Posted on: 14th Jul, 2008 09:10 am
hi!
i own about 10 acres of land (no home) and have refinanced for cash out. an investor has approached me and wants to purchase approximately 2 acres of this land. i currently have a loan against the land, but would like to sell a portion to this investor. i do not have the money to pay the loan off in full. can i use a quit claim deed to deed the desired land to the investor or what is the best solution to this issue? thanks in advance for you time!
i own about 10 acres of land (no home) and have refinanced for cash out. an investor has approached me and wants to purchase approximately 2 acres of this land. i currently have a loan against the land, but would like to sell a portion to this investor. i do not have the money to pay the loan off in full. can i use a quit claim deed to deed the desired land to the investor or what is the best solution to this issue? thanks in advance for you time!
jamie, if you sell any portion of that land without notifying your lender, you run the risk of having them call your entire loan. it is a far better idea for you to seek a partial release (which you'll need, anyway, in order to deliver valid title to your buyer) along with a partial payoff for that portion of the land.
as an example, perhaps your lender will require you to pay 20% of your loan off, since you're planning to sell approximately 20% of the total acreage. this ought to be negotiable with the lender, though how much negotiating you'd be able to do will have much to do with how you conduct your overall business (with them and with others).
a quit claim deed is often worth the paper it's printed on and nothing more, and your buyer would be disappointed to learn later on that what the purchase actually entailed was simply a piece of paper.
contact your lender to see what you can arrange.
as an example, perhaps your lender will require you to pay 20% of your loan off, since you're planning to sell approximately 20% of the total acreage. this ought to be negotiable with the lender, though how much negotiating you'd be able to do will have much to do with how you conduct your overall business (with them and with others).
a quit claim deed is often worth the paper it's printed on and nothing more, and your buyer would be disappointed to learn later on that what the purchase actually entailed was simply a piece of paper.
contact your lender to see what you can arrange.
Thanks for your reply. I was going to contact me lender, but wanted to find out what I should be asking for prior to contacting them.
Welcome back Jamie.
Are the investors agree to accept the quitclaim deed? I am asking this because when someone buys a property they likes to use a an Warranty deed or at least a Grant deed. A quitclaim deed doesn't assures that the title is free from liens.
Are the investors agree to accept the quitclaim deed? I am asking this because when someone buys a property they likes to use a an Warranty deed or at least a Grant deed. A quitclaim deed doesn't assures that the title is free from liens.
The investors have not agreed to the quit claim deed. I was wanting to find out my options before talking to them directly. Since I have a loan on the property, I want be able to give them a warranty deed or a grant deed since the title is not free from any liens.....CORRECT?
Hi Jamie.
To use a warranty deed the title should be free and clear. So as George has mentioned, you can make a partial payment so that that part of the property which you want to sell can be free and clear. So talk to the lender or the mortgage company on this issue and let us know about it :)
To use a warranty deed the title should be free and clear. So as George has mentioned, you can make a partial payment so that that part of the property which you want to sell can be free and clear. So talk to the lender or the mortgage company on this issue and let us know about it :)