Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.3 alpha 5/22/85; site cbosgd.UUCP Path: utzoo!watmath!clyde!cbosgd!mark From: mark@cbosgd.UUCP (Mark Horton) Newsgroups: net.invest,net.consumers Subject: Re: Re: "No Money Down" (Other People's Money) Scam Message-ID: <1761@cbosgd.UUCP> Date: Sun, 12-Jan-86 00:15:36 EST Article-I.D.: cbosgd.1761 Posted: Sun Jan 12 00:15:36 1986 Date-Received: Sun, 12-Jan-86 06:15:35 EST References: <164@bubba.UUCP> <757@hou2g.UUCP> <131@molihp.UUCP> Organization: AT&T Bell Laboratories, Columbus, Oh Lines: 53 Xref: watmath net.invest:1017 net.consumers:3837 In article <131@molihp.UUCP> martinl@HP-UX.UUCP (Martin M Lacey) writes: >And along those same lines, Doesn't everyone who own's a house and >sells it recieve the equivelent of cash anyway ? Yes, the seller is paid off in cash at closing. However, there are still at least two advantages to the seller if the buyer pays cash: (1) There is no 2 month delay for the buyer to get a loan approved. (2) There is no chance that the buyer will back out because s/he was unable to get a loan approved. As to why a seller would take $150K on a house worth $200K, if you've ever sold a house, you'll start to appreciate why they might be interested. Just getting any offer at all can be very difficult, especially for "by owner" sellers that don't use a broker, or in problem areas. (My in-laws had a house listed with Century 21 for over a year, and not only didn't get any offers, but didn't even get any showings! They lived in Youngstown, Ohio. They were asking $32K for a 30 year old house originally bought for $13.5K, and wound up selling it to a broker for $13K, as I recall, just to get it over with.) Real estate scam people describe a class of sellers called "don't wanters." These people are very anxious to sell quickly, and are having a hard time doing so. Perhaps they are paying some huge anount of interest each month until the house is sold, and that interest is eating them alive. Perhaps they've already bought another house and are making double payments. Perhaps they just got divorced and are anxious to sell the house, split the profits, and get it over with. Perhaps the house has been up for sale for 6 months or a year with no offers, and the sellers are getting desperate. Perhaps they can't buy their new house in their new location until the old one sells, and they are paying rent plus house payments in the meantime. Perhaps the 90 minute one-way commute to work in Steubenville each day is getting old. I believe the scam people say that if you go down the MLS listings and offer each one 80% of the asking price, some significant percentage of the sellers will accept. (I can't remember the percentage, but the figure 10% sticks in my mind.) If you go down a "by owner" list, the percentage may get higher. There is one big limit to this reasoning, however. It assumes the seller has at least $50K equity in the house. If they bought the house recently, chances are they are fighting just to get the real estate broker's commission paid from their equity, and they can't afford to go down in price much, if at all - otherwise they'll owe money to get out of the deal. So we're just talking about people who have lots of equity, generally who have owned the house for a long time. Mark