November 7, 2006
Exercising Their Option
Good news, Fliperati readers: I received a full asking price offer on my very first real estate investment (my flip!) this weekend. Now, everybody remain calm. Seriously. Please stay in your seats and do not get up until the captain has turned off the Fasten Seatbelt sign. We all know that getting a good offer is just the beginning of what is oftentimes a very arduous closing process, and this deal definitely looks like it will have its challenges.
***The alternate opening sentence of this post was: While the vast majority of lease-option transactions end without the property changing hands, it looks like I might have the pleasure of closing on the sale with my lease-option tenants before they even move in.***
That’s right – the couple that set me running around last week working on a rent-to-own deal has apparently secured a mortgage co-signer (the wife’s sister) and can now purchase the house outright. They are clearly completely infatuated with the property (they contacted me daily last week to check-in) and will be very motivated to make the deal work, but there are obviously a lot of hurdles ahead. They said they will need until the end of this week to get the mortgage approval ready, so I’m not even touching the contract until they can demonstrate that they will actually be able to get financing. The good news is that they do not have a realtor and are instead relying on their attorney to walk them through the process. He seems quite competent and I’m optimistic that the sale process will go smoothly even without realtors frenetically working both sides of the deal to make sure it closes. Even if I have to micro-manage the process, it will be well worth it to save more than $10,000 by dodging payment of a broker’s commission.
Beyond the financing, I’m a little concerned that they will try to nickel-and-dime me with the home inspection.
The buyers have repeatedly mentioned that the sale is contingent upon a satisfactory inspection and that their $5,000 earnest money deposit is fully refundable if they back out of the deal because of something the inspector finds. I have been countering these comments by stating that I am still getting several calls per day about the property and will continue to show it until the deal closes. This has also motivated me to get off my lazy post-renovation butt and take care of the stupid little things around the house that an inspector might make a fuss about. It’s a little easier to spend time/money on the house now that there’s a possible payday in sight. Keep your fingers crossed for me…
Way to go!! I hope things turn out for you!!!
I’m still down here in the trenches, one more week and I’m on the market.
Nice!
That’s great! Can’t wait to hear what happens…
Awsome news. Keep us posted.
Yay! Great news! Will be waiting in anticipation. BTW, I’ve never heard of a property bought without an inspection clause. I’ve closed numerous transactions and my husband was a real estate agent for a few years. In other words, what the buyer is asking is nothing out of the ordinary… (at least around here).
You rock! In a way it’s good experience to handle this deal. You’ll have some great experience to draw on for the next deal.
hey,
How’s it going? Sold yet? Also, what part of Jersey is the house in? I’m in Hoboken, just curious.
Great Job!
Thanks for the well-wishes, all! You’ll notice I haven’t posted an update on the sale process in a while. That’s unfortunately because I don’t really have any updates to share. My buyers are still going back and forth with their bank to get the financing approved and all the documents in place, so I haven’t been able to do much to prep for the sale besides keep the house in good shape. I should be more anxious since they had originally said everything would be done by Friday or yesterday, but, having gone through the process myself, I know there are tons of little things that can cause delay. I would be more nervous if they weren’t so passionate about owning this house. It’s clear they want to get the deal done and there’s not much I can do until they work out a deal with their bank. If things falter there I can try to see if my mortgage broker can get the $$ approved, but who knows if he would be able to do anything the 1st bank couldn’t.
As to what part of Jersey the house is in, I’m trying to keep everything anonymous until the sale goes through because I don’t want to connect this blog to the actual property. All I can say is that it’s a middle-class neighborhood half an hour outside of Manhattan.
Have you closed on this yet???