How to Buy a House Without an Agent (CFFL 0082)
How to Buy a House Without an Agent
Jack Butala: How to Buy a House Without an Agent. Every Single month we give away a property for free. It’s super simple to qualify. Two simple steps. Leave us your feedback for this podcast on iTunes and number two, get the free ebook at landacademy.com, you don’t even have to read it. Thanks for listening.
Jack Butala: Jack Butala for Land Academy. Welcome to our Cash Flow From Land show. In this episode, Jill and I talk about why you don’t need and really shouldn’t use a real estate agent to buy or sell your primary residence, or your house. Jill, I love this topic. I’m really glad we’re actually talking about it on the air, but before we do, let’s take a question like we always do from a caller.
Jill DeWit: Okay. Frank, from Texas, called in and left us this question. “A lot of my buyers are concerned about available water on the land I’m selling. What do I tell them if I don’t know the answers?”
Jack Butala: Water is a big topic. You mind if I just jump right in?
Jill DeWit: Yeah, go right ahead.
Jack Butala: Water is a big topic for everybody, especially out West here, but I think everywhere water’s a big topic. Now more than ever, here’s the good news. There’s a tremendous number of alternative ways to capture water or reclaim water or even distill it. You can distill saltwater at a pretty good yield, actually, if you just spend a few minutes on the Internet and figure out what’s involved in the whole thing. There’s rainwater reclamation.
I think what this person actually is saying, what Frank is asking is, how deep is the water table and can I drill a well and how much does it cost? I think that’s what people, when they ask this question about water, is how deep’s the water table. If you drill far enough just about anywhere, you’re going to get water. A lot of times, in certain places especially, with the type of soil and things, the deeper it gets, it becomes cost prohibitive.
Jill DeWit: I agree. A well is not cheap.
Jack Butala: Right.
Jill DeWit: You know what was interesting, one of the ones that I love, my favorite, is the people that just truck it in, people that have their own resources there. They’ve invested, not a lot of money, not even $1000, in units to store water.
Jack Butala: That’s right.
Jill DeWit: There, maybe it’s their weekend getaway or something. They’re not living on it full-time and they truck it in themselves and just fill up their thing. Other people have it delivered. You can have it delivered once a month, have enough for…
Jack Butala: The whole world does this.
Jill DeWit: Right.
Jack Butala: We’re the only ones who just turn the water on in the sink and then run it for whatever and it costs 13 cents.
Jill DeWit: Isn’t that funny? We make a big deal about it when it really doesn’t have to be a big deal.
Jack Butala: Jill and I go down to Mexico all the time and they have water systems that involve storage tanks on their roofs, everywhere.
Jill DeWit: Everywhere. Every single home.
Jack Butala: Right.
Jill DeWit: Every home has their own thing on the roof.
Jack Butala: It’s a normal course of everything.
Jill DeWit: Yeah, it’s not a big deal.
Jack Butala: They don’t have a reliable source of water like we do. When I think about that sometimes, when I really start to think about, especially when we go away somewhere and it’s like that, you know, we’re nuts in this country. We just take it for granted that water comes out of that tap.
Jill DeWit: Right. Where’s the faucet? You know, just hold on everybody, that’s…
Jack Butala: Have you ever turned on a tap and had nothing come out, ever? I never have.
Jill DeWit: No, you’re right, and in other countries, that’s a common thing. That’s very true. I remember one time I was in Spain, not Spain, side note.
Jack Butala: Let’s hear travel stories from Jill. We should have a sound effect with those.
Jill DeWit: Sorry. Speaking of water…
Jack Butala: Like a jet airliner or something.
Jill DeWit: Speaking of water, I was traveling with my girlfriend and we went to Ios in Greece. We were in our 20s and we picked this island because we were told that … We did some research, it was the party island in Greece, so we said, “We’re going to Ios.” We did. Took us three days to get there, spent three days and then three days back, but I’ll never forget, that was one of my first experiences with the water thing. It was no big deal. You just dealt with it. Water was available, hot water, between 5 and 6 p.m. at night, every night, and that was it. You had to plan if you wanted to take a shower or anything like that, it was between 5 and 6:00 every night. That’s all you get, on the whole island. Deal with it. Nobody complained.
Jack Butala: No, of course not.
Jill DeWit: I just was tying that into your thing. We get hung up on this sometimes and there’s a lot of options. We’re spoiled.
Jack Butala: This is not how I thought this was going to go at all.
Jill DeWit: Sorry.
Jack Butala: No, I’m glad. I’m glad. We are spoiled. We should talk about stuff like this more often.
Jill DeWit: Yeah. Thank you.
Jack Butala: Everybody needs to take a whole big chill pill about a lot of stuff.
Jill DeWit: Exactly. Gosh.
Jack Butala: We’re the luckiest people ever, I think.
Jill DeWit: Back to our topic.
Jack Butala: Oh, yeah, so it was about…
Jill DeWit: Go ahead. All right, we’re sounding like the car talk guys. We’re interrupting each other. Sorry. No, I was wanting with this topic. Please say the topic and then I have a comment.
Jack Butala: The topic is how to buy a house without a real estate agent.
Jill DeWit: Did we just lose a bunch of listeners?
Jack Butala: No. We have a ton of members who are functioning real estate agents, are retired real estate agents. No, no, I don’t think we did at all. If there’s a real estate agent out there who is listening to this and they’re sitting there saying, “Oh no, the future of being a real estate agent is bright and shiny and great,” then you have way bigger problems than the fact that you’re burning a half hour listening to this show.
Jill DeWit: Wow.
Jack Butala: Because let me tell you, what happened to the dinosaurs … Fill in the blanks.
Jill DeWit: Yes. Okay, well here’s my thing about how to buy a house without an agent. Some people don’t think this is possible. They must not have heard the term, FSBO.
Jack Butala: Oh, for sale by owner?
Jill DeWit: Yeah.
Jack Butala: I had to think about it.
Jill DeWit: Yeah, I love that. I need that as a kid, because you know what? That was my dad. My dad was really adamant about not using a realtor.
Jack Butala: Jill and I … You know where I got this…
Jill DeWit: My mom was a realtor for a while.
Jack Butala: I got this title from … Jill and I went to a book store because I haven’t been to a book store in years because of Amazon and the whole thing. There’s one huge book store left in Arizona, I think, or at least close to where we are.
Jill DeWit: Yeah.
Jack Butala: There are a lot of books with this title, so I said we should do … It obviously hit somebody’s radar to write the book, so we might as well do a show about it. We are. What I learned by just flipping through these books really quickly is that, there are a lot of people who believe that you have to buy a house with a real estate agent, like it’s a law.
Jill DeWit: Right.
Jack Butala: That’s just not the case at all.
Jill DeWit: It’s not true.
Jack Butala: In fact, you don’t have to get title insurance. You can do anything you want. You can deed it. You can sit down across a coffee table with the person that you’re buying it from, write the deal on the back of a napkin. In fact, that’s not even required. Generate a deed on your Notebook computer and have that person sign the deed over to you while you hand them a sack full of cash. Whether or not that’s legal, I don’t know. I’ll leave that up to you. Now you own the house. They hand you the keys. It’s just like a car. It’s easier than buying a car, in my opinion.
Jill DeWit: It is. I’m with you.
Jack Butala: Did you know that you don’t even have to record the deed for it to be a valid sale?
Jill DeWit: I do know that. Once it’s signed, it’s legal. You’ll only record it for public knowledge.
Jack Butala: Right. The title is, how do you buy a house without an agent? What you do is you use the same data that we use to buy land, and houses by the way, and you send all the houses that you think are logical candidates that you’d like to buy, whether for your primary residence or if you’re a wholesaler or a flipper, use the data to do that. Send them an offer, just like we do with land, and somebody’s going to call you back. Several people are going to call you back, in fact, if you do it properly and you’re going to buy the house.
Here’s the key. Here’s the whole secret, the pros’ secret. Don’t send letters to people who have mortgages on their houses.
Jill DeWit: I was going to ask that.
Jack Butala: People who have mortgages on their houses or land or anything else are very limited in the price that they can negotiate. What you want to do is you want to find somebody who’s just had that conversation with his wife, “You know, we should really move out of here.” Then she says, “Oh my gosh, you know, I really think we should too and now I’ve got to call a realtor and I’ve got to clean the house and…,” and on and on and on. Then they get your letter that day and it says, “We’ll buy your house. I know it’s a little cheaper than maybe market value, but you’re going to save all this time and money in the real estate stuff and no one’s got to walk through your house.”
Let me tell you. Trust me on this. You’re going to be shocked at how much response you get. People will choose a cheaper price over doing a bunch of stuff to prep their house to get ready for sale 9 times out of 10.
Jill DeWit: I love that. You know, it’s funny, that’s on HGTV, the House Hunters shows and all that, if you notice those are their favorite ones because they get them at the best price. When you walk through and it’s a disaster and it’s like the family just, you know. It’s just food everywhere and clothes everywhere or they haven’t done renovations. There’s holes in the walls and it’s funny because they always take the people through and they can’t quite see the vision, like the Property Brothers, they’re all excited about it and I get excited about those too, because I’m like, “That’s great. You’re going to get a better deal,” and the people know it. They don’t want to do the work, like you just said. They’d rather just take the cash and go. That’s fine. Everybody wins on that one.
I was going to add something. I just noticed in the last week or two. I don’t watch a lot of TV, so this may have been going on for a while and I may have not been aware of it, but I just picked up on a couple of new commercials on network television advertising these companies where you want to sell your house, you type it in to their web site and they make you an offer.
Jack Butala: Oh, it’s We Buy Ugly Houses. That’s been going on forever.
Jill DeWit: No, it’s not even them. It’s another one. You think it’s the same thing?
Jack Butala: Yeah. Our friend, named Joe, that’s what he does.
Jill DeWit: Well, I know that, but…
Jack Butala: It’s the same thing.
Jill DeWit: Okay, it’s the same … All right, well it’s a new company. I wasn’t sure if they had a spin on it or not. I’ll have to look into it.
Jack Butala: No, I am working with an app developer to address what I think is an incredibly overlooked need to get a deal done fast. Yeah, how do you buy a house? You send a bunch of letters out to houses that you’ve identified in a data set, like let’s say based on geography or square footage and then you make them an offer. You don’t send a postcard out. That’s not going to work. I’m telling you right now. You don’t send a letter expressing your interest like, “Hey, give me a call and let’s talk about buying your house.” If you want to waste three weeks of your life, send a letter out expressing your interest. If you want to buy a house pretty quick, really cheap, send them an offer.
Jill DeWit: Could you imagine?
Jack Butala: It’s not that hard to figure out the prices. You go out on Zillow, you go out on Trulia, check the MLS, look at completed sales. It’s all over the place.
Jill DeWit: Just to get an idea of pricing?
Jack Butala: Yeah, so what I would do or what we do is you take a look … The way that it works best for me is, I pick a subdivision. Out here in Arizona and on the west in general, we have what’s called Master Plans Communities. It used to be that a developer would buy a bunch of lots and build different houses, all custom houses on different [inaudible 00:11:13]. Wherever the city center is, where you are, if you go look at the old houses, the small ones, that’s how those got built and that’s not what I’m talking about. I’m talking about the one in the suburbs. There’s maybe four models. Maybe one’s a two-story, so you can tell, when you break it down per square foot what they’re selling for, you knock $40-50,000 off of that, send a bunch of letters out, make sure people with no mortgages get the letters and enjoy a response.
Jill DeWit: That brings up a good point that I don’t think people realize the number of people out there that their homes are paid for is bigger than you think it is.
Jack Butala: What is it?
Jill DeWit: I don’t know.
Jack Butala: I know what it is.
Jill DeWit: Do you know what it is?
Jack Butala: Oh, I’m sorry. I didn’t mean [crosstalk 00:11:53].
Jill DeWit: No, I don’t know the exact percentage, no, but I just know that just because your home isn’t paid off, doesn’t mean that everybody’s in your situation. It’s very interesting. What is the percentage?
Jack Butala: According to last census data, it’s 39%. That’s not just single-family residences. That’s purchasable places to live, townhouses, condos, all that.
Jill DeWit: There’s a lot out there.
Jack Butala: Right.
Jill DeWit: We’re not the only ones.
Jack Butala: Right, oh and land is like 99% or 98%. It’s very difficult, for the record, to finance land. It’s called “unimproved property,” and I don’t mean a house on it, I just mean sewers and any improvement at all. Whatever reason traditional lenders do not lend against that, which is one of the reasons that … The no mortgage thing I came up with a long time ago and then what ended up happening is, well wait a minute, there’s no mortgages on all this land, so that’s how I sort of tripped into that.
I have yet to send out a mailer, I’m going to knock on wood here, I have yet to send something out on any product type, including hospitals, which is what I used to be. I was an acquisition person for. That’s how I honed my skills on the contacting people who own these things. I have yet to send a mailer out or a fax, like we used to do, and not have a deal come out of it.
Jill DeWit: Isn’t it funny, that all it does is further affirm for me why you and I are here and why you and I are so good at what we do. You brought your knowledge…
Jack Butala: You’re in such a good mood today.
Jill DeWit: Oh thank you. You brought some real valuable tested knowledge in like a past life, a past career, and figured out a way to apply it to this. I have my own sales, customer service, working with a lot of people and systems and things that I got to bring to this environment that made it better also.
Jack Butala: It makes it better, sure.
Jill DeWit: Thank you.
Jack Butala: Yeah, you’re good to customers, Jill. I don’t know how to deal with customers.
Jill DeWit: Thank you.
Jack Butala: I mentioned this in an earlier podcast. Somebody asked me recently, “How do the pros do it? Let’s just cut to the chase.” My first response was, and I couldn’t say it without bragging, “Well, I am a pro and I used to buy commercial property this way and it works every time.”
Jill DeWit: This is how it’s done.
Jack Butala: Yeah, this is it. This is it, people.
Jill DeWit: This is it.
Jack Butala: This is how you do this.
Jill DeWit: You want to know the secret? This is it. We’re telling it. That’s the whole thing too. We are giving away all the answers. Now it’s up to you to decide to do something with it, by the way. You can do this. It’s not rocket science.
Jack Butala: Exactly.
Jill DeWit: There’s a lot of steps. You’ve just got to get through it, be methodical.
Jack Butala: It’s like anything.
Jill DeWit: Don’t get hung up on a little detail.
Jack Butala: Yeah, make a commitment. Hey, if you have a question or want to be on the show, give us a call at 888-735-5045 and join Jill and I in another episode where we discuss your all-important success in real estate investment and in life.
If you enjoyed the podcast, please review it in iTunes . Reviews are incredibly important for rankings on iTunes. My staff and I read each and every one.
If you have any questions or comments, please feel free to email me directly at steve@LandAcademy.com.
I would like to think it’s entertaining and informative and in the end profitable.
And finally, don’t forget to subscribe to the show on iTunes.
