Offering more than the asking price

[Wyman]

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Yes I'm [censored] with you but the fact that you don't know it tells that it's your first home investment and you need to be asking all resources available to you for guidance because you're well aware that you don't know everything.

J

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FYP.

I am just looking for advice. To be leveled, I'll stick with BBV.

It's funny, though. I never thought twice about the 3% because it seemed so standard to the professionals I've talked to. Seemed to me like they should know how to do their job, but I should follow-up to make sure. Point well taken.

[Thremp]

I'm almost positive there are laws that specifically prevent this kind of kickback fraud.

[AMerv]

Who/where did you get your RE Agent and Lender from?

[Wyman]

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Who/where did you get your RE Agent and Lender from?

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RE Agent: A national real estate agency
Mortgage Broker: Talked with 2, one from a brokerage involved with the above real estate agency, and the other from a national brokerage

These aren't folks from like "Joe's real estate" or "Backyard Mortgage"

[Wyman]

[ QUOTE ]
I'm almost positive there are laws that specifically prevent this kind of kickback fraud.

[/ QUOTE ]

There are indeed laws to prevent defrauding lenders, but my situation does not violate any of them.

1) I am allowed to offer any amount on the house that I want.
2) If I put > 10% down, I am entitled to ask seller for up to 6% of the sale price back in closing costs. If I put < 10% down, I'm allowed to ask for/receive up to 3%.

Thank you all for your concern for my legal well-being. I look forward to someone weighing in on the original topic.

[Tien]

Man, from the looks of it as well as the motivation, looks like a good deal but the fact that it is listed and other people bidding it up is something I am not liking about this deal.

Max 20 grand in repairs. Conservative 250 000$ looks good to me.

Ask the listing agent this question:

"why did the family decide to list the house at such a low price? You know this house is worth more than this and you allow them to list it so low?"

I'd throw in an offer at 180 000$ and try and get a contract signed ASAP.

If there is nothing wrong with the house and title is good than you better pounce on this ASAP. Deals like this literally disappear overnight.

If you decide to flip this property, it's going to cost you more than you think:

Buying Price: 180 000~$
Repairs: 15 000~$
Holding costs: 5000~$

Selling price: 250 000
Actual sold price: 240 000
Real Estate Agent: 14 000
Other selling costs: 3000~$

240 000 - 14 000 - 3000 - 200 000 = 23 000~$


Running these numbers off the top of my head. You aren't going to make the 60 000 you think you are going to make. And I calculated worse case scenario figures.

[Wyman]

Your numbers look about what we figured. We were planning on holding it for 3 years to live in as well, so we get some equity out of it, don't pay rent, and can write off the interest, so we figured to make a reasonable amount more off of it (especially if the market starts to turn around at all here). But yeah, thanks very much for your input. The other offer was accepted, so we're looking at other places and waiting to see if this deal actually goes through.

[Tien]

The other guys were smarter. They knew everyone would be offering less or exactly what the seller's were asking.

Good move.

Deals like these are difficult to find and close on in the MLS.

I heard the Michigan market isn't doing too good. Is that where Detroit and all the layoffs are happening?

[Thremp]

Wyman,

Ah. We use different terminology back here. Asking the seller to pay closing costs is std. But I can see what you were saying now.

Maybe you were on the bad end of this type of fraud. I saw someone offering a 6k decoration rebate the other day. So who knows what goes on. Theres a post in this forum from a couple months back about how someone who offer like way more than what a house should sell for and get a substantial kickback from the sellers. So it seems people do shady business more often than it should.

Sorry for the confusion.

[mtgordon]

Out of curiosity, where was the house located in AA? I'm also in AA so feel free to give something as specific as street names or as vague as 'undergrad ghetto' or west side.