House on market for 3 days. Received 2 offers already!

yogastefOctober 27, 2012

I've been lurking here for a while. I have posted a few answers to Weedyacres thread on curb appeal. I put my house on the market a few days ago, and have already received two offers. We listed it at $112,000. I received an offer for $112,000. and one for $125,000. I am thrilled! My agent is concerned that the appraisal will be too low. She thinks I will get more offers, and was hoping for a cash buyer. It's an old 1943 cottage, and I haven't done any remodeling. I added an orchard, cottage garden, and vegetable gardens. The pipes are the original galvanized pipes, and they've been working fine. I replaced the kitchen floor 10 years ago, recarpeted last year, and have done good basic maintenance. Anyway, I'm thinking that maybe I will offer the higher bidder seller financing. I own the home outright. I bought it for $89,500. Have any of you done this? The house is 567 square feet on a 7,260 square foot lot. The property taxes can only go up 2% a year in CA. I know the land will go up over time. I plan to rent in Oregon and look for a tiny home. I may fix up and resell again. I enjoy landscaping and decorating, and this experience has really motivated me to reinvest. I have enough cash to pay the agents, closing costs, termite tent, and septic pump. I live very frugally, and have enough in savings to pay my personal expenses for over a year.

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Congratulations on selling your house so fast! Getting a full price offer and then another offer well above asking all within 3 days shows your house was underpriced to begin with. I wouldn't be so worried about it appraising. I definitely would not complicate things by helping them with financing. If they know you are financially capable of financing, who knows what other things they would expect you to pay for. If someone is willing to pay $13k above asking price, that suggests to me that even if the property didn't appraise, they would have the extra money to chip in. So let them worry about financing - thats their problem, don't let it become your problem. Hope everything goes smoothly for you.

    Bookmark   October 28, 2012 at 10:40AM
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Nice! Please spread your good juju to me please :) Good luck, hope it goes smoothly!

    Bookmark   October 28, 2012 at 2:26PM
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Thanks for the encouragement cass66ragtop and bosegirl. I thought my agent was pricing too low, but now I'm kind of glad that she did. The comps were very run down foreclosures and short sales. They were bought by investors, remodeled, and are now rented. My agent said we should be getting a third offer today.
This will be my first sale, so I'm learning a lot about negotiating here. If it appraises low, is it possible for me to negotiate with pre-paid property taxes, and/or including my O'Keefe Merritt stove? (I put in the paperwork that the stove is not included.) I told my agent I would replace it if I need to...
We also don't know if it will pass the inspection. I haven't rewired it, but everything works.
I'd like to sell quickly and take advantage of this timing as a buyer.

    Bookmark   October 28, 2012 at 2:49PM
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A home can't pass nor fail an inspection. The inspector will only point out items that are not performing the function for which they were intended.

    Bookmark   October 28, 2012 at 4:03PM
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The new property taxes for the buyer will be based on the purchase price of the house, there is no limit on the new assessed value in CA.

Hopefully your buyer is experienced and won't be scared away by notations from an inspector.

    Bookmark   October 28, 2012 at 4:37PM
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Thanks for all the replies. Well, my agent just called and she had a cash buyer. She said that they already wrote up an offer over the purchase price, sight unseen. This is amazing to me...
They spent quite a bit of time here. The buyer wants to add on a patio. Her agent was asking me about the zoning and if they could build back. I told her that we are R3 and that you can build up, but not back. (We're in a flood zone.) She seemed happy with that and asked me when I would be receiving my other offers. I told her tonight.

Everything works, it's just not new. I repaired rather than replaced. I figured if somebody rich came in, they'd redo it all anyway. Thanks for the input.

    Bookmark   October 28, 2012 at 5:25PM
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Yogastef, out of curiosity, where in California are located,and where in Oregon are you going? I'm a California transplant living in southern Oregon.

    Bookmark   October 28, 2012 at 8:04PM
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I'm in Canyon Country, CA. I've never been to Oregon, so I'm not sure where I'm going. I lived in Seattle until I was six, and I loved it there. I have worked with people from Oregon, and I really liked them. I think I will be happier there socially, spiritually, and personally.

My agent said that the cash offer wants the termite done, (which is fine and needed,) and a home warrantee. I want to sell as is, since the house was built in 1943. I'm nervous about the warrantee and what it means. (sp.?)

    Bookmark   October 28, 2012 at 9:37PM
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I think the home warranty is that you buy a plan for a year, 6 months, whatever amount that supposedly pays should anything need replacing... Almost like extra insurance. Ask your agent.

    Bookmark   October 28, 2012 at 11:03PM
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Well, if you want any information about southern Oregon, where we have a lot more sunshine :) ,let me know

    Bookmark   October 28, 2012 at 11:33PM
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Home warranties, paid by the seller, are quite common around here. They cost about $400, although that would probably depend on factors specific to your home, and cover appliances for a year from purchase. You pay the $400, and if the refrigerator breaks in 11 months, the home warranty company pays for it to be fixed - absolutely no money or involvement on your part once the policy is paid for.

Congratulations on receiving so many offers!

    Bookmark   October 29, 2012 at 2:47AM
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Thanks for all the info. For some reason I thought a home warranty would be really expensive. My appliances are old and used. (Tried and true Kenmores.) She is bringing all her own. I thought it applied to pipes and electrical. It's very reasonable, and I'm glad that she pays the deductible. I'm paying to have the septic tank pumped, for a termite inspection and tenting. (I know I have termites.) She will pay for any repairs from the termites.
I got three offers last night. One for $112,000. One for $125,000 with only $10,000. down and an FHA loan, and one cash offer for $122,000.! (I was hoping for a cash offer.) She wants a two week escrow, so I'm packing and making plans. She showed proof of funds. She has $249,000. in the bank. Can't beat that!
I'm very excited. My agent is putting the showings on hold and said that we probably will still receive more offers. I guess underpricing was the way to go. It seemed to make the buyers more generous and eager. I tried to sell this house twice before, and didn't get a single offer. So, this has been really incredible. This agent is a much better match for me. I noticed that she was selling several nearby mobile homes in a row. She turns them over so fast! She said she likes selling the lower end properties.
Southern Oregon sounds great! I didn't know they had more sun there...

    Bookmark   October 29, 2012 at 10:59AM
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I have lived in southern California most of my life and agree underpricing can be great, it creates lots of interest and over offers. That all cash offer sounds great.
I wish you the best!

    Bookmark   October 29, 2012 at 12:56PM
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Congrats on the cash offer!
Every once in a while I will run into a client that the "Painfully Low Pricing" technique is suited for. Three months ago or so I listed a home that had been on the market for a while and the seller was not getting many showings and no offers. She fired the agent and hired me. She told me she had two months to close or she would be in big financial trouble. So, we priced it "painfully low". The other agent had it priced something like $165,000. We priced it at $147900 and I sent out 6000 E - Flyers to the local agents. The plan worked... we got multiple offers (2), and told each to bring their Highest and Best. One of them came back at $156,000. $8000 above list price. The home was Active for about 2 or three weeks. We closed about 3 or 4 weeks ago. It made me feel really good that I helped in some small way to save this young couple from foreclosure. One of the most satisfying deals I have ever done.
This technique can work, but it is not for every scenario.
Congrats again on your fine offer.

    Bookmark   October 29, 2012 at 1:38PM
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Interesting - sounds like the Ebay technique of luring buyers in by posting a low starting price and then let them duke it out.

Also - you know what I think - I think it illustrates quite well that there is indeed a healthy market for the small, old house that has been well loved and well cared for. Comps are not the be all, and end all - there is such a thing as how the light fills the house (or not), views out the window, just the whole feng shui or feel of a place. Is there historic wood work in good condition or just some neat or cool oddity about the house that people like. Well chosen colors, the flow of the room, etc.

    Bookmark   October 29, 2012 at 3:49PM
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Just be aware that in that area, that the seller has to sign a million docs, especially regarding earthquakes, fires, etc. How do I know? I sold my home in that area and according to county (Los Angeles) you as a seller HaVE to disclose alot!!!!!!!! If you do not? It is your problems. Believe me NOT FUN!

    Bookmark   October 29, 2012 at 6:11PM
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Thanks for all the replies. I really appreciate your good wishes and knowledge. I will be sure to disclose everything. That's why I said right away that I do have termites and would pay for the tenting. There could be some mold behind the tiles in the bathtub. I haven't redone it, so I don't know what's back there. I told the agent I want to sell it "as is". That's how we bought it. I rented it for a year before purchasing it, so I knew it was a good little home. I put in a new gas heater and gas water heater. The Gas Co. did the work, so I know it was done to code. They paid for the permit, too. There haven't been any additions. Part of the low pricing was because I didn't remodel the bathroom. I'm so glad now that I didn't pour a ton of money into the house. I bought lots of beautiful antiques at the Salvation Army. I found a few antique lamps for $15.00 that are feminine and charming. I tried to keep the style and period of the house. The agents were really receptive. I put begonias in window boxes with shabby chic curtains from Target. Those little details seemed to really help. We repainted it eggshell with white trim, and I took everything off the walls. I put half of my closed in my car, and covered it with a car cover. It made it feel much bigger. Here's the listing. The photos are before I had it painted and decluttered. MLS# SR12132328.
I found another home in the mountains for $80,000! It's gorgeous! It sat on the market for a year. Now it
s a REO and they changed the agent and droped the price. It was a vacation home, and I love it. Very high end neighborhood. Feels like Lake Tahoe. I put a cash offer for $80,000. on it, contingent on the sale of this house. It's quite a find.

    Bookmark   October 29, 2012 at 9:06PM
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Update: Well, the cash offer backed out. She said that she went to LA Country and they said that she couldn't build more than 25 feet back. (I had already told her agent that. You can build up.) She also didn't want to do the soil test. Her father was putting up the money and changed his mind.

My agent called the buyer who offered list price, and she doesn't want it anymore. I asked her to call the agent for the couple with the FHA loan who offered $125,000. They were ecstatic. My agnet said you can;'t get an FHA loan without a garage. I am going to carry the papers for them. I feel like they are perfect for the house and this neighborhood. That way I can sell it "as is" and get $125,00. I won't have to worry about a low appraisal or problems with the home inspection.

My agent wanted me to start showing it again, but my gut says to go with these people. I liked them very much and they told me they had made offers on other homes and didn't get them. They were concerned that prices were going up. They originally were going to offer $120,000 and when they found out I had two other offers they raised their offer to $125,000. which I think is excellent.
I like that it's a fast sale and that the people love the home and will be happy here. I am okay with getting the house back if for some reason they can't make the payments. My realtor has someone who can draw up the papers.

    Bookmark   October 30, 2012 at 4:26PM
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My agnet said you can;'t get an FHA loan without a garage

What?? I have never heard that before. Check with a lender before trusting what your agent has to say.

    Bookmark   October 30, 2012 at 5:24PM
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That's why I would rather carry the papers myself. I have more control. I trust the buyers. I met with them and they were very sincere.

    Bookmark   October 30, 2012 at 5:30PM
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I really doubt if a lender on that foreclosed home that you like will accept a contingent offer. I have never found one that would.
You don't need the cash from this current sale to buy the other home? If you carry the note, you dont get the $125,000 up front. Only the down payment.

    Bookmark   October 30, 2012 at 7:37PM
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"My agnet said you can;'t get an FHA loan without a garage"

WHAAAT?? Ummm not true.

    Bookmark   October 30, 2012 at 7:47PM
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I did need cash from this home to buy the REO. I called my agent up there and explained the situation. I had told her at the time that I had a feeling this woman was going to back out.

My agent is going to broadcast to the other agents that I will offer seller financing. I will call a lender and find out about the garage situation. The couple with the FHA loan only has 3.5 % to put down. I told them I need at least $10,000 for a down payment, the last three year's tax returns, and the last three month's bank statements.

I may just keep my house. We'll see. It's frustrating when you don't know if people are telling you the truth or not. Thanks for the help.

    Bookmark   October 30, 2012 at 8:07PM
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If you need the cash from your current home in order to buy your next home, why offer seller financing?

    Bookmark   October 30, 2012 at 9:08PM
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Good point. I was thinking of buying a tiny home in Oregon. My plan was to rent month to month and see how the buyer did as far as making payments. I have a year's living expenses and $25,000. in the bank. I've wanted to get out of this neighborhood for a while. I love my house and garden, but not my neighbors.

But, everytime I go to sell I realize that my house is really cute and if it doesn't sell, I'm fine with keeping it. At least I don't have to sell...

    Bookmark   October 30, 2012 at 9:26PM
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One other huge thing to think about with owner financing- if these people don't even have 5K for a down payment, how are they going to be able to pay for all of the expenses that crop up when you own an old house?

Don't take the risk yourself, because if you get the house back, you're not likely to get the house back in the shape you left it in.

    Bookmark   November 1, 2012 at 12:24AM
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Seller financing? You have got to be crazy, because that hangs the house around your neck like an albatross for the duration of the loan.

If they trash it and default, you have the lengthy foreclosure process and the fix-up - all out of your pocket - and then have to start over with selling it. If they get hit by a bus, same thing, but you have the heirs to deal with.

Sell it with normal financing from some bank that does it for a living and get it out of your life.

    Bookmark   November 1, 2012 at 6:34AM
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I agree with the others: don't do seller financing! It doesn't accomplish your objective of buying another house in Oregon with cash, and it opens up a potential can of worms if they don't pay.

If the buyer can't get a loan with normal banks, it's because they've deemed it too risky. Why would you want to take on a risk that sophisticated banks aren't willing to? Seller financing is more risky than renting, because the foreclosure process is way more difficult than the eviction process.

You're giving up way too soon on a normal buyer with a normal mortgage. You've only been on the market a week. Take a deep breath, slow down, and don't make a rash decision just because you've got a good supply of cash in the bank.

    Bookmark   November 1, 2012 at 11:16AM
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Update: Thanks for the advice on seller financing. I was having trouble with my realtor and it clouded my vision. I took the house off the market. I am going to continue doing all the repairs, spending $3,000. a year. We got a fourth offer. She said it wasn't that great, and I didn't see it. (I think it was with seller financing.)

You were right about the family. That night, I heard a bunch of people outside my home as I was trying to sleep. A man's voice said, "Stephenie, your house isn't selling. "125,000." It was so creepy! Thank God I didn't get into that mess!

The agent was trying to control who I chose as an agent for the cabin I'd found. She also wasn't conveying my messages to the agents who had made offers. She kept trying to get all buddy buddy with me, and discussing inappropriate subjects. (Her daughter on meth and pregant with twins, her sex life, her grandchild that she has custody of because she was going into foster care...") I kept trying to get her to focus on the business of the sale and she would veer off. It's like she wanted a therapist or a friend. She said that the buyers who had made offers talked to the next door neighbors and they had nothing nice to say about me or my property. (He was intercepting them during showings.) I was worried that would happen. That's why I was moving, to get away from them.
My mom said they may buy the REO cabin as an investment property. They could pay cash. They helped me buy this one, and are very happy with how it looks now. It was an eyesore when we bought it.

    Bookmark   November 1, 2012 at 1:06PM
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We got a fourth offer. She said it wasn't that great, and I didn't see it

Umm, your agent is required to give you all offers.
Sounds like it's a good thing you dumped her. Totally unprofessional.

    Bookmark   November 1, 2012 at 3:04PM
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OP wrote:
"You were right about the family. That night, I heard a bunch of people outside my home as I was trying to sleep. A man's voice said, "Stephenie, your house isn't selling. "125,000." It was so creepy! Thank God I didn't get into that mess!"

I am confused... what is all this about?

    Bookmark   November 1, 2012 at 10:29PM
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"You were right about the family. That night, I heard a bunch of people outside my home as I was trying to sleep. A man's voice said, "Stephenie, your house isn't selling. "125,000." It was so creepy! Thank God I didn't get into that mess! "

What???? Are you saying the potential buyers were outside your home last night?

    Bookmark   November 2, 2012 at 7:57AM
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This thread is getting more and more unreal...I have been wondering its validity.....

    Bookmark   November 2, 2012 at 9:08AM
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I think it was the agent with a group of people. My sense was that they were scrambling to get the down payment. This is LA, and these buyers are from Mexico, as is their agent. We have gang problems here. The family had made offers on other houses and lost out. It made me really uncomfortable. They may have been planning to pool their money, and move in several people into my one bedroom. That happened next door.

Anyway, I am glad to be out of that mess. I know it sounds crazy, but I'm not making it up. It was such a whirlwind and it felt like a scam. I was moving to get of this neighborhood. I have some very nice neighbors, but the ones next door have been a problem. (They work in a group, on both sides.) I turned them in the Building and Safety because they were living in the garage and had built four free standing buildings on the property. Those structures were demo'd. Ever since, they've wanted revenge. Many of the people had to move out, and it's much better now than it was. It's hard to explain it all in a post. I took the other side to court, and the judge ruled in my favor. It's difficult being a single woman next to these people.

    Bookmark   November 2, 2012 at 3:15PM
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Knowing all this, seller financing is a crazy idea. Sell it outright, move on.

    Bookmark   November 2, 2012 at 3:18PM
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