I currently have a motived seller willing to sell me her house for about 350k (she owes about 315k) the house’s value is about 450k-500k but I’m not sure what to do exactly because of the Home equity theft prevention Act( http://www.banking.state.ny.us/hetpyrul.pdf ) . Even If the seller suspects the investors is making too much they could sue . My question is what’s to stop the seller from intentionally abusing this law? Particularly the following:
If you suspect that your buyer is doing or has done any of the following, the buyer may have committed a felony and
the contract may be voidable—you may be able to legally cancel the contract and the sale, even after it has been
signed and executed.
Your buyer may not, at any time, deceive or mislead you in any way about any aspect of the sale of the house or
about any aspect of a buyback agreement. In particular, your buyer must not:
• Deceive or mislead you in any way about the value of the house;
• Deceive or mislead you in any way about the amount of money you will receive as
a result of the sale;
• Deceive or mislead you in any way about the timing of the foreclosure process, or
about how much time you have until your home is put up for foreclosure auction by
the court;
• Deceive or mislead you in any way about the terms of any contracts;
• Deceive or mislead you in any way about the nature of any document the buyer
asks you to sign;
• Deceive or mislead you in any way about your rights and responsibilities before,
during, or after the sale of the house.
*Also how will this affect title insurance? and possibly wholesaling of the property? THANKS!
I’m confused…
If she has agreed to sell for 350K what is against the law about that?
Buy it for 350K–she’ll make 35K from that
Then you wholesale it for 450-500K like your comps indicate.
That is the beauty of free enterprise. Just make sure your comps justify that MV!! The reason why she appears to be losing so much equity (the diff between 315K and 500K) is because her realtor didn’t do a good job listing the property for what it is worth. Does that make sense?
what if she later on decides that she’s just not happy with 35k and that she wants to claim one of the reason I listed in the previous thread- the laws say that the sale could be rescinded within a two year period under certain conditions.
I don’t live in NY but we also have that 82% law. This might break that and in the current political environment with everyone looking out for the HomeOwner victims, I would be careful too.
I think you just need to consult an attorney and maybe have them draw up the paperwork with the HO. Might be $500 well spent.
Would it be better if I had an attorney draw up contracts stating the seller knows the actual value of the house and that the buyer investor did not mislead her in anyway about the amount of money she will receive as a result of the sale, about the terms of any contracts etc. And maybe I could have her write a thank you letter?I could even refer her to Home equity theft prevention Act flyer’s . Does this make sense? would anyone else do this?