Contract Offer Review

Hey, get a locate Realtor to help you out, that will be good

Thanks BeRealll,
Is this the contract that we put and or assigns next to our name? Thats what I am afraid of.

If the property is an REO, and it sounds like it is if you have a 21 page contract, you cannot assign it. You will have to double close.
Banks will not allow assignments. I've been dealing with REO's for almost 20 years and I've never been able to get that removed from the contract.
If it is not an REO, you might want to find an easier contract. I've never heard of a contract with that many pages, other than banks "corporate addendums". And you don't receive these until they accept your offer. Now, having said that, sometimes there are some addendums they will require you to include with your original offer. I've never done it, but I've heard others say they have.
I hope you can work out your deal and make some great money.
Jim

Thanks jbezoski,
The property is not a REO. However, one portion of the contract is "AS IS CONDITION ADDENDUM", "DISTRESSED PROPERTY ADDENDUM TO PURCHASE CONTRACT" PURCHASE CONTRACT". Lets hope the seller accepts it!
Listing price is $385,000.
ARV is $415,000.00
Repair Cost is $100000.00
My offer: $230,000.00

I pray the seller will either accept or counter. So we'll see and I will keep everyone posted on the outcome. Again thanks for your word of advice jbezoski.

Mahalo
Ken

I've never heard of the "Distressed Property Addendum". However, different states have different addendums like this and different laws dictating transfer of title, so everything is fully disclosed. In my state we have "Sellers Disclosures". Whenever a house is listed, the seller is required to fill this out. It is pretty detailed regarding the condition of the house, land, any water rights, utilities, pretty much everything. It is about 8 pages. It doesn't speak of distress, but if filled out correctly and honestly, it will show any and all problems with the home past and present, at least to the sellers knowledge. So, it probably accomplishes the same thing.
I would read that addendum very thoroughly and see if there is anything that would keep you from assigning the contract or in anyway delay it, if you have to double close it, like having to wait 90 days to resell it (Fannie Mae requires this).
If you don't understand what some of it means, I would definitely have an attorney look at the contract to make sure you are fully protected and help you to understand all of the verbiage in the addendum.
It sounds like you have a decent deal. Having said that, if they are having you sign that distressed addendum, I would want to know exactly what they consider distressed. It may be nothing more than they are behind on their payments, or it could be they have major structural problems. You will want to get these question answered ASAP. Whether you are rehabbing it yourself or assigning it. There could be substantial and undetected repair costs that could really blow your budget out of the water. If you are assigning it, you will want to know these things for your buyer. By having all of the info possible when you assign it, you will build a good reputation with your buyers and they will continue to buy your properties, when you call them.
Good luck,
Jim

Good for you for getting out there and taking action.

Unfortunately, your offer is too high. How are you figuring your numbers?

Here is what I would suggest.

$415,000 X .70 (70%) = $290,500 (this allows for holding costs, closing costs and profit for the end buyer)

Then $290,500 - $100,000 (repairs)= $190,500

$190,500 - $10,000 (your fee) = $180,500 (if you want a higher fee, adjust here)

This should be your offer.

Good luck!

Karen