lead based paint and agreements for deed - Posted by chan lipscomb

Real Estate Investing
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Posted by chan lipscomb on March 23, 2001 at 17:20:47:

thanks for the input, mike. i had not considered the idea of switching it at some point. a good idea, but in this case, i think i would still prefer to take back the mortgage. my insurance specifically excludes lead paint liability, and i would not want a claim to arise during the period of time when the paper was AFD (in other words, while i held title).

thanks

chan

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lead based paint and agreements for deed - Posted by chan lipscomb

Posted by chan lipscomb on March 23, 2001 at 11:33:37:

i am preparing to sell an old frame house and carry back paper that i will resell. i usually sell on an agreement for deed, but will this lower the marketablility of the note, since the buyer would be taking title to a property with a potential lead based paint exposure? would i be better off using a note and mortgage?

thanks

chan

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AFD, CFD, are OK - Posted by Michael Morrongiello

Posted by Michael Morrongiello on March 23, 2001 at 17:10:56:

Chan:
You can sell your property using a land contract, contract for deed, Agreement for deed, etc. and that “paper” is STILL very much marketable as long as it is properly drafted.

I’ve seen many of these instruments that lack a proper default clause, provide for acceleration remedies, or have a taxes and insurance clause in them…

If you are going to sell a contract for deed, as a paper purchaser we would take title to the property “subject to” the contract for deed so therefore there “may” be some concerns over the lead paint issues and the potential liability.

In this instance it probably does make more sense to carry back a mortgage & prommissory note so its clear that you are a creditor and would be selling your creditors interest (the mortgage & note) against the property.

OR, to have the best of both worlds, depending on your ability to “age” or season the loan for a period of time, why not sell intitally on an Contract or Agreement for deed and include a provision in the contract with the debtors so that the contract can be converted into a mortgage and note in the future at your (as the sellers) option, where they agree to cooperate.

To your success,
Michael Morrongiello