Co-ownership

[FutureSDguy]

This stuck me as clever: http://sandiego.craigslist.org/rfs/208860795.html

Clever enough that it must have been done before. I don’t expect this house to be very much, but the concept of splitting the price and paying back the seller when you sell seems amenable, as long as the seller can afford to be apart from the money @ with no interest gained on it. Comments?

[barnaby33]

There has to be a catch. Nobody would give an interest free 180k loan. You have no incentive to sell. Especially in an inflationary environment.

Josh

[no_such_reality]

My guess would be the house isn’t worth $300K let alone $360K.

The owner will have the senior lien on the home.

If it’s a townhome, what’s the rental value of it?

At $1500/month, you’ve basically up-front paid the loan for the next 10 years without interest, with interest, somewhere between 20 years and indefinitely.

The owner no longer has the has any an management costs, no maintenance costs, no mortgage payments, no taxes, no HOAs. If you go to default, he as the $180K to make the loan whole and repossess.

[FutureSDguy]

Banks wouldn’t give an interest free loan, but we’re talking about an owner who is weighing giving a 0% interest-free loan against his other obligations and risks associated with that house. I am guessing that this house is not the prettiest house on the block (360k houses in SD usually aren’t), and this move opens him up to a bigger buyer pool, reducing his risk of not selling significantly.

From a buyer’s perspective, I don’t think this makes a difference on decision to resell. The profit (or loss) from the house stays the same, and he/she pays off all the liens just as in any sale.

I see the biggest risk the seller is taking is what happens if the house forecloses–where does he stand in such an event? But liability to the bank–180 or less–is not as likely to be foreclosed on.

Clever, or stupid? I dunno…

[sdcellar]

Whoever takes him up on his offer is in an outstanding position to lose $180,000, so clever on the seller’s part and stupid on the buyer’s…

[Author]

Posts