So you think you can’t get a seller to pay you to take their problem home off their hands? I have heard many times from students, friends and relatives alike, “are you nuts, nobody would pay you to take a house off their hands.” Wanna’ bet??
There have been many instances where a seller needed to get rid of a piece of property quickly and they needed our assistance to help them make their problem go away. They were more than willing to pay us to make that happen. You have to remember that you are not in the business to make someone else’s problem your problem. We get paid to solve problems for sellers.
Now, you will never get paid to take a house off someone’s hands unless you ask. You never know what a seller will agree to until you ask them. The worst they can do is to simply say “no”. You just have to explain to them why they should pay you to take their problem out of their hands and outline the benefits to them of selling their property this way.
The way this scenario happens is this. The type of deal where this situation will occur is a situation where a seller simply deeds you their property. What this means is that the seller will deed you the property, but the underlying mortgage remains in the sellers’ name until such time as you sell the home and pay it off. You then take over the monthly mortgage payments and the seller walks away. The seller will often pay you money to make this happen. Two pieces of advice here:
There are many reasons a seller will agree to pay you to buy their property. For example, I personally have purchased properties where the seller had to move before their home was sold due to a job transfer for example, and they ended up having to pay two mortgage payments. Most times, they are simply unable to continue to make two payments, so they only have two choices. One is to stop making the payments and let the home be foreclosed on, thus severely hurting their credit and their ability to purchase another home, or they can deed the home to you and let you continue to make the payments for them. When their credit is at stake, the second option becomes much more desirable. But why would they pay you to make their problem go away?
Now, think about it. If the seller listed their home with a Realtor they would have to pay Realtor fees, closing costs, mortgage payments, taxes and insurance until the house sells. So they may have to write a big check or several big checks. If they choose to sell the home on their own, they would have to find the time to show it, and they would still have carrying costs from month to month including mortgage payments, insurance, taxes, and the closing costs. We also don’t know how long it would be before they could sell it. So now they may end up making six months or more of payments plus all the costs involved. This can add up to a lot of money very quickly. These are all good reasons for the seller to simply pay you to take the problem off their hands right now. It actually ends up costing them a lot less and gives them peace of mind knowing their problem is solved.
Another situation that happens often is that we end up buying really nice houses in really nice neighborhoods this way. You may come across a seller who purchased a home in a really nice area, then decides this simply isn’t where they want to live. They have money, but they don’t have much equity in the property. So they will deed you the property and pay you to take the house off their hands so they can buy another one somewhere else. We had just such a situation where the seller bought a home in Florida, didn’t have a lot of equity, then decided within months that they wanted to move back to Connecticut. They deeded us the property, then paid us for solving their problem.
Another situation that arises is one where the seller deeds you their property, but they are already two or three months behind on payments. Even though there is equity in the property, these payments still need to be made up. What I will do in this instance is to simply have the seller give me a promissory note where they agree to make smaller monthly payments to me to make up the amount of the past due payments I will catch up for them, plus whatever amount we agree to regarding the amount they will pay me to take the property off their hands. The sellers are very grateful to us for doing this, since very often we are saving their credit which allows them to purchase another home at a later date. Most of my sellers have paid off these promissory notes.
So we build our logical case to the seller as to why they should pay us to take the problem off their hands. After all, won’t we have carrying costs until we either sell the home or find the right tenant/buyer for the property? Plus, won’t we have to run ads and put out signs to advertise the property and pay someone to show the property for us?
If we end up listing the property with a Realtor or use our own sales person, there are still commissions that need to be paid. These are called marketing costs and carrying costs, and if you present these costs and savings to the seller in the right way, you can easily get the seller to pay you whatever amount of money you agree to, take the house off their hands, solve their problem for them, and save their credit. You are once again creating a win-win situation for you and your seller.