{"id":920,"date":"2007-01-20T23:00:17","date_gmt":"2007-01-21T06:00:17","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=920"},"modified":"2007-01-24T22:17:19","modified_gmt":"2007-01-25T05:17:19","slug":"dont-drop-that-listing-pricejust-yet","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/920\/dont-drop-that-listing-pricejust-yet\/","title":{"rendered":"Don’t Drop That Listing Price…Just Yet"},"content":{"rendered":"

Real estate agents have consistently used pricing as the primary mechanism to sell your home. Don’t forget owner-financed terms as a selling feature.<\/strong> Let me give you an example of how to offer a seller-carryback<\/a> (and cash it out):<\/p>\n

You listed your home at $500,000 and it isn’t selling. You are getting nervous and your real estate agent thinks you should lower the listing price to $460,000 to attract more potential buyers. You’ve already come down $50K. Don’t drop the price… just yet! Try offering a seller-financed second mortgage at 12% for $150,000. You can sell that note as early as one day after COE (settlement). You may only get 80 cents on the dollar when you sell the note but that is only $30,000 (less than the proposed reduction). If the home was fairly priced at $500,000, it might make sense to offer terms before reducing the price.<\/p>\n

Let’s see how this would work:<\/p>\n

Buyer obtains a 70% first mortgage for $350,000 (that isn’t too hard to get, even with lousy credit). You offer a $150,000 second mortgage at 12% and sell it for $120,000 after closing. You net $470,000.<\/p>\n

When you offer terms, you open the property to people with recent bankruptcies, past credit problems, and hard to verify income. Seller-carrybacks significantly expand the pool of buyers. Your real estate agent can advertise in the paper and attract many buyers who need this help.<\/p>\n

Realtors:<\/strong> Customers who buy on “owner terms” are grateful and become excellent referral sources. You will also develop quite a list of buyers from your advertisements to call when your next listing is not moving<\/em>.<\/p>\n

So what’s the downside? <\/strong><\/p>\n

1- You have to have equity in your home or you’ll be bringing cash to the closing.<\/p>\n

2- You have to employ a savvy mortgage broker (or note broker) to market that owner-financed note. The secondary market for private mortgages is not large and highly illiquid.<\/p>\n

3-The seller may have to hold that note for a period of time (and collect 12%).<\/p>\n

4-The buyer may eventually default on that Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Real estate agents have consistently used pricing as the primary mechanism to sell your home. Don’t forget owner-financed terms as a selling feature. Let me give you an example of how to offer a seller-carryback (and cash it out): You listed your home at $500,000 and it isn’t selling. You are getting nervous and your […]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,6,5],"tags":[],"class_list":{"0":"post-920","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-investment","7":"category-marketing","8":"category-real-estate","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":17470,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17470\/listing-and-selling-a-san-diego-home-the-bloodhound-blog-way\/","url_meta":{"origin":920,"position":0},"title":"Listing and Selling A San Diego Home The BloodhoundBlog Way","author":"Brian Brady","date":"January 19, 2021","format":false,"excerpt":"I am a California real estate broker.\u00a0 I don't sell a lot of homes and prefer not to have a robust brokerage business.\u00a0 My business partner (and wife of 22 years) and I make our bread by funding residential and commercial loans, the former in California and the latter nationwide.\u00a0\u2026","rel":"","context":"In "Enduring Interest"","block_context":{"text":"Enduring Interest","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/enduring-interest\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2021\/01\/frank-mckenna-OD9EOzfSOh0-unsplash-480x320.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":3014,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3014\/actions-speak-louder-than-words-so-let-your-actions-say-this-i-intend-to-do-more-to-earn-your-business\/","url_meta":{"origin":920,"position":1},"title":"Actions speak louder than words, so let your actions say this: “I intend to do more to earn your business.”","author":"Greg Swann","date":"April 24, 2008","format":false,"excerpt":"Mike Rohrig got to hang a sold sign on the first custom yard sign he built for a listing. The sign probably didn't sell the house, but it did sell another homeowner on listing with Mike. He relates this in email:I had reports from my seller of at least one\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1781,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1781\/i-went-duck-hunting-with-elmer-fudd-and-came-home-with-a-radically-different-approach-to-real-estate-prospecting\/","url_meta":{"origin":920,"position":2},"title":"I went duck-hunting with Elmer Fudd and came home with a radically different approach to real estate prospecting","author":"Greg Swann","date":"August 9, 2007","format":false,"excerpt":"About fifteen months ago, we were preparing to list a home for someone we had known for quite a while. The house was a cosmetic flip in an excellent location. We had been consulting with the seller for months to get the repairs and upgrades done the way we wanted\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":216,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/216\/there-is-a-case-to-be-made-for-experience\/","url_meta":{"origin":920,"position":3},"title":"There is a case to be made for experience . . .","author":"Greg Swann","date":"August 16, 2006","format":false,"excerpt":"This bit from RedFin (tipped by FoREM) reads to me like a dual agency lawsuit waiting to happen. Why? Because RedFin is paying an extra incentive for its buyer clients to purchase a home from its seller client before the seller's home is MLS-listed. RedFin would surely argue that no\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":948,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/948\/recent-refinancing-can-make-selling-a-house-costly\/","url_meta":{"origin":920,"position":4},"title":"Recent refinancing can make selling a house costly","author":"Greg Swann","date":"January 26, 2007","format":false,"excerpt":"This is me in this morning's Arizona Republic (permanent link). \u00a0Recent refinancing can make selling a house costly A buyer e-mailed me a question about a house she might be interested in. At first glance, it looked promising: A newer west-side home in good condition. 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