And It Doesn’t Matter Whether You’re a Real Estate Investor or a Realtor…

Every now and then a member of my Real Estate Group asks this question: Is doing an open house more profitable when you do it as a licensed Realtor? I do open houses both as a Realtor, and as an investor in states where I don’t hold a license and my answer is:

I do both types the same way, no changes, and I always get traffic!!!

First, you must plan your open house at least 5 weeks in advance. This is not the time to do spur-of-the-moment things hoping for traffic. You must plan in order to generate traffic. I always do the following before I even schedule the date.

Here are 6 things I ALWAYS include to make my Open House work:

®    If your house is listed ask your realtor to supply you with the names and complete addresses (including e-mail and phone numbers) for all the realtors who have sold at least one home in your zip code or within 3 miles of your property (if the neighborhoods are similar). Then ask your realtor to break down the list to find agents who have sold 2 or more homes. Don’t worry, in most cases it is not more than 10 to 15% of list. My recent list had 235 realtors and only 28 had sold more than 2 homes.

®    I know what you’re thinking: I’m not a Realtor and don’t have access to the MLS. I am licensed in Georgia only, but have property in 6 States. If you have your properties listed your realtor can supply the info. If you’re selling them yourself just ask a Realtor to get the information for you. When I do it this way I pay $ 10.00 per hour. It takes about 8 to 10 hours depending on the size of your area and number of sales. This will be a very targeted list as all names will have sold homes in your area. And if you have ever bought a list from a names broker you’ll know this is a low price.

®    After I have the names I sort them into in two groups (2 saIes, more than 2 sales). Then I do the following: The large list I send to Handy Mailing (Call Julie at 316-944-2231; she handles most of my printing and mailing needs). I also send her the flyer I had made for my property. She prints and sends them to the names on the list so they arrive about 7 to 10 days before the open house. Then I have my web guru (Steve Tickner 941-228-7810) upload all the e-mail addresses into my web server. I send them emails at the following times: 2 weeks out; 10 days; 7 days; 5 days; 3 days; day before; and the day of the open house. I have the Realtor e-mail the flyer to their office and contact lists. I also upload the flyer to my social networking sites (like Yahoo and Face book) to let everyone know about my open house.

®    Now for the small list: this is the list of realtors who have multiple sales in your market. I have a 3 page sales letter I send telling them the reason I’m contacting them is that I know they are among the top sales people in the area and I want them to see my houses and bring me a contract. I offer the buyer a few bonuses such as $ 2,000 in closing costs and a home warranty. For the agent I offer them 4% commission and $ 100.00 gas card. Along with the letter I have mock checks showing them what the commission would be and a DVD of the house. (I have a DVD made of each house; cost is $ 99.00). The video company I use puts the DVD up on their web site with its own URL, so I go to Go Daddy and buy the domain name for my property. I always use the street address.

www.3021delmonicodrive.com

www.2880belvederelane.com

(The URL’s also go on all my E-mails and social media sites). I send this packet to the top agents so they get it between 7 and 10 days before the open house. Remember, they are also receiving the Emails as well. Right before the scheduled date, I call each one of the top Realtors to see if they got the letter and answer any questions they might have. I personally ask them to please show and sell my home.

®    Another media type I make use of is the local paper. Most of the areas I have homes in have a number of papers, and I usually choose 2. I include the number of bedrooms, baths, address, open house hours and the web site address. I also buy extra 3 lines on top and 3 extra lines on the bottom and bold the whole add. This way it’s bigger than all the other ads and stands out.

®     And the final thing I do is put out signs. I use a combination of hand-written and pre-printed. I like to use the arrow open house signs that are pre-printed as they stand out better and the ‘sign police’ leave them alone. I usually put the signs out late Friday; you need to do what is best for your area. I also display a 4 x5 banner on the house on Wednesday before the open house date.

These actions and your advance planning will drive traffic to your open houses, whether you are a Realtor or an investor.

 1181 South Sumter Blvd suite 301 North Port Florida 34287 941-716-2597

695 Mansell Road Suite 120 Roswell Georgia 30076 678-287-4800

Paul J Da Costa

Is a licensed Realtor in Georgia. He is a Real Estate investor, educator, and national speaker.

Paul is available for select speaking engagements and can be reached at

941-716-2597

www.pauljdacosta.com

paul@pauljdacosta.com

I’ve talked to hundreds of Realtors and REO specialists about contract offers and the biggest complaint I hear is (and pardon the French) “…the offer sucks!” The price is in line but the bidder did not follow the bank’s requirements to submit a bid. Too many investors and Realtors think it’s ok to skip a few unimportant steps when submitting an offer, as long as they name a good price.

When you fail to submit all the required documentation with your offer, the lender is probably going to put it in the dead pile. They don’t care what’s missing, they just care that anything missing means more time and effort on their end. The Realtor is required to present all offers but the seller is not required to look at all offers. So, unless every required item is included your deal is dead on arrival.

You lost another deal. Why? Your offer did not solve the Bank’s problem..

Let’s look at this from the banker’s point of view. More than likely they are handling properties from a few counties to all over the place in a small state. That must be taken into consideration: they may have 100’s of properties to manage and 50 different realtors calling on deals and problems with the properties.

This is why your offer must address the bank’s problem as well. If you submit a half-baked offer or an incomplete offer the lender doesn’t have the time to deal with it. Period. The bank representative has to deal with the realtors and with his/her supervisor as to why these properties are not yet under contract. S/he is being pulled from both ends and they feel the pressure. It’s your job to solve that problem. Every month the representative has reports showing how many loans they have closed. This may translate to a bonus. Is your offer going to add to that for the month or quarter? If not, you lose.

You bid over the asking price and still lost? Read your own offer. Would you accept it????

I’m dead serious about this one. Look at your own offer from the lender’s perspective. Would you accept it? My close friends in the business tell me stories about offers that make them laugh until their sides hurt. Here is a list of the biggest ones. Remember, you’re buying a foreclosed home from a bank.

·       My wife is not home now she will sign it later

·       I can’t close for 120 days

·       I have to sell my other house first

·       Well just loan me the money since you already own the house

·       Offer contingent on wife’s approval ( bet this made the wall of idiots)

·       Will you loan me the money to fix it since I am doing you a favor and buying this house?

And the list goes on but you get the idea:

Not all deals for Foreclosed properties revolve around the offer price. Your contract may be the problem.

Let’s take some time to look at the offer. First, read all the requirements from the lender. You can offer full price but if you haven’t submitted all the required documentation you’re not going to get taken seriously.

A lot of banks require you to get approved with one of their accepted lenders first. You’re not required to close with that lender, but the bank wants to make sure you can get the loan. I have been told if their lenders say you’re not approved…. Next! (See, your price was not the issue)

I’m surprised at how many people fail to supply proof of funds. The money must be liquid or you must be able to get it in a few days.

A big problem is a buyer who says he is buying the home cash, but is actually financing it. This is not a good idea because you lose the mortgage contingency in the offer and you may lose your earnest money. (OUCH)

Two of the bank’s biggest concerns in an offer are the right to inspect and the closing date. So let’s take each one by itself.

Right to inspect. Some Realtors have told me their buyers wanted 30 days to inspect because the house was a mess and they wanted to make sure of the rehab cost. This is all well and good but if your contractor needs 30 days to figure out a bid, get another contractor.  No bank or seller should ever have to keep a property off the market that long while you do your due diligence.

Closing date is a big issue for the banks. Remember, they answer to Wall Street (and now the Federal Government) and the faster they can get a non performing asset off the books the better (Remember they have a problem and you’re there to fix it) So know when they report to the SEC and Wall Street. This is easy: Google it. I personally think your realtor should do this but I wouldn’t hold my breath. Be ready to close when you make your offer.

I’ve presented some very compelling ideas on making offers and getting your bids accepted. But you must also do your homework before you present an offer.

When I am looking for a home I go through the following steps every time. It’s like the pre-flight checklist- nothing is omitted.

·       Is the contractor available for the whole day and ready to give me bids on the spot? (Don’t buy the “I need time to check the prices” excuse. Both of you should know the cost of carpet and light fixtures, appliances, etc) They and you should have a rough estimate of the electrical costs and A/C

·       Have the funds in place and liquid so all you have to do is wire transfer funds to the closing attorney

·       Know the comps in the area on foreclosed and rehabbed homes. Bring your laptop so you can get on the web right there and figure out the issue

·       Have the MLS sheets, owner information and due diligence on the bank done before you go out. The bank information will make a difference in your offer

·       And be prepared to buy a house if it fits into your buying program.

Good luck!

 Paul

Paul J Da Costa

Is a licensed Realtor in Georgia. He is a Real Estate investor, educator, and national speaker.

Paul is available for select speaking engagements and can be reached at 941-716-2597

www.pauljdacosta.com

paul@pauljdacosta.com