Okay, you have read the manual, went through the basics of the sales pitch with your manager, been knocking some doors and now are running a route of properties on a daily basis. As a locator you are going out and trying to make contact with the homeowner. While you are out at the property you are evaluating the outside condition and the neighborhood. This is your investigatory stop. You take pictures of the outside of the home, some shots of the neighborhood and you are trying to determine whether the property deserves the time and effort to follow up on the home. This first visit whether you have contact or not is investigatory in nature.
What are honest eyes and how do you develop them in this business? For a locator to earn a commission we must use each visit as a way of showing the end purchaser (our managers) what the property and the area are like. During your visits to the property you can weed out some of the properties due to the neighborhood and the physical condition of the property. By weeding out the properties it will allow the locator time to spend on properties that are actually going to make you money. Remember, we are on a tight time schedule for the purchase of a home and if the locators fails to describe enough about the neighborhood and condition of the property the price that is offered to the homeowner will not be the best price and we may not then have the opportunity to purchase the property.
It is absolutely in the locators best interest and pocketbook to take detailed notes of the area and the condition of the property during each visit. In our experience the first visit to the property can flush out the following facts:
1) Assess the neighborhood.
Remember people are not only purchasing the house but also the neighborhood. If the neighborhood is run down it will not be a purchase. If the house is physically distressed then you are wasting your time going out there for a repeat visit. These are issues you and your manager can decide after the very first time you go out to the property. Over time you will become quite familiar with the area you are working and will know the details of each street. This will allow you to become more efficient. Here are some notes from locators about neighborhoods.
“Not home..busy road.. located near Route 28.”
“Busy and loud section of the blvd.”
Tells us that it may be a hard resale so we will have to price accordingly.
“Good area though (juniper and south street).”
“Almost at the corner of 18th and fitzwater – “
This note is from a locator that is quite familiar with his area and now knows the streets. This also means the manager knows this area well.
“near a ballpark (good location).”
Amenities that people may enjoy. Ballparks, parks, down the street from shopping, beach, pond, boat ramp, highway etc. all help us decide the neighborhoods value.
“Nice quiet side street. next to wet land. Good neighborhood. House in good shape. Hard to find. Old Skating Rink Rd ends at wet land.. extension picks up after wet land.”
Wetlands could cause a more expensive septic system but may also bring in more value. Quiet side street is an excellent resale point.
“Upscale neighborhood. Great house, great neighborhood, Contemporary style, hot tub and new swimming pool in back, all fenced in , slate in foyer, hardwood floors.”
This tells us that we are dealing with either a step up house or higher end house. Requires very precise marketing knowledge. Harder to resell. Need to have a bigger spread.
“Yard well kept although lawn was full of weeds. Pool not opened although it was full of water. Neighborhood is well kept. Home is in a cul-de-sac.”
This is a typical suburban house that we want to go back to many times.
“Property unkept. Lots of “stuff” in the back yard and on the side of the house. No curtains. Dog in the house. Daughter was pleasant. Neighborhood is nice. Quiet and homes in the immediate area are well kept. Traffic was light.”
Good note describes a great neighborhood for investing.
“Neighbor is in good shape. Several properities for sale. This property has a huge yard in the rear. Not well kept. Appears to be a cottage that was converted into a full time residence. Will most likely have septic issues. High water table. View of the lake is unobstructed.”
Again much information in this note. We know that there will be a septic issue with a high water table. Water view house always adds value. Cottage conversion means that any rehabilitation has to be light construction. Framing of cottages in this area was unreliable. Several properties for sale tells us we have to be under pricing this to sell before the others if we purchase the property.
“Area is so-so …Across from circuit city at bustleton and cottman.”
Here we know that the resale will be harder in a commercial area or adjacent to a commercial area will make the house less desirable. Must be priced accordingly on the buy and the sell.
“The neighborhood is an excellent area of Brockton and homes in that area did sell in the mid $400’s recently”
Absolutely a high end neighborhood for the town of Brockton. I would personally stay away from the high end of a blue collar district unless it is a steal.
2. Assess The Outside of the home
Here your goal is to educate your manager about the condition of the home from the outside. This will allow him to begin putting together a realistic rehab budget. The faster the rehab budget is put together the quicker you can present an offer. More offers will equal more deals.
As a locator you are attempting to describe what you see by taking pictures and helping the manager find out the shape of the home prior to purchasing the property. Remember we are taking a process that usually involves home inspections, mortgage contingencies, bank financing, etc. and trying to make the decision in a few days after contact with the homeowner. You help with that process by gathering the intelligence necessary to make an offer as well as getting the deal signed. Here are some recent notes from some of the locators and amn analysis of the note.
“The exterior of the home is well maintained. Interior was empty and in near move out condition. However, we did sit in the kitchen and from my perspective nothing short of a complete overhaul is required.”
From the notes it seems like a light fix-up which will allow us to purchase at the right price. New kitchens are easy to install and add dollar for dollar value.
“The exterior of the property is in good condition. Nicely landscaped. Main access is not Wellington Place; it is from Curve Street. Photo is of the front of the home facing Wellington PLace.”
Excellent note seems that this property would be a nice purchase.
“Storm windows no landscaping. Brick bottom/half-shingledtop1/2 grey black shutters. Storm windows.”
Storm windows = old windows probably single pane requiring all new windows possibly. More info about the house is needed to decide whether it is worth the follow-up.
“Ranch house, two car garage, turquoise awnings over windows, average house, average neighborhood, corner lot.”
Not enough description about the property to decide what to do with it? Nice color description but what about, the shape of the roof, windows etc.?
“Low average shape condo units tried to speak Portuguese was unsuccessful next to Country Garden.”
Reading this note I expect that the place at resale will sell at a discount due to its shape. May have considered physically distressed if we had more info.
“Small skiff in yard. Small ranch with garage and attached breezeway. Place a real mess. Needs roof, trim needs paint, no landscaping, Junk in back. Power was shut off on 6/6/06.”
This note makes it clear that this house will not be a purchase unless it is a steal. This is contractor rehabilitation not a financially distressed home. Probably would archive
“this is the nicest house on the street. Falmouth Street appears to be zoned both residential and commercial. other properties on the street appear to be investor owned multi famlies and a few single families similar to subject property.”
From the note we are in a transitional neighborhood. Need more description of the shape of the home to decide if this is one we should keep in route.
“House Empty. Roof near EOL, Cement work OK, Siding OK, Inside looed OK through Window.
House is in OK shape, has old aspestos siding and has been painted.”
Here we know enough that we will need to price out the roof, cement work etc.. Good note to review.
“6/9 House boarded up, rough shape on outside.”
Most likely archiving this one. Boarded up and rough shape usually means a contractor rehab.
“Nice Property needs driveway, and Garage door. Has for sale by owner sign.”
Good note helps with the rehab budgeting but could use a quick summary of the other sections of the home.
Conclusion: the locator is the sales and fact finder of the property. Each time the locator goes out to the property he/she will find out more about the neighborhood and the property in question. The more information that management has the easier it is to pull the trigger and purchase a property. Remember the homeowner wants to wait until the last minute to sell. It is hard for management to invest thousands of dollars without the right information. Let’s try to make it easy to purchase by refining the notes to a point where the property is ready for the purchase. This will give the locator more deals and money.