Posted by JohnBoy on January 25, 2005 at 08:37:29:
Why couldn’t you just do a title search to see if there are any liens that exist against them? If there are currently no liens against them then taking a quit claim deed should be OK.
I would think recording a DILF would show up on their credit in the future since a lot of this info is gathered from public records.
What if you were to just agree to buy it from them for the balance owed on the lot? Since you are the one they owe the balance to it would be a wash and you would get a general warranty deed.
The main thing you would want to do is to talk with your accountant to make sure whatever you do won’t have any tax liability involved with doing it that way. Then figure out the best way to handle based on that.
I do have this posted on the RE discussion; I apologize for not having put it here first. I did listen to the tape and from the sounds of it I possibly should use a Special Warranty Deed or Quit-claim deed, but I’m still sure because of the nature of my transaction. I did forget to mention that I’m in Texas. Here is my post:
I own a mobile home SUBDIVISION (we sell and owner finance lots) and I have a situation where the buyer wants to hand back the land to us because they are buying a house. Normally I would use a Special Warranty Deed in the form of a deed-in-lieu of foreclosure (DILF) if someone had defaulted on payments, but this couple was outstanding with their payments. I have asked a couple of people including the attorney who prepared our original contracts and have received a few different responses. I have heard that it would be ok to use the same DILF and as long as I didn’t report it beyond recording at the county clerk’s it would be an acceptable solution for all involved (this was actually from a paralegal at the attorney’s office). This doesn’t seem right to me.
I don’t think I want to do an assumption since I don’t want to assume it back; I just want it back after all obligation has been released. I have been told not to use a quit-claim deed because I would be responsible if there were any liens placed against the people/property. Do I use a different kind of Special Warranty Deed, General Warranty Deed, etc.?
Final note: I am the lender in this situation so I am the one who would release the buyer of his obligation to the mortgage.