All Forum Posts by: Jim L.

While this is a creative solution, caution may be prudent as the proposed action would include knowingly making a misrepresentation to a mortgage lender in violation of Washington's Mortgage Lending and Homeownership Law (RCW 19.144.080).  There are some pretty stiff penalties including jail time and/or fines.

@Joseph Delia, that is an interesting idea - did you have to deal with zoning zoning issues in going from SFR to MFR?

@Marian Smith, thanks for your response.  I'm in a pretty hot market, where houses currently go for tens/hundreds of thousands over list, with multiple escalating offers and no contingencies in a matter of days.  I'm just trying to figure out a way to make (e.g., wholesale) offers that make investment sense, but will still occasionally get accepted.  Being new to this, I can't wrap my head around someone taking less than current market value if they have a choice.

@Brent Coombs, I get that undue influence is a "valid reason to cancel".  I'm just looking to avoid court proceedings that potentially could unravel a deal after a lot of money and time has been spent.  Obviously, one could simply avoid making below-market offers.  But doesn't that generally defeat the purpose of investing?   Maybe voiding contracts for undue influence is rare and I'm making more of it than is warranted?

A sale contract can be voided, at the seller's discretion, if the seller was "unduly influenced" by the buyer.  As I understand it, "insufficient consideration" (e.g., purchase price well below market value) alone can be considered sufficient evidence of undue influence. 

The forums and many books evidence that making hundreds of well-below-market offers to motivated potential sellers is a popular strategy.  Naturally, some sellers are so motivated that they don't care about the buyer getting instant equity and foregoing a significant difference between the sale price and market value, but surely not all sellers are aware of the market value of their property when they accept a low offer. 

So, aside from clearly informing a seller that your offer is well below what they could get in an open market, is there a way to ethically reduce or eliminate the risk that a seller will later change his mind and seek to void a sale contract by claiming it resulted from undue influence?