Considering buying a house, advice.....

[Wailer]

Microman wrote:

I think we can afford it. ANd hopefully we can come to terms on selling price. We may be able to do this without a real estate agent. But I guess that would only tend to save the seller

The seller is going to look at how much they net after commission, so the reality is that you both can benefit. I'd rather do net $97k on a FSBO than gross a $100k and pay a 5% commission.

You know the house probably better than anyone. Maybe even better than the heirs and certainly better than any 3rd party trustee would. If it were me and I knew the house, I'd make an all-cash offer and waive all the contingencies (inspection, financing, etc) and be willing to close within 30 days.

Of course, in exchange for this, I'd want a 15-20% discount off the fair market value. Before you scoff, just realize that you are offering them a quick "guaranteed" close with no hassle, no headache of having to prepare the home for sale, etc. Who knows? Maybe the beneficiaries are unemployed and need the money quickly (or think they do) and consider the proceeds a windfall in which case they won't be focused on "how much they could get". I see this behavior all the time when people sell something that was a gift or they got for free.

Even if you aren't going to rent to your son, you should try to buy it (for a discount of course). It'd be very easy to manage a rental home right next door and you can be picky as hell about your tenants (just don't discriminate). Just put an offer in that won't make you regret not making an offer. If they don't accept it, at least you tried. Who knows? They may not get any offers and come back to you so just don't make an insulting offer. Of course, if they come back you should welcome them back with an even better (for you) offer.

[Wailer]

Microman wrote:
This is a Southern California home. Tract Home.

Zillow had it at 447K years ago, now it says 340K

Who cares what zillow says. If you can rent that home for $3k/mo, then $340k is close to a fair value. If you can only get $2k/mo rent, than I wouldn't touch it for anything more than $250k.

I hope you don't plan on selling your house soon. If you buy this one cheap, it'll be a "bad" comp for you.

What part of Southern California?

[mrbigstuff]

depends on location and if the market is strong in the area. as other said, a correction has taken place but no one knows the "corrected" price long-term. the fact that housing drives our economy is a sad, stupid measure since it encourages all sort of price inflation and the invention of the insane instruments that made the bubble grow exponentially - and artificially.

so, yes, it may be a good investment if the area is still "hot" but if that was the case, perhaps this house would not be on the market very long. around my area, houses are down to just stupid prices from completely f^cking insane.

[MacDoxy]

omg but it IS next door and you will have a family compound..

if the house is sound and if u decide to buy it, get the lowest most ridiculous rate quote you can and keep getting them. go to a broker, online, and every bank in town and then take the best printed out quotes to your most respected banks in town and tell them to match it or you will go elsewhere (which you will) you will find their bottom line get lower and lower with your good credit and low debt load. i agree it is good to be able to work with a person for things like this. they will come down. we went to a bank that offered us 4% and then kept getting other quotes until days before closing until we had them (the bank near my fiancees work) down to 3.25%.

you HAVE to make a formal contract with your son though. re-selling may be a hard thing to do and renting is good if it covers the mtg and taxes plus a few xtra dollars, but you don't need that hassle. see if you can indeed loan him the downpayment (a LOAN in print with payback expectations is different than gift or handshake) and get him to take on the house with his own mtg - sans gf if they aren't married.

you will actually help preserve the relationship with your son if everything is clearly in black and white about your financial entanglements with him. nobody ends up thinking they are entitled to things they didnt get or acts like they didnt know what their responsibilities are etc. your son should respect u for presenting a good clear contract.

i agree that you need to have your retirement in place to take on more debt though- if you dont plan on having your son take on the debt load on paper. he can get away and leave u with it, even in a nice way, but u'd still be stuck.

I hope your vision for grandchildren just next door works out! good luck!

[haikuman]

Can you say "Put this Property in a Trust" Then try to achieve your family goals *(:>* :priate: