Good deal but lien on property

4 Replies

I found this amazing deal on 3bds and 2ba w/garage for $53,700 but the seller has a home equity loan on it for $18k. The house needs some TLC but the ARV is around $120k. I personally know the seller and she desperately wants to get rid of the property. I was about to put it under contract today and that's when she told me about the loan. Does anyone have suggestions on how we can make the deal work? I thought about paying off the $18k out of the $53,700 for the purchase of the property then pay her the difference. But I want to be sure that I protect my interest in case she defaults. Any suggestions? Thanks!

@Evans Murray A buyer doesn’t “pay off a seller’s mtg and then pay them the difference”.  You sign a contract for the purchase price, and at closing the closing attorney/title company collects the purchase price from the buyer, pays off the debts on the property from that money, and gives the seller the balance that is left over.

Yes, I've been a  licensed agent for about a year and a half but I never dealt with a  scenario like this before. I thought the lien had to be paid for first but I didn't realize that the title company would take care of this out of the seller proceeds. This makes perfect sense! Also, this is my first investment property and I really appreciate  your response. Thanks!