What to expect when buying a low end home in Las Vegas Episode #212
Hello! Welcome to Todd Miller TV. I wanted to a video about buying homes on the very low end and maybe explain some of the frustrations of some of you might be having out there and what to expect if you want to come to town to buy a $30,000 house. Okay, so we have 2 issues. One issue is the realtor side, and then one issue is the market side. So we’re gonna start with the market side. Okay. Houses that are very low in price range are in high demand and the reason they’re on high demand is because, as a percentage those homes have taken the biggest hit. You know some of these homes were you know worth maybe 200,000 they’re now at 40,000, they are fifth of what they were worth. So a lot of people see those and say “Hey these could really rebound if I buy a bunch of them; And those values could all come back and I could you know, quadruple my money in certain amount of time.” So, normally that is they’re, they’re rent-able. And so you can get a place for 40-50,000 maybe get $600 a month rent out of it. Get a good RY. You know it’s great. So you get all these benefits. The problem is everybody else realizes this too. So these things are super competitive. I mean anything under about $100,000 is gonna get a ton of offers. We got 53 offers on 1 property. It was listed for $93,000 and upselling for like 115 or so, way over but okay. So you’re in the most competitive section of our/you’re really in the low end. Now we’ll look on the realtor side. Okay. It takes just as much work for a real estate agent to do a/process a transaction and help a person a $50,000 house as a Million dollar house. It does. Now, just keep in mind, realtors tend to get paid based on the commission which is the percentage of selling price. So, let’s take a $50,000 and let’s look at the commission 2.5% on average, so that’s $1,250 for the agent; and what is gonna be involved for the agent to get that 1,250? Well what’s gonna be involved is the agent’s gonna have to probably either go with the investor or preview probably 20 or 30 houses, write offers on probably 10 of them, hope to get accepted one maybe, maybe not. I talked to one investor recently who said “Hey we only looked at 20-30 houses to get one.” And you know what? That’s a ton of work. So the realtor does all this work, maybe he doesn’t get a house at all. Maybe they go out and look at 20-30 houses and end up not getting anything, for what? to get $1,200? And then, remember this: the agent has typically transaction fees, they have to pay to their company, or they have commission splits to the company, so when all of the sudden done, the agent gets about $500-$600, and you know, it’s really not gonna be worth their time. There’s a lot of works the agents do that the consumer doesn’t see. You’re not aware that they’re doing stuff. So, all this process and everything is very/it’s cumbersome. So if you’re on the low end and you’re trying to find an agent, and you’re finding that your agents aren’t very reliable, or you’re having a hard time, then that’s normal for this situation. Okay? So, you’re probably not used to that. You probably said “Hey, you know I’ve never had this much problems with agents before but you know when they’re gonna make 10,000 you’re gonna get a lot more personal attention than a smaller amount.” So there’s a couple ways you can as a consumer, you can overcome that. Just agree to pay them something. You guys negotiated an amount and say “Hey, we’ll pay you this much money if you help us, we’ll give you whatever your transaction fee, we’ll pay that, we’ll give you a minimum commission, we’ll make sure you make $1,500, $2,000 whatever.” and just make it good for them. make them want to do the work. People have gotten so used to not having to pay the agent because the agents gets paid form the other agent, the listing agent that it’s now foriegn to people, they don’t wanna do it but you know, so you’re kinda stuck in this place. I also had somebody who said “hey we’re gonna buy a lot of these house so you’ll make it up on the volume.” and it’s like “Wait a minute.” So now you’re gonna be working 30 times as hard, each of that maybe $600 paycheck at the end of the day. And that doesn’t include taxes by the way. That’s just the check they get at the closing, right? After they pay the broker and the company and everything. So, just keep that in mind if you’re looking in the low end that you’re not just gonna find agents ready to jump all over. I actually have had people come in and say “Well, I wanna do some of the work myself, scout the houses out in line, so I want some of the commission, you credit that back.” I mean, “Seriuosly?” You know what so, just be aware of that. I wanted to share that with you because there’s mis-perception out there. You know, most full time agents were good, they have business, they have clients, they just don’t have to take any person that comes along. Typically the person that’ll take any person that comes along is a worth working with. So anyway, so I thought I would share that with you, that’s sort of my thought about the interactions on the low end when you’re buying a super low end property between a buyer, investor, and an agent and what to expect. So anyway, that is my update for today and hoe to see you on another video. Thanks!