Personal property can often be used as down payment or part down payment to buy Real Estate. Hypothetical Situation: Mr. & Mrs. Weaver want to purchase a new home in ABC Corporation’s Subdivision. This builder, as many others over the last few years, is over-stocked with already constructed homes.
The builder is asking $210,000 for the home that the Weavers would like to buy. He has a construction loan on the home (with his bank) for $170,000 that he needs to pay off when he sells the home. Because of the slow market, the construction loans on these unsold homes are quickly eating up the profits; therefore, the builder is motivated to sell these existing homes. The builder can be flexible to a point; however, he has to have cash to pay off the loan to the bank for each home he sells.
The Weavers really want the house but they have a problem. They have been pre-approved for a loan up to $190,000. The Weavers happen to own a very nice 22 foot fishing boat. The boat is in great shape and Mr. Weaver had it appraised at $20,000. It happens to be in the Winter time when the demand for boats is not too great. I has been said that the two happiest days in a boat owner’s life is the day they buy the boat and the day they get rid of it.
Mr. & Mrs. Weaver made an offer to purchase the new home with a loan of $190,000 cash to go to the builder plus their boat as $20,000 down payment. After a short consideration period the builder accepted the offer. Even the builder may not have need of a boat, but the deal gets the builder’s $170,000 loan paid off to the bank, plus he get $20,000 cash from the buyer’s loan. He can market the boat and probably sell it in the Spring to make some boat buyer’s FIRST happiest day.
Lesson Learned. When potential buyers are short on cash, they should look for other assets they may use as part or all of the cash requirement. It could be a boat, a car, an airplane, motorcycle, Jet Ski, etc. Afterall, this is nothing in the world but using barter to make transactions and the Barter System has been around a lot longer than money. The way our money is being devalued, more bartering may be in the Vogue.
These posts are the opinion of the author who is not engaged in rendering legal, accounting, or investment advice. If such advice is required or desired, the services of competent professional persons should be sought.
Showing posts with label sell. Show all posts
Showing posts with label sell. Show all posts
Friday, August 13, 2010
Friday, July 16, 2010
Realtors - Sowing The Seeds
We will pick-up the story where the Johnsons closed on the home found for them by realtor Jane. Jane knew that her company, the “We Treat ‘Em Right” Realty’s policy was to send a free door knocker and a company Thank You letter signed by a company officer to new purchasers of homes. But, Jane recently attended a seminar that focused on developing a “Client” base rather than a history of one-time customers. The seminar was called “Building Your Farm”.
Jane made sure that she had the following information from the Johnsons prior to the closing:
*Birth dates of Mr. & Mrs. Johnson and their two children, plus their children’s ages.
*Wedding Anniversary date for the Johnsons
*Date of move-in at new home. If this is unknown at closing, Jane will stay in frequent contact to be sure she has the move-in date.
A few days after the closing, Jane sent a PERSONAL card, handwritten to the Johnsons thanking them for hiring her to assist in the purchase of their new home.
On move-in day, in the midst of boxes, furniture, and sweat, Jane shows up at the new home with a hot meal and cold drinks for the Johnsons in front of their new home among the chaos.
During the following years Jane diligently did the following:
*Sent a personal, handwritten card on each of the Johnson’s birthdays, including the children.
*Sent Mr. & Mrs. Johnson a personal, handwritten card on their Wedding Anniversary and maybe a small gift.
*Sent the Johnsons a personal, handwritten card on the Anniversary of their move-in date in their home. Included with the card Jane sent the picture she took of the Johnsons on move-in day.
*Periodically sent a copy of any news or articles she thought the Johnsons might be interested in concerning the local real estate, neighborhood news, etc.
Two years later Mr. Johnson gets transferred and must sell their home. Which realtor are they going to hire to help them sell their home? In the meantime, Jane has shown the same caring and staying in touch with the Smiths, who are now also sending Jane referrals.
How much longer do you think Jane will be pulling floor duty and looking for new prospects? In fact, Jane now has to have a team of assistants to help her keep up with the referral business. She knows the true meaning of “Building Your Farm”.
These posts are the opinion of the author who is not engaged in rendering legal, accounting, or investment advice. If such advice is required or desired, the services of competent professional persons should be sought.
Jane made sure that she had the following information from the Johnsons prior to the closing:
*Birth dates of Mr. & Mrs. Johnson and their two children, plus their children’s ages.
*Wedding Anniversary date for the Johnsons
*Date of move-in at new home. If this is unknown at closing, Jane will stay in frequent contact to be sure she has the move-in date.
A few days after the closing, Jane sent a PERSONAL card, handwritten to the Johnsons thanking them for hiring her to assist in the purchase of their new home.
On move-in day, in the midst of boxes, furniture, and sweat, Jane shows up at the new home with a hot meal and cold drinks for the Johnsons in front of their new home among the chaos.
During the following years Jane diligently did the following:
*Sent a personal, handwritten card on each of the Johnson’s birthdays, including the children.
*Sent Mr. & Mrs. Johnson a personal, handwritten card on their Wedding Anniversary and maybe a small gift.
*Sent the Johnsons a personal, handwritten card on the Anniversary of their move-in date in their home. Included with the card Jane sent the picture she took of the Johnsons on move-in day.
*Periodically sent a copy of any news or articles she thought the Johnsons might be interested in concerning the local real estate, neighborhood news, etc.
Two years later Mr. Johnson gets transferred and must sell their home. Which realtor are they going to hire to help them sell their home? In the meantime, Jane has shown the same caring and staying in touch with the Smiths, who are now also sending Jane referrals.
How much longer do you think Jane will be pulling floor duty and looking for new prospects? In fact, Jane now has to have a team of assistants to help her keep up with the referral business. She knows the true meaning of “Building Your Farm”.
These posts are the opinion of the author who is not engaged in rendering legal, accounting, or investment advice. If such advice is required or desired, the services of competent professional persons should be sought.
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