Appraisel Issue With L/O

I currently have a 12 month lease option and the tenants are excersising their option after 3 months. I negotiated top price for the neighborhood and now fear appraisel issues. They are paying 1000/month rent with a purchase price of 122,500. Top house in the area has sold for 116,000.

ckdonley

Comments(4)

  • chumah5th June, 2005

    All well said. Additionally, ask if he will pay the difference?? Because the prize projection you made to get even or whatever is based on 1 yr appreciation.

    It would have been nice if it was added to the contract.
    "Exercising the purchase opt early"

  • edmeyer5th June, 2005

    chumah,
    What do you mean by adding "Exercising the purchase opt early"? This appears to be an option contract at a fixed price over the option period, which is extremely common.

    Ed

  • jdflybuy5th June, 2005

    ck,

    Regardless of what the appraisal comes in at, your tenant/buyer contracted to purchase at $122,500.

    A contract is a contract. $122,500 is what you agreed to accept for your property. How your tenant/buyer comes up with the money is not your concern. However you could be the hero by offering to carry back a small 2nd.

    If they choose not to excercise, you get more option consideration from your next tenant/buyer.

    Just my opinion.
    JD

  • edmeyer5th June, 2005

    Hi, quinn

    Glad to see you are back. There are some programs out there with 100% financing. I am pursuing one for not-owner occupied. The interest is high because it is a rental and it is for a small amount. Whether your tenant/buyer can qualify is another issue. Section 8 also has a home purchase program but I know nothing about it other than some of my Section 8 tenants have "signed up". None have purchased as yet. You might check this out with your local Housing Authority to see if your property may be a candidate.

    Regards,
    Ed

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