Subject to Financing _ Tittle Company or Attorney?

Question

So, I found a house that was placed for sell on MLS, then it was taken down by the seller a few weeks after. The house didn’t sell. I knocked on seller’s door and asked if he was interested in selling and he says yes. The seller is just not interested in selling through a real estate agent and wants to do something more on a person-to-person deal.

After talking to him he’s open in either “option to buy” or “subject to financing” – I’m exited as this would be a great deal since the seller is willing to give me a 3% interest basically to take over the mortgage payments and 5 years to pay out the equity $400K.

Now, I have never done anything besides the regular real-estate agent / Bank / Tittle company and close the transaction.

Is there a path I have to take?

Any recommendation on going through an attorney or Tittle company instead? Any recommendations are welcome

Any specific contract I should be using (I’m in California)? (I need to seal the deal…)

Does the deed need to be changed to my name? worried about the deed being called by the bank...

Thanks…

Mark Pedroza · Answer

@Shannon Wright can assist. She might be busy..no she's not an attorney but she is a reliable title rep...

Good luck!!

Edgar Ruelas · Answer

Great! thank you Mark...

David M. · Answer

@Edgar Ruelas

Have the seller double check the listing agreement --- usually its just literally the 2nd page... If you didn't physically go view the property, then you are probably good with not having to worry about the prior listing agent.

You'll want to get a good attorney involved to makes sure the deal is structured properly, since you don't have experience in this. I haven't done these, but a subj-to isn't really that hard. You just close on the property with the existing lien in place. Make sure to get Power of Attorney over his mortgage so that you can call the servicer/bank. Otherwise, if you call regarding his mortgage (for whatever questions you have, or when its time to refi, whatever) they won't talk to you. Whatever repayment deal you make, its generally a good practice to put everything in writing. But, honestly, it seems like its really the seller's risk, not you...

Yes, in a subj-to deal you take Title to the property. Having the Due on Sale clause called in is pretty rare. That's why subj-to deals "work" all the time. It would be nice if you have a backup plan to refi if you had to... Also, they would call in the Note/loan, not the "deed." If you couldn't pay back the remaining principal, they would eventually try to foreclose and then take "Title" back.

Hope this helps. I'd be happy to chat if you'd like, just send me a message. Good luck.

Sergey A. Petrov · Answer

They are all different but, generally speaking, I believe your description of it accurate. In this case, @Edgar Ruelas already said he saw it on MLS so it definitely applies. If I were the one who listed it and the seller then took it off the market and sold it two days later, I’d make a claim regardless. There is just no way for it to be a random coincidence

Doug P. · Answer

Doesn't that normally only apply if the agent was the procuring cause? For example if @Edgar Ruelas viewed the property while it was listed or called the agent for info or made an offer that fell through etc.

Edgar Ruelas · Answer

Thanks!

Edgar Ruelas · Answer

I agree with your comment - Thanks.

Eliott Elias · Answer

Get with a attorney owned title company whos'e seen these kind of transactions. You don't want to tread this alone

Sergey A. Petrov · Answer

Either a title company or an attorney can help you put the deal together. But…ask the seller to see the agreement they signed with the listing agent when it was on MLS. The chances are it says the seller will still owe commission even if sold after it goes off MLS for a period of time (6 months to a year is common)

Subject to Financing _ Tittle Company or Attorney?

Subject to Financing _ Tittle Company or Attorney?

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