# Foreclosure-Red Alert



## cleveman (Dec 28, 2007)

Foreclosures-Red Alert

I saw a listing this morning on realtor.com for a house in my town for $39K. I don't know the street numbers very well, but I couldn't think of a house on that street which was that trashy.

So I found it and it's been empty for about 3 years. I was a decent house before that, always well kept. Last sold for $78K.

Me call realtor and he has meetings to show at at 3:30 and 5:00. Me request meet at 3:00 in order to get in first offer.

Me read fine print and come with letter from bank. Me make offer for 39,101 with the only stipulation being a clear title. Me think me very smart. Me think other goofballs not read fine print and come with letter from bank.

Any experience out there with such pricing? I think the bank may think:

1. Hell we're trying to sell these homes for what we have in them, in this case maybe $65K, and we're sitting on them for a year before we sell them for $45, so let's try pricing one at this price $39K, and see what happens.

Or...

2. Let's lowball it and set up a bidding war.

What is the general opinion out there, can they do #2 and not get in trouble?

Anyone seen anything like this (such low prices) in their area?

This is a 1200 square foot 2 bedroom build in 1978 and I can't build this cheap. My thought is it will be a good rental with a bit of cleaning up and frozen pipe replacement. I did another foreclosure, so I'm not going in with blinders on.


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## works4me (Sep 1, 2007)

I find they are doing more low balling and setting up price wars. Did you notice anything about a multiple offer sheet to be filled out if needed, and the banks also state now in their listing agreement they may need up to 14 days to respond to any offer (this of course gives them plenty of time to collect bids. Then they call everyone back and say "We have multiple offers - bring your highest and best befroe Fri. 12 noon". This just happened to me. Listing for 105k, offered 104k, got the run around listed above, put in new offer of 119k - DIDN'T GET IT! They know how to play a new game now.


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## cleveman (Dec 28, 2007)

they have to reply in 3 days. did not notice such a form. I thought my offer of $101 over list price was good, especially because I waived my right to an inspection and can close in 15 days. I only stipulated clear title. It's difficult to reply because when I go to reply, I can't see your original message. Anyway, people need to know what is happening. When I go to sell a property, I can't play games like this. Will update with results of what happens if it is descypherable. spelling?


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## works4me (Sep 1, 2007)

Yeah, your right, you are not intentionally allowed to play this kind of game - ask your Realtor about it. That's why they have come up with this new multiple offers disclosure sheet I mentioned - I guess it makes it o.k. for them - so they don't get in trouble for doing it. Yours sounds like you have a pretty good shot of having it go through though. I hope you get it and make some $$. Good luck.


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## firemike (Dec 11, 2005)

> It's difficult to reply because when I go to reply, I can't see your original message.


Scroll farther down the page, all replies should be under the ADDITIONAL OPTIONS form


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## SelfContract (Dec 6, 2007)

So, did "me" able to bid/got it yet? :thumbsup:


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## cleveman (Dec 28, 2007)

Firemike, thanks.

Selfcontract, I don't know yet. I put in my offer around 3:30 friday afternoon and the realtor won't get it to them until monday morning. Then they have 3 days to respond. Theoretically, I should have news by thursday morn.

This allows them to write offers all weekend, I suppose. The realtor would probably let them get a bank guarantee on monday morning also, if they didn't have it over the weekend. This takes away my early bird advantage.

Will post back when I have news.


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## riggs (Dec 22, 2007)

Bank don't always take the highest offer. You did the right thing by only requiring clear title. You're already ahead of the most people.


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## cleveman (Dec 28, 2007)

Riggs, self contract, works for me,

I got a call from the realtor and they are turning down all bids and inviting everyone to re-bid.

I declined to participate further.

I suppose that there is some way to legally do this, but I don't think any reputable realtor/real estate company will have anything to do with such a bank.

In the future, I guess the way to proceed is to form a group of bidders and collude on the bids, rolling the dice to see who gets to buy. Of course this is impossible to organize.

There was some talk about turning the water on to the house. It is supposed to get down to about -5 friday night, so this would be quite a spectacle. If something like this happened to the next dozen houses which banks tried to sell in this manner, they might think twice.


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## Dustball (Jul 7, 2006)

Same boat here. A REO house was listed on Jan 9th for a very reasonable price, we viewed the house on the 10th and made an offer the same day. On the 15th, the listing agent told us that 17 offers were submitted for that house over the weekend and the bank will be picking which offers to negotiate with.


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## LNG24 (Oct 30, 2005)

Real Estate Laws differ from State to State. There is/was nothing unscrupulous about what they did. It is done all the time. 

Your first mistake was submitting an offer with the Listing Agent. The Listing Agent represents the bank and is only looking out for the banks interest. 

The bank sets the asking price, not the Realtor. The bank is the one who gets to accept the offer. As you quickly found out, the bank was trying to incite a bidding war. Guess it didn't happen, but the are Not Required to SELL even if they get full asking or more than asking price. Same goes for you if you put your house on the market. You are not required to sell it! You need to be careful as to the commission thought, because if the contract is not worded correctly, you can owe a commission even if you don't sell it. 

A perfect example of that is your offer. Now I don't know how strong your offer was. Were you doing CASH (typical in these situations), or were you Pre Approved (not good because the house then needs to appraise to close the deal) Either way, if you were indeed a Ready Willing and Able Buyer, the commission is now due, unless that little IAW clause is in there (*I*f *A*nd *W*hen title passes) 

Regardless, the best thing to do when working with a REO (Real Estate Owned) property is to go in at your Walk Away Price. That is the price at which above it, just doesn't work for you. Even by a dollar. You also need to have a strong offer. Clear Title is great, but you should be buying it with CASH. Either by getting a Home Equity Loan or Business Loan and have that money in the Bank. Then your offer is submitted as: Contingencies: Clear Title, Cash with a letter from your bank verifying the funds are there.

If you did a Foreclosure before, you know that they are not in the best of conditions. Usually Busted Pipes, Water Damage, Busted Interior (some people that are loosing their home will sell everything out of it before hand. What they don't realize is that they are Still Responsible for the difference between the final sale price and what is owed on the mortgage. The bank is responsible for getting the highest price possible. 

Lastly, Foreclosures usually happen because people can't sell the home. Either they owe more than its worth (too many home equity loans) or it is destroyed inside and isn't worth what is owed. Either way, if you say that it had sold for $78k previously, how long ago was that? If it was 3 years ago. Figure they put down between 3 & 20%. Even if you try the 20%, that left a mortgage of $62,400. Now a foreclosure doesn't happen overnight. Usually takes about a year to get to where you are now. So you can bet that they have not paid the mortgage in the last year. Also, if I am not paying my mortgage, I am not paying my taxes either. (Did you check the tax bill?)

So to sum it all up: A $78k house bought 3- 5 years ago probably still owes around $60k since you don't pay too much principal in the beginning. Add in the tax bill and you can see why your offer and others did not fly. 

All that said, I do know people who have simply let their mortgage laps and ignore all the calls and letters and one day they are just removed from the house without ever trying to sell it. It is sad, but these are the Real Foreclosure Deals. 

Now go get yourself a GOOD Realtor (we are not all equal) Interview them and find out how many successful REO deals they have negotiated on *and won! *The one with the best results is the one you want. Most Realtors in the market today are so new, they don't even know what a REO is, let alone how to put in a good offer.


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## XanadooLTD (Oct 6, 2007)

The 3 days you guys are talking about is the 3 day right to rescind. This only goes for refinancing, and that is once you have signed to documents. We do property preservation for bank foreclosures. This flipping business was once huge. To many shady characters ruined this business. You can buy a house here for 35000, put 10000 into the remodel and sell it for 120000. Now since the banks starting watching their predatory lending the guidelines for purchases are so strict. I do know that the banks are spending more money in fixing up houses now. The banks are going to start competing in the selling wars with people trying to sell their home.


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## silvertree (Jul 22, 2007)

Put a verbal bid on one today.
Banks asks 144K
Tax value 217K
Zillow value and comps 220K (so thats close)
I bid 70% of tax value plus repairs. Repairs 40K
So I bid 110K, bank, if they want to sell will probably go 118 or 120, if they don't I walk. I've done a dozen of them, always fix them nice, always good cabinets ( box) always quartz or granite tops, all systems go.
Would sell at 5% below appraisal or around 205K.
120000 purchase
6ooo loan costs
40000 fix up
7000 Realtor
205 minus 173= $32000 plus you pay yourself to work on it.
More if you sell yourself.


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## cleveman (Dec 28, 2007)

LNG24:

Thanks for the good post. I think this topic may be of interest to more than a few people and you certainly made some good points.

I have a few questions which I'm sure others are sure to bring up as well, first let me clarify a few things.

My offer was cash with verification of funds available contingent upon clear title. I guess the only thing better than this is cash with verification of funds available and I don't care about the title.

I've done (bought) a foreclosure before and I think any remodeler has at least seen their share of them.

I don't care what is owed on the homes or how much money the bank is going to lose on the deal. However, I see your point here. It could be useful to know this amount because the bank would surely sell for anything above that amount.

The reality here and probably everywhere is that homes that were overvalued by 20% when they were last purchased are now going to come up for sale in a market which has since come down another 20%. It takes 2 years here from the time of the sheriff's sale until the homes appear on the market. So you have a home last sold at 100 which is now worth about 60, plus 5 in taxes and lawn mowing, snow removal, etc. The bank has 85 in it, but it is still only worth 60, in good condition, ready to be inhabited. If the bank feels that the 5 in taxes and costs has added any value to the property or that they are entitled to re-coup those costs, then good luck.

As far as going in with your top dollar bid at the beginning, I'm sure that the bank would like everyone to do that. It may be a good tactic for the second round of bidding. I'll monitor what this home sells for, then I'll gather my experiences.

Your comment about finding a realtor to make my bid for me baffles me. I'm not sure I could find a realtor to make a bid for me on a $39,000 house. The last one I dealt through on the foreclosure I bought said she never wanted to deal with another foreclosure again. Also you say my first mistake was making the offer to the listing agent, who was there to collect bids for the bank. Do you mean that I should try to go directly to the bank? Do you mean that my realtor would be able to go directly to the bank? 

How could I find a realtor who could make a cash offer more attractive?

Thanks for your post. Maybe you've got some insight on how to make an offer directly to the bank before they even come up for sale.


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## philner (Dec 27, 2007)

I've found that the best way to find out what the bank has into it is to go to the auction. Around here the bank opens up the bidding with what they are into it for.I've never bought one at auction(too many unknowns). I do go to the auction where I find out what they have into it and who at the bank is handling the property. That way I can see the property,get a full title search etc.. done and sometimes save the bank a brokers fee. If they wont meet my price I often leave a verbal open ended offer so that a year or two later when they get desperate and/or realistic and want to dump it they give me a call. Cash is king and its what banks want. Phil


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## LNG24 (Oct 30, 2005)

Any Realtor who walks away from a Flipper, Rehaber or Contractor should not be in the business! It is our job to Help you Sell or Help you Buy a home. This is why I said to interview potential Realtors. We are not all the same. Let me ask you this...Is your job easy? Why do some Realtors expect theirs to be? 

On a typical sale: Lets say you buy buy a house through me (I am representing you as a Buyers Agent, not a term or law in all states, check your state law about representation agreements) then if I am lucky, you will be selling that house in 5-7 years on average. Maybe 10 years.

On a Contractor/Flipper/Rehabber: You buy a house from me this week. In 30-120 day you are re listing that property with me to sell for you. If we luck out and close in 90-120 days, you are looking to buy another property!

One Flipper can keep me in business all year. Sure I might not make big bucks with him or her, but its the volume that is of value with this type of client. 

These clients expect Me to be on the lookout for the deals, thats my job. These clients expect me to tell them the comps (Zillow is not accurate everywhere and usually a bit outdated. Locally, the tax office {where Zillow gets their info from} is backlogged 6-8 months) I on the other hand know exactly what closed and for how much as of today! I know whats on the market and for how long, I know whats selling and why. I know the price it needs to be at and what it needs to sell. My Flipper takes my information and does his job, rehabs the house and gets it into salable condition. 

Working with a Realtor, you will know going into it, what the approximate final price will be and then you work backward. I can sell for $120k, needs $20k work, I want to make $30k So my walk away price is $70k. You don't always get a second chance, in fact it is unusual. You bid to WIN. Your job is to make money on the sale, not be outbid by others so they can make the money. 

The reason I say to go in at the walk away price is because EVERY REO property is going to the Highest AND Best offer. Anyone who tells you otherwise is dishonest. You had a Perfect Offer. Cash and just clear title. No attorney would allow you to buy any other way! Your price was just too low. They wanted it to go to a bidding war and it either didn't happen or didn't get high enough. 

Oh and No, The starting bid at auction IS NOT what the bank has in it. 

Finally, You can not find a Realtor to make a Cash Offer better. You can find a Realtor to represent you and not play games. See when you put that offer on the house, if I am representing the Seller, in this case the Bank, it is my job to get the highest price I can. So I, no the Bank, shop your offer around. This is not a Sealed Bid Auction. This is a Sale of a REO, don't confuse it with an Auction. A Foreclosures IS NOT an auction. An auction is not a foreclosure. So I get your offer and I start to make calls, to "my" flippers. I tell them what the highest offer is and they top it. Can this happen even if you have a Realtor representing you, absolutely, but (again, laws vary from state to state) I can present the offer directly to the Seller, in this case the bank. I can do this at zero hour so no one can outbid my client. I can also play the dangerous Trump Card. Ex: $5k over highest price. This is of course dangerous and not always looked at favorably.

You hook up with the right Realtor and that Realtor will scour every inch of the market for you to find the next flip. Auctions, For Sale By Owners, Just Listed, Back Taxes, Foreclosures. 

I think I answered all your questions, if not ask away.


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## silvertree (Jul 22, 2007)

I want to add one thing, Zillow and Real Estate ABC are helpful. If your area allows go to the city or county website and depending on how well they operate you can find last sale price, permit info, taxes owed and then you can check nearby addresses. The key is simple, buy low sell high and never buy without an inspection or clear title. With a Realtor or without do your due diligence. Also go to MLS online for the area you are interested in and see what the asking prices of homes are. Asking price and selling price are different. The free info out there will get you going.


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## LNG24 (Oct 30, 2005)

silvertree said:


> Put a verbal bid on one today.


All States laws vary, but in my market...No Such Thing as a Verbal Offer. Its either In Writing w/proof of funds or Pre Approval or its not an offer.



silvertree said:


> Zillow value and comps 220K (so thats close)


 Again, areas vary, Zillow is not even close in my market. They are also 6 months behind in the comps as they get their info from the county tax department and they, the tax department are 6 months behind. I on the other hand knows exactly what sold (Title Passed) yesterday.

It doesn't cost you a thing to work with a Good Professional Realtor when you are buying. Working with a Good Professional Realtor when you are selling with save you thousands. Like my Accountant Rule, if my accountant doesn't save me his fee, then why am I using him? If I can't make you my fee in either time or money, then I am not doing my job. 

I can't make miracles happen, but I can save you from costly mistakes.


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## silvertree (Jul 22, 2007)

All States laws vary, but in my market...No Such Thing as a Verbal Offer. Its either In Writing w/proof of funds or Pre Approval or its not an offer.

Verbal offer is made to bank from my Realtor. I have bought from him before, he knows if the bank takes the offer I come up with the cash. He works for the bank, but because I follow through he will present a verbal. If they say OK I buy the house, if I didn't, I would imagine they would not work with me again.
I don't see why that isn't legal, I can tell you I'll buy your house for x amount, if you agree we get the paperwork out. I bought my last 2 houses this way.
I also bought another home and put $5000 down and when I found out it was in the flood plain and I couldn't add on I got my money back within a few days. When I buy as is, it's as is. If I offer $100,000 and the bank says yes the Realtor gets a purchase agreement from me, until the banker signs it, it is legally still for sale.


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## Putty Truck (Oct 6, 2007)

With all that inventory out there, you are still buying to flip? 

In my area, we have very few repos, so it won't be an option and I'm not setting foot in Mexifornia again. There is a healthy inventory of new homes here, but used homes are selling better due to lack of quality vs. price on the new homes.

I could see buying to rent it out if the price was right on both ends, I guess, maybe. Or not.


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## cleveman (Dec 28, 2007)

Putty Truck:

I don't know who your question was addressed to, but if it was to me:

No, I wouldn't do a flip anymore. I'm looking for nothing but if something finds me which costs $40/square foot, I can rent it. I can't build it for that.

However, I can build for not much more than $50, not including my labor, and I'll have something top notch.

On rentals, the size is also important. I don't want to try to rent out some 4 bedroom homes to some people with 8 children. In fact, nothing larger than a 2 bedroom.

Maybe this is why I just want to steal them. I'm not looking to buy them and live in them, I want to make money from them. And like I say, when you can build yourself, it is difficult to find anything out there which is a value to you.


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## Frankawitz (Jun 17, 2006)

Last summer I was looking at foreclosed property here in south east Michigan we had a lot of property being foreclosed on then even more now with all the buy outs and lay offs, I keep an eye on the prices and they have dropped at least 40k to 50k, I was looking to buy a few of these houses and the Realtor I was working with told me to wait, I'm glad I listened to her, I'm thinking about calling her to see what she has to say about the market. I read today housing starts are down 16% lower then they were back in 1980. they are saying new homes might not come back intil 2009 sometime. I know when times are tight it's better to put your money into Real Estate.

LNG what do you think about the market


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## riggs (Dec 22, 2007)

cleveman said:


> Putty Truck:
> No, I wouldn't do a flip anymore. I'm looking for nothing but if something finds me which costs $40/square foot, I can rent it. I can't build it for that.
> 
> However, I can build for not much more than $50, not including my labor, and I'll have something top notch.


Is that $50/sf for a new construction? That's a great price. Am I reading it wrong?

Around here in MD we gut rehab rowhouses for $40/sf-$80/sf. Partial rehab can be much less but it's much trickier and you need good experience.
:jester:


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## rino1494 (Jan 31, 2006)

cleveman said:


> Riggs, self contract, works for me,
> 
> I got a call from the realtor and they are turning down all bids and inviting everyone to re-bid.
> 
> ...


Same thing happened to me. I put an offer in on a foreclosure. Within 2 days, 3 more people put in offers. Bank said to the listing agent to take no more offers and tell the 4 people to come back with their best and final offer. I didn't get it and the house ended up selling for more than what it was originally listed for.


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## philner (Dec 27, 2007)

Around here (SE MA) I quite often deal directly with the bank, thier opening bid is invariably what they are into the property for, and When you are dealing directly with the bank it is quite often all verbal until the numbers get real close, then you normaly won't get a real commitment until you put your offer in writing,with a check.Yes they work buyers against each other, that's thier job and legal obligation. When the numbers don't work for me I will often leave it at " let me know when you can let it go for 180K" and have gotten calls months later to see if I am still interested, at which time I have purchased several properties at a price I could live with. It seems some of you guys are dealing with unscupulous lowlifes who can't be trusted, everyone has thier job and role in the process and if I can't do it with integrity I won't do it.Of course I want to buy it for the lowest price,Of course they want to sell it for the highest price. Some times they would rather keep it on their books at a higher value than sell it and have to record the loss that selling it for its current value would be.I've been buying REOs and OREOs since the 80s and its a small world when it comes to dealing with alot of the local banks, If you can't be trusted word gets around and you'll be on the outside looking in. Phil


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## cleveman (Dec 28, 2007)

Riggs,

You read right. That includes the land, all appliances, a detached garage, energy star. But my labor isn't included. Some labor is included. I hire out the excavation, footings & bsmt walls, waterproofing. Also the sheetrock and sewer/water line from the street. I also have a helper to frame and pour the bsmt floor. I hired a bricklayer to do the brick veneer for $25/hr. and I tended him.

I suspect the sales price would be about $120/ft.

The good thing about these as rentals is you can build them like a dog kennel or prison cell. You can make them with no carpet, nothing which will get ruined immediately such as laminate countertops, fiberglass tub enclosures, etc. They clean up back to original condition and look good again after you have collected all the toys and stuff out of the yard.


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## silvertree (Jul 22, 2007)

I confirmed my offer and the bank said I could probably get the loan if I put 30% down. Realtor is taking me to lunch Monday and I will sign the purchase agreement then. If it goes the way I expect, this house will be on the market in May or late April. It will be nicer than other houses in this price range and be sold for a little under market value. In the Mpls area sales for new homes are flat, this house stands a good chance of selling fast. New kitchen and bath, curb appeal and less money than comparable homes. If I'm wrong, won't be the first time. I will not list with an agent, but I will pay 3% to a selling agent. That is typical around here with the more experienced agents.


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## SelfContract (Dec 6, 2007)

Good luck silvertree.


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## philner (Dec 27, 2007)

Yeah, Best of Luck, Hope it all works out. 
Phil


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## Putty Truck (Oct 6, 2007)

silvertree said:


> I confirmed my offer and the bank said I could probably get the loan if I put 30% down. Realtor is taking me to lunch Monday and I will sign the purchase agreement then.....


Stupid banks. I got turned down for an expansion loan today. It must have something to do with the bank losing 80% of its stock value and 30 Billion lost in loans. I guess I'll have to do it the old fashioned way....

Don't be surprised if the loan money is funny for flippers.


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## cleveman (Dec 28, 2007)

the decent people are going to be punished for this whole predatory lending fiasco.

We will end up with more regulations and bureaucracy and pay for it with higher costs. Don't be surprised if the banks start charging a $100 fee on each loan, labelled, "special check to comply with anti-predatory lending guidelines".


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## XanadooLTD (Oct 6, 2007)

If you are looking to buy repos, remember you are not the only one that knows about this house. Investors are like sharks. If you are serious about buying these repos...Cash offers talk and ____it walks. The banks can't waste anymore time on the houses. At a national seminar for mortgage loan servicing i heard that on average these banks spend anywhere from $250-$1000 a day holding these repos. Depending on where property is located. You need to offer cash, because the banks can't wait while your financing goes through and gets denied at the end. When we focused mainly on flipping we would offer some times as much as 20k less than asking. Our offer was cash and we would always walk away with an accepted bid and close within a few days.


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## LNG24 (Oct 30, 2005)

silvertree said:


> I will not list with an agent, but I will pay 3% to a selling agent. That is typical around here with the more experienced agents.


Not sure of your area again, but out here you would have to find some way of letting more than 10k agents know your house is for sale and you were willing to pay them 3%. This could cost you in time and carrying costs as you try to find a buyer. Buyers are scarce right now. Advertising in the local papers are expensive. Carrying costs are expensive. There is no way you are going to reach every potential buyer that is serious and working with a Realtor. You will reach a number of tire kickers. Plus, you will need to stop what you are doing and show that house to every tire kicker out there. Whats your time worth? Whats your carrying cost worth? Whats your advertising budget worth? Can it be less than the $6,150 you are going to be "Saving"?

You said You Found this On Realtor.com, If thats where the next Buyer for your Flip is looking, they won't find it because it needs to be listed with a Realtor to be there. It then also gets put on EVERY real estate web site in the area, Yahoo, Realtor, Zillow and dozens more. Every Realtor on that MLS now knows about your house and has easy access to get their buyers into it. 

It is very easy to build this into the asking price if you are going to do as great a job as your saying. Keeping a deal together is just one aspect of our job, but it is probably one of the points very few people ever realize. I and I am sure many other Realtors "Keep" more deals together after an Accepted Offer than deals where we can sit back and relax and wait for a check to come it. Since 2002, I can only recall two deals that went smooth!


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## cleveman (Dec 28, 2007)

this is a good thread and I'm going to let all you yeasty slit lickers know what the house I was bidding on goes for.


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## silvertree (Jul 22, 2007)

LNG24 said:


> Not sure of your area again, but out here you would have to find some way of letting more than 10k agents know your house is for sale and you were willing to pay them 3%. This could cost you in time and carrying costs as you try to find a buyer. Buyers are scarce right now. Advertising in the local papers are expensive. Carrying costs are expensive. There is no way you are going to reach every potential buyer that is serious and working with a Realtor. You will reach a number of tire kickers. Plus, you will need to stop what you are doing and show that house to every tire kicker out there. Whats your time worth? Whats your carrying cost worth? Whats your advertising budget worth? Can it be less than the $6,150 you are going to be "Saving"?
> 
> You said You Found this On Realtor.com, If thats where the next Buyer for your Flip is looking, they won't find it because it needs to be listed with a Realtor to be there. It then also gets put on EVERY real estate web site in the area, Yahoo, Realtor, Zillow and dozens more. Every Realtor on that MLS now knows about your house and has easy access to get their buyers into it.
> 
> It is very easy to build this into the asking price if you are going to do as great a job as your saying. Keeping a deal together is just one aspect of our job, but it is probably one of the points very few people ever realize. I and I am sure many other Realtors "Keep" more deals together after an Accepted Offer than deals where we can sit back and relax and wait for a check to come it. Since 2002, I can only recall two deals that went smooth!


I don't know about Realtor.com, thats just a handy site to see recent sales prices. I get my potential homes through networking with some local Realtors. Listing agents tie you in and you lose control of the selling process, plus another 3% or whatever you have agreed on. Selling a house is simple, and I have sold enough of them to be comfortable with the process. I understand your an agent, and more power to you, but I won't advertise this house in the paper. Agents are having a tough time around here, I have never had a negative experience with the 3% to agent who brings a buyer, and doing it this way I can network to get my own buyer. Also some agents buy houses to flip and do the work themselves, more power to them. This is a simple fix and sell situation, $600.00 for MLS and a sign on the front lawn. Have a few opens and wait for the agents to call and tell me they have a potential buyer. If I were selling my home, I would probably get a Realtor, and sign a listing agreement. Not for a rehab. As for time and carrying costs, thats already figured into my asking price. This isn't my first deal. The markets flat, but if I'm ready in May to sell, I have the best season to show it in. The house is located in White Bear Lake, Minnesota. 
Pluses are great school districts, parks within walking distance, shopping and mall close by and a lake for fishing and swimming ect. Houses next door on both sides worth 15% to 20% more in value.
Downside, busy street, flat market, tighter loan control.
$200,000 is a starter home around here.
Last, you are a GC, Handyman and Realtor, if I were to follow your logic, I should leave the house selling to the experts because I guess dedicated professionals do their one thing well and other things not as well----------


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## Dustball (Jul 7, 2006)

silvertree said:


> I don't know about Realtor.com, thats just a handy site to see recent sales prices. I get my potential homes through networking with some local Realtors. Listing agents tie you in and you lose control of the selling process, plus another 3% or whatever you have agreed on. Selling a house is simple, and I have sold enough of them to be comfortable with the process. I understand your an agent, and more power to you, but I won't advertise this house in the paper. Agents are having a tough time around here, I have never had a negative experience with the 3% to agent who brings a buyer, and doing it this way I can network to get my own buyer. Also some agents buy houses to flip and do the work themselves, more power to them. This is a simple fix and sell situation, $600.00 for MLS and a sign on the front lawn. Have a few opens and wait for the agents to call and tell me they have a potential buyer. If I were selling my home, I would probably get a Realtor, and sign a listing agreement. Not for a rehab. As for time and carrying costs, thats already figured into my asking price. This isn't my first deal. The markets flat, but if I'm ready in May to sell, I have the best season to show it in. The house is located in White Bear Lake, Minnesota.
> Pluses are great school districts, parks within walking distance, shopping and mall close by and a lake for fishing and swimming ect. Houses next door on both sides worth 15% to 20% more in value.
> Downside, busy street, flat market, tighter loan control.
> $200,000 is a starter home around here.
> Last, you are a GC, Handyman and Realtor, if I were to follow your logic, I should leave the house selling to the experts because I guess dedicated professionals do their one thing well and other things not as well----------


The house you're looking at is on Cty Rd E, right? I like the White Bear area and the houses we look at are in the east metro. Yesterday we looked at a house in Stillwater and we like it a lot and we're working on putting together an offer.

Initially we tried selling our houses ourselves as we can list on the MLS but we found an agent that works on a flat fee and he does a whole lot more advertising than we did. He's worth the $2500 he's charging since he takes care of the professional photography, advertising, open houses and mailers (full color post cards) and all of the showings. It's something worth considering for you.

Good luck on the WBL house.


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## silvertree (Jul 22, 2007)

Dustball said:


> The house you're looking at is on Cty Rd E, right? I like the White Bear area and the houses we look at are in the east metro. Yesterday we looked at a house in Stillwater and we like it a lot and we're working on putting together an offer.
> 
> Initially we tried selling our houses ourselves as we can list on the MLS but we found an agent that works on a flat fee and he does a whole lot more advertising than we did. He's worth the $2500 he's charging since he takes care of the professional photography, advertising, open houses and mailers (full color post cards) and all of the showings. It's something worth considering for you.
> 
> Good luck on the WBL house.


Yup, County Rd E. We probably know some of the same people I'm guessing. I would be interested in the guy you work with, if he's looking to hook up with anyone new he can email [email protected].
You know the whole Realtor thing is different for flips, and I don't call them flips, I call them Rehabs and I always do them first class and offer a 2 year warranty on them. Maybe run into you some time, coffee at Caribou Hwy 96 and Centerville Rd?


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## cleveman (Dec 28, 2007)

Dustball and Silvertree:

How do you get to list on the MLS?


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## rbsremodeling (Nov 12, 2007)

Get a girlfriend whose a realtor:thumbsup:


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## Dustball (Jul 7, 2006)

cleveman said:


> Dustball and Silvertree:
> 
> How do you get to list on the MLS?


Get a realtor license and a membership to your local realtor association.


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## silvertree (Jul 22, 2007)

cleveman said:


> Dustball and Silvertree:
> 
> How do you get to list on the MLS?


Google " List on MLS ", you can list as a FSBO or get many different Realtor deals that don't require listing with that agent. 

Help-U-Sell is one way. Lots of packages to choose from. My experience is when I list FSBO is, first thing, I get 10 or 20 calls from Realtors who tell me they have a buyer, maybe they do, but I never see a purchase agreement, they want the listing. After that experience it makes it difficult to separate the good Realtors from the other type. Just Google MLS and call a couple of the businesses that advertise. There is one MLS that everyone uses. Realtors have more information that you won't get, but you can check city and county websites for free information, it will take a little longer but it's very usefull stuff. I check for permits pulled, permits open, assessments, recent sales, tax payments ect. All free from the local goverment.


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## silvertree (Jul 22, 2007)

Dustball said:


> Get a realtor license and a membership to your local realtor association.


You can do that, but after classes and passing the test I think you still have to work with a broker, and thats probably a good way to learn the real estate side of the rehab business. Education is never a waste of time, unless you have a Philosophy Degree. :jester:


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## XanadooLTD (Oct 6, 2007)

I have had my realtors license since 2000. WHen we flipped house not once did i sell it through a real estate company. All done myself and we were selling houses on average from 2 weeks to 1 month. With a realtor in ohio comission is 7%. It is true that you should not have a problem paying comission to the selling agent, but we also never sold a house to someone that was represented by a realtor. We did all marketing, showing and listing without the help of realtors. Once again though this was all done when the housing market was booming. But think about the realtor price. 7% taken away from 100K is 7k. If you needed to replace the roof of this subject house you just lost your profit of replacing the roof by paying the realtor. Really the only job a realtor has is answering the phone. Someone in your family would be happy to answer phones and show the house. And if it matters that much to you pay your family a comission. But i will say again that the flipping business is over. That business ended about a year ago. Like someone said there is now to much competition.


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## XanadooLTD (Oct 6, 2007)

If you guys get your realtors license you will still have to split your comission with your broker. You can not get your realtor license and open shop as a broker. You have to work for a broker for an amount of years. I can't remember just how long that is.


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## silvertree (Jul 22, 2007)

XanadooLTD said:


> If you guys get your realtors license you will still have to split your comission with your broker. You can not get your realtor license and open shop as a broker. You have to work for a broker for an amount of years. I can't remember just how long that is.


I have no intention of getting a Real Estate license, and selling is selling. Realtors have their place, but I agree with you that you let people know a home is for sale, you qualify to get rid of the tire kickers and you show it potential buyers. The title companies do all due diligence work, you just sell it.
The flip business isn't the same, but it's not over, you watch your costs and sell a nicer home for a little below market. People won't stop buying houses.
I sold my last one with a realtor who brought the buyer 3% of 230K sale. It was worth it to me. I always go in with the buyers agent figured in, but have only used that option a couple of times.


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## LNG24 (Oct 30, 2005)

silvertree said:


> Google " List on MLS ", you can list as a FSBO or get many different Realtor deals that don't require listing with that agent.
> 
> Help-U-Sell is one way. Lots of packages to choose from. My experience is when I list FSBO is, first thing, I get 10 or 20 calls from Realtors who tell me they have a buyer, maybe they do, but I never see a purchase agreement, they want the listing. After that experience it makes it difficult to separate the good Realtors from the other type. Just Google MLS and call a couple of the businesses that advertise. There is one MLS that everyone uses. Realtors have more information that you won't get, but you can check city and county websites for free information, it will take a little longer but it's very useful stuff. I check for permits pulled, permits open, assessments, recent sales, tax payments etc. All free from the local government.


There is NO WAY to list on MLS unless you are a member of that MLS and in most cases the National Asso. of Realtors. There are MLS members that do flat fee listing. These businesses are Members of the MLS and the National Asso. of Realtors. Don't be deceived. You pay anywhere from $600-$2,500 to have them list it on MLS for you, the rest is up to you, They will charge for lock boxes (cheaper to go to a hardware store and get your own) they will charge you to talk to them, they will charge you for paperwork, etc. On top of all this, you STILL have to pay the broker that brings the buyer there. Usually 3-5% depending on your area and local market. 

In the end, all you save is 1/2 of the commission. What you loose, Representation, Negotiation, Market Condition Reports(I update my clients weekly as to changes in the market), Showing Feedback, your time and paying for ALL advertising out of your pocket.

The average Broker around here pays approximately $2,000 in advertising per listing. This is the reason low price homes do not get the same advertising as higher prices homes; just not in the budget. 

Before you pay for one of those Flat Fee MLS listers I would take the $600 and send a letter to ever Realtor in the area and offer them the same commission you will have to offer them in the MLS. Sure you will get many of us asking for the listing and you can sign OPEN LISTING agreements with all of them, but only Exclusive Listing Agreements get put on MLS. Or, use the $600 to advertise your property and include a little line that says Brokers Welcome 3% (or what ever commission you want to offer them)

Becoming a Realtor just to do a flip is a wast of time. You need to attend continuing education, license and yes, you have to work under a broker until you have a number of deals under your belt and a number of years. Then the Insurance and cost of maintaining a brokers license will be very cost prohibitive. 

Good Luck, just don't buy the Flat Fee Hype. If it really worked, EVERYONE would be doing it. There is just no way to stay in business doing that. They work on No Service and Lots of Volume. Very few of their listings sell. In fact I have sold more FSBO homes than Flat Fee homes and yes, FSBO's pay me for bringing a buyer.


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## silvertree (Jul 22, 2007)

Being a remodeler is a full time job for me, doing a rehab or two a year is worth the time. Becoming a Realtor is not something that appeals to me. The hours suck, and who needs another job. There are coop agreements with the flat fee people, but my impression is that they are members of the Realtors association. Or someone in the office has a brokers license. FSBO has a magazine with listings and does a MLS listing without signing to pay a broker.
But usually you can market the home yourself. I sold 4 homes in the last 3 years without an MLS listing. After 6 months with an agent to sell my home, the week before the listing ends the agent calls to tell me she has a buyer, but she's going on vacation and asks me to sign for 3 more months and she'll call when she gets back. I say lets see a PA. The listing ends and I sell my home in 3 weeks, lucky?, maybe but I sold it for $5000 less and saved $25000.00 in fees. Sold one in August after 2 opens and no advertising. Like I said, I fix them up to stand out in the neighborhood. Maybe your advice to get people to use a Realtor is good advice, but a lot of us can sell homes without the services of a Real Estate salesman. Just like a lot of HO's can do pretty good remodeling. The Real Estate business does a sneaky stuff still, like the "Guest Book" agents ask people to sign when they have open houses. Want to explain that one?


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## LNG24 (Oct 30, 2005)

silvertree said:


> Being a remodeler is a full time job for me, doing a rehab or two a year is worth the time. Becoming a Realtor is not something that appeals to me. The hours suck, and who needs another job. There are coop agreements with the flat fee people, but my impression is that they are members of the Realtors association. Or someone in the office has a brokers license. FSBO has a magazine with listings and does a MLS listing without signing to pay a broker.


You can not list a home for sale unless you are either a Broker or working under a broker. That broker and the listing agent must be Licensed in the State you are working in. When you sing up for a Flat Fee or "FSBO" on MLS type listing, They ARE BROKERS! Just a different type of business model. Instead of Full Service, they give you want you want and nothing more. I congratulate you on your success, but the majority of people who work with them do not achieve it. I would bet your success is due in No Small Part to your Skills as a Rehaber, Understanding of the market and even if you don't want to admit it, your salesmanship skills. 

Just remember, anyone who takes a listing on a house and puts it on MLS is a Broker, plain and simple. Not all, but most MLS systems require compensation to the Selling Broker (aka Buyers Broker).



silvertree said:


> After 6 months with an agent to sell my home, the week before the listing ends the agent calls to tell me she has a buyer, but she's going on vacation and asks me to sign for 3 more months and she'll call when she gets back. I say lets see a PA.


 This is why Realtors have a bad name. She is a wart on our industry. Unfortunately there are many just like her. It is also why we are one of the most highly regulated industries in this country. A lot of lying, conniving and false representation. You did well by demanding a Purchase Offer. Another thing they will do is to bring "pseudo" buyers in right before the listing expires to make it look like there is a lot of interest and you need to re sign. The truth is the contracts stipulate that you still have to pay them a commission if the buyer they brought to you while its under contract buys the house after the contract expires. So they are protected and there is no need to extend the listing just because they might have an offer coming in. 



silvertree said:


> Maybe your advice to get people to use a Realtor is good advice, but a lot of us can sell homes without the services of a Real Estate salesman. Just like a lot of HO's can do pretty good remodeling.


Yes, you are right again, in fact my marketing material for FSBO's is a Self Marketing kit. I encourage people to sell a home by themselves if they so choose. If they decide its too much for them, thats when I want the job! 



silvertree said:


> The Real Estate business does a sneaky stuff still, like the "Guest Book" agents ask people to sign when they have open houses. Want to explain that one?


 Yes, the Guest Book is a LEAD GENERATOR. National Average is less than 3% of the people who attend an Open House will buy that house. Hoverer, 50% will be buying a house within 6 months. So what a Public Open House does is give me an opportunity to get Leads, not sell your home! The way I explain that to a client is that I would like the opportunity to Show Off their home and get a reaction from the public. Though we will most likely not find the buyer, we will get important feedback from the people coming through the Open House. I am willing to do it to help the house sell and in return I will be getting leads on future clients. 

This way the seller knows Up Front that there is some though little benefit to an Open House. They know the true facts and can make an educated decision then. 

Selling a Rehab, Flip or New Construction is very different than selling a Lived In home. If you can do it, and YOUR track record is great, then Go For It. However, you are an exception rather than the rule. Most people end up killing a deal with their emotions they have tied to the house. You know what you are doing and you know how to approach it. 

Everyone does not need a Realtor and Everyone does not need a contractor to remodel their homes. To think otherwise is foolish. However, it never hurts to "Have Connections" I think you are already doing this with some Realtors. Stay away from the ones who play games. They don't bring anything to the table and therefore you (as in ANYONE) does not need them.


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## Grumpy (Oct 8, 2003)

Go to open auctions to avoid obvious games and run-around.


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## silvertree (Jul 22, 2007)

Signed purchase agreement today at 10am, now I'm waiting to see what the bank responds with. The banks Realtor asked if I would like to sign a listing agreement with him, I didn't. But it went well enough.


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## LNG24 (Oct 30, 2005)

silvertree said:


> Signed purchase agreement today at 10am, now I'm waiting to see what the bank responds with. The banks Realtor asked if I would like to sign a listing agreement with him, I didn't. But it went well enough.


My Brothers are such Salesmen, aren't they? :whistlingYou don't even own the property yet and he/she wants you to SIGN a listing agreement? 

Even as Contract Vendee, you still need to BE IN contract!:no:


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## silvertree (Jul 22, 2007)

Hey, you can ask, and I can decide what I will do. I wasn't offended by the broker asking for the listing agreement, if I was a Realtor I would have asked also. Just reminded me of the old joke about waiting for the ink to dry:laughing:


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## boman47k (Oct 13, 2006)

Called about an ad today for a property "Hadyman special appraised at $65000, sell for $23000 for cash!" got a recorded message: "If you are calling about the property/house in the paper, leave number or email address. I have several houses for sale, they are all handyman specials."Heheh, made me think of this post. I'm betting it is the same type thing, starting a bidding game.


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## LNG24 (Oct 30, 2005)

Have you guys seen the guy in Cali who had so many forclosures, he leased a bus and is giving Forclosure Tours. He's booked solid. No charge for the tour, but he figured instead of just showing one person at a time, he takes full bus loads to all the houses to sell them! 

Thats Marketing for ya!


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## LNG24 (Oct 30, 2005)

boman47k said:


> Called about an ad today for a property "Hadyman special appraised at $65000, sell for $23000 for cash!" got a recorded message: "If you are calling about the property/house in the paper, leave number or email address. I have several houses for sale, they are all handyman specials."Heheh, made me think of this post. I'm betting it is the same type thing, starting a bidding game.


Was that by a Realtor? If so, his/her Brokers name must appear in the ad and he/she must give you details about that specific listing.


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## boman47k (Oct 13, 2006)

> If so, his/her Brokers name must appear in the ad


No idea yet. Nothing in the ad about being a realtor. Haven't gotten an email with a list or anything yet.


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## riggs (Dec 22, 2007)

boman47k said:


> "Heheh, made me think of this post. I'm betting it is the same type thing, starting a bidding game.


I don't think he's a Realtor or bank trying to start a bidding game. Basically he's an investor who is trying to buy houses directly from homeowners and then reassign the contract to investors for an assignment fee.

He put an ad to create his own buyers list. He may be just starting out.:no:


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## TNRocks (Jul 29, 2007)

Zillow is somewhat a farce. You can go and change the price of your house yourself. I know, cause I did it. So really don't depend on it.:whistling


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## silvertree (Jul 22, 2007)

Your right about changing the zillow price, but you can still get a lot of information. It's a few months old, but it can help. I built an addition on a house and a couple of months later the satellite photo of the house still didn't show the addition I built for the homeowners.


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## boman47k (Oct 13, 2006)

He put an ad to create his own buyers list. He may be just starting outSeems like a strange add for that purpose. Kind of like bid low then.....? I do think it is some kind of hook.


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## cleveman (Dec 28, 2007)

OK, guys, here's the rest of the story. I promised to update.

To recap: I went to look at a house for sale for $39 which had last sold for $78. It is a repo. The first set of offers was turned down. The realtor asked for a new set of offers. I declined to participate further. This was a new game for me, I wasn't accustomed to people turning down full price cash offers.

A guy I know ended up buying the house for $45,750.

I still think it would have been better for the bank to just auction off the house.

Thanks for all the posts. I learned a few things and I think some others did as well.

end of story.


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## Dustball (Jul 7, 2006)

cleveman said:


> A guy I know ended up buying the house for $45,750.
> 
> I still think it would have been better for the bank to just auction off the house.


No way. Judging by the auctions I've seen lately, the house would've sold dirt cheap if the bank put it up for auction.


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## silvertree (Jul 22, 2007)

End of story, my $110 K bid for a foreclosure listing for $144K didn't fly. They are sending my earnest money check back. Story is a first time rehabber paid asking price. On to the next one.:thumbsup:


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## LNG24 (Oct 30, 2005)

silvertree said:


> couple of months later the satellite photo of the house still didn't show the addition I built for the homeowners.


Those Satellite Images are VERY OLD. At least a Year or Two behind. Some areas are even 4 years behind!


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## LNG24 (Oct 30, 2005)

*Foreclosure Available:*

Anyone interested in becoming my neighbor? House just went into Foreclosure. $310k owed on a $350k house. :blink:


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## silvertree (Jul 22, 2007)

LNG24 said:


> Those Satellite Images are VERY OLD. At least a Year or Two behind. Some areas are even 4 years behind!


I figured a few months or so for the photos. The building dept in Mpls uses satellite sometimes when you get permits, I would guess thats a better setup.


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## valerko (Jan 11, 2008)

LNG
I have a house for you.I'm just over the hill in Wingdale.It's listed on FSBO website .I pay sellers commission.Sent some people over,I'll take care of you.:thumbup:


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## LNG24 (Oct 30, 2005)

valerko said:


> LNG
> I have a house for you.I'm just over the hill in Wingdale.It's listed on FSBO website .I pay sellers commission.Sent some people over,I'll take care of you.:thumbup:


I can work something out with you for sure. We'll call it a ContractorTalk Discount :whistling but I can't contact you as you don't have your info posted. Shoot me an e-mail: [email protected]


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## LNG24 (Oct 30, 2005)

silvertree said:


> I figured a few months or so for the photos. The building dept in Mpls uses satellite sometimes when you get permits, I would guess thats a better setup.


The addition I did at my brothers house 5 years ago still dosn't show up on Google or anyof my MLS Sat Image Sites. 

There are companies that for a fee will give you a very recent picture. We use that for commercial or development stuff.


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