I have a seller that is in preforeclosure with a sales date of 10/28/04. She wants half of the equity if we sale the house minus our cost. $2300 will get the house out of foreclosure…. There’s about $45k in equity if we sold the house to a buyer that wants to live in the house. Normally, I wouldn’t even entertain giving that much up but she made it clear she will let it go into foreclosure if she can’t get half. I don’t have a problem with doing the deal but I want to cover my interest in the deal. I’m going to pay the $2300 to get the house out of foreclosure.
My question: What should I do to cover my interest in this deal?
Should I be placed on the DEED, simply place an option on the house or WHAT?
If so, how would I get paid if a conventional mortgage is used by the buyer?
There are several ways to protect yourself. Some sort of transfer of the property by deed is the best protection. She can transfer 50% ownership to you by deed or you two can form a partnership and transfer the deed to the partnership or even a LLC or C Corp. The only problem may be seasoning when you go to gat the buyer a new loan.
Other methods would be the option agreement or a simple earnest money contract with a delayed closing.
You too could simply file an agreement or notice affecting real estate that would cloud the title. This would do away with the seasoning problem if she has owned the house long enough and it sounds like she has met that requirement.
With the seasoning problems of todays lenders I may do the Notice thing. They are similar to notices lawyers may file if they plan on filing a lawsuit to stop someone from selling their property until the pending legal matter is resolved.
My name is … and I have a vested interest in the below described property because I stopped the foreclosure and spent … and became a partner in the ownership. Anyone interested in buying the property is hereby and notified of my interest in the ownership of said property and needs to deal with me as a partial owner.
Be sure to get notary to sign. Then get recorded at the local courthouse in the county where the property is located.
This worked for me and was prepared by my attorney. You can use your own words.