Investors Need Not Apply

[New2Tn]

Clevelandgal and Aquaboy both confirmed what I was thinking, so we'll take some time and do it right without putting ourselves in legal jeopardy. Thanks for the input from everyone.

[hydro]

just look at the lending. If they are coming in with 3% or less down, they are likely not an investor. If they have less than 20% down, it is not a 2nd residence and therefore likely not an investor. If they are paying PMI, they are likely no investor. These are tells, and your realtor will certainly know the terms of the buyers offer and should be easy to determine if you pay attention to the details. Do they want a 90 day escrow? No flipper wants a long escrow, market could turn in meantime. Are they asking YOU to replace the carpet during escrow? That does not sound like the investors I know.

[New2Tn]

Originally Posted by hydro

just look at the lending. If they are coming in with 3% or less down, they are likely not an investor. If they have less than 20% down, it is not a 2nd residence and therefore likely not an investor. If they are paying PMI, they are likely no investor. These are tells, and your realtor will certainly know the terms of the buyers offer and should be easy to determine if you pay attention to the details. Do they want a 90 day escrow? No flipper wants a long escrow, market could turn in meantime. Are they asking YOU to replace the carpet during escrow? That does not sound like the investors I know.

Those are all excellent points. Thanks.

[KC6ZLV]

Originally Posted by Aquaboy

Carmichael has racial CCR's but they were made illegal by the Fair Housing Act and the Supreme Court.

Do you have a reference to back up your statement?

I've considered buying several houses in Carmichael. Not one of them had a racial CCR.

[KC6ZLV]

Back to the original topic, there is a possibility you could write a deed restriction prohibiting certain activities, such as a requirement that the property be owner-occupied.

[Aquaboy]

Originally Posted by KC6ZLV

Do you have a reference to back up your statement?

I've considered buying several houses in Carmichael. Not one of them had a racial CCR.

You wont see them on newer homes, and the SCOTUS made them illegal anyways. They basically restricted ownership in the area to white, Christian people. That was before 1948.

[Aquaboy]

Racist Language Found in California County's Home Ownership Documents | Fox News

Old news, but here it is.


http://legal-dictionary.thefreedicti...ng+Act+of+1968

Interesting reading on CC&R's.

[Aquaboy]

Originally Posted by KC6ZLV

Back to the original topic, there is a possibility you could write a deed restriction prohibiting certain activities, such as a requirement that the property be owner-occupied.

Good idea, Bill. Any experts here? Nina? Is this legal?

[shelato]

The problem with that type of deed restriction is who is going to enforce it later? In a condo complex, the condo promoter can insert a deed restriction and the Home Owners Association generally serves as the party responsible for enforcement of these deed restrictions, so that makes these deed restrictions binding. But this type of deed restriction puts limits on the transferability of property. Let's say you sell this property to a young couple as you wish. Five years later, they need to sell the property but the market is tough and the only person interested in buying the property is an investor. So in this situation who will enforce the deed restriction. My hunch is that this situation now the young couple and the investor who want to sell this property will take the matter to court and try to get the deed restriction removed. Maybe the court will enforce it or will subpoena you as the beneficial third party to the deed restriction to make you defend the deed restriction or more like since both parties to the suit want the deed restriction dropped they court will strike it as an infringement on transferability of the property, with the consequence that basically you just screwed up the ability of the young couple to take some equity out of her time owning the property because it went to lawyers fees.

While I appreciate the idea of trying to look out for your neighbors, fundamentally neighborhoods change over time. Sometimes they increase the number of owner occupants and sometimes they decrease the number of owner occupants. But if the economic vitality of the neighborhood changes at some point in the future where the property is worth more to a landlord as a rental property than to a homeowner as an owner occupied property, then perhaps you are helping the couple more by not putting this type of deed restriction on the property.

[NinaN]

I agree. In the end, you get to choose who gets to buy your house but I don't think it wise to try to do a deed restriction. There have been a lot of great suggestions on how to determine if a potential buyer will be owner occupied. Since you said your house is in great condition it should sell at a premium compared to the neighborhood. That alone will likely deter investors as they are looking for below market properties.

Good luck with your sale. It's awesome you are concerned about the neighborhood even after you leave. I'm sure that you will make a good choice.