Posted by Nancy Cason on February 13, 2000 at 07:31:40:
When you say agreement for sale are you talking about some type of owner financing? The words agreement for sale by themselves do not indicate financing method.
The decision of which type to use is yours, subject to negotiation of course.
How much money is on the table and how much control do you wish to keep in your hands? Do you intend to sell the note or hold it in house? How easy do you want reposession to be in case of default? These issues and many more determine which type of financing is best for you.
The type of deal(s) you do and your financing expertise and knowledge will determine the financing method.
Posted by JPiper on February 13, 2000 at 10:38:29:
I assume that by ?agreement for sale? you mean ?contract for deed?, ?land contract?, or perhaps ?contract for sale?.
If I were owner financing I would evaluate what method I would need to take the property back with in the event of a default. This is going to depend on your state law. Some states a contract for deed is handled in a simple fashion?..something similar to an eviction?.and therefore is less burdensome than a foreclosure. However, it?s also possible that a contract for deed would need to be foreclosed, and if so, there is no deed of trust to be foreclosed under. Therefore, you would end up foreclosing judicially?.meaning using the court system. This could be quite expensive and time consuming. In many cases this is one of the advantages to being secured by a deed of trust. The AITD is secured with a deed of trust.
So the answer is that it depends?..it depends on your state law and which is easier to get the property back with. For an answer to that in your state, contact a lawyer who is knowledgeable in real estate.
A refinancing technique involving the creation of a new trust deed that includes the balance due on the existing note plus the new funds advanced; also known as a wraparound mortgage.
WRAP-AROUND MORTGAGE
A mortgage that includes the remaining balance on an existing first mortgage plus an additional amount requested by the mortgagor. Full payments on both mortgages are made to the wraparound mortgagee, who then forwards the payments on the first mortgage to the first mortgagee. (Source: FNMA Selling Guide, Glossary)
AGREEMENT FOR SALE
A written document in which the purchaser agrees to buy certain real estate (or personal property) and the seller agrees to sell under stated terms and conditions. Also called a purchase agreement or sales contract.