Realestate Lawyer?

[Yoby]

So I have a house up for sale and have an offer, but am leary of it. Is there anyone that knows a person in the SE corner that has an expert in banking/real estate? I am NOT looking for a real estate agent, just looking for someone that can tell me if this offer is fully legal.

 

[Phill Latio]

What's the question?

 

[eyexer]

yea no question in that lol

 

[wslayer]

You have the house for sale. You can accept or deny any and all offers if you desire. If you don't feel comfortable the way it is presented, pass.

 

[Brian Renville]

Just be careful you have everything dislosed that needs to be. A person can look at a place and make an offer, buy then come back saying certain things about the property were not disclosed and screw ya for it. I'm no agent or expert though but that is also how i understand some of the process. I have a property for sale an I called an agent to make sure the bases are covered, the shady possibilities gave me the creeps.

 

[Yoby]

So the situation is that a person came to look at our house. Once I had his name I did a bit of research and found he is a realtor. Not a big deal, he indicated he was looking for himself. He and his wife look at the place 2 more times and he puts in his first offer. Not a full offer, but the top number was something that you could start negotiating with, until I started reading through the rest of the PA. He added in that he wanted 6% and 5K towards closing. Since then he has also indicated that the money from the 6% and 5K are the majority his down payment.

Talking with a couple people, they have indicated this might be "creative" banking. I have no interest in party to "creative" banking. An that is why I am looking for someone that knows something about the banking side to tell me the ins/outs of banking for mortgage.

yea no question in that lol

It would be the sentence with the question mark (?) behind it.

 

[Bri-guy]

PM sent

 

[pluckem]

He added in that he wanted 6% and 5K towards closing. Since then he has also indicated that the money from the 6% and 5K are the majority his down payment.

.

I sold my previous house by myself and the buyer was looking to buy the property as a rental property. His offer was $6k over asking price but he wanted $6k in return. Basically I would walk away with full ask price and he would finance $6k under his loan on the property.

The potential issue I saw with this, is the property needs to appraise for whatever the selling price is regardless of the cash back the buyer wants. So I added some verbiage in the contract that he would have to cover the difference (if there was any) between the appraised price and selling price. I did not want to have the deal go south after missing 2 of the prime home sales months.

I did have an attorney look over the documents. There were no issues in the process and closing went smooth.

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He added in that he wanted 6% and 5K towards closing.

Thinking about this some more, the 6% is coincidently the standard real estate agent costs and $5k would be a good estimate to cover all of closing. If I had to speculate he might be interested in flipping the property and doing so without any cash out of his pocket.

You cover closing costs and the 6% to cover the future real estate agents costs and he will some cash in hand to cover the interest and other costs associated with the flip.

 

[Allen]

So basically you are saying the person wants a 6% commission to sell your house to them plus $5k to go towards closing costs.

Yeah, I think the person is trying to buy the house for a quick flip while you pay the cash out of hand costs of doing so. I am guessing the realtor values your house at something above what you have asked and if he/she can get you to sign it over to them, then they can make a tidy little profit.

Regardless of the above, your goal is to get out of the house with $XXX,XXX dollars in hand. If they are offering you something that allows you to get what you want/need, do you really care what they do with it later?

Basically, if they intend to flip it, they are taking a bit of a risk in that they could get stuck with owning it for a long time if your estimate of what it's worth is more realistic than theirs. In order for them to make money on it they have to flip it pretty quickly because each month they "own" it costs them money in the form of interest to whoever the lender ends up being. I figure with today's interest rates it would cost them about $400 a month in interest/taxes/insurance per $100k of the value of the place. It doesn't take long to kill any profit they may envision.

Of course, I am neither a banker or real estate expert, nor do I have any insight to the housing market of your area.

One thing I WOULD absolutely recommend is to contact a different realtor and have them do a market assessment for you. Some will do this for free in hoping to get your business, but you may be able to come clean with them and just let them know you are planning on selling by owner and are willing to pay a few bucks for their time. $300-500 in this sense can be money well spent.

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Note: My experience with "appraisals" is that unless you are way out of line, their motto tends to be one of "the appraisal will come in as needed". And yes, I don't see why this wouldn't be legal. Perhaps a little on the fringe of what banks want though as the buyer doesn't really have much skin in the game.

 

[Yoby]

One thing I WOULD absolutely recommend is to contact a different realtor and have them do a market assessment for you. Some will do this for free in hoping to get your business, but you may be able to come clean with them and just let them know you are planning on selling by owner and are willing to pay a few bucks for their time. $300-500 in this sense can be money well spent.

I actually had 3 agents come in and give me an estimated list price. I am about on que with what they told me for list price. Which is another head scratcher to me. Only other thing I can come up with is the guy would split land house off from the land, sub-divide the land and parcel it our for sale. The only other thing that catches me is that the way it is listed in the PA, 6% is paid to the brokerage, not identified as a commission. In the negotiation process, he has actually come up 6% in his offer, but won't give up the 6% verbiage. Why wouldn't he turn the 6% into a monetary value and add it to the 5K he is asking for? That 6% bothers the shit out of me.

 

[Phill Latio]

So basically you are saying the person wants a 6% commission to sell your house to them plus $5k to go towards closing costs.

Yeah, I think the person is trying to buy the house for a quick flip while you pay the cash out of hand costs of doing so. I am guessing the realtor values your house at something above what you have asked and if he/she can get you to sign it over to them, then they can make a tidy little profit.

Regardless of the above, your goal is to get out of the house with $XXX,XXX dollars in hand. If they are offering you something that allows you to get what you want/need, do you really care what they do with it later?

Basically, if they intend to flip it, they are taking a bit of a risk in that they could get stuck with owning it for a long time if your estimate of what it's worth is more realistic than theirs. In order for them to make money on it they have to flip it pretty quickly because each month they "own" it costs them money in the form of interest to whoever the lender ends up being. I figure with today's interest rates it would cost them about $400 a month in interest/taxes/insurance per $100k of the value of the place. It doesn't take long to kill any profit they may envision.

Of course, I am neither a banker or real estate expert, nor do I have any insight to the housing market of your area.

One thing I WOULD absolutely recommend is to contact a different realtor and have them do a market assessment for you. Some will do this for free in hoping to get your business, but you may be able to come clean with them and just let them know you are planning on selling by owner and are willing to pay a few bucks for their time. $300-500 in this sense can be money well spent.

- - - Updated - - -

Note: My experience with "appraisals" is that unless you are way out of line, their motto tends to be one of "the appraisal will come in as needed". And yes, I don't see why this wouldn't be legal. Perhaps a little on the fringe of what banks want though as the buyer doesn't really have much skin in the game.

This exactly

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I actually had 3 agents come in and give me an estimated list price. I am about on que with what they told me for list price. Which is another head scratcher to me. Only other thing I can come up with is the guy would split land house off from the land, sub-divide the land and parcel it our for sale. The only other thing that catches me is that the way it is listed in the PA, 6% is paid to the brokerage, not identified as a commission. In the negotiation process, he has actually come up 6% in his offer, but won't give up the 6% verbiage. Why wouldn't he turn the 6% into a monetary value and add it to the 5K he is asking for? That 6% bothers the shit out of me.

This just sounds fishy to me. The purchase agreement is yours to write up. If you don't like what he added give it back to him with that part in white out

 

[eyexer]

I'm guessing he has a buyer already, possibly from out of town that doesn't even know the purchase price your asking. He will buy it and have it sold before he even buys it. The 6% and 5K will cover his down payment for his extremely short term financing and the 5K will cover closing costs. Lots of difference scenarios could be behind this. I would call his bluff by requiring 5K in earnest money paid to you and not ran through escrow therefore if he backs out or something falls through on his end you get 5K. If you put it in escrow you'll never see it because he is smart enough to have something in the PA that will allow him to opt out and not loose his earnest money. But if he gives it to you it's yours.

 

[deleted___account]

Yep he's about to flip a house for free lol

 

[deleted member]

i vote investment property and a loan to value situation. probably needs 20-25% equity and doesn't quite have it. nothing illegal about it. if you are getting what you want from the sale as far as dollars goes, then go for it. its no real concern of yours when it comes to how this affects his deals with others.

 

[westwolfone]

Follow your gut and pass on selling to this guy.

 

[pluckem]

Did the guy disclose he was a realtor? Sounds like he left that part out and you only know because of Google. I thought there was some laws or ethics about them disclosing that.


I wouldn't automatically pass on the deal. Just do what you need to do to get comfortable with the contract. Get the $$ you want out of the house and lay out your counter. I think you were headed in the right direction with attorney consult.

 

[Zogman]

If you are selling this house on your own you need to get a good/experienced Real Estate Attorney and you write your contract. Do NOT enter into his contract.

 

[Allen]

I am just spitballing here, but it could just be that he wants to finance the whole thing (or next to the whole thing to avoid PMI) and this is his way of doing it. Jack the price up 6% so long as the appraisal comes in that high, and voila, he gets it for little to no money down. There were all kinds of "Learn How to Buy Real Estate for Little or No Money Down" things over the years and this may be one of the gimmicks for doing so.

Like I said before, so long as you are comfortable with the language allowing you to walk away with whatever you wanted/needed, it's not something I'd worry too much about. Especially since you've already confirmed your asking amount with a market assessment.

Once he owns it, he may very well plan on splitting off some of the land, etc. But again, as the owner that's his prerogative.


Any luck in finding an attorney to review it for you? I see you're in the SE corner of the state, maybe a trip to Wahpeton or Farhole to talk to an attorney for a couple hundred pesos would give you the peace of mind you seek.

I actually had 3 agents come in and give me an estimated list price. I am about on que with what they told me for list price. Which is another head scratcher to me. Only other thing I can come up with is the guy would split land house off from the land, sub-divide the land and parcel it our for sale. The only other thing that catches me is that the way it is listed in the PA, 6% is paid to the brokerage, not identified as a commission. In the negotiation process, he has actually come up 6% in his offer, but won't give up the 6% verbiage. Why wouldn't he turn the 6% into a monetary value and add it to the 5K he is asking for? That 6% bothers the shit out of me.