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Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 33803
Experience:  15 years real estate, Realtor. Landlord 26 years
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I. Buying a condo the seller is carrying the paper for five

Customer Question

I. Buying a condo the seller is carrying the paper for five years then I make a balloon payment at the end of the 5 year and the tile transfers to me but hes retaining the tile ? How do I protect my sell
Submitted: 2 months ago.
Category: Real Estate Law
Expert:  Barrister replied 2 months ago.

Hello and welcome! My name is ***** ***** I am a licensed attorney whowill try my very best to help with your situation or get you to someone whocan. There may be a slight delay in myresponses as I research statutes or ordinances and type out an answer or reply,but rest assured, I am working on your question.

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Is your contract in writing with the seller?

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Are you saying that you are getting ready to enter this contract or you already have done so?

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Is this a "land contract" where the seller keeps the property in his name, you make the payments for 5 years, and then once you make the balloon payment to pay it off, they then transfer the property title to you?

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What is your concern about the transaction?

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thanks

Barrister

Customer: replied 2 months ago.
the contract is writing I haven't signed .
Im giving he 20.000 down payment
Yes it a land contract for a condo .
What if someone put a lean on the property ? Can he borrow against the property .what if he dies and have to deal with his family dosent want to give the tile How is the tile protected for me
Expert:  Barrister replied 2 months ago.

What if someone put a lean on the property ?

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You would want to have a title search done on the property to determine if there are any liens or outstanding loans on the property. That doesn't necessarily make this a bad deal if there are, because the seller only has to provide clear title once you pay off the property. But it can be troublesome if he owes as much as he is selling for, and then doesn't make his payments on the property and just takes your money.

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Can he borrow against the property .

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If it is in his name, then yes. If not, then no. So assuming that the property is in his name, that is another concern.

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what if he dies and have to deal with his family dosent want to give the tile How is the tile protected for me.

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With the written contract, his estate would still have to honor it and transfer the property to you once you had paid for it as the estate would still be liable for the contract.

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I personally don't like land contracts because there are several big problems... Since the property stays in the seller's name, if he gets sued, they can file a lien on the property.... he can borrow on it without you knowing about it.... he could stop making his payments and just keep your money, disappear, and then let the bank foreclose.. And since the property is not in your name, you can't borrow on it or improve your credit by making payments as you would with a normal bank.

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So if it were me, I would rather have a normal seller financed mortgage where the property is put in your name just like a normal sale, the seller acts as the bank, and you just make your payments to them like a bank and then refinance through a normal lender at the end of the 5 years to pay it off...

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I really don't like land contracts as there are just too many things that can and do go wrong.

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thanks

Barrister

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