What kind of documents do you need for a sub2?
and how do you put a property into a land trust?
I heard that there different type of agreements when doing these type of deals. :help
You dont need a land trust… That is fear selling at its best…
I use the following disclosures when buying SUB2
My contract is 12 pages long and covers everything I could think of…
XIX. SUBJECT TO/DUE-ON-SALE ACKNOWLEDGEMENT: IF CHECKED „: INVESTORS COMPANY NAME as Buyer have entered in to a certain purchase and sales agreement date herewith, the parties fully understand, acknowledge and agree as follows:
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Seller and Buyer are fully aware that the mortgage(s)/deeds of trust securing the property Described in Section I contain(s) provisions prohibiting the transfer of any interest in the property without satisfying the principal balance remaining on the underlying loans and/or obtaining the lender’s prior written consent (i.e., a “due-on-sale” clause), and that this transaction may violate said mortgage.
a. Seller specifically understands that this loan will be paid on a monthly basis by buyer, but will not be assumed or paid off completely at this time, and that this loan will remain in Seller’s name and may continue to appear on Seller’s credit report. -
Seller and Buyer execute this disclosure form after having had the opportunity to seek legal counsel as to the legal and financial implications of the due-on-sale clause. The parties agree and understand that if said due on sale clause is enforced by the holders of said mortgages, the entire balance due under said mortgages/deeds of trust will have to be paid off. In this event, Seller and Buyer agree to take all reasonable steps to satisfy said lender, including both parties taking steps to obtain financing and/or Purchaser submitting an application to formally assume liability for said obligations. Buyer understands that in the event that the underlying debt is not paid off, the lender holding the deeds of trust may foreclose the property, which will extinguish Buyer’s interest in the property.
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Seller and Buyer hereby agreed to defend, indemnify and hold all parties involved in this transaction harmless from liability in the event that the holders of the mortgages and/or deeds of trust on the aforementioned property are called due and payable.
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The seller agrees and understands that the buyer is purchasing their property with the buyer taking seller’s existing loan “subject to” with the current loan balance and prepayment penalty to be deducted from sale proceeds.
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Seller’s Current Lender will not refund seller’s Current Impound Funds To Seller when The Existing Loan Is Paid In Full. There will not be a Credit or Debit To Either Buyer or Seller For impound accounts on This Transaction…
Indemnification: The borrower shall indemnify, defend and hold harmless the negotiator and/or buyer and all persons or assigns, regardless of responsibility, from all costs, expenses, suits, liabilities, damages, attorney fees and claims of every type, including but not limited to those arising out of injury to any person, or damage to any real or personal property to any person, including the borrower and said financial institution, for (i) any items resulting from the information furnished by the borrower, or (ii) those relating to the financial information, or ability or inability to pay for or continue to support the debt of which the buyer is attempting to negotiate on the property by the buyer, or any person in the buyers firm, or the performance or exercise of any of the duties, powers or authorities granted to the negotiator and/or buyer by the borrower.
Hey Guys / Gals:
I am working on a sub-2 with seller taking back. No interest or payment on the seller hold back…Balloon in 1 year. The seller only wants to recoup the different from the current balance and what he paid 3 years ago. the purchase price is $360k. He was making double payment, so the balance is $287. He will carry the difference of $72k.
My question is, what forms do I need for a deal like this. Also, do I need to close with a title company or attorney when the seller is essentially financing the deal? Any advise would help. thanks.
Escrow should handle the paperwork as long as you have it detailed in you agreement…
Good Luck…
Michael Quarles
If your getting involved with owner financing and you don’t know what your doing I would highly suggest getting a RE lawyer involved so your docs make sense and are in line with the transaction. Who ever handles your closings in your state (lawyers, title company, etc.) should handle the closing aspect of the deal.
Nate-WI