Seller getting anxious, ready to negotiate w/ tenant buyer to close th

[speedingpenguin 19]

I dunno if it's just because it's a slow time of year, the fact that this house is on a main road in an "ehh" city (totally unique home though, set back from the road and everythings way above street level), or maybe it's just priced on the higher side for what it is, but I've only had one really serious tenant/buyer come through and fill out the lease application. They're a young family of 3 with recovering credit scores, and they're waiting for the option $$$ to become available after a CD matures at the end of the month.

 

The sellers fell in love with the tenant/buyers when they met, and they're anxious to get someone in the house and on a lease.

 

I'm ready to just be done with this house, I had been shooting for 4.5% option fee (340,000 x .045 = 15,000), these tenant/buyers say they have the money but it's tied up in a CD until the end of the month. They had originally offered to put 4k down as a deposit on the house but the seller is also trying to sell the house outright at the same time and didn't want to tie up the property waiting for them to come up with another 11k. I also had another tenant/buyer who seemed serious so I didn't want to loose out on other opportunities while waiting for them to come up with the rest either.

 

Now the sellers are bugging me to get someone in ASAP and that they want these tenant/buyers even if they don't put down much money.

I'm fine walking away with less than the 4.5% or creating a note in addition to some cash down, but can't really figure out how I should approach the tenant/buyers.

 

I'm ready to negotiate, I'm willing to leave some $$$ on the table even, I just want to close this deal soon.

At the same time, I don't want to walk away from a real nice check either.

 

The supposed $11,000 + first months rent that they're waiting on is tied up until the end of the month, but I haven't gotten an exact date. A few weeks ago they were ready to put $4,000 down ($2,100 for 1st mo rent to the seller, $1,900 to me with $13,100 due after a CD matures at the end of the month).

Move in wouldn't be until either Dec 1 or Jan 1 but I don't know how I feel about taking $1,900 and having 13k due in 30 days...

 

I have until 1/1/11 on my contract with the seller but they've also got it listed with an agent (After me) for sale so I'd like to get out with some $ ASAP

[MichaelC 160]

Hmmm. . .quite the conundrum, Chris. Actually it isn't. I just wanted to use that word.

Let's take an overview of the situation to help clarify what you've got. First, regarding the listing and a possible sale. That's the least of your worries from what I can see. Is the asking price well below value? If not, it isn't selling in the next few months. Thanksgiving but three weeks away; Winter fast approaching in the northeast. . .I'll say it again, that house isn't selling until Spring, at the earliest.

Then you have the prospective t/b with the CD tease. My first reaction would be to blow 'em off and tell them to come back when they have the cash in hand. But, who else do you have in line behind them? You mentioned a second t/b "who seemed serious". Where is he? Does he have any money? Does he have any money today? This kind of falls into the ol' "A bird in the hand is worth two in the bush" category.

Assuming the t/b with the CD is still interested, how about collecting the available cash they have today, $4K, and keeping all of that yourself. Prior to their taking possession on December 1 or January 1 they would need to pay the homeowner the first month's rent. In the meantime, the paperwork is signed, sealed and delivered. The homeowner can rest happy because they have their t/b in hand. The t/b's are happy because they have the house they want.

You're skipping merrily along because you pocketed $4K now, with the possibility of another $11K in three weeks. Works for me, Chris.

[speedingpenguin 19]

The other guy who was "serious" disappeared off the face of the earth. He had told me he had the $$$ available to put down (The full 15k) and appeared motivated (wife was driving 40 mins to/from work and she works right down the street from the house, he grew up in the neighborhood and his parents were still there and getting old, self employed and planning to buy in the next year... this is a 3 yr lease w/ option that i've got with the seller), he loved the pictures and knew the neighborhood well, but haven't heard from him since!

[MichaelC 160]

Chris, I suspected as much. Lots of t/b prospects talk the talk, but that's as far as it goes. For all intents and purposes you can forget about him and move on.

[pilot76180 51]

This sounds like a no brainer to me Chris. I don't know if you were planning on giving the HO some of the $$, but I'm guessing so since the HO didn't want the house held unless the T/B had all the $$.

Get the $4k and it holds the property for 30 days, non-refundable if your receipt shows as such. Tell the owner the deal is on and looking to close the first week of Dec or by the 10th ish. If it doesn't, split the $$ with the owner. In the meantime, keep all leads you get for the next 30 days.

Worse case, you get $2k and keep marketing.

This is how I handle this all the time.

If the T/B's dont' have the $11k, man..that sucks to be you....if they get it before you find another T/B, great, finish the deal.

[BEV! 0]

I'm assuming this is a CA where the homeowner is putting pressure on you and you need to put pressure on your T/B's

Here's what I would do.. (actually, I speak from experience)

 

..I'm ready to just be done with this house, I had been shooting for 4.5% option fee (340,000 x .045 = 15,000), these tenant/buyers say they have the money but it's tied up in a CD until the end of the month.

Fine, first of all, continue marketing, don't stop...Secondly, if they don't have the money, you can suggest they get a personal loan and they can pay it off when they get the money and problem solved.

If they say they have bad credit and can not qualify for a personal loan, then suggest for them to get a "Pink Slip Loan".

With a Pink Slip Loan, they can have bad credit, late payments, foreclosures and everything else and still qualify for the loan which they can pay it off once they get their money and problem solved.

 

What? Their car is not worth that much? No problem, suggest for them to get a family member's automobile worth as much as their $11,000 or more and get a Pink Slip loan which they can then pay them off when they get their money ($13, 000) and problem solved.

 

What? They don't have any family with cars? No problem, in this case move on to Plan "B"

 

The supposed $11,000 + first months rent that they're waiting on is tied up until the end of the month, but I haven't gotten an exact date. A few weeks ago they were ready to put $4,000 down ($2,100 for 1st mo rent to the seller, $1,900 to me with $13,100 due after a CD matures at the end of the month).

In this case, I would take the $1,900 non refundable money to hold the property and give them 30 days.. talk to homeowner and tell him you got the house on hold for the happy couple, don't worry if the owner gets mad, he ain't going no where, you're he's only hope.

If the T/B says no to this because of some lame excuse, then you're just wasting your time with them and I'm sure you know what to do next.

If they go for it, then fine, they're serious enough and continue to work with them BUT DON'T STOP MARKETING.

 

That's what I've done 3 times

 

Hope this helps,

BEV!

[pilot76180 51]

Hey Chris, let me clarify what I said..When I said "sucks to be you.." I meant, you get the $$ and if the T/B can't produce the rest then tell them "sucks to be you" I didn't mean sucks to be you..Chris..sucks to be them.

What Bev said, except I'd get all the $$ down you can, and if they can't perform, keep on going.

[speedingpenguin 19]

Sounds good guys! Yes it's a C/A and no the homeowner isn't getting any of the option $$$. I'll update what's going on once I figure out what's going on!