Great tips! How do you feel about buyers asking about additional info about the house or prior inspection findings? If I see a house that’s been listed for quite some time, and has already gone through a contingency period but the sale failed, I would like to know if there’s been an inspection which prompted the buyer to pull out. If the seller or their agent refuse to communicate this information, it raises a red flag in my opinion. For example, why would a seller mark “no representation”, if they very well know that the roof is 30 years old and leaking during major rainfall, or that there’s termite and mold damage in the floor joists in a super tight crawl space, or that the septic system is clogged. This sneaky behavior just wastes everyone’s time and money.
Good tip, when talking to the agent before placing an offer I always ask if there is anything wrong with the house the buyer should know about to make sure the buyer has as much info as possible before making a decision, and if the house has been in escrow it’s always important to ask why it fell out of escrow and again get as many details as possible. Thanks for watching!
I'm selling my mother's house in Garden Grove, CA. She lived there for 65yrs, and after my father died she was not able to keep up with typical updates, etc. We immediately received multiple cash offers over $1M from investors who seek to flip the property for $100K profit. What is the best way to allow a family who needs a home to buy it if it needs work, and still get market value for the heirs?
There are special construction loans buyer can get to help finance the cost of renovations to the property, or there are also companies out there that will pay for your home to be renovated up front and you pay them back with the proceeds of the sale so buyers can purchase it with the renovations already done. If investors are willing to give you over a million there is probably also a very good chance you can find a regular buyer that would pay that amount as well so placing it on the market in as is condition is always an option as well in a market as hot as this one.
Make sure you do your own research about real estate contracts as well as find your own home inspector to try and mitigate chances you might be taken advantage of as the selling agent is primarily and contractually obligated to look after the sellers best interest first. I still always recommend getting your own agent to represent you but understand not everyone wants to go that route.
Hi Josh - This is my first video of yours that I have stumbled across. Currently renting in NJ and looking to purchase first home in NJ since Jan. Homes are listed and the agent is calling for highest and best within the first 3-5 days of listing. All offers we've submitted have ranged between $25-60K over ask, including waiving partial appraisal and inspection, good faith deposit, 10-15% down payment dependent on purchase price, etc. It's been noticeable all accepted offers are waiving everything in full. What are your thoughts on this, and do you have any additional tips?
I never recommend buyers remove all contingencies up front but I understand the feeling that you need to in order to compete. The problem is really the inspection contingency, there are problems in homes that inspectors can find that could cost you $100,000 or more to fix. So although these major issues aren't as common, you're taking a huge risk by not allowing an inspection to happen. With appraisal contingencies there are lenders out there that offer gap insurance if you remove the appraisal that could cover you if the home didn't appraise and if you are working with an A+ lender that does all the work up front for your file, not having a loan contingency can be less risky as well, but not having an inspection contingency is really tough unless you are financially prepared to deal with issues that come along with buying a home without knowing the true condition. Not sure what the laws are in NJ but another strategy you could possibly try is an escalation clause that would basically say you'll pay X amount over the highest offer up to a certain price so this give you a cap on how much you are spending but can help you outbid others who don't have that clause in the contract. Again, check with your agent to see if that is something your state allows. Best of luck in this tough market.
@JoshAlexanderRealEstate thank you for taking the time to reply to my comment, it's very appreciated on my end. Your knowledge and insight have validated my thoughts/concerns. We have been waiving the appraisal up to $XX, so I will inquire about gap insurance for the appraisal. I believe the escalation clause is allowed, but I've come across several homes requesting an escalation clause not be included. I feel an escalation clause is not applicable due to the offers we submit are our best and final because a house will be listed on a Friday, open house occurs on the weekend, and highest/best is called by Monday. The current market is a dangerous place.
No problem, I know it's a challenging time right now for home buyers in many markets, patience is going to be the key when hunting for a home right now. Not sure how the market looks over there but typically the farther we get into summer, the slower the market becomes, so hopefully it cools off slightly over the next few months for you. Also, if you haven't already I highly recommend setting up a search for only homes that have been on the market for more than 30 days. This will give you a list of homes that are probably overpriced, even in today's market, and also probably have substantially less actively on them so you might be able to submit an offer at a time where the seller is already thinking of doing a price reduction and get into a home without haven't to wave all contingencies.
New development will work completely differently than buying an existing home, at least here in California. They have their own contracts and timelines so you can ask what makes a stronger offer but it will be harder to stick out if there are multiple buyers looking at the same home. Also with new construction if you visit the development without your agent they first time you go, then you are not allowed to have your own representation for the purchase, so make sure you tour all new development with your agent if you want someone else looking out for your best interests.
