My brother, Bruce Burrell, started being Santa Clause after he was in a theater production with his son where he was the Ghost of Christmas Past in a production of Scrooge. Everyone liked the look, so he started playing Santa at holiday parties to make children happy. He is exceptionally good at it. Then, he was Santa on morning television shows, Santa in a Haines commercial and now Santa in the Mercedes Benz commercial for Christmas. This morning I saw the commercial for the first time on NBC. So, when you see Santa pull the huge lever to swap the sleigh for a red Mercedes coupe, the guy with the white hair and beard is my brother. What fun!
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I have an LLC that purchases properties using lease options and have been doing that for years. One of them is coming up on a decade. The use of lease purchases or lease options his highly regulated in North Carolina. Here is a link to the law on lease purchases in North Carolina. It is not hard to draft an agreement that complies with the law because the statute gives you a checklist of what is required. http://www.ncga.state.nc.us/EnactedLegislation/Statutes/PDF/ByChapter/Chapter_47G.pdf. In North Carolina, the real estate commission has said that Realtors cannot draft lease option and lease purchase agreements, you need to hire a lawyer to avoid engaging in the unauthorized practice of law.
The law in North Carolina came into effect to cure the problem where landlords would take a large option payment from a tenant, sign a lease purchase agreement, then not pay the mortgage while they were collecting the rent. I had one of these where the tenant was a heavily armed bounty hunter. The lender foreclosed and the lender called me after their regular Realtor for that area called them in tears after the bounty hunter explained to her that if she was involved in throwing him out of the house, he would spend the rest of his life hunting her down. To say he was upset is an understatement and rightfully so because he had paid the landlord thousands in an option payment and pre-paid his rent with additional thousands. I took the assignment and it all worked out. He is not hunting me down, other than he wants me to help him buy a house in the future. As a result of situations like this, the NC law gives the tenant/buyer the right to terminate the agreement and get a refund of the option payment. If you are the one buying the property with the lease/purchase, the termination provision is not a problem. If you or your client are selling to a third party, there may be an issue caused by the refund provision for the option money
When you buy a property with a lease option, one thing to remember is the title is still in the sellers' names. If the sellers get a judgment against them, it can become a lien on the property which could affect the tenant/buyer's ability to close the sale. Also, you need to set up a system where the tenant/buyer is sure that the landlord/seller pays the mortgage. I trust my seller's completely (one is my son, the other is the son of a friend), so I do not have to worry about this. On my son's property, I pay the mortgages directly and the lender has no heartburn about the fact that the check has a different Burrell's name on it. Other lenders might get weird on you and try to stretch the "due on sale" clause to say that there is enough of a transfer of an interest in the property to call it a default under the terms of the deed of trust. However, that is extremely unlikely because the lender is getting paid and there is not enough of a transfer of an interest in the property.
One third of all loan applications get turned down. Many of the applicants are good borrowers, but the regulations on loans are getting too strict. If you have a situation like this, a lease purchase or a lease option might be the right tool to solve the problem.
Patrick Lilly is a successful Realtor in New York who leads an exciting group called Real Estate Success Rocks. He interviewed me on Negotiation Strategies. It was a wide ranging discussion from negotiaging styles (collaborative vs. Trump style), how to negotiate with bullies and the tools that Realtors need to succeed. You can listen to the entire interview at http://repodcast.rocks/033-negotiation-strategies-with-tim-burrell/ . I hope you like it.
About a week ago, I sent a copy of my book, Create A Great Deal, the Art of Real Estate Negotiating, to a woman in Australia. She must have passed the word around, because I just got an order asking for the immediate shipment of 10 copies and an additional purchase of 100 copies. Most of my sales are to readers in the United States and I have sold a lot of the books in Canada However, this is such fun to have Australia get excited about it.
My latest article with Inman News just came out. When you negotiate, do not gloat over your victories. Instead, make the other people involved fee that they did well. Point out every concession you make so that they can value the victory that they accomplished. When they feel that they have gained something, they will be more willing to let you gain something in return. To read the entire article with stories about my clients, go to http://tinyurl.com/pyd6aqo
Too many acronyms, right? CRS is the Council of Residential Specialists, an organization where only the top Realtors qualify for membership. They have a rigorous review process to select certain Realtors as Subject Matter Experts, which they designate as SME. As you know, I wrote the book on real estate negotiating, so they asked me to be considered for this designation. I am happy to report that they designated me as a negotiating Subject Matter Expert. So, if you need someone with negotiating skills, please to go www.NegotiatingConsultant.com and I will be happy to help you.
It is important for a Realtor to have reviews, so a potential client can see what the experience of other clients was. However, written reviews are limited in their ability to convey the full impression of the writer. In a video review, the viewer can get a sense of the person giving the review. If you want to try it out, look at this review by Sarah Kirwan who describes her experience with our Team in a sale where her father died after the contract was signed. https://www.youtube.com/watch?v=7qnIVutudE4 . Which do you prefer, written reviews or video reviews?
You can become frustrated making offers on properties that have multiple offers. If you do not win the bidding war, your client does not get a home and you do not get anything. The five top tips start with learning the most important thing about the situation: how many other offers are you competing with. If there are a few, you offer a good price. If there are many, many offers, you offer an amazing price. Second, try to find out if there are any terms where you can win on something other than price. Third, before anyone else gets to the property, try to get it under contract to avoid the bidding war. Fourth, consider an escalation clause to offer more than any other offer. Last, if you lose, see if you can tie up the property with at back up offer. For all the details, look at the article in Inman News.
Since I wrote the book on real estate negotiating, Inman News has asked me to write for their online newspaper about negotiating, with an article on how to represent a seller who is receiving multiple offers. The five top tips start with looking for the best buyer, who may not be the one offering the best price. Next, make sure that the buyer you select cannot renegotiate the price after you sign the contract, mainly by using the appraisal. Tip three is to make sure that the successful buyer who pays top price is going to want to pay the seller back later in the transaction. The agents make a difference in which buyer is selected, as the ones that are professional and good to work with are more likely to get selected. For all the details, the article is at http://www.inman.com/2015/08/18/5-tips-for-picking-the-best-buyer-among-multiple-offers/
There have been so many false predictions of the recovery of the real estate market that every bit of good news is greeted with scepticism. Oh, yeah, hurry because it is going fast! As a result, many buyers are sitting there being sceptical while the market takes off and leaves them behind. Or, they could look at the numbers and react to the reality while there is still time.
Across the nation, we used to have many to many homes for sale compared to the number of properties that were actually purchased. If the sales continued at the same pace, it would take years to work through the inventory. Now, ProTech Valuation Services May Home Forecast shows that there is a 6.3 month supply of homes for sale. That means that if sales continue at the same pace, the current inventory will be sold in 6.3 months. This is the lowest level since 2006.
All real estate is local. In Raleigh, Durham, Chapel Hill and the rest of the Triangle, the inventory is down and the number of sales are up. As a result, the prices are starting to rise.
I enjoy the buyers agents I deal with who try to justify their outrageously low offers for homes in Raleigh, Cary and the Triangle by trying to reference the poor real estate market. That is about as believeable as trying to convince Mrs. Lincoln that she and Abe had a wonderful time at the play at Ford's theater.
The market still has some areas that are slower to recover. However, the numbers show it is starting to change. So, you should change to keep up with what is happening now.