Posted by JoeB(Atlanta) on February 09, 2000 at 22:10:22:
Hi Sean, you can try a letter of intent w/all 3 offers just to see what kind of response you’ll get. Remember, agents don’t like anything out of the ordinary. So the agent may insist that you immediately write it on a contract.
But I think your biggest hurdle is the average agent is NOT going to understand nor be able to “sell the sizzle/benefits” of your 3 offers. Spell out the benefits in clearer terms, assume you’re explaining this to your grandmother.
I wrote an example after each of your offers:
Your#1. $260,000, $10,000 down, seller to finance $250,000
New#1. $260,000 with $10,000 cash down pmt paid at closing by seller, remaining $250,000 paid to Seller at 10% interest, $2100/month for up to 48 months (balloon), whatever remains will be paid in lump sum at that point. Secured by a 1st mortgage on the house.
Your#2. $290,000, zero down, seller to finance at interest only monthly payments, ballooning in 7 years
New#2: see example #1 above, spell out benefits/terms
Your#3. Lease w/ option to purchase: $1400/month rent, 5-year option to purchase for $314,000 (asking price), 50% rent credit to purchase price. (The rent is below FMV which is probably closer to 1700.
New#3: Buyer will have an option to purchase the house for full asking price of $314,000 and will Lease the house at $1400/mo for up to 60 months before purchasing. Buyer will handle all maintenance, etc, etc. $700 of each month’s lease pmt will be credited toward reducing the purchase price.
I know it seems like I went into way too much detail, but I’ve NEVER met an agent that could (a)understand these offers without all that detail and (b)could ‘sell the sizzle’ (explain the benefits) of anything other than a purchase with cash or new mortgage, to a Seller. Since your written offers will be ‘selling themselves’ (you won’t be there when the agent pitches this to the seller) you may need to spell them out more.
P.S. seller financing and lease-options are still ‘scary, alien, way-too-creative words’ to most agents, because they’re unusual…so don’t get your hopes too high.
Best of luck,