Posted by Jay IN on February 26, 2002 at 16:22:25:
Take the house but make sure they give you some cash and/or quite a few payments since there’s no equity at all. Also be aware that the taxes are artificially low since they probably won’t reaccess it with the house and land for 12-18 months. When they do, your payment is going to jump up a lot. This is another reason to ask for an ADDITIONAL payment or two.
It is a deal if you structure it correctly (others will disagree). Your buyers will be thrilled to get into a new home and will probably not even question the price difference. If they do, tell them they can go build one themselves if they want the builder’s price. That’s when they’ll say “I can’t because of my poor credit”. Now they have to choose…pay more and move in now or wait another year or two until they can qualify on their own when the price will likely be higher anyway.
A divorcing couple want to sell me their two month old house. They’ll sign over the deed for free. Of course, there’s no equity in the house.
I’d like to take over the house subject-to, and then L/O or Wrap to a new buyer at a 10% price increase, and higher interest rate (cash cow deal). However, the builder is still building and selling new houses in this development. I am wondering if this should concern me. Should I be concerned that any potential buyer would find out that the developer is selling the same house, new, at a lower price? Even if they couldn’t qualify for a new house (credit probs), would they all be upset about paying more and decide not to buy?
Have any of you had success in reselling houses in unfinished developments? What if the back yard landscaping is not in yet (dirt)?