OT: for sale by owner house

[ripvanrando]

I have only bought 5 houses in my life and all were with Realtors and attorneys representing me.

1. One house had unpaid taxes.....what a mess that was

2. Another house had changes that the previous owner did not get approval for and I had to pay the back taxes

3. Selling a house, the buyer was refunded $200k earnest money a week before closing. The Broker did not even discuss with us in advance. Just gave them the money back because they developed cold feet...in the midst of 2008 market turmoil. It was a cash deal and they had the money.

4. On the "positive" side, a Realtor caught wind of a home to come on the market and she got us in there before it was listed and we bought right away (from a relo company).

Is it worth 6-7%? Not in my mind.

[Ralph]

Is it worth 4%? 2% each side. That can be bargained down to around here.

[jlwdm]

Originally Posted by rcnute

Be mindful of the potential conflict of interest and obtain informed consent to the extent required by your applicable code of professional ethics.

Ryan

I don’t know if this was directed at me - I hope not.

Jeff

[19wisconsin64]

Sounds like you are the procuring cause of the transaction - you found it yourself, so the rest will require a whole lot of extra due-diligence on your behalf to ensure a safe transaction. A good legal team is needed-- to do the title examination, transferring of funds, prorations of items at closing, drafting and reviewing of the sales contract...... top priority. Also, you will need to have a great contractor to find out what's needed repair-wise, and maybe some good inspections. You would be paying this most likely anyway, even in a super-heated real estate market.

That being said, I walked into a house that was off-market a few months ago, begged the owner to let me in, knowing the house was going live on the market in a day, and said "I'll take it", and he said, "wait, you don't even know the price", and I said, "whatever, i'll take it, as is, no conditions, no contingencies, at your price... when would you like to close?" yes, crazy, but where I'm at, it's crazy. overpaid by $150K!, then the market bounced up $200K! My point is, prices are peaked, don't be like me, give yourself some outs in the contract, we got lucky (and I've been a real estate investor for nearly 30 years so I believe in making my own luck).

Realtors, the good ones, are amazing, and worth every penny, but if you find something on your own, it's most likely worth it to do the work yourself, but don't kid yourself into thinking it's a cake-walk...... As always, buyer beware.

Good luck in your transaction, and I hope you get this home, or one soon to hoard your bicycles!

[Tickdoc]

Getting close to making an offer on this house with land. Anyone done this and rented the house back to the owners? Would like to secure the house now before rates hike and they aren’t ready to leave just yet.

[batman1425]

Originally Posted by Tickdoc

Getting close to making an offer on this house with land. Anyone done this and rented the house back to the owners? Would like to secure the house now before rates hike and they aren’t ready to leave just yet.

We did a rent back for a week or two when we sold our last house to make the timing work. Wasn't a big deal. Remember that that the rent back is based on your mortgage payment, not whatever theirs was.

Make sure you have a good lawyer with experience with this stuff and it is all clearly in the contract. Big ticket items are who is responsible for upkeep, wear and tear, taxes, etc. Not unreasonable to say the place should be in the exact condition that you saw it in during the pre-close walkthrough.

[Tickdoc]

Originally Posted by batman1425

We did a rent back for a week or two when we sold our last house to make the timing work. Wasn't a big deal. Remember that that the rent back is based on your mortgage payment, not whatever theirs was.

Make sure you have a good lawyer with experience with this stuff and it is all clearly in the contract. Big ticket items are who is responsible for upkeep, wear and tear, taxes, etc. Not unreasonable to say the place should be in the exact condition that you saw it in during the pre-close walkthrough.

Meeting bank pres tomorrow to discuss and see who they have to help negotiate the legal parts. This would be for a month or two. They’ve been there 20 yrs and it will take them a bit to clean it all out.

One slight hesitation I have is if the housing market opens up any or something we like better pops up for sale then it will kill me to see that ( or rather my wife will kill me and I will hear “told you we should be waited” for the remainder of my life

[jlwdm]

If it is a week or two it is not a big deal. If a lot longer there can be issues in getting an owner occupied mortgage rate.

Need a deposit and make sure turned over it same condition as went under contract.

Rate is whatever is agreed upon. Depends on who is in the better bargaining position. Buyers here are often giving free rent for up to 30 days to make their offer better. How paid. Due date. Penalty if late.

Need a high rate if they don't move out on time. Can cause you problems if they don't when supposed to.

Pets: allowed?

Landsape expense?

Pool maintenance?

And so forth.

Jeff

[Tickdoc]

Originally Posted by jlwdm

If it is a week or two it is not a big deal. If a lot longer there can be issues in getting an owner occupied mortgage rate.

Need a deposit and make sure turned over it same condition as went under contract.

Rate is whatever is agreed upon. Depends on who is in the better bargaining position. Buyers here are often giving free rent for up to 30 days to make their offer better. How paid. Due date. Penalty if late.

Need a high rate if they don't move out on time. Can cause you problems if they don't when supposed to.

Pets: allowed?

Landsape expense?

Pool maintenance?

And so forth.

Jeff

Good info and thanks for all the replies.

After missing out on so many houses that we got our hopes up for I’m excited at the prospect of getting one sans realtor.

[Louis]

Originally Posted by Tickdoc

One slight hesitation I have is if the housing market opens up any or something we like better pops up for sale then it will kill me to see that ( or rather my wife will kill me and I will hear “told you we should be waited” for the remainder of my life

But this would always be the case, whether you buy this one, or wait N months or years and get another one. Nothing's 100% perfect (well, very little is) so no matter what you buy there will always be a better one out there.

My only other comment is that you should be sure (unless you really trust these people, which is up to you) to have a fixed, mutually agreed upon, date for them to be out. Otherwise, they could drag it out forever and you might not be able to do anything about it. Same story about the condition of the place. How much do you trust them to not trash it?

Edit: I see Jeff mentions some of the same issues in his post.

[Tickdoc]

Originally Posted by Louis

But this would always be the case, whether you buy this one, or wait N months or years and get another one. Nothing's 100% perfect (well, very little is) so no matter what you buy there will always be a better one out there.

My only other comment is that you should be sure (unless you really trust these people, which is up to you) to have a fixed, mutually agreed upon, date for them to be out. Otherwise, they could drag it out forever and you might not be able to do anything about it. Same story about the condition of the place. How much do you trust them to not trash it?


Edit: I see Jeff mentions some of the same issues in his post.

Well, I’ve known them for about 10 yrs now, they are at retirement age, but you never really know someone I guess. They moved to California for some time but kept this house, and a lot of the stuff they moved back is still boxed up.

What kind of motivating factors are in a contract like that to ensure they are out on time? I need to speak to them about their true date to get out before I make an offer.

Will need an appraisal for the bank, and then an architect to see if the house is worth improving as it is not up to my wife’s standard of living currently. I’m happy with the land alone as it comes with two barns, two ponds, and is in a very private setting close to my work. There is a chance that the house could be demolished and we could build from scratch, but with building prices and material delays how they are I really want to play off the existing house. Not sure if they would be up for an architect visit or not prior to sale? I did bring a contractor with me when we viewed the property but he was much more excited at the prospect of scraping the house and starting over.

[batman1425]

Originally Posted by Tickdoc

Well, I’ve known them for about 10 yrs now, they are at retirement age, but you never really know someone I guess. They moved to California for some time but kept this house, and a lot of the stuff they moved back is still boxed up.

What kind of motivating factors are in a contract like that to ensure they are out on time? I need to speak to them about their true date to get out before I make an offer.

Will need an appraisal for the bank, and then an architect to see if the house is worth improving as it is not up to my wife’s standard of living currently. I’m happy with the land alone as it comes with two barns, two ponds, and is in a very private setting close to my work. There is a chance that the house could be demolished and we could build from scratch, but with building prices and material delays how they are I really want to play off the existing house. Not sure if they would be up for an architect visit or not prior to sale? I did bring a contractor with me when we viewed the property but he was much more excited at the prospect of scraping the house and starting over.

We had a holdover fee in our rentback. Every day we were late moving out, there was a financial penalty we were on the hook for.

Should also make sure they have renters insurance. Your homeowners will cover the property once you close, but not any of their stuff.

[54ny77]

That's why you hire a good local attorney familiar with the city/county who has longstanding relationship with a title co. as well as the local building/zoning/permit departments.

I would never do an RE transaction without one, regardless of what's common in the state for settlement agent.

I can speak firsthand of title companies and closing agents missing stuff over decades that would have, and should have, clouded title and/or occupancy. A good RE attorney knows how to leverage finding those items to your benefit.

Originally Posted by jtakeda

Of course check for back taxes, liens, building violations, and depending on the area/type of real estate be diligent about doing a water test if you’re drinking ground water. As long as you use a good title company and understand the market and get proper inspections you’re good

[yngpunk]

Originally Posted by Tickdoc

Well, I’ve known them for about 10 yrs now, they are at retirement age, but you never really know someone I guess. They moved to California for some time but kept this house, and a lot of the stuff they moved back is still boxed up.

What kind of motivating factors are in a contract like that to ensure they are out on time? I need to speak to them about their true date to get out before I make an offer.

Will need an appraisal for the bank, and then an architect to see if the house is worth improving as it is not up to my wife’s standard of living currently. I’m happy with the land alone as it comes with two barns, two ponds, and is in a very private setting close to my work. There is a chance that the house could be demolished and we could build from scratch, but with building prices and material delays how they are I really want to play off the existing house. Not sure if they would be up for an architect visit or not prior to sale? I did bring a contractor with me when we viewed the property but he was much more excited at the prospect of scraping the house and starting over.

Why not just push for a further out closing date as part of the sale contract? May need to pay extra fees to have your mortgage rate lock for longer than 45-60 days, but shouldn't be too unreasonable. This is where a mortgage broker may be helpful in helping you find a lender who is amicable to this. This way, sellers know they need to move once contract is signed, but have additional time and you can confirm that house is empty and as negotiated condition before closing, but sellers are responsible for maintenance and upkeep until closing date Also, gives you an "out" (but may cost you your earnest money) if you find something else/better between contract signing and closing date.

[B4_Ford]

Originally Posted by redir

Yup all you need is a Real Estate attorney. All the realtors do is help you find a house and frankly if they didn't have a monopoly with the MLS you could find it all on your own anyway.

What is your job so I can make wildly misinformed and inaccurate generalizations about it?