Press Release –

Real Estate Buyers in the Seattle area get Thousands in Cash Rebates

 

MWM Realty pays buyers Thousands in Cash Rebates. MWM provides full service and pays buyers up 50% of their commission in cash through escrow. Rebates to $15,000 in cash and more, depending on the purchase price.

Source: MWM Realty
Mar 04, 2008 18:02:09

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FOR IMMEDIATE RELEASE

PRLog (Press Release) – Mar 04, 2008 – MWM Realty pays buyers Thousands in Cash Rebates. MWM provides full real estate service and pays buyers up 50% of their commission in cash through escrow.  Rebates to $15,000 in cash and more, depending on the purchase price.

Sellers can benefit too by getting full seller real estate services while listing their property at 4%, not the 6% most brokers charge. Service includes listing in the MLS, for sale sign, with color flyer, 10 color pictures on-line where thousands of agents and potential buyers can view them on their PC. Internet ads weekly, and full seller representation in all negotiations and assistance with all paperwork.

MWM Realty is a member of the Realtors Association, Multiple Listing Service and provides full service to all clients.

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Buyers – an approach you may find valuable

The approach is called a least with an option to purchase agreement.  This can be used to the buyer’s advantage if the purchase price is low enough and/or flexible and based on some objective index and a major part of the monthly payment is applied to the purchase price when the purchase option is exercised. . 

The lessor is the party who owns the property and is leasing the property and selling the property under a lease with an option to buy.  The lessee is the person leasing and potentially buying the property.   

 

The lease with an option to buy has in the past mostly benefited the seller.  Sellers have set a purchase price higher than market value and sold the option to buy as a benefit to the lessee and prospective buyer.  Part of the lease payment is applied to the purchase if the lessee exercises the purchase option. 

 

The current market has now shifted the advantage to potential buyers who may want to lease the home first and then buy.  If the seller wants to resolve the problem of having their home on the market they may consider a lease/purchase agreement.

 

Your agent must pre-qualify the seller before you make a lease/purchase offer.  This must be done carefully because you are looking for both a home you would like to buy and a good deal.  The home has been on the market for a long time because it is overpriced.  The seller needs to be willing to take a lower price and allow the buyer to lease the property.  With 10 to 15 homes available for sale for each qualified buyer the lease/purchase option can becomes a rescue net for some sellers.   

 

This approach can work well for people with an adequate income and no money for a down payment.  If the buyer can pay a higher than normal rent they may be able to negotiate a great contract to lease with an option to buy.  The devil is in the details on this approach.  The potential buyer needs to make sure they are not over paying either for the rent or the purchase of the property. 

 

Another key is finding a seller who is willing to look at this option.  The agent for the buyer should look for homes that have been on the market for a long time, probably over 90 days and where the seller has already reduced the list price at least once.  If the home is vacant and the seller is paying a mortgage payment this is to the benefit of the buyer also.  At this point the seller may consider a lease with an option to buy agreement to cover their mortgage costs.  It is also in the interest of the listing agent to at least present this kind of offer.  The agents will get a small commission on the lease, but they will also get a commission if the purchase option is exercised and the sale closes.

 

The actual structure of the agreement should provide a large part of the monthly payment go toward the purchase price.  For example if the home would normally rent for $2,000 per month and the buyer can afford to pay a slightly higher amount, say $2,500 per month,  this benefits the seller if the option to purchase isn’t exercised.  The seller/lessor will keep the higher amount.       

 

For this consideration the lessee/buyer should ask that half or more of the monthly payment amount go toward the purchase price.  I wouldn’t be afraid to ask that all the monthly lease payment go toward the purchase if the option is exercised.  In this case that would be $30,000.   

Buyers who want to explore this option should find a patient and knowledgeable agent willing to do the up-front work to find the right home and seller and pre-qualify the seller.  The team should also include a real estate attorney.          

 

       

 

 

 

Buyers Beware!

There is a trap out there lurking for buyers who don’t ask their agents the right questions.  The MLS is now flooded with listing that are in foreclosure or listed at or below the amount needed to pay-off the sellers loan and cover selling costs.  Sellers are making a last effort to sell their properties before the property goes to foreclosure sale.  These are called short sales, because the sale is sort of money to cover the loan and selling costs.  The lender must agree to take less than the amount needed to pay-off the loan and any interest and penalties due for the sale to become final. Sometimes these listings are clearly marked “subject to lender approval” and sometimes they are not because the property is listed slightly above the amount needed to cover the loan and the selling costs.  In either case the buyer needs to proceed with great caution.  Lender approval usually takes weeks and many times can take months depending on the lender.  Sometimes these sales have to go before a loan committee for approval and the committee only meets periodically.  The lender can say no and then all the time and effort put into the sale is lost.  If you decide to buy one of these listings there are several things you need to do.  First, is to realize the time frames in the standard purchase and sale (P&S) agreements need to be changed to allow for the lender approval.  You do not want to have an inspection and pay hundreds of dollars until you know for sure you have a deal and the lender approval in place.  The P&S states the buyer will have the inspection within 10 days after both parties have signed the agreement.  Second, the P&S states the buyer will apply for a loan within 10 ten days.  Here too you may want to change this time line.  Once you apply for a loan the lender usually orders an appraisal and this costs the buyer money. There are two addendums you should consider.  One is to make the time lines start two days after the buyer and seller receive the lenders written approval of the P&S.  Second, there should be an addendum allowing the buyer to cancel the deal unilaterally and have their earnest money deposit returned if the lender doesn’t approve the P&S within three weeks or by a given date.    Finally, you if you decide you want to try and purchase one of these properties I recommend you contact a real estate attorney and have them explain all the issues and have them write the needed addendums.  This will cost you a few hundred dollars but it is worth every dollar. In my opinion these deals are not the best deals available in this market, because they have little or no room to negotiate a major price reduction and they are subject to a third party’s approval.  There are many great deals out there for qualified buyers who are willing to make low offers and walk away if they don’t get the deal. 

It is a Buyers Market

Buyers should be able to take advantage of this market and make great deals.  The market in King & Snohomish Counties is flooded with homes and there are very few qualified buyers.  Buyers should follow the following process to find and buy the best deal.  Have you agent find out what the sellers equity is for each property your are interesed in buying.  This equity is the potential profit the seller has in the property at list price.

Be willing to make low offers on homes you would like to buy and see if the sellers is interested in making a deal.  If not go to the next property.  If the seller has owned the home for 5 years or longer and is tryiong to make over $150,000 in profits he or she should be willing to come down in this market to sell the property.   

There are several other key factors in this simple process.  Email me for more info if you are interested.  Or see my article posted on Biznik…

Your comments and questions are always welcome…