Seller Financing Question

[Mika Jones]

An owner of a property that I am interested in is willing to seller finance a property that has 2 lots. One lot has a 1/1 home and studio apartment on it. The second lot is cleared, vacant and has its own tax bill.  After agreeing to the terms, am I allowed to sell that vacant lot to help with renovation costs on the home that is on the other lot or can I not sell it until I have paid the balloon payment? Is this something I need to have added to the aggreement?

Thanks in advance!

[Account Closed]

Quote from @Mika Jones:

An owner of a property that I am interested in is willing to seller finance a property that has 2 lots. One lot has a 1/1 home and studio apartment on it. The second lot is cleared, vacant and has its own tax bill.  After agreeing to the terms, am I allowed to sell that vacant lot to help with renovation costs on the home that is on the other lot or can I not sell it until I have paid the balloon payment? Is this something I need to have added to the aggreement?

Thanks in advance!

Your seller becomes your lender. Usually when lending against two properties, if you sell one, you have to use that money toward paying off the lender. 

But ultimately, it's whatever you and the seller both agree to and I'd have that clause in the agreement if that is your intention.

[Account Closed]

Quote from @Mika Jones:

An owner of a property that I am interested in is willing to seller finance a property that has 2 lots. One lot has a 1/1 home and studio apartment on it. The second lot is cleared, vacant and has its own tax bill.  After agreeing to the terms, am I allowed to sell that vacant lot to help with renovation costs on the home that is on the other lot or can I not sell it until I have paid the balloon payment? Is this something I need to have added to the aggreement?

Thanks in advance!

Your seller becomes your lender. Usually when lending against two properties, if you sell one, you have to use that money toward paying off the lender. 

But ultimately, it's whatever you and the seller both agree to and I'd have that clause in the agreement if that is your intention.

[Chris Seveney]

@Mika Jones

You will not be able to get clear title if you have a mortgage that encompasses both lots and you go to sell one.

[Andrew Syrios]

The issue would be what the seller's loan is secured against. If it's not secured or only secured against the lot with a house and studio on it, then yes. If it's attached to both and you sold the vacant lot, you would need to either payoff the loan or get the seller to release the lot from the loan without a payoff. I would ask that the seller only attach the loan to the lot with the house/studio.