Real estate question .. Help Please

You have three choices. The first choice is an installment contract. The attorney will draw up articles of agreement for a set period of time which can be as an example ten years at a set interest rate until the principal balance is paid. He will set up an insurance escrow and tax escrow. I have always had recommended to me to have a memorandum recorded showing the contract sale and preserving all priorities. I always try to use reliable title in Pensacola and Navarre for the title work. I do not feel comfortable recommending a lawyer, and their rates vary, and you should call informed and ready to take control of the sale.

The second choice is to have an attorney to prepare a deed transferring the property to the buyer. Then the attorney will create a note with a principal amount and an interest rate with monthly payments to you. He will create a mortgage and record it on your property. I have sold things this way, but I am not a bank, and there are regulatory rules that made me nervous. However, if it is properly prepared, you can assign the note and mortgage to a bank if you need quick cash.....of course they will want a discount.

The third choice is a lease with option which should be drafted by the attorney to protect your interest. I like this option as a seller because I am not transferring my equitable interest in the property to somebody until I am paid.......choice one transfers equitable interest, and choice two transfers legal interest. The third choice you are just a landlord who is allowing the buyer to gain equity over a certain time period and that equity can be applied. I did a three year lease with option where I put a price which was 10k higher than the market at the time, and had them pay $300 a month over market rate and applied that money to the option, once they had made all the 36 payments, I gave them the additional credit for the 10k bonus.....with over 20k of option payment, the CPAs who were renting from me got their financing.....however the commercial building was up to code and close to the valuations we used.

I would recommend going to reliable title and talk to them how much they would charge for a contract sale, or if the could recommend a reasonable attorney who quote fair fees. I have some recommendations, but I learned a long time ago not to recommend realtors, accountants, or lawyers......you can turn a friend into an enemy by bad behavior by the professional. I hope this helped.

The contract sale can be structured for a short period, or balloon payment, and these options should be weighed by the chance the house will appraise in X amount of time, and the upside of the buyers who can repair their credit and increase their income.

I would ask the buyers to voluntarily submit a credit report to you, and have reliable when doing the title commitment do a judgment search on the buyers. I have been involved in too many tall stories which can be confirmed with the credit report and judgment search.

Talk to an attorney.....it needs to be written up that if a certain number of payments are missed the contract is void and the house must be vacated. You hold the deed until the final mortgage payment.

What do you mean by "would not pass an appraisal"? Don't you mean, "would not pass an inspection?" Does the property have significant defects? If you are selling "as is", then you write those words into the contract. I don't think it costs significantly more to have your closing with a real estate attorney. I have done it both ways. Your buyer may still want to hire a property inspector...and should, in case there are problems you don't know about. And do you want to hold the paper on a house that's not insured? An attorney can probably be of more help to you in structuring the language and terms of the agreement. Ideally, both parties should walk away happy with the outcome.

A competent real estate lawyer and good title company is probably all you need. You do not need to pay a commission in this situation where the ready, willing, and possibly able buyer has expressed their interest, but do not discount their expertise in particular in finding private funding sources for the buyers.. I think the appraisal part is that most of us have become submarine occupants and that values are slowly if at all recovering to make something work for both parties.

Insurance.....like FT said must be carried by the buyer until the mortgage is satisfied......all the more reason to have a real estate attorney.

Run, don't walk to a bar approved real estate attorney.  Any top notch real Realtor will refer you to two or three.

Doing I "yourself" is an invitation for disaster.  If not now, down the road.  There are times when you want to save a few dollars, this is not one.

Property that has been in a family for an extended period of time will be the ones with the biggest problems.

Tell the attorney what you both want to accomplish and they will determine the best route for the most safety for you.  The buyer also needs an attorney to review the documents before anyone signs the deed and other closing documents.

Above all, make sure the attorneys for both parties are BAR CERTIFIED REAL ESTATE ATTORNEYS.

They will write Title Insurance for both the buyer and seller protecting you both forever. Don't buy or sell without title insurance.

Thanks Markle....

Mr Ichi wrote:Thanks Markle....

Title insurance is a one time fee and is never paid again although the coverage continues on forever.

With my decades in the profession, I could write volumes on accidental mistakes made in a title alienation and thousands more where it was intentional.  People's ingenuity to cheat others is monumental.