Can I sell a house before I actually own it? - Posted by Rachel Dutton

Posted by Frank on July 03, 2003 at 12:16:14:

I’m not an attorney, but I think you had your offer in and accepted first. Both the realtor and the full price buyer sound a little shady. Check the buyer’s credit, if its decent sell it to him and take a note or have him get financing. Otherwise, I would consider engaging your own realtor to market the property for you, sell it for the $25K (can you put in 2-3K and maybe get $30 K for it?) Also, why discount the note? Just sell the house and avoid the discounting. You may be taking too many steps to arrive at the cash in hand that you want.

Just my $0.02, good luck!


Can I sell a house before I actually own it? - Posted by Rachel Dutton

Posted by Rachel Dutton on June 25, 2003 at 12:26:15:

Ok, I?m new at this, so help me out, please. This is a bit of a strange story, so bare with me. I did the shot-gun offer approach to realtors a couple of weeks ago. One of the houses I offered on was listed for $25,000, and I offered $12,000. The offer was accepted. I went to look at the property, which I had never seen, and it turned out to be in great condition and well worth the $25,000 asking price. (The neighborhood is a bit iffy, which explains the low property values, but it isn?t awful.) Everything looked good, but I had one more house I needed to look at that night, so I told the realtor I would talk to my husband and sign the (formal) papers in the morning. That evening she showed the house to another man who made a full price offer, which was accepted. A couple of days after that, the man decided he wanted the owners to finance it, which they didn?t want to do, so they went back to my offer. The realtor agreed to give me the name of the man who made the full price offer so I can sell it to him for $25,000. (I haven?t spoken to him yet because the realtor is out of town and doesn?t have his info with her. So, I don?t know his credit score or how much he could put down yet.) I was planning on creating a note for the 25,000, discounting it and selling it to a note buyer, and paying off the sellers, keeping the rest.

So, I guess my question is: can I sell this house before I buy it (therefore avoiding closing costs), or do I have to buy it first and then create the note?

Any advice on the situation would be greatly appreciated. Thanks.

Rachel Dutton
Little Rock, AR

He who sells what isn’t hizen… - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on September 20, 2003 at 14:44:06:

…must either pay or go to prison.

Rachel, we often refer to selling before we buy as being the best way to go. But what we really mean is to find a buyer for the property you are considering buying to flip, before you actually buy it. I would never sign a contract to sell something I don’t own or control yet, through a contract or an option. If you fail to be able to buy it for any reason, the person who you signed a contract with to sell it to, could sue you, big time.

One thing you could do is to sign a contract to buy the property and then just flip the contract to your buyer. The drawback to this is that your buyer knows how much you contracted to buy it for. The good thing about this way is, of course, that you don’t need any money, beyond a deposit of $1-$100 or so.

You also could sign a contract to buy, with a good weasle clause in it, such as, subject to the approval of my husband, wife, attorney, etc. Then you could sign a contract with your buyer, and even take a downpayment from him if you wish, with less likelyhood of being sued. There is STILL, the possibility that the person will default in his agreement to sell to you though. In that case you would still be exposed to potential liability from your buyer, UNLESS you put a weasel clause in your contract with your buyer saying something like, subject to your being able to deliver good title. When he asks what that means, just say, you don’t know but someone told you to put such a clause in your contract.

Please note that I am NOT an attorney. This is provided as general information only, to illustrate how similar problems might be solved, not what you should do in your case.

Regards, doc