You win some and you lose some right? That’s at least what they say. It seems way too often that there is a greater risk to lose money rater than make money. If you’re not careful, that is true. But if you make the right precautions in your contracts, then you don’t have to worry about it!
Unfortunately that wasn’t the case here. I originally locked up a property under contract for $4,000. This property was textbook. I locked up the property, went home and sent out a mass email to my cash buyer’s list, 30min later by the time I left to get in my car to go somewhere else, I had a serious buyer. He offered $7,000 and offered to close in 10 days and it was a deal! We signed to assignment contract and BOOM! $3,000 for me!
The house was once a huge, beautiful house but it was highly damaged. You can tell that a few people would squat in the house during the night, so things were broken that shouldn’t normally be broke in an empty home.
Unfortunately the story doesn’t end here! The seller had recently divorced but didn’t have the proper paperwork to make a clear title during closing. Then the title company found tax liens against the house from the ex husband that had not been paid for 2 YEARS! Oh, I forgot to mention, taxes were not paid on the house for that previous year as well. This story is getting worse by the minute…
The problem with this scenario is that the house was under contract in one month, and it took a total of 8 MONTHS to close!!! The ex husband did not want to pay the taxes. Once he finally paid the back-taxes, the only way the tax lien could be released from the house is after the original seller calls the tax revenue company to release the lien, and then it will take another month for the revenue service to release the proof of liens to the court house so that the title company can see it! Confused yet? Yea, I am too.
So long story short, the house sat for months. I had to stay in contact with the seller and because it took so long, I had to renegotiate with the buyer so he could close when that time eventually came. Since this was nearly another year since the original contract was signed, the property taxes had accumulated. Not only that, the seller had more court issues and she was in danger of losing valuable assets if she didn’t have the money to pay her lawyer. I feel bad for anyone who had to endure a bad divorce…
The deal was a free lead for me and I didn’t need the money, so I did was anyone else would do (yea right)…I gave her a huge portion of my assignment fee so that she could keep her name clear in the midst of the nasty fighting of divorce. I walked away from my title company with a measly $400 that day. I deserved a purple heart medal after all that I had experienced and endured for this deal, but I did for the greater purpose of helping someone solve a problem.
You see, its not always about the money, but you are also a problem solver when it comes to buying homes from motivated sellers. Sometimes the return you get may not be in cash because it is priceless. Trust me when I tell you that this lady had a lot of things going downhill if she wasn’t able to pay her lawyer. What type of person would that make me if I see you drowning and I don’t offer my hand to help you out. Sure, I lost $2,600 on a $3,000 deal, but I helped someone gain their life back.
I don’t ever want to be in those shoes again though! 🙂
Here are a few related articles:
3 Things You Need To Close A Deal In 30 Days
What Tony Robbins has to do with real estate
The 1 Secret I wish Someone Would’ve Told Me Before Closing My 1st Deal
Top Reason Why You’re Not Making Money On Your Assignment Fee
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