Selling pre-settlement

[Connor]

How do you do it? Where do you find the buyer? Any experience and story?

[Bobsyouruncle]

You simply find a buyer. It is called contemporaneous settlement where you effectively buy and sell on the same day.

[Connor]

But how do you show the house to the buyer? Do you use the same agent you bought from?

[Bobsyouruncle]

Those are big questions to answer in a forum. Generally when I was doing this full time I had an agent to buy from and another to sell from. I always favoured private sales when I was buying so only had one side with an agent.
There are various ways to achieve the process.
I used a clause allowing me access to show prospective buyers and I would disclose that I was trading the property. Subsequently I never had issues with access etc.
The market has changed quite a bit so some sellers will be less keen on allowing you to do this, especially with all the nonsense in the media. Nevertheless I have done 4 trades this year and had no issues with any sellers. Tell them up front what you are doing and why they should let you and the worst they can do is say no.

[Nick G]

What Bobsyouruncle said. Basically you ask the vendor for access. If you just tell people what is happening it normally is OK.

Make sure you understand the tainting rules also.

[Connor]

Thanks both. TBH, it sounds quite hard in terms of finding buyers, I just don't know how people do it.

[Bobsyouruncle]

You can learn to be a trader which involves finding sellers and buyers. it's a skill you can acquire. Involves, amongst other things:

Building a list of investors to sell to.
Cultivating relationships with real estate agents.
Learning to always be asking people if they are looking to buy or sell a home.

[Nick G]

You have a sell strategy and work backwards from there. We work with traders quite frequently.

[Connor]

What do you mean by sell strategy? Can you give an example?

[Connor]

You can learn to be a trader which involves finding sellers and buyers. it's a skill you can acquire. Involves, amongst other things:

Building a list of investors to sell to.
Cultivating relationships with real estate agents.
Learning to always be asking people if they are looking to buy or sell a home.

I wish there was a book that teaches you how to these thing step by step. Like when you meet other investors, here's a list of questions you can use to make connection etc.

Cultivating relationship sounds simple but it's damn hard. This is where I look at people and just wonder how they do it? I ask questions but actually forming a lasting relationship is much more difficult.

[Orkibi]

But how do you show the house to the buyer? Do you use the same agent you bought from?

these days you better buy from one agent and sell with another. The agent you buy from is running the risk of been deemed to be under selling the property if you on sold it for profit prior to settlement.
but if you use different agent, preferably from different company you should be ok. Many people do it in south AKL.

trading this way could be/ is been challenged by the REAA, especially if you market the property but you don't actually own it. Ie take title.

unfortunately it's to risky in NZ if you can't settle the purchase, I almost completely stopped doing contemporaneous settlements. ( I will do it if I gone unco on deal but fined a better suitable, but I wouldn't advertise it and I could settle it if need be.) in most states in the USA is very common and called wholesalling.

one thing to remamber is ALLWAYS make sure the deposit you get from your buyer is double of what you pay.
ie. You pay 20k deposit when you go unco and get 40k from your end seller. This way you profit (or some of it) is given to you upfront.

I hope that helps.

[Bobsyouruncle]

It's actually called double closing in the USA Orkibi. You may mean wholesaling? Wholesaling is simply trading, nothing to do with contemporaneous settlement.

[Orkibi]

contemporaneous settlement.

that's how we call it in nz Bob. We don't often use the terms closing here.

another way contemporaneous settlement called is double settlement.

[Orkibi]

Wholesaling and Wholetailing can be a "ledjit" business in the USA. here in NZ it's Grey area boardering illegal now days. Assigning contract for fees as most wholesalers do, while marketing a property you don't actually "closed" on is boardering crime if you ask the REAA. You are "bringing about transaction of land"'without licence and some got big fines doing that.

[Bobsyouruncle]

We don't often use the terms closing here.

I know. You said:

in most states in the USA is very common and called whole selling.

.
I was just pointing out that it's not. It's called double closing or contemporaneous settlement.