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NC has a lot more 'hobby farms' than working farms, but the same issues occur---just on a smaller scale. I make the distinction that a hobby farm is a part-time operation for someone with a different full time job, while a working farm is a full-time farm job often supplemented by a different part-time job. Maybe that form 25-9 would be a good one in both cases, but it seems that hobby farm buyers might want everything cleared out by closing.
The 25-9 anticipates most problems in selling both.
We closed on a 795 acre piece of property about 5 years ago that was a mix of farm/ranch. It had a barn that was pretty large, with a small apartment located inside the barn...it had 368 acres of actual crop land in rice production, and the remainder was pasture land....We used 25-9 and we bought all of the furniture, tractors, mowers, planters, hay bailing equipment, irrigation equipment, generators, tools, pressure washers, art, etc that was at the place. They literally took 2 family photos, their clothes a few guns, and drove away.
It certainly was not a ranchette or a hobby farm...however I will differ with your opinion on what makes a farm a farm.
I run this 795acre place on the weekends. I converted it all to pasture land, and no longer plant crops, but I run the place like a commercial operation with the help of my dad....Its by no means full time for us, but I consider it a for profit venture. Heck, we make money on it every year...pretty much everyone in my family runs a ranch on the weekend...its apparently addictive or it runs in the blood.
There are lots of what I call weekend warriors that have farms/ranches as second jobs b/c they love the work...Im one of them. I enjoy it...its far bigger than a hobby farm, its profitable, but it just happens to be close to a major city so I can do both. Animals need alot less attention than crops - so it works out well. Plus its great for the kids to get out of the city and get a different perspective on life.
Except that in my market most loans are VA or FHA and they don't have 10k to put down. I'm in a low income area and on a 200k home the EM often ranges from 1-2k but that is a lot of money here.
I agree! - Although $1-2K is really not high enough to ensure a serious commitment. (IF a potential buyer cannot comfortably come-up with more than that for a EMD on a $200K house, they are probably not a very good candidate as a buyer. In my earlier post, I was actually responding to what seemed to be a suggestion that 5%/$10K was insufficient. In this market, I would say that's a pretty good EMD.
I agree! - Although $1-2K is really not high enough to ensure a serious commitment. (IF a potential buyer cannot comfortably come-up with more than that for a EMD on a $200K house, they are probably not a very good candidate as a buyer. In my earlier post, I was actually responding to what seemed to be a suggestion that 5%/$10K was insufficient. In this market, I would say that's a pretty good EMD.
I still think it is insufficient to say it will prevent buyers from walking away. Depending on why they are walking that could be very acceptable to them. And even that much will limit your pool of buyers as Brandon was pointing out since some don't put anywhere near that much down.
Okay, here is a scenario that might happen (although I have no evidence for it). Buyer A contracts on the house, seller has everyting ready, including a vacant house, for the walk thru the day before closing. Buyer A says oh golly I have changed my mind. I will give up my 1K of EMD. The seller is in a panic. ExBuyer A has a friend Buyer B who just happens to come along and says gee, I will buy the house but for 20K less and close in 3 wks. The poor seller, who is desparate says thank heavens, and happily is swindled out of 20K. Does that seem morally right?
Okay, here is a scenario that might happen (although I have no evidence for it). Buyer A contracts on the house, seller has everyting ready, including a vacant house, for the walk thru the day before closing. Buyer A says oh golly I have changed my mind. I will give up my 1K of EMD. The seller is in a panic. ExBuyer A has a friend Buyer B who just happens to come along and says gee, I will buy the house but for 20K less and close in 3 wks. The poor seller, who is desparate says thank heavens, and happily is swindled out of 20K. Does that seem morally right?
While there is some possible duress, the seller has the right to be unpanicked and say, "No."
If it helps, by that time, the buyer should have additional investment in the transaction, loan app fees, inspection, survey, appraisal.
While the seller is looking at a $1000 EMD, the buyer is in effect walking away from at least a couple thousand dollars invested.
I would be scared to death of selling my home without a rent back arrangement because of fickle buyers and an ever increasing number of closings that are either postponed or canceled at the last minute.
There are just tons of stories out there about last minute delayed or cancelled closing with sellers who moved out of their homes and into rentals in anticipation of the new owner coming in the next few days. Now the seller is sitting in an apartment paying rent and a mortgage on their old home at the same time licking their wounds trying to figure what to do. They have to pay rent in their new home while they are also paying a mortgage at the house they thought was sold. Also the empty home does not sell as well as a home that is staged and full of nice furniture.
At least if the seller is doing a short rent back they were not forced to move out before the home actually closed and try to put an empty stale home back on the market.
I would be scared to death of selling my home without a rent back arrangement because of fickle buyers and an ever increasing number of closings that are either postponed or canceled at the last minute.
There are just tons of stories out there about last minute delayed or cancelled closing with sellers who moved out of their homes and into rentals in anticipation of the new owner coming in the next few days. Now the seller is sitting in an apartment paying rent and a mortgage on their old home at the same time licking their wounds trying to figure what to do. They have to pay rent in their new home while they are also paying a mortgage at the house they thought was sold. Also the empty home does not sell as well as a home that is staged and full of nice furniture.
At least if the seller is doing a short rent back they were not forced to move out before the home actually closed and try to put an empty stale home back on the market.
I would expect a seller to pony up many thousands of dollars for a 30 day rent back requirement.
Interesting conversation. It made me think about the opposite. What prevents a seller from saying at the last minute they aren't going to sell the house?
How about the 6% commission that the seller would owe their listing agent for breaching the contract and walking?
Great system, the buyer loses out on the cost of inspections, appraisal and mortgage application and the listing agent walks away with 6% (or whatever the seller agreed to pay them).
How about the 6% commission that the seller would owe their listing agent for breaching the contract and walking?
Great system, the buyer loses out on the cost of inspections, appraisal and mortgage application and the listing agent walks away with 6% (or whatever the seller agreed to pay them).
Name one time this has happened. Just one will do.
Make it within the last ten years.
Name one time this has happened. Just one will do.
Make it within the last ten years.
As a seller I have never breached contract so I wouldn't know.
All I know is that it is a common condition in most listing agreements. Seller breaches (walks) and they owe their listing agent the full commission.
Show me one boilerplate state RE Association Listing Agreement that doesnt have this clause. Just one will do.
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