Hello Everyone,
I’ve been reading a lot on Sub2 deals and read that you don’t have to use and Attorney or Title Company to close the deal. Is this true?
I thought there were documents that had to be notarized. Would I just go to a notary with the seller to have them signed and then record them at my courthouse?
Any clarity is appreciated.
Thanks
Rich
You don’t HAVE to legally, but you’d be foolish not to these days. Years ago tabletop closings were common from what I understand…nowadays I would do everything I could to get that seller in front of a real estate attorney. It’s too easy to make a mistake that can cost you money down the line or even get you in trouble with the law.
Close them yourself at your own peril!
I agree with this totaly !!! It will cover your backside and the sellers as well !!!
All will go through with the deal much more at ease
I’ll beat the dead horse again. Close with an attorney. The one I used for my cash and refi closings would not close a Subject To.
I sat down one day and called about a dozen attorneys until I found one who understood it and closed them on a regular basis. He has saved me more times than I can count. After about a dozen closings and a few disputes, he went through my documents and tightened up a few sentences to make my side stronger. Closing with an attorney is more professional, safer, and gives you a stronger case when the buyer or seller forgets something (“It’s in your closing documents that you signed in the attorney’s office at the closing”).
Take the time to find one you can work with. If you are going to do Subject To, you will need an attorney eventually.
Hey RJ,
Yes…technically, you could do it yourself but going closing through a title company or an attorney
will be the best way to close. Make sure you get an owners title policy, survey, and all the other
trimmings that usually get left out when one tries to close a deal on the kitchen table. :cool
One of the main reasons to close through an attorney or title company is that it seems less suspect
to an outsider. To find an attorney/title company that will close your deal just hit up the phone book
and ask them. From there, you can get a closing in a week. They will probably have a contract that
they are most familar with and prefer you to use, but you don’t have to.
In addition, they’ll probably insist on having extra discosures signed by the seller stating they
understand the DOS liability and that they’re still responsible for the mortgage.
Just an addition to what others have said. My lawyer brought up a good point when doing Sub2 deals (a few actually) years ago that I use regularly today. Get the seller to write (in their own handwritting) the fact that they have been given choice to get legal advice independant of me or my lawyer. IN THEIR OWN HANDWRITTING. They may of course waive that right. But this is something that I make the sellers do, a line of two then sign their signature and date. Of course like others I detail the specifics of what is being done in the writting part of the deal, but this handwritten thing is something that I’ve used and it adds a bit extra so that at no point can the seller say they weren’t aware that they could get legal advice of their own. Just gotta protect yourself just in case of he said she said crap. Another small point mainly for newbies. Understand when doing a Sub2 you also gotta be sure to find out what’s on title. Additionally be careful and aware that even AFTER you’d done your notarization/lawyer visit, what happens if you get the deed and say a year later the owner has some sort of judgement which ends up being on the same house you did Sub2 on? You have to be aware of it because this could ruin your deal or at least diminish your profit. So it’s possible that if owner has judgement on them after entering into a deal with you that YOU would have to pay that judgement amount (which is essentially a lien) and anything underlying like the mortgage and so on. Just something to be aware of. So then this is why I try to have a very good understanding of what the seller’s situation financially is about as much as I can to help me make choices along the way.
if i have the deed in my name now, how can a lien be attached to it in someone elses name?
I’ve personally never had it happen to me Tony, so I can’t tell you this from experience. It’s something that my lawyer has mentioned that he’s seen happen in his practise (35 years). So he cautioned me about it. For me this would only really be a consideration to think about if I considered holding onto the Sub2 for say longer than 1.5 years, as most of rent-to-owners get qualified in about 12 months. But this does raise a good question. Tony, is it your opinion that once you’ve signed up the Sub2 deal, and say the homeowner gets some sort of judgement to which a lien of some kind is attached to the same house, are you saying that lien isn’t going to stick? Do you have actual experience with this where you’ve been in this situation? Not arguing on this one with you, just wanting to understand if you’re speaking from theory standpoint or experience. We all know theory-wise how some things with Sub2 deals should go but then don’t work exactly the way you read. Whatever the response is, I certainly would consider it, but I’d still side with my lawyer’s experience in this matter. I welcome your reply though.
chunkoftheearth,
Well over 500+ deals and never had a lien attach to any of my properties from a seller after the property was recorded in my name.
Frankly I don’t understand how an attorney would even say a lien from a previous owner could attach after the deed is recorded in my name.
Suggest you get a new attorney.
John $Cash$ Locke
Thank you everyone for all of the feedback.
I’m just going to use an attorney to close any deals like this. I don’t want to take a chance on anything.
Thank you again.
Rich
This may sound stupid, but would an attorney or title company officate a closing when one party has violated a due on sale clause of his mortgage?