Over coffee with a friend she mentioned that her parents are planning to move out to the country to retire and will be selling their home in the city.  I have been investing in real estate for the past while and told her to have them call me when they were ready to sell.  We hadn’t talked price but she did admit that their original asking price had been about $30,000 lower than the bank had eventually appraised it for.  I told her that it would not be a problem and they could consider it sold.  The look on her face told me that she thought the price was now too high and I had lost my mind.  To an unsophisticated investor it looked like I was throwing away money but I knew better.

 Like so many others, her parents were unsure about how to sell their home. They didn’t want to hold it as a revenue property as they needed the sale proceeds to fund the new home they were building.  With the market as healthy as it is right now they were hesitant to involve a realtor and preferred to avoid the hefty commission that went along with that.  I say that tongue in cheek as I often use a realtor in my dealings but when you are unfamiliar with them it is easy to be skeptical.  To make it a little more interesting, they had a possession date of four months down the road while their new home was being finished so they didn’t want to list it too early as they would need somewhere to live.  On the flip side, if they waited too long and it didn’t sell right away they would be stuck paying two mortgages until it did.  They were stuck between ‘analysis paralysis’ and leaping before looking.

I assured her that everyone would win if we went ahead because we would each walk away with what we wanted most.  When the real estate market is going crazy like Edmonton, Alberta where we live, I come to learn that you can pay market value for a property and still do very well on it.  I was trying to make my friend understand that even buying their home at full price today would be a deal for me this time next year. On the other hand, if they sell to me now they get their sale proceeds right away which reduces their anxiety about finances.  This way they wouldn’t have to worry about finding somewhere else to live until their new home was finished as they could continue to live in their city home. With construction trades going wild there would be a definite possibility of their possession date getting moved, even a number of times.  This would work well for both of us as they would have no pressure to move until they were ready and I would have great tenants who would take care of my new revenue property.  Now my friend was starting to appreciate that her mom and dad would get the price they wanted and be able to stay as long as they wanted and I would get a good price on a great new property.

I understand her mother practically danced for joy when she told her that they could sell the home to me now and stay in it as long as they want to while their new home is being built.  We all get what we want whether they pay rent while they stay or I take their rent amount off of the selling price.

 They get to sell their home without any stress and have somewhere to live as long as they need to and I get a great property without the stress of looking for it.  It is the perfect scenario for everyone involved and an investor’s dream deal.

Rhonda Hoffman

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