Transaction education
No need to upload them anywhere! Just email them to us at docs@pellego.com. You can cc us on your transaction paperwork or forward it to us.
If you cc us throughout the transaction, we will let you know if anything is missing.
You can credit your commission in one of two ways:
1. You can credit it against buyer closing costs. You can only credit up to the total of the closing costs. For example, if there are $10,000 in buyer paid closing costs and the commission is $15,000, you can only credit $10,000. If you go this route, you do the credit near the end of the transaction on the commission disbursement form (CDF). Please let our team know at docs@pellgo.com and we will prepare the CDF for you.
2. You can credit it back to the seller. In this way, the seller pays less commission, so their net take home is higher. You can do this with a blank form 34.
[UPDATE NUMBERS BEFORE PUBLISHING]
From analyzing 13,000 flips in greater Seattle-area since 2002, we find that on average, MLS-purchased flips sell for 1.8x their purchase price compared with 1.6x off-market and 1.4x at foreclosure auctions.
While we do not know the condition of these flips, we think if anything MLS-purchased flips are in better condition, not worse. Furthermore, off-market deals often have an assignment fee and foreclosure deals have a commission paid on top of the purchase price, which makes MLS deals even more favorable than the numbers suggest.
Our guts tell us that this feels off, and to some extent this is true. The opportunity for luck is greater in these markets, and the top 10% of off-market flips perform better than the top 10% of MLS-purchased flips. Nevertheless, the MLS still presents a meaningful buying advantage for rehab investors.
This suggest there is more supply (deals) relative to demand (competing buyers) when shopping for deals on the MLS versus off market or at foreclosure auction.
From a supply perspective, 4_% of historical flips were purchased from the MLS versus 3_% off-market and 2_% at a foreclosure auction. With more supply, the MLS can absorb more demand.
From a demand perspective, we can say there's roughly 87% of the relative demand off-market as measured by the resale multiples (1.4 / 1.6). Because there are 1.25x more deals on the MLS than off-market (4_% / 3_%), we can deduce there is about 1.09x more demand (87% * 1.25).
In other words, there is 1.09x more demand on the MLS, but 1.25x more supply to absorb it.
We can't say for sure, but we have some theories as to why there is less competition on the MLS than it might appear.
For starters, prospective homeowners cannot easily finance properties that need repairs, and when they do compete it is normally for cosmetic flip opportunities. Many sellers also over price their listings and end up accepting a lowball offer—think of it as a hidden supply on the MLS.
The demand for off-market deals is also is also higher than it appear. From intuition and the advice of others, investors gravitate to the idea that buying off-market or at the auction is less-competitive. The problem is that everyone thinks this way.
In many cases, investors are purchasing overlapping mailing listings and calling on the same FSBO directories.
This is not to say you should only pursue MLS-listed opportunities. Rather, we believe the MLS should be an active source of opportunities for serious investors. From analyzing 13,000 flips in greater Seattle-area since 2002, we find that on average, MLS-purchased flips sell for 1.8x their purchase price compared with 1.6x off-market and 1.4x at foreclosure auctions.
If you are amazing, we want to know. Here is a list of current openings, and we are always open to unsolicited pitches.