Q-About a month ago, we closed the purchase of our first home. We like it very much. But the realty sales agent promised us things that haven’t been delivered. She told us the sellers would have new carpets installed after they moved out. We’re still waiting for the new carpets. Also, she promised us the house would be painted inside after the sellers moved their furniture out. That hasn’t happened, either.
We delayed our move-in, thinking the agent would take care of the promised new carpets and painting. Instead, she took off on vacation and nothing got done. As we could only delay our move for one week, we had to move in, although the walls are filthy and the carpets are threadbare. What can we do to get the realty agent to deliver on her promises, which she now denies?
A-Do you have any written evidence of the real estate agent’s promises for new paint and carpets? If not, shame on you for being so trusting of the realty agent. Without written evidence, you will have an uphill battle proving the agent made those promises.
If the combined costs of the carpets and painting come within the Small Claims Court’s jurisdiction in your community, that is the appropriate place to sue the realty agent and the seller for your damages. Because the realty agent was acting for the seller, both parties can be held liable to you if you can prove the alleged promises. Your situation is a lesson to all home buyers to get every promise in writing so you can prove it in court if necessary.
`Fair’ interest rate
Q-We own our home free and clear. It is listed for sale. Our Realtor says the sale will go much faster and for more money if we agree to carry back the mortgage. If we do so, would 9 percent be a fair interest rate to charge today?
A-No. A 9 percent interest rate would be an excellent yield for you but few, if any, prospective buyers would agree to pay such a high rate. The reason is they can get a new fixed-rate first mortgage for 7 percent or less. In today’s market, seller financing at 7 to 8 percent should make your home very attractive to most buyers.
Creative selling
Q-Our home has been listed for sale with two different Realtors for the last six months. The current 90-day listing expires next week. Both Realtors did excellent marketing jobs. I don’t know what more they could have done to get our home sold. We have no complaints, except our home is still unsold even though we have reduced the asking price several times.
The home is in excellent condition and everyone who inspects it loves it. The problem is the house adjoins a late-night grocery store. We have tall trees to screen our property and the soundproofing is excellent, but most prospective buyers don’t want to live next to a grocery store. The nearby houses are well-kept, but the grocery store seems to be why our home won’t sell.
We have lived in the house about 12 years and rather like the convenience of a nearby grocery. But because I have been disabled, we put our house up for sale. We can barely make the mortgage payments, so we must sell soon. Any ideas on how to sell our unsaleable house?
A-Yes. There is a buyer for every property. But at the buyer’s price and on the buyer’s terms.
You’ve tried selling your home “the regular way,” by listing it for sale with two different Realtors who did excellent jobs, so now it’s time to become creative. When used correctly, the technique I am going to suggest works for houses, commercial properties and just about any type of real estate.
This method is the lease with option to purchase. The reason it works is the prospective buyer doesn’t have to put up much cash, but is given a very strong incentive to buy the property. This incentive is the rent credit whereby part or all of the rent is credited toward the down payment when the tenant buys the house.
For example, suppose your home is worth $100,000 and it would rent for $750 per month. You or your real estate agent might run newspaper classified ads reading “$3,000 MOVES YOU IN. Beautiful 3 BR, 2 BA home. Lease with option to buy. $1,000 per month. 100 percent rent credit toward your down payment. Open Sunday 1-3 p.m.” Then list any special features of the home and the address.
When I run an ad like that, I omit my phone number because it will ring off the hook. Start the ad a few days before the open house, under both “houses for sale” and “houses for rent.” But be prepared to welcome the serious early birds who will drop by before Sunday afternoon. In the example above, $1,000 would be allocated to the first month’s rent and $2,000 to a non-refundable option consideration.
Of course, you can adjust the numbers to fit your situation. As for the rent credit, the higher the rent credit, the greater the probability the tenant will exercise the option and buy the house.
Because you are very anxious to sell, I suggest a 100 percent rent credit toward the down payment. If you were not very motivated, then a 33 or 50 percent rent credit would be sufficient.
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You can address inquiries to Robert Bruss at Tribune Real Estate Features Service, P.O. Box 280038, San Francisco, Calif. 94128.
