I recently sent letters to a few select homeowners to see if any of them would be interested in selling privately. (FSBO). My vision was to get a desirable piece of property cheap. I sent letters saying I would purchase “as-is”, was flexible with settlement dates, and we could save on the realtor’s 6% commission. Well, an interested owner contacted me, but here’s my predicament…
House Market Value: $275k
Sale price: $263
Primary home – 1st time home buyer
They will not be ready to move out until approximately April. I have thought about a Post Settlement Occupancy agreement (November Settlement), but then I would have to pay the difference between their mortgage and mine during that occupancy period (~$500/month). I could request we add 3% assist to the Sale price to mitigate my out of pocket expenses during this 4 month period, but I’m still paying for it! (maybe they would be willing to lower the sales price a little more, but I doubt it …)
- Is there a simpler and cheaper way to structure this agreement?
I’m reluctant to wait until April to settle because:
a. Interest rates are going up! b. They may back out of the deal if they can sell for more in 6 months!
Does a sales agreement contractually bind them to sell you their house at the specified price, or can they back out at any time?
Will I have to pay taxes on the money they are contributing to the mortgage during that period? (like a renter)
Can we defer the tax and insurance escrow at settlement since they would be responsible for it during that time?
Any advice would be appreciated…
Thanks - Jim