Mobile Home Sales/Use Tax Question - Posted by Mel in Calif.

import · November 6, 2003, 2:40pm

Posted by Tim on November 11, 2003 at 20:07:26:

with the buyers agreement, pay it and add the fee, plus a convience fee charge plus intrest to the note. (Principal goes up say $800 if you lay out $700) You earn intrest on the fees and you can sell the note if you wish, and get your money right back. If they havent paid, chances are its because they don’t have the $. why else would you not take title to something youve paid towards other then that?

import · November 6, 2003, 2:40pm

Posted by Mel in Calif. on November 06, 2003 at 15:40:08:

Any suggestions on what to do if the buyer doesn’t follow through and pay the Sales/Use Tax on the MH Purchase?

Since it’s a Tax on his purchase of the home, and not the same as the yearly Property Tax/Registration Fees, as Noteholder, I’m not responsible for paying the buyer’s Sales Tax.

But, what happens to the status of the Mobile Home itself and what can I do to protect my investment at this point?

Any thoughts or ideas are most welcome!!!

Thanks,

Mel

import · November 13, 2003, 9:39am

simple Q - Posted by Steve-WA

Posted by Steve-WA on November 13, 2003 at 10:39:59:

Mel, how much are we talking about here? What is the amount of sales tax owed?

import · November 12, 2003, 2:28pm

Much ado about nothing. - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on November 12, 2003 at 15:28:45:

What will you lose if you do nothing. Nothing, I think. It won’t stop you from selling your note and when the note is paid off the buyer will still have to pay the tax himself, won’t he?

Why would he sign a new note with tougher terms? What is his incentive. I woulldn’t sign it would you? In negotiation you don’t give up ANYTHING without getting SOMETHING in return. You may have to figure out what could entice him to do what you want. Maybe a slightly lower payment and add the balance to the end of the note, extending it another 6 months or so might work.

Regards, doc

import · November 8, 2003, 6:06pm

Re: Mobile Home Sales/Use Tax Question - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on November 08, 2003 at 19:06:02:

I don’t think your buyer can register the mobile in his name with you as a lien holder without paying the sales tax. Why not phone DOH and ask them?

Regards, doc

import · November 13, 2003, 11:13am

Simple & Not So Simple - Posted by Mel in Calif.

Posted by Mel in Calif. on November 13, 2003 at 12:13:07:

The simple answer: The Sales Tax is $696.

Not so simple: My goal is to sell the Note, but I wasn’t sure how to go about doing so with the Sales Tax unpaid and registration not updated. I would sell the Note right now if I got a reasonable offer and someone was willing to deal with the tying up the loose ends!

But do you think any Note buyers can or would want to take on this sort of challenge?

Any other thoughts?

Thanks,

Mel in Calif.

import · November 13, 2003, 9:23am

Re: Much ado about nothing. - Posted by Mel In Calif.

Posted by Mel In Calif. on November 13, 2003 at 10:23:24:

My ultimate goal is to sell the Note and I would sell the Note today if I had a reasonable offer, but aren’t most Note Buyers going to want the lien on the title assigned to them and how could I accomplish this if DOH won’t finalize the titling and registration without the sales Tax being paid?

I would imagine the buyer’s motivation might be to avoid the potential for being sued for breach of contract where he might lose the home altogether and/or to avoid being evicted by the MH Park for violating the lease by not keeping the registration current. This would remain an issue as long as the Sales Tax goes unpaid since the DOH won’t complete the titling or registration without it.

This is where I am confused as to what my options are to accomplish my goal of selling the Note.

Thanks again,

Mel

import · November 9, 2003, 10:59am

Re: Mobile Home Sales/Use Tax Question - Posted by Mel

Posted by Mel on November 09, 2003 at 11:59:09:

Hi Doc,

DOH has been contacted both by phone and via email and they say the same thing, that nothing can happen further on the title until the buyer pays the sales Tax, but they don’t seem to be pursuing any action themselves in attempting to collect the tax.

How does a person go about “persuading” the buyer to pay the Sales tax? He keeps saying it’s being taken care of, then doesn’t follow through. The worst part for me is that the buyer knows I’m disabled and on fixed income, yet still ignores his responsibility in completing the titling.

I’ve made calls to the buyer, and he always tells me the same story, and I’m wondering if I should send some sort of an official notice in writing warning the buyer he has 7,10 or? days to pay what is due on the Sales tax to bring the registration current or further action will be taken? Maybe this would light a fire under the buyer and get him to take it seriously.

There is also a provision in the buyer’s lease with the MH park that the registration must be kept current, so I’m wondering if I should perhaps make contact with the Park’s owner or management and see if they could help me, or would that be likely to cause more problems for me? Before selling the home and relocating, I had previously lived in that MH Park for 20+ years, so maybe that would count for something and they might be willing to assist me.

The buyer does get his payments to me on the Note and keeps the Lot Rent current, so the main issue is somehow getting him to follow through and pay the Sales tax so that the title part will be settled.

Let me know if you have any other suggestions.

Thank you,

Mel

import · November 13, 2003, 1:20pm

how much - Posted by Steve-WA

Posted by Steve-WA on November 13, 2003 at 14:20:38:

what is the face value of the note? Have you gotten offers to buy the note? What do you expect someone would want as a discount price?

Bottom line here is:

Is it worth $700 to you to just get the thing sold? Might be, I’m thinking.

import · November 13, 2003, 11:28am

Another option that works great for weak notes… - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on November 13, 2003 at 12:28:34:

…is to trade it for something, like another, better quality mobile home. Then sell it, double your money again and try to write tighter, more marketable notes the next time. Desperate sellers just might take your note for their mobile home, at full face value, rather than face space rent on an empty unit. Haven’t you already experienced first hand that desperate sellers will often take much less than what they wanted for their mobiles? Well then offer your note for another, better mobile home. If you have basically done this once before, you can do it again.

I would also consider trading such weak notes at full face value for downpayments on nice single family houses, especially if they are fixer-uppers, or vacant or have out of state owners.

You might trade it for a used car that you can sell for cash. Then go back and buy two more mobile homes.

Consider trading it at full face value for ANYTHING that you can sell for cash. Traders are much more flexible and wouldn’t likely examine it so closely or compare it with stronger more secure notes. You DID say that it is well seasoned with a good payment recored, didn’t you? Then it IS marketable to SOMEONE.

Be creative. Don’t give up on selling your note at this time. You traded you money for this mobile home originally, didn’t you?

So you ARE a trader. Happy trading.

Regards, doc

import · November 9, 2003, 6:07pm

Re: Mobile Home Sales/Use Tax Question - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on November 09, 2003 at 19:07:05:

Do you have a clause in your contract with him, requiring him to pay when due, all costs, fees, taxes, maintenance, space rent, etc.? You should. If you do, send him a notice of impending reposesion for breach of contract if he doesn’t pay in 10 days or so (whatever may be required by law in your state).

The manager could threaten eviction if not paid as you have suggested. You should give him a nice X-mas present if he does.

You could have collected this tax in advance as you signed the original contract. This would have prevented the problem in the first place, as you already know. I don’t generally let them get a leg up on me like this to begin with.

Why is it so improtant to you that he pay this tax now?

I wouldn’t make waves at this time. If it is a small amount and he is paying both you and the park, I would probbly let it slide until you are paid off. Then what would it matter to you anyway?

Are you listed on the title as the lien holder?

Regards, doc

import · November 14, 2003, 1:25pm

Re: how much - Posted by Mel in Calif.

Posted by Mel in Calif. on November 14, 2003 at 14:25:47:

Hi,

The MH Selling price was $14,500.00 with $1600.00 as the down and the remaining $12,900.00 at 7.5% in 35 monthly payments of $250.00 and a balloon of $6,000+ due at the end (Nov. 2005.)

Once I receive the buyer’s Dec. payment he will have paid $3,000 total to date in monthly payments, plus the down, so he’s already invested almost $5,000.

I got a notice in the mail today from the insurance company that the buyer did renew the insurance for another year, so everything is in order except the Sales Tax/registration/title part.

I haven’t actually tried marketing the Note yet because I wasn’t sure how to do so without tying up the loose ends first. I’m not sure what price someone might be willing to offer on one like this. (Any ideas on dollar amount I might be looking at?)

Unfortunately, it would be difficult for me to pay the $700 in Sales tax myself at this point as I’m on fixed income/disability. (One of the reasons for wanting to sell the Note!).

If I have difficulty selling the Note due to the Tax issue, I could try (as Doc suggested in a later post here) to trade the Note for something of value that I can sell for cash, or as Tim suggested, try to get the buyer to agree to adding the Tax on to the Note or hold a second Note for the Tax at say $100 a month + interest until paid off.

The buyer might go for that idea rather than risk losing the home altogether for being in breach of contract or risk being evicted by continuing to violate the lease with the MH Park for not Paying the Taxes to keep registration current.

There’s a lot to consider here, and would seem to be a lot of ways I could go with this, so at least I feel more hopeful of resolving it in some way. I appreciate the help I’ve received here in the forum.

Thanks,

Mel in Calif.

import · November 13, 2003, 12:35pm

Not a Bad Idea… - Posted by Mel In Calif.

Posted by Mel In Calif. on November 13, 2003 at 13:35:27:

The trade idea could have possibilities since one of the reasons I wanted to sell the note is to purchase some property of my own in the same general area where I’ve relocated (I’m outside of 29 Palms, Calif…not exactly the “high rent” district!!!).

How would I go about transferring the Note to someone else in a trade arrangement? What type of documents would I use for something like that?

As far as the actual trading part goes, do I just approach someone who’s selling a property I’m interested in and say “I have a Note on a MH worth X amount of dollars to trade towards the property” or is it something I would advertise myself in a local paper?

Thanks,

Mel

import · November 10, 2003, 7:39pm

Re: Mobile Home Sales/Use Tax Question - Posted by Mel in Calif.

Posted by Mel in Calif. on November 10, 2003 at 20:39:24:

The contract says that the buyer is responsible for space rent & keeping registration current and providing adequate insurance on the home. DOH says they won’t update the registration and title until the Sales tax is paid by the buyer (it is around $700). So, I guess, technically, I am still the owner rather than the Lienholder at this point.

DOH suggested if the home has not been paid in full, that I can begin legal action if I wish. It is a bit more complicated than just voiding out the sale.

I had wanted to try to sell the Note, is part of why I need to settle it.

Let me know if you have any other words of wisdom…

Thanks,

Mel

import · November 13, 2003, 2:01pm

Re: Not a Bad Idea… - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on November 13, 2003 at 15:01:01:

I wouldn’t use the paper. Find your own deals, the regular way and offer your note, when ever you sense a desperate seller. 20 people will say no, then one will say yes. The trick is to make that 21st offer.

I would add up all of the payments and say I have a note that is worth (?) x dollars (total dollars, including interest), payable at yy per month for zz months, to trade for ____whatever junk you have. When you do this you are adding in, yet unearned, future interest to make the dollar total of you note sound much higher.

You can get an assignment of TD form free from title companies and just endorse the note over to your new buyer by writing (on the back) a simple statement of assignment and signing it. It might say “This note assigned to Joe Schmoe, on 11/15/03 signed by Mr. Mel Whatareliefitis.”

Regards, doc

import · November 10, 2003, 8:13pm

I have a thought but it isn’t wisdom. - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on November 10, 2003 at 21:13:00:

If you have sold the mobile home by contract it isn’t yours any longer regardless what DOH says. Check with a lawyer if you don’t believe me.

I understand your problem now. Its just a decision that you will have to make for yourself. How long has this buyer been paying and how much downpayment did you get?

Regards, doc

import · November 17, 2003, 9:49am

Trade vs. Sale Value Of Note - Posted by Mel in Calif.

Posted by Mel in Calif. on November 17, 2003 at 10:49:53:

Doc,

The current face value of the note (with interest) is a little over $12,000. So basically, I would be looking to trade for something of equal value?

If the Note was offered for sale rather than trade, is it best to set an asking price and then take offers or let the potential Note buyers make the offer going by the face value and details of the Note? What might likely be offered on a Note worth $12,000 with good payment history and only problem being the sales/use tax issue?

One encouraging note to add: the buyer did renew the insurance for another year…something else I entrusted him to do. Unfortunately, I hadn’t found this forum until after I made the deal so I guess I can chalk this up to a learning experience and I’ll be better prepared for the next time around…

Thanks,

Mel in Calif

import · November 10, 2003, 9:57pm

Re: I have a thought but it isn’t wisdom. - Posted by Mel in Calif.

Posted by Mel in Calif. on November 10, 2003 at 22:57:38:

What I was meaning to say is that on the registration records themselves I would still be showing up as Registered Owner rather than Lienholder, since the transfer hasn’t been completed. I understand I wouldn’t have any actual right of ownership right now without going through legal channels regarding the breach of contract issue.

The buyer paid $1600.00 down and has been making the monthly payments for a year and has been keeping up on the space rent. I never imagined the sales tax would become an issue and didn’t discover the problem with the taxes and registration until I contacted DOH to find out why I hadn’t received the title document with me as Lienholder and that’s when I was told the transfer wasn’t complete because the buyer never paid the sales tax .

I immediately contacted the buyer to find out what happened and got a lot of excuses and promises that it was being taken care of and it’s been dragging on ever since. This is one of those “learn the hard way” scenarios.

Since the buyer’s reliability is at issue here, wouldn’t the Note essentially be worthless as far as any sort of sales potential? This is where I have the dilemma. Do I hang in there in hopes that the tax issue gets cleared up and try to be content in the meantime having the monthly payment coming in or do I go ahead and pursue the breach and regain ownership of the home and attempt to resell on a cash deal of some sort?

Thanks for your input,

Mel

import · December 14, 2003, 6:07pm

Re: Trade vs. Sale Value Of Note - Posted by nick metzger

Posted by nick metzger on December 14, 2003 at 19:07:48:

I have a mobile home approx. value $12.000.00
Like to trade with similar in florida.Located in Vallejo California.

import · December 14, 2003, 6:05pm

Re: Trade vs. Sale Value Of Note - Posted by nick metzger

Posted by nick metzger on December 14, 2003 at 19:05:53:

I have a mobile home approx. value $12.000.00
Like to trade with similar in florida.