Written Offer On A Million Dollar Property
This is every Real Estate Agent’s dream, writing an offer on a million dollar property. I should rephrase that to closing on a million dollar property.
One day, I received a call from a lender I work with who had a referral on an investor looking for Real Estate. It was much better than a buyer lead. The buyer already knew the property he wanted to purchase. Almost every transaction has its share of problems, every Agent deserves an easy one. At least an easy one every year. This one seemed too good to be true. I had my suspicions.
This property was a huge 40-unit boarding house with a gross income of over $8000 per month. It was well maintained with no major defects. We wrote the offer, which was accepted in a few days. This was an estate sale handled by an independent Broker. I saw a few warning signs based on the manner he handled the paperwork and communication. The buyers paid $2000 in earnest money and set up an inspection.
Sometimes an inspection is a day of recognizing that you never know what to expect once the inspector begins looking at heating units, roof, and foundation. Although nothing seemed to be a major defect when we viewed the property, we only viewed a few rooms and one section of the basement.
Much to my surprise, the inspection went well. The only subpar feature the inspector pointed out was a roof with about 8 years of useful life left. The buyer decided to go on with the deal.
Now all we had to do was cross the financing hurdle, which should not be a problem, since the buyer had a substantial down payment. Everything seemed to be going well, until the lender began collecting paperwork required to process the loan. It turned out that the buyer neglected to file tax returns for two years, which meant no loan and no sale. Sometimes things seem too good to be true and they usually are.
Few people know what Real Estate Agents have to go through to survive. In today’s market, most sales result in a check of only a few hundred dollars. It’s part of the job, finding buyers the best value results in the smallest commissions. Real Estate may be the only job where you get paid less while doing the best job you can. Those are the deals that take longer to close because they are usually foreclosed properties requiring more paperwork, not to mention viewing a lot more properties before finding one a buyer is capable of fixing up. Working on a deal with a private seller is like a dream. Most people have no idea how much time Agents put into searching properties, sending out Emails, driving around viewing a countless number of properties, finally writing an offer only to see any number of things go wrong. The few good properties usually receive multiple offers, so a buyer has to be willing to outbid the competition. Anything can turn up during an inspection. The loan process is never easy. A low appraisal, or underwriter questioning the condition of the property are the main reasons a deal can fail. Others include an unexpected drop in credit score, change in employment, or any number of other situations a buyer may experience. Some of these can be avoided. Others are beyond our control. It never seems to be easy in Real Estate these days.