Re: Should I use a Land Trust here? - Posted by JPiper
Posted by JPiper on November 26, 2000 at 14:18:47:
One way you could do this would be to take title subject to the existing loan. You’d probably want to do this in a trust. If you’re asking how to do this then you probably need a course.
The next problem though is that when the seller remains in the house you open yourself up to other issues. For example, what if the property is damaged during this tenancy? What if there are delays in the construction of this new house? What if the seller’s financing falls through? What if the seller doesn’t pay?
Each of these risks is something that you need to think about (and this list of risks is not intended to be all-inclusive).
Better to have a clean deal. They sell the house to you, you rent the house to them complete with a lease, damage deposit, etc. YOU make the payments on the loan…they don’t. And THEY pay rent…an amount that would compensate you for having bought the house.
Where you don’t want to be with this deal is in a deal that is somehow contingent on the uncertainly of the seller’s side of the deal. You taking the risk of ownership on the one hand, without the privileges of said ownership.
If the rent is higher than the mortgage payment then they should pay a higher rent. Careful recording of the existing condition of the house should be made so that there are no disputes later. I would do this both in writing and by video tape.
Who else will they sell this house to while retaining possession for another year? And at what price? You need to think this deal through.