Buying a house....broker is owner?

**kugsby** · 11-25-2007, 10:52 AM

I've found a house I really would like to buy and after doing some research I've found a few things I'm concerned about. It seems to be way overpriced considering the neighborhood comps. It sold in 2005 for $330k, and the last owner paid $415. He had 2 mortgages, one for $332 and one for $83 (100% financed) the mortgage company went out of business 1 week later. The house in now in a short sale, and the broker the bank is using, is now the seller. He says he 'owns the house in a land trust'. I'm assuming that he knows what the bank will accept and he is looking to make a profit between what the bank will take, and what he can sell it for. He hasn't filed the deed to himself yet. Who's name goes on the contract? Who decides yes/no on the offer-the broker/owner or the bank? He is looking for $360. He does not have any disclosures from the previous owner and says since he is the owner now and never lived in the house, he doesn't have to provide one. I will have it inspected, but I'm more concerned that my offer, which may be accepted by the bank, will never make it passed the broker/owner because he wants to wait to see if he gets a better offer. I was planning on starting with an offer of $315, going as high as $330.

**Smokehouse** · 11-25-2007, 05:14 PM

get a realtor working for you, let them handle that part of it.

**thedeallocator** · 11-26-2007, 08:28 AM

The Owner/Broker obviously has more info and knowledge about the real estate market in your area. That home may be worth less than $300K now, eventhough it sold for $413 in 2005. You need to get a knowledgeable real estate agent to help you with the due deligence and negotiation. You will save a lo of money, when you use a a professional.

**BrooklynBroker** · 12-01-2007, 09:34 PM

Originally Posted by kugsby

I've found a house I really would like to buy and after doing some research I've found a few things I'm concerned about. It seems to be way overpriced considering the neighborhood comps. It sold in 2005 for $330k, and the last owner paid $415. He had 2 mortgages, one for $332 and one for $83 (100% financed) the mortgage company went out of business 1 week later. The house in now in a short sale, and the broker the bank is using, is now the seller. He says he 'owns the house in a land trust'. I'm assuming that he knows what the bank will accept and he is looking to make a profit between what the bank will take, and what he can sell it for. He hasn't filed the deed to himself yet. Who's name goes on the contract? Who decides yes/no on the offer-the broker/owner or the bank? He is looking for $360. He does not have any disclosures from the previous owner and says since he is the owner now and never lived in the house, he doesn't have to provide one. I will have it inspected, but I'm more concerned that my offer, which may be accepted by the bank, will never make it passed the broker/owner because he wants to wait to see if he gets a better offer. I was planning on starting with an offer of $315, going as high as $330.

There is some misunerstanding. Your words "the bank is the seller now" are just not correct. If it's a short sale, the bank is not the seller. The owner is the seller.

Also, the owner is being represented by a licensed broker (it does not matter at this point whether the property was deeded to the broker or not) and they have every right to decide which offer to accept and which not.

Supposing, the bank will accept $330K. But the owner wants $360 for a reason. With short sale, he is responsible for capital gain on the amount written off by the bank. So he wants to minimize his loss which is only
natural.

In a short sale situation, it's the owner (who will take advice not only from his broker but also from his lawyer and CPA) who says yes/no to offers. NOT the bank.

There is nothing you can do about it. Submit an offer, listen to the counteroffer.