By: Jay Long
Q: Dear Jay, I’ve been working with a real estate agent who gets a lot of bank owned foreclosure listings. The agent says the bank has accepted my offer via email, but they are sending an addendum to the contract that should be here next week. My plan is to sell the house for a small quick profit. Do I start showing the house now? Do I trust the agent that I’ve really got a done deal? I’m worried if I show the house to other investors, they might try and steal it from me. What should I do? Paranoid in Portland A: Dear Paranoid, Just because you’re paranoid doesn’t mean they’re not out to get you. In other words, you’ve got good reason to worry. Don’t trust real estate agents. Don’t trust bankers. And don’t trust investors who you’ve never done business with before. I don’t mean to sound cynical, but let’s be grownups about the situation. People are self-centered. First, don’t trust anything that the real estate agent says. Nothing counts until it is put in writing and everybody has signed it. What they say, what they say the seller said and what they say you said… none of that matters until you’ve got a signed contract in hand. And in your situation, you don’t. You’ll have a binding deal only when the bank signs your offer and you sign the addendum they’ve added to it. Second, never, never, never trust anything a banker says… especially a low level employee in the REO department (that’s who is in charge of selling their foreclosures). Bankers are the used car salesmen of the money business and they’ll change their minds at the drop of a hat. If it’s not in writing, don’t believe it. Third, don’t tempt other investors. For the most part people are reasonable and honest. But when temptation is staring them in the face, many will sell their moral high horse for a very small chunk of cash. By you showing the house to other investors before you’ve got it locked in with a contract, you’re presenting a huge temptation to backdoor your deal. After all, you don’t have a binding contract and the real estate agent is bound by law to present all offers. Legally, the other investor has every right to steal your deal (because you don’t have one) and the agent is required to help them. My advice is to keep your mouth shut. Push the agent to get the paperwork signed immediately. Then and only then consider showing the house. Also, it doesn’t take a week to send an addendum. It takes only thirty seconds by fax or email. Is there a reason the banker or agent is dragging their feet? You’ll want to look into what’s going on right away. Do not show the property until you’ve got a signed deal. Actually, a lot of times I don’t show the property until I’ve had the title checked also. It’s very common for banks to have bad titles to the properties they took back in foreclosure. I feel better selling a house that I know is clean. You’ll feel like an idiot if you make a deal to sell it and then have to back out because the bank doesn’t really own it and can’t sell it to you. Jay Long is an expert real estate investor and national speaker. He’s also a licensed real estate broker, author of several real estate courses, seminars and a monthly newsletter, and former vice-president of KREIA (Kentuckiana Real Estate Investors Association). If you would like more information about Jay’s courses, monthly newsletter subscriptions, or if you would like to have Jay speak to you group… contact him at: JAY LONG PO BOX 20025 LOUISVILLE, KY 40250 PHONE (502-893-3313) FAX (502-893-3384) EMAIL Jaylong7@aol.com or www.JayLongInnerCircle.com
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