What docs do I need? - Posted by Carlos

Real Estate Investing
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Posted by Carlos on February 09, 2001 at 11:35:55:

I just wanted to thank you for the info Jim. Your post is very helpful in helping me understand the process from start to finish… thanks again…

Carlos

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What docs do I need? - Posted by Carlos

Posted by Carlos on February 02, 2001 at 03:14:58:

What paperwork do I need to make the deal happen in either scenario?

Scenario 1 (Subject to) using Land Trust:

  1. Standard pro buyer Purchase Agreement?
  2. Trust Agreement?
  3. Warranty DEED from seller to trust?
  4. Assignment of Beneficial Interest?
  5. Authorization to Release info?
  6. Due on Sale disclosure?
  7. A letter to change Ins. to Landlord policy
    naming Trust as additional Insured.

Scenario 2 (Land Contract)

  1. Standard Pro Buyer Purchase Agreement?
  2. Actual Land Contract?
  3. Escrow Agreement?
  4. Due on Sale Disclosure?
  5. Warranty Deed for seller to sign to put into escrow?

I have some courses, but I’m still sort of fuzzy on what docs to use… I’m trying to understand the process and the documents needed to complete the transaction. From the time I get a motivated buyer on the line till the time we close.

Thanks in advance,
Carlos… (On my way to the top!!!)

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Re: What docs do I need? - Posted by JohnBoy

Posted by JohnBoy on February 04, 2001 at 03:15:23:

On the Land Contract part, when YOU are the seller you also want to have your buyer sign over a “quit claim deed” to be held in escrow. That way if the buyer defaults you can record the quit claim deed releasing all of your buyers interest in the property and then just file for eviction vs. judicial foreclosure proceedings. (check with your state laws on how contract for deeds are handled in the event of default since laws vary in different states on this)

When your the buyer buying on Land Contract don’t mention it unless the seller knows to do this and requiries it also.

You could also offer to sign a quit claim deed to a seller that may have doubts about selling subject to in order to offer them some protection to get the property back should you default on their loan. Just make sure that either you hang on to it (which would be a dumb thing for the seller to let you do) or at least have it held in escrow with written instructions on how it’s to be handled in the event you were to default.

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My $0.02 … - Posted by Rick Wheat

Posted by Rick Wheat on February 02, 2001 at 06:13:56:

I have been using the Limited Power of Attorney covering all matters concerning the property for the last year or so. I use it primarily to cover all insurance and escrow matters, but it really comes in handy. Otherwise, Jim’s list is very complete.

GOOD LUCK!!!

Rick Wheat
rick@rwcproperties.com

p.s. - MAKE SURE your CYA letter is very specific concerning the mortgage remaining in the seller’s name. Failure to do so, regardless of what they tell you at the time the documents are signed, will result in a full blown case of amnesia in the future, when any questions regarding the transaction arise. ASK ME HOW I KNOW THIS!!!

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Re: What docs do I need? - Posted by Jim IL

Posted by Jim IL on February 02, 2001 at 04:41:49:

Carlos,
When buying “subject to”, using a land trust to cover the DOS issue you will need the following:

  1. Purchase and sale agreement stating you are buying subject to.
  2. Warranty deed to trustee
  3. Trust agreement
  4. Assignment of beneficial interest in trust
  5. CYA letter, which the seller signs acknowledging the terms of the sale.
  6. Letter to the insurance agent advising them to change the insured.
  7. An authorization to release loan info.
  8. OPTIONAL, some do, some don’t…a Limited Power of attorney which enables you to handle the insurance proceeds IF there is a claim.

** and optionally, in other words, “up to you”, you can send a letter to the lender IF you want to telling them the home has been placed into a trust and that all future correspondence, mailngs, bills, payments stubs, statements are to be sent to the trustee at the trustee’s address. But frankly, I do NOT do this, and only fill out the “Change of address” on the statement or payment stub, sending all future correspondence and billings to the trustee’s address. This seems to work for me and does not confuse the lender.***

And it is late, so hopefully I did not miss anything, but you may want to buy a course (Legrand and Bronchick both have courses for sale here which will get the job done.), so make sure this is done right.

And that’s all I can think of off the top of my tired head at this late hour.

HTH,
Jim IL

P.S. When/IF you get a motivated seller on the line and are ready to get this done, feel free to e-mail me off the board and I’ll do what I can to help you.

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Re: My $0.02 … - Posted by Carlos

Posted by Carlos on February 09, 2001 at 11:37:27:

Thanks Rick… You people are wonderful…

Carlos

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Welcome back, Rick - Posted by Fred

Posted by Fred on February 02, 2001 at 18:01:53:

Glad to see you back. I heard about your troubles. Hope everything is OK. Are you still working with SDI?