REISkill - When Buying - Viewing Property

Viewing Property

After you have pre-qualified a seller over the phone, the next step is to meet the seller so you can view the property.

Meeting Private Sellers

There are several key points to remember when visiting a private seller at their property.

Make Sure Both Spouses Are There

First, when you meet the seller, you should be prepared to make them an offer right there on the spot. Therefore, if the property is owned by a husband and wife, you'll want to make sure both spouses are present when you view the property. This way, you can explain your offer to both of them at the same time and if they are interested, you can get both of them to sign an agreement right there on the spot. If both spouses are not there, you'll be relying on one spouse to explain it to the other when they get home which could ultimately cost you the deal. If the sellers do accept your offer later, you'll also have to meet with them a second time to get the agreement signed.

How To Dress & Act

Another thing to think about is how to dress and act when meeting sellers. When meeting a seller you'll want to dress according to the situation. In other words, you won't want to show up at someone's lower class home wearing a suit and tie. On the other hand, you don't want to show up in an upscale neighborhood wearing old blue jeans and a T-shirt, and driving an old pickup truck.

How you dress and act should be tailored to the class of seller you are meeting and their property. You don't want to look unprofessional, yet you don't want to intimidate the seller by being too professional.

Inspecting The Property

When inspecting the seller's property, there are numerous things you should be looking for and asking about.

As with all properties you look at, you're going to look for what investors call "deferred maintenance". These are repairs that should have been done in the past but for one reason or another they were not taken care off. Such deferred maintenance includes ... replacing the roof, repairing rotten wood, fixing broken windows, upgrading the kitchen or bath, replacing the carpet, repainting, replacing old light fixtures, maintaining the yard, and so on.

Something else to look for is whether or not the property is "functionally obsolete". In other words, does the property have an extremely bad floor plan such as a bedroom off of a kitchen, or having to walk through one bedroom to get to another bedroom or bathroom?

Don't forget to ask the seller ...

"If you could change one thing about your property, what would it be?"

This is an important question because it gives you a heads up on what the property's biggest problem may be.

Pointing Out Repair Problems

When you spot a problem with the property, try to point it out to the seller without offending them. Most of the time, the seller will already know what is wrong with their property. Your intent should be simply to let the seller know you are aware of the problems as well and looking for the property to be priced accordingly.

Viewing Listed Property

When viewing property that is listed by a real estate agent, you won't be having your agent drive you around to each property as if you were a home buyer. If the property is vacant, the listing agent should be willing to give you a key so you can let yourself in. If the property is occupied, the agent should assist you in making an appointment to have the seller let you in.

Viewing Bank Owned Property

If the property is owned by a bank, it will usually be assigned to a specific real estate agent who specializes in REO listings. Because these agents deal with numerous real estate investors on a regular basis, they usually put a key in a regular combination lockbox on the property. So investors can gain access to the property on their own, these combination lock boxes don't require a special Realtor ID key.

When looking at really run-down junkers, it is hard for many people to picture what a trashed-out property would truly look like after it is fixed up. This is good in a way, because it will scare off a lot of other buyers from the property. You just have to make sure you aren't one of those people who can't imagine what a property would look like after it has been rehabbed.

There will be occasions in which neither the bank, nor the real estate agent, have a key. Realize, most banks don't have a key when they get a property back through foreclosure. The real estate agent usually has to call a lock smith to have the door locks changed. So don't be scared when someone tells you to get in anyway you can. This is just part of the business of buying REGs.

Seeing Past The Needed Repairs

Many of the properties you look at will need a lot of repair work. The important thing for you as an investor is to be able to see past the repairs a property needs so you can visualize its potential.

If you can't see past such things as rotten wood and pealing paint, you're going to have a problem with this part of the business because you're not going to be able to recognize a deal when you see one.

To get a feel for what can be done with a junky old house, get with another investor at your local association who is currently doing a rehab. This way, you can see in person what a house looks like both before and after it gets rehabbed. In the end, you'll probably be amazed at how good a grungy house can look after doing some simple repair work.