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Flipping Houses: Ask This Question Now… Save Yourself A Headache Later

OK, so you contract on a peach of a deal.  You negotiate tough, there are minimal repairs needed and you’ve marketed like a pro.  You’ve fielded inquiries and lo and behold, a cash buyer wants it.  Assignment signed, deposit in hand and all contracts are now with the title company.

Then it happens.  The dreaded call from the title rep.  Clouded title.

Nothing is more freaking frustrating than thinking your deal, and bundle of cash, is all sewn up, only to have a nice, pricey lien attached to the house you’re about to flip… all at the last minute.

That’s how quickly a deal can go from being a peach… to a rotten tomato.

Luckily, there is a way to seriously diminish the chances of this happening.  Qualify your lead up front… and do it thoroughly.  Look, it’s rare that a seller doesn’t know when there is a lien on his property.  Even if he’s forgotten, just asking him will usually jog his memory.

Mr. Seller, what is the total amount owed on the house, including any liens or taxes that need to be paid?

$32,000.  Oh, and I almost forgot.  I had medical bills of $10,000 from a car accident years ago that I couldn’t pay, so they put a lien on my house.  I owe $1,500 in back-taxes from the past two years, as well.  So, total, I owe $43,500.

Know this, a lot of the sellers you will be speaking to are in a bind financially.  And, chances are, this isn’t the first time, either.  There’s a pattern.  And, it’s happened over, and over, and over again to them their entire life.  A black cloud is following them.  And, if you don’t press them to include all they owe, that black cloud will linger over the title, keeping you from flipping the house.

This is a huge time-waster.  Nothing sucks more than thinking you’re going to make $20,000 on a flip, then finding out there is a first mortgage, or medical lien or some other encumbrance that is killing your deal.

And, another thing.  Nothing pisses a buyer off more, either.  It makes us look amateurish.  And, he knows he’s just wasted a lot of time and effort on evaluating the deal.  He’s going to be that much more wary of working with you in the future.  So, take a just few more minutes when speaking with the seller the first time.  Make sure you ask, not only about the existing mortgage.  But, any liens or taxes owed, also.  This could not only save you a huge headache in a few weeks… but could save you a ton of time and effort, as well.

Andrew “The Maestro” Massaro
Founder and Coach of the most personal,
direct, hands-on and 1-on-1 wholesale and
REO coaching program on the planet.
Wholesale Coaching, Inc.

 

 

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Posted under: Flipping Houses

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