I wanted to ask some of the subject to vets here how would you structure this deal.
I have a home I'm about to buy, the owner is going to let me catch up on the rears of the mortgage which is about 12k then I'm going to pay 2 months advance mortgage payments while i rehab the property. I'm going to give the homeowner 30k for the house.
MORTGAGE PAYMENTS 12K REARS 2K ADVANCE PAYMENTS
30K TO THE HOMEOWNER
While I have control over the home I going to rehab the property then I will resell it.
So I'm thinking of setting it up like this your thoughts here are my options
1) Should I Do a Quit Clam Deed ?
2) Because its a probate property have the seller create a trust with me as the trustee, then i Buy the beneficial interest by purchasing it from the seller for 30k
HOW WOULD YOU SET THIS UP ?
KEEP IN MIND I'M DONG THIS BECAUSE I DON'T WANT TO PAY 2 CLOSING COST MEANING WHEN I BUY IT AND WHEN I SELL IT.
I think it sounds like you know just enough to get yourself in lots of trouble. I'm not familiar with MD laws, so I better let the locals chime in about specifics. But your plan sounds like a sure way not to get marketable clear title.
Quit claim is bad idea. In California I would want a grant deed. Not sure what equivalent is for you.
If the property is probate, who is going to put it into a trust? Do you have any details on if private has been opened? What are the powers? Who is the PR?
I really don't like the idea of saving a few dollars and not paying a title company to make sure you get proper payoff and clear title.
Updated over 6 years ago
Darn auto correct. It should have said "probate" instead of "private"
Don't give any money till you have the deed. Is this an assumable loan? The bank will call the loan if not. Need to do a tile search to make sure there aren't other encumbrances against the property. Call The Buck Law Firm. They specialize in sub2 deals . They may be available in your area. Also the judge on a probate has to approve the sale contract I think in Maryland.
@Ocie Gibson Your query suggests that you are pretty confused.
If you're going to buy the property, then buy the property and get marketable on the front end. If your deal is so skinny that you can't afford closing costs, that's a problem too.
You are not clear if property is currently in probate or was prior.
Get a grant deed and title insurance w/ a binder policy now so you'll be ready for resale. Otherwise, who wants to buy from a rebabber seller who only want to sell beneficial interest?
As for sub-2, be careful that lender does not apply future payment to principal reduction, if that's not your intention. I usually just tender separate cashier's checks with specific payment instructions because loan servicers hire payment processors with limited skills, low pay and few powers of discretion.
Here is how I am doing a similar (FHA) foreclosure/probate. I gave the heir $1000 up front, and in return, he assigned his (future) beneficial interest to me; I become the PR and set up a restricted account to receive payment as soon as the property sells, which will still be within the 4-month advertising period. The lender gets paid off at closing to the retail buyer; I get my profit, and the heir gets his balance due, later, after the probate closes. My total up-front out-of-pocket expense, under $5000, and no double closing. In your case, charge the probate costs to the heir, unless you have it built into your profit.
I'm not going to take the property in Quit Claim deed but a Warranty Deed in a land trust.
Probate is set up and we are in the process of getting court order to sell the property.
@Dave Metsker I like your idea because I'm also giving one of the heirs 2k to help with relocating and moving out of the property.
So the trust will be setup, the ownership of the property will not change but making me the trustee, and the heirs will be the beneficiary's. The beneficiary rights will be brought from the heirs for the total of their profit.
Are there any contracts here that would illustrate a subject two agreement?