I’m in the middle of a Real-Estate deal, the conditions get waived tonight by 9pm. Part of the deal, had to be verbal - I chose to allow it. I could get screwed, but I wanted the rest of terms of the deal.
The buyers didn’t want my tenants, and asked for “vacant possession”, because they wouldn’t get financing with student tenants. They verbally told me they actually wanted the tenants ie they were going to lie to the bank. Heir go, the bank has told them, they can get financing if they rent to a family. Apparently, students are poor tenents - go figure.
I leaned back in my chair, and decided to have faith in human beings and accept the written offer as well as the verbal terms. Since, they did give me 3% higher than my ask after an awesome multi-bid evening, I figure - I’ve been lucky thus far. I’m being optimistic that their verbal declaration of a willingness to accept my tenents will come to fruition. I could get screwed, and sued if the buyers end up being ass hats. But, for now, in my youth - I’m choosing to have faith in people, and be optimistic, that it will all work out (and that they were being honest)
I’m taking a page for a smart dude I know, “To the optimist go the spoils” …time will tell if it was smart or not.
April 12th, 2008 at 6:14 pm
if they are going to lie to the bank about the students being a family, and they need the family to get the financing, then why can’t they lie to the bank now? Something is wrong. It makes no sense that the bank would rather have the space vacant with the hopes of renting to a family instead of having it already rented (if the students don’t work out and the place has to be released then the bank is no worse off) The current set up leaves you with all the downside risk and them none. If nothing else, you should require that the deposit money not be contingent on them getting financing. I would also find a lawyer friend and ask if the banks request is even legal under fair housing laws (I don’t think so). Any chance some of the multi-bidders knew each other?
Read the contract carefully and see what the buyers rights are at the time of closing if you have not provided a vacant space and breach the contract. Have you seen a copy of the estimated closing expenses? Which one of you is required to pay the title insurance? Have they requested that you use their title agent? Are you using a realtor or are you handling this sale yourself? If you are using a realtor then is the buyer using a buying agent or is there just one realtor handling both sides? Does the contract call for the buyer to pay any of the closing cost that would be incured before the closing, ie: aprasial, home inspection, etc, or are you required to pay them all?
April 12th, 2008 at 9:06 pm
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April 12th, 2008 at 10:32 pm
Hey NotReallySure,
Thank-you for your insight, it’s a local technicality. I’m in Waterloo, Ontario, and there are two huge universities. Town is like 50% students during 8 months of the year. The local lenders are more strict with student accomadations.
We were using a realator, the only reason I got to talk to the actual bidders is because of the multi-bid situation. It was awesome.