Dispositions Definition

What is "Dispositions" in Real Estate?

In real estate investing, the term "dispositions" refers to the effort, action, and process of selling a property. As an antonym to the real estate investing term “acquisitions,” dispositions is the act of “disposing” of inventory, which happens either through selling it or donating it to charitable institutions[1].

Dispositions Explained

In every type of real estate investing business, there is a person or department responsible for finding buyers and overseeing the disposition (sale) of properties.

The process of selling real estate involves several steps:

  1. Marketing the property for sale.
  2. Generating and maintaining a buyer’s list.
  3. Processing buyer leads.
  4. Facilitating the closing.

This article will explain each step below.

1. Marketing a Property for Sale

The initial goal when marketing a property for sale is to generate responses from potential buyers. Each type of real estate investor will be looking for unique types of buyers.

For example, real estate wholesalers will most likely market to other investors such as rehabbers, buy and hold investors, or turnkey operators. On the other hand, a rehabber is likely looking to attract buyers who are interested in the property as their primary residence.

A dispositions team may employ various marketing strategies depending on the goal of the sale[2]. Some common methods include:

  • Listing on sites like Zillow.com, Realtor.com, Redfin.com, and Trulia.com.
  • Listing on the local MLS through a realtor.
  • Listing on online directories like Facebook Marketplace or Craigslist.
  • Putting a for sale sign in front of the property.
  • Partnering with other investors and/or wholesalers.
  • Having an inventory website.
  • Sending out regular email notifications to an active buyer’s list.

RELATED: 5 Fundamentals That Sell Real Estate Fast

2. Generating and Maintaining a Buyers List

A buyers list is an essential element of any dispositions process. A buyers list is a list of potential buyers who are routinely get notified of a real estate wholesaler’s current inventory.

A common responsibility of a dispositions team is to send out regular email notifications to the buyers list with updates on inventory, price, or discounts. It is typical for people working in dispositions to master the specifics of their criteria, call the most active buyers on the list, and build rapport with them.

RELATED: The Real Estate Investor’s Guide to Building a Buyers List

3. Processing Buyer Leads

Once buyer leads are generated through marketing, they also need to be serviced.

Someone working in dispositions needs to communicate with leads, add them to the buyer’s list, respond to questions or concerns, and get them access to properties for showings. Their aim is to make the process of buying a property as painless as possible.

4. Facilitating the Closing

Once both parties have worked out the terms of the deal and the buyer is ready to move forward, the final step is to close the sale of the property.

A closing agent (also known as a settlement agent[3]), such as a title company or an attorney, usually handles this part of the process.

Some real estate investors and wholesalers may hire a transaction coordinator to oversee the closing process. Others still may have it fall under the responsibility of the dispositions manager or department.

With that said, no matter who is responsible for closing the deal, all parties must conduct further due diligence on the title history to ensure no outstanding concerns. They will also assist with issuing a preliminary title report and ultimately, a title insurance policy to cover any liabilities in case they missed something.

RELATED: How To Do Your Own Title Search

Takeaways

Dispositions is an essential component of any real estate business. This department is responsible for selling inventory, which ultimately leads to the generation of revenue.

Sources

  1. Carmichael, K. (2018). Charitable Dispositions and Receipts of Real Property Interests: A View from both the Individual Donor’s and Charitable Donee’s Perspective. Wood, Buckel & Carmichael. Retrieved from https://www.wbclawyers.com/wp-content/uploads/sites/74/2018/06/Charitable-Dispositions-and-Receipts-of-Real-Property-Interests.pdf
  2. Isaak, S. (2020). Top 15 Ways to Generate Real Estate Buyer Leads. Retrieved from https://fitsmallbusiness.com/generate-real-estate-buyer-leads/
  3. Settlement Engine Inc. (n.d.) What Does A Closing Agent Do? Retrieved from https://settlementengine.com/uncategorized/what-does-a-closing-agent-do/

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