Yes, that’s write, you get an option. If they are willing you can set up an option contract or a purchase contract that says you will close in a year. You record a memorandum on your contract and your position is somewhat secured. In order to determine what kind of loan you can get in what time period you need to be talking to a good mortgage broker. You could also buy on owner financing and have them sell some payments to receive cash. If you think you can, or you think you can’t, you’re right.
I have located a piece of water-edge property on
which I would eventually like to construct a home.
What are some of he particulars to check before
proceeding (e.g., water access, utilities, ?, ?) ?
Finally, I will not be in a financial position
to proceed until late 1999. Is there a “proper”
way to put the land on “layaway”. so to speak? It
is currently listed through a realtor.
have another buyer buy it for you, getting all the right kinds of things in the contract, e.g. subordination when and if… and then find a way to buy it from your buyer when your ship comes in. you would like to have the right to step in when you want to…
Seller Financing - Subordination - Posted by John Behle
Posted by John Behle on November 28, 1998 at 11:37:40:
What is commonly used is seller financing that ties up the property for now and makes life easier when you build.
Negotiate whatever downpayment and terms are acceptable to the seller. When you go to build, structure terms that allow for a subordination of all or part of the seller financing to a second position behind a contruction loan.
Builders and developers commonly subordinate 50% or more of the note. This means you pay them some cash out of the contruction financing, but not all of it. That way you have plenty of funds for the build job and then pay them off when you replace the interim financing with the new takeout financing (new first loan when the build is complete).
A title company or escrow company can help you stucture a deal. Avoid an attorney unless they specialize in real estate. They can be costly in fees and in their lack of experience in an area. Title companies are the pros in areas where they are used. In some states back east attornies handle most of the closings.
Mr. Behle, thank you for taking the time to
respond.
I did however, have one more question regarding the
initial land deal. As mentioned, I am currently
recovering from a substantial debt - with break
even due near the end of 1999. Until then, I
cannot obtain a loan and would not be the most
attractive catch with regard to seller financing.
I do, however, want this land and I’m afraid if I
do not tie it up in some fashion it will be long
gone come 2000.
Would it be best to just sit down with the
seller/realtor, explain the situation and possibly
offer some earnest monies to “hold” the deal for a
year, at which time my financial footing should be
much more secure? - - Or do I have any other
options?