Posted by Egny on July 04, 2002 at 15:58:46:
N/T
Please help with CFD - Posted by Egny
Posted by Egny on July 04, 2002 at 13:06:24:
Hello,
Would some one tell me what kind of forms to use when buying on land contract.
Thanks before hand
egny
P.s would some one be kind and Email me those forms
Re: Please help with CFD - Posted by JohnBoy
Posted by JohnBoy on July 04, 2002 at 14:23:09:
Follow what Anne said. Every state has different laws, especially pertaining to land contracts. So you don’t just want any forms that someone can e-mail to you! You NEED an attorney to look over everything to ensure anything you use conforms with the laws in your state!
If you are the buyer the basic forms you will want will be:
The land contract (which MUST conform to your state laws)
A deed to the property signed over by the seller to be held in escrow to with written instructions to the escrow company to ensure delivery of the deed from the seller.
The written instructions for the escrow company.
A performance mortgage signed by the seller to be recorded to protect your interest in the property in case the seller does anything to cause any liens to end up recorded against the property. Any liens that get recorded behind your performance mortgage will allow you to wipe them out if you had to foreclose on the property to protect your interest if the seller could not pay off the liens. The performance mortgage is what allows you to foreclose if you had to if the seller breached his end on the contract.
If the seller has a mortgage you want everything set up where your payments go towards paying the mortgage payments first and if anything is left over after covering any mortgage payments, taxes and insurance, then that goes directly to the seller. NEVER send all the money to the seller trusting the seller to make his mortgage payments. So either YOU send the seller’s mortgage payments directly to the lender OR set up a third party escrow to handle it. Then you would mail your payments to escrow, escrow would mail the seller’s mortgage payments to his lender, escrow would escrow any taxes and insurance unless that is included with the seller’s mortgage payments where the seller’s lender is already escrowing taxes and insurance. Then escrow will mail anything left over to the seller after covering the mortgage payment, taxes and insurance.
When you go to pay off the contract escrow will then release the deed signed by the seller over to you without you having to worry about hunting the seller down later and getting them to sign over a deed at that time.
You may need to sign over a quit claim deed to the seller that will also need to be held in escrow so the seller is protected in the event you default on your end of the contract. Then if you default escrow would release the quit claim deed to the seller where the seller can record the quit claim deed which would release all your interest in the property where the seller can then file for eviction to have you removed from the property. But this also depends on the laws in your state as to whether this can be done this way or not. Some states require a seller to foreclose on a land contract.
This is why you need to use a qualified attorney for all this. If you don’t do something right or if you don’t use proper contracts and forms, then you can have bigger problems to deal with later if things go bad!
So get an attorney for this!
Re: Please help with CFD - Posted by Anne_ND
Posted by Anne_ND on July 04, 2002 at 13:37:30:
Egny,
I suggest you find out your state’s laws on the subject of buying and selling on CfD. I started with Bronchick’s course (Cash Cow), read the materials thoroughly, and then went to my attorney armed with a list of things I wanted the contract to say to help me as the buyer.
My attorney urged me to use the standard contract for the state, as it was already skewed to the buyer, and if there were problems down the road, the judge would look more kindly on the state form. We went over my list point by point to make sure that all of Bronchick’s suggestions for buyers were included, and they were.
Bronchick’s forms are available at legalwiz.com. Do find out what your state statutes are that govern land contracts (esp if you’re in Texas, from what I hear), and get a standard form to check it out.
good luck,
Anne