Posted by Sal on July 06, 2003 at 10:42:36:
Thanks, Hal!
Your acknowledgement to seller looks straight forward.
Do you provide this in an addendum to the contract?
Sal
Bothered . . . - Posted by Joe Kaiser
Posted by Joe Kaiser on July 05, 2003 at 14:55:47:
Someone wrote a couple weeks back about inserting a clause in their
CYA docs that says something like “buyer intends to make an obscene
profit and seller says that’s okay.” Someone then responded to confirm it
was a good idea.
It’s not.
Ron Starr posted a message about an ad that said something like “I
want to steal your home . . .” I figured the post was in jest, but then
someone said, “hey, good idea . . . I’ll try that.”
Bad idea.
To us it’s fun and games and this kind of stuff seems harmless and a bit
edgy . . . and we like that.
But, you should resist the temptation to be the smart aleck and realize
that this kind of stuff can and will get you into trouble.
When the judge looks at your paperwork and the homeowner’s attorney
is accusing you of making an obscene profit, believe me, by having that
clause in your paperwork you will not be helping your case. Frankly,
you’ll be handing them a victory on a silver platter.
Just because someone agrees it’s okay with them doesn’t make it okay.
It’s all about perception, and ANYTHING that introduces “obscene
profits” or “stealing houses” will immediately create the wrong kind of
image.
It was a late night and I’m not explaining it well . . . but my gut tells me
this kind of thing needs to be avoided at all costs. Playing it straight and
acting professional may be boring and uninspiring, but it works.
Joe
Slight modification… - Posted by William Bronchick
Posted by William Bronchick on July 06, 2003 at 09:40:56:
I don’t see a problem with putting something like, “seller acknowledges that sales price is less than market price and enters into this transaction with buyer at said price because he needs to sells quickly.”
This acknowledgement removes the seller’s legal argument of “mistake,” which is an equitable argument that “I didn’t know I was selling diamonds judge, I thought the stones were fake.”
A real estate agent friend of mine always put a clause like this whenever he bought a property, so the seller couldn’t argue later that the agent took advantage and/or lied to the seller about his opinion of value.
Re: Bothered . . . - Posted by Rob FL
Posted by Rob FL on July 05, 2003 at 21:08:12:
I agree with you 100%. The less it looks like I’m taking advantage of a sitution, and the more it looks like a legitimate deal, the better. At a bare minimum, I have every closing conducted by my attorney even on the “get the deed” transactions, just to make sure it has his blessings. Also, any transaction that has the remotest oddity, I make sure to get the seller to sign off on lots of CYA documents.
Re: Bothered . . . - Posted by Bryan-SactoCA
Posted by Bryan-SactoCA on July 05, 2003 at 19:57:49:
The problem with making jokes like that on an open board like this is you never know who’ll read it. Somebody who rarely posts may read it and think it’s a good idea and get in trouble. Somebody may read it a year from now, since every post is archived, and try it.
Re: Slight modification… - Posted by Redline
Posted by Redline on July 07, 2003 at 12:58:23:
Agreed, and Joe’s “Best *@## Document” has this covered.
RL
Bill, this is good, solid advice. - Posted by Robert Campbell
Posted by Robert Campbell on July 06, 2003 at 10:18:18:
Bill,
A clause like this is not going to hurt you in anyway, and can only help you if the seller tries to say he was unknowingly taken advantage of at a later date.
Very professional, honest, and straightforward.
Robert Campbell
I think Joe’s point is that - Posted by Ben (NJ)
Posted by Ben (NJ) on July 05, 2003 at 20:23:15:
someone who is suing you may stumble across it and their lawyer will twist it around and make mincemeat out of you on the stand!
Robert, Right as always! - Posted by Potash
Posted by Potash on July 06, 2003 at 21:30:12:
How many gurus does it take to screw in a light bulb?
Re: I think Joe’s point is that - Posted by Joe Kaiser
Posted by Joe Kaiser on July 05, 2003 at 22:14:25:
I’m not so much worried about yucking it up here on the board or
among friends.
I just wouldn’t use it in a classified ad or in my documentation.
Joe
Re: I think Joe’s point is that - Posted by Sal
Posted by Sal on July 06, 2003 at 08:11:05:
Should we not still make the seller aware (documents) we are investors and this is a business and that we intend on making a profit?
Sal
I’m up front; my clause from contract… - Posted by Hal Roark
Posted by Hal Roark on July 06, 2003 at 08:20:42:
“Purchaser?s Intentions: Seller acknowledges that he has been made fully aware by Purchaser that Purchaser is entering into this transaction with the specific intent to resell, assign, transfer, bond for deed, or rent the property for a profit. Purchaser shall not live in the Property as his personal residence.”
That clause above, btw, appears in my purchase and sale agreement, my ilc agreements, and in my form to sellers called “Acknowledgement of Risk.”
You have to realize, the more subterfuge, the more suspicious the deal can appear. One easy, strong way to dispell that is to be real up front from the git-go. In my experience, truly motivated sellers don’t care who I am or what profit I’m making… they just want out of their problem.
So why hide my intent, if it doesn’t matter to the real customers anyway?
Hal