For all the home "flippers"

[houstondb2]

I would like to try my hand at flipping a home. I dont mind something that needs work, i think that fixing up a house would be half of the fun. Do you guys have any tips or things that I should look out for? Keep in mind that I am 20 years old, and before anything gets under way, I need to convince the bank to hand me over the money (to help with this, a friend is going to help with this to keep costs down for each of us). If you guys have any tips, or any areas that I should be looking for, I would greatly appreciate it!

[musicman]

as a first timer, make sure you start out with a sound building would be my first suggestion.

[spiderman]

I would like to try my hand at flipping a home. I dont mind something that needs work, i think that fixing up a house would be half of the fun. Do you guys have any tips or things that I should look out for? Keep in mind that I am 20 years old, and before anything gets under way, I need to convince the bank to hand me over the money (to help with this, a friend is going to help with this to keep costs down for each of us). If you guys have any tips, or any areas that I should be looking for, I would greatly appreciate it!

I went to a real estate investment seminar yesterday evening, one of the speakers was a mortgage broker, one of the things he said was that, at least at the lower end of the market, the flip market will get tougher because there will be fewer buyers and more renters - subprime loan standards are being tightened, fewer people will be able to qualify for a loan at the low end of the market, so there will be fewer qualified buyers to purchase flipped homes at the low end.

His recommendation was that it is now "buy and hold soup" time - tougher subprime loan requirements, increase in foreclosures, mortgage rates are creeping up, consumer doubts about home buying, fear of decreasing home values will cause some sellers to set their asking prices lower - couple this with a strong job market in Houston means renters will have jobs and money to pay the rent, it is a good time to buy distressed properties, rehab them, and hold as rental properties.

[jm1fd]

I would like to try my hand at flipping a home. I dont mind something that needs work, i think that fixing up a house would be half of the fun. Do you guys have any tips or things that I should look out for? Keep in mind that I am 20 years old, and before anything gets under way, I need to convince the bank to hand me over the money (to help with this, a friend is going to help with this to keep costs down for each of us). If you guys have any tips, or any areas that I should be looking for, I would greatly appreciate it!

I don't think the market conditions are currently favorable to learning how to flip. You're going to have to do everything just right, otherwise you could lose your shirt. Hell...you could lose your shirt even if you do everything perfectly. These two flips have been on the market for several months now (probably because they're not priced aggressively). I'm sure they're being eaten up by carrying costs.

[Scharpe St Guy]

jm1fd,

Good point on those two homes sitting. Both nice homes, areas are not that bad, etc... I would though suggest that any flipper but especially a new flipper be very very picky when it comes to the property they are going to flip. As they say you make the money at the time of purchase not the sale (if you buy it right). Personally I don't like doing any properties smaller then 1400sqft or let's say I look for the homes that have 3 bedrooms and hopefully 1.5 bath or better to redo. People these days want room and room translates into flexibility for roommates, family growth, office, friends coming in for the weekend, etc...

Both homes you spotlighted are 2 bedrooms while one has 2 baths it also lacks a garage or a secure place to store extra items. For the first timer I would think that you would need to obtain a mortgage approval and I would suggest that you walk into Champions School of Real Estate and sign up for the classes to obtain your real estate license. Why? Well when you purchase a home listed on MLS you can walk away from the closing with the buyers agent commission since you are satisfying two roles as both the agent and the purchaser. When you resell the home you can like wise save at least 3% when you list the home since you are now the Selling Agent. This amounts to a good portion of your budget. ***Just thought of this but you also control your listing on MLS, you can take the pictures (16), add comments to each picture, write descriptions for the agent and the buyer, attach attachments, etc.... basically do a full and complete listing. Take a look at RPS's listings and then look at 90% of all the other listings out there and notice the difference.***

All the best and either way even if a flip house sits for a while it stinks for the flipper however it's great for the neighborhood as one more ugly duckling is once again (hopefully) beautiful.

Good Friday everyone!

Scharpe St Guy

[flipper]

I would like to try my hand at flipping a home. I dont mind something that needs work, i think that fixing up a house would be half of the fun. Do you guys have any tips or things that I should look out for? Keep in mind that I am 20 years old, and before anything gets under way, I need to convince the bank to hand me over the money (to help with this, a friend is going to help with this to keep costs down for each of us). If you guys have any tips, or any areas that I should be looking for, I would greatly appreciate it!

Are you saying that you plan to do the work yourself?

flipper

[OldHouseLover]

Are you saying that you plan to do the work yourself?

flipper

Just my experience from flipping for many years. We bought a few houses in EE when it was NOT the place to do flips. We're not agressive in our flipping. Flipping is extra income for catching up on bills. Don't quit your day job until well established. Remember everyone needs a home & not all buyers are expecting to purchase one looking like the pages from a slick magazine. The more $ put into a house, the higher the price & as prices rise, the % of buyers declines. I find homes listed on MLS are more expensive than those bought by word of mouth/etc. I have stuck a sign right after cleaning up place & sold in 6 wks. Didn't make 50 grand, but made a very very nice income in a very short time. I've never bought a house that "was for sale". Good luck in your venture. Be cautious @ the $ spent & doing it yourself is the right way to go if possible. We do most all the work ourselves. Think very consertative, not artistically. Thinking with my heart has lost $ for me. Be realistic @ what the buyers in a particular area [of purchase] ARE EXPECTING. Most of we flippers get carried away artistically & try to duplicate the slick magazine pictures. Just my 2 cents of experience. First one we did in EE was @ 1970 on Stimson by Jackson Jr Hi. Neat block street access front & back.

All flippers have to buy low/sell high. I've sold "fixer uppers" that for various reasons we didn't want to deal with. Flippers have a HUGE EGO which causes friction in the transaction. I kinda likened it to being "robbed without a gun", but with the same attitude. I've been very pressured by flippers wanting owner financing [yes along with low price/low interest] because my properties are all paid for. I was really nasty to one guy who was putting the squeeze on me. I told him that I didn't remember being in labor & delivery with him & only someone from that source would get the deal he wanted. If people are losing their shirt, let it be done in a positive manner. Guess everyone can tell I've been on both sides of the fence.

Edited April 6, 2007 by OldHouseLover

[TAK]

tip #1 - learn everything you can possibly learn, from anyone you can learn it from - BEFORE you try flipping.

that means do things like:

join a local Real Estate Investment Club (not necessary, but there are lots of "flippers" there - lots of wannabes, too. you can learn from both.)

read real estate investment books, forums, etc... the forums at REIClub.com are a good place to read and ask questions.

tip #2 - your profit is made when you BUY. your profit is realized when you sell.

tip #3 - related to #2, if you haven't bought and rehabbed and sold before, you may do yourself a big favor by learning how to find a propoerty first, then letting someone else BUY it (that is, birddog it or wholesale it).

tip #4 - your costs are greater than you think - far greater - especially for your "first time" (which is why #2 is so important and #3 is a good way to learn to get around it.)

tip #5 - get someone else to do the rehab work. they're experts, you're not. there is one of you, and N of them. you may "pay" more for a crew/cotnractor, but it will "COST" more (possibly money, and definitely time, which in this biz, is definitely money) to do it yourself.

as a small-time investor (landlord, not flipper) i can tell you that #2 and #3 will sound understated, but are more important than almost everything else. i'm betting flipper will tell you something along these lines: start at #1, learn how to proceed to #3, which will help you with #2, which will help you with #4. i ignored #5 on my first project and got an education that i'm still paying for. my next property will be done by a contractor who will do the work in 1/3rd the time (meaning the property will be on the market in 30 days, not 90 days).

selling / renting the place is the easy part if #1 - #5 are met...

and yes, i left out a bunch of 'stuff' but if you get the 5 above, you'll do fine (either flipping or renting.)

good luck.

[Ralo]

I would like to try my hand at flipping a home. I dont mind something that needs work, i think that fixing up a house would be half of the fun. Do you guys have any tips or things that I should look out for? Keep in mind that I am 20 years old, and before anything gets under way, I need to convince the bank to hand me over the money (to help with this, a friend is going to help with this to keep costs down for each of us). If you guys have any tips, or any areas that I should be looking for, I would greatly appreciate it!

I am not a flipper (but am a homeowner) but be sure to understand all the costs and risks beforehand. Do you have any experience remodeling or "fixing" a house? If not, you will find that actuals costs usually far exceed estimates. What about contractors? You do realize these folks can be worse than car salesman right? You mentioned a friend . . . well, there are no friends when it comes to business. Make sure whatever he has agreed to or is responsible for is in writing. Make sure you understand all the costs of owning a home such as taxes, insurance, maintenance/repairs, and what if there is theft? Well, just listen to the flippers on this site - they have much more and better advice than I can give.

[houstondb2]

Thanks for all of the info guys! This is all really good information that I will be looking into before I jump into this

to flipper- i plan on doing the work myself, but we all know that plans can change lol. this is something that I want to try just to see what happens.

[TheNiche]

One way to control costs very effectively is to have one or both of you move into the home. You'd each have to agree on what constitutes a 'fair' rent, and that can be tricky, but it is basically set up as though each of you as individuals were renting from a landlord, which is your partnership, to keep things straight.

I'd agree with comments made by others. In selecting your home, be very shrewd. If you have to do an FSBO, it may be very helpful to do a house along a major thoroughfare so that signage gets a lot of visibility; I selected a corner lot. I also like Scharpe Street Guy's comments about not bothering with anything less than 1,400sf. Frankly, I'd never do anything that wouldn't end up with three livable bedrooms.

The house I'm able to slow-flip by having the co-owner living there was a three-bedroom, two-bath configuration, with a bombed out half-bath on the first floor. By the time I'm done with it, I'll have combined the master bedroom with the smallest bedroom and its attached bath, creating a master suite with a huge walk-in closet, and built out a secondary bedroom suite in part of the addition and turning the other part of the addition into a garage. So it'll be a 3/3.5 with an attached garage created without having to have built any new structure, and I can sell part of the land that had previously been used for a garage apartment.

One thing that did put a crimp in my financials was the discovery that the roof over the addition was structurally unsound (the inspector didn't spot it), so it is getting replaced and reinforced with some glue laminate beams. Speaking of which, I'd also echo the comments about avoiding artistry. Some folks on this board recommended tearing down the addition entirely as it wasn't fitting with the style of the original home, but that just won't do. Walls and a foundation are just too valuable to waste...not to mention the impact that it'd have on landscaping.

[Scharpe St Guy]

I will second Niche that if you want to get into flipping make the flip your home so you can offset your housing costs while your knocking around learning what's what and learning the first foot of the rope. So far we have done 3 true flips although one extra could be thrown in but it was my first home while I learned some of the ropes. This translates out to about 1 a year however it has greatly blessed us and has been very educational as well. We are trying to get setup so that we could be like "flipper" on here and do a few homes a year however that takes contacts within the money industry/banks to obtain the financing unless your able to self finance.

In regards to another post on here I would argue that there are more buyers for the lower end homes then the bigger/more expensive homes here in Houston. That being said I believe the lower end home has to meet some basic requirements of at least 3 bedrooms and 1.5 bath and 1 car garage. Of course a 3bed, 2 bath, 2 car garage would be optimal and will garner many more buyers and fit the requirements of the buyers out looking.

Anyhow good post, I love learning and sharing on this topic,

Scharpe St Guy

[OldHouseLover]

I will second Niche that if you want to get into flipping make the flip your home so you can offset your housing costs while your knocking around learning what's what and learning the first foot of the rope. So far we have done 3 true flips although one extra could be thrown in but it was my first home while I learned some of the ropes. This translates out to about 1 a year however it has greatly blessed us and has been very educational as well. We are trying to get setup so that we could be like "flipper" on here and do a few homes a year however that takes contacts within the money industry/banks to obtain the financing unless your able to self finance.

In regards to another post on here I would argue that there are more buyers for the lower end homes then the bigger/more expensive homes here in Houston. That being said I believe the lower end home has to meet some basic requirements of at least 3 bedrooms and 1.5 bath and 1 car garage. Of course a 3bed, 2 bath, 2 car garage would be optimal and will garner many more buyers and fit the requirements of the buyers out looking.

Anyhow good post, I love learning and sharing on this topic,

Scharpe St Guy

Understand what you are saying @ sq ft/bdrms/baths/gar/etc., but money is money. Smaller homes are much easier to work on, require less $ spent/etc. I'll take the small ones. Working on small 2/1 on N side at present time. Sooooooo much easier than a large one in EE. 2 lots each 60X200. Paid $20000. Almost finished with house/now to decide what to do with the lots. They've appreciated....cound just sell & probably make %wise as much as if I built new or moved in/redo & sell. We're getting older...think of easiest money

[houstondb2]

thanks again for all of the info guys. im glad i made this post before jumping into something like this. also, financially, how much would be a good amount to have on hand for something like this, if I were to get something like a 3 br, 2.5 bath?(nothing specific, just general idea)

[musicman]

thanks again for all of the info guys. im glad i made this post before jumping into something like this. also, financially, how much would be a good amount to have on hand for something like this, if I were to get something like a 3 br, 2.5 bath?(nothing specific, just general idea)

depends on how much updating the house needs. if you're just doing cosmetic stuff, you'll need a lot less than if you're doing some major upgrades as well.

[TheNiche]

thanks again for all of the info guys. im glad i made this post before jumping into something like this. also, financially, how much would be a good amount to have on hand for something like this, if I were to get something like a 3 br, 2.5 bath?(nothing specific, just general idea)

Hard to say, as it depends largely on your personal finances and situation. And of course, it depends entirely upon what the house needs. Sometimes you can find one at a good price that has good bones, a reasonably good roof and foundation, and that just needs to be cleaned up and updated, perhaps given some modest landscaping to add to curb appeal.

[Scharpe St Guy]

As noted by others above it depends upon:

1. Current Condition of the House (Roof, Foundation, Sewer Line, Electrical, Plumbing, Insulation, HVAC, and then the items one can see such as cabinets, hardware, appliances, paint, landscaping, etc...)

2. Other homes in the area and those that are on the market. You check out those homes currently For Sale, Option Pending, Pending, Pending Sale, and Sold in the prior 6-12 months to gain an insight into price per sqft and finishes that the other homes had. This will provide you an idea of how yours needs to look at the minimum so say kitchen counters were formica but most of the other homes have been updated to Granite.

3. Before you close the deal you want to have the home inspected by an inspector. They won't catch everything but they do a good job and this will then become your checklist of repairs that the home requires, take that checklist with the upgrade list and set up a very generous budget for each item. Total it up to come up with your total renovation budget.

4. Don't forget these items though to identify a possible profit: purchase closing costs, sales closing costs including commissions to agents, holding costs such as the PITI (Principal/Interest/Taxes/Insurance) for three months at the bare minimum, and taxes on the profit. So say you estimate that after spending everything budgeted and staying within budget and all costs associated with buying and selling the home you produce a pre-tax profit of $10,000, if you are in the 30% tax bracket take out $3,000 which leaves you with an estimated profit of $7,000. Is the amount of work and time worth $7,000? What if the home takes longer so holding costs go up? Budget goes up? Vandalism occurs which costs x dollars to rectify? You open up a wall and find termites and or extensive damage?

Make sure you MISC budget item is Large. Many people on here look down on those of us that undertake a flip home however there is a lot of risk involved for a product if not done right, marketed right, and timed right could trigger numerous downfalls both financially and within relationships.

Good Luck,

Scharpe St Guy

[TAK]

for an 'average' rehab (ie, mostly cosmetic, no major renovations like roof or foundation, not ripping out the kitchen), estimate $8 - $10 per square foot.

for a major rehab, take the above number and throw on whatever major redo you would do. for example, a kitchen, adds anywhere from $10k (low end to average) to $50k (high / near-luxury, end). for a new bathroom, you're probably looking at anywhere from $5k - $30k)

for a 'working class' 3/2/2 $1,800 sf, i'd estimate $15k for cosmetic rehab (flooring, paint, fixtures, landscaping, appliances). You could certainly come in under $15k, but you could easily end up at $25k if you run into major unforseen "opportunities for improvement". you will run into some type of issue that the inspection didn't catch (a 1 - 2 hour inspection is not the same as 2 weeks of messing around to get the place into shape.)

again, i've yet to flip, but the process for getting a rental on the market is about the same (but generally a little cheaper, as the level of "nice" isn't quite the same.)

[jscarbor]

jm1fd,

Good point on those two homes sitting. Both nice homes, areas are not that bad, etc... I would though suggest that any flipper but especially a new flipper be very very picky when it comes to the property they are going to flip. As they say you make the money at the time of purchase not the sale (if you buy it right). Personally I don't like doing any properties smaller then 1400sqft or let's say I look for the homes that have 3 bedrooms and hopefully 1.5 bath or better to redo. People these days want room and room translates into flexibility for roommates, family growth, office, friends coming in for the weekend, etc...

Both homes you spotlighted are 2 bedrooms while one has 2 baths it also lacks a garage or a secure place to store extra items. For the first timer I would think that you would need to obtain a mortgage approval and I would suggest that you walk into Champions School of Real Estate and sign up for the classes to obtain your real estate license. Why? Well when you purchase a home listed on MLS you can walk away from the closing with the buyers agent commission since you are satisfying two roles as both the agent and the purchaser. When you resell the home you can like wise save at least 3% when you list the home since you are now the Selling Agent. This amounts to a good portion of your budget. ***Just thought of this but you also control your listing on MLS, you can take the pictures (16), add comments to each picture, write descriptions for the agent and the buyer, attach attachments, etc.... basically do a full and complete listing. Take a look at RPS's listings and then look at 90% of all the other listings out there and notice the difference.***

All the best and either way even if a flip house sits for a while it stinks for the flipper however it's great for the neighborhood as one more ugly duckling is once again (hopefully) beautiful.

Good Friday everyone!

Scharpe St Guy

Or you could have an agent that rebates commissions back help you?

[Scharpe St Guy]

Or you could have an agent that rebates commissions back help you?

Good point Carbor!!!

Scharpe St Guy

[jm1fd]

walk into Champions School of Real Estate and sign up for the classes to obtain your real estate license

I thought you had to work under a broker for a certain length of time before you could take all the commission for yourself. No?

[TAK]

I thought you had to work under a broker for a certain length of time before you could take all the commission for yourself. No?

yes and no.

The commission is actually belongs to the broker, who then pays the agent a percentage of the commission...

To become a broker - and have the "right" to all of the commission on the side of the deal you're on (possibly both), you have to be an agent under a broker for 2 years.

However there are brokers that give 100% of the commission to the agents. There is usually a monthly fee in this case, and you usually need to be listing / selling a lot of homes or few homes of very high dollars (ie, generating a lot of revenue) to make this work the best.

If you're a part time agent, you're probably going to give up some commission. I don't mind "getting" up to 60% of the commission on the houses I buy/sell for myself. Actually, it may even be smarter to forego the commission and have it taken out of the sales price of the home (depending on your tax situation.)

This might become one of my favorite threads!

i'm hoping flipper or ldogg comes on and validates / invalidates my numbers from earlier post... but it's been a long while since an ldogg siting!

[flipper]

for an 'average' rehab (ie, mostly cosmetic, no major renovations like roof or foundation, not ripping out the kitchen), estimate $8 - $10 per square foot.

for a major rehab, take the above number and throw on whatever major redo you would do. for example, a kitchen, adds anywhere from $10k (low end to average) to $50k (high / near-luxury, end). for a new bathroom, you're probably looking at anywhere from $5k - $30k)

for a 'working class' 3/2/2 $1,800 sf, i'd estimate $15k for cosmetic rehab (flooring, paint, fixtures, landscaping, appliances). You could certainly come in under $15k, but you could easily end up at $25k if you run into major unforseen "opportunities for improvement". you will run into some type of issue that the inspection didn't catch (a 1 - 2 hour inspection is not the same as 2 weeks of messing around to get the place into shape.)

again, i've yet to flip, but the process for getting a rental on the market is about the same (but generally a little cheaper, as the level of "nice" isn't quite the same.)

I really cannot remodel a house for less than $50,000. I've even spent almost $70,000 on a 2000 sq ft. house that needed extensive foundation work. A house like the Sugar Hill house (almost 3000 square feet, and a pool) will eat up $100,000 really quick if you are doing "everything" like we usually do.

Granted, I don't use the cheapest subs around. I use the most reliable and professional people that I can afford.

So, things can be done for less than I pay. But at the end of the day, when I'm on the hook for selling the product, I want it to be as nice as possible so it sells quickly for top dollar.

Someday I'd like to do a lower end rehab to see what it's like, but that would mean finding cheaper subs too.

flipper

[youngflipper]

alot of good information. For the most part I don't understand half of it but I guess in due time I will. Hopefully by the end or beginning of next year I can do my own project but first things first I gotta learn the stuff they don't show you on TV

[AJXterra]

alot of good information. For the most part I don't understand half of it but I guess in due time I will. Hopefully by the end or beginning of next year I can do my own project but first things first I gotta learn the stuff they don't show you on TV

Do you own a house youngflipper?

[TexasArchitect]

i'm glad this thread was made...very helpful.

i have a couple questions though. i see several of you referring to MLS listing. what is MLS??

secondly i see that houstondb2 is 20 yrs old. if this were to be his first flip, technically it would be his first home purchase..right? if so isn't there something out there that helps in the cost for a first time home buyer? like a grant of some sorts?

thirdly, when purchasing this first house to be flipped would it be advised to get a house that is for sale from a source such as century 21, remax, etc??? or would it be better to get a foreclosed home?

lastly, if purchasing from centruy 21, etc. how much lower is reasonable to bargain below the asking price? example: if they are asking 80k for a house can one bargain and say 71k?

[TheNiche]

i'm glad this thread was made...very helpful.

i have a couple questions though. i see several of you referring to MLS listing. what is MLS??

MLS = Multiple Listing Service

HAR.COM

secondly i see that houstondb2 is 20 yrs old. if this were to be his first flip, technically it would be his first home purchase..right? if so isn't there something out there that helps in the cost for a first time home buyer? like a grant of some sorts?

Yes, there are various programs out there. Be careful, though, because a few carry stipulations that can trip you up later on if you don't continue to own the house as a primary residence for long enough of a time.

thirdly, when purchasing this first house to be flipped would it be advised to get a house that is for sale from a source such as century 21, remax, etc??? or would it be better to get a foreclosed home?

Generally speaking, one of the least important things to consider is who the seller's Realtor is. ...but if you're absolutely indifferent between homes and you just want an easy transaction, I can tell you to stay away from Realty Associates. I've had three bad experiences, ranging from bait and switch, to utter incompetency, to outright lies. On the plus side, if you know your rights as a consumer and can bark laws like a dog, or alternatively if you can create conflicts of interest, it can become laughably easy to take advantage of them.

lastly, if purchasing from centruy 21, etc. how much lower is reasonable to bargain below the asking price? example: if they are asking 80k for a house can one bargain and say 71k?

That's hard to answer. If they're already asking a price that seems low, they may just be looking for a quick sale with little hassle or negotiation. If you think that it is a fair or low price, then offer 100% of the ask and perhaps get them to agree to pay your closing costs. They'd take that bid very seriously. Then, once you've had it inspected and had it appraised, you can go back to them, present the list of imperfections, needed repairs, or that the appraisal doesn't justify your bank lending to you, all of which you should claim not to have known about before, and then you have the green light to give them the old "You're breaking my balls" routine. A good realtor will tell you (whether it is true or not) that there is one or more backup contracts on the home to try to get you to back off, but you have to play tough. You also have to have the finances in order. If you can dangle a wad of cash over their head, it'll do wonders. But since the place is priced to move, it is likely that the owners really want out of the mortgage, and if you've got the money and the willpower to pull it off and they don't have to wait on another buyer that may or may not pan out, the seller may feel pressured enough to go ahead and let you have it.

The above is one scenario, but it illustrates the game-like qualities of transactions. I've been through several now, and not a single one has gone perfectly smoothly. There's always a lot of posturing and posing, sprinkled with little flakes of incompetency and sometimes utter randomness. If a couple is buying a house from another couple, and each couple is using a Realtor, there are six people that can effectively kill a deal pretty much because they say so. If any of them becomes obstinate for any reason at all, it is off. For that matter, problems with surveyors, title companies, inspectors, contractors, mortgage brokers, underwriters, insurance underwriters, creditors, government officials, previous owners, tenants, and acts of God, can conspire against a deal.

[TexasArchitect]

That's hard to answer. If they're already asking a price that seems low, they may just be looking for a quick sale with little hassle or negotiation. If you think that it is a fair or low price, then offer 100% of the ask and perhaps get them to agree to pay your closing costs. They'd take that bid very seriously. Then, once you've had it inspected and had it appraised, you can go back to them, present the list of imperfections, needed repairs, or that the appraisal doesn't justify your bank lending to you, all of which you should claim not to have known about before, and then you have the green light to give them the old "You're breaking my balls" routine. A good realtor will tell you (whether it is true or not) that there is one or more backup contracts on the home to try to get you to back off, but you have to play tough. You also have to have the finances in order. If you can dangle a wad of cash over their head, it'll do wonders. But since the place is priced to move, it is likely that the owners really want out of the mortgage, and if you've got the money and the willpower to pull it off and they don't have to wait on another buyer that may or may not pan out, the seller may feel pressured enough to go ahead and let you have it.

man you are good!!! you should write a book bout this stuff

i was just wondering because i read somewhere that agents get 6% commission. so someone was explaining to me that when they sale a house, the price is jacked up to include profit for the owner and commission for the agent. so i just wanted a general idea of how much i could possibly bargain down to. like a car, i guess, if i know more or less the MSRP i know how far to push it in my bargaining

The above is one scenario, but it illustrates the game-like qualities of transactions. I've been through several now, and not a single one has gone perfectly smoothly.

are these deals going through agency or foreclosed homes. if foreclosed do you go to the "family law center" for the list of foreclosures. or are there "other ways" to obtain this list of foreclosed homes?

[TheNiche]

i was just wondering because i read somewhere that agents get 6% commission. so someone was explaining to me that when they sale a house, the price is jacked up to include profit for the owner and commission for the agent. so i just wanted a general idea of how much i could possibly bargain down to. like a car, i guess, if i know more or less the MSRP i know how far to push it in my bargaining

are these deals going through agency or foreclosed homes. if foreclosed do you go to the "family law center" for the list of foreclosures. or are there "other ways" to obtain this list of foreclosed homes?

6% is standard, although it can vary for very low-value properties. Typically half of the 6% is given to the buyer's agent unless the seller's agent is also the buyer's agent. You can negotiate with Realtors on their take, but they can be tricky. If you don't feel like one is being up-front with you, find another one. Realtors are easy to find. The commission that they're paid is seperate from the price of the house, but you will have to pay for it and other fees and expenses at closing, so it does affect the bottom line.

A word of warning, though: many buyers use Realtors to screen homes, and if their Realtor sees a listing that fits the buyers to the tee but that doesn't pay standard comission, they'll probably never show it. So you do need to promise 3% to the buyer's agent.

In my last deal, I was able to get a 1% kickback as a buyer for a fairly low-value property...it was a very good deal for me.

[TheNiche]

are these deals going through agency or foreclosed homes. if foreclosed do you go to the "family law center" for the list of foreclosures. or are there "other ways" to obtain this list of foreclosed homes?

Bank foreclosures are listed on MLS, but I don't think that the public has access to that search option. You'll have to go through someone that does have access (or pay me a whole lot of money). Tax-related foreclosures go through Harris County and are listed in Daily Court Review.