Seller doesn't want to sell to LLC

Member since 2020 · 6 posts · 1 vote

Me and my friend/contractor put a all cash offer to buy my neighbor's house in Los Angeles. I created a LLC for which me and my friend are 50% owners. We have a proper operating agreement. provided proof of funds and offer letter. Everything was provided to the seller the way she wanted

After 2 weeks of silence, seller is saying they don't want to sell their home to a LLC. they will sell if both of us are buyers

What is the best way to do this transaction ?

What is additional cost of moving the title from us to the LLC ?

is this a big deal or easy fix ?

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Joe SplitrockPro Member

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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

Originally posted by @Ahsan Faheem:

After 2 weeks of silence, seller is saying they don't want to sell their home to a LLC. they will sell if both of us are buyers

What is the best way to do this transaction ?

What is additional cost of moving the title from us to the LLC ?

is this a big deal or easy fix ?

I would try to find out why the seller is requesting this. There must be some underlying reason or concern, which may have a different solution. Maybe they want to know who is buying the property or they are concerned an LLC means you are less reliable to get the deal to closing. They may want to have personal recourse if you back out. In that case a larger down payment may satisfy their concern. Dig in a little and find out what the real objection is. Good luck.

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Jason Taken
Lender · Chicago, IL · Member since 2021 · 424 posts · 145 votes
4y
Purchase it in your individual capacity then quit claim it to your LLC. Should be relatively smooth given its a cash deal. Will obviously cost a little more in attorney's fees and recording fees, but can be done pretty seamlessly.
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Ahsan Faheem
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Member since 2020 · 6 posts · 1 vote
4y
Originally posted by @Jason Taken:
Purchase it in your individual capacity then quit claim it to your LLC. Should be relatively smooth given its a cash deal. Will obviously cost a little more in attorney's fees and recording fees, but can be done pretty seamlessly.

Any idea how much more recording fees we are talking about approximately ?
I am very close to walking away from the property because of several seller silly demands but hanging in there.

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Jason Taken
Lender · Chicago, IL · Member since 2021 · 424 posts · 145 votes
4y
https://lavote.net/home/record...

Take a look here. I'm a Chicagoan.
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
4y
Originally posted by @Ahsan Faheem:
Me and my friend/contractor put a all cash offer to buy my neighbor's house in Los Angeles. I created a LLC for which me and my friend are 50% owners. We have a proper operating agreement. provided proof of funds and offer letter. Everything was provided to the seller the way she wanted

After 2 weeks of silence, seller is saying they don't want to sell their home to a LLC. they will sell if both of us are buyers

What is the best way to do this transaction ?

What is additional cost of moving the title from us to the LLC ?

is this a big deal or easy fix ?

I would try to find out why the seller is requesting this. There must be some underlying reason or concern, which may have a different solution. Maybe they want to know who is buying the property or they are concerned an LLC means you are less reliable to get the deal to closing. They may want to have personal recourse if you back out. In that case a larger down payment may satisfy their concern. Dig in a little and find out what the real objection is. Good luck.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
4y
Originally posted by @Jason Taken:
Purchase it in your individual capacity then quit claim it to your LLC. Should be relatively smooth given its a cash deal. Will obviously cost a little more in attorney's fees and recording fees, but can be done pretty seamlessly.
Attorneys dont handle these type of closings on the west coast this would be a title and escrow officer function.
ONe thing to be careful of.. is making sure your title insurance follows to the LLC.. sometimes if you quit claim out your title insurance will not follow you and if you have a claim they will deny.. so not always but you want to make sure of that .. before you quit claim out.
and also for a practical matter unless your buying a lot of property.. tenants in common is just fine for owning a single asset.. its not like the LLC is some magic asset protection vehicle.

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Michael Dumler
Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes
4y
@Ahsan Faheem maybe inlcude a personal letter with your offer. The seller very well could be emotioanlly attached to the property, and therefore, does not want to sell to an LLC. I would keep the letter simple, inform the seller your plans proceeding forward and ensure a smooth closing. Odd situation, but maybe that's what they're looking for.
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Paul FalboPro Member
Investor · Massapequa, NY · Member since 2016 · 9 posts · 4 votes
4y
@Ahsan Faheem are you in escrow ? Or has the seller stalled the deal? I dont know the CA law but why don't you close in your name and then transfer to LLC post close?
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Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
4y
Originally posted by @Ahsan Faheem:
Me and my friend/contractor put a all cash offer to buy my neighbor's house in Los Angeles. I created a LLC for which me and my friend are 50% owners. We have a proper operating agreement. provided proof of funds and offer letter. Everything was provided to the seller the way she wanted

After 2 weeks of silence, seller is saying they don't want to sell their home to a LLC. they will sell if both of us are buyers

What is the best way to do this transaction ?

What is additional cost of moving the title from us to the LLC ?

is this a big deal or easy fix ?

Seems like a really odd requirement. I haven't heard that one before.
You could write up the purchase and sale agreement to get the deal and then assign it to your LLC at closing, or do a double closing if you don't want him to see the HUD with the LLC on it. Ask your escrow agent how much the added cost would be. Not more than a few hundred dollars would be my guess.
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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
4y
I agree with Jay. Just do 50% ownership under your names.
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Dustin P.
Realtor · Tempe, AZ · Member since 2017 · 541 posts · 442 votes
4y
Sign it up in personal name and either assign to the LLC or quit claim to the LLC after
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