Posted by RonE on August 29, 2003 at 12:17:45:
Redline,
Thanks that helps. I think sometimes when trying to explain we tend to give too much information and confuse the seller. Of course the more motivated they are the less they analyse, but we want to be sure that they are completely comfortable before moving forward so there are no horror stories later (or at least a lesser chance of them)
Thanks again
How to explain - Posted by Ron E
Posted by Ron E on August 29, 2003 at 10:24:57:
Hello
I was discussing Sub2 with someone and they did not understand how I can have the deed to their house but the mortgage still be in their name. They wanted me how to explain exactly how that would work.
It was difficult to come up with an explaination that was not confusing to the average seller.
Can anyone here help.
Thanks
Ron
How I explain - Posted by gerald(tx)
Posted by gerald(tx) on August 29, 2003 at 13:43:48:
I simply say, “I will buy your house, but rather than putting a new loan on it, I will arrange to take over your existing payments.”
Seller asks, “can you do that?”
I very confidently answer, “Don’t worry, I know exactly how to take care of it.”
Over 90% of the time, the issue is dropped at that point. No further questions, I just show up at closing and have them sign the documents.
Re: How to explain - Posted by Redline
Posted by Redline on August 29, 2003 at 11:03:31:
I find the “mortgage still in your name” to be a sticky subject often times. I have talked to many people who haven’t paid their mortgages (or anything else) in 11-12 months but will tell you “Oh no! We couldn’t let the mortgage stay in our name … what if you dont pay?”. Makes you wanna laugh right in their faces.
Anyway I am taking one subject to TODAY actually, and while they weren’t thrilled the mortgage would stay in their name I convinced them that since I was bringing it current and paying them cash as well - I had a pretty serious equity interest and that it was now in BOTH our interests that I get the home resold. That would mean I get paid, and their mortgages go bye bye.
I also explained that when I brought their loans current and paid them off that would reflect on their credit so that was a positive for them.
I find that the people who “want” a solution will usually have a problem with staying on the mortgage. People who are smart enough to realize they NEED a solution will work with you. Unfortunately many that should need only want.
RL
Re: How I explain - Posted by RonE
Posted by RonE on August 29, 2003 at 16:51:47:
Yeah…
I know this works “most” of the time. But there are some people that analyse tooo much. An “I know exactly how to take care of it” was not enough! This was NOT one of those 90% times. My attitude is usually when they analyse toooo much I let it go!
Ron E
And THAT is why I was asking!
Thanks for the response.
RonE
Re: How to explain - Posted by RichV(FL)
Posted by RichV(FL) on August 30, 2003 at 08:30:17:
Redline,
Congrats. You seen to be doing well with sub2’s.
All I keep running into are the thick headed ones that are 8 months behind in payments and would rather “stick it to the mortgage company” than have me bring their payments current and continue to pay on the mortgage for a short time period until I am ready to sell or refi.
I just dont understand some of these people. I guess they are waiting for the white knight to come and save them.
Regards,
RichV(FL)
Re: How to explain - Posted by RonE
Posted by RonE on August 29, 2003 at 11:30:03:
Thank you for that input Redline, I am not sure it answered my question though. They get that the mortgage will stay in their name and that we will be responsible for the payments etc. They just don’t understand how we will have the deed in our name if the mortgage is still in their name. I hope I am explaining it correctly.
Re: How to explain - Posted by RonE
Posted by RonE on August 29, 2003 at 11:29:59:
Thank you for that input Redline, I am not sure it answered my question though. They get that the mortgage will stay in their name and that we will be responsible for the payments etc. They just don’t understand how we will have the deed in our name if the mortgage is still in their name. I hope I am explaining it correctly.
Re: How to explain - Posted by Redline
Posted by Redline on August 30, 2003 at 16:00:26:
Rich,
I like the concept of Sub2 because I can control the property, solve their problem and tie up alot less money doing it. Of course, just as in any deal, there are risks involved and you better have cash reserves.
And yes, most sellers you’ll meet no mattter how screwed up their situation is … won’t like the idea of you owning the home with the loan still in their name. But … some of them will take it when they have no other option!
Like LeGrand says … “SW SW SW” (Some will, Some won’t, So What!)
RL
Re: How to explain - Posted by Redline
Posted by Redline on August 29, 2003 at 11:45:51:
Well that part is simple. I just explain that I am purchasing their house but it will still remain as collateral to the bank. The documents they signed when they bought it, pledging it as such, still remain. It’s just ME who will send the checks every month not THEM. I also explain this was done all the time until (when was it??) 1978 when the banks decided they didn’t want “assumable” mortgages anymore because they were losing money.
The HOUSE and the MORTGAGE are two seperate entities. I am puchasing ONE and NOT acquiring the other.
RL
Re: How to explain - Posted by RichV(FL)
Posted by RichV(FL) on August 31, 2003 at 06:16:30:
Redline,
I love the concept of sub2’s myself. I agree 100% about having a reserve fund just in case the bank calls the loan.
My only problem is finding a sellers willing to strike a deal.
The motivated sellers are out there, its just a bit more difficult these days to find them. I need to keep hunting.
Thanks for the response.
Great Success,
RichV(FL)