Closing The Sub-To Deal Today, But Need Some Final Questions Answered By The Experts...
ok today is the day i go out to pick up the paperwork on this sub-to i've been dealing with......but the owners have some questions that they need answered when i get there, that i don't really know how to answer......
1. They (the sellers) want some type of addendum that gives them some assurance that should our tenant/buyer come in and destroy the home that we will be responsible for the damages......i keep trying to explain to her that once we have finalized the paperwork, that will be my worry, not hers....but she still wants this in writing. Is this typical and if so, how would i word it.
2. She asked me are they (the Sellers) totally covered with their homeowner's insurance policy that they have should something happen to the home.....she also wanted to know if they could be sued by my tenant/buyer should something happen to them while they're living in the house......how do i explain this to her?....and why did i need to have them to sign an 'Authorization for Insurance'?......why would i need that and how (if any) could "their" insurance benefit me?.......do i need to take out some insurance as well on the property even while their policy is in place?.....
3. What exactly is a "GRANT, BARGAIN AND SALE DEED"? ....
4. Do i ask the sellers for their deed or do i find a blank one and then have it filed at the courthouse?.....and what would this particular deed be called so i'll know exactly what i'm looking for and that i'm filing the right one?
5. Can anyone explain what "fiduciary position" means?
6. What exactly is the Quit Claim Deed and do i need to have them sign one?
7. The forms that i have had them sign so far are: Authorization to Release Info, Power of Attorney, Change of Address, Authorization for Insurance........aside from the actual Purchase Contract, before my sellers leave town, is there any other documentation that i need to have them sign or have them turn over to me???
8. The seller has asked if I will be responsible for any extra monies should there be a change in escrow?....what exactly does this all mean and how do i answer the question?????
9. How do i get them to really understand that once we're finished with all the necessary paperwok, WE'RE DONE????......How do i say to them nicely, it's my home now, not yours.....goodbye!!!????? how do you guys make your sellers understand this valid point?
10. In my Authorization for Insurance form that i had them to sign, it states "should there be a future insurance claim or loss with the insurance company, I grant Power of Attorney to (My Company/Me) and all subsequent property owners the right to collect and negotiate all payments for that loss". What does this mean and again, how does this statement benefit the seller?.....hw does it benefit me?......and if their insurance is still in place, how would subsequent property owners reap the benefits of THEIR Insurance?
I have to meet with my seller today (early afternoon), if i could have you experts answer these questions for me, i would greatly appreciate it.
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ok there have been like 11 views but no takers on this one?......come on all you experts, give me a little assistance here........where is THE ONE AND ONLY JOHN LOCKE WHEN "I" NEED HIM?....
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I think the reason no one is replying is they are dumbfounded that someone that is as far as you are into this deal has so many questions. I gotta tell you. I haven't entered into my first deal yet...(a couple in the works)...but if I had as many questions as you do about this sub to, there is no way I would move forward with it. Sounds like the old cart before the horse strategy.
thanks for that much "not needed" reponse.....yes, it's really a done deal but that doesn't mean that i'm not still confused about A LOT OF THINGS.....which is why i posted here......this is where we come for support, much needed help and hopefully 'helpful answers' to our questions.....i think a lot of reasons people don't post their questions here is because of replies like the one you posted.........most of the advice that i've heard here on this particular board is to just "jump on in there and do it"........questions will forever arise, the business we're in teaches lessons constantly.........you can never know 'too much' in this biz.........and you should never be afraid to ask questions if you think you might benefit from someone else's knowledge, no matter how 'dumb' you think your questions are......so thank you for......well.......nothing!
I will answer a couple of your questions fist a QD is the worst deed you could get don't. Get a warranty Deed.
Second in the deed at a lien saying all escrow will pass to you. That way if there is any escrow you will get it it could be a few thousand dollars. If the sellers don't like it offer to split the escrow with them.
A grant bargain sail deed is the deed that the state gives you if you buy the house at a forclosure auction.
If they want an addendum go ahead and give them an addendum saying your responsible for any repairs
Finally you may never be able to tell them nicely this is your home get out. The best you can do is in the contract specify how many days they have to leave and if they don't leave pay a cop to evict them.[ Edited by demosthenes on Date 11/22/2003 ]
i just read your profile..you portray yourself as being an expert ...you even have a web page that offers different real estate services..but you dont know what a bargain and sale, grant and quit claim deeds are?.....i am confused???[ Edited by lp1 on Date 11/22/2003 ]
I bet Locke would hold your hand through this deal for a couple of hundred bucks. Remember, no one here is paid, and your problem is not our problem. We help out when we can, when we can give good advice, and when we happen to be online, stumble across your post, and have some time to kill.
rbw4,
No one on this board - guru or minion - owes you answers. It's all on a volunteer basis as a part of the community that has been developed here.
Ask your questions as briefly as possible and in smaller doses and you are more likely to get contributors to weigh in on a response. Good luck.
Molotov
Hook up with a good closing attorney that is familiar with Sub to's...They will cost some money...but they will definitely help you out with regards to any local hoops you might need to be aware of.......They will set your documents up properly and review your contracts to make sure they are in good order...
Best of luck...
Sub To's are profitable and can ocassionally get sticky (title work, lenders, insurance comapnies)...I will continue to use a trusted closing attorney until I can walk throught these deals with my eyes closed...
Get an extension on this. I can answer these questions for you, but do not have the time to answer them thoroughly. I would also suggest the extension because you have some very basic and generic questions which would leave concern about how good the deal is as an investment.
rbw4,
Since no one else has taken the time to answer you, I will try to help you with your questions.
1. If they want an addendum that puts in writing something you are prepared to do anyway, give it to them. Just have it say, " Should there be any damage to the property, we agree to repair at our expense. This clause shall survive closing." or something along those lines. Don't worry so much about it being too legaleeze. It doesn't matter. Your seller wants reassurance, nothing more.
2. If you are buying in a trust (you should be by the way) the landlords policy that you will place on the house will name the trust as the owner (it will be the owner). As the owner, it would be sued if there was a lawsuit. Make sure your landlord's policy has as much liability coverage as you can afford.
3. I believe a Grant Deed is the deed they use on the west coast, most specifically in CA. They do not use them in all states so be sure that you are using the type deed that is specific to your state.
4. Don't ask the sellers for their deed. You have them sign a new one that you draft or have drafted. After a deed is filed at the courthouse, you can burn it if you want. It is never needed again. The term "get the deed" is just a term. Don't take it literally.
5. Fudiciary position means that you are holding a position of responsibility to act for someone else, on their behalf.
6. Don't have them sign a QCD to you. Get the strongest deed that your state recognizes. In GA, that is a Warranty Deed. I am not sure what state you are in but a closing attorney can help you with this question.
7. Yes, A deed, please don't forget that one, LOL, and at least one disclosure laying out the terms of your agreement in full. You might also need transfer tax forms (depends on your state) as well as any other state specific forms your state may require.
8. They mean if their escrow payment goes up (the part of their loan that the lender collects for taxes and insurance) will they have to pay it. The answer is no. Tell them you (or your trust if you are smart) will own the house. Everything that happens going forward will fall to you to handle. The escrow need not be a concern to her.
9. Well, I tell them. "Mr. Seller, when we wrap up this transaction you will no longer own this property. We will, however be leaving the loan in place for a while to speed the buying process and let you get out of here much faster than you normally would be able to do so. You are no longer responsible for one bloody thing that happens here. You are free as a bird with respect to this property so go on with your life and we will take care of the rest."
10. It means that they are giving you the authority to handle claims for them. Sounds like the authorization you are using needs some tweaking. In fact, I would say from the questions you ask surrounding this, you will not have any valid coverage on this house with this approach. You had better make sure you are handling your insurance properly to avoid any nasty surprises should a claim arise.
rbw4, I know this comes too late to help you with your seller but I hope it helps you in the future. This only took a few minutes to answer so I didn't mind taking the time.
You obviously need further education on the proper handling of sub2 type deals.
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William Tingle
WilliamGA
[ Edited by WilliamGA on Date 11/25/2003 ][ Edited by jfmlv1950 on Date 11/26/2003 ]
William Tingle, thank you so very much from the bottom of my heart for taking the time to detail and explain al that you did for me. And no, it did not come too late. My sellers aren't leaving until this weekend and i still have a few days to have them sign any other needed documents. But again, i can never thank you for that assistance, it really came in and will continue to aid me in my sub-to transactions. And by the way, I love reading any article that you put together on sub-to transactions. Every time i visit a website and your name is listed, the first articles i flock to are yours. I carry around two articles that you hve written on this subject: "FREQUENTLY ASKED QUESTIONS ABOUT SUB2" & "ANATOMY OF A SUB2 PURCHASE". They have been very helpful to me. Thank you kind sir, your kindness will never be forgotten.
And now for the person who wasted MY time posting that "no one on this board owes me anything in the way of answers or anything else", i don't recall ever posting here that anyone did! It took Mr. Tingle a second to post a "much-needed" reply here as opposed to some of the negativity that some of you took the time to post!.......again when i post, i ASK for constructive, positive replies that will help me. I don't like receiving notification that a reply has been posted only to hurry to get to it and find that it's A WASTE OF GOOD SPACE HERE! Again, this is the reason people who need help are afraid to post their questions here, because they're afraid of the negative responses some of you waste time posting. I'M NOT AFRAID!
Now on a better note, HAPPY THANKSGIVING TO ALL !!!!
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