Seller wants offers first prior to showing the house

G

greatname

New member
A seller said (through his agent) that he wants your best and final offers first. Then after accepting the offer, the house can be seen (inspected) and the offer can stand or being retracted. I still have to get more details whether or not a deposit is required. The agent said that it is a very common process. The reason for it that there is a tenant in the house who might not like too many people coming. I have 2 questions.
The first is that really reasonable even in this market? what could prevent the seller from taking punch of deposits and not return them? The second is, if the house is sold, what happens to the tenant? Does the tenant have to leave? what if one buys the house to find the tenant not leaving.
 
greatname said:
A seller said (through his agent) that he wants your best and final offers first. Then after accepting the offer, the house can be seen (inspected) and the offer can stand or being retracted. I still have to get more details whether or not a deposit is required. The agent said that it is a very common process. The reason for it that there is a tenant in the house who might not like too many people coming. I have 2 questions.
The first is that really reasonable even in this market? what could prevent the seller from taking punch of deposits and not return them? The second is, if the house is sold, what happens to the tenant? Does the tenant have to leave? what if one buys the house to find the tenant not leaving.
Click to expand...

It's not uncommon for offers subject to inspection in any kind of market, but no way I would allow my clients to submit a deposit until they see the home in person.  As part of the purchase, you will need to get a copy of the lease so you can see when the lease expires but I would ask the listing agent to provide the lease expiration date prior to showing.  Once a lease expires, it's fairly easy to boot a tenant out but that's rarely done in Irvine.
 
Offer should be written with specific language that it is subject to interior inspection and that EMD won't go in until inspection.
 
Has housing court in OC resumed functioning so that you are able to non-renew a lease and terminate a tenancy?



USCTrojanCPA said:
greatname said:
A seller said (through his agent) that he wants your best and final offers first. Then after accepting the offer, the house can be seen (inspected) and the offer can stand or being retracted. I still have to get more details whether or not a deposit is required. The agent said that it is a very common process. The reason for it that there is a tenant in the house who might not like too many people coming. I have 2 questions.
The first is that really reasonable even in this market? what could prevent the seller from taking punch of deposits and not return them? The second is, if the house is sold, what happens to the tenant? Does the tenant have to leave? what if one buys the house to find the tenant not leaving.
Click to expand...

It's not uncommon for offers subject to inspection in any kind of market, but no way I would allow my clients to submit a deposit until they see the home in person.  As part of the purchase, you will need to get a copy of the lease so you can see when the lease expires but I would ask the listing agent to provide the lease expiration date prior to showing.  Once a lease expires, it's fairly easy to boot a tenant out but that's rarely done in Irvine.
Click to expand...
 
I wouldn?t bother with the home.  This is a house not a set of coat hangers purchased off Amazon.  The tenant could be a significant issue moving forward and not being able to even look at the home before submitting an offer is so one sided it ridiculous.
 
Slevinkelevra said:
I wouldn?t bother with the home.  This is a house not a set of coat hangers purchased off Amazon.  The tenant could be a significant issue moving forward and not being able to even look at the home before submitting an offer is so one sided it ridiculous.
Click to expand...

A buyer can cancel escrow any time before the buyer removes all contingencies and get all of their deposit back without any issues so there isn't much risk in submitting an offer.  In California, it's very buyer friendly when it comes to purchasing resale homes.  Not so much with buying a new home, once a deposit is cashed by the builder it is at risk.
 
freedomcm said:
Has housing court in OC resumed functioning so that you are able to non-renew a lease and terminate a tenancy?



USCTrojanCPA said:
greatname said:
A seller said (through his agent) that he wants your best and final offers first. Then after accepting the offer, the house can be seen (inspected) and the offer can stand or being retracted. I still have to get more details whether or not a deposit is required. The agent said that it is a very common process. The reason for it that there is a tenant in the house who might not like too many people coming. I have 2 questions.
The first is that really reasonable even in this market? what could prevent the seller from taking punch of deposits and not return them? The second is, if the house is sold, what happens to the tenant? Does the tenant have to leave? what if one buys the house to find the tenant not leaving.
Click to expand...

It's not uncommon for offers subject to inspection in any kind of market, but no way I would allow my clients to submit a deposit until they see the home in person.  As part of the purchase, you will need to get a copy of the lease so you can see when the lease expires but I would ask the listing agent to provide the lease expiration date prior to showing.  Once a lease expires, it's fairly easy to boot a tenant out but that's rarely done in Irvine.
Click to expand...
Click to expand...

Yes, evictions have been happening even during Covid just not for not paying rent. The eviction ban is over so evictions will begin to pick up.
 
USCTrojanCPA said:
Slevinkelevra said:
I wouldn?t bother with the home.  This is a house not a set of coat hangers purchased off Amazon.  The tenant could be a significant issue moving forward and not being able to even look at the home before submitting an offer is so one sided it ridiculous.
Click to expand...

A buyer can cancel escrow any time before the buyer removes all contingencies and get all of their deposit back without any issues so there isn't much risk in submitting an offer.  In California, it's very buyer friendly when it comes to purchasing resale homes.  Not so much with buying a new home, once a deposit is cashed by the builder it is at risk.
Click to expand...

For resale homes, how can you force seller to return the deposit money? Especially if the escrow is chosen by the seller.
 
USCTrojanCPA said:
Slevinkelevra said:
I wouldn?t bother with the home.  This is a house not a set of coat hangers purchased off Amazon.  The tenant could be a significant issue moving forward and not being able to even look at the home before submitting an offer is so one sided it ridiculous.
Click to expand...

A buyer can cancel escrow any time before the buyer removes all contingencies and get all of their deposit back without any issues so there isn't much risk in submitting an offer.  In California, it's very buyer friendly when it comes to purchasing resale homes.  Not so much with buying a new home, once a deposit is cashed by the builder it is at risk.
Click to expand...

I concur with everything you said Martin, my suggestion to avoid the house is simply based upon starting on what is perceived as such a disadvantage.  In addition I don?t feel this seller is likely to accommodate anything that might be needed during a sale if this is how they start.
 
A warehouse sellers agent sent me a property in Corona, and asked if I was interested.
However, to see the warehouse, I had to submit an offer first.

So this is the first time I heard this happening for residential.
 
I feel like the seller's agent is doing seller a disservice by deterring buyers. Unless seller doesn't care about maximizing the price of the sale.
 
If the house has a tenant they may be marketing more to investment buyers who would be more interested in the cash flow than the specific details of the interior
 
talkirvine said:
USCTrojanCPA said:
Slevinkelevra said:
I wouldn?t bother with the home.  This is a house not a set of coat hangers purchased off Amazon.  The tenant could be a significant issue moving forward and not being able to even look at the home before submitting an offer is so one sided it ridiculous.
Click to expand...

A buyer can cancel escrow any time before the buyer removes all contingencies and get all of their deposit back without any issues so there isn't much risk in submitting an offer.  In California, it's very buyer friendly when it comes to purchasing resale homes.  Not so much with buying a new home, once a deposit is cashed by the builder it is at risk.
Click to expand...

For resale homes, how can you force seller to return the deposit money? Especially if the escrow is chosen by the seller.
Click to expand...

You prepare a Cancellation of Contract Form that the Buyer signs and cancels escrow under Section 14B of the Residential Purchase Agreement.  Escrow being chosen by the Seller has no impact on getting the deposit back, they are 3rd party entities in a real estate transaction.  The Seller does have to sell the cancellation form and send it escrow and then escrow will refund the entire deposit to the Buyer.  If the Seller doesn't sign the form, then the Seller can not open escrow with another buyer and is stuck until it goes to mediation (in this market the Seller will move on to the next buyer in line).  I've been doing real estate for 15 years, I've never experienced a Buyer not getting all of their deposit back by cancelling escrow (from both being a listing agent and a buyer agent).
 
fatduck said:
If the house has a tenant they may be marketing more to investment buyers who would be more interested in the cash flow than the specific details of the interior
Click to expand...

All depends on when the lease expires, that's why it's important to find out what the lease expiration date is.  I've helped a handful of buyers purchase tenant occupied homes where the tenant would move out by the time escrow closed or shortly after closing with no issues.  That being said, you want to have a good buyer agent who knows what they are doing.
 
The tenant lease expired in September but apparently still waiting for his new house to be finished. There is a court order for him to leave by February 6.
The seller suggested 2 options 1) long escrow to close February 10; 2) 45 eschew to close befoe the tenant leave and another contract for the seller to pay up to $100K to fix the interiors if needed.
I should add that the house is priced about 10% below current market and hence the interest.
 
Seller is going about this all wrong. Just hold an open house every day of the week until tenants leave.
 
fatduck said:
Seller is going about this all wrong. Just hold an open house every day of the week until tenants leave.
Click to expand...

One little problem with that is that the seller needs the tenants permission to show the home...it's that pesky non-disturbance clause in a residential least agreement that the owner has to comply with.  Remember, CA is a very, very tenant friendly state.  haha
 
USCTrojanCPA said:
One little problem with that is that the seller needs the tenants permission to show the home...it's that pesky non-disturbance clause in a residential least agreement that the owner has to comply with.  Remember, CA is a very, very tenant friendly state.  haha
Click to expand...

But the lease already expired in September. So whatever agreement isn't valid anymore, right?
 
the owner might find themselves losing their property, or at least have it tied up in the courts, for a claim of constructive eviction.


CalBears96 said:
USCTrojanCPA said:
One little problem with that is that the seller needs the tenants permission to show the home...it's that pesky non-disturbance clause in a residential least agreement that the owner has to comply with.  Remember, CA is a very, very tenant friendly state.  haha
Click to expand...

But the lease already expired in September. So whatever agreement isn't valid anymore, right?
Click to expand...
 
You must log in or register to reply here.
Back
Top