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duplex update...sales price questions

December 16th, 2008 at 09:35 am

I got the lease information. Top floor is in month 4 of a 12 month lease. Bottom floor is month to month and needs 30 days notice to vacate.

Now I am going back n forth with the lender to try and lock in a "primary residence" loan even though once we close I will have to give our bottom floor renter 30 days to get out. I don't think they are going to go in my favor- and that means we miss out on the $7500 first time buyer tax credit too (we can refinance to a primary residence loan 6 months after closing...we miss the July 1st deadline for the tax credit).

I am going to request that the current owner vacate the bottom floor unit by the time we move in...but with house sales falling through all the time I doubt the current owner will be agreeable to that.

Now...question is...what to pay?? Owner has property listed for $32,000 over what he paid for it in '04. He bought it as an investment property and lives 4 hrs away in another city. He has several investment properties for sale in the area. He did not put any improvements into the property at all. (Previous owner did all the work.)

If I get this place for what he paid for it in 2004...am I getting a good deal? Months ago (last year?...amazing what sticks in your head) Suze said that if you can capture 2005 housing prices- you are getting a good deal- but housing has since dropped lower.

I am a bit stuck because the current owner paid during the housing boom- and so although he might have paid an over inflated price- he wont want to take a loss on the property.

Any advice? Suggestions? I think we are going to make an offer today. (Ack!!) Where should we start? What is reasonable to expect to end up?

4 Responses to “duplex update...sales price questions”

  1. mom-sense Says:

    My advice is don't go insultingly low; it could wreck the deal. We bought our house in late 04. The asking price was $430K and had been on the market for five months. I wanted to offer $375K, but the realtor suggested not to. We then offered $385 - they came back $415K and we met in the middle at $400 (which was our higheset and their lowest) so it all worked out. We were told a rule of thumb is 10% under asking.

    Best of luck to you! See what the lender will do given the fact that one tenant in month to month and you want to move in. I think you could even have your attorney draft the letter for lease termination to be served upon closing - might help move things along.

  2. merch Says:

    I wold ask the realtor for comps in the area and then go for from there.

    I would recommend to never let the seller dictate your price. Only go as high as you are comfortable with. There always is A DEAL OF THE CENTURY!!! So, just go in smart and try not to overthink.

    Good luck!!!

  3. gamecock43 Says:

    I did ask for comps...but nothing has sold lately. Duplexes in the area comps are based on the past year (4 sales) all sold for 10-40k above this asking price. But Nothing has sold in the last 4-5 months. And then upkeep and upgrades factor into those prices.

  4. scfr Says:

    My memory (which certainly could be flawed) is that Suze said 2003 prices. Sounds like the seller is asking way too much IMHO. I'd be shooting to get it for a bit less than what the current owner paid in 2004. But then again, I'd be ready to walk away from the deal too, and it sounds like you're a bit more "attached" to this house.

    The guy is an investor; this is not "his" house (as in the one he actually lives in). He is not emotionally attached to the house, and you will not insult him by low-balling. For him, it's a business transaction.

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