All Forum Posts by: James H.

I have found that it works better for me to have a more lenient grace period. I made an "administrative" change to my late fee policy when I converted my tenants to bank deposit. I made the grace period 5 days and charge on the 6th. This way they have absolutely no excuse to be late, whether it be holidays, bank holidays, February (short month), etc. The extra couple of days don't affect my bottom line.

It is hard to believe rates getting any lower. I refied my primary FHA aboiut 6 months ago at 3.75% I'm looking at doing a VA loan on a new primary residence at 3.25%.

That said, I am curious about something when I convert my primary to a rental: Since my taxes and insurance are escrowed into my mortgage payment, will I be able to change the insurace coverage to LL insurance?

Does GA have state income tax? I believe my federal tax on rental income is tied to my overall income level, but not 100 percent sure. All I know is that a refund turned into an IOU after I added my rental income, lol!

Thanks Rob,

Yeah, you are correct with everything you've said and the contract is contengint upon financing. There will be another appraisal, so hopefully it comes to more or at least close to the one they had done recently. I replied that 5000 was unusually high and counter offered for earnest money of 1300 and some other changes related time of possesion. One concern I have is that if the appraisal comes in low,/i want the option to re-negotiate the price without risk of being put in the position of paying the deficiency or loosing my earnest money. I don't know if that is possible, but I don't need to be laying out 5000 to risk of loss in any case.

Now I just need them to hurry up and get the contract back to me so we can sign it and lock in our interest rate. Hopefully they don't get in their own way of selling the house to me...

Thanks Cody. I understand all that. I am just wondering if there is some typcical compoent of a deal that would cause a seller to deviate so much from what is generally understood by local agents and attorneys as a typcial/standard amount (about 500-1000 in this case).

I am guessing they just sent it up the flag pole just to see if I would accept it - but I will not. They need to be more reasonable.

Rob K,

This is the VA purchase I was talking about. The title company, which they agreed to let me choose - and whose lawyer reviewd the contract for me, will hold the money. I feel like the brother is skewing the contract hard and just figures if I accept it, all the better.

They had an appraisal done that came to 131,000. So, it is not like I'm getting a "good deal". Additionally, there are no RE agents involved. So not only are they getting nearly full price, but they are also not paying RE fees or closing costs. The mandatory VA seller contribution is built into my offer price as well, so technically, they are getting 126,800...

So really, they are making out like bandits. Why push the issue? I'm actually slightly offended, all things considered. But I don't really care that much as long as I can buy the house at the price I'm willing to pay and don't have to risk so much money just for the opportunity.

The age of the structure does not really matter so much as the age of the mechanicals. Make sure the electric is not knob and tube. Be aware that old plumbing could require replacement and make sure their is adequate crawl space for future maintenance.

Do not underestimate this "tired old landlord". He is a lawyer and will take you for all he can.

Hi guys,

I am in the process of negotiating a purchase contract for a house. The verbally agreed upon selling price is 128,000. The seller's brother (a real estate attorney) wrote the contract using standard state forms and also some addenda. I had my lawyer review it and it looks mostly fine with some small changes I have requested.

My biggest concern,m though, is the earnest money. 5,000 seems unusually high for the purchase price - especially considering it took them almost two weeks to get the contract to me after we agreed upon a price. Their lack of responsiveness plus the fact that the house was recently inherited and is (according to them) free of encumbrances, why the high earnest money? I countered with 1,300 as earnest money. About 1,000 is typcial/standard for the puchase price, but I offered a little higher just to show that I am serious about buying the place.

Any thoughts on why they asked or would ask for such a high earnest deposit?

Give them first right of refusal and only accept a refundable deposit? Collect first and last month's rent prior to giving keys?

I don't know. It seems like when a low end tenant makes your head hurt, they are not worth the trouble. I can see how one might get in the situation to make this request and it not be a bad thing, though.

These are the people you find a way to prevent getting an application in their hand in the first place. Too late for that now.

I have told people in the past that I just didn't think it would be a good fit. When pressed I just say what my concerns are and tell them it's not personal, its just a business decision. They won't like it, but oh well. I don't need everyone to like me. If it was for a non-quantifiable reason like a "gut feeling" I would probably refund their application fee just to get rid of them easier.

Also, the less you say, the better. If they don't accept your reason, don't play the game where you search for a reason that they will accept and not debate. Just tell them your reason and leave it at that.

Say this:

"Getting rent on time is the first most important thing to me. The second most important thing to me is that the property is maintained and respected. Based on my observations of your vehicle appearnace, I cannot accept the risk that my property will be maintained the same way."

They will argue, they will feel insulted, etc. Just listen to them and say, "I'm sorry, that's my final decision, here is your application fee back."

Then learn to not get involved with these types of applicants next time.