Posted on: 11th Feb, 2009 04:33 pm
We are currently in a lease purchase agreement. Because of the market the owner has approached us with putting the house in our name and changing the current agreement to a straight owner finance. What would be the best terms and legal forms needed to protect and transfer our interest in the house?
Under the current agreement a portion of our lease goes torwards the down payment so we have a legal interest in the house via the current agreement.
I am reading warranty deed is the safest bet to insure the our safety in making sure there are no other leins or interest in the house.
IS this the best route? Also, what forms are used ( am in WA state) for a owner finance deal.
Under the current agreement a portion of our lease goes torwards the down payment so we have a legal interest in the house via the current agreement.
I am reading warranty deed is the safest bet to insure the our safety in making sure there are no other leins or interest in the house.
IS this the best route? Also, what forms are used ( am in WA state) for a owner finance deal.
Hi Guest,
You're right. A quitclaim deed can be used to transfer property ownership but it does not guarantee whether the grantor is the actual owner of the property or whether the property is free and clear of any lien. On the other hand, a warranty deed is much safer way of transferring property as it comes with the warranty that there is no lien on the property. It also guarantees that the grantor is the legal owner of the property and if it is found later that someone else has an interest in the property which was not disclosed in the Warranty Deed, the grantee can sue the grantor.
You're right. A quitclaim deed can be used to transfer property ownership but it does not guarantee whether the grantor is the actual owner of the property or whether the property is free and clear of any lien. On the other hand, a warranty deed is much safer way of transferring property as it comes with the warranty that there is no lien on the property. It also guarantees that the grantor is the legal owner of the property and if it is found later that someone else has an interest in the property which was not disclosed in the Warranty Deed, the grantee can sue the grantor.
You need to take title with a full Warranty Deed. Then you give the seller a "Deed of Trust" which gives him title back, in trust, as security for payment of the loan. You must evidence the loan with a Promissory Note, which contains the terms of the loan and repayment. The Deeds should be recorded in the county where the property is located.
This is a great forum. Thank you to both of you for clarifying. Are you personally seeing more of these kinds of deals now? I
Hi Guest,
It's nice to know that you found our suggestions informative and useful.
Yes, these kinds of deeds are quite common now and are used, quite often, to transfer property from one person to another in a hassle-free manner.
Please feel free to ask further queries, if you have any.
It's nice to know that you found our suggestions informative and useful.
Yes, these kinds of deeds are quite common now and are used, quite often, to transfer property from one person to another in a hassle-free manner.
Please feel free to ask further queries, if you have any.
You both actually prompted me to become a real user and I would like to help others as I learn to help myself and my family. What I am finding is written about owner finance deals is a little outdated. An owner finance deal used to prompt for a high interest rate to the buyer. However, I think not having alot of credit and having income might be the better buyer right now for sellers who are in the position to do an owner finance deal.
Some of the interest rates I have seen written in the past seem to mirror predatory lending ideas. IDK any thoughts?
Some of the interest rates I have seen written in the past seem to mirror predatory lending ideas. IDK any thoughts?
Hi jamma,
I'm glad that you decided to become a real user and help others, while learning to help yourself in the process.
The interest rates are negotiable in nature thus, vary to a great extent. Yes, some of the rates do mirror predatory lending ideas which is why it's very important for the borrower to check things in detail before going for such a loan.
I'm glad that you decided to become a real user and help others, while learning to help yourself in the process.
The interest rates are negotiable in nature thus, vary to a great extent. Yes, some of the rates do mirror predatory lending ideas which is why it's very important for the borrower to check things in detail before going for such a loan.
And now here becomes the real issue. The terms need to be re-negotiated. The original price of the house we agreed to doesen't coinicide with real market prices now. So not only do we need to negotiate interest, we need to negotiate a new price and payment. My question is now, do you think that the online sites that estimate what your house is worth very accurate?
Hi jamma,
The online sites that estimate your house's worth cannot always give you an accurate estimation. But if you browse through a few of those sites, you can get a rough idea as to what the house could be worth in current market scenario. As far as the re-negotiation is concerned, if there's no agreement signed between the buyer and seller, the terms can be negotiated again. But if there's already an agreement, I'm afraid, the terms cannot be re-negotiated. In that case you have to convince the seller to re-negotiate.
The online sites that estimate your house's worth cannot always give you an accurate estimation. But if you browse through a few of those sites, you can get a rough idea as to what the house could be worth in current market scenario. As far as the re-negotiation is concerned, if there's no agreement signed between the buyer and seller, the terms can be negotiated again. But if there's already an agreement, I'm afraid, the terms cannot be re-negotiated. In that case you have to convince the seller to re-negotiate.
Good Info. I am looking around the neighborhood seeing what is for sale, and houses with ALOT more sqaure footage are the same price as ours. The seller actually does want out of the agreement and the house won't asess at what would be financable on a good market meltdown day :) So even if the perfect buyer came along..they would have to lower the price either way. It is a very interesting situation. Our issue really is we want the payments lower. I am thinking instead of waiting to see what plan their laywers come up with, is to offer them some cash and lower the purchase price with a decent interest but I am debating to see if maybe they offer something even better and not sure if I should take the ball into my own hands. This market situation is actually a ray of light to me to not have to deal with VA financing (regardless ofthe 8 grande tax credit) and that leads me to he next question, if you do the warranty deed and then the deed of trust like you mentioned above..do you still get a tax credit or does that have to be with reg financing?
Hi Guest,
You can wait to see what offers they come up with because as you've mentioned those offers can be even better. If their offers don't seem to interest you, then you can of course pitch in your own offer. As for your question whether you get a tax credit with owner financing, I think you can. It doesn't necessarily have to be with regular financing.
You can wait to see what offers they come up with because as you've mentioned those offers can be even better. If their offers don't seem to interest you, then you can of course pitch in your own offer. As for your question whether you get a tax credit with owner financing, I think you can. It doesn't necessarily have to be with regular financing.