Posted by mountin’dew on January 15, 2001 at 03:25:26:
dew
do not keep posting on every subject- only if you know what you are talking about- which is obvious that you do not
Please help in writing an offer… - Posted by Tommy_FL
Posted by Tommy_FL on January 14, 2001 at 17:48:26:
I have a verbal agreement from a seller to sell me his 2 family home. He is tired and ill and 70 year old and lives out-of-state. He agrees to sell me his rental property for 120K. The place needs up to 10K in upgrades. If I write a offer with a purchase price of 130K instead of 120K for financing purposes, he would give back 10K for repairs. How can I word this in my offer? No agent is involved. Can I legally do this? This is a buy and hold deal. Thanks for your help.
Re: Please help in writing an offer… - Posted by Tommy_FL
Posted by Tommy_FL on January 16, 2001 at 09:04:21:
Thanks all for your input. I think the best thing to do now is to use a real estate attorney.
Re: Please help in writing an offer… - Posted by Frank Chin
Posted by Frank Chin on January 15, 2001 at 07:53:47:
Use a side agreement. Although some of the situations I’ve gotton into is not exactly the same - here are some suggestions my attorney gave me.
1- There must be consideration in the side agreement for it to be legally enforceable. State in the agreement what upgrades are needed by closing - else he’ll have to pay you $10,000 for non performance. Of course - you and he knows its not going to be done by closing.
2- Another way is to state the upgrades needed in the $130,000 contract, with $10,000 going into escrow if not done at closing . This will be all up front via-avis the lender. Of course it won’t be done by closing. Work out an agreement before hand to have the monies in escrow released to you or the contractor doing the repairs. In this case - the escrow agent is probably your attorney.
3- A third way: and I have done this. However, you’ll need $10,000 up front. Here’s the agreement with the seller
a) In lieu of deposit required in purchase agreement, I make about $10,000 worth of repairs before closing.
b) The selling price would then include $10,000 of repairs.
c) If the purchae falls through I can place a lien on the place more than $10,000, in this case $15,000.
d) A Vendee lien (filing of the purchase agreement) is placed to prevent him selling to another buyer.
Option (2) requires no up front cash, but repairs will have to be done after closing.
The advantage of (3) is the repairs are done while the mortgage is being processed. All the repairs are done by closing. Good for doing a flip.
I’ve signed certifications at closing stating that there are no side agreements. Options (2) and (3) above is all up front and won’t get you into trouble.
Re: Please help in writing an offer… - Posted by dewCO
Posted by dewCO on January 14, 2001 at 17:57:06:
Sound slike you are getting a new loan. You are supposed to dislcose everything to the seller, and if you put that in the contact and it is a conventional loan, it won’t fly for you. Having said that, “getting a little back” from the seller is done all the time. You’ll have to have a separate agreement outside of the contract and make arrangements for the seller to send you a cashier’s check of some such because it won’t be allowed to show up on the HUD Settlement either at closing. (Meaning the title company probably won’t cut you a check from his proceeds if it doesn’t say so in the contract, even if the seller sends them written authorization.
Side agreements are FRAUDLENT - Posted by TD
Posted by TD on January 15, 2001 at 22:12:39:
Those “side agreements” are fraudlent in nature and can lead to a few years in a Federal prison - where parole (in the US) has been abolished.
If it’s not disclosed to ALL parties to the transaction, then don’t do it - plain and simple.
TD
Sure - it’s called LOAN FRAUD! - Posted by Redline
Posted by Redline on January 15, 2001 at 20:44:00:
RL