Possible Lease To Purchase Problems
Hello,
I recently purchased Jeff's manual and I am very confident that I can do this and I am anxious to get started. However, I have a few questions. It seems to me that a lease to purchase would be more desireable to a wider range of sellers, from sellers with problems to sellers that just would like to sell but don't need to much cash now, for example, than would be a subject-to sale, which seems more for the desperate seller. I see a lot of people saying there is more money in subject-to's but if I were a seller I think I would feel more comfortable with a lease-purchase. Am I correct or am I trying to answer for sellers I don't even know yet? My next question is what if I get a deal signed and set and The seller decides six months down the road he wants to get an equity loan on the said property for his own use? Can he do this? What if he decides not to pay taxes or insurance, if they are not included in his mortgage payments, six months down the line? Should all these payments be made directly to the companies or to an escrow or loan servicing company which will disperse funds? I know these are a lot of what if's and that I should just get started. I have nothing to lose but I also don't want my T/Bs getting screwed or the sellers either. That would bother me as much as my self getting screwed. Sorry this was such a long post. Thank you all for your help.
Hello l/o do offer more options for sellers that are not real desperate, they work great for both. In your contract you should have something that says the seller can't put any linens on the property. Set up a escrow to dispense the funds to protect you and the seller. Here are some tips to help protect you.
Escrow the deed. If your seller has died or disappeared, you will have a big problem getting him to sign a deed. An escrow should be created up front in which a title company or attorney holds an executed deed. When you are ready to exercise, you simply tender the money to the escrow agent and collect the deed.
Record a mortgage. Typically a mortgage is recorded to secure payments on a promissory note. A mortgage can be recorded to secure performance of any agreement, even a purchase option. You as optionee (buyer) will now be a lien holder, in the same position as a secured lender. If the seller refuses to sell the property, you foreclose. Now the SELLER has to go to court to protect himself, rather than the other way around.
Hope this helps a little
I know this isn't my post but I must ask, how do you record a mortgage if you aren't the original seller?
Thanks,
Quinn