All Forum Posts by: Charles Lewis

Does anyone have a good form of commission agreement to use between a non-MLS member buyer's broker and an MLS member seller's broker? I assume I could just use a standard commission agreement, but is there any form folks in Michigan prefer?

Dom - The Findling law firm in metro Detroit does a lot of these. They're probably cheap. But, to the point of the posters above, any lawyer will laugh you out of the office if you're trying to negotiate a discount for one or two properties. If you've got a few dozen, they might cut you a little break, but some lawyers might not even take a case (let alone give you a discount) if the total billables are only $1,000. 

file a notice to quit

I am planning on buying a Homepath property and financing it with Homepath financing. I know Homepath properties don't require an appraisal because they try to set their prices square on the appraisal amount. However, I'm planning on offering a few thousand above asking. Will Homepath give me a mortgage for the amount of my offer if it's above asking or will I need to prove that I can bring cash to the table if they'll only finance up to the asking price?

So, long story short, I have a piece of vacant land I'm thinking of selling. It's right next door to my residence, so it counts as part of my homestead. I've only owned it for a year, though, so if I sell now I'll incur long-term capital gains. If I sell after two years, I'll pay no tax on it due to the principal residence exemption.

My question is this - if my salary is $60,000, such that I'm in the 15% tax bracket and, consequently, pay 0% on capital gains, will the whole $150,000 long-term gain be taxed at 0% if I sell right now instead of waiting two years and getting the principal residence exemption?

Purchase agreements will vary from state, given that each state has its own laws relative to certain issues in real estate transactions. For instance, in Michigan, the seller is required to attach a lead paint disclosure form as well as a form for disclosing any known issues with the property. You should find a state specific form to make sure you're covered.

So, long story short, I inherited a piece of land in a downtown residential area of a highly desirable city from a distant relative. It's a prime location for a house. I've gotten multiple offers for it already and will likely sell it in the next little while. Many of the interested buyers are developers/builders. Obviously, if they bought it, they'd just build and sell. That being the case, there's clearly additional equity potential in the property outside the value of the land - there's the development component.

Let's say I can sell it for $125,000. I can do that, take the cash and walk away. Super easy and less than a few hours of work. Alternatively I could build a 2500 sq/ft house on it for, say, $125 a sq/ft (estimate...I could be way off on that number), and sell it for $200 a sq/ft. Sales price of $500,000 minus construction costs of $312,500 would net me in the ballpark of $187,500. Obviously, there's a lot more time/effort/risk involved in building, but for an additional $62,500 it seems like it might be worth the effort.

What say you, BiggerPockets? Take the easy money or take the riskier path with potential for more coin.