Interesting Counter Offer Question (Can I do it?)

6 Replies

So I offered 80k on a house yesterday.  The sellers came back with a counter offer of 85k (they asking 89.9k).  I thought this might happen, because they bought the home in 2009 for 95k.

They claim that 85k is their breakeven point on the loan, otherwise they would have to 'short sell'.  That's what the selling agent told my agent. 

So let's assume for a second that they really do need 85k to break even.  Is there a counter offer that I could do to get around this, to help them?  I want to stay at 80k (as I think it's more than a reasonable offer), but if they are willing to sell it to me for 80k and need out of the loan, can I do a side offer (or through the purchase agreement) where I give them 5k as a loan to pay me back with an interest rate over 1-2 years?  I would be willing to give them cash.

Can that be done? 

Is there a more efficient way to go about this, that protects me?  I think in Michigan the max amount a person can lend another person is 7% simple interest.  Maybe others in Michigan know about this.

Thanks.  I would like to get back with them today with a counter offer that has something to do with this.

If you were going to do that, you might want to still keep the price at 85K (higher basis) and get your financing on the 85K number.  They can then pay off the mortgage and you can give them a loan, but that may not be their issue.

They probably have the money to pay off the extra 5K (it's just that they don't want to go out of pocket).  Having a loan would require they still pay it as well as interest.  You will know once you propose it.

Maybe propose 85K but they pay all closing costs (should be in the middle somewhere).  They may go for that.

I wouldn't do that! It probably will have no collateral.  What is the AV in the neighborhood? Are you getting a "great" deal or paying market? I might offered 75k and do a Short Sale :) if the values support it. A bank is going to do a bpo. Plus when push comes to shove many people can "suddenly" find the money when needed.

Question- Why would a seller take an extra 5K from you that they would need to repay over the next year or 2? Why would you want a  past seller to be indebted to you?

How long has the property been on the market?

How badly do you want the house- Can the deal still be done at 85k. Maybe the sellers are being totally honest-they may want to get rid of the house without ruining credit and without coming out of pocket.

Unless your deal is the only one for a very long time I don't see them agreeing to go into debt to sell it to you.

I agree with Elizabeth Colegrove .  Why would you do that.  It doesn't help you.  It sounds like you are willing to pay 85k for the house, so if the numbers work for it, then just pay it.  If the numbers don't work for it, no amount of creative tinkering is going to change that.

Just offer what you want to pay for it.  It they agree you have a deal, if not, you don't have a deal.  I think you are trying to make it more complex than it needs to be....and this is from someone who thrives on creative offers.

Joe Villeneuve

I'm not willing to Pay 85. 

Anyway,  I declined to get mixed up in any nuttiness like I was suggesting lol

ill post more later as I'm on phone but,  80 is slightly over market but the house is move in ready and has some upgrades others didn't have that were comparable.  I stand to get 370ish cash flow after  expenses per month at 80, around 300 at 85.  Didn't want to overpay that much and am willing to let go 

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