Posted by Brent_IL on April 04, 2002 at 01:05:44:
1 - You can’t buy a contract like that. Course sellers have to make the contracts general enough so they can be used in all states. You can readily find lists of pro-buyer clauses. The problem is that many of these are mutually exclusive. That’s why a good RE lawyer is worth high billing rates.
The one I use is the result of many years of legal consultations and countless hours reviewing contract law. It is constantly evolving to better fit my needs and as a result of new case law. It isn’t that the seller’s attorneys don’t object, they go ballistic, but it’s after the fact and the deal is on.
I never give out a copy so someone can use it as a purchase contract. It isn’t that I’m mean or selfish. I buy with an uncommon assortment of terms. When I?m with a seller I build an offer from scratch. I need total flexibility prior to, and after closing. I have a hard time explaining what it is that I’m thinking about doing. At times, I don’t know what I’m going to do with the property until after the contract is signed. By putting everything I might need in the contract all I have to worry about is getting the best deal that is acceptable to the seller. Sellers don’t read the contract. If they did they would need a RE legal background to fully understand the implications. By giving me total control the seller is taking a great risk. I’m assured that I am not actively trying to steal (60% of FMV isn’t stealing) his property and ruin his life, but I have no control over the actions, covert or inadvertently naive, of others. I don’t want to see my contract on Sixty Minutes.
Bottom line; learn enough to write your own and stay with more traditional deals in the interim.
2 - I use a corporate general contractor because I don’t want to be the one filling the Mechanic’s lien. There is probably a way to do the work yourself, but I don’t know a way with which I would be comfortable. That doesn’t mean that there is no way.
Without going into details, in one part the purchase contract the seller(s) give a mortgage on the subject property to secure their performance on the terms of the contract. I give them the right to opt-out of the deal by paying me money. If they pay, I have to take the cash as liquidated damages and release them. If they try to cut me out, they are in default and I foreclose. I’ve had to file for foreclosure a few times, but it never takes too long before they recall their obligation. I haven’t had to take over a property by this route. Not sure if I would want to. Don’t try something like this without thinking it through and getting counsel.