When doing a wholesale deal, who is responsible for paying off the mortgage?
If it's the seller, how can we be assured that that will be done so that the lender does not later come looking to the next owner (our buyer) for the debt? In other words, what document is executed to prevent that from happening?
Ok, There is something you are not understanding here. The person getting the property under contract is generally not the buyer. The person having gotten the property under contract sells his right to buy it to if another investor then that investor buys it cash from the originally seller who should be the owner on the title and deed. This process would be done in an escrow at a title company. The title company assures the mortgage gets paid and the actually buyer gets title to the property. If there is yet another party let us say between the second investor buying the contract from the first wholesale and an end retail buyer then the part you are concerned about is still handled in escrow at the title company so that they mortgage if existing will get paid off by the title company to the mortgage holder if such a mortgage exists. If the house is owner outright by the first and original seller then they are the ones to get paid off.
To clarify and simplify. the wholesaler never buys or owns the property , they only transfer or assign they contractual agreement to buy the property to yet another party usually another investor or cash buyer.
The actual buying of the property takes place in escrow at a title company. If you are the buyer of course you will get title to the property and the mortgage holder gets paid off with everyone getting all the proper, legal, and required documents
Thank you for taking the time to answer my question.
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