Your best and strongest legal position is to get the deed (use the land trust method described in my “due on sale” article). If he is not willing to do this, a recorded land contract is second best, with your payment to him mirroring his underlying loan terms. Definitely use a third party escrow company for servicing payments, or you may them directly to the lender.
FYI, my upcoming Vegas seminar goes trough this in detail - click on the banner above.
I have located a fsbo property to buy as personal residence. Seller has owned home for approx. 1 year and has maybe $2000.00 equity. My thought is to pay him his eqity and do a wrap-around owner finance type deal for term of two years untill I re-locate to another area, and sell. FYI: I am not able to qualify for a loan at this time. The home is slightly under priced. My idea would be to just assume his loan, and make the same payment to him, that he is making now for P.I.T.I.
Questions:
A) If this deal is negotiated this way does he just sign deed to me as new owner?
B) If a due on sale clause exists, how can I work around that?
C) Would I be wise to just make payments direct to him or to an escrow?
D) Anything in particular to be aware of or be cautious of?
Any advice or input gratefully appreciated.
Thanks, Josh.