I have been contacted by someone that has a house they have purchased with a contract (Iowa). The want to get out of the property and asked me if I’d be interested in the house.
Do any of you have experience purchasing a home from someone that has a contract with the original owner?
I’m looking for some advice. I haven’t even looked at the property but it sounds like the guy that contacted me bought the property on contract for around 26K and has around 17K left on the contract. He just wants to get out and have me take over payments.
Before I get too far into this deal I wanted to see what kind of options might be available to me if I would be interested in this property.
What does his contract say? Does it have a “Due on sale” clause? In other words, does his contract say his loan becomes due on sale of the property? This is a standard clause in mortgage agreements to prevent sellers from reassigning their mortgages to someone else upon sale of the property.
You can always sign a contract for deed (keeping the property in his name, not yours, until the mortgage is paid off). Or you can contract the lender if he’s ok with transferring the mortgage.
Yes, communicating with the original sellers so everyone is in agreement will be how I want to do this. I like the idea of just having the contract “transferred” to me pending approval from the original seller.
What would need to happen to get the current contract transferred to me?
This should be similar to if you buy a home but the owner has a mortgage. The easiest option is to simply pay off the mortgage - or the land contract in your case. The second option is to assume the contract.
If assuming the land contract is possible, it will be spelled out in the land contract itself. There must be a paragraph in there that addresses a sale of the property before the contract expires.
Your best bet is to get a copy of the contract and look it over and see what it says. That is your best answer.