Please Help w/This Offer... - Posted by eric


#1

Posted by eric on December 20, 1998 at 11:47:33:

>>I can’t help but wonder why you think you need a “$3000 concession”…whatever that is. If you’re thinking it will eliminate your need for a downpayment on an FHA loan, it won’t. What are you attempting to do here??

Thanks for your reply.

I don’t NEED the concession… I’d like to get it, however to conserve my cash for fix up. A concession is $ paid by the seller to help with closing costs.

>>If you’re thinking it will eliminate your need for a downpayment on an FHA loan, it won’t. What are you attempting to do here??

You’re correct. The concession doesn’t eliminate the need for a DP on an FHA loan (which by the way can be as little as $200 of the BUYER’S own funds–the rest can be gifted), but it sure helps with those closing costs… which due to Phila, PA transfer taxes are quite high!


#2

Please Help w/This Offer… - Posted by eric

Posted by eric on December 19, 1998 at 16:30:45:

Hi!

I made an offer on a property in Philly. It’s a single family attached. The comps show other homes on the street have sold recently for anywhere from 55,000 to 69,000. (Some of those with the higher prices had much more new things, ie: fresh paint, carpet, etc.)

Anyway… the home I want (for myself to live in for only 2-3 years) was originally listed back in April for 69,900. Then the price was dropped to 64,899. Then the listing expired. Then it was taken over by another agency and it too expired. Then again, listed for the third time with the present agency. The price: $53,900.

I offered to buy it with an FHA loan. My offer: $51,000 with a $3,000 seller concession. My earnest $ is $500.

They came back saying they wanted 53,000 NET. Thus, they wanted to pay no concession. But they DID drop $900. (Originally $53,900.)

My next offer was for $53,000 (up from $51,000) WITH the $3,000 seller concession.

My Realtor (not a buyer’s agent… my big mistake)… told me they countered with $52,000. So… they dropped this time from $53,000 to $52,000… still no concession. But this time he told me that if I paid $53,000, they’d pay $1,000 concession.

Now what? My goal is to get in with as little out of my pocket as possible. The home is vacant. They are in a retirement home. It’s been vacant since April/May.

My Q is: "Why did they not simply say–when I offered $53,000 with the $3,000 concession that they would take the $53,000 and pay $1,000 concession. Instead they said they’d take $52,000, BUT if I DID pay $53,000, they’d pay a $1,000 concession? Because they are short on cash? I assume, tho, that after being paid by my mortgage company that they certainly could just write me a check from the proceeds, right?

Anyway… I cannot think of a creative way to solve this. I COULD pay $54,000 and ask for the $3,000 concession. (I really need a $3,000 concession.) It’s not as big a deal to finance the additonal $ because I plan to stay only for a couple years.

Any suggestions would be GREATLY appreciated!!

Eric

P.S. I can think of all kinds of creative financing ideas, but when it comes to buying a house for ME, I’m brainless. :slight_smile:

My second offer was $53,000


#3

some questions for you… - Posted by Cesar

Posted by Cesar on December 20, 1998 at 11:37:52:

I suppose you have your reasons for wanting this house so bad. From the comps you have given, it is really not a good deal, if that’s what you are looking for.

Otherwise, there are still some things you need to know:

1)why do they need the money? Is there a creative way to get them what they want and still get a good deal?

2)How much do they owe on their previous mortgage? Is it free and clear? If so, will they take back some paper? This can only be answered if you answer question #1.

3)It’s impossible for them to get $53,000 net if their price is $53,900. If you take the realtor’s commission of say 6%, that gives them $50,666.00 NET. Plus there are still closing costs that they will be responsible for, such as doc stamps and tax credits, etc. There is a reason they are adamant about it. Find out what it is.

4)What is the $3,000 concession going to do for you? Is it to raise the price so your LTV is lower for financing? I’m not sure what you’re trying to do here either.

5)You haven’t told us what this PARTICULAR property would appraise out for. Does it need work? Have any inspections been done to find out if there are any problems? Remember, if it’s been listed three times, then Buyer beware!! There is a reason for this.

6)If you are still having trouble after finding out all of this information, then I have one more piece of advice for you:

SOME WILL, SOME WON’T, SO WHAT?! NEXT!!!

I am sure there are more deals out there. BTW, I hope you gave yourself an out clause before you put down a deposit…


#4

Re: Please Help w/This Offer… - Posted by Mike-DFW

Posted by Mike-DFW on December 20, 1998 at 10:33:27:

They can’t just cut you a check. FHA regs prohibit any agreement like that. If you are using the 3k for fix-up then all the work needs to be done before closing.

Also, there is no real diff. in a buyers agent and any other agent. They don’t have any special skills or magic wand they can wave to make a deal happen. The realtors want to see the deal happen more than you do.

Mike

PS. There are ways around the FHA regs.


#5

Re: Please Help w/This Offer… - Posted by JPiper

Posted by JPiper on December 20, 1998 at 09:24:52:

I can’t help but wonder why you think you need a “$3000 concession”…whatever that is. If you’re thinking it will eliminate your need for a downpayment on an FHA loan, it won’t. What are you attempting to do here??

JPiper


#6

Re: Please Help w/This Offer… - Posted by DRU

Posted by DRU on December 19, 1998 at 18:14:02:

The only thing I would add is try to set something up with the realtor-s and the sellers. Talk to them face to face while the agent-s sit in the car. Find there motivation and pound your agent to get the deal done.


#7

Re: some questions for you… - Posted by eric

Posted by eric on December 20, 1998 at 11:50:49:

You’ve asked some great q’s… thank you for stirring my thinking. I will look further into this! Much appreciated, my friend.

eric