There have been more people become rich from owning real estate than from any other way in the last 100 years. Sure, some big tech companies did make some multimillionaires and even a few billionaires, but the vast majority of people made their money from property. There have been hundreds of books written on the subject and many thousands of people have tried and failed, yet others still succeed at the same time. Here are some timely tips on dealing with rental property listings by owner.
Whether You Use A Real Estate Agent Or Not, Buyer Beware
OK, sure, some real estate agents really do know their stuff, but a lot of them are just after that commission and will stretch the truth to get it even if the deal falls in their lap. When they have to actually list a property, then they have expenses like advertising, that do add up. So, many investors believe they can get a better deal on a rental property if they buy directly from the owner.
The thought process goes like this, since the real estate agent is going to charge about 5% or more, the seller and the buyer can split that, make their own deal, and each save some money. What can also happen, is that the seller thinks his rental property is worth way more than it really is, and he couldn’t find an agent that would list it that high and pay for advertising.
Of course, there is always the possibility that rental properties listings by owner are priced under the market as well. But those deals are few and far between, plus they are snatched up quickly by buyers with cash. The other part of the reason buying from an owner can be good deal, is financing.
If the buyer wants the seller to hold the contract, he’ll make a down payment and then start making monthly payments directly to the seller. However, the seller is going to owe a real estate commission if there is an agent involved and that money will come out of the down payment. So, if the agent is eliminated, then the amount of down payment is lessened at the same time.
Title Insurance, and Escrow Are A Necessity
Even though two savvy people, one seller and one buyer, have agreed on a deal, it’s still very important to always get the title search and the escrow done professionally by a quality company. They can find hidden liens, other owners, tax problems, or even city assessments that an owner might not know about or isn’t telling.
Escrow it where the money is held by a third party until the clean title is delivered and protects both sides from fraud. It’s a small price to pay for not having to worry about losing hundreds of thousands of dollars on a transaction. Get to know more about philadelphia pa real estate and get the best price for your property.