Guy wanting to buy our house - need advice

[Antonia]

Before we could even list our old house with a realtor, a guy comes along and wants to buy it. We have moved out and are living in our new house. He is an inexperienced home buyer and we are inexperienced at selling a home.
He knows our asking price. Has not made us a firm offer. Wants an appraisal first before making an offer. The price we quoted him was actually low since we were not going to be paying a real estate commission. He wants to sign a contract so he can work on getting financing, but wants to work out a price once he gets an appraisal. This sounds backwards to me.
Anyway, I don't need a realtor to find a buyer for my house, but it might be nice to have one to work out these sticky details. Wondering if it would be tacky to ask a realtor to sell my house to this guy for a lower commission since we already have a buyer and the realtor could just work out the details - like we need a guide!
Anybody have any suggestions??

 

[quentina]

Before we could even list our old house with a realtor, a guy comes along and wants to buy it. We have moved out and are living in our new house. He is an inexperienced home buyer and we are inexperienced at selling a home.
He knows our asking price. Has not made us a firm offer. Wants an appraisal first before making an offer. The price we quoted him was actually low since we were not going to be paying a real estate commission. He wants to sign a contract so he can work on getting financing, but wants to work out a price once he gets an appraisal. This sounds backwards to me.
Anyway, I don't need a realtor to find a buyer for my house, but it might be nice to have one to work out these sticky details. Wondering if it would be tacky to ask a realtor to sell my house to this guy for a lower commission since we already have a buyer and the realtor could just work out the details - like we need a guide!
Anybody have any suggestions??

We had the same thing happen to us.....our new home was built, we were cleaning our old one and fixing it up. Someone walked on porch and peeked in. He asked if it was for sale, his daughter was going through a divorce and wanted to buy it. He did. We used a real estate lawyer, cost a few dollars less than $1000.00. I might also add...he had cash, no financing needed.

 

[Antonia]

Well, this guy needs financing. He is 29 years old with a good job so I feel sure he will get financed. I just have a feeling this might turn out to be a headache and I don't want to find out later I made mistakes in selling it because we did it ourselves.

 

[Sanchez]

A contract is not enforceable when key terms (price) are not agreed to. Since you cannot force him to agree to terms, you should advise the potential buyer to provide you with a contract. You should have that contract reviewed by a lawyer. It sounds as if a realtor would be of no service in this situation.

Should you decide to list the home while this fellow makes up his mind please make sure that that the real estate broker is excluded from receiving a commission if you enter into a contract with this guy.

Finally, it is extremely difficult to obtain financing at this time - good job or not. Do not assume that he will qualify. If he makes an offer you still may want to list the home if he backs out or does not qualify.

 

[Antonia]

I am getting the feeling this guy wants to really low ball us on the price. His dad works at the same company as my husband and he used to bag my groceries when he was in college.
Anyway, I do not want to feel like I am letting my house go for way less than it is worth. I do realize that it would be nice to sell it and be done with it. But at the same time, I don't want to feel like we are being taken.
So maybe we don't need a realtor - maybe a real estate attorney???

 

[Lisa loves Pooh]

No suggestions, just a comment.

I was watching one of those home buying (home selling as well) shows b/c we are going to be relocating.

On one episode a couple was buying a house. The realtor suggested an offer based on comps and square footage as she felt the seller was asking too much. The seller countered and the buyers were not happy. The realtor suggested an appraisal that the seller would pay for but be reimbursed after a successful closer.

To the shock of the realtor, the seller and the buyers--the appraisal came in about $10K lower than what the buyers had originally offered. The buyers decided to be nice and offer $5K more than appraisal b/c they felt bad for the seller, but they did accept.

I'm guessing that in this economy, he wants to cover his bases that you are not overestimating the value of your home. I'm guessing that an appraisal before contract is not too common of a thing, but it did come up on this home buying show. The market was somewhere in AZ.

While you feel your price may be "low"--him requesting an appraisal before hand is in his best interest. He woudln't want to waste his time, but I'm not sure why he'd want to fork out the money for one ahead of time.

If he wants to foot the cost, then let him. You are under no obligation to accept any offer that follows. But since he is inexperienced, he may not realize that he is the one that has to fork over a few hundred to get a full appraisal.

 

[Lisa loves Pooh]

Well, this guy needs financing. He is 29 years old with a good job so I feel sure he will get financed. I just have a feeling this might turn out to be a headache and I don't want to find out later I made mistakes in selling it because we did it ourselves.

You can get fully pre-qualified before you even look at a house. Perhaps he just really likes your house.

You might explain to him (since you are an experienced buyer) that he can go and do all this ahead of purchase to know what he is albe to buy given his debt/income ratio and credit scores. Final approval of loan is based on the information being credible and verified.

This is how we bought our house. We saw no sense in looking wihtout knowing what we would beallowed to spend.

We are looking at our housing situation where we are going and thinking buying may be better. Before we got too carried away in looking, we called the bank. We cannot get pre-qualified, yet due to some factors--but we were able to do a high level look based on what will occur (he is contract switching to permanent and will get a raise) and now we know the price range we can look at. We will go through formal underwritting/prequalification prior to getting too serious in our search.

 

[Antonia]

He likes our house because of the location near his family and it is one of the nicer starter type homes in the particular area.

Getting pre-qualified is a great idea. That is what we did when we bought the house we just moved into.

 

[golfgal]

We put in an offer on a house that was contingent on the appraisal price, the offer was we would pay xxx dollars or the appraised price, which ever was lower. The appraisal came back higher then the offer price so we got a good deal. He can also get fully qualified for a house without having an accepted offer, which is what 99% of homebuyers do these days. I would find a real estate attorney to handle the paperwork for you and go from there.

If he wants an appraisal first tell him to go ahead and order one--he would pay for that anyway--and then don't take a penny less then the appraised price.

 

[tinkntraining]

I would suggest you meet with a real estate attorney. They will draft an Agreement of Sale under your stipulations (contingent on getting mortgage approval, settlement date, downpayment amount, selling price, etc.) If buyer wants an appraisal/inspections, he pays for it. If it's a go, the attorney will represent you at the closing, draft a deed, etc.

I'm not sure where you live, but the fee for the attorney from beginning to end, should be much less than the commission (even reduced) to a real estate agent.

Good luck!

 

[CruiserMom]

A realtor can absolutely help you in this situation. They not only sell, they assist in closing transactions also.

I would suggest you have the guy go get pre-qualified first. He may not even be able to secure financing. After he brings you a prequalification letter, let him have your property appraised by whatever appraiser the lender would use. That way, if he does make you an offer and you work it out, his lender would not have to order another appraisal.

In our state, contracts can be contingent on financing, and if the property doesn't appraise for the contract amount, the lender won't OK the loan. At that point, you and he could renegotiate the price, or walk away.

Expect him to low-ball the offer. Everyone is doing that today, just to see what they can get.

 

[The Mystery Machine]

OK, firstly you made a mistake telling him a "low price" because you will not be paying commission. You might decide that you need a realtor in there to broker the deal and have to pay some commision or may need a real estate lawyer to assist you.

We did "for sale by owner" on our first house however we did use our old realtor who brokered the deal for 3%.

You always go highish and then they talk you down. So oops on that.

I agree with making him get a prequal before you even do a thing. That way you know right away if your house is even in the cards for him and less headache all around.

 

[Bren's Mom]

Unless he's a cash buyer any contract to purchase is going to have a contingency clause for the financing. The bank will always get an appraisal, and if the appraisal comes in lower than the loan the bank will not approve the loan. So the buyer is protected there. At that point, he would be able to renegotiate the sales price with you.

I think it's fine if you want to sell to him. Tell him to make you an offer in writing. Agree on a price. Have your attorney execute a contract and get a deposit from him. Be sure it has a time limit for arranging financing.

And I'd continue to show the house but tell them it's under contract and that all contingencies have not yet been met.

 

[Tuffcookie]

I agree with everyone else who stated the buyer should be prequalified. That way you know he is serious and you will not waste precious time!

TC

 

[PigletsPal2]

Just a note - pre-qualified and pre-approved are not the same thing. Make sure the buyer is pre-approved before entering into a contract to sell him your house.

Queen Colleen

 

[Antonia]

Well, today I spoke with the potential buyer and told him that I would need a letter of pre-approval before we proceeded any further. He seemed a little insulted, but I was kind, but firm. I told him that is what most people are doing these days and explained to him that that is what we had done and got pre-approved over the phone in about a day. I asked him to get back to me by Friday. If he does not, we will begin to advertise our house for sale by owner and probably up the price. But we have to rein this situation in and start moving forward to sell whether it is to this guy or to someone else.

 

[Bluestars]

Hopefully it will work out with this guy.

We sold our last house by owner. They buyers made us an offer over the phone. We countered. They accepted. The they had their attorney draw up a contract. We took it to our attorney and approved it. It was all very simple.
We already had a current appraisal to show the buyers though. They hired a home inspector too, which is always a good idea.