Agent Wants Us to Do An Exchange?

emilynewhomeOctober 22, 2010

We need advice - we are selling a $600K house to buyers with a 'contingency to sell' their $360K home.

Our agent has recommended that we do a 1030 exchange plus $250K! He says the buyers are concerned someone without a contingency will buy from under them, and as an alternative are considering purchasing a lot that our agent owns in our subdivision.

Our house has been on the market since February 2010, the buyers put their home on the market last month, September with our agent, after deciding to purchase our home.

Does this sound 'odd' to anyone else?

Thanks!

Thank you for reporting this comment. Undo
sylviatexas1

not if you like the house.

    Bookmark   October 22, 2010 at 2:26PM
Thank you for reporting this comment. Undo
emilynewhome

We are moving out of state, we have already purchased a home there earlier this summer. Our agent is aware of this, that is why we are puzzled as to his suggestion.

According to him, his reasoning is that the cheaper house will sell quicker than a $600K will.

We do agree with that, but since we now have a buyer, and the buyer's house has only been on the market for just over a month, why would we consider an exchange! (Apart from the agent earning his commission).

    Bookmark   October 22, 2010 at 3:10PM
Thank you for reporting this comment. Undo
linda117117

This sounds more like your agent trying to make sure he gets his commission on both ends. I dont know where you are, but in my area, houses under 300k are selling and houses over 500k are selling. Everything in the middle is sitting. I dont see how this "offer" benefits YOU at all. Your agent says they are worried that you will sell the house out from under them but yet, if you dont do the 1030, they will buy the lot instead? It sounds like a bunch of bull to me. I dont think this is the buyer at all, I think you have a slick agent on your hands.

They are afraid someone else will buy your house before they can. So to "fix that" they are considering buying the lot in your subdivision. Hummm, how does that help them? They still would have to sell their house to start construction leaving them in the same exact position they are in now. The whole thing sounds to me like your agent and their agent is making sure he has a couple of really nice checks coming in. Give them some time to sell their house with a 3 day kick out clause. (Meaning, if another buyer comes in to purchase your home without a contingency, buyer number 1 would have three days to move forward with the purchase or withdraw their offer). You dont need to do a 1030. (besides the tax implications of purchasing a home almost half the price of the one you are selling since you already puchased a home in another area)

    Bookmark   October 22, 2010 at 6:01PM
Thank you for reporting this comment. Undo
clemrick

A 1030 exchange is a way of deferring taxes on the gain of a sold investment property by requiring the money from the sale of a current investment property be used to buy a similar investment property. The agent seems to be the only one with an investment property. A 1030 exchange is really just the way the seller moves investment money around, the buyers don't have to be party to that part of the transaction.

So what exactly has the agent suggested you do?

    Bookmark   October 22, 2010 at 6:02PM
Thank you for reporting this comment. Undo
linda117117

One more thing. If the "cheaper house will sell easier than the more expensive house" then they dont have anything to worry about. They should have an offer before you get another one with that logic. The whole thing sounds slick to me.

    Bookmark   October 22, 2010 at 6:03PM
Thank you for reporting this comment. Undo
orv1

I'm familiar with 1031 but not the 1030. What are the rules on it?

I would start questioning who your agent is working for here.

    Bookmark   October 22, 2010 at 6:55PM
Thank you for reporting this comment. Undo
sparksals

Wouldn't the buyers be breaching the contract if they pull out to buy a lot? If they have a contingency they can pull out anytime, well, guess they can, but it seems to me the only contingency would be to sell their home and other typical financing stuff.

    Bookmark   November 7, 2010 at 2:46PM
Thank you for reporting this comment. Undo
butterfly4u

Emilynewhome,
I know this is late, but if I were you,
I would fire your agent now.
Look for another agent, ask around and try to get someone
that has a good reference.
The agent who is suppose to be working for you, is
selling a lot in the same subdivision that you live in, and he is mixing the deals, so to speak.
Get a good honest agent, ask family and call agents
that have sold homes on your block recently.
Good Luck to you, I hope you sold your home to a good
serious buyer.

    Bookmark   November 15, 2010 at 11:53PM
Sign Up to comment
More Discussions
Lady Realtor coming to house at 6:30pm and its dark outside?
I was looking up homes for sale around me on trulia...
tlbean2004
Should we buy a home that was unoccupied for 6 years?
There is a cup-de-sac where a builder built 5 homes,...
coffeemama1
Seller not allowing final walk-through before closing
Hi, I am struggling with a strange situation in my...
musicgold
Moving to make room for mom?
My mother is getting to the age where she should not...
paintedpeggies
Why would nosey realtor say these things?
It is clear my house lacks a wow factor. I over de-cluttered...
belfastbound
People viewed this after searching for:
© 2015 Houzz Inc. Houzz® The new way to design your home™