Ep. 108 – Seller Financing / Matthew’s Mom

Matthew Maschler:
Welcome to the Real Estate Finder podcast. I’m Matthew Maschler, real estate broker with the signature real estate companies in the great state of Florida, and with me the co-host of the Real Estate Founder podcast,
Staci Garcia:
Staci
Matthew Maschler:
Garcia. And we have a full studio today, Stacey? Yep. Who else is here? We have my real estate partner of 45 years, Jill Glanzer.
Jill Glanzer:
Hi everybody.
Matthew Maschler:
What’s funny about that joke is I’m going to be saying 45 years for the next 10 years
Jill Glanzer:
He keeps raising it. Do I
Matthew Maschler:
Raise it? 37?
Staci Garcia:
I think you were 37 years.
Matthew Maschler:
No, but I’m saying I don’t think it was
Jill Glanzer:
Like 18 years last time.
Matthew Maschler:
18 years is the real number.
Staci Garcia:
It’s actually
Matthew Maschler:
14.
Jill Glanzer:
It’s 13. 13, yeah. Lucky number 13.
Matthew Maschler:
Yeah. So 45 years, but it probably won’t go higher than that dog years. Yes,
Staci Garcia:
It’s 45. Hey,
Matthew Maschler:
And then also we have President Smith. Hi Preston. Hey. Hey, how are you? I’m good. How are you doing? I am loving this beautiful weather in South Florida. Alright. All right. So one of the things that we did a little bit late on this, usually in February we do our year end party because December has way too many functions and festivities and then also to get the year end numbers for a broker of the year, et cetera. I like to see all the closings that happened in December and figure out everybody’s numbers. So usually in February we’ll do our year end party, which it’s weird because if I’m giving out awards from 2023 and it’s February of 24, they seem out of date as soon as you get them. So yeah, we had our broker realtor of the year, runner up award and several other awards. It was a really nice night. We did it at Preso on military Trail. I had bought a happy hour at the Red Meat Livers Club auction and our friends at Preso set up a very nice happy hour for it. Stacey wasn’t there, so you missed it. So I’ve been carrying your award around. Oh, that’s funny. In my purse.
Staci Garcia:
In his purse. I love his purse. A band Bagg.
Matthew Maschler:
The signature Real Estate Finder All Star Award. Oh, thank you. Do they all say All Star Press? No. So this one’s the Allstar Award and that says Stacey Garcia, we congratulate you for having the second highest dollar volume of sales and the third highest number of sales for 2023. Thank you. So you are,
Staci Garcia:
And I only worked for four
Matthew Maschler:
Months. You,
Staci Garcia:
That’s pretty impressive. Imagine if you worked the whole year you’d have, you’d be more than number one.
Matthew Maschler:
Humble brag. So yeah, you are a signature real estate all star. Thank you. Congratulations. That’s awesome. Yeah, you had to attend the event to receive an award. Even the number one award, the if they weren’t there, if people weren’t there, they didn’t get their award, the picture got recycled and the frame will be reused next
Staci Garcia:
Year. Does that mean I move up to two and won?
Matthew Maschler:
But you were an exception. I kept your award. Thank you. Kept it from the recycle bin. Okay. That was kind of you. Yep. I’m a very kind person. You are. Alright, so one of the things we like to do on the podcast is answer questions and a question came up the other day, Stacy, do you want to present the question? I said, oh, I’ll answer it on the podcast.
Staci Garcia:
Yes. Here’s my question. So during an open house that I had over the weekend, a family came in and they really liked the house, but they weren’t really expecting to actually a house that was kind of like a drive-by check out an open house and they weren’t put their house up for sale. It’s not ready, all of that. But they fell in love with the house that I had an open house for and they brought their kids back and they are real serious. They asked me, is there any way for you to sell our house and we’ll put in an offer on this house contingent on selling our house, but you’ll be the listing agent for our house. That’s the first question.
Matthew Maschler:
All right, so that’s amazing. You did an open house and you got a buyer. They were a looky-loo, but they liked the house so much that not only might they make an offer on the house, you got a great lead for a listing. All that’s awesome. That’s a great reason to do an open house. There are a lot of people in the industry that don’t like to do open houses. I think open houses are a waste of time or whatnot. And especially when a house is vacant, when the house is occupied, I have a very have different theory. I don’t want to bother the sellers and make them leave for nobody in particular coming. But especially if you have a vacant house, I mean, agents have to advertise. If you don’t have a listing, any of my agents that don’t have a listing pick any of my listings, I’ll go on Facebook and post my new listing. Why aren’t my agents saying? And they could say, it’s their listing. We just listed this great house, so I don’t understand why they don’t do it. And if you have an open house, why aren’t you doing it? It gives you something to advertise. You could put it on your social media, et cetera, and you’re going to the house anyway. So you have an open house and someone comes in. That’s great. We spend a lot of money trying to drive traffic to our houses. Why do people resist having the open house?
It’s like the Billy Joel song. Some people stay far away from the door if there’s a chance of it opening up. We got to keep doors open and because you just never know who’s going to walk through.
Staci Garcia:
That’s funny too, because it’s such a great weekend. Over the weekend, the weather was amazing that I propped the front door open. Originally I put a note on the front door that said, please come in. And then I just decided, you know what, I’m just going to open the doors. And I opened the doors wide open and the whole house was breezy and nice. And so anyone driving by would see the doors were wide open and there was open house. They could just come in.
Matthew Maschler:
Okay, so not specific to this deal. The question that came up was, would the seller take an offer that had a home sale contingency? Right. And I have a lot of thoughts about it. The home sell contingency. Certainly in a bad market when sellers need offers, they’re more likely to take it in a go-go market sellers are less likely to take it because maybe there’s another better offer and certainly all the exact same terms without a home sale contingency is a better offer. Jill, what do you think? How do you feel about a home sale contingency?
Staci Garcia:
I think it depends on the seller. If they have time and they’ve maybe had their house listed for little bit, a little while and nothing has come through and this is a pretty good offer, but it happens to be contingent on the sale of someone else’s house, then I think you can go for it. As long as the house is listed already, it’s being marketed. So I would want information before I advised my seller to accept that,
That’s when I asked Matt, I said, here’s a couple, and they’re really interested. I don’t even have an offer yet, but I would represent them. So I’d be writing the offer and I would be also representing them on selling their house. And I haven’t even seen it yet. So it’s a little premature, but also the incentive is there for me to deliver it in a nice way. I know this would’ve never happened during Covid because cash offers were everywhere.
Matthew Maschler:
But without talking about this specific, I want to answer the question. I want to go on record, answer the question as a seller, not as a seller’s agent, as a seller, how I respond to the home sale contingency. And before I do a Preston, do you have any comments as far as that? I’m going to think of a seller as what’s my motivation? How much time do I have to sell the place and what risk am I willing to take when I’m the seller? Meaning I’m selling my own property, something I own either as an investment property or a vacation property, or maybe my primary residence. And so I’m selling that and I receive an offer, and the offer contains a home sale contingency, meaning that the buyer has the time and really the opportunity to cancel. If the house that they are selling in order to buy my house doesn’t close for whatever reason, they have the opportunity to cancel mine, would I? I consider a home sale contingency, and this is what my experience has been. I would consider the home sale contingency if the property’s under contract,
Staci Garcia:
Which property?
Matthew Maschler:
The property that the buyer is selling. If I’m selling a property, I get an offer. It’s a good offer. But the buyer has a home sell contingency, meaning that they have to sell a different piece of property where they’re getting the money from to buy mine. So would I consider this offer with a home sale contingency? And I would, if the property that they’re selling is under contract, I’d want to see the listing. I’d want to see the contract. I’d want to see are there real deposits. I’d want a confirmation from the escrow agent that there’s money there, that it’s under contract. I’d want to know, does the buyer have a lot of contingencies, right? Is it past inspections? So if the property that they’re selling is under contract and past inspections and there’s a good amount of money on deposit, and I’m confident that their buyer is confident that you could be, you’re never confident that a buyer is going to close.
But this seller, my buyer has done everything they need to do. They have their property, they’re waiting to close, they’re going to close it in 45 days, and they’re trying to find the replacement property and they want to line it up so that they would do that closing and then I would do my closing. But if their buyer screws them, they have no money for me and they don’t want to be facing me in a breach of contract case or me trying to go after their escrow. So I recognize that people need to do these things. People need to buy and sell in order and line up these closings in order to move on. It could be very complicated. Sometimes these transactions have a huge tail. Their buyer might be selling something and be subject to their, I don’t get that far involved to see if their buyer is selling something. But especially in a seller’s market and it’s fast paced, I recognize that people have this need and people don’t have money sitting around. Well, that’s why there’s
Staci Garcia:
Knock right? In those programs that
Matthew Maschler:
Buy, there are programs, there’s bridge financing and there’s things that you can do in these emergencies. But I always try to be reasonable as a landlord, I try to be reasonable as a seller. I try to be as a buyer, I always try to be reasonable. And I think it’s very reasonable to accept a contract, to accept an offer with a home sale contingency. Can I ask a question? One? I’m just going to get all the words out. So I get that offer. There’s a home sale contingency. The property’s under contract, it looks good, their buyer vetted. I’m not going to overthink it past that, right? I’m saying good. I’m willing to take this chance. I’m willing to take my house off the market for X number of days. I’m willing to give this person the opportunity and look, maybe they’re going to buy my house over my competitor’s house.
Maybe they might like that one a little bit more. But that seller wouldn’t accept this home sell contingency. So I’m willing to partner with my buyer on that risk and take my house off the market and waste 30 days, et cetera. But that’s my approach. First I’ll say, and I’ll just ask, what is the status? And really if you are that buyer, submit with your offer, submit the contract and submit that their buyer’s information. So I have everything I need to make that thing. I look at that and what I’m saying is in that offer, I’m not concerned. I look at that. That’s a good offer. It’s not a good factor. But I say, okay, this is a real offer. This is a good offer. This is something to consider as an agent, I would explain that to my seller. I advised them that while nothing’s certain, except for death and taxes, we can proceed here.
So now you have to peel that back a little bit. What if the property is not under contract? Right? Well, is it listed? No, no. I’m answering the question. Sorry, Stacey’s a very, very specific question. But one of the reasons I do the podcast is I’m trying to educate my listeners. I’m trying to educate my agents how to approach this, how to approach the home cell contingency. Your specific questions inspire me to do these episodes. So my agent’s out there, my sellers out there. This is how we should look at home sell contingency. When the buyer comes in with a home sell contingency, meaning that they have some time to sell their home and the opportunity to, the most important thing is an opportunity to cancel and not lose their deposit and not be at risk if the house that they’re selling doesn’t sell. So if they’re under contract, the contract doesn’t have contingencies.
There’s a good amount of money in as group. I’m saying, okay, good. We could proceed here. And then obviously we have to look at all situations first. If they present me all this information, I don’t have to ask questions. If they just throw a home cell contingency, I’m like, Hey, this is the property listed. Yes, the property’s listed. Is the property under contract? Yes. The property’s under contract. I got to pull teeth. Right. Okay, so is the property listed? So if it’s listed and it’s not under contract, then I got to look at the listing. Is it a good listing? Who’s the agent? Is it a discount agent? Is it a for sale by owner situation? Are they just make me move price on Zillow? Is it really listed? Oh no, it’s professionally listed. It’s with a good agent. It’s very nice picture. It’s very, very good description. Hasn’t been sitting on the market for eight months. Right? I look at in a situation where it’s listed but not under contract, I do want to look at the days on market.
I don’t put too much faith in days on market. I don’t say, oh, this house has been 90 days. The seller must be desperate. I don’t try to read the tea leaves on it, but if I’m going to take my house off the market waiting for your buyer and you haven’t found a buyer in nine months, there’s some concern there. But you just got the house listed. It’s with a good agent, there’s good pictures. Then I look at the price. Does the price seem fair? It’s not the same situation as I discussed before that it’s under contract. I actually skipped, is it under contract? But there’s still contingencies, is still inspections and stuff like that. Not too much risk. If it gets canceled during inspections, I could just put my house back on the market. So anyway, that’s why we skipped to, it’s listed but not under contract.
If the listing looks good, pictures, description agent, everything looks good, price looks good, this person’s going to sell, then there’s a question to me of do I have any other offers or leads or something like that. It’s a bigger risk to me right now. They first have to find a buyer. That buyer first has to send in their financials and be pre-approved. Then first do their inspections. They can find a buyer and lose 10, 15 days really quickly. Do I want to subject myself to that? Yes. Sometimes I am willing to take a little bit of a risk. Am I advising my seller to do it? Maybe if the price is right. So it’s a little bit more iffy in that situation. If it’s a bad listing, if it looks overpriced, if it’s stale, I’m just not going to accept the offer. That makes sense with the home sale contingency. So that’s how I look at the hometown contingency. Alright, now we’re going to go to Stacey’s specific question. All right, Stacey, do you want me to say it? Do you want to say it?
Staci Garcia:
So the buyer says, can you sell our house? Well,
Matthew Maschler:
Let’s rewind a little bit. Just say what happened. You listed a property.
Staci Garcia:
I listed a property and I was having an open house and the people that came in were not really expecting to the house so much.
Matthew Maschler:
They see a sign
Staci Garcia:
And they said, wow, we didn’t even put our house up for sale yet. This is our house. We didn’t think we would find our house so quickly. Boom, this is our house. We don’t want anyone to buy it. We want to buy it. We didn’t put it up for sale our house, and now we don’t want to lose this house that they came in and they said, can you sell our house? And I said, well, yeah,
Matthew Maschler:
Yes, that’s what we do. I
Staci Garcia:
Situation’s like dream job. So then I asked them about their house and I’ve been talking to them and that was my question is how do I present this so that it’s a good offer?
Matthew Maschler:
So if you wrote up that offer, it would be a terrible offer, right? Hey, I didn’t even ask what they’re offering, but hey, we’d like to buy the house, but we have to sell our house first. Well, is it under contract? No. Is it listed? No. Is it ready to list? No. Frankly, we weren’t even thinking of listing. We have downsize, rent the storage unit to do this. Then we’re going to have to paint. We’re going to have to carpet. How long is it going to take you to get the house? Oh, it’s going to take us 60 days to get the house ready to sell and then we have to list it, take pictures. I’m like, well, if it’s not going to get listed for two months, then we got a problem. So that’s really my answer.
But here is, now here’s where it gets a little funky. They don’t want, they’re not real sellers. They’re not going to sell their house except to buy this house. And if they’re going to sell their house and they’re going to use Stacy, then we get a listing and we make a little bit of money. Can we do a deal where Matt breaks his custom and rule accepts the home sale contingency when the house isn’t ready in favor of getting a new listing? So then I’m like, oh, we like the action. This actually could work in everyone’s favor. So that’s what I’d say. I’d say draft up the offer with the home sale contingency and at the same time get them ready to get the house listed and price it and let’s move on and get a deal.
Staci Garcia:
So I was thinking of another, because I saw Ben’s email this morning that says, please use Signature Choice Mortgage Mortgage.
Matthew Maschler:
Shout out to Emmanuel S
Staci Garcia:
Signature Choice Mortgage. And I’m thinking about it because he was saying that he lost some deals over the weekend where people thought they were approved but they didn’t get their financing. And if that wouldn’t have happened, ideally if they used Signature. So then I thought, would you ask them to have financing approved by signature?
Matthew Maschler:
Okay, so forgetting the home sale contingency for a second, when you make an offer, you should have some kind of proof of funds. And one of them is a pre-approval. And everybody says, A lot of people like to say Pre-approval is not worth the paper it’s written on. And I don’t always agree with that. The reason I don’t agree with that is it shows some level of effort. They did something, they spoke from someone and used words and started the ball rolling. So I do like to see a pre-approval. So yeah, if putting my seller’s hat on, I got the pre-approval. And you’re putting your buyer’s agents on, they have a pre-approval. Yes. And it’s obviously not with Signature Mortgage. No. From before you met them.
Staci Garcia:
It’s not from before. I met them from that day literally,
Matthew Maschler:
But they called their guy. So yes, I don’t want to contradict Ben or anything at Signature, but sometimes I wonder if it’s the seller’s place to, that’s what I was thinking, to require a buyer to use a particular mortgage company. I know where Ben’s coming from. We see a lot of shady shit and a lot of incompetent people and our vendors are very, very vetted. And we’ve seen them close deals that other people couldn’t close. And we’ve seen them close deals on time when other people would’ve been late. So it is definitely, but it’s not to say San the choice is the only decent mortgage operator. It’s just that there are tons of bad ones. So as part of this, we could always say, Hey, we’d like you to meet with our mortgage broker. No obligation to use them, but it’s always good to get two or three quotes. I don’t always agree with that statement about always getting two or three quotes, but if it works to my advantage, I’ll use it. So yeah, you could always say, Hey, we’d like you to, because we are going to be taking the house off the market for a good amount of time. We would like you to meet with our in-house lender just to make sure that you’re qualified for the loans and that I’m not going to be wasting my time. So that’s how you’re going to have to phrase it on this one.
So yeah, so let’s write up an offer. I don’t think you have to put in the offer that they’re going to use signature, but you should tell them bullet points on the cover letter. Yeah, we’d like you to get pre-approved your mortgage. No obligation to use them. It’s just always good to see what else is out there.
Staci Garcia:
Should I get more complicated now? Sure. Okay. So what if they said they want to get out of their house? They did get the house deep clean. They brought in the handyman, they do the window washer today. All these things that gave them all these vendors. And they’re boom, boom, boom. They’re serious. Talk to me all every day. Now we’re best friends and they want to get out of their house. So they were asking me, could we rent the house to get out of our house? It would be easier to sell if we didn’t there with our dogs and our kids. And originally when I said, how much do you want to put down, they were putting down 20% I think for a
Matthew Maschler:
Second, putting down 20%, borrowing 80%, which is normal.
Staci Garcia:
And then after more discussion, they said, well, we only have $10,000. The
Matthew Maschler:
20% was, see, when we talk about what they’re putting down, there’s two different conversations. One is for the contract, how much are they putting down under the contract to be held in escrow? But the other is how much are they putting down on their loan? You had thought they had 20% to put down on the house. I did. Yes I did. They were going to put 20% down on their loan using the proceeds from the home. Exactly. So we are stuck a little bit right now. They want to move into the house so that they have somewhere to live while they’re selling their house, but they don’t have enough money for rent or enough money to put down as a deposit. So how could I possibly let them move in without
Staci Garcia:
Any money? I don’t know. That’s where I’m like,
Matthew Maschler:
That’s where we’re stuck.
Staci Garcia:
We’re stuck. So I wanted to figure out, I guess, is this a really extreme scenario?
Matthew Maschler:
It’s a little bit,
Staci Garcia:
I end up with these, and I think they may be normal.
Matthew Maschler:
Reason you end up with abnormal situations is because you’re tenacious and don’t give up. And so many people will stop and run away at the first sign of pain
Staci Garcia:
Right away,
Matthew Maschler:
And they won’t have me to explore and to get to the next level. So yeah, it’ll happen to you because you’re out in the world doing shit. It doesn’t happen to other people because I’m not saying that there’s tons of realtors out there that have very conservative, normal, I don’t want to say normal, but straight laced type of deals. And they’re probably just like the inexperienced agent. They’re probably just not delving deep into these situations. I
Staci Garcia:
Like to not say no right away. Of course. And I don’t like when people say no to me right away. I like to explore. Well, let me hear this out mean,
Matthew Maschler:
And that’s why we get along. We’re deal makers, right? Yeah.
Staci Garcia:
So I put myself in their positions and say, oh my gosh, they really did find the house that they want to live in forever.
Matthew Maschler:
I mean, my biggest concern with renting it to them is now they’re going to live in the house. If they don’t like it, they’re not going to buy it.
Staci Garcia:
And I didn’t think of that concern. My concern was, they’re going to live in the house. We have staged it.
Matthew Maschler:
Oh take
Staci Garcia:
It looks beautiful right now. What if something goes wrong and read
Matthew Maschler:
All this? I’m always concerned when I stage a property that when the staging comes out and they come for the walkthrough, they’re like, Ooh,
Staci Garcia:
Right. That’s happened to me before. And it’s,
Matthew Maschler:
It does not look as good without
Staci Garcia:
That staging. And when your eye goes to the baseboards and the all different things that they didn’t see before, it staging does a miraculous filter on top of everything. So yeah, my concern was I don’t want to disassemble the whole situation right now. It’s perfect. But also then I was like, how can I make this work?
Matthew Maschler:
Yeah. Well, I don’t know if they’re listening, but between you and I, do we have anyone else interested? Any other offers on the table? No. So as long as there’s no other offers on the table, that’s what I said to
Staci Garcia:
Them,
Matthew Maschler:
Then we can continue our path up.
Staci Garcia:
I said to them, they every day are texting me. Has anyone put in an offer? They were there.
Matthew Maschler:
Alright, so let’s start papering it up. Let’s write up the offer with their home cell contingency with that schedule that I gave you with X number of days to list the property, X number of days to get a buyer, an X number of days to close. That way I have some kind of out, and I have a timeline we will have to discuss offline if I don’t see how we can let them move in with no money.
Staci Garcia:
Well, they had $10,000, but it’s really not than first last security. You know what I mean?
Matthew Maschler:
They can move in for $10,000, but that’s a fee. That’s not a deposit or against the
Staci Garcia:
Purchase price. That’s why I was like, how do I write this out? And it’s, I’ve been thinking about, oh so much that I overthought it now. It’s like burnt
Matthew Maschler:
Out paralysis. Yeah. Let’s start with, it’ll be that they can move into the house on that schedule that I gave you for $10,000 of rent, no security deposit. And that’s not counted towards their purchase price. Got it. You know what? Let’s count 5,000 of it towards their purchase price. Okay. Right? Yeah. And I think that would See, I want to give them the ability to move. If I put up walls that are too big, then they can’t move. If I put up walls too small, then they can take advantage. Right?
Staci Garcia:
It’s a delicate situation.
Matthew Maschler:
And then also, I told Stacy at the very beginning, and it’s something that has to go into the listing. I’ll have to double check if it’s in the listing. It’s in the listing that the seller is a licensed real estate broker. Yeah. Alright. Yep.
All right. So we got that. That is the home sale contingency. I hope you enjoyed this episode of the Real Estate Finder podcast, and thank you to Jill and Preston. Thank you, Stacy, and good luck with the listening. Thank you. All right. The main character was a podcaster, and she was taking calls from listeners as if it was like a radio show. Do you remember the Frazier sitcom? I’m listening, but it’s a podcast so people aren’t calling live. It’s not a live podcast. But what they did was they said they had voicemails. So instead of taking a live phone call, they pressed a button. It was a voicemail. So in this fictional world, they had set up that someone can leave a voicemail and then it would be answered on the air. So if you want to call and leave a voicemail to be answered on the Real Estate Finder podcast, that’s 5 6 1 2 0 8 4. Or submit your questions@mattrealestatefinder.com. And if you would like to, we could always schedule for you to call in to the show and ask your questions, or we can schedule interviews on the show, on the podcast. Yeah. So thank you for joining us on the Real Estate Finder podcast. Check us out@realestatefinder.com and hopefully in April when we launch our new social media campaign, we will have a lot of new content.
Speaker 4:
The future looks bright and the storms pass by the sky’s dog. Blue. When it’s almost that time, light shows cameras flash when I pass living in the moment, forget about the, they saved the best for last. Matthew Mania. We about to make a splash. Life is a marathon full of sharp turns, got to keep pace while the hands on the clock turns high stakes. Five star real estate. I run a show. You can tell the boss, center place electricity energy. If I brace, I’m always on time. Even if I’m making, I make dreams come true. Living my life. Hope the same for you. Real.
Speaker 5:
It’s what time you.
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It’s mania. The time it says, you know what time, whose time, what time? It’s mania. The time says, yeah. Got him shook, scared. Can’t look. We’re not afraid of the big bad wolf.