I'm new and need help?!?
I'm wondering, and I apologize for my unfamiliarity with this, but are there closing costs in a subject to deal where you take over an owner's payments on thier mortgage? And where can I find a free real estate contract for doing a subject-to deal?
@John Baker Yes, there are closing costs in a subject-to ("Sub2") deal. Better said: There ought to be closing costs. Why? Because, closing costs imply a formal closing with a closing attorney. While you don't necessarily have to close formally, you always want to, if you can help it. You'll want title insurance. You'll want a HUD-1 settlement statement to prove that an actual sale took place. You'll want an attorney presiding over the transaction.
That said, I strongly urge you to seek training before proceeding. Sub2 is not well suited to "learning as you go." Find a local investor who has done several successful Sub2 transactions and get some advice and counsel. Start with your local REIA. Or, a good closing attorney who does these types of closings can probably point you in the right direction.
Trust me: Any "free real estate contract" you find will be barely worth what you paid for it!
Yes, there are closing costs that you should plan for. You will want to do a Title search and other due diligence. I couldn't find any free contracts, but I did find this other forum helpful if you want to create a contract:
I would also have an attorney look at it, if you plan on doing several it would be worth the cost.
Hey, thanks guys for responding. How much does it typically cost? I know that usually it's 2-5% of the selling price, but there's no selling price with a subject-to, so would you say it would cost around $300-$500? Thanks again.