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Dimitry Esquire
Dimitry Esquire, Attorney
Category: Real Estate Law
Satisfied Customers: 41221
Experience:  JA Mentor, multiple jurisdictions, specialize in business/contract disputes, estate creation & admin
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I have land free and clear. Buyer wants to put 50% down &

Customer Question

Hi I have land for sale free and clear. Buyer wants to put 50% down & remaining 50% for me to carry to be payable in 1 year. They plan on getting a construction loan. If they default on the construction loan or on what they owe me. What are my risks? Would I be in first position or would the construction loan be first in case of foreclosure?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Dimitry Esquire replied 1 year ago.

Thank you for your question. Please permit me to assist you with your concerns.

The biggest risk is the risk of collection. But you can minimize that risk by placing into the agreement a statement and clause that your title to property will only be released at the end of full repayment, and if they default at any time, you are permitted to keep their payments as 'liquidated damages' and keep the property. Therefore you wouldn't be in first position or in any position, you would still own the property until they finally pay everything off. Otherwise the construction loan would be in first position if you end up self-financing this to them.

Sincerely,

Dimitry, Esq.

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