Posted by JA - MIA on June 07, 2002 at 13:53:52:
Many, many thanx!!
Sub2 vs. Contract for Deed - Posted by JA - MIA
Posted by JA - MIA on June 07, 2002 at 11:49:10:
You pros may not like this, but here’s the question…
In the event the seller is hard in NOT giving up the deed on a Sub2, can I offer him a Contract for Deed? I can occupy the property, make payments on the loan (if need be), while I seek a buyer. Once my buyer is on the my contract, i can perform a double closing satisfying both parties.
OK… let’s hear it… good or not… and WHY (please).
-joe
Re: Sub2 vs. Contract for Deed - Posted by Stacy (AZ)
Posted by Stacy (AZ) on June 07, 2002 at 11:56:16:
I buy using land contracts. I’d prefer to get the deed, but not every seller will go for it. In my opinion there’s too much emphasis on only “getting the deed”. I’d miss out on many deals if that’s all I was willing to do. Sometimes when you have a hammer in your hand, everything looks like a nail. Just know that your position is not as strong by buying on land contract, and manage your risks accordingly. Know what you’re doing, and know your state’s laws regarding land cointracts.
Re: Sub2 vs. Contract for Deed - Posted by JA - MIA
Posted by JA - MIA on June 07, 2002 at 13:05:10:
stacy,
thanx for your prompt reply.
are you referring to “land contract” as i’m referring to “contract for deed”?
if so, you’re agreeing that this is better than losing the deal altogether?
in a contract for deed, i make the payments on the existing mortgage, as in Sub2. correct?
since i do not have the deed in hand, is another option to assign the contract for deed,
if i get no one to flip it to? in such case, i would just get an assignment fee.
preferably, i’d first seek to flip the property…second, to assign the contract if needed.
is it feasible for me to deal in this manner?
again, if i get no bites, i’m in this contract monthly until i get the property flipped or contract assgined.
that would be the risk. correct?
is L/O to a potential T/B an option for me if i got the seller to agree to a contract for deed?
thanx for answering.
-joe
Re: Sub2 vs. Contract for Deed - Posted by Stacy (AZ)
Posted by Stacy (AZ) on June 07, 2002 at 13:36:10:
>>are you referring to “land contract” as i’m referring to “contract for deed”?
Yes. This instrument is called different things in different states. Here in AZ it’s called an “Agreement for Sale”. In other states it’s called a Bond for Deed, Land Contract, Installment Land Contract, Contract for Deed, and other names, but it’s the same thing.
>>if so, you’re agreeing that this is better than losing the deal altogether?
It depends on the numbers and the risk. There are some deals I won’t touch unless I get the deed.
>>in a contract for deed, i make the payments on the existing mortgage, as in Sub2. correct?
Correct.
>>since i do not have the deed in hand, is another option to assign the contract for deed,
if i get no one to flip it to? in such case, i would just get an assignment fee.
preferably, i’d first seek to flip the property…second, to assign the contract if needed.
is it feasible for me to deal in this manner?
I don’t assign my CFDs, I sell the houses on L/O. I’m not sure of the risks involved in assigning a CFD, so I’ll defer to someone who knows. At the very least, you’d still be in the middle and liable for performance on the CFD, unless you get a release of liability signed by the seller. How likely is it the seller would allow another buyer to step into your shoes?
I would recommend assigning the Purchase and Sales agreement rather than the CFD, if that’s what you want to do. Even then, you still need a release signed by the seller. But, maybe someone who assigns CFDs will post an answer and enlighten both of us.
>>again, if i get no bites, i’m in this contract monthly until i get the property flipped or contract assgined.
that would be the risk. correct?
Yes, that’s the main risk. Make sure you can make the payments. Another risk is that the lender could call the loan due and payable (unless it’s a VA loan), since equitable title was transferred to you. You need to be able to handle it if this comes up.
>>is L/O to a potential T/B an option for me if i got the seller to agree to a contract for deed?
Yes, this is what I do, and I prefer it.
Good luck!