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Old 11-09-2007, 03:56 PM
 
3,031 posts, read 8,556,016 times
Reputation: 840

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We had to sell our house last February. Long period of unemployment/under employment and then a failed business and we had to stay one step ahead of the bank. So we found someone who wanted to flip it, but still offered us a decent price (bottom end of market but we had some decent equity in it and we had to unload). He also made it very easy for us--allowed us to live there 3 mos rent free, did some needed repairs on the place etc. The problem (well his problem, not ours) is that he's obviously not done this before because he priced the house too high in this crazy market and it's been sitting since May and completely empty since June.

We had to move into a rental. We're hoping to move out of area and try to start fresh someplace new. Even if we could afford it (we're cleaning up our credit and it's better but still has a ways to go) we don't want to buy in this real estate market since we don't want to live here more than another year or two (for my oldest to graduate HS).

We're really unhappy with the rental for a number of reasons. And our old house still sits empty. My husband wants to make him some offer to lease option/buy it back but I'm leaning towards seeing if he'll want to take it off the market for a period of time and rent it to us. Though I guess if he wanted to carry the financing while we continue to clean up our credit, I'd consider something.

For the record, after 5 years of financial devastation, we're both working now (I returned to full time work about 18 mos ago and he finally found a good job about a 7 months ago). While neither of us is making what we once were, together, we're making a bit more than he did when he was the sole breadwinner. We're paying off debts slowly. We can't save much but we're trying to do as much as we can there. We're able to meet all of our bills (that's a great feeling!) and we have no new debt--just old debt we're cleaning up.

Any advice from the experts (and non-experts) about: 1)how to approach the guy, 2) what kind of deal to potentially offer him and/or 3) is this even a good idea?
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Old 11-09-2007, 09:03 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,693,669 times
Reputation: 1008
Do you still own the home? If not, I would walk away.....and find yourself a new place to live. Look forward...and dont look back!




Quote:
Originally Posted by NChomesomeday View Post
We had to sell our house last February. Long period of unemployment/under employment and then a failed business and we had to stay one step ahead of the bank. So we found someone who wanted to flip it, but still offered us a decent price (bottom end of market but we had some decent equity in it and we had to unload). He also made it very easy for us--allowed us to live there 3 mos rent free, did some needed repairs on the place etc. The problem (well his problem, not ours) is that he's obviously not done this before because he priced the house too high in this crazy market and it's been sitting since May and completely empty since June.

We had to move into a rental. We're hoping to move out of area and try to start fresh someplace new. Even if we could afford it (we're cleaning up our credit and it's better but still has a ways to go) we don't want to buy in this real estate market since we don't want to live here more than another year or two (for my oldest to graduate HS).

We're really unhappy with the rental for a number of reasons. And our old house still sits empty. My husband wants to make him some offer to lease option/buy it back but I'm leaning towards seeing if he'll want to take it off the market for a period of time and rent it to us. Though I guess if he wanted to carry the financing while we continue to clean up our credit, I'd consider something.

For the record, after 5 years of financial devastation, we're both working now (I returned to full time work about 18 mos ago and he finally found a good job about a 7 months ago). While neither of us is making what we once were, together, we're making a bit more than he did when he was the sole breadwinner. We're paying off debts slowly. We can't save much but we're trying to do as much as we can there. We're able to meet all of our bills (that's a great feeling!) and we have no new debt--just old debt we're cleaning up.

Any advice from the experts (and non-experts) about: 1)how to approach the guy, 2) what kind of deal to potentially offer him and/or 3) is this even a good idea?
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Old 11-10-2007, 03:12 PM
 
Location: NC
1,264 posts, read 2,205,478 times
Reputation: 554
Approach him with a lease-purchase deal. Pay him rent that at least covers his payment, and offer to purchase the house a year or two down the line at a guesstimated higher price, contingent on the house appraising at the time you're ready to get a mortgage.

In the meanwhile, get your credit reports and start pounding away at the negative items until they're gone.

And no, not that strange, I've seen it before.
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Old 11-10-2007, 10:21 PM
 
3,031 posts, read 8,556,016 times
Reputation: 840
Thanks, Chip. The quandary is that we really would like to move out of New England but don't have any job prospects now (though we're both chasing down some possibilities in Charlotte at present--not our first choice--that was Raleigh--but a good, close second!). Anyway, our lease is up here soon, though we could probably break it without much problem but we are hesitant to buy in this market. Not that purchasing our old house back wouldn't be as risky but maybe it feels safer for some reason? The one/two year deal though--what happens if we do decide to move within that time frame?
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Old 11-11-2007, 07:06 AM
 
Location: NC
1,264 posts, read 2,205,478 times
Reputation: 554
And not go through with the contract? That's fine. That's why it's called a Lease / OPTION. The contract gives you the option of either going through with it or not.
Hmm..sounds good, but then why would the seller agree to something where he may, or may not, sell his home? What about his uncertainty? Let's look at what the seller gets out of it:
1. Upfront non-refundable option money. This could be 2%, 3%, 5% or the market price. Generally, here in NC, I've seen around 2%. This is his money whether you go through with the deal or not. You are in essence paying the seller for your right to choose at a later date. The deal can be structured whereas, if you go through with the purchase, that money is credited towards the purchase.
2. The seller's mortgage gets paid. No one likes to bleed money and getting someone in the house who will pay the mortgage can make sense for the seller.
3. If the buyer goes through with the deal down the line, the seller will make his money, just not now.
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Old 11-11-2007, 09:59 PM
 
3,031 posts, read 8,556,016 times
Reputation: 840
Great advice! Thanks. I think we're going to approach him after the holidays. By then we should know if something is going to open up in NC again for one or both of us. And if it looks like we're staying until my oldest graduates in 2009,it might not be a bad idea to move back there with the option of buying . Rentals in my town are few and far between and we're stuck with the place unless something better shows up which is doubtful.
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Old 11-13-2007, 03:45 AM
 
Location: NC
1,264 posts, read 2,205,478 times
Reputation: 554
When the time comes, PM me if you need help structuring this.
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