Brent,Sorry but sometimes I’m not real good at explaining.Let me try again.
The home was purchased 3 years ago.The purchaser is a Corporate attorney which made a pretty substantial down when he had this home Custom Built.One and a half year ago he got a divorce.Has been remarried about eight months ago.The new wife does not want to live in a house the exwife had a part in designing so the attorney moves in to hers.He has been making 2k payments since with the house being vaccant.The lot is a little over a half acre by the lake and golf course.Still several vaccant lots for sale in the area.For some reason the inside was never cleaned before listing.Two homes in the same developement ( Comparable ) have sold for the 320k to the 340k range.So I am taking a conservative 310k for market value. He will take the balance of the mortgage of 248k.I do a 30 day option to purchase,Advertise for sale with “Easy Qualify,Low Down” to attract a larger market.Do a double closing and walk with a nice check.
I am out a little time in cleaning the place , advertising cost and the Hundred Dollars I give him for the Option.If the house does not sell in the thirty days I will have the option to renew for an additional 30 days for another Hundred dollars.
Here are the numbers:Market Value 310k,Listed at 275k,Option price of 248k (Mortgage balance).Has been on market for about
8 months.Home is 3 years old.Owner divorced a year and a half ago and wants this 2k payment off his back.Would stay on note for a few months but really wants cashed out.He is open to an Option but a nonexclusive because he dosent want to miss a possible sale thru the realtor.
Game plan is to offer financing on this with a 95%ltv loan with credit as low as a 600 (Private investor money)to widen my market of buyers.
Question:How could I keep my buyer from possibly knowing its listed at 275k when I’m asking market value of 310k?Would this financing that I would have in place possibly detour the fact of it being listed at a lower value?
When you say the house is “listed”, do you mean with an agent? If it is you are still going to have to pay the commission. But then again I did read through this one fairly quickly and I may be off in what I am saying.
Re: Option to Purchase on a Listed House ? - Posted by Dave Mckee
Posted by Dave Mckee on February 10, 2002 at 24:15:50:
TC,
Your option idea sounds fine, but to prevent your buyers from by-passing you, also get a right of first refusal in the event of any sale. That will require the owner to give you the opportunity to match the price and terms offered by any buyer. If their offer is less than your option, you can opt to buy it at that price. If not, you can offer to sell it to them for something less than they had offered the owner.
Just a thought.
Re: Option to Purchase on a Listed House ? - Posted by Brent_IL
Posted by Brent_IL on February 09, 2002 at 20:33:51:
I’m confused.
The FMV is NOT 310K. A house on sale at less than 90% of actual FMV would have a buyer in a lot less time than eight months. The seller isn’t getting offers at the listed price of $275,000, so that’s not it either.
Just to make sure that I understand the question, are you saying that you want to buy for all cash at $248K, and re-sell on terms at $310K? Your terms would be $15,500 down, and you would carry a $294,500 loan?
If you are absolutely certain that this is what you want to do, why not make an offer to purchase for $248,000? Another approach would be to forget about the non-exclusivity clause and tell the seller that is looking for debt relief that you?ll pay two months payments in return for a 60-day option to purchase for $248K. What has changed that he thinks his agent will get it right after eight months? Get a right to renew.
If for any reason you can?t find a buyer, you are only out $4,000 instead of $248K + closing costs of someone else?s (private) money. Check the recent comps to verify.