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10 Questions To Ask Sellers Who Approach You Out Of The Blue
1) Is the property occupied? And by who?
You should not assume that the property is owner-occupied or rented out to tenants. The answer you get plays a part in helping to schedule your own deadlines and remodeling timeline to put it on the market as fast as possible.
2) Price for the remaining equity in the property?
You can expect a seller to have an emotional attachment to the equity on his property. This was build up with their own sweat and money. Instead of making an offer straight up, first ask what the seller wants. If he initiates to contact you, he must have a price in mind.
3) Is there a mortgage on it? If yes, what is outstanding?
You are either going to take over the mortgage or replace it with one of your own. This is why you need to know what you are getting into. Banks are not the most flexible parties to deal with. If the outstanding is low, you can even consider paying it off once and for all.
4) Contact information?
Although this sounds basic, a lot of people forget to obtain contact information or leaves it to the seller to them again. Sellers often don’t call back due to being disorganized or running into a more receptive buyer. You want to keep in touch in case it turns out to be a great deal after your diligence checks.
5) Age of the property? And remaining lease (if any)?
This helps you get get an idea of the condition of the property. If there is a lease on it, you will alo be able to tell how much time you have left to produce an income from the property.
6) What is the address?
With an address alone, you are able to grab a host of information concerning it if you know where to go and who are talk to. You can also find out zoning details to uncover opportunities.
7) Any liens on the property other than the mortgage?
The ultimate blindside is to buy a property and only realizing later that there are many other parties who have a legitimate claim on it. You surely need to know these details before going further. Do your research even when a seller provides you these information.
8) Is there a 2nd or 3rd mortgage on the property? How much?
Things can get much more complicated when there is more than just 1 mortgage on the property. If that happens to be so, you have to weight it up to see whether this deal is worth the effort or not.
9) What is the condition? Any pending major maintenance?
The best scenario is that the seller is frank and upfront on existing major problems that require significant costs to rectify. This helps your budgeting and eveluation of the investment.
10) Who are the legal owners?
The owner could be calling you. But the actual legal owner could include other parties or even be the seller’s company which can complicate the transaction. Creditors could have a say on what happens.