We have a seller, that agreed to come down on the price 40%. The house appraised recently for $95,000 and she agreed to sell for $60,000. Then later she tells me they owe $74,000, but they will get a loan on the $14,000, to pay the mort. company in full. I haven’t been doing this long enough to know, can we do this? Will that work? Any help on this is greatly appreciated!!!
Howdy Sherry:
This can be done and is done often in bad markets where folks with good credit and some cash want out of a deal. Usually the property is not worth more than they owe however. I almost did a deal on two duplexes once where they were worth about $45,000 each but still owed $90,000 on them each. The seller was going to pay off one if we assumed the other loan. He backed out and I do not know what happened after that.
You could also get them to give you the $14,000 and leave the loan in place or maybe even borrow more than the $60,000 that you will need to close. How do they plan to secure the $14,000 loan that they are getting?
My only question is why are they willing to sell so cheap when it is worth a lot more?
Thankyou for your response. I had forgot to ask why they were selling, but she tells me it’s her parents house and her father due to illness can no longer make the payments. So their motivated sellers. They want to finance the remaining $14,000. Is there a finance company that will do that?
They would have to use other property to secure the loan unless you are willing to let them use the house you are buying. I do not thing you want to do that or to borrow the extra yourself and let them pay you. That will kind of get old for them and when they quit paying you will be stuck with the remaining balance.
You will be better to let them borrow on their credit at a bank or personal loan or a credit card etc if they have no other stock, bonds, gold or other real estate or real estate lien notes or ?
Yes, that sounds right. I’ll suggest that they get a personal loan. Thankyou!!!