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I have conducted a few successful HBS, however never one for the highest amount down payment. Have a potential client who wants to move back to the Philippines after losing her husband last year. Do not think a standard HBS will work as she is trying to get the most for her house (naturally) and a discount under fair market would not be enough. She has tried the RE agent listing with no success as it was priced way too high, which will help my case in presenting this sale to her. Her mortgage balance is around $55K and a fair retail price for the home is about $140K to $150K.
So this is a three part (maybe more) question, not even sure I am phrasing questions properly.
Should the sale price of the house be firm?
Would I do a L/O with her, so she could have some cash from down payment and monthly payments after her monthly mortgage is taken care of ?
Would I do a L/O with the down payment going towards the Option amount to be paid?
Or should this be a Seller/Finance situation, with down payment towards purchase price?
Thanks,
EdHI Ed
If the house is in good condition and in a desirable area, you might be able to get close to retail for the house with a traditional highest bidder sale (for highest price)
But if maximum price is her objective (versus) getting cashed out), then the highest bidder sale for the highest price is the way to go.
It would be better if you write a contract to buy the house with seller financing that wraps the underlying loan. Then when you sell, you can sell with seller financing. You;’ll get part of the down payment and you could get monthly cash flow too.
You’ll get MUCH more for a down payment with seller financing than you ever will with a lease option.
Most likely, she will want a balloon so she knows she can get cashed out in a few years.
When you sell for the highest down payment, you do have a FIXED price for the house. Sometimes I will offer a lower interest rate for a higher down payment.
There could be some private lenders in your area who would buy the note, at a discount, so the seller could get cashed out if that is her objective. But it is good to have that lined up before you offer it.
Let us know how it goes.
Jackie
remember, you can do 3 seller finance transactions a year before dodd-frank rules kick in.
Another way you could do this… still sell for the highest down payment but you get paid a flat fee. The seller and the new buyer go to contact together. You are not in the middle. There is no dodd -frank rule if an owner occupant sells their house with seller financing.
But you stand to make more if you stay in the middle, part of the down payment, monthly cash flow and probably a chunk of cash when the buyer refinanced in a few years.
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