Lease/Option Help with Closings...Please - Posted by Mike (IN)

Posted by Mike (IN) on August 28, 2001 at 15:16:34:

I called the “Title” company today. They said to have the seller sign a warranty deed as we discussed. But, they said to protect the seller, also sign and record a mortgage for the balance owed to him. This way he is protected!

Mike

Lease/Option Help with Closings…Please - Posted by Mike (IN)

Posted by Mike (IN) on August 28, 2001 at 12:03:00:

I’m lost here. Please help!

I have a home I acquired on a lease/purchase March, 2001. My tenant/buyers are ready to buy.

Problem; The loan officer says that in order for us to close with this lender, I have to show up on title. This means that the person I acquired the home from on a L/O has to Quit-Claim the home to me (and record it)now before we even go to closing. The loan officer said just get him a copy of the recorded quit-claim, etc. The seller does not have a problem doing so (he trusts me a lot!). But, in essence he is trusting that I’ll pay him after I close with my tenant/buyer. Not everyone will be this trusting.

What else can I do?

Re: Lease/Option Help with Closings…Please - Posted by Doug (ON)

Posted by Doug (ON) on August 28, 2001 at 12:20:20:

You can have the seller close directly with your buyer. Just make sure you get paid before releasing your claim (cloud or mortgage/DOT).

The above is also used in cases where title seasoning is an issue.

Doug

Re: Lease/Option Help with Closings…Please - Posted by Kim (FL)

Posted by Kim (FL) on August 28, 2001 at 14:26:45:

I’ve been wondering how this issue is overcome also. What is a “cloud or mortgage/DOT”.

Also, what do you do when the seller is not a willing participant to my profit?

Thank you!!!

Re: Lease/Option Help with Closings…Please - Posted by Mike (IN)

Posted by Mike (IN) on August 28, 2001 at 13:47:47:

Thanks Doug! That sounds like a good option.

Cloud? Mortgage? Huh? - Posted by Doug (ON)

Posted by Doug (ON) on August 28, 2001 at 15:38:13:

A ‘cloud’ is something which is not a lien, but puts the status of the property into question. An example of a cloud is a recorded contract or notice of such (option, land contract etc.)

Mortgage for mortgage states (and Canada) and Deed of Trust (DOT) for Trust Deed states.

Not willing to participate in your profit? They gave you the option didn’t they? If they refuse to sell you can sue for performance if you have a recorded contract, or better yet foreclose on them if you have a recorded performance mortgage.

Doug