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Kirc

Seller's concerned about locking a price today

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How do you guys respond to the seller objecting to locking in a price right away? He told me he didn't want to decide on the price now because he didn't know where the market would be in 2 years. This is not the 1st time I've heard this either.

 

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Tell the homeowner that leaving the price open ended on an option agreement isn't legal. It's referred to as an Illusory Contract and renders the agreement invalid. A price must be set upfront, or there's no deal.

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Lynn, I was told that by an attorney many years ago. I took it at face value and I repeat it whenever a homeowner wants to leave the option price open because they are sure appreciation will double the value of their beloved house in 12 months. They never question it.

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It sounds legitimate to me if you think about it. If you don't set a price and you as the seller agree to sell the house, what happens if there's no agreement on price? It makes sense that it's a required term.

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It sounds legitimate to me if you think about it. If you don't set a price and you as the seller agree to sell the house, what happens if there's no agreement on price? It makes sense that it's a required term.

 

Exactly. The homeowner gets a seller friendly appraisal; the buyer gets a buyer friendly one. They are 15% apart. Now what? It's a lawsuit waiting to happen.

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I've had a few owners say this, and my response is.."Oh, do you think the market will appreciate dramatically in a year?" "Well, you never know what will happen." "Hmm, well, if you think it's going to go up dramatically, then you may just want to rent it, but we don't rent houses. We don't work with renters. They just don't meet our criteria, and you never know what you'll get with a renter. But., if that's what you want, I have a property manager I can refer you to."

It is at this point where they come back to my world of reality, and we agree on the numbers I originally presented.

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