Contract section question...
I have a question about a section in my purchase and sales agreetment I plan on using.
It reads the following...
EXISTING MORTGAGE (s): Existing financing on subject property will be current in all payments of principal, interest, late charges and escrow amounts required by the mortgagee. Escrow balance has been calculated into the price and will transfer to the Buyer along with the title. Buyer will take title subject to his debt.
Does this mean that if the seller has a mortgage, the selling price is to cover, at the very minimum, the payoff value of the house (including principal, interest, late charges), plus any "escrow" amounts the seller wants?
Or does it mean that before close, the seller has to be current on all payments of the house including principal, interest, and late charges? Because if thats what means, then...isnt it impossible then to sell a house that you are in (pre)foreclosure on because being in (pre)foreclosure basically means you are behind on payments and the reason you are selling it is to avoid actually taking the hit of the house being taken away.
I dont know, maybe I'm just an idiot, but the wording of that section just came off weird to me.