My House Just Won’t Sell!

Sell in 16 – 60 days or less!

5 Options for Sellers Who Can’t Sell1. Drop the price, drop the price, drop the

price and lose money2. Wait, Wait, Wait 3. Short Sale 4. Rent = “4 letter” word5. Sell NOW using a creative exit strategy

Scenario: Retail Sale $150,000 – List Price

◦ Drop price, drop price, drop price! $132,000 – Sale Price -$8,100 – 6% Commission to both agents -$4,000 – seller closing costs -$4,050 – seller concession 3% ($16,150 – seller costs) $115,850 Net Check from Title Company

◦ Remember this number because we will come back to it.

What’s owed? Is this a short sale?

Scenario: Rental $150,000 – List Price

◦ Drop Price, Drop Price, Drop Price! Decision To Rent It Market For Sale

◦ Craigslist, Mls, Post, Repost Ads Daily Show Property Over And Over

◦ Deal With No Shows And Time Wasters 30 -90 Day Vacancy Looking For A Tenant Screening: Credit Verification, Job Verification,

Criminal History, Reference Checks Then Collect The Rent And Chase People Down And Hope They Don’t Destroy Your House.

Seller {Landlord} Expenses When Renting 8% Vacancy Fee

◦ One Month Vacancy ◦ At Least 1 Mo Out Of 12 House Will Be Vacant ◦ Every Month Vacant Is Money Lost

5-10% Management Fee◦ Stark Property Management Company Example

$100 A Mo Per Unit 5-10% Maintenance Fee

◦ Including Water/Sewer/Grass/Snow/ Garbage Pick Up Appliances

What if you could sell now for top dollar… Forget the hassles of selling and / or

renting…. And get multiple tax breaks?

Interested?

1. Rental Agreement 2. Plus A “Pre-agreed Upon” Sale Of The

Property In The Next 6 To 24 Months3. Buyers Put Non-refundable Option Money

Down That They Don’t Want To Lose 4. Buyers Are Responsible For All Upkeep And

Utilities5. Buyers Get Approved For Mortgage And

Buy ASAP.

What is a lease with option?

Why Are Lease Options Working? Home prices are bottoming out, sellers are getting

realistic that they won’t get the price they want today, opening a big market for home sellers.

Sellers who can’t sell are more open to creative selling strategies ◦ The house is vacant◦ Carrying 2 mortgages◦ House is not selling

Seller maintains on time mortgage payments and good credit

Banks are still tight with lending criteria, so there’s an abundance of buyers who want the rent to own option

Top 3 Seller Questions

1. What is major damage occurs?1. Mindset – “Ownership” not renters2. Improve property 3. Why would I purposely damage my own house 4. Large down payment 5. Hazard Insurance – landlord and renters policy

2. Midnight move out1. They move out with notice 2. Just re-sell it 3. Seller keeps the option deposit

3. Money collection {Rent and Monthly rent}1. Angelo Russo, Avalon Escrow Company ($50 a mo)2. Title company can collect

5 Parts of a Lease Option Contract1. Rental Agreement

a. 1 Year, With 1 Year Option To Continueb. Utilities Included And Paid By The Buyer c. 10% Late Fee If Rent Paid After 5th Of Month

2. Option MoneyA. 1-2% Of Purchase Price

3. Future Purchase Price a. Seller Typically Gets Full Asking Price

4. Rent Credits A. 10% Of The Rent Rate B. Incentive For Tenant Buyer To Pay Rent On Time And

Eventually Buy Property Outright

5. Assignment Fee/ CommissionA. Paid By The Buyer

Tenant Buyer Writes 2 ChecksAll Checks Paid “Avalon Escrow” 1. Option Deposit

1. Applied 1. 3% Buyer’s Agent / Assignment Fee2. Sellers Option Consideration Fee

2. First month’s rent - $1,2501. Rent Credit - 10%

1. Applied 1. Reduces the Sales Price 2. ~OR~3. Down payment

The Closing The title company handles the payment

collection. Protects the seller and buyer

◦ Makes buyer pay on time◦ Makes sure seller pays the mortgage and doesn’t

go into foreclosure The title company charges $50 month.

◦ Buyers pays for this service

The Sharp Success Process The Seller Now Has Options. A Buyer Is Ready To Buy And Move In Now. We Only Work With Qualified Buyers We Handle All The Screening: Job, Credit,

Criminal We Show The Property By Appointment No Long Term Vacancy No Inconveniences Property Is Sold For A Higher Net Profit!

The Hook

“If you want to tie up this property, you need to put down $1,000 in earnest money to lock it up. Are you ready to lock up this property?”

Scenario: Lease Option Sale $150,000 – Future Sale Price – FULL ASKING PRICE -$3,500 Now – Option Deposit Non- Refundable -$9,000 Seller Concession 6% To The Buyer -$4,000 Seller Closing Costs -$4,500 Sellers Agent Commission (3% Of $150k) $129,000 NET PROCEEDS From The Sale +$3500 TODAY From Buyer $132,500 – NET PROCEEDS In Their Pocket + “Margin Over Payment” $150 /Mo For 2 Years = $3,600 Cash Flow

Proceeds + Principal Pay down = $200 / Mo = $4,800 Prin Paydown + Depreciation = 3.5% Value = $5250 BENEFIT!!!!! Per Year!!!!!!!

◦ $3500 Tax Savings - $10,500 - 35% Tax Bracket (Includes Fed, State And Local)

+$144,400 Net Net Over Course Of Agreement

**All number are approximate and projected. Not Guaranteed!

Seller Agrees to Allow Sharp to Market Their Property ◦ Sign either the:

Listing Agreement ~OR~

Letter of Understanding

Then we begin immediately to find a buyer!

Next Steps