How to approach and offer on a house not sale yet? (tenants, contingencies)

[qhoc]

I am not a professional real estate investor but very interested in one house in a neighborhood. I know the person living there through a friend. Recently I learnt through the tenant that he will move out and the house will be for sale (since his mother died). The money will then be distributed amongst the children. I like that area and if it is a good deal, I definitely can rent it out for stable income.

My question is: How do people usually go about doing this? The guy living there definitely doesn't know how to deal with it on his end either. I am thinking about this process in my head:

1. Call him and let him know my cash offer

2. Hire an attorney for both of us and work on the title transfer

3. Offer him to close in a week (since there is no loan) and help to move out (Uhaul rental, moving team)

I want to make it compelling so that it is a no brainer.

Do you have any advise? Thanks.

[Spottednikes]

Call your bank and get a proof of funds letter. Make sure you know comps in area so you offer a fair price for both of you. Call him up and tell him you are interested in buying house. Meet with him and make offer. Use a real estate atty for paperwork. Get inspection.

[qhoc]

Originally Posted by Spottednikes

Call your bank and get a proof of funds letter. Make sure you know comps in area so you offer a fair price for both of you. Call him up and tell him you are interested in buying house. Meet with him and make offer. Use a real estate atty for paperwork. Get inspection.

Thanks for the advise. I didn't think I need "proof of funds letter" since it'd be cash and verbal offer. I guess the attorney can guide me through the process then.

[rational1]

> I didn't think I need "proof of funds letter" since it'd be cash and verbal offer.

OK, you talk to the guy, you make an offer, he says that sounds good, but asks how he can be sure you have the $.

NOW you need the letter.

Having said that- if the guy gets an offer before it's even on the market, he might say to himself, hey, this is a hot market, maybe I can get even more if I put it on the market.

[KevinE]

Who is executing the will? That person will decide how the property is disposed.

[jghorton]

If you are making a cash-verbal offer, Go ahead and meet with him and take a standard purchase-offer form with you ... and a check, for when/if you agree on a price and earnest money deposit. Both of your signatures on the purchase agreement whould be sufficient to carry the process forward.

Before making your offer, find out what they have in mind and are hoping to get. This will give you an idea of how much room you have to negotiate ... even if it's just the realtor fee savings for a direct sale.

The title company and/or your attorney will manage the paperwork, so that's not really that big an issue. You should also arrange an inspection and include a discussion/contingency regarding major 'hidden defects.'

[qhoc]

Originally Posted by KevinE

Who is executing the will? That person will decide how the property is disposed.

Yeah this is an important question. According to him last time I spoke, it is his brother who doesn't live there. So I guess I need to get bypass him and talk to his brother then. Since if he is not the right guy, I don't want to give him too much information and waste time (for both him and myself).

[jdhall1]

Check the town records for the mailing address for the estate and contact them.

[Diana Holbrook]

I am currently doing this. We have a client with a house that was being readied for sale but was not yet on the market and someone walked in who was looking at the house next-door (which was coincidentally, also our listing). The buyer had an agent and they sent us an offer. We're running it very much like it would have run had it happened a month later. All the same issues are there, for buyer and seller, as any other purchase.

Is it here in WA? If you make an offer on the house, would you want all the standard contingencies that would ordinarily be involved in a purchase? Inspection, title, well and septic (if there is one).

Or do you want to buy it as is where is? It makes a difference in whether you need someone to help walk you through it or can do this on your own with FSBO forms. Or whether you'll be relying on us here to walk you through it with new questions every day . I don't recommend doing that!

It is customary with cash offers, to provide proof that you actually have the funds. That's what a proof of funds letter does... it can take many forms, depending on where the money is, from a copy of a statement, to a letter from a banker or investment broker.

[qhoc]

Originally Posted by Diana Holbrook

Is it here in WA? If you make an offer on the house, would you want all the standard contingencies that would ordinarily be involved in a purchase? Inspection, title, well and septic (if there is one).

Or do you want to buy it as is where is? It makes a difference in whether you need someone to help walk you through it or can do this on your own with FSBO forms. Or whether you'll be relying on us here to walk you through it with new questions every day . I don't recommend doing that!

It is customary with cash offers, to provide proof that you actually have the funds. That's what a proof of funds letter does... it can take many forms, depending on where the money is, from a copy of a statement, to a letter from a banker or investment broker.

Yes, it is WA King County.

I have been in the house before and it was in bad shape. Now it must be in very bad shape, not to the point of roof leaking or collapsing but it won't be move in ready for any new tenants. It will require some remodel at least just to rent out.

So I will plan to get some inspector to come in one morning to get a laundry list and whatever it is, I won't make contingency. My cash offer is low as I suspect it is in bad shape.