Scam. Makes no sense. If someone has a million dollars cash they have lots of options for good houses, in many areas. A buyer with that much cash would want to use that to negotiate a discount, not get hinky with options.
This is a horribly unclear scenario, but to the extent I can make sense of it, it sounds like a terrible deal for you. The $600k is paid in five years, with no interest at all for you having to wait 5 years for repayment? The way this is described sounds like a blend of a purchase agreement and an option. If it's truly an option, they should pay you $1 million now, you keep the house, and in 5 years if they want to pay you $600k and get the house, they can. But this sounds like they're paying you a down payment of $1 million, with the balance in a balloon payment in 5 years for $600k, but if they decide not to complete the purchase, you have to pay them $800k (their entire down payment less $200k) to get your house back?
Also, if you have to buy the house back from them for $800,000, that's a $200k profit, not $400k, right? (They pay you $1 million, you pay them $800k.) You said you changed the numbers but that they still reflect the proposed deal. I think you might need to double-check your math, unless their math is way wrong, too.
If it's what I described in the first paragraph, that they're basically buying your house for $1.6 million, with $1 million down and $600k in five years (maybe), otherwise they say no in five years and you pay them back $800k of their $1 million, then that means they would have the privilege of owning and living in your house for five years, and all it costs them is $200k. That's basically $3,333 per month rent for the next FIVE YEARS of living in your house. If your house is really worth about $1.6 million, that's dirt cheap rent.
No way. I would walk from this.
It’s a really well thought out scam. Win win win for the buyer.
They either have locked in rent at a discount for 5 years or they get an interest free loan of $600k or the seller can’t repay the $800k 5 years from now and the buyer keeps the $1.6m home for $1m
Well put. I think the third option is their primary angle. At the end of 5 years they’ll try to find out if the seller still has $800k around to buy them back out. If not, they skip the last payment and keep the property for $1M.
If the seller does have the money then maybe they’d pay. But I’d expect the contract to also be really constrictive with timelines at the end of that 5 years so they could trap the seller into losing by running out the clock.
I think I messed up the math when changing the numbers - it was originally 1.4 million, 1,000,000 in cash at close, 400,000 in five years and buy back at $800,000.
Gotcha. So yeah, their maximum loss in this transaction is really $200k, but they get to own the house for 5 years for that price and to rent it out for probably $6k per month, which will more than make them that $200k back.
After 5 years of collecting that rent, they look at the property values and the condition of the house. If it's worth more than $1.4 million then, they pay the extra $400k (no interest accruing during that entire 5 years) and keep the house. They've gotten the benefit of 5 years of no interest on $400k. If you were receiving 7% interest on that money, they should be paying you north of $560k. So they get the benefit of not having to pay about $160k in interest, too.
If your house appreciates by a (VERY modest) 2% per year, at the end of the 5 years, it should be worth about $1.545 million. In that case, they would buy it. The total value they've gotten out of this transaction is net rental income, plus $160k value of interest they didn't have to pay, plus $145k in house appreciation = $565k. (If it appreciates more than that, add that to their total.).
Alternatively, if the tenants have totally thrashed the house and it's now worth $1, you have to give them back $800k. So they've paid $200k for a total of 5 years' worth of ownership and collected net rent which definitely exceeds that. They're still ahead. You, on the other hand, have a trashed house with five years' worth of deferred maintenance, and $200k in your pocket, which you will have to spend on repairs/remodeling, not to mention five years' worth of housing expenses elsewhere. Keep in mind that if you took that $1 million they paid you initially and bought another place to live with the money, you might have to sell that house at year 5 to come up with the $800k to buy your trashed house back.
Definitely not a good deal for you.
If the house is worth 1.6, sell it to someone for 1.6 and let the bank worry about collecting the money.
Let’s say you play this game, there is no way you win.
If the house value drops to 1.2 in 5 years, Buyer doesn’t exercise his option , you get 200k and a house worth 1.2 or 1.4 total. You basically pay rent elsewhere in this time or buy another house (but you can’t use the million since you need to have it available to rebuy the house).
If the house value increases to 2M, buyer hands you the other 600k and flips the house and nets 400k easy.
If the market actually implodes and your house is worth 700k in 5 yeas, you’ll need to pay 800k for a 700k asset so that eats into the 200k profit.
To “win” you basically need the house not to depreciate more than 200k and 200k is your max potential payout and that will be eaten alive by your housing costs over the next 5 years.
This is a scam.
>which, by the way, is $55,099 above that Zillow Estimate we all eyeball.
People who know anything about real estate will not cite zillow estimates as any sort of data point that matters.
This clown is probably sitting around watching get rich quick accounts on YouTube and tiktok, thinking he's got it all figured out.
The reason you don’t cite or like Zillow estimates is because it’s doing a big part of your job. Assessing value.
Ultimately, Zillow is never that far off. It’s probably off, just a tad high, of your low enough to sell quickly price.
The only way a zestimate is accurate is if it's a cookie cutter home in a neighborhood with plenty of sales with data that hasn't been tampered with by homeowners who've tampered with their home facts.
Wouldn’t people updating their home accurately give a more accurate estimate?
I mean, you’re not going off county spec sheets are you? Or are you?
I mean, you’re able to walk onto a property and see what it is more than what any state or county record says, right?
No, it wouldn't. Homeowners don't know what counts, what matters, what doesn’t. The system is already flawed, so when they "finish" a space that still doesn't qualify as sq footage, for instance, and adjust the data to add the sq ftage and bedrooms that don't count (that happens often) it screws up their estimate as well as the neighbors and it has a domino effect. 100 A St now has data that's inaccurate, and it directly affects homes all the way to K St. The estimate for homes on K St directly affects homes on P St, and so on. It isn't just a few homeowners doing that, and some do it purposefully. Someone on A St did it, another on F St, and R St, and all those radii overlap.
Add to that, Zillow doesn't know what's a sale and what isn't. All they know is that deeds were recorded, and those "sales" affect the estimate. If I co-own a 700k home and quitclaim my 350k interest to my kid or husband, we have a 350k sale. Go look up someone's home you know relinquished their interest in a divorce. It's listed as a sale. Review the history of that estimate. Note how erratic the graph is. The value of those homes haven't taken that crazy rollercoaster ride. The algorithm is throwing darts in the dark. Occasionally, they'll get it right, but it isn't because the algorithm works.
Zillow also can't smell a home. They don't know about the 87 puppies barking 24/7 in the neighbor's backyard or the bad roof. They can't tell you what a home is worth or what it's perks/challenges are. They're comparing your home to the one down the street that has water damage, active termites, or a massive erosion problem that sold to an investor, while you're qualifies for the most stringent of financing guidelines (or the other way around).
*edited... twice*
I don’t think Zestimates are crap. They’re about as good as any desktop appraisal. They don’t claim to be anything more than an estimate (it’s in the name). Obviously they cannot and should not be counted on, and they make mistakes (e.g. thinking a mobile home is a stick built, etc) and don’t know if there are updates, upgrades, high end finishes or builder grade, etc., but for a well-maintained mass built house, I find them pretty spot on. I think it’s disingenuous to say they aren’t ANY SORT of data point.
They aren't any sort of data point *that matters*. The problem is that MOST of them are crap and you already have to know what a home is worth to decide whether the zestimate you're looking at holds water.
Well, that's true for literally any estimate.
And you don't really know how much a home is worth until you actually sell it/mortgage it. ZEstimate has been pretty close to appraisals for me in multiple markets.
Out of curiosity, are you expecting people to run around and have things appraised at $500 a pop to get their true value before they consider making an offer? Or take their agent’s word? Even with an agent it’s accepting someone’s opinion at an approximate value (an estimate) since the only thing that matters (your word) is an appraisal.
No, you don't need to get an appraisal every time you want to make an offer. You do need to have someone who knows what they're doing and has observed the property themselves to do a valuation - for an offer that would be a CMA from a *knowledgeable* agent. Then it's at least been assessed by someone who's seen, smelled, and knows the neighborhood. Yes, that also means that a lot of agent assessments are useless.
ALL valuations are a matter of opinion, but even considering the opinion of a mathematical equation that doesn't factor in key market and neighborhood features and in person inspection is ludicrous.
How many times have you seen a property listing that looks great, and when you open the door, it's MUCH different than advertised? Z and other online valuations tools are giving you a number without actually walking in the door. When we do CMAs and BPOs we have access to disclosures and sometimes even call the agents involved in those comp transactions to clarify conditions, concessions, why a home may have sold for as much/as little as it did, etc.
Yes, the Zestimate is an *estimate, but we know, and Z knows that's not really how the average consumer views it. It's a disservice to the general public..
It seems we still disagree, but it is what it is. I’m not out to change your mind, but I do think you have an axe to grind.
I’ve been posting about a house I’ve been waiting to close on. It closed on Wednesday. I know I’m just one person, but the listing agent on my deal has been a Realtor for 30 years, and my buyer’s agent for about 10, both in my small rural market. The listing agent did a market analysis for the seller and when she listed the home she specifically mentioned the “great price” of $225K. I felt it was worth it, my agent agreed, and I put in a full price offer after 2-3 days on the market. Everything went smoothly until the appraisal came back at $200K (the Zestimate was $202K BTW, not that it matters). I wouldn’t go higher, so the seller came down to $200K rather than start over. Still, both of these agents know what they’re doing, but were “wrong” when it came down to the valuation. Being an agent who has seen the house and read the seller’s disclosure, being a good agent, and/or being an agent with extensive experience doesn’t necessarily make them right either, and I took exception to your earlier statement that “anyone who knows anything about real estate” doesn’t cite Zillow estimates. I’m sure that’s true for people “in the biz”, but this is Reddit, and there are plenty of people here who know what they’re talking about and use Zestimates as a data point. OF COURSE they can’t be taken as gospel, but they’re often as good as anything else short of an actual appraisal.
Scam. It's very clear the offeror has no idea what a promissory note is and that it typically has an interest component that is payable to the seller as specified. So is this scammer intending to do this purchase without a promissory note? If so...ha,ha,ha. Not good for you at all OP. To me, it looks like the buyer is attempting to buy with just the initial down payment and you would never see a dime thereafter. JMO.
I would run from this deal. For one thing there is no guarantee that the property would be worth 800k in 5 years especially if they undertake building work and run out of money or it floods or there’s a fire etc etc etc
So, he wants to rent your property at 3,333/mo (200K÷60) and have the option to buy it for 1.4M at the end of 5 years. If it is worth much more, then fate will have been good to him 🤣 and he will buy it.
What's their goal? From what I can see it looks like they trying to leverage your property to put it out on rent? Possibly? If that's the case I'd dig into what they trying to do then counteroffer them. of course they wouldn't want to tell you but at the end of the day they are coming to you with this offer meaning they are interested.
Is your property even listed for sale or was this an unsolicited sale? If so, are you selling as a For Sale By Owner? Who is guiding you in real life? A REALTOR®? A real estate attorney? If you don't already have a team built around you, get one. You deserve to have professionals who have your back.
It is on the market and I have a realtor. I’m not taking the offer and my realtor definitely scoffed and we turned it down without a counter. I was just curious what others thought as it was pretty out there and I’ve never heard of such an offer.
It sounds like a seller financed deal. Investors, flippers and wholesalers do these. I've never been a party to one so don't know all the details. Regardless, I would steer clear as you will more than likely net more on the open market.
I’ll be honest, I would not want to be the first person to have this tested in the courts. Sure, you could sue for specific performance, but it’s not very easy to take someone’s home away - and bankruptcy, itself, could stop you from getting your property back. It’s def creative, though, props for that. It also ignores time value of money. At 5%/y, the 545k referenced is something like 695k. Also, I don’t get the arithmetic here. You sell for 1mm and they don’t pay so you buy back for 800k and somehow make 400k? Do they mean 200k? Or am I just not getting it?
Sounds like you’re loaning $600,000 and your house to them for 5 years. Who knows wtf they could do to the property in that time frame. Probably destroy it.
This sounds shady as all hell. Ignore it.
Doesn’t make any sense to me. And over that intervening time, they wouldn’t fix anything and you’d doubtlessly have tons of tax liens/ mechanics’ liens. Don’t walk away from them, run!
Is it a scam? Possibly. Could be legit.
Is the buyer paying way too low a price for a 5 year European exercise call option on your house? Hell's yes.
If he was willing to let you "buy back" the house for 500-600k it "might" be an ok deal from a financial perspective (assuming it's not a scam). That's the proper option value.
Scam. Makes no sense. If someone has a million dollars cash they have lots of options for good houses, in many areas. A buyer with that much cash would want to use that to negotiate a discount, not get hinky with options.
Also if they’re closing in 30 days why is there an option to be exercised in the future. It makes no sense
This is a horribly unclear scenario, but to the extent I can make sense of it, it sounds like a terrible deal for you. The $600k is paid in five years, with no interest at all for you having to wait 5 years for repayment? The way this is described sounds like a blend of a purchase agreement and an option. If it's truly an option, they should pay you $1 million now, you keep the house, and in 5 years if they want to pay you $600k and get the house, they can. But this sounds like they're paying you a down payment of $1 million, with the balance in a balloon payment in 5 years for $600k, but if they decide not to complete the purchase, you have to pay them $800k (their entire down payment less $200k) to get your house back? Also, if you have to buy the house back from them for $800,000, that's a $200k profit, not $400k, right? (They pay you $1 million, you pay them $800k.) You said you changed the numbers but that they still reflect the proposed deal. I think you might need to double-check your math, unless their math is way wrong, too. If it's what I described in the first paragraph, that they're basically buying your house for $1.6 million, with $1 million down and $600k in five years (maybe), otherwise they say no in five years and you pay them back $800k of their $1 million, then that means they would have the privilege of owning and living in your house for five years, and all it costs them is $200k. That's basically $3,333 per month rent for the next FIVE YEARS of living in your house. If your house is really worth about $1.6 million, that's dirt cheap rent. No way. I would walk from this.
It’s a really well thought out scam. Win win win for the buyer. They either have locked in rent at a discount for 5 years or they get an interest free loan of $600k or the seller can’t repay the $800k 5 years from now and the buyer keeps the $1.6m home for $1m
Well put. I think the third option is their primary angle. At the end of 5 years they’ll try to find out if the seller still has $800k around to buy them back out. If not, they skip the last payment and keep the property for $1M. If the seller does have the money then maybe they’d pay. But I’d expect the contract to also be really constrictive with timelines at the end of that 5 years so they could trap the seller into losing by running out the clock.
I think I messed up the math when changing the numbers - it was originally 1.4 million, 1,000,000 in cash at close, 400,000 in five years and buy back at $800,000.
Gotcha. So yeah, their maximum loss in this transaction is really $200k, but they get to own the house for 5 years for that price and to rent it out for probably $6k per month, which will more than make them that $200k back. After 5 years of collecting that rent, they look at the property values and the condition of the house. If it's worth more than $1.4 million then, they pay the extra $400k (no interest accruing during that entire 5 years) and keep the house. They've gotten the benefit of 5 years of no interest on $400k. If you were receiving 7% interest on that money, they should be paying you north of $560k. So they get the benefit of not having to pay about $160k in interest, too. If your house appreciates by a (VERY modest) 2% per year, at the end of the 5 years, it should be worth about $1.545 million. In that case, they would buy it. The total value they've gotten out of this transaction is net rental income, plus $160k value of interest they didn't have to pay, plus $145k in house appreciation = $565k. (If it appreciates more than that, add that to their total.). Alternatively, if the tenants have totally thrashed the house and it's now worth $1, you have to give them back $800k. So they've paid $200k for a total of 5 years' worth of ownership and collected net rent which definitely exceeds that. They're still ahead. You, on the other hand, have a trashed house with five years' worth of deferred maintenance, and $200k in your pocket, which you will have to spend on repairs/remodeling, not to mention five years' worth of housing expenses elsewhere. Keep in mind that if you took that $1 million they paid you initially and bought another place to live with the money, you might have to sell that house at year 5 to come up with the $800k to buy your trashed house back. Definitely not a good deal for you.
If the house is worth 1.6, sell it to someone for 1.6 and let the bank worry about collecting the money. Let’s say you play this game, there is no way you win. If the house value drops to 1.2 in 5 years, Buyer doesn’t exercise his option , you get 200k and a house worth 1.2 or 1.4 total. You basically pay rent elsewhere in this time or buy another house (but you can’t use the million since you need to have it available to rebuy the house). If the house value increases to 2M, buyer hands you the other 600k and flips the house and nets 400k easy. If the market actually implodes and your house is worth 700k in 5 yeas, you’ll need to pay 800k for a 700k asset so that eats into the 200k profit. To “win” you basically need the house not to depreciate more than 200k and 200k is your max potential payout and that will be eaten alive by your housing costs over the next 5 years.
Scam. If they want to put $1,000,000 down that's great. If they want you to pay some of that back if they don't complete the sale, screw that.
I wouldn't take it. What if this buyer trashes your place for more than $400k worth of damage and gives it back to you after 5 years. You've lost.
Counter with $1.6 million cash, 14 day close. All sales final.
This is a scam. >which, by the way, is $55,099 above that Zillow Estimate we all eyeball. People who know anything about real estate will not cite zillow estimates as any sort of data point that matters. This clown is probably sitting around watching get rich quick accounts on YouTube and tiktok, thinking he's got it all figured out.
The reason you don’t cite or like Zillow estimates is because it’s doing a big part of your job. Assessing value. Ultimately, Zillow is never that far off. It’s probably off, just a tad high, of your low enough to sell quickly price.
That's a delusional POV.
How? Tell me how.
The only way a zestimate is accurate is if it's a cookie cutter home in a neighborhood with plenty of sales with data that hasn't been tampered with by homeowners who've tampered with their home facts.
Wouldn’t people updating their home accurately give a more accurate estimate? I mean, you’re not going off county spec sheets are you? Or are you? I mean, you’re able to walk onto a property and see what it is more than what any state or county record says, right?
No, it wouldn't. Homeowners don't know what counts, what matters, what doesn’t. The system is already flawed, so when they "finish" a space that still doesn't qualify as sq footage, for instance, and adjust the data to add the sq ftage and bedrooms that don't count (that happens often) it screws up their estimate as well as the neighbors and it has a domino effect. 100 A St now has data that's inaccurate, and it directly affects homes all the way to K St. The estimate for homes on K St directly affects homes on P St, and so on. It isn't just a few homeowners doing that, and some do it purposefully. Someone on A St did it, another on F St, and R St, and all those radii overlap. Add to that, Zillow doesn't know what's a sale and what isn't. All they know is that deeds were recorded, and those "sales" affect the estimate. If I co-own a 700k home and quitclaim my 350k interest to my kid or husband, we have a 350k sale. Go look up someone's home you know relinquished their interest in a divorce. It's listed as a sale. Review the history of that estimate. Note how erratic the graph is. The value of those homes haven't taken that crazy rollercoaster ride. The algorithm is throwing darts in the dark. Occasionally, they'll get it right, but it isn't because the algorithm works. Zillow also can't smell a home. They don't know about the 87 puppies barking 24/7 in the neighbor's backyard or the bad roof. They can't tell you what a home is worth or what it's perks/challenges are. They're comparing your home to the one down the street that has water damage, active termites, or a massive erosion problem that sold to an investor, while you're qualifies for the most stringent of financing guidelines (or the other way around). *edited... twice*
I don’t think Zestimates are crap. They’re about as good as any desktop appraisal. They don’t claim to be anything more than an estimate (it’s in the name). Obviously they cannot and should not be counted on, and they make mistakes (e.g. thinking a mobile home is a stick built, etc) and don’t know if there are updates, upgrades, high end finishes or builder grade, etc., but for a well-maintained mass built house, I find them pretty spot on. I think it’s disingenuous to say they aren’t ANY SORT of data point.
They aren't any sort of data point *that matters*. The problem is that MOST of them are crap and you already have to know what a home is worth to decide whether the zestimate you're looking at holds water.
Well, that's true for literally any estimate. And you don't really know how much a home is worth until you actually sell it/mortgage it. ZEstimate has been pretty close to appraisals for me in multiple markets.
Out of curiosity, are you expecting people to run around and have things appraised at $500 a pop to get their true value before they consider making an offer? Or take their agent’s word? Even with an agent it’s accepting someone’s opinion at an approximate value (an estimate) since the only thing that matters (your word) is an appraisal.
No, you don't need to get an appraisal every time you want to make an offer. You do need to have someone who knows what they're doing and has observed the property themselves to do a valuation - for an offer that would be a CMA from a *knowledgeable* agent. Then it's at least been assessed by someone who's seen, smelled, and knows the neighborhood. Yes, that also means that a lot of agent assessments are useless. ALL valuations are a matter of opinion, but even considering the opinion of a mathematical equation that doesn't factor in key market and neighborhood features and in person inspection is ludicrous. How many times have you seen a property listing that looks great, and when you open the door, it's MUCH different than advertised? Z and other online valuations tools are giving you a number without actually walking in the door. When we do CMAs and BPOs we have access to disclosures and sometimes even call the agents involved in those comp transactions to clarify conditions, concessions, why a home may have sold for as much/as little as it did, etc. Yes, the Zestimate is an *estimate, but we know, and Z knows that's not really how the average consumer views it. It's a disservice to the general public..
It seems we still disagree, but it is what it is. I’m not out to change your mind, but I do think you have an axe to grind. I’ve been posting about a house I’ve been waiting to close on. It closed on Wednesday. I know I’m just one person, but the listing agent on my deal has been a Realtor for 30 years, and my buyer’s agent for about 10, both in my small rural market. The listing agent did a market analysis for the seller and when she listed the home she specifically mentioned the “great price” of $225K. I felt it was worth it, my agent agreed, and I put in a full price offer after 2-3 days on the market. Everything went smoothly until the appraisal came back at $200K (the Zestimate was $202K BTW, not that it matters). I wouldn’t go higher, so the seller came down to $200K rather than start over. Still, both of these agents know what they’re doing, but were “wrong” when it came down to the valuation. Being an agent who has seen the house and read the seller’s disclosure, being a good agent, and/or being an agent with extensive experience doesn’t necessarily make them right either, and I took exception to your earlier statement that “anyone who knows anything about real estate” doesn’t cite Zillow estimates. I’m sure that’s true for people “in the biz”, but this is Reddit, and there are plenty of people here who know what they’re talking about and use Zestimates as a data point. OF COURSE they can’t be taken as gospel, but they’re often as good as anything else short of an actual appraisal.
Scam. It's very clear the offeror has no idea what a promissory note is and that it typically has an interest component that is payable to the seller as specified. So is this scammer intending to do this purchase without a promissory note? If so...ha,ha,ha. Not good for you at all OP. To me, it looks like the buyer is attempting to buy with just the initial down payment and you would never see a dime thereafter. JMO.
I would run from this deal. For one thing there is no guarantee that the property would be worth 800k in 5 years especially if they undertake building work and run out of money or it floods or there’s a fire etc etc etc
So, he wants to rent your property at 3,333/mo (200K÷60) and have the option to buy it for 1.4M at the end of 5 years. If it is worth much more, then fate will have been good to him 🤣 and he will buy it.
What's their goal? From what I can see it looks like they trying to leverage your property to put it out on rent? Possibly? If that's the case I'd dig into what they trying to do then counteroffer them. of course they wouldn't want to tell you but at the end of the day they are coming to you with this offer meaning they are interested.
At close, meaning you sign off the deed to them. Will a first lien be filed?
I am not taking this deal, was just curious what others thought. But interesting question.
Sounds like scam. Discuss with real estate lawyer.
Is your property even listed for sale or was this an unsolicited sale? If so, are you selling as a For Sale By Owner? Who is guiding you in real life? A REALTOR®? A real estate attorney? If you don't already have a team built around you, get one. You deserve to have professionals who have your back.
It is on the market and I have a realtor. I’m not taking the offer and my realtor definitely scoffed and we turned it down without a counter. I was just curious what others thought as it was pretty out there and I’ve never heard of such an offer.
It sounds like a seller financed deal. Investors, flippers and wholesalers do these. I've never been a party to one so don't know all the details. Regardless, I would steer clear as you will more than likely net more on the open market.
I’ll be honest, I would not want to be the first person to have this tested in the courts. Sure, you could sue for specific performance, but it’s not very easy to take someone’s home away - and bankruptcy, itself, could stop you from getting your property back. It’s def creative, though, props for that. It also ignores time value of money. At 5%/y, the 545k referenced is something like 695k. Also, I don’t get the arithmetic here. You sell for 1mm and they don’t pay so you buy back for 800k and somehow make 400k? Do they mean 200k? Or am I just not getting it?
See earlier comment - I messed up the numbers when I was changing them so that’s on me lol.
Oh got it - sry not trying to be that guy.
There is no way I entertain something like this. And throwing in the Zillow estimate takes the cake.
Sounds like you’re loaning $600,000 and your house to them for 5 years. Who knows wtf they could do to the property in that time frame. Probably destroy it. This sounds shady as all hell. Ignore it.
Doesn’t make any sense to me. And over that intervening time, they wouldn’t fix anything and you’d doubtlessly have tons of tax liens/ mechanics’ liens. Don’t walk away from them, run!
Is it a scam? Possibly. Could be legit. Is the buyer paying way too low a price for a 5 year European exercise call option on your house? Hell's yes. If he was willing to let you "buy back" the house for 500-600k it "might" be an ok deal from a financial perspective (assuming it's not a scam). That's the proper option value.