Posted by Tom – IN on July 28, 2001 at 08:56:09:
You have answered your own question. Do the lease option. But why not do it for a year or renewable for three, but under not so favorable terms. Have him sign and have notarized the contract for deed, but don’t you sign it until the total down payment is made. You could just as easily sign it in Florida and mail it to him.
HELP! Closing a deal & Protection - Posted by Joe
Posted by Joe on July 28, 2001 at 04:53:30:
Hi Everyone,
I need your help.
We recently put our home up for sale and after lots of callers and several lookers have a potential buyer. The details on the deal are:
Purch Price: $115,900
Down Payment 10%: $11,590
Land Contract on balance at 10% interest
I have a buyer that is going on disability retirement from an Ohio government job. His wife is currently employed with the state as well. His income will be secure and consistent and she has several years with the state so the income should remain secure in the future. They do have some credit blips (divorce, bankruptcy) on their report which still has to be pulled. However, they assure me that they don’t have foreclosures, evictions or late pays with rent.
The first concern is that they currently have $5,000 of the downpayment. They have two major lump sums (related to his disability) coming in and want a 90 day note to secure the $6590 remaining down payment. Where I want to cover myself is in the event they don’t follow through with the downpayment but have already assumed occupancy of the home.
We are selling on a Land Contract. However, I don’t want to do any of the Land Contract paperwork until I have the down payment in full.
They are coming by today to sign the purchase and sale agreement and drop off the $5k. Acceptance of the contract is dependent upon acceptable credit (my concerns are primarily with foreclosure, eviction, etc.).
My thoughts on this are to NOT complete the deal with a Land Contract until the full down payment is received. I could do a very short term Lease Option (90 -120 day) with the $5,000 they now have and then do the land contract once the remaining money is received. I don’t want this to be a long term lease as we are moving to Florida in a few weeks and don’t want the landlord hassles on a property 1300 miles away.
Bottomline question is" HOW DO I PROTECT MYSELF IN THIS DEAL?
Thanks in advance for all your feedback.
Joe
PS: I acknowledge that another option is to not sell and wait for a better buyer who has the down payment. The house has only been on the market for one week and have had several intereted parties. As you are well aware, lots of people are interested, most don’t have the downpayment. The price and deal we are offering is very fair (at FMV and no goodwill money added to the price for owner financing), almost to the point that the price could have been 3-5k higher and the interest could have been a point higher.