Need some help on a direct buy from seller

[Matt Mayotte]

Ok, I might have a deal tomorrow with a seller who has inherited property from a relative and sounds pretty eager to sell.  There are other buyers interested so I will need to move fast but I want to make sure I do the offer correctly so I don't get screwed.  She is asking 110K for a property that has a partially finished second floor addition.  Looking by price per sq. ft. estimations on zillow I figure its worth 260K after its done.  I have about 15K liquid funds immediately available.  I'm in the middle of a cash out refi on a duplex that I own and will have funds from that in another 2 weeks.  If that falls through I have retirement funds that I can tap but I'll get hit with the 10% penalty and I really don't want to do that unless absolutely necessary.  So assuming I like the property (I have a showing tomorrow afternoon), should I ask her to write up a PA and give her 2K personal check for earnest money?  How do I know she won't run with my money?  I have never met this person so I have no idea how honest she is or isn't.  She mentioned that she had one offer but it was contingent on the sale of that person's home which they hadn't sold.  So she may be legally bound to sell it to that other party, I'm not sure.  She had it advertised at a lower price and then when I called her she mentioned it was now going for 110K...that also sounds kinda shady.  I noticed there are special assessments on the property for 1500$ for unpaid citations also so that's indicative of someone who is flat broke.  Any help on how to protect myself in this deal would be appreciated.

[Mindy Jensen]

@Matt Mayotte , you don't have the seller write up the contract, the buyer writes it up. Typically the agent will write it up, but it sounds like this is off market and you'd like to keep agents out of the picture.

There isn't anything wrong with that, but you should both have representation. I'd have an attorney help you write the contract and @Toby D.  is right, have a title company hold the earnest money - never the seller. Making a mistake on the documents and title could cause some big problems down the road. Avoid those by having your documents double checked by a neutral third party who is well versed in the real estate laws of your state.