a confusing offer....at last (clause, negotiating, landlords, property)
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More good points, 2cod. For sure we would not let them move in without the 10 grand. Certainly we would not contribute anything towards rent.
I guess this isn't really like "rent-to-own" because they want to build, and that's a risk for us. And, I can see how in their eyes, they're "doing us a favor"....
This scenario seems to be going downhill....but at least we're forewarned, thanks to you-all!
You're not a bank. If they want to build then they can get their own loan when they buy the land from you. If they can't get a loan the normal way then they have no business building a home to begin with! This is the craziest thing I have ever heard of! A lot of scammers start coming around once a property is listed for a long period of time. They prey on desperate people. You don't seem desperate to me. Don't fall for it!
I'd consider a lease with option to buy with a high nonrefundable deposit...like 10k or more.
I'd tell them you WILL not finance construction nor allow construction to start without them closing on your home. And that there are to be no modifications to your property unless they close on it. Then they own it and can do what they like. And that prior to moving in, they need to be preaporoved, and actually have an underwriting desktop approval from lender, pending appraisal. Make sure they can actually buy before letting them sign contract and move in. Have a real estate attorney you choose do contract.
Our rural property (5 acres with mobile home) has been for sale for almost 3 years. We just got this offer:
This is not an offer, but a proposal sent to your Realtor, to judge the potential of being able to make a deal with the owners (you). If the Realtor is able to work the details out with you, they will go to a contract. This is not unusual, and just a normal way of doing business for the Realtor.
WE HAVE NOT FALLEN OFF THE FACE OF THE EARTH JUST WORKING WITH THE CONTRACTOR FOR NUMBERS. WE STARTED WITH ONE DESIGN BUT HAVE SWITCHED TO ANOTHER ONE SO HE HAAS HAD TO REDO THE NUMBERS A COUPLE OF TIMES
An explanation of why it has take time to get back to possibly making a deal on the property. They have finally settled on a design and worked a agreement with the contractor to buildthe home at a price they can live with and afford. Reasonable explanation, and not unreasonable as this type of thing takes time to do.
1-IS THERE ANYWAY THE SELLER MIGHT LET US LEASE THE PROPERTY WITH OPTION TO PURCHASE AFTER WE KNOW WE LIKE IT THERE., THINKING 9 MONTHS WOULD BE BEST WE WOULD TAKE CARE OF PROPERTY PAY ALL COSTS, WOULD RELIEVE HIM OF FINDING SOMEONE TO CARETAKE THE PLACE. 90% WE WILL LIKE (I AM 100%) BUT HATE TO PUT MONEY DOWN THEN NOT WANT TO BE THERE.
They want to lease the property to see if they will really like living in that area. And if they like it at the end of 9 months or before it would turn into a purchase. Again not unusual. This type of thing is done on a regular basis. Especially a very difficult property to sell as your property has proven to be. In a hot market for similar property, people do not consider a lease option. A property that is hard/impossible to sell, this often done for one reason or another and my be a very good route for you to follow. Most such options end up converting to a sale. A few thousand dollars for the option, applied to the sale if it is exercised is common. Say $5,000 as the option payment.
2-WE WANT TO PUT A NEW HOME (2000 TO 2500 SQ FT CABIN STYLE ) ON THE PROPERTY WOULD SELLER SUBORDINATE TO A CONSTRUCTION LOAN THAT WOULD BE HALF OF THE CONSTRUCTION COST, IE IF HOME COSTS WERE 150,000 WOULD ASK HIM TO SUBORDINATE FOR 75,000 WOULD PUT HIM AT A LITTLE RISK BUT WOULD ALSO GIVE HIM A MORE DERISABLE PROPERTY IF WE DEFAULTED
Again common. 50% of the construction cost is apparently available and only 50% cent to be financed. When the home is completed, the mortgage goes into place, and the lot is paid off in full. Developers do this all the time. They split up a property into lots, and follow this plan that the seller is proposing, and get paid as the homes are sold and loaned on. This may be the only way you will ever get the property sold. A lot of residential salespeople do not understand what really is happening in these situations, so you need a real estate attorney familiar with this type transaction to draw up the lot sale contract to protect you.
THANKS FOR YOUR HELP THINK WERE GETTING CLOSE TO MAKE OFFER DEPENDING ON HIS RESPONSE.
Of course I will search for a real estate attorney to look this over, but at first glance, what does anyone think?
I barely understand what he's saying. I realize any deal like this is not optimum, but we have been sitting on this place forever, and now we're in So. America trying to find someone to irrigate the place for irrigation season. We are worried with no caretaker; the place has been sitting empty...
Before you say "Run quickly" realize our difficult position.
Really appreciate any input....thanks all.
I spent from 1972 until I finally retired as an investment real estate broker. I have subdivided land, had buildings built, and bought and sold a tremendous amount of homes for investors along with large farms, ranches, commercial buildings, etc., buying, selling, and exchanging real estate in numerous states, and as far away as Costa Rica and Belize. What they are wanting to propose is very common and not unusual in any way. If you follow this proposed idea, then you want a real estate attorney involved to approve or do the paper work. Unless the attorney specializes in real estate look for another one that does.
Again common. 50% of the construction cost is apparently available and only 50% cent to be financed. When the home is completed, the mortgage goes into place, and the lot is paid off in full. Developers do this all the time. They split up a property into lots, and follow this plan that the seller is proposing, and get paid as the homes are sold and loaned on. This may be the only way you will ever get the property sold. A lot of residential salespeople do not understand what really is happening in these situations, so you need a real estate attorney familiar with this type transaction to draw up the lot sale contract to protect you.
It would still be very risky for them to subordinate their interest in the property. If things don't work out as the buyer plans (even assuming they are legitimate), the OP could lose everything. That is not a risk I would encourage someone to take.
I personally know a few people who were cheated on land sales through development schemes involving Seller-financing. Caution needs to be the watchword.
Again this is rural land that has been on the market a long time. This is an illiquid asset.
And you negotiate the arrangement as best you can. And you try and understand the financial capability of the buyer. The assumption on here appears to be that all such buyers are dead beat con men. That is unlikely.
First off you can separate the lease purchase from any financing of the home build. And if they do not make sense as a tandem don't do them as a tndem.
You structure any deal to finance the building such So that the buyers money goes first. And you try to set it up so you cover only the last phases of the building. And you try and make sure the home has market value when done before you commit at all.;
I am with old trader. Perfectly reasonable deal if the details work out satisfactorily. And not a deal that you reject out of hand. In fact the normal victim in this sort of situation when they go bad is the buyer not the seller.
I sometimes think we have opinions on her lacking fact and good sense. This being a good example.
That they're in South America was in the original post. (The "equator" part was in the OP's screen name header.)
The post says they are NOW in South America. It does not say that the parcel of land they are selling is in South America. And you can't go by locations listed if a person is actually there. Mine says somewhere in America. That could mean the United States of America, North America, South America, or I could just be pulling your leg. I've seen people say they're from Mars, Venus, Jupiter, etc....highly doubtful they're living on another planet!
The post says they are NOW in South America. It does not say that the parcel of land they are selling is in South America.
Correct, they never stated that the land is in South America. In their second post they indicated that the property is in Utah. It's helpful if all appropriate information is in the first post of a thread, but sometimes we just have to put the pieces of the puzzle together.
Quote:
Originally Posted by Sand&Salt
Yes, this was forwarded from our real estate agent, unedited. We have had only one other (poor) offer in 3 years, so do not want to reject anything out of hand. This is the first we have heard from our agent for several months. This is in Utah, btw.
Absolutely not. They have no money to buy it, wanting you to give them financing and then they want you to be on the hook for money that they borrow to build a house on, incidentally, land that they do not own.
They can borrow the money to build the house and then just take the money and walk away, leaving you with a lien for the entire amount of the loan on your property, which, incidentally, they never paid you for.
If you have not had an offer in three years, you are over-priced. I suggest that you drop the price substantially and simply unload it instead of getting yourself entangled in what could easily turn into a quagmire.
(you understand, right, that when you subjugate, you are taking second position, so if they walk away from a bad mortgage, you have no hope at all of reclaiming any money
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