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Real Estate is ‘Easy Money’

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Jonathan Osman

Jonathan Osman

By Jonathan Osman

Step 1: Find a buyer. In my market, the unemployment rate is 11.1 percent and the under-employment rate is around 16-20 percent. While a few years ago, one could conceivably purchase a house without a job; today, employment is essential.

Step 2: Find the buyer a loan. As long as the buyer has a job, modest credit scores, and reasonable debt load, this can be accomplished with relative ease.  However, only 75 percent of buyers ever make it past Step 2.

Step 3: Find the house. SO VERY EASY especially with only 24,000 homes in the market to choose from; 5 percent being REO, and the buyer wants “a deal.”  The buyer then proceeds to view all 24,000 homes, making offers at fifty cents on the dollar, with only a $10 earnest money check.

Step 4: Under contract: Oh yeah baby. I can count the dollars now.  Just sit back and wait for the closing day.  If that were only so true…

 

Once the home is under contract, now there stands a nearly insurmountable set of obstacles that will kill any transaction such as (All of the following actually happened at some point in the last 3 years):

Inspection:

–          Did the inspection reveal needed repairs? Yes. Will the seller repair? No! Deal dead.

–          Does the inspector freak the buyer out over unnecessary repairs? Yes! Deal dead.

–          Does the house have mold? Yes every house has mold? Buyer freaked? Yes! Muerto.

–          Did the house burn down before closing? Yes! Does the buyer still want it? No! Done.

Financing:

–          Did the lender actually approve the buyer? No! Deal dead.

–          Is the buyer still employed? No! Deal dead.

–          Does the buyer live too far away from work (FHA requirement)? Yes! Hit the showers.

–          Did the home appraise? No! Seller willing to pay the difference? No! Next stop: the local bar.

–          Did the buyer go to Rooms-To-Go, purchase furniture on a No Payments until 2050 promotion? Yes! Catastrophic.

–          Does the HOA not have enough insurance to meet lender guidelines? No! Will they buy more? No! Hope no one has a slip and fall at the pool HOA geniuses.

–          Does the underwriter, who have never seen the house or even live in the same state, believe that the home is worth less than the appraised value? Yes! WHY ME????

–          Did the buyer decide to get a divorce mid-contract? Yes! Can the buyer afford the home alone? No! Welcome to rentsville, sweetheart.

–          Is the condo Fannie Mae or FHA approved? No! Death may come sooner.

Seller issues:

–          Is the homeowner selling the home for less than what’s owed? Yes! Can they pay the difference? No! You’ve just been put on ice, bucko.

–          Did the short sale get approved by the lender? No! Dead.

–          Is the seller really the seller and not a spouse by a similar name as the seller on record? No! Yikes.

–          Did the seller declare bankruptcy mid-contract? Yes! Today’s not your day.

–          Did the HOA foreclose on the home a week before closing? Yes! I’m applying for a greeter position at Walmart.

So if all of that and much more doesn’t get in the way, a closing occurs and we get to collect that easy money…which usually averages out to 32 cents an hour.  Real Estate is easy money.

Jonathan Osman is a broker and team leader of the Charlotte House Hunter Group with Keller Williams Realty in Charlotte, N.C. Connect with Jonathan via Facebook, Linkedin, Twitter or his Web site CharlotteHouseHunter.com.

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Comments 8

  1. Pingback: Tweets that mention Real Estate is ‘Easy Money’ : YPN Lounge -- Topsy.com

  2. hahaha, GREAT article here! sad but true!

    I actually have a friend who hired an agent to do his short sale, but he has already decided not to accept any offers. he can’t really decide, but thinks he wants to keep the dang house! seems like we work for FREE most of the time. 🙁

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