I’m interesting in this new home for my primary and I’m waiting for my current one to sell. I was thinking the seller would have been interesting in a lease option since the house has been on the market for about 490 days.
Here’s the response back:
The owner, through his agent, offers these comments: He is not interested in renting his house, but he will sell it to you with 25% cash down, and he would hold a balloon mortgage at 5 1/2% for one year, while you have the chance to sell your property. If you don’t have a closing in a year, he will extend the mortgage for another three months, after which, if you still didn’t close on your current property, he would call the loan. The sale price, would be very near the asking price of $475,000.
Now, my offer for this home would be 425,000 and i’d buy it below 450,000.
Before i walk - I was just wondering if anyone else had some thoughts…
25% cash down?
Balloon mortgage at 5-1/2%?
Asking price of $475k?
YOUR OFFER $425K!!!
Do you know you can get foreclosures for half price now in this market? I don’t mean to sound rude but I’d offer $325K AT MAX!!! If they didn’t except that then I’d RUN away from that deal.
As an investor I have no emotions in a purchase so this advice is as an investor. I always make a lowball cash offer so I know the lowest amount the seller will sell for. Make sure you are far apart such as 300K offer and seller wants 450K. Tell the seller you will meet him in the middle if he does a lease option or seller finances. This property has been on the market for almost a year and a half. It is obvious the seller is asking way too much. Do you know how much is owed? He is probably under water and you may be able to pick it up as a short sale or REO. I would sell your home first actually.
If they have had it listed for 490 days, it means they are either asking too much or are unmotivated to sell. Or both.
The terms are lousy and totally in favor of the seller.
If you have your heart set on this home, then get your home sold first. Then buy it or work a deal with the seller. Do not get yourself in a position where you have a short term note coming due in a turbulent market like this…
They must be unmotivated to sell. Any home that doesn’t sell in 90-180 days is either over priced or something is wrong with it. This is the tough part as investing is all about the numbers and buying your home to live in is very emotional. My advice is to pay what it is worth to you, on your terms, then find 10 more houses you love and do the same thing. Then take the deal that makes you the happiest.