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Ok, I just tried this out of the blue trying to put together a deal that looked dead and it worked. I had been seeing and hearing about annuities being used as an incentive to home buyers and these annuities are really very good. For a $2,000 by seller out lay at closing five years from the date of closing the buyer would recieve a cash payment of $5,000. So, we were $15,000 apart after a couple of times back and forth and both my seller and the buyer started to get frustrated and were ready to walk away. So, I talked to my sellers about purchasing three of these annuities for the buyer instead of comming down further on the price since they did not want to and I didnt think they should. We wrote it up offering it to the buyer and they took it so now we are in contract and my sellers saved $9,000. Just trying to share some info with my fellow agents. Please dont give out my new tool in negotiations to anybody in my market.
If anybody else has some unique ideas that have worked to put together deals please share them.
I dont understand. Why not just give cash at closing? Then the buyers can purchase an annuity or a savings bond or a T bill or an IRA or do home improvements or whatever they want to do with it.
If the byers take 2K and buy an annuity wouldn't it turn into the same 5K?
Quote:
Originally Posted by Jamesww
Ok, I just tried this out of the blue trying to put together a deal that looked dead and it worked. I had been seeing and hearing about annuities being used as an incentive to home buyers and these annuities are really very good. For a $2,000 by seller out lay at closing five years from the date of closing the buyer would recieve a cash payment of $5,000. So, we were $15,000 apart after a couple of times back and forth and both my seller and the buyer started to get frustrated and were ready to walk away. So, I talked to my sellers about purchasing three of these annuities for the buyer instead of comming down further on the price since they did not want to and I didnt think they should. We wrote it up offering it to the buyer and they took it so now we are in contract and my sellers saved $9,000. Just trying to share some info with my fellow agents. Please dont give out my new tool in negotiations to anybody in my market.
If anybody else has some unique ideas that have worked to put together deals please share them.
I heard of someone else doing that at our companies IBC this year with much success. It sounded like when offered in numerous occassions it paid for itself. The agent offered it to buyers knowing enough wouldn't cash in to pay for the ones who did. I've considered it but haven't taken the time to learn more about it. How did you set it up and was it difficult?
For a $2,000 by seller out lay at closing five years from the date of closing the buyer would recieve a cash payment of $5,000.
If I did the math right, (and it is 2 am, so it's possible I did it wrong) that would be a return of about 20% per year. Can you please tell me where I can buy such an investment?
I've heard about using annuities as part of a package when buying a business as it helps to mitigate some risk while providing a lower initial cost basis.
I agree with Bill. The first thing that hit me was that the numbers don't add up. I'd be awfully careful that this isn't some fraudulent scheme. I can't see how after paying for whatever annuity commissions (and they are usually on the high side) you can turn $2,000 into $5,000 in five short years. Something is wrong here. On a predictive return value this is presently impossible.
Did anyone see Dateline NBC this weekend about annuities? Guess not. It was how they were sold with the promiss of all these high interest rates and people and up losing moeny. If you need the money the penalties are so high. The people selling these annuities were followed with the hidden camera and it is a really huge scam. Probable not all, but watching this makes me wonder why does any one want to buy a home under these conditions. Allianz is one of the companies whowas ordered to pay money back to clients because of the way these annuities are sold, under false statements just to rip off people.
I dont understand. Why not just give cash at closing? Then the buyers can purchase an annuity or a savings bond or a T bill or an IRA or do home improvements or whatever they want to do with it.
If the byers take 2K and buy an annuity wouldn't it turn into the same 5K?
You'd be surprised as to what works with sellers. I've offered vacations to sellers and had them take them as partial down payments. I've offered gift cards to realtors as partial payment for commission fees.. Everything is open..
I'd be pretty suspicious though in an investment offering such a high return as the OP listed though.. nothing is paying that high.
You'd be surprised as to what works with sellers. I've offered vacations to sellers and had them take them as partial down payments. I've offered gift cards to realtors as partial payment for commission fees.. Everything is open..
I'd be pretty suspicious though in an investment offering such a high return as the OP listed though.. nothing is paying that high.
Exactly,
Did anyone hear the statement "if it sounds too good to be true, it probably isn't"?
The fees on annuities are extremely high.
This is just another gimmick by realtors to confuse the buyer. Some will get duped. If you do your homework you should reject this immediately and ask for IMMEDIATE returns whether its money back at closing or a lower price.
This sounds like a gimmick that would only work on the most foolish buyer to me. No annuity actually exists that can produce a return of 150% in five years, and if it did why would the sellers want to get paid in cash when they could ask the buyers to pay with magical annuities instead.
I might just try this with my next offer to buy, instead of paying 500k cash at closing, I will offer to buy the sellers a magical annuity for 400K that they can cash in for 1M five years from now, everybody wins.
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