[michealb]

Zillow - Real Estate Valuations, Homes for Sale, Free Real Estate Information
Will tell you about what the property is worth. The problem with real estate is that it is worth what someone else will pay for it and you can't move it to a location where someone will pay more for it. He is an investor so he is trying to get the most he can for his house. You may want to consider hiring your own agent, a professional who knows as much about realestate as the seller does. At the very least you should make your offer contingent on a home inspection and an independent appraisal. Many real estate investors make their money taking advantage of the people that fall in love with a house.

[truong81]

I live in Virginia - Fairfax County.

Now you've really got me wondering............do you mind telling
us where you live?

The high prices (MUCH higher than I'm used to) I know aren't uncommon in some places. But is it common in your area for realtors to kick back $$ to the buyers/sellers? That I've never heard of as standard practice. Just curious.

Karla in TX

[RubyPitbull]

You know Michael, you bring up a good point with checking out Zillow. For me, they still haven't managed to get housing prices in my area, so I forgot about the. Another site that I find very useful to get an idea of what houses are going for in any area is Trulia - Real Estate, Homes For Sale, Sold Properties, Real Estate Maps.

I believe truong mentioned that he has a buyers broker. Somehow, I don't think the broker is doing his/her job properly. That broker should be advising what we have all advised.

[RubyPitbull]

Ah, I missed Fairfax County. Yep. That is another high priced area along with DC.

[GoldieMae]

1. He is not breaking any law by telling you that he is going to use an agent to sell it.
2. He is trying to get more for his house than he thinks it is worth. Of course he is. Every seller on the face of the planet is.
3. If you want to bid on the house, then offer him what you think it is worth, and put down little to no earnest money (maybe $1000). If you think it is worth 480,000, then that is what you should offer.
4. Your lender will require an appraisal if your offer is accepted. You can't get a mortgage without one. But lender appraisers always appraise homes for $2-3000 above the offer presented on the contract. They are in the business to help the mortgage company get the mortgage. If you want, hire your own appraiser to look at the house before you make an offer.
5. Put every possible contingency in that offer. Make it subject to appraisal, obtaining financing, getting a home inspection with no repairs, payment of the buyer's broker's commission, throw in the refrigerator, stove, and every yard tool in his garage, etc.
6. Do you have a buyer's broker? Get one if you don't, particularly in your area. The seller will have to pay the buyer's broker's commission, not you. He has the right to refuse to deal with anyone who has a broker, but I would not proceed without the aid of a broker in this case. And get one familiar with the area, not some guy from DC who only knows Chevy Chase.
7. Get title insurance. Your lender will require it, but even if they don't you should still get it.

Don't let the seller's self-interest scare you off from buying the home if you love it. Just be shrewd.

[truong81]

Yes I do have a buyer broker - however this house was advertised as FSBO therefore I did not get my agent involved. But now if the seller wants to bring his agent into it so will I.

You know micheal, you bring up a good point with checking out Zillow. For me, they still haven't managed to get housing prices in my area, so I forgot about the. Another site that I find very useful to get an idea of what houses are going for in any area is Trulia - Real Estate, Homes For Sale, Sold Properties, Real Estate Maps.

I believe truong mentioned that he has a buyers broker. Somehow, I don't think the broker is doing his/her job properly. That broker should be advising what we have all advised.

Yes I do - and that should be she has a buyer broker not he ;)

[RubyPitbull]

Truong, I didn't even think to ask if this is your first home purchase. The info Goldie Mae has given you will be very helpful to you. In addition, I like putting into the contract, contingent upon not only a home inspection, but an insurance inspection as well. Insurance companies can have very stringent requirements. Both of those things will allow you the latitude to go back and negotiate a lower price if there are items that must be repaired, replaced, or installed.

P.S. sorry truong, hard to tell gender here.

[excon]

Hello again, truong:

Do you have a separate buyers broker agreement?? If not, your broker represents the seller.

If you're bringing him in as protection against their broker, you're whisteling Dixie. Your broker should help you negotiate the price and the purchase and sales agreement.

After that, if you want protection (and you DO), hire a lawyer for the closing.

excon

[truong81]

1. He is not breaking any law by telling you that he is going to use an agent to sell it.

2. He is trying to get more for his house than he thinks it is worth. Of course he is. Every seller on the face of the planet is.

3. If you want to bid on the house, then offer him what you think it is worth, and put down little to no earnest money (maybe $1000). If you think it is worth 480,000, then that is what you should offer.


4. Your lender will require an appraisal if your offer is accepted. You can't get a mortgage without one. But lender appraisers always appraise homes for $2-3000 above the offer presented on the contract. They are in the business to help the mortgage company get the mortgage. If you want, hire your own appraiser to look at the house before you make an offer.

5. Put every possible contingency in that offer. Make it subject to appraisal, obtaining financing, getting a home inspection with no repairs, payment of the buyer's broker's commission, throw in the refrigerator, stove, and every yard tool in his garage, etc.

6. Do you have a buyer's broker? Get one if you don't, particularly in your area. The seller will have to pay the buyer's broker's commission, not you. He has the right to refuse to deal with anyone who has a broker, but I would not proceed without the aid of a broker in this case. And get one familiar with the area, not some guy from DC who only knows Chevy Chase.


7. Get title insurance. Your lender will require it, but even if they don't you should still get it.

Don't let the seller's self-interest scare you off from buying the home if you love it. Just be shrewd.

1. Ok he's not breaking any law but he had it falsely advertised. The signed on the lawn is FSBO but when he got me into the house he's telling me he will get his 'friend' who's a agent to write the contract.

2. Yes I understand that but as a buyer I don't want to get sucked in and pay more than the value for this community. It is not my fault he spent 100k on upgrades. His house was the most expensive one in that community.

3.I'm not an agent so I don't know what it is really worth. I am only going by what the house in that community has recently sold for. And he has a point, no other house will have the same upgrade cause he went above and beyond.


4.Yes, but this is a short sale. I went under the impression that his lender will have the house appraised. Now he is telling me that he knows a friend who can and will appraise the house.


5.-Very good point.

6. I do have a buyer broker.


7.In today's market I think you have to get the title insurance. I think it might even be
required by the lender.


I'm only worried because this is a 'short sale' and I do not know much about short sale that I don't want to make an offer and then have his lender just refuse it right off the bat.

[truong81]

No this is not my first home purchase. I have purchased several in the past which are all rental properties now. This townhome however will be the first for me to live in :)

Truong, I didn't even think to ask if this is your first home purchase. The info Goldie Mae has given you will be very helpful to you. In addition, I like putting into the contract, contingent upon not only a home inspection, but an insurance inspection as well. Insurance companies can have very stringent requirements. Both of those things will allow you the lattitude to go back and negotiate a lower price if there are items that must be repaired, replaced, or installed.

P.S. sorry truong, hard to tell gender here.

[RubyPitbull]

Okay, so you know what you need to do.

I would most definitely avoid allowing him to have a "friend" give you an appraisal. That puts up red flags to me all over the place. Get your own estimate either before, if you prefer (probably cheaper), or pay for the lender's appraisal if you go into contract.

I have to say that if this was me, I would wait and watch. You mentioned that he went "above and beyond" in his upgrades. He put himself on the line with that. Sounds like he lost his head a bit and was getting greedy with the market the way it was, and now has boxed himself into a corner with wasteful upgrades. Not smart on his part.

P.S. I understand your concern about the short sale. You can't control what his lender will do. But, you can control how much you are willing to pay. Just remember, a lender can and will reject you because it isn't worth what you are offering.

[ScottGem]

Whether it's a short sale or not doesn't really matter to you.

You want the contract drawn up by YOUR attorney or representative, NOT his.

But the bottomline is still that, if you want the house you make an offer that YOU are comfortable with. If the offer is accepted then you go to contract.

[michealb]

Truong81, I'm just south of you in Prince William. So if you decide you need a real estate agent let me know. I use to run Coldwell Banker's computer network. So I know some of the best agents in the area.

[truong81]

I know what I'm willing to offer. I honestly do not like the attitude the seller was giving off from the jump start. He kept saying 'put in any offer you want, it is not my decision.'

Whether its a short sale or not doesn't really matter to you.

You want the contract drawn up by YOUR attorney or representative, NOT his.

But the bottomline is still that, if you want the house you make an offer that YOU are comfortable with. If the offer is accepted then you go to contract.

[GoldieMae]

1. Ok he's not breaking any law but he had it falsely advertised. The signed on the lawn is FSBO but when he got me into the house he's telling me he will get his 'friend' who's a agent to write the contract.

2. Yes I understand that but as a buyer I don't want to get sucked in and pay more than the value for this community. It is not my fault he spent 100k on upgrades. His house was the most expensive one in that community.

3.I'm not an agent so I don't know what it is really worth. I am only going by what the house in that community has recently sold for. And he has a point, no other house will have the same upgrade cause he went above and beyond.


4.Yes, but this is a short sale. I went under the impression that his lender will have the house appraised. Now he is telling me that he knows a friend who can and will appraise the house.


5.-Very good point.

6. I do have a buyer broker.


7.In today's market I think you have to get the title insurance. I think it might even be
required by the lender.


I'm only worried because this is a 'short sale' and I do not know much about short sale that I don't want to make an offer and then have his lender just refuse it right off the bat.

1. Yup, he can do that. It may technically be a FSBO, and the friend may be just helping him out as a favor. Don't worry about that. As far as writing the contract, you and your broker will present an offer that will become the main part of the contract. The contract is a form document. They all look very similar. You and your broker should have the most control in writing that contract, not the seller. Don't let the seller control anything except showing up to the closing ready to sign his house over to your bank.

2. As a buyer, that is always a risk. But you are buying on a downturn in the market. That should give you some comfort, particularly if you plan to live in the house for a number of years.

3. Agents can't tell you what a house is worth. They're not allowed to tell you what they think a house is worth. It's in their code of professional conduct. However, I wouldn't count upgrades as part of the house value becaue you are unlikely to get the full value of that money out of the house if you sell it, so don't pay much more for it. 100K worth of upgrades is not worth 100K in the Fairfax market right now. It may be worth 50-60K, though.

4. Your lender will have the house appraised, not his. It is part of getting the mortgage. If your lender says the house is not worth your offer, then make sure the contract allows you to back out of the deal without losing your earnest money. His representative could say the house is worth $1 or $1Million. Either way, the opinion is not worth anything to your lender. Don't let his friend appraise the house. Your mortgage company will hire their own.

7. Yes, title insurance is required by the lender.

In a short sale situation, this is really important. There can be "no encumbrances" on the property or you will not be able to get a mortgage. His lender cannot place a lien on the property. You need to make sure that his lender, if any money is owed on the house, is taking the debt as "unsecured debt." The seller will be required to pay off the mortgage at the time of the sale. If he cannot, then the lender has the right to refuse to allow the sale to proceed, and you will get your earnest money back. Unfortunately, you have no control over the situation, unless you are taking over his mortgage, which I strongly urge you to not do that.

[rockinmommy]

4.Yes, but this is a short sale. I went under the impression that his lender will have the house appraised. Now he is telling me that he knows a friend who can and will appraise the house.



I'm only worried because this is a 'short sale' and I do not know much about short sale that I don't want to make an offer and then have his lender just refuse it right off the bat.

Regarding 4: The seller can have whoever he wants appraise the house as long as he's paying for the appraisal. It will be up to your lender who performs the appraisal they will use for underwriting purposes. The seller has no say-so whatsoever who 'WILL' do YOUR appraisal, as you're the one who pays for it. Once he (his lender, actually) accepts your offer you and your lender basically drive the process from there. He just shows up where he's told for the closing.

Regarding short sales: Is the seller claiming to have already negotiated a short sale with his lender? For you, there's really no difference in the process. Are you pre-approved? Get with your broker. Figure up a fair price for the property. Have your broker write up and offer for less than that amount (leave yourself bargaining room.) Write in that the offer is contingent upon you receiving something in writing from the seller's lender/s. Have your broker present offer to his broker along with your pre-approval from your lender. (If the lender is considering a short sale, you being pre-approved will make them more likely to go along with it.) Go from there, just like you would with any other transaction.

If you know of other properties in the neighborhood that the guy has rehabbed it wouldn't hurt to just stop by and have a quick visit with the owners. Tell them you're thinking of buying a place done by the same guy and are just curious how they like their places? How are the improvements he did holding up? Etc,etc,etc. The guy definitely sounds like he's got some questionable practices, so you might want to check out his actual craftsmanship, as well. Rehabbers can definitely make a place look spiffy - like they spared no expense, but that doesn't mean that the work was well-done.

You'll have to keep us posted.
Karla

[truong81]

I want to question if this house is a 'short sale'.

I have already gotten my credit score pulled and have been pre approved for a loan and I have the letter in hand.

I will def. keep you guys updated :o

[LisaB4657]

I am going to go against the tide on this one. I say that unless you absolutely positively have to have this house, then you should run away from it as far and fast as you can.

This seller has openly admitted to you that he intends to commit fraud. Once you know that, you are no longer an innocent buyer. If the lender ever chose to investigate the transaction after closing they may decide to prosecute him for fraud. They may also possibly be able to prosecute you for assisting him in committing this fraud. That doesn't mean that they'd be able to prove it, but they could definitely accuse you of it. The fact that you had knowledge of his intent to commit fraud doesn't help.

There are millions of townhouses for sale. Try looking around a little longer before you commit yourself to this one.

[GoldieMae]

I am going to go against the tide on this one. I say that unless you absolutely positively have to have this house, then you should run away from it as far and fast as you can.

This seller has openly admitted to you that he intends to commit fraud. Once you know that, you are no longer an innocent buyer. If the lender ever chose to investigate the transaction after closing they may decide to prosecute him for fraud. They may also possibly be able to prosecute you for assisting him in committing this fraud. That doesn't mean that they'd be able to prove it, but they could definitely accuse you of it. The fact that you had knowledge of his intent to commit fraud doesn't help.

There are millions of townhouses for sale. Try looking around a little longer before you commit yourself to this one.

I'm not seeing the "fraud" part of this situation. I may be completely wrong. Can you let us know what part you think is a crime? Because if there is a crime being committed, that would be very useful information for the OP. I don't see a crime here. Short sales are legal. His using a broker is legal, etc. Am I missing something?

[truong81]

I see red flags all over the place, but I have truly fallen in love with this house and this community. Sure there are a lot of TH on the market but this is the only corner lot in this community - and with all the upgrades he has put into this house. It truly is a beauty.

I think the fraud would be working with his agent who is a friend to make some money off this deal. The money would be coming from his lender if this house is really a 'short sale'. So he said to me last night that he has already lost a lot of money on this house. I think that is just a bunch of crap.

Lets play with the numbers...

He bought the house for 701
He takes a loan for 630 - 570 big loan 60 for the small loan. So he down 10% for the house.
Now it has to be in favor for the lender to agree to have him short sale this house so they (the lender) can recoup from the lost - maybe I'm wrong but I am under that impression.
There for he's asking 575 for this house which will make up for the big loan with the lender and only be out of the down payment of 70k and the 60k for the small loan - and yes he will have to pay the taxes on that.