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Started By
Message
Advice needed: Selling Rental Home to Tenant Directly.
Posted on 2/22/23 at 9:27 am
Posted on 2/22/23 at 9:27 am
My tenant wants to pursue buying the rental property. Great tenant and home is in perfect condition. The home is worth a price and she is willing to buy at that price. Since selling to her eliminates much of the middle men involved, I was wondering want I still needed to do to properly sell this. I.e. who to contact, draw contracts etc. While saving a realtor is good and all, I cannot do everything myself, so I just want to assure I am doing it correctly.
6
Posted on 2/22/23 at 9:39 am to rpg37
Hire a closing attorney to assist.
They want the business.
Tell them up front what you need and that you intend to call 2 to 3 attorneys to get a feel for where to go.
Is the renter qualified now to buy?
If yes, it is a basic purchase contract.
If not, then it is either a lease purchase agreement or land contract.
The attorney is representing you. If the tenant fails to pay rent or fails to purchase within a specified period of time, you should not lose anything in the termination of the agreement (failure of duty on the tenants part)
Edit to add: "the cheapest" attorney is not the correct choice. The correct choice is the attorney who gets excited about working with you and feels their offer of services at a price is a good use of their time. An attorney excited about working with you should be excited about doing a good job and excited about telling you the protections that they are putting into place for you (online reviews is their additional reward on top of compensation).
They want the business.
Tell them up front what you need and that you intend to call 2 to 3 attorneys to get a feel for where to go.
Is the renter qualified now to buy?
If yes, it is a basic purchase contract.
If not, then it is either a lease purchase agreement or land contract.
The attorney is representing you. If the tenant fails to pay rent or fails to purchase within a specified period of time, you should not lose anything in the termination of the agreement (failure of duty on the tenants part)
Edit to add: "the cheapest" attorney is not the correct choice. The correct choice is the attorney who gets excited about working with you and feels their offer of services at a price is a good use of their time. An attorney excited about working with you should be excited about doing a good job and excited about telling you the protections that they are putting into place for you (online reviews is their additional reward on top of compensation).
This post was edited on 2/22/23 at 9:43 am
Posted on 2/22/23 at 9:42 am to rpg37
You will nee a real estate attorney to oversee the transaction and proper documentation. Before doing that I would tell the tenant to make sure they get their financing and down payment secured so you dont waste your time.
Posted on 2/22/23 at 1:14 pm to rpg37
Have an attorney draw up a sales contract or buy/sell agreement.
Have tenant/buyer get approved for purchase.
Have mortgage company and attorney do the proper paperwork.
Have tenant/buyer get approved for purchase.
Have mortgage company and attorney do the proper paperwork.
Posted on 2/22/23 at 4:05 pm to rpg37
Call around to a Mortgage Title Company and tell them your situation. That shouldn't be an issue for them to handle.
You need to be very clear in regards to the process though. In other words what happens if their mortgage application falls through?
Before doing anything else, I'd make them get a pre-approval letter from a trusted bank.
You need to be very clear in regards to the process though. In other words what happens if their mortgage application falls through?
Before doing anything else, I'd make them get a pre-approval letter from a trusted bank.
Posted on 2/22/23 at 4:40 pm to baldona
quote:
Call around to a Mortgage Title Company and tell them your situation.
You do not want a title company! You want to work directly with the real estate attorney that represents YOU. When you work with a title company the attorney represents the title company!!!
Posted on 2/22/23 at 5:00 pm to armsdealer
Semantics.
It is the same person (a real estate attorney wears many hats).
But you are correct.
Technically a title attorney is for the title insurance.
Closing attorney is usually for the mortgage company.
Etc...
It is the same person (a real estate attorney wears many hats).
But you are correct.
Technically a title attorney is for the title insurance.
Closing attorney is usually for the mortgage company.
Etc...
Posted on 2/22/23 at 5:14 pm to rpg37
Make it very, very, very, clear that once closing occurs, you are not getting *any* home related phone calls, texts or emails from them. That's not a contractual issue, but the clear understanding that if the water heater explodes the day after closing, you will not be involved in solving that problem in any way, shape or form.
Edited for emphasis for people from south of Bunkie.
Edited for emphasis for people from south of Bunkie.
This post was edited on 2/22/23 at 6:29 pm
Posted on 2/22/23 at 5:59 pm to LemmyLives
quote:
That's not a contractual issue,
This is the wrongest thing I’ve read on the internet today and I’ll been to the Polly board!!!
Posted on 2/22/23 at 6:26 pm to jfw3535
quote:
This is the wrongest thing I’ve read on the internet today and I’ll been to the Polly board!!!
I'm not referring to the sale of the house, title companies, etc., prior to closing I'm specifically addressing clarifying the expectations of the new homeowner when they're used to OP being their landlord.
Posted on 2/22/23 at 7:16 pm to LemmyLives
Understood - he needs to manage expectations, but to be legally binding OP needs to make sure his purchase agreement has strongly worded "as is" language.
Posted on 2/22/23 at 7:55 pm to jfw3535
quote:
purchase agreement has strongly worded "as is" language.
Roger. So how does OP select representation that will do this?
To me it seems obvious, but as I've learned with a divorce mediator, uh... people often don't perform what I would consider the minimum scope of their jobs. This includes what I would consider basic fiduciary responsibility to the person that hired them.
Posted on 2/22/23 at 8:49 pm to armsdealer
quote:
You do not want a title company! You want to work directly with the real estate attorney that represents YOU. When you work with a title company the attorney represents the title company!!!
This makes no sense. Title companies pass 99% of sales that happen and already have all the paperwork he is looking for. They also have multiple attorneys on staff so you’re not paying an hourly rate.
You obviously had a bad experience at a title company before.
Posted on 2/22/23 at 9:19 pm to LSU1018
quote:
You obviously had a bad experience at a title company before.
I'm not who you're responding to, but getting out closing documents at 3:45 PM the day before you're supposed to close at 10AM? Yeah, just happened. Thanks for the review time when escrow closed five weeks before.
Who hasn't had a bad experience with a title company that's owned more than one house? I was going to tell OP not to close on a Friday, because the person preparing the docs was likely on their way to happy hour on Thursday or wasted when they printed them Friday morning. My name is the equivalent of Jonathan, yet title company spelled it, "Johnthan" in the draft they sent me an hour before the office closed the day before my closing. This is Houston, not somewhere 60 miles outside of El Paso.
Yeah, a ton of people don't like title companies.
Posted on 2/22/23 at 9:33 pm to LemmyLives
The main reason you wouldn’t get docs early is the lender on the buyers side doesn’t send anything to the title company until the day of closing. We have a closing tomorrow morning and still didn’t have documents from the lender as of 5:45 this evening.
The reality is that the title companies don’t throw the lenders under the bus bc that is who refers them business. As far as grammatical errors, that’s on who you’re using. Lots of bad attorneys start their own title companies bc it’s so easy to start one. There is a reason the companies that have been around for awhile are still doing the most business.
The reality is that the title companies don’t throw the lenders under the bus bc that is who refers them business. As far as grammatical errors, that’s on who you’re using. Lots of bad attorneys start their own title companies bc it’s so easy to start one. There is a reason the companies that have been around for awhile are still doing the most business.
Posted on 2/22/23 at 9:47 pm to meansonny
quote:
Tell them up front what you need and that you intend to call 2 to 3 attorneys to get a feel for where to go.
I'd put that potential client in the trash right away. Good attorneys don't want to waste their time on nonsense. Your advice is horrible.
Posted on 2/22/23 at 9:48 pm to LSU1018
I don't doubt you because you do this on the reg, but it's not OK. Hey, this would be a great idea for a Consumer Financial Protection Board which has been in existence for over a decade to tackle. 
I think this is the fifth house I've sold, second since 2008, and the worst. I've never at least not gotten a draft two weeks after escrow, there was *nothing.* Did I follow up and be proactive? No. It was more important to just get divorced. That's on me.
In the end, everything was fine, but the lack of preparation, given weeks of notice, was stunning. I already expected incompetence, on some level. But to support OP, how do you know the title companies full of , how do I put this kindly, addiction issues that don't pay attention to detail, vs., the ones that do? I honestly want to know for the next time I have to use one. You're in LA, and I'm in TX, but I can't believe just trolling dive bars like Ivars or Superior in Baton Rouge is how I'm supposed to understand which is which (were I in BTR, but you get my point.) I've closed with USAA, Wells Fargo, and others (not title companies), and none of them let stuff linger like the buyer's reps did.
I think this is the fifth house I've sold, second since 2008, and the worst. I've never at least not gotten a draft two weeks after escrow, there was *nothing.* Did I follow up and be proactive? No. It was more important to just get divorced. That's on me.
In the end, everything was fine, but the lack of preparation, given weeks of notice, was stunning. I already expected incompetence, on some level. But to support OP, how do you know the title companies full of , how do I put this kindly, addiction issues that don't pay attention to detail, vs., the ones that do? I honestly want to know for the next time I have to use one. You're in LA, and I'm in TX, but I can't believe just trolling dive bars like Ivars or Superior in Baton Rouge is how I'm supposed to understand which is which (were I in BTR, but you get my point.) I've closed with USAA, Wells Fargo, and others (not title companies), and none of them let stuff linger like the buyer's reps did.
Posted on 2/23/23 at 6:24 am to cable
quote:
I'd put that potential client in the trash right away. Good attorneys don't want to waste their time on nonsense. Your advice is horrible
I've also seen attorneys play games with fees. Title insurance. Processing. It can be worse than car dealerships and undercoating protection.
If an attorney can't handle a hint of price responsibility, a client doesn't want to waste their time either.
As I said, it isn't a race to find the cheapest attorney. But the fees should be reasonable (you sound like you've seen an attorney be unreasonable with fees that they do not want to waste their time on).
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