Selling it fast
by James Miller
Selling a home or rental property quickly has become a concern today more than ever. Tight lending and falling home prices are putting the squeeze on investors and home owners alike.
Selling on Terms
The Lease Option can be thought of as a “Rent to Own” scenario. The tenant buyers put up a down payment, (usually more signifigant than a security deposit, but less than they would have to have with a bank) and pay monthly payments that are typically above market rental rates for a comparable rental home. Much like a bank, the buyers lose the Down Payment deposit money if they decide to take off in the middle of the night, stop making the monthly payments, or are in default of the lease. If they follow through and purchase the property, the down payment money, along with any other equity they have built up, is credited to the buyer at the closing.
The lease option is not the only way we sell, but it is one of quickest ways to get people into a property. This brings up the first point; in order to sell fast, you need to:
Make your property easy to buy
If you create and easy purchase plan for the buyers, you can also command a premium for the home. Which way would you rather buy a home $100,000 cash, or $100 down and payments of $10 a month for the next two years? How much more would you pay for the property if you were able to get great financing like that $1000? $5000? Some would probably even pay $10,000 pr more above market for this deal.
While the numbers in this example are an exaggeration, you can see that there would be a middle point where it made some sense to sell on terms as you can command a premium for it.
There are other ways to make it easy for them to buy besides doing a lease option. You can offer to take back a second mortgage, or give cash back credits to them at the closing. You can offer to carry the financing in other ways, such as originating the first mortgage. When you start to think in terms other than the buyer coming to the table with all cash
Appeal to the hidden market
A starving man doesn’t really care what a meal costs, only that he is able to obtain it.
Holding an Auction
Many people choose to stage a home for an auction and auction off the items inside. Many times, these can be consignment items where the owner of the home is allowing furniture stores, artists and other businesses or individuals to market their wares in exchange for a small commission to the home owner. This can work particularly well for higher end homes where the furnishings can often bring as much profit as the sale of the home.
Another built in profit center is the list of names of people who registered for the auction. This is basically a buyers list of qualified leads that many real estate agents, moving companies, and mortgage brokers would love to have. Good qualified leads for home buyers can bring $10 to $25 per lead.
Having a “No Reserve” Auction will get you the highest attendance, but without the safety net. If not done right, it is possible to lose a good amount of money. It is a tempting idea to hold a No Reserve auction and know that aunt Millie is sitting in the audience, ready to bid the property up to your predetermined price, but this practice is forbidden and if auctioneers catch wind of something fishy will stop the auction.
Yet another way…