I want to make an offer but don't want to seem unreasonable

7 Replies

Hello BP family, I am looking to make an offer on the following property:

Condominium

2 bedrooms

2 bath

1,204 sq ft

patio with storage, near pool, wood floors, washer/dryer, fridge included

seller wants $1,850 per month and wants to sell for $335,000

I checked the comps using Zillow and it looks like a comparable unit that is a

2/2 that has all upgrades and is asking 313k, the owner said this unit just sold for 310k

all the upgrades: dark wood floors throughout, granite counters, stainless steel appliances, recessed lighting, pedestal lighting, upgraded trim, counter back splash, new cabinets and fixtures, floating shelves and a new HVAC unit.

Whereas the unit I want to make an offer on has none of these things, but does have a larger square footage (1,204 sf compared to 952 sf). Let me know if I am out of line by trying to offer the following:

Since I am not yet the owner of the property I will care for the property and make any repairs up to $200, the owner will be responsible for anything above $200.

I will offer a monthly lease payment of $1,700 which will include the HOA fees and any other fees associated with the complex (only being responsible for the electricity), which still pays down the mortgage leading up to my option to purchase, for up to 3 years.

The owner will be allowed to claim the home on their taxes every year until I am able and have the option to purchase.

The owner will not have to deal with a realtor thus saving a large percentage of realtor's fees.

The owner will not have to pay for marketing leading up to my option to purchase the property within 3 years.

After researching and doing a comparison of properties in the area my offer is as follows:

Pending an inspection, which could change the agreement; I will lease the unit for $1,700 per month for up to 3 years with an option to buy the property at the price of $280,500.

I will have the option to renew the offered price (every 12 months) in case the market depreciates the value of the property. If the property value does not change I will still have the option to purchase the property at the price of $280,500.

These terms do not go into affect until I am able to sub-let the property.

Thanks for reading BP family and let me know if I am being unreasonable and what you all think or what you would offer.

Understand, that you don't ever decide what you should offer. The numbers tell you what to offer. You do not force anyone to accept your offer, they do so of their own accord. When you place an offer that may seem low, you must know that you are giving them an option. At least someone is willing to purchase the property. They may not have an options or they may have several but at least you were able to give them one. They will make their decision based on what is best for them and you must do the same.

@Robert Hidrogo I agree with @Brian Gibbons I have dealt with some HOA's that only allow owner/occupants and forbids lease options. Check with them first if you plan on sub-leasing. Also, you never mentioned what was owed on the property.

Are you interested in living in this place or strictly as an investment?

A sandwich lease/option with possible HOA objections/complications seems unnecessarily complex.

If you are interested in living there and the HOA will allow a lease/option - it could be a good option. With the discrepancy in square footage and improvements you need more than one comp. You might call around and see if an agent would be willing to do a CMA for you and submit for offer for a flat fee. I would expect to pay something even if I didn't close, but a lot less than typical.

How much do you have available to offer as an option fee?  A significant option fee can help make a lower price more appealing.  Keep in mind that you will need separate funds for a downpayment when you close - the option should apply to closing costs.

@Jesse T.

Are you interested in living in this place or strictly as an investment?

A sandwich lease/option with possible HOA objections/complications seems unnecessarily complex.

How much do you have available to offer as an option fee?  A significant option fee can help make a lower price more appealing.  Keep in mind that you will need separate funds for a downpayment when you close - the option should apply to closing costs.

I am not going to live in the place and am not planning on paying an option fee. The payoff price is $140k.

Originally posted by @Lonnie Pickard :

@Robert Hidrogo I agree with @Brian Gibbons I have dealt with some HOA's that only allow owner/occupants and forbids lease options. Check with them first if you plan on sub-leasing. Also, you never mentioned what was owed on the property.

The payoff price is $140k. 

Originally posted by @Robert Hidrogo :
@Jesse T.

Are you interested in living in this place or strictly as an investment?

A sandwich lease/option with possible HOA objections/complications seems unnecessarily complex.

How much do you have available to offer as an option fee?  A significant option fee can help make a lower price more appealing.  Keep in mind that you will need separate funds for a downpayment when you close - the option should apply to closing costs.

I am not going to live in the place and am not planning on paying an option fee. The payoff price is $140k.

 If you can put down the typical 25% down payment, I think you can make a strong offer for seller financing at 280K.  The deal is safest if he can put in cash to pay-off the mortgage.  If you offer him a 5% rate, that will be a very strong stable return.  For that rate you should be able to get a pretty long fixed rate.