Original message
| Megan
   |  "How would you make this fly?"
, Thu 3 Aug 16:09 
I have a new opportunity I would like to run by ya'll. Great advice flies around this board, so I thought I'd take advantage of some of the brain power available:
We met with a man this morning who owns a house Free & Clear (!) in one of THE premier neighborhoods in our area. Exclusive, gated community on the top golf course, right off the water. He had had it listed for over 2 years, sitting vacant, and nothing happened. He just cancelled the listing and called me. Here's the info as I know it now:
4/4 + 2 half baths 3800 SF
LR, DR, media room, 2 car garage w/separate golf cart entrance
built in 1993
His final asking price at the time he cancelled the listing was $460,000. Comps suggest FMV is $500,000. At least two other houses in the neighborhood, including one across the street, have sold for more with less square footage. This house is in practically brand-new condition. I can't figure out what the problem is. He said he doesn't know of a single house that has sold for less than $440,000 in the neighborhood. I didn't find any, either.
I cannot figure out what the problem is with this house. If it's not the house, it has to be the price.
We have discussed my purchasing the house O/F with no money down. He's open for more discussion and wants me to nail down my exact offer, then we'll go from there. While talking at the house today, he came down to $430,000. So far so good; if I can get him to come down $30k every time we talk...
Seriously, I'm a little stuck on this. Again, comps suggest that the house is worth about $500,000. Great, but it's not selling for anywhere near that. Other houses on the street are, however.
I think I might have a fighting chance if I try to sell the house CFD for $460,000 at 9.5% or more. Charging a premium because I'm offering O/F doesn't seem an option this time. Charging even FMV doesn't seem like an option, which would be closer to $500,000. I figure, if I ask what he did at last listing (which was only at that price for 6 mos.) along with favorable terms, it might fly. My problem is, what do I ultimately offer him? I think I could easily get him down to $420,000, but no less than $400,000. That's a $40k-60k spread. Not too great.
Additionally, I don't want to be in a position of owing a payment before I have a buyer. If we do this at 7% or so (not decided yet), the payments would be between $2500-$2800 mo. Big pain if I don't have a buyer. Granted, I will probably have around 90 days before closing, but still.
Would any of you take this deal? Under what terms would you accept it? How would you structure it in order to feel confident? Any comments at all would be much appreciated.
For now, I asked him to discuss with his wife what their actual limits are, as in the least they will take. I would like to get back to him soon, but I don't want to put myself at too much of a risk if the deal isn't good enough.
Thank you again and I look forward to any responses.
Megan
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Replies:
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| | Megan
|  "Surprise! I'm confused."
, Thu 3 Aug 17:54
Lynn,
Thank you for the quick reply, but I'm a little confused. I was under the impression that an Option was restricted to finding an ALL CASH buyer who would purchase from me, then I purchase from my seller via simultaneous closing. Are you suggesting that I secure an Option that would allow me to purchase via O/F only if I find a buyer? In the meantime, beyond exclusivity, the seller could continue to sell FSBO?
If I understand you right, that would be an excellent position to be in for me, and I, too, would do these all day long on such high-end houses. However, I have a feeling that I've misunderstood you. I truly have believed all along that an Option could only be done if I am locating an all cash buyer, at which time I immediately cash out my seller.
Please clarify when you have the chance.
Thanks again,
Megan 
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