Cape Coral, FL · Member since 2008 · 469 posts · 32 votes
how do you protect your investment in a property someone else owns?
how do you keep liens/encumbrances off the title?
If the seller already has a mortgage in place, one that could foreclose on the property, would you insist on taking the "deed subject to"?
how do you know the seller is using your payments to pay the T&I?
when flippinga/assigning a land contract, how typical and easy or not is it? is it standard or something to be emphasized at some point as an option before signing anything? I'm thinking from a seller's pov that my trust is being transferred to a stranger. isn't that something a seller should think twice about or should the deal have been structured so that the actual entity/person you're selling to makes little/no difference?
A land contract and purchase money mortgage is when the seller carries the loan for the buyer and becomes the bank. If the property has existing financing in place from lender to seller, then the seller is not in a position to offer the buyer a mortgage because there is an existing lien in place and title cannot be transferred. Could you do a land contract subject 2 existing financing? Yes, if that's what you're wanting to do, but you will not get title on the property until the existing loan and any additional loan you've encumbered is paid off. A purchase money mortgage will transfer title immediately and the seller will carry the note back, but this isn't possible if there is an open lien on the property. Make sense?
first off, you're not buying with a land contract if the seller has an existing mortgage on the property. You'd be buying Sub2. In my experience, if you are going to go down that route, your best bet is to insist on making the payments directly to the lender yourself. I know @Brian Gibbons could help you out in this arena.
A land contract and purchase money mortgage is when the seller carries the loan for the buyer and becomes the bank. If the property has existing financing in place from lender to seller, then the seller is not in a position to offer the buyer a mortgage because there is an existing lien in place and title cannot be transferred. Could you do a land contract subject 2 existing financing? Yes, if that's what you're wanting to do, but you will not get title on the property until the existing loan and any additional loan you've encumbered is paid off. A purchase money mortgage will transfer title immediately and the seller will carry the note back, but this isn't possible if there is an open lien on the property. Make sense?
A "warranty deed" is what's in place to protect your "equitable" interest in a clean title for property? What does that mean ultimately? Legally no one could put anything on top of my interest?
A warranty deed is what is conveyed from one party to another and technically "warrants" that the new owner has a clean title, free and clear of any clouds. I'm not an attorney and my advise shouldn't be construed as legal advice, but your interest can always have someone in a higher position. Bank liens and tax liens always come in higher position than your interest.
Under what circumstances would you insist on the deed with a purchase money mortgage? Is the land contract always the preferred instrument for the seller?