I’ve personally never invested in a foreclosure deal so I’m only writing about this based on a story I heard from someone else. It’s tough enough to find a gem like this but if you do, here’s how to play it out.
So you’ve stumbled on a piece of property and the owners invite you to come over and during the second cup of coffee they make a deal that can’t be beat. The only bad thing is that they are leaving town tomorrow and won’t be back for a closing for three weeks. Being desperate, you reach into your bag, pull out your laptop and printer and do a self-prepared deed and close the deal right in the kitchen.
After all, you’ve seen it done on television ads for years and you know a few folks who have acquired hundreds of properties and saved in closing costs for each of them. Here’s what you should think about
the ‘kitchen table closing’.
- DO not do them as a standard way of business. You will be deemed the scam artist of the real estate world.
- DO not do them as a way of saving on closing costs. You probablywon’t save much anyway with this method.
- DO not make your kitchen table closings part of your spiel to buy property. They DO NOT hold in court in most cases
- Some people will refute them if they change their mind.
Now that you have a great view of this style of real estate closing, let me tell you a few more things about kitchen table closings.
- Do them. If you feel that a seller may be flaky, do the closing at the home right there. It’s better than nothing.
- Don’t use them. Have these documents as a backup in case your seller fails to show for the ‘real’ closing at the title company.
- Keep those documents handy. Most sellers are willing to understand them as a legal contract and will follow through, if not, you’ll at least have something to show in court.
It’s always good to get something in writing from a seller when an agreement is made. I have seen too many deals go down the drain over a hand shake and five days between the deal and the closing. All-in-all, be honest and don’t get greedy. If one deal flakes, keep walking the streets and find you another property to invest in.