How do I make an offer using Sub2? Buy/Sale agreement? I need specific steps and line item information. Where are options placed? Id like to have 60 day option for due diligence and finding end buyer.
Wes, Are you looking for a Sub2 contract?
The basic steps are explaining what you are offering to the Seller and getting a verbal agreement.
Then you'd both sign the documents.
The terms are in the agreement.
You can have as many days as you put in your contract. You don't have to use anyone's contract. Get a few and edit the one you like the most.
Any more questions?
Yes @Mark Kemp im looking for an example to read over, see what it looks like. What a LOA looks like and any other doc that would be used.
Email me and I'll send you mine. You might get 2-3 and pick the best parts of each.
Be sure you are honest with the seller and let the seller know you are not the buyer, but you like to tie up their property hoping you can sell it, and if I cannot sell it; I just wasted your time. Show the seller you are honest and legit by giving the seller $1000 not one dollar like the Gurus preach in their books.
The only thing that needs to be there is the line "subject to the existing financing". You should ask your attorney and maybe title company about anything else to put in there. But as others have said, the key is making sure that the seller is fully aware and onboard with what you are doing. And to get them there, you need to build rapport.
Subject to is the trickiest tactic to execute without hithces:
- drop the current insurance, get new, listing the lender and the new owner
- must get a power of autorney so you can talk to the bank and set up autodebit and eventually payoff etc.
- seller must sign an affidavid that they acknowledge the mortgage will stay in their name etc. Talk to your closing autorneys. They might have experience with sub to's and have the doc set. But you need the power of autorney asap to verify payoff.
- pay for quick title search ($50-$100) to look for 2nd liens and other liens. Your sale contract must be contingent on NO liens other than the 1st lien and that the pay off amount is approx what the seller is saying. Folks who do alot of sub-tos, buying notes have their tricks at searching public records themselvs or their favorite cheap but quick search service you run BEFORE closing. Else you cancel closing if there';s problems. Sub to is not a typical sale!
Usually we pick up the contracts and steps from some guru's training. So it IS valuable to get the training IMHO.
great info guys, thanks so much
good stuff guys.
@Mark Kemp would I be able to get a copy of that as well if it's not too much to ask?
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