Expert: Jessica Bryan - 4/15/2009

Question
Hi Jessica

Thanks for taking my question.  

We are looking to buy our next house.  I have come upon knowledge of an older couple wanting to sell their house, but have not listed it yet.  I've talked to him and he said he's ready to "talk".  The only thing is, we haven't sold our house yet and he has another interested possible buyer.  I think he'd rather sell to us, and has said the other buyer is tied up in a lawsuit that he expects to drag out.

One question is, when we talk with him initially, what things should we specify?  Should we agree on a price, make some sort of contigent upon the sale of our house (example, If we don't sell by X-date, we'll rent it from you for $X per month), inspection, appraisal?  He knows we're in the process of selling our house.  They are a wealthy couple, so the sell of this house isn't holding them up, but they are just ready to sell (they've already moved out).

He used to be in the real estate business a while back, but I think it mainly pertained to commercial real estate.

Also, I know you probably can't help with what type of offer we should make because you aren't familiar with the market in our area.  Should I ask a local realtor to help me out?  You think they'd expect a payment or fee for helping me come to a price?  Or should I ask for an appraisal before we talk price?  I ask because in our very first conversation, he alluded to the appraisal districts appraisal was off because it didn't include an enclosed porch (one central AC vent) and two storage areas (not heated & cooled) in the appraisal.

Sorry for all the questions.  Thanks so much!

Answer
Dear Jeff;
You seem to have thought of most of the important questions regarding the purchase of the home.  I do think that an agent who would assist you could be valuable in helping you to determine what price your offer should be.  Perhaps you can negotiate a set fee for the assistance.  Call a few agents and see if anyone would be willing to do this consulting work and perhaps assist with the paperwork and closing.  This involves less time than the job of running around looking at lots of homes to find the one you want.  Since you will be 'hiring' this person it is not advisable to involve your agent in negotiations with the seller unless you discuss this with the seller in advance.

As for your other questions, you are correct in making your offer contingent upon selling your home by a certain time and if not then renting back until your home has sold.  You should also do a professional home inspection and termite inspection. When you get a loan for the home purchase the lender will undoubtedly require an appraisal, so your offer should be subject to the appraisal coming in at or above the offered price.  This is essential even if the seller thinks that the home is worth more because the bank will not loan more than the appraisal says the home is worth.

Good luck and best wishes.

Jessica Bryan