Posted by Kristine-CA on September 25, 2003 at 22:20:12:
Dear Ron Starr: as always, thank you for your reply. Please know that if I ever attend law school that you will be the first person I will invite to my graduation.
While I take your suggestion about taking real estate agent classes to heart and think that may be of some value to me, I think you may be over-estimating what is taught in those classes. I have several smart friends who have taken the classes and passed the exam. And to be honest, they know…hmmmm, how should I say this…they have very little practical knowledge about real estate, mortgages or how to run a business. Just today I got another email from a friend who took the classes a few months back, looking for property owner info. I doubt she could answer a question about priority of obligations. I don’t know what she learned in those classes. Mostly likely she learned how to pass the exam. If you were teaching the classes, I would pay top dollar.
So, how much are you asking for that 9-volume set?
Not to worry, I would never carry back 50% of anything. I was trying to figure out the position of a seller that foreclosed a couple of years ago. He had carried 50% and, as it turned out, he was in second position. He then satisfied the first and paid all the other debts against the property. And then agreed to sell to me for my asking price, which was less than he is into the property for. I have to admit that I find notes/paper very, very interesting and am always drawn to study up on the details of notes even on deals that don’t call for it.
I’ve determined that IF I ever attend law school, I’d like to specialize in elder law. Any suggetions for my future alma mater?
Posted by Kristine-CA on September 24, 2003 at 22:58:01:
Greetings all. I have a question about the order of trust deeds. When a seller agrees to carry back a portion of the price and the buyer is using lender funds for the remaining funds, how it is determined who will be in first position? If both loans are recorded on the same day, who is first? Do the lenders make a stipulation regarding their position?
This is one of those things I never thought of before. But if I were carrying back 50% or more of the purchase price, I’d want to be in first position.
Is there a customary or typical way position is determined? Thanks for any thoughts or ideas.
I still think you should take the community college courses which people take who are going to try the state real estate sales license.
Miller and Starr have a good discussion of priority of obligations on properties. I’ve got an extra copy I’ll sell cheap–9 volumes. Even if you don’t go to law school you can read a law book.
Institutional lenders will insist on being recorded as a first lien, unless they have agreed to do a second loan.
The deed of trust that is recorded first is technically the first, even if it is only one document ahead of the other. That is why the documents have a number stamped on them. To show which was recorded ahead of which… However, should it ever get before a judge the intentions of the parties may control. Thus, if the large institutional loan is recorded behing the small seller carry-back loan, the hold might still get a judge to allow it to be treated as a first loan, as that was the intention when it was recorded.
I’d suggest you not be carrying back more than 50% of the purchase price.