I sold my house…

[GoUSC]

Wow just wow. Kaycee pretty much summed it up. The “buyers” made out like bandits. And yes, to clarify, you haven’t sold anything until escrow closes.

[GoUSC]

Wow just wow. Kaycee pretty much summed it up. The “buyers” made out like bandits. And yes, to clarify, you haven’t sold anything until escrow closes.

[(former)FormerSanDiegan]

An historical anecdote on a lease-option I considered …
I once considered buying a house in Ocean Beach on a lease purchase. This was in 1996. The San Diego market really stank at the time. The seller wanted me to rent for something like 12-24 months at a rate that was about $300 above market (to be applied to purchase, if I elected the option). The price was set at two discrete points. 12 months in it was about 7% above the current price (about 200K at the time), then would go up another 7% if I waited 2 years.

This was at a time when the market had been DOWN for 5-6 years. The deal was clearly intended to be a win-win for the seller, not the buyer.

[(former)FormerSanDiegan]

An historical anecdote on a lease-option I considered …
I once considered buying a house in Ocean Beach on a lease purchase. This was in 1996. The San Diego market really stank at the time. The seller wanted me to rent for something like 12-24 months at a rate that was about $300 above market (to be applied to purchase, if I elected the option). The price was set at two discrete points. 12 months in it was about 7% above the current price (about 200K at the time), then would go up another 7% if I waited 2 years.

This was at a time when the market had been DOWN for 5-6 years. The deal was clearly intended to be a win-win for the seller, not the buyer.

[kaycee]

I agree with all of your posts.

I do think rent-to-own deals were historically geared towad the seller not the buyer. That was why they were rare I think. But as we know now, nothing is on the sellers side now so I’m clearly negotiating with my hands tied behind my back.

Gn, I absolutely considered your scenrio. That if the house appreciates, they win and if my house depreciated why would they settle. It kept me up several nights as a matter of fact. It is a huge part of the risk. But my rationale is that if they do walk away, I’ve got some money from escrow and I’ve been renting all along, and I still have the house to rent or sell.

They did ask for a portion to be applied to closing, and I gave them the option of raising the rent and I would apply a portion or keep the rent they asked for and apply nothing. They chose the lower rent.

Their rationale was that they wanted to use the money to upgrade the house, specifically the bathrooms which are clean and functional but “low end” finishes. They felt that if they put in brand new bathrooms and then walked, I would have more “value” in the house and they would have to walk away from the money they spent on them. BS I know. Granite bathroom counters will be meaningless in a freeefall market. But it would show a personal investment in the buying of the house. They were adamant about this and they wouldn’t do the deal if they couldn’t immediately begin improving the house which they felt wasn’t to their standards.

And Radelow, they did get a fabulous deal. I admit, it is certainly not the deal I was hoping to do. But are you really surprised? I mean, you’ve been on this board. “Don’t be stupid and buy now” “If you own a home sell it now at any loss” “Its only going to get worse”

I guess what I really have is a tenant without any landlord problems and a possiblity of a sale in my future. But you know, I took what I could get.

Interestingly, my B-I-L just called me. He has been trying to sell his condo in South Forida for about 2 years now. And the market there I think is worse than anywhere. He was just offered a rent to own deal. Seriously. Because the buyers can’t sell their house. I really wonder if this is going to be new trend. Are any realtors on the board seeing this?

[kaycee]

I agree with all of your posts.

I do think rent-to-own deals were historically geared towad the seller not the buyer. That was why they were rare I think. But as we know now, nothing is on the sellers side now so I’m clearly negotiating with my hands tied behind my back.

Gn, I absolutely considered your scenrio. That if the house appreciates, they win and if my house depreciated why would they settle. It kept me up several nights as a matter of fact. It is a huge part of the risk. But my rationale is that if they do walk away, I’ve got some money from escrow and I’ve been renting all along, and I still have the house to rent or sell.

They did ask for a portion to be applied to closing, and I gave them the option of raising the rent and I would apply a portion or keep the rent they asked for and apply nothing. They chose the lower rent.

Their rationale was that they wanted to use the money to upgrade the house, specifically the bathrooms which are clean and functional but “low end” finishes. They felt that if they put in brand new bathrooms and then walked, I would have more “value” in the house and they would have to walk away from the money they spent on them. BS I know. Granite bathroom counters will be meaningless in a freeefall market. But it would show a personal investment in the buying of the house. They were adamant about this and they wouldn’t do the deal if they couldn’t immediately begin improving the house which they felt wasn’t to their standards.

And Radelow, they did get a fabulous deal. I admit, it is certainly not the deal I was hoping to do. But are you really surprised? I mean, you’ve been on this board. “Don’t be stupid and buy now” “If you own a home sell it now at any loss” “Its only going to get worse”

I guess what I really have is a tenant without any landlord problems and a possiblity of a sale in my future. But you know, I took what I could get.

Interestingly, my B-I-L just called me. He has been trying to sell his condo in South Forida for about 2 years now. And the market there I think is worse than anywhere. He was just offered a rent to own deal. Seriously. Because the buyers can’t sell their house. I really wonder if this is going to be new trend. Are any realtors on the board seeing this?

[sdrealtor]

I’m not seeing it and I wouldnt get involved in a transaction like that. If one of my clients wanted to do that, I would try to refer them to an attorney and tell them to go ahead without me. Too much liability on my part that I couldnt control.

[sdrealtor]

I’m not seeing it and I wouldnt get involved in a transaction like that. If one of my clients wanted to do that, I would try to refer them to an attorney and tell them to go ahead without me. Too much liability on my part that I couldnt control.

[gn]

kaycee,

Thanks for sharing your story with us. I fully understand the difficult position that you are in.

Just out of curiosity, do you have a good amount of equity in that house ? If so, it would have been better to lower the price to attract a buyer with a strong offer. In a falling market, it’s better to cut your loss early.

[gn]

kaycee,

Thanks for sharing your story with us. I fully understand the difficult position that you are in.

Just out of curiosity, do you have a good amount of equity in that house ? If so, it would have been better to lower the price to attract a buyer with a strong offer. In a falling market, it’s better to cut your loss early.

[kaycee]

I hear you sdr, and my agent felt similarly to an extent. The only difference was that Beaufort SC is a small town and everybody knows each other. My agent had known this family well for years and felt she was trustworthy. And by well I mean from church, and a local business owner, on the board at the Y, etc. Not going out to dinner friends. My realtor said if this was an a complete stranger she would have told me to walk away. As it was she really almost fought me not to take it because she knew it wasnt a great deal. But at the same knew that she couldnt tell me that she could get me any better later. Plus obviously that she could wait two years for her money was a big dissinsentive.

[kaycee]

I hear you sdr, and my agent felt similarly to an extent. The only difference was that Beaufort SC is a small town and everybody knows each other. My agent had known this family well for years and felt she was trustworthy. And by well I mean from church, and a local business owner, on the board at the Y, etc. Not going out to dinner friends. My realtor said if this was an a complete stranger she would have told me to walk away. As it was she really almost fought me not to take it because she knew it wasnt a great deal. But at the same knew that she couldnt tell me that she could get me any better later. Plus obviously that she could wait two years for her money was a big dissinsentive.

[kaycee]

gn,

I had lowered the price from originally $749,000 to $599,000. The other houses on my street (waterfront) are currently $749, $795, $850, $890. So I would say I tried that strategy.

As for equity: I paid $385,000 but I bought the house from a bankrupt builder so it still needed a ton of finish work. We have about $120,000 into it. But I have a 1st of about $300 and a 2nd of about $75. And I took $520. So I’ll clear $140 before commissions and transfer costs. All in all I guess I’m about even to a small loss? Not bad I guess.

I tried to cut the timeframe shorter. I even offered to lower the price if they would settle sooner. But they’re scared too that they won’t be able to unload their house. It is, after all in the same nieghborhood as mine so they have to face the same market.

[kaycee]

gn,

I had lowered the price from originally $749,000 to $599,000. The other houses on my street (waterfront) are currently $749, $795, $850, $890. So I would say I tried that strategy.

As for equity: I paid $385,000 but I bought the house from a bankrupt builder so it still needed a ton of finish work. We have about $120,000 into it. But I have a 1st of about $300 and a 2nd of about $75. And I took $520. So I’ll clear $140 before commissions and transfer costs. All in all I guess I’m about even to a small loss? Not bad I guess.

I tried to cut the timeframe shorter. I even offered to lower the price if they would settle sooner. But they’re scared too that they won’t be able to unload their house. It is, after all in the same nieghborhood as mine so they have to face the same market.

[sdrealtor]

Most decent people are reputable and friendly when you enter a contract. The problem is what they become when things go wrong. I’d make sure that I had very good legal language covering disolution of the agreement just in case.

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