Real Estate Gurus - Question here - GoFuckYourself.com

beemk · 12-11-2006, 08:29 AM

i just made an offer on a property. they said theres a deed restriction and they send me this when i asked about it:

"deed restriction will hinder the Buyer from selling or re-financing the property for more than 120% of the purchase price for the first 3 months. After 3 months Buyer can do whatever he/she wants and deed restriction is lifted. "

does that mean exactly what it says or is there more to it? and why would they even do that in the first place?

ForteCash · 12-11-2006, 08:30 AM

Quote:

Originally Posted by beemk

i just made an offer on a property. they said theres a deed restriction and they send me this when i asked about it:

"deed restriction will hinder the Buyer from selling or re-financing the property for more than 120% of the purchase price for the first 3 months. After 3 months Buyer can do whatever he/she wants and deed restriction is lifted. "

does that mean exactly what it says or is there more to it? and why would they even do that in the first place?

Consult your realtor or a real estate attorney.

Arab_Sex · 12-11-2006, 08:36 AM

Speaking from experience,I would walk away from this deal

Psycho_x · 12-11-2006, 08:42 AM

They put that inplace so you can't purchase the property and immediately flip it to another buyer. This is actually common . Some buyers will purchase properties and already have a buyer lined up. This is to keep you from swinging an immediate profite which could limit the present owners profits on this property. And keep you from making the buck instead of them.

avalanche · 12-11-2006, 08:43 AM

Deed restrictions are typically pretty cut and dry and they mean just what they say. In California for example they use an example on state broker exams that a seller says alcohol can't be consumed on the premises for X amount of time, so if the seller discovers that alcohol has been consumed on the property then the property reverts back to the seller. Likely a restriction on flipping properties. I've never seen this is California, but that doesn't mean it doesn't happen. Couple things to look at are, whether you really think the prop is going to appreciate that much in the first 3 months and why you're buying it. If you plan to live there than a restriction on the 1st 3 months shouldn't matter. But ideally you should consult an attorney if you really want it, otherwise I'd walk.

BitAudioVideo · 12-11-2006, 08:50 AM

flip prevention

beemk · 12-11-2006, 08:54 AM

Quote:

Originally Posted by Psycho_x

They put that inplace so you can't purchase the property and immediately flip it to another buyer. This is actually common . Some buyers will purchase properties and already have a buyer lined up. This is to keep you from swinging an immediate profite which could limit the present owners profits on this property. And keep you from making the buck instead of them.

that makes pretty good sense, i was planning on fixing it up and renting it out anyway. the house needs tons of work so it will take 3 months to even fix it up. i guess what i'll do is accept the offer with the deed restriction and if they accept ill talk to an attorney first then if it doesnt work i'll use the private inspection contingency to back out if i need to.

UP IN Smoke · 12-11-2006, 09:07 AM

Quote:

Originally Posted by Psycho_x

They put that inplace so you can't purchase the property and immediately flip it to another buyer. This is actually common . Some buyers will purchase properties and already have a buyer lined up. This is to keep you from swinging an immediate profite which could limit the present owners profits on this property. And keep you from making the buck instead of them.

He is right! They seller does not want you to flip the property with in the 3 months. You might want to find out why.

Sick Bastard · 12-11-2006, 09:38 AM

So why should the seller care or even have say in what a potential buyer does once the property is sold?

beemk · 12-11-2006, 03:50 PM

i asked the listing agent and just heard back and they said

"Seller is trying to avoid fruadulent real estate activity in the Detroit metro area which is statistically high. "

doesnt make very much sense to me, but im going to go see a lawyer if they accept my counter offer with the deed restriction.

Webby · 12-11-2006, 04:20 PM

Crap. It's not the vendors right to have opinions on anything once they sold it. Whether there is a claimed valid excuse or not, suggest you have that removed then consider buying the property - else walk away.

Quote:

"Seller is trying to avoid fruadulent real estate activity in the Detroit metro area which is statistically high."

More crap - since when was a realtor honest? What's the seller? A law enforcement agent with a dedication to cutting down fraud in Detriot?

Nobody else counts - the only person who matters is your lawyer beemk

collegeboobies · 12-11-2006, 04:35 PM

In Detroit? Yea probably a lot of mortgage fraud in Detroit. People buy a shit house for $15k, get fraud appraisal for $100k, and walk away. Mafia and organized crime does this type of shit and on huge scales usually.

RawAlex · 12-11-2006, 04:37 PM

With a restriction like that, I would lower the offering price in consequence of financing the property for there months (three monthly payments of a full value mortgage), because the property is basically frozen for that time frame.

woj · 12-11-2006, 05:45 PM

I would use it as another reason to negotiate... "I made a bid of $200k for the property assuming there were no restrictions, given this restriction, I can offer only $195k" or something along those lines, but consult your attorney for more details...

Peaches · 12-11-2006, 06:15 PM

Do you WANT to sell it within 3 months? If not, then don't worry about it.

A lot of people are buying houses and then getting inflated (false, bought) appraisals on them, then refinancing or selling based on the inflated appraisal, mortgage doesn't get paid, house is vacant, vagrants move in, neighborhood looks like shit.....it's been happening in ATL and other big cities. I'm not surprised to see this in a contract, but surprised it's only for 3 months.

atmclick · 12-11-2006, 07:08 PM

yeah, there are actually deep frauds involving sham lenders or identity thieves buying houses with a mortgage on someone elses back, then they flip and fly. sometimes neighborhoods have restrictions on flip rates or cooperations- tends to keep the uninterested owners out. people with nothing but 10% down equity invested in a second property wont give a shit if they leave consruction shit in the yard or whatever (its not their neighborhood). there are some loans that restrict selling options as well if memory serves. its pretty common.

Adam_M · 12-11-2006, 07:30 PM

From my experience everything is up for negotiation unless it is apart of a Body Corporate situation.

Use it to your advantage!

MaddCaz · 12-11-2006, 07:34 PM

call a lawyer...I can tell you that much...

slapass · 12-11-2006, 07:50 PM

Quote:

Originally Posted by woj

I would use it as another reason to negotiate... "I made a bid of $200k for the property assuming there were no restrictions, given this restriction, I can offer only $195k" or something along those lines, but consult your attorney for more details...

Perfect advice.

12-11-2006, 08:29 AM	#1
beemk CLICK HERE Industry Role: Join Date: Jan 2002 Posts: 20,829	Real Estate Gurus - Question here i just made an offer on a property. they said theres a deed restriction and they send me this when i asked about it: "deed restriction will hinder the Buyer from selling or re-financing the property for more than 120% of the purchase price for the first 3 months. After 3 months Buyer can do whatever he/she wants and deed restriction is lifted. " does that mean exactly what it says or is there more to it? and why would they even do that in the first place? __________________ I host with Vacares

12-11-2006, 08:42 AM	#4
Psycho_x Confirmed User Join Date: Oct 2006 Posts: 697	They put that inplace so you can't purchase the property and immediately flip it to another buyer. This is actually common . Some buyers will purchase properties and already have a buyer lined up. This is to keep you from swinging an immediate profite which could limit the present owners profits on this property. And keep you from making the buck instead of them. __________________

12-11-2006, 08:43 AM	#5
avalanche Confirmed User Industry Role: Join Date: Feb 2005 Location: SoCal Posts: 1,922	Deed restrictions are typically pretty cut and dry and they mean just what they say. In California for example they use an example on state broker exams that a seller says alcohol can't be consumed on the premises for X amount of time, so if the seller discovers that alcohol has been consumed on the property then the property reverts back to the seller. Likely a restriction on flipping properties. I've never seen this is California, but that doesn't mean it doesn't happen. Couple things to look at are, whether you really think the prop is going to appreciate that much in the first 3 months and why you're buying it. If you plan to live there than a restriction on the 1st 3 months shouldn't matter. But ideally you should consult an attorney if you really want it, otherwise I'd walk. __________________ Avalanche CherryPimps - Daily Pornstars, LIVE and more! Last edited by avalanche; 12-11-2006 at 08:44 AM..

12-11-2006, 08:50 AM	#6
BitAudioVideo Confirmed User Join Date: Jul 2005 Location: USA, Georgia Posts: 1,246	flip prevention __________________ Hi-Quality Encoding - Bulk Orders - On Time! http://bitaudiovideo.com icq 50476697 - aim n3r0xXx

12-11-2006, 09:38 AM	#9
Sick Bastard Confirmed User Industry Role: Join Date: Oct 2006 Location: BangedUpville Posts: 499	So why should the seller care or even have say in what a potential buyer does once the property is sold? __________________ FTW! bangedup.NET

12-11-2006, 08:36 AM	#3
Arab_Sex Confirmed User Join Date: Dec 2006 Posts: 221	Speaking from experience,I would walk away from this deal

12-11-2006, 03:50 PM	#10
beemk CLICK HERE Industry Role: Join Date: Jan 2002 Posts: 20,829	i asked the listing agent and just heard back and they said "Seller is trying to avoid fruadulent real estate activity in the Detroit metro area which is statistically high. " doesnt make very much sense to me, but im going to go see a lawyer if they accept my counter offer with the deed restriction. __________________ I host with Vacares

12-11-2006, 04:35 PM	#12
collegeboobies So Fucking Banned Join Date: Jul 2004 Posts: 3,644	In Detroit? Yea probably a lot of mortgage fraud in Detroit. People buy a shit house for $15k, get fraud appraisal for $100k, and walk away. Mafia and organized crime does this type of shit and on huge scales usually.

12-11-2006, 04:37 PM	#13
RawAlex So Fucking Banned Join Date: Oct 2003 Location: In a house. Posts: 9,465	With a restriction like that, I would lower the offering price in consequence of financing the property for there months (three monthly payments of a full value mortgage), because the property is basically frozen for that time frame.

12-11-2006, 05:45 PM	#14
woj <&(©¿©)&> Industry Role: Join Date: Jul 2002 Location: Chicago Posts: 47,882	I would use it as another reason to negotiate... "I made a bid of $200k for the property assuming there were no restrictions, given this restriction, I can offer only $195k" or something along those lines, but consult your attorney for more details... __________________ Custom Software Development, email: woj#at#wojfun#.#com to discuss details or skype: wojl2000 or gchat: wojfun or telegram: wojl2000 Affiliate program tools: Hosted Galleries Manager Banner Manager Video Manager Wordpress Affiliate Plugin Pic/Movie of the Day Fansign Generator Zip Manager

12-11-2006, 06:15 PM	#15
Peaches Old broad Join Date: Oct 2002 Location: Away Posts: 13,933	Do you WANT to sell it within 3 months? If not, then don't worry about it. A lot of people are buying houses and then getting inflated (false, bought) appraisals on them, then refinancing or selling based on the inflated appraisal, mortgage doesn't get paid, house is vacant, vagrants move in, neighborhood looks like shit.....it's been happening in ATL and other big cities. I'm not surprised to see this in a contract, but surprised it's only for 3 months.

12-11-2006, 07:08 PM	#16
atmclick Confirmed User Join Date: Oct 2003 Location: downtown chicago Posts: 167	yeah, there are actually deep frauds involving sham lenders or identity thieves buying houses with a mortgage on someone elses back, then they flip and fly. sometimes neighborhoods have restrictions on flip rates or cooperations- tends to keep the uninterested owners out. people with nothing but 10% down equity invested in a second property wont give a shit if they leave consruction shit in the yard or whatever (its not their neighborhood). there are some loans that restrict selling options as well if memory serves. its pretty common. __________________ hostmonster.com - 50 gb - 999 GB transfer - unlimited domains - $4.95/month

12-11-2006, 07:30 PM	#17
Adam_M Confirmed User Industry Role: Join Date: Mar 2006 Location: Australia Posts: 3,800	From my experience everything is up for negotiation unless it is apart of a Body Corporate situation. Use it to your advantage! __________________ DiscountedPorn.Com ReviewedPorn.com

12-11-2006, 07:34 PM	#18
MaddCaz Confirmed User Join Date: Mar 2006 Location: Illinois Posts: 9,483	call a lawyer...I can tell you that much... __________________ BigCocks.com - MatureWomen.com - Tranny.com - DrunkGirls.com - TeenGirls.com - MonsterCock.com and many more... Click here to see them all!