Interesting Counter Offer Question (Can I do it?)

[David Roberts]

So I offered 80k on a house yesterday.  The sellers came back with a counter offer of 85k (they asking 89.9k).  I thought this might happen, because they bought the home in 2009 for 95k.

They claim that 85k is their breakeven point on the loan, otherwise they would have to 'short sell'.  That's what the selling agent told my agent. 

So let's assume for a second that they really do need 85k to break even.  Is there a counter offer that I could do to get around this, to help them?  I want to stay at 80k (as I think it's more than a reasonable offer), but if they are willing to sell it to me for 80k and need out of the loan, can I do a side offer (or through the purchase agreement) where I give them 5k as a loan to pay me back with an interest rate over 1-2 years?  I would be willing to give them cash.

Can that be done? 

Is there a more efficient way to go about this, that protects me?  I think in Michigan the max amount a person can lend another person is 7% simple interest.  Maybe others in Michigan know about this.

Thanks.  I would like to get back with them today with a counter offer that has something to do with this.

[Louis Leone]

If you were going to do that, you might want to still keep the price at 85K (higher basis) and get your financing on the 85K number.  They can then pay off the mortgage and you can give them a loan, but that may not be their issue.

They probably have the money to pay off the extra 5K (it's just that they don't want to go out of pocket).  Having a loan would require they still pay it as well as interest.  You will know once you propose it.

Maybe propose 85K but they pay all closing costs (should be in the middle somewhere).  They may go for that.