Lawyer for AFS transaction in Alberta

[Cargren]

This post is directed to Barry McGuire or Tony Peters, but it is certainly open to any warm body who wants to offer me advice.

I am wanting to make an offer on a property in Alberta. It was originally listed by the owner for $592,000 who was relocated elsewhere by his company. When it didn`t sell it was bought out by his company who has dropped the listed price to $500,000.

My thought was to make two offers: 1) a standard offer for $460,000, conventional financing, etc, and 2) an offer for full list price (or even $510,000-515,000) built around an AFS, proposing $20,000 down, monthly payments of $1750-2000, with a 0% interest rate, to buyout in full in 24 months. Immediate closing, etc.

Any suggestions or recommendations? Would you offer above list price and no interest (saves us about $30000 in interest and we give up $10000-15000 in above list price) or somewhere below list and an interest rate of, say, 3.5%?

Also, do you know of a good lawyer who could do this for us? We have used Ritchie Mills in the past, but not sure if they are the one`s to do an AFS.

This concept is new to me, so appreciate any comments and advice.

 

[BarryMcGuire]

Hi Rob. Let`s start with your last question first. There aren`t too many lawyers in Alberta who are familiar with the agreement for sale process or who handle it on any regular basis. It`s an older concept now coming back into use so it is mostly older lawyers who know about it. At Ritchie Mill Law office we have re engineered the process and understand the agreement for sale very well. So, if you`re looking for a lawyer, look no further!

Re: your proposed deal, whether you choose the conventional financing route at $460,000 or the agreement for sale route at list price or a little more, depends on which of those two choices is best for you and, of course, which one the seller will accept. You said that the seller`s company has bought the house from him. A vital question to answer is whether they assumed his existing mortgage or whether they paid out the lender and the property is free and clear. If the property is free and clear and if his company is Imperial Oil and they don`t need the money right away and if they think you are a good credit risk and if they can see themselves getting all their money back, then they might listen to you.

I suggest you check the title and see if you can get any more information about the seller`s company and what their attitude is. Then, post again with that information and we`ll try move this along.

Hope this helps

Barry

 

[tonypeters]

Hey Rob,

I think Barry`s response supports the advice and guidance I provided you with in my e-mail correspondence.

On another note: Please be sure to close the loop on this post by providing us with an update when and if you move forward with the deal, as this will benefit all forum members who are interested in "Creative Real Estate Investing" strategies.

Good Luck!

QUOTE (Cargren @ Nov 30 2009, 01:04 PM) This post is directed to Barry McGuire or Tony Peters, but it is certainly open to any warm body who wants to offer me advice.

I am wanting to make an offer on a property in Alberta. It was originally listed by the owner for $592,000 who was relocated elsewhere by his company. When it didn`t sell it was bought out by his company who has dropped the listed price to $500,000.

My thought was to make two offers: 1) a standard offer for $460,000, conventional financing, etc, and 2) an offer for full list price (or even $510,000-515,000) built around an AFS, proposing $20,000 down, monthly payments of $1750-2000, with a 0% interest rate, to buyout in full in 24 months. Immediate closing, etc.

Any suggestions or recommendations? Would you offer above list price and no interest (saves us about $30000 in interest and we give up $10000-15000 in above list price) or somewhere below list and an interest rate of, say, 3.5%?

Also, do you know of a good lawyer who could do this for us? We have used Ritchie Mills in the past, but not sure if they are the one`s to do an AFS.

This concept is new to me, so appreciate any comments and advice.