Posted by Glenn OH on January 18, 2000 at 09:26:04:
nt
Is this a good deal or is the “Banker” Tenant taking advantage? - Posted by Jogre
Posted by Jogre on January 17, 2000 at 17:27:08:
I am very new at buying and selling homes and would like advice on how to handle my sister’s “out of state” home situation.
Current Situation:
My sister has a home in another state which is currently being leased to a “banker” for $2,000 per month. Lease ends 4/29. First of all he is late with his rent money and has installed a fence without written permission for $1,700 with the assumption that she had agreed to this in lieu of a $2,000 security deposite originally requested.
Today, he faxed a letter which he calls an offer, offering $245,000 (FSBO) for the house with the intent to close on June 1. Recent homes in this area have sold bewteen $265k and $269k broker assisted. This price is based on his research of recently sold homes of like size and quality less his investment of $1,700 for the fence. His letter also requests the following: termite inspection, clear title, property inspected by certified building inspector and that all mechancical and appliances are in working order. He include this following: “This includes but is not limited to the following: security system, dishwasher, microwave, hot water heater, sprinkler, oven, HVAC system, plumbing electrical and others perhaps not specifically listed”. This quote concerns me.
The offer is good for 7 days.
The house was purchased for $259,000, PITI approx $2100 per month, loan balance approx $225,000.
How can she get more than the asking price? or Should she continue to rent the home?
I may not be very clear so please respond with questions if necessary.
Thank you very much for the help.
Jogre
Re: Is this a good deal or is the “Banker” Tenant taking advantage? - Posted by chris
Posted by chris on January 18, 2000 at 08:33:29:
Whatever you do, it does not sound like you should continue this with the “banker” as a possible buyer or as a tenant.
-Chris
Don’t concern yourself with the clauses in the contract!!! - Posted by Paul_NY
Posted by Paul_NY on January 18, 2000 at 04:36:06:
This response applies only to the conditions in the purchase offer:
Don’t concern yourself with the clauses in the contract!!!
Obviously, he’s making a buyers offer to you. If you say no to any of the ‘terms’ of the offer, he will
- ask for something else in return, e.g. lower price or down pmt
- use the ‘terms’ to cancel the contract; otherwise known as an exculpatory clause or escape clause
All the ‘terms’ of an offer are usually there for negotiation purposes exclusively. Its a common strategy for an investor to ask for everything and then give something up in exchange for something else.
Assuming the seller (you) is not motivated, I would:
- File that offer away in a trash can
- Write a new offer to the potential buyer stating your terms of sale. The seller can write an offer that is ready to be signed, isn’t that what realtors do?
Hope this helps!
Re: Is this a good deal or is the “Banker” Tenant taking advantage? - Posted by Glenn OH
Posted by Glenn OH on January 17, 2000 at 20:19:42:
I would recommend the PACTrust method of selling the property. It adds security you don’t have in other arrangements, plus it still allows your sister to depreciate the property as she can now with the rental arrangement. Also, the resident can deduct the taxes and interest, so that she could easily charge more for the rent (18 to 50% more depending on the buyer/resident’s tax bracket) with the buyer paying no more out of pocket than the current rent. You could also set the mutually agreed value now to a level more in line with its current real value (no reason to discount it). If the banker isn’t interested, there are probably others who would be. Take control of the situation - don’t let the banker think he is. He’s the one with the lousy payment record.
For more info on the PACTrust, see www.cal-equity.com
I’m a little confused here - Posted by Jim IL
Posted by Jim IL on January 17, 2000 at 20:00:24:
Jorge,
You say “how can she get more than the asking price?”
The asking price to me would be the price set by your sister, not the offered price from the banker.
If your sister wants more for the house, then she can dom one of two things;
- Reject the offer outright
- Counter offer at a higher price
And, her decision would obviously be based on her needs, and what she wants. Not something we here could guess about with the limited info provided.
Since this banker has not been too reliable as a tenant, then why work with him at all?
IF the banker would agree to a higher price, I would want to make sure that the contract was written to protect your sister, not him.
Maybe have him give you a “proof of funding” letter, this way you have a better chance of closing on time, or at all.
or
Have your sister sell him (or any buyer) the place “owner financed”. There are MANY ways to do that.
She could L/O the home at a price greater than FMV with the T/B’er paying “rent” higher than her payment, PLUS get some cash for option money.
She could sell it on a wrap,or a land contract.
There are too many ways to structure the deal to lay them all out here, and each one depends on what your sister needs to accomplish with the sale of this home.
Find out what she NEEDS, and then come here and post questions on how to structure the deal.
I’m sure you’ll get a ton of replies.
Whatever happens, good luck,
Jim IL