Discount realtor for selling house?

[Topaz]

2bindenver - I checked out the Web site of the law firm you mentioned and found this article:

http://www.frascona.com/resource/kjr1005wrap.htm

It contains this sentence: "But entering into an ILC or a lease/option is probably a violation of that due-on-sale clause as well."

If you aren't too weary of this topic, can you advise me how you interpret this? I promise not to construe this as legal or financial advice or to sue you for any reason.

Topaz

[2bindenver]

Originally Posted by Topaz

2bindenver - I checked out the Web site of the law firm you mentioned and found this article:

http://www.frascona.com/resource/kjr1005wrap.htm

It contains this sentence: "But entering into an ILC or a lease/option is probably a violation of that due-on-sale clause as well."

If you aren't too weary of this topic, can you advise me how you interpret this? I promise not to construe this as legal or financial advice or to sue you for any reason.

Topaz

There are two different types of lease to own. One is a called a lease option - there is a lease and option money is tendered to the seller. The buyer/tenant has the option to purchase. Then there is a lease-purchase - the buyer/tenant will purchase.

It is good that you are reading articles from the experts online. Here is another:

http://leaseoptions.bobbruss.com/leaseoptions/

[Topaz]

2bindenver, I read the article by Bob Bruss and I totally agree that doing a lease option would be an excellent way for me to sell my house in this terribly slow real estate market, but I still have concerns about the "due on sale" clause.

See this article by attorney William Bronchick:

http://www.creonline.com/articles/art-071.html

Here's the paragraph that worries me:

"Remember that the "due on sale" is triggered by "transfers" other than a deed. A lease of three years or more or a lease with option to purchase (of any term) also gives the lender the option to call the loan due."

Isn't a "lease with option to purchase" a lease option? I understand there is a difference between a lease purchase and a lease option but this seems to be saying that a lease OPTION also triggers the due on sale clause.

William Bronchick also says that banks are unlikely to call the loan due as long as interest rates stay low but that if interest rates start to rise and they find out you did a lease option, then there is more temptation for them to call the loan (unless, of course, you hide it from them, which sounds stressful).

Am I reading this correctly?

Topaz

[manchul]

Hi Topaz,

Thanks a lot for initiating this thread. It has provided me a lot of good information. I am in a similar situation as you were two years ago.

We too have to do a cross-country move and have a house to sell on the east coast. The market is not at all favorable and I think we will incur a loss of about $30K if we sell now.

I was seriously thinking of renting the house, but gradually 'am turning away from that option because trying to maintain a house on the east coast from the west coast will stress me out. Also the costs associated with renting (property manager, routine maintenance of the house etc.) may not get offset by the appreciation in the house in a year or two.

I am not sure how to proceed. I am plagued with the following questions...
- whether to do an FSBO (I think it will be difficilut for me, because managing 'showings' from across the country wll be near impossible)
- whether to negotiate with my realtor for a low commission, so that I save some money, otherwise the hit will be about $55K
- whether to do a 'rent to buy' option.

If you happen to see this post, can you please let me know...
- what did you finally do (how did you sell the house and what were the consequences?)
- any advice

Please let me know.

Thank you.

[Topaz]

Originally Posted by manchul

Hi Topaz,

Thanks a lot for initiating this thread. It has provided me a lot of good information. I am in a similar situation as you were two years ago.

We too have to do a cross-country move and have a house to sell on the east coast. The market is not at all favorable and I think we will incur a loss of about $30K if we sell now.

I was seriously thinking of renting the house, but gradually 'am turning away from that option because trying to maintain a house on the east coast from the west coast will stress me out. Also the costs associated with renting (property manager, routine maintenance of the house etc.) may not get offset by the appreciation in the house in a year or two.

I am not sure how to proceed. I am plagued with the following questions...
- whether to do an FSBO (I think it will be difficilut for me, because managing 'showings' from across the country wll be near impossible)
- whether to negotiate with my realtor for a low commission, so that I save some money, otherwise the hit will be about $55K
- whether to do a 'rent to buy' option.

If you happen to see this post, can you please let me know...
- what did you finally do (how did you sell the house and what were the consequences?)
- any advice

Please let me know.

Thank you.

We chose not to lease the house because we couldn't make the numbers work for what we could get in rent, plus the stress of having a rental house in a different state sounded unpleasant to us. We chose not to do a lease option or other "creative" real estate deal because there seemed to be many ways in which such a deal could go wrong. We ruled out a FSBO because we didn't want to stay in Colorado to manage it.

So we hired a full service realtor, re-painted and re-landscaped and upgraded the home, completely staged the house at considerable expense, and got the place sold. We lost money but not as much as we could have considering the neighborhood was full of unsold inventory and we absolutely did not want two house payments at the same time as doing that for too long could have bankrupted us.

It is a tough situation to be in...I wish you good luck in resolving it quickly with as little cost and expense as possible!

Topaz

[manchul]

Hi Topaz,

Thanks for your prompt response and good wishes!

We too are inclined to do something similar. I spoke to one of my friends who just sold his house after advertising it on FSBO. His advise to me was 'if you are not going to be local then don't go the FSBO route'. There is a lot of hassle and the buyer's agent can (bvery well) take you for a ride. He suggested hiring a full service realtor and see if he/she is willing to negotiate the comiission (he paid 2% commission to the buyer's agent)

I will try to talk to a few realtors and see what they say.

Thanks again!

Have a nice one.

Later.

[MMichelle]

I can only add that in this market it takes MORE not less to sell a house. This is no time for a seller to be cheap when it comes to who is going to market the house.

I can't figure the advise "someone" gave you about Realtors not showing houses after they have been on the market for 14 days. Frankly, that's crazy - not true at all.

A rent to own in no way gets "better" tenants. It will attract tenants who are not credit worthy - if they were they could get their own financing. I've never known a tenant to end up buying the property. I'm sure it's happened somewhere, sometime. My general feeling is that it plays on the dreams of someone who can't buy a house. I won't say it's a scam .... but sometimes when something "walks like a duck...."