Posted by John Corey on March 11, 2006 at 02:14:17:
General comment. Toughen up a bit as the seller’s pain is not really your problem. The monkey is on the seller’s back and you are not stepping into their shoes. There are limits to what you can and will do. Just because the seller would like to get a bit more does not mean you have to step up. You are taking a lot of risks (repairs, resale, holding costs). You need to be rewarded for such risks.
What the seller wants and what they get are not the same thing. In 2 weeks he gets a foreclosure on his credit report, no cash and a visit from the sheriff. He needs to get real about the options. Maybe you pay him something beyond saving his credit or maybe you his ‘reward’ is relief from the nightmare without the full foreclosure.
You can agree a higher sale price. How do you expect to close the gap? One possibility is he takes a note at zero interest to be paid off if and when you sell or refinance. Hence you do not need to supply any cash and he gets to wait until you have made a profit. You can even set the terms so that if you do not make a profit he gets nothing. For all you really know you will have extra repairs to make and then find it hard to sell so the profits are not there.
Make sure you completely understand you are not ‘assuming’ his mortgage. He still owes the money. You are taking title to the asset securing the mortgage. You are not in any way taking on the legal liability for the mortgage directly. All you have is a promise to him that you will make payments on the mortgage. Hence your agreement is with the seller and not with the lender. Do not use the word ‘assume’ as it means something completely different legally.