Re: What clause in contract assures me FSBO makes his pymt? - Posted by Tom (GA)
Posted by Tom (GA) on May 25, 2000 at 13:17:00:
All your documents (deeds, contracts, etc) should be placed in escrow with a third party. You could then use a clause similar to this:
In the event of any default in payment of any mortgage on the above described property; on in failure to pay taxes when due; or to keep the property fully insured against loss by fire, windstorm, flood, or natural disaster in an amount of no less that fair market value until the time of transfer; or in the event of any impairment to the title, by liens or encumbrances, or by any physical deterioration, normal wear and tear excluded which reduces the value of the Optionee?s interest; title to the premises shall pass immediately to the Optionee or his assigns, without further compensation to the Optionor.
Of course this will not give you notice if the seller defaults, that is easy enough to check by getting the info and calling the mortgage co., but it does give you a specific remedy and a club to hold over the seller’s head. It also may be cheaper than having to foreclose on the seller via a performance option.
(FYI: I am not an attorney, but this clause was reviewed by one.)