Q: I'm executor to a home with debt on it. It's in bad shape and can't be financed traditionally by buyers. What can I do?
Debt is about 1/2 the value of the home in its current condition. No FHA and more than 35k needed to make it habitable. I have a young self employed family desperately wanting to buy it but they cannot get conventional financing and have been waiting for their commercial property to sell. They could then pay 100%cash for this home and pay for the repairs. They have had several developers come through and have had a lot of interest and a few decent offers. What can I do to help them take this house off of my hands? They asked to take over the original loan payments and add a bit extra once they were able to live in it. They have to put about 40k in it before moving in. No furnace, plumbing, usable bathrooms, etc.... So, they won't have much more money to put down. They want to take possession of the property, land contract, do rehab on it, move in, then start making payments, have a promissory note that as soon as their current property sells they will complete the purchase in full
A:
This is very complicated and you will have to work with a lawyer to accomplish this.
Probably, you can set this up under an Installment Sale Agreement. This obligates them to buy, but you would retain title until they are ready to pay the balance due. The first issue is whether this is permitted under your existing mortgage, and a lawyer would have to review the mortgage with you to determine that. Secondly, the Agreement would have to be recorded to protect the buyer. If the buyer defaults, you would have to sue to clear the title, which is time consuming and expensive. Third, you would have to work out a system so that both the buyer and seller are assured that the mortgage payments are being made. Fourth, you would need to understand that this is not really taking the property off your hands. The estate continues to hold legal title and is responsible for everything that goes with it. While you may have an agreement with the buyer, if the buyer defaults, the property, and its problems, comes back to you.
As indicated, you need the assistance of a lawyer to handle this.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
