LOI vr actual real estate contracts in buying parks?

Wondering what is in vouge presently. A new listing came on the market last

Wednesday so Sunday we went to Cedar Falls, Iowa to check it out and indicated to broker we wanted to do a buy-sell contract on Wed. Called back Friday where was the contract and the sellers had two full offers and they accepted one, both were of course LOI and had no real legal responsibility to either buyer or seller. The offer accepted was a buyer that never even visited the property. So if a property looks like a possibility we just offer full price and than negotiate during DD a lower price. The property of 90 sites has NO city utilities!!!

Most buyers look at the property using Google Earth or street view. You almost have to do it this way these days as most buyers would rather get it under contract first before spending the money to go see the property in person. That part is unlikely to change and as technology improves, seeing the property virtually will likely become easier.

If I were you, I’d keep pressing in backup position. When buyers don’t see the property in person before making an offer it is more likely to fall out or get renegotiated. This also causes the listing to go stale as most buyers don’t back out until a few days before their money goes hard. Keep pressing the broker and you might even want to contact the seller at some point too just to ensure your offer is making it him or her. A lot of offers don’t get presented once the seller says yes to an offer.

Thanks Charles, always thought it more professional to make a contract after at least visiting the property. Google Earth is great but fails at times to see the actual condition of homes or lacking infrastructure. We have decided to only make LOI in tthe future and if all information without visiting seems ok even shoot a price beyond asking price and during DD turn the offer lower or basically just tie the property up–after 30 years of experience–still changing how we might do business. We talked with one of the owners and there water system is very questionable and probably would not pass with new ownership and with our last contact with listing agent indicated half of our DD was complete. The agent had never visited the park. In the past selling one of our parks we would not even consider a LOI since there is NOTHING binding on a buyer but a buyer from Austin, TX. and within 45 minutes of meeting had a signed legal contract for our asking price—strange world. Any other buyer familiar with the property in discussion??? Grundy County?

I agree. My gut says that this one will fall out of contract if the listing wasn’t presented with the water issue up front. As you know, stuff like this tends to go into and out of contract until either someone overpays or buys at a fair price that prices in the risk and effort of dealing with that on day 1.

I’d keep an eye on that deal cause it sounds like a long and painful price adjustment as the market beats them up on their price. We bought one in Florida that sat on the market for almost 2 years as it slowly came down from $2.1 to $1.4. If the guy had been up front from the outset, it probably would’ve went for $1.6 or $1.7.

In FL and the 4 New England states, the use of an LOI is recommended because of some “onerous” landlord-tenant laws. And in some states tying up a property using an LOI may create liability.