74

Risk. The bank will probably get more over time, as long as the borrower continues to make payments. If they don't, the bank may lose money (especially if they end up having to foreclose and can't sell the house for enough to cover the loan balance). If you act as the lender, you take on this risk. You could just take the $500,000 up front from the sale and ...


67

Compared to the other answers, I feel like I'm taking crazy pills, because: Is my following calculation correct? Sorry to be the bearer of bad news, but no, this is not correct. In 3 years, if the market gets soft, and I have to sell the house for $200,000. Am I still better off than renting, because, $180,000 (taking off 20k for the realtors and ...


55

You can make a contingent offer: "I will buy this house if I sell my own." In a highly competitive environment, contingent offers tend to be ignored. (Another commentator described such a contingency clause as synonymous with "Please Reject Me".) You can get a bridge loan: you borrow money for a short term, at punishingly high interest. If your house ...


45

You negotiate with the buyer's realtor, just like a seller's realtor would do. He already has a contract with the buyers that says he won't charge them a commission. He will have to get it from you. You will tell the realtor his clients will have to offer more to cover his commission, and he will resist. And eventually you will either agree a price and a ...


40

the highest offer we could make is substantially below the asking price by around 5%. I wouldn't necessarily call that 'substantial', especially if the property has been on the market some time (I surmise this from "sales in our local area are slow"). That you are ready to proceed also makes you a strong contender, and reduces the window of opportunity for ...


38

You could ask, but you risk the seller deciding to just cancel and put the property back on the market once restrictions lift, shutting you out. Depending on the exact neighborhood and local market, there is no guarantee that a recession will even affect the chosen neighborhood. You described it as a very competitive, presumably it will still be a desirable ...


33

This is known as a "vendor take back" mortgage. It's common with empty land and with vacation properties, which Canadian banks often prefer not to offer mortgages for, or to charge quite a bit more. It's also likely in those cases that the property is subject to capital gains (not being a primary residence) so taking the money a bit at a time can lower the ...


33

Is there any shady reason why the seller would use this strategy? The seller has a reason for staying for many months and they want to get out of ownership now. If I was presented with a counter-offer like this, I would worry that the seller has inside knowledge of something. They know that the city is going to seize the property for a big project, or they ...


28

There are other things you need to account for in your math: Property Taxes Home Insurance Utilities Maintenance Neighborhood dues (maybe) Yes you build up equity in the house, but you still pay interest on your mortgage plus all of the above factors. Closing costs of getting a mortgage should also be considered, but that's a one-time upfront cost and ...


25

We’re in Utah rather than Florida, but we bought our house like this (almost 6 years ago). The seller wanted nothing to do with an agent and did not list the home anywhere, but just had a sign in their yard. However, we wanted an agent to make sure everything was done properly. The agent asked them to pay the standard commission, and they refused. We decided ...


22

With the caveat that I'm assuming your verbal agreement isn't legally binding (AIG says it isn't), I would pull out of the deal completely if I were in your shoes. By negotiating, you're essentially trying to price an unprecedented global financial/economic meltdown. What is the right haircut to the existing price? 5%? 10%? 50%? Are you looking for a ...


19

If you've already signed a contract, it's too late. Well, barring legal shenanigans. If you haven't signed a contract, then sure, you can ask. That's how negotiations work. The buyer comes up with reasons why he should pay less, the seller gives reasons why he should pay more. I wouldn't expect asking for a lower price to derail the sale. The seller could ...


15

The two most common scenarios are: You put an offer on a house which is conditional on you selling your own house first. You sell your house with the condition that you will rent it from the new owner until you purchase a new house. Since you have more control of timing when you are the buyer compared to when you are the seller, #1 is probably more common, ...


13

A bridge loan (or bridging loan) is designed for exactly this circumstance. They're short-term loans (6 months is common) designed to help home-buyers to bridge the gap between buying and selling. MoneySupermarket defines them like this: Bridging loans are designed to help people complete the purchase of a property before selling their existing home by ...


12

If you can qualify for two mortgages, this is certainly possible. For this you can talk to a banker. However, most people do not qualify for two mortgages so they go a different route. They make offers on a new home with a contingency to sell the existing home. A good Realtor will walk you through this and any possible side effects. Keep in mind that ...


12

My wife and I run a real estate brokerage in Florida. The transaction process is different here but principles are similar. I think there's a good chance the deal will fall apart if you try to renegotiate the price at this stage. Buyers and sellers in residential real estate transactions often make emotional decisions. Don't be surprised if the seller ...


10

is this how it usually works? Usually, the seller hires a realtor and agrees to a commission the realtor will get in case of a sale. This commission is included in the price, so the seller receives the amount the buyer offers minus commission. Part of it is shared with buyer's realtor if they have one. In your case, this commission is not agreed upon when ...


10

This is not risky, or dishonest. It is known as a contingency. Your relative is free to back out of this deal if it does not work for him. Although not common, basically your relation is buying a home and becoming a landlord for a period of time. A similar situation would occur if they were buying a home that was rented to a tenant with a lease in place. ...


9

(Disclosure - I have a Realtor license) You are free to negotiate any deal you wish. There are brokers who may be willing to list your home for a $1000 flat fee and 2% to the buyer broker. Another might be willing to put it up on MLS for you for a small fee, and not provide any other service. You sound like a candidate for FSBO, for sale by owner. You ...


9

Typically, in the U.S., buyer- and seller- agents (or Realtors) acquire their commission from the purchase price. If you don't have a seller-agent, then that commission is not paid. Example: You list the house at $200,000. Standard commission values are 3/2%, which means 3% for the first $100,000, 2% thereafter. Sometimes they're 3/1.5% or 3/1%, but usually ...


9

You asked, What is the best way to maximize growth on this sum of money And you gave some constraints: given that the time frame for investment would be short (no more than 1 year), it needs to be extremely liquid, and it needs to be a very safe investment since I am making concrete plans based on the amount. Is a simple savings account the best ...


9

It's not unheard of to charge rent during a closing period, but 12 months is a LONG time. It's a year of potential missed rent payments, and 12 months of "wear and tear" that the seller is no longer concerned about. I would back out just because of that, not because of the rent arrangement. Lots of houses will come on the market in the next 12 ...


8

Some things immediately spring to mind: If the remaining lease term is short (75-80 years or less), buyers will struggle to get a mortgage on the property and in turn you may struggle to find a buyer and/or you may have to accept a reduced price. Unless you pay to extend the lease or agree to start the process of doing so and negotiate the costs into the ...


8

First off this house is a very odd configuration. Twelve bedrooms and three baths in a 2500 sq ft home? The bedrooms must be pretty darn small. These things are key to your question: ...I'm a programmer, not a DIY guy. ...but my ex sigh rushed us into the purchase... First off, money in real estate is typically made at the buy, and it sounds ...


8

Your friend and her husband should urgently consult a lawyer. Worst case they are fully responsible for the mortgage while owning only half of the house. I really, really hope that you or they misunderstood something.


8

Assuming it's under English law - Scotland is different - then offers are not binding. Similarly, acceptance of offers by the seller aren't binding either. It only becomes binding when the contracts are exchanged. If you are in Scotland, then check the local law. This means that gazumping is possible, and there's nothing you can do to stop it, other than ...


7

Am I better off? Not necessarily. Renting: Buying a service. You are paying 54k for the 'service' of housing. You do not own any asset. Buying: Buying an asset, of course. Not only are you purchasing an asset, but you must also service the debt associated with it. You must also maintain the asset. This must all be done to provide yourself the same housing ...


7

"listed as an equal co-owner" means just that. Heck, he might own half if your friend+husband are considered a single unit. After all, they are only paying the mortgage because the other friend is paying the rent. Did your two friends have a contract specifying ownership percentage?


7

Recession (and the related risks and uncertainties) goes both ways. If the real estate marked drops significantly and doesn't recover quickly, you will have overpaid if you buy at the agreed price. It would indeed be reasonable to ask for a price reduction and cancel the deal if you don't get one. If the government decides to counter the economic recession ...


6

If you want to buy a house for below market price, don't fall in love with the house. Look at many houses, and focus on those which are short-sales or distressed properties. Alternatively look for properties which have been on the market for some time and have not had many viewings, and appear to be undervalued, but which also show potential. Keep an eye ...


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