and everything.

My partner and I spent some time and dollars on the place, replacing the furnace, water heater, and the electrical panel, painted every wall, replaced every window, sanded the maple floors, carpeted the stairs and bedrooms, replaced woodwork, and sprayed out the basement.  With a lot of sweat equity, to boot.

We felt pretty good about the whole project; it became a great house for a family within walking distance of downtown Baraboo, and it sold quickly because of the attention that we had given it.  Most of all, we felt great about the former owner that we helped get out of a situation that would have cost her twice as much to fix as it did us.

In our experience, for most sellers that need help, how much money they make is lower on the list of priorities than just getting out of the situation.  Ultimately, it can be about the money; about how much is being lost daily just holding on to a property that they don’t want anymore.  But mostly, we alleviate emotional distress for people; providing a service that few others are able to do.



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