I can't make sense of the fence!

By
Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

I had a pretty good day today. I got to do the thing I enjoy most about Real Estate and that is negotiating. The good thing about negotiating is, that if I’m successful, I get to place one of my listings pending. That means that in 30 days or so, my Sellers can move on with their lives and I get paid. I love that, getting paid. One of my favorite things. The reward for all my hard work. Of course “The Lovely Wife” and the relative I never asked for, Uncle Sam, get most of it, but that’s OK, I really enjoy what I do and the money is secondary.

Anyway, I got to negotiate two deals today. One was pretty straight forward, a fair price that my Seller agreed to and a two week closing. Now, I like two week closings but let’s be real. They asked for a two week closing on a 100% financing deal and put 25 days for a financing contingency and 21 days to do inspections. Math was one of my only strong subjects in school and for some reason these time frames just don’t add up. So, we decided to counter back with a 30 day close. Everything has been accepted and we are good to go. I guess the point on this one, is to, please, put realistic time frames in a purchase offer and make sure the closing date is not 10 days before the financing contingency runs out. Oh yeah, make sure the Buyers can do the inspection before the closing date.

Now, the second one was little more confusing. Maybe I’m missing something here. So here goes, a cash offer but wanting the Seller to give back $5,000 at closing. These Buyers want to give the Seller $200,000 cash and then have the Seller give them back $5,000 at closing. Now what the heck is this about? Does this make any sense at all? The only thing this achieves is giving my Seller more closing costs. Why would you give someone cash and then ask for some back?

Well,I had to call the other Realtor on this one and ask the question. His response, “They want to put up a fence.” Uh, excuse me, why don’t they just pay for a fence? They are paying cash right? He assures me that this is a cash deal. They are closing on the house they own in a couple of weeks and paying cash. I just don’t get it. I have negotiated hundreds of deals and this one I just don’t get. Maybe it’s not really cash. Now that sounds right. It’s not really cash and for some reason they think this will slip by. Oh well, I think I will have to sleep on this one. I think tomorrow I will have to get to the bottom of this fence thing. My Seller and I can have a good laugh in the morning. Humor really is good for the soul! I can't make sense of the fence!

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Rainer
42,594
Melissa Kruse
Gryphon - Lewis Center, OH
Could it be that they are paying cash now but are hoping to refinace later and want the purchase price to be as high as possible so they could refinance for more and claim it was due to improvements?
Oct 17, 2006 11:35 PM #12
Ambassador
378,614
Karen Hurst
RICOASTALLIVING.COM - Warwick, RI
Rhode Island Waterfront!

Keep us posted, Bryant, definitely a hidden agenda here.

The proverbial fence trick.

Oct 18, 2006 12:20 AM #13
Rainer
2,696
Andrew Holenchuk
Remax Camosun - Victoria - Victoria, BC

Hey Bryant,

Maybe the $5000 fence is really ther edown payment and it's not all cash.  I've seen this happen many times in my prior career.

Let me know how it goes.  Goodluck!

Andrew from Victoria Canada

Oct 18, 2006 06:49 AM #14
Rainer
452
Test Test
Test - Eckelson, ND
Good point
Oct 18, 2006 07:54 AM #15
Rainmaker
1,142,060
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Ok update, The first deal went pending. The second deal the seller rejected out right. They also had a 6 week contigency to sell their current home. I know it may be switching to a buyers market but lets be real. Oh well we are expecting more offers on it today. 
Oct 18, 2006 07:58 AM #16
Rainer
75,626
Ann Guy
NA - Allentown, PA

Thank you BB for advising to use realistic closing dates.  I have had been in a few situations where I have had to really hustle to meet closing.  I, too, like quick closings.  However, 2 weeks is not alot of time to get the inspections, appraisals, and customer cooporation is getting what they need to get to the table.

 

 

Oct 18, 2006 08:09 AM #17
Rainmaker
1,142,060
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Ann, I love quick closings but I love staying under contract too. If it's not realistic is just creates more stress for the buyer and the seller. Then you have to hit them up for an extention. Best to try and get it right from the get go.
Oct 18, 2006 10:58 AM #18
Rainer
23,647
joanne Douglas
Terrie O'Connor Realtors - Ridgewood, NJ
Guess we'll be sitting on the fence waiting for you to sort this all out!  


Oct 18, 2006 11:19 AM #19
Rainer
76,527
Mary McKnight
Sacrilicious Marketing - Orlando, FL
Your posts always entertain me.  I suppose they want a fence that the other party pays for so the grass can look greener in their neighbor's yard.  That makes about as much sense as the cash back scenario.
Oct 18, 2006 11:48 PM #20
Rainer
53,146
Ron Withers ----Retired Mortgage Professional
Kissimmee, FL

This post kind of reminded me of a test that my father posed to me as a child. Make a sentence out of these four words; dehead, deduct, defense and detail!

Answer.....Dehead of deduct flew over defense before detail.  But with this situation.....Detail of deduct flew over defense before dehead!  This offer is Bassackwards.

Oct 19, 2006 12:47 AM #21
Ambassador
557,018
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL
I love that "bassackwards"...LOL. See :>
Oct 19, 2006 01:49 AM #22
Anonymous
nick

"Could it be that they are paying cash now but are hoping to refinace later and want the purchase price to be as high as possible so they could refinance for more and claim it was due to improvements? "
-When they refi, all the lenders care about is what is it worth and what do you owe. IMHO

"if anyone pulls up their home, either for resell, comps for appraisal, etc, it will show a larger figure."
-for resale,.. maybe but 5K is a drop in the bucket. Any appraiser worth their weight will call to confirm if there were seller concessions on the deal or not, and that reduces that comp's value by that amount.

I wonder if this deal was written up as a cash deal without contingencies? if not, its not really cash. how many time have i seen 20% down deals, with 3% in escrow and then at closing its 100% financed and the 3% towards closing costs.

my best guess on the 5K fence deal is.. its not really cash.. if it is, then mr buyer, lets make that escrow deposit at leat 5% and make it non-refundable and no contingencies. then i'll believe its cash.

otherwise, it doesnt make sense, or maybe i dont see the reason for the 5K back.

NM homesnick

Oct 19, 2006 06:21 AM #23
Rainer
137,413
Rich Kruse
Gryphon USA, Ltd. - Columbus, OH

Since I go through life thinking everyone is lying to me, here is my thought: 

It's because the buyer is full of crap.  They are going to "change their mind" at the last minute to "conserve cash" and want the 5k to pay for the loan points, etc.

Delicate Rich

 

Oct 19, 2006 07:37 AM #24
Ambassador
557,018
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

Hey Hun, Rich and I have been chatting, we decided he needs a nick name...Delicate Rich...I like it!

Oct 19, 2006 08:06 AM #25
Rainer
137,413
Rich Kruse
Gryphon USA, Ltd. - Columbus, OH
It was an inside joke for a little while at least. :)
Oct 19, 2006 08:11 AM #26
Ambassador
557,018
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

By the time I finished Blog Romping tonight everyone would know anyway...:> I love nicknames....See :>

Oct 19, 2006 08:15 AM #27
Rainer
48,480
Lisa Dunn
Edina Realty - Minneapolis, MN
www.TwinCitySeller.com
<blog romping> that is AWESOME.  I hope that get's added to the active rain vocab list.
Oct 19, 2006 10:36 PM #28
Rainer
48,480
Lisa Dunn
Edina Realty - Minneapolis, MN
www.TwinCitySeller.com
<blog romping> that is AWESOME.  I hope that get's added to the active rain vocab list.
Oct 19, 2006 10:36 PM #29
Ambassador
557,018
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL
Lisa I added that a few weeks ago. Funny. See :>
Oct 20, 2006 02:46 AM #30
Anonymous
Nick Davis
Maybe to trick the comps so they have a better investment -- on paper.
Jun 06, 2007 05:00 AM #31
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