All Forum Posts by: Alexandra Belle

Reading this thread I noticied a few things:

1. I wouldn't buy a property regardless of how opportunistic the financing sounds if I am overpaying 150k on a 150k property. You will have to wait a really really long time for that to appreciate to simply break even. You might be burying yourself before you even get started. 

2. If you're an agent, you can talk to your broker about deferring a portion of your commissions to the agent or seller as an extra incentive for negotiations. 

3. I wouldn't force this deal at -100% equity. Better to save up a little use an FHA loan with seller's assist and buy something at market value

hope this helps

You said you were buying a house subject to the first mortgage of only $14,700 and there's obviously a lot of equity in the property. Did the seller agreed to seller financed the difference? If so, was he/she willing to do so with no down payment?  The reason I ask is since you said you had no money for agent so assume you have no money to give seller for downpayment.  Yes you can structure without anything down but with $200k++ of equity the seller more than likely will ask for some down.  

What am I missing here? Why in the world would a seller do a transaction subject to the mortgage with a balance of $14,700? You're using the wrong tool for the situation. And how do you miraculously come up with the money to cover the $280k-ish in equity if you don't have cash to pay an agent's fee? These creative solutions only work in certain situations. Sub to works best with low to no equity, a great loan/rate, and a seller with no other options. A subject to transaction is not in the best interest of the seller if the place is essentially paid off. How would this be better than a traditional sale where they walk away with $250k or more cash in their pocket? 

You're likely going to have to educate an agent and seller on what subject to even is, convince the seller that it is a good idea to not take $250k+ cash in a sale prior to leaving the country, and then have to talk the agent into getting a smaller commission amount or being paid over time. I don't understand. Please let me know if I am missing something. I don't want to be a cynical, negative jerk. The purpose of these forums, as I see it, is for answers and encouragement. The likelihood of an idea or transaction working out is directly related to you analyzing this from the seller's point of view. If you can figure out how it is better for them, you may be on to something. I don't see that here with a sub to transaction. I hope that helps. You're on the right track trying to get yourself into a house hack. 

Short Answer: 

I am going to answer this assuming you are not using a Realtor.

In Arizona it is the responsbility of the seller to pay their agent the commission and I would assume it's the same in Michigan, so really this shouldn't be your problem.

I don't know the specifics of the Detroit market, but where I am in Arizona, as a Realtor, I have access to a form called an "unrepresented buyer."  Therefore, if I represented a seller in the sale of their home and a buyer came as you did, I still have recourse to get paid my commission. 

You can always talk to the agent directly about this. They will really appreciate that you want them to get paid.

Leave it to the sellers to take care of the realtors commission. You can not go around closing costs, unless you ask the sellers to pay it and add it as a balance on top of the subto offer. 

@Alexandra Belle This is a strategy getting a lot of attention. From what I hear, people that do it are a lot more talk and hype than actual closed deals. It also is a LOT of work calling and educating sellers. Is there no one who would co-sign or partner with you on the house hack deal? @Jordan Batchelor is looking for people to partner with with house hacking. 

I've never thought to partner with someone - what would be the purpose of partnering? Sorry if stupid question I'm new to this. 

The best candidates for subto are sellers with no equity and a low interest rate.