How To Create Contracts for Lease-To-Own (Illinois)?

Question

Hi,

I've recently been learning a lot on how to lease-to-own or flip a property to a tenant buyer but I haven't found any information on how or where I can find/create the correct contracts for the seller or buyer.  Is there a generic form I can use?  Will I need to get an attorney involved?

Also,  assuming I do get the property under contract, where can I find a Title Agent that can handle all the escrows and closings?

Thanks,

Rob

Bill Gulley · Answer

Title companies are insurance agencies basically, providing title insurance. These agencies are often owned by attorneys, but an agent does not need to be an attorney. If a title company is owned by a non-attorney agent, they will have some relationship with a local attorney to cover the bases of the business.

An escrow closing is usually done by an insured closing agent or an attorney. Lenders may also close thier own loan transactions involving sales and usually have an insured closing letter, a gurantee by a title insurance company to cover any errors or ommisssions in such closings. I use to close my own loans and obtained title coverage.

An escrow is simply money held in trust, Real Estate Brokers may have escrow accounts and may close transactions but that is rare today due to compliance issues, liability assumed and the fact that the services are affordable.

Attorneys may also close transactions and they will also have escrow accounts to hold money in trust to facilitate a closing. Title insurance will generally be afforded for an attorney closing as they are also insured and bonded as attorneys and meet such requirements.

You should look to an attorney or title insurance company in your area to provide closing services for you. You could have a situation where an attorney is willing to close a transaction yet a title insurance company will not insure the closing but will provide title insurance. In such a case, it is the attorney's professional coverage that may cover the attorney services. This is probably rare now but could be arranged if allowed under state law.

So, as an investor, you should have choices, however, when you sell and the buyer obtains a loan, that lender may require how, where and when such loan is to be closed.

Talk to TI folks and RE attorneys in your area to see what best fits your needs.

Rob Van Riet · Answer

Is the Title Agent and RE Attorney separate entities or can one do both the sales contracts and escrows?

Bill Gulley · Answer

Hi Rob, I see you posted about 30 minutes ago and no answer.

All Real Estate, like politices (LOL) is local.

It doesn't matter what strategy you want to get into, before you begin you really need to talk to a local RE attorney. IMO, you should never use a contract from some other area (state) or any site without running it past a local attorney.

As to title folks, they are in the phone book, you need to talk to these folks and see what they will do, ask, they will be a good source of information for local requirements. Not all are investor friendly, so shop around and don't take the word of one closing agent as gospil. If you hei a dead end on any issue run it by the attorney as he or she may convince the closing agent that all will be well in some cases. Good luck