Sweetening a deal with Visitation rights for seller good idea?

3 Replies

Neighbor to my parents is parting with his vacation home. Plan on buying it and using it mostly as airbnb. Will make offer slightly below asking before it hits MLS. He could most likely get more $ from a bidding war, but to sweeten the deal we plan on giving him and his family 2 weeks a year for free (1 week summer, 1 week fall non-holidays) for maybe 5 years or so. I have talked with seller about this and he has expressed interest. He has been a neighbor to my parents for the past 20 years or so and seems like a real decent guy. He is an older man and is using an agent but wished he wasn't when he found out we were interested.
How common is this situation? Any legal issues I should be aware of? How should this be written up in the offer? Does 5 years sound too long or too little? Any advice is greatly appreciated!

Originally posted by @Trevor Praetsch :

Neighbor to my parents is parting with his vacation home. Plan on buying it and using it mostly as airbnb. Will make offer slightly below asking before it hits MLS. He could most likely get more $ from a bidding war, but to sweeten the deal we plan on giving him and his family 2 weeks a year for free (1 week summer, 1 week fall non-holidays) for maybe 5 years or so. I have talked with seller about this and he has expressed interest. He has been a neighbor to my parents for the past 20 years or so and seems like a real decent guy. He is an older man and is using an agent but wished he wasn't when he found out we were interested.
How common is this situation? Any legal issues I should be aware of? How should this be written up in the offer? Does 5 years sound too long or too little? Any advice is greatly appreciated!

seems like a great win win .. go for it.. 

 

I should have said  go for it thats what i would personally do.. Not speaking for others on BP or giving you advice.. but it seems like a win win.

I have given two sellers life estates over the years and those worked out quite well for us.. Of course it was different product it was real estate we eventually entitled and subdivided so BIG up side 

Not a bad idea at all and a nice thing to offer the seller but I would settle on all the details in writing upfront. I would handle the agreement outside of closing and the sales contract but an attorney may say include it. You are asking them to take a future benefit in lieu of a bigger sales price. While all parties have their hearts in the right place there are many ways this could get complicated. When do they have to define what weeks? You don't want your rental calendar in limbo. Can they "give" their weeks to a 3rd party? What if you book it fully or there is major rehab issue or disaster and you can't give them their weeks or any weeks or you sell before 5 years? Are you or your STR business liable? Who pays for cleaning after their weeks? Are they bound to house rules on #of guests, check in out times, etc? For your record keeping are you giving them 2 free weeks no income gained in lieu of your IRS 14 day free use of your rental window? If you then use it personally, you have to prorate your expenses between personal and business use and this gets tedious. You are offering free use of your future business. You might want to just give them a big discount for x number of years via a post-stay rebate and they follow what ever process you are using for booking like any other guest whether you self manage or use a PM.

I'm just offering an opinion on what I would consider if I were in your shoes and have no experience executing something like this. Best wishes!