Buyer wants to give existing home to bank - Posted by Scott (ATL)
Posted by Scott (ATL) on September 24, 2003 at 13:47:46:
Okay, this is a first for me. I have a potential buyer for my Rent-To-Own?she would rather do Owner financing and with the right amount down I?ll do it but here is the situation.
I?m trying to rent to own a 280k home for 1,795/mo. If I sell today with owner financing I?ll make the price around 290k with about 9% rate minimum 10% down. She has come into cash from selling her business but has decided to declare bankruptcy and stop paying on her current home and other creditors. Her mortgage is only 2 weeks late as of today and she already talked with her lender about ?giving the home back?. Of course the bank didn?t care. They are 100% financed and the Realtor told them to try and sell it by owner and call her back later. They are planning on declaring BK in November but want to get into my house right away. Then she mentioned which I know nothing about that she can?t have more than 20k into a house otherwise the BK trustee will ?take it??I?m not sure about this?I imagine no matter how much equity they have a BK trustee could determine that 10k in equity is enough to sell the house and give it to the creditors?
I just assume get upfront payment from them and rent the place. After 2 years we can talk about owner financing. This is probably cleaner for their BK too since they won?t have ownership. I could put title into a land trust (in my LLC right now) and then sell on a land contract if they really needed the tax write offs and this should protect it from the BK courts.
In addition I wouldn?t mind picking up their current house. Really too far for me but I could take over their payments however since they are 100% financed maybe I should let the bank sweat it out and go after a short sale especially if they vacate the premises and move into my place.
Any thoughts on how I should structure or go about this?If they can?t buy my house I still may want to buy theirs but with no equity currently short sale is probably the better way to go?
Thanks for the input!