Real Estate Law

Have real estate law questions? Ask a real estate lawyer.

Ask a Lawyer,
Get an Answer ASAP!

A real estate purchase was financed in full by seller (owner…

Customer Question
A real estate purchase was...
A real estate purchase was financed in full by seller (owner financing). There is also a promissory which was issued by buyer saying that the buyer will be paid in full in lump sum at the end of 3 years. There was also a non-recourse mortgage issued using the house as a collateral for the promissory note. If the buyer defaults on the house. Can the buyer just amicably give the house back to the prior owner without any foreclosure proceedings being initiated by the prior owner. If yes, what is mechanism for giving the house back.
Submitted: 11 months ago.Category: Real Estate Law
Show More
Show Less
Ask Your Own Real Estate Law Question
Answered in 5 minutes by:
8/17/2017
Real Estate Lawyer: Legal Eagle, Lawyer replied 11 months ago
Legal Eagle
Legal Eagle, Lawyer
Category: Real Estate Law
Satisfied Customers: 13,467
Experience: Licensed to practice before state and federal court
Verified

Hello! I am a licensed attorney, admitted to practice in state and federal court. I have a nearly 100% satisfaction rating so all that means is that you can count on me to help today. Fortunately, because this was privately financed, it makes it a bit easier. The answer to your question is yes, the buyer can amicably give back the house to the prior owner without any foreclosure proceedings being initiated by the owner. This is is normally called a “cash for keys,” situation where in lieu of a foreclosure, you return the the property back to the seller. The buyer may have to consider the forgiveness of this debt on their income tax return for 2017, but they can certainly return the property. The final thing would be signing a quit claim deed back over to the seller from the buyer.

Also, although I provided an initial answer, it’s important that you are 100% satisfied. If you feel I have done so, please rate me 5 stars and let me know if you have any follow up questions. As a side note, you can also click here in the future to request me individually.

Ask Your Own Real Estate Law Question
Customer reply replied 11 months ago
But in this situArion there is probably no forgivness. The buyer returns the house back to the owner and the owner releases the seller from paying the promissory note. There is no gain on anybody part -- right?
Real Estate Lawyer: Legal Eagle, Lawyer replied 11 months ago
Well, there would be gain would be on the buyers party from having the loan forgiven. I represent debtors and they are issued a 1099 for every dollar that is forgiven and they have to report that as taxable income at the end of the year. Otherwise, that's it. Did you have any other questions?
Ask Your Own Real Estate Law Question
Real Estate Lawyer: Legal Eagle, Lawyer replied 11 months ago

Hello, it’s been awhile since we connected so I wanted to check in with you to see if you had any further questions or if there is anything else I can assist you with today. Please reply here and let me know. Thank you.

Ask Your Own Real Estate Law Question
Customer reply replied 11 months ago
if I never return the house back and defaulted on paying my promissory note then there is a forgivness of the note. But if i returned the house back which is the same price as the note -- where is the forgiveness?
Real Estate Lawyer: Legal Eagle, Lawyer replied 11 months ago

Well, if you default, then there is no forgiveness. The home goes through foreclosure and you would still be responsible. If you give the house back and the seller agrees not to begin foreclosure proceedings, then there is forgiveness.

Ask Your Own Real Estate Law Question
Customer reply replied 11 months ago
You and I had several question-answer -- and I gave you 5 star rating. On this one --- I would like to get someone else opnion -- as to me it does not make sense. As regardless of the above two scenarios -- I do not seem to have any gain..
Real Estate Lawyer: Legal Eagle, Lawyer replied 11 months ago

Not a problem. I'l go ahead and opt out. Please be sure to not rate because the moderators will close the question altogether. Thanks so much!

Ask Your Own Real Estate Law Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a real estate lawyerLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Legal Eagle Your Own Question
Legal Eagle
Legal Eagle
Legal Eagle, Lawyer
Category: Real Estate Law
Satisfied Customers: 13,467
13,467 Satisfied Customers
Experience: Licensed to practice before state and federal court

Legal Eagle is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Barrister

Barrister

Lawyer

12,142 satisfied customers

17 years real estate, Realtor. Landlord 26 years

Infolawyer

Infolawyer

Lawyer

8,377 satisfied customers

Experienced lawyer

Ray

Ray

Lawyer

8,253 satisfied customers

Texas Attorney for 30 years dealing in real estate

LawTalk

LawTalk

Attorney

6,208 satisfied customers

I have 30 years legal experience. Additionally, in CA I held a Real Estate Broker's license.

Dimitry Esquire

Dimitry Esquire

Attorney

5,526 satisfied customers

JA Mentor, multiple jurisdictions, specialize in business/contract disputes, estate creation & admin

Ely

Ely

Counselor at Law

4,998 satisfied customers

Qualified attorney in private practice including business, family, criminal, and real estate issues.

P. Simmons

P. Simmons

Lawyer

3,572 satisfied customers

12+ yrs. of experience including real estate law.

< Previous | Next >

Related Real Estate Law Questions
I seller financed a mortgage in Nevada in 2013. The buyer
Thank you. I seller financed a mortgage in Nevada in 2013. The buyer has defaulted and I want to get the house back. What is the process? … read more
Barrister
Barrister
Lawyer
Doctoral Degree
12,142 satisfied customers
I am located in the state of wa. I have a person interested
I am located in the state of wa. I have a person interested in buying 5.88 acres of property that I have for sale. I would like to finance it my self but not sure of the process. I have read that one … read more
Christopher B, Esq
Christopher B, Esq
Attorney
Juris Doctor
1,886 satisfied customers
My property in Georgia is offered with Owner Financing.
My property in Georgia is offered for sale with Owner Financing. When the transfer is complete, the seller signs a warranty deed and the buyer signs a security deed with intent to pay the balance to t… read more
Christopher B, Esq
Christopher B, Esq
Attorney
Juris Doctor
1,886 satisfied customers
In the state of Pennsylvania, if a seller owner - finances s
In the state of Pennsylvania, if a seller owner - finances his home what is the better method forhim to use: purchase money mortgage or contract for deed?… read more
KLAW
KLAW
Juris Doctorate
2,273 satisfied customers
I want to sell my land in Arizona with seller financing.
I want to sell my land in Arizona with seller financing. What is the best way to go about this? What documents do I need to complete? How do I protect myself from the buyer defaulting? Can I do this a… read more
Barrister
Barrister
Lawyer
Doctoral Degree
12,142 satisfied customers
The contract on the wraparound mortgage I have on my
The contract on the wraparound mortgage I have on my property expired on 9/1/14 and the buyers have yet to close. They want me to give them another month but I'd like to remove them altogether from my… read more
Law Pro
Law Pro
Doctoral Degree
19,000 satisfied customers
I need to write a mortgage document in this seller financing
I need to write a mortgage document in this seller financing real estate sale. Hello, In this property selling, the seller decides to sell the property through seller financing. As a result, the selle… read more
Ray
Ray
Lawyer
Doctoral Degree
8,253 satisfied customers
In real estate is there a limit to how many promissory notes
In real estate is there a limit to how many promissory notes can issue on properties to make sure you are not facing "securities" issues? If I continue to purchase rental properties can I continue to … read more
Barrister
Barrister
Lawyer
Doctoral Degree
12,142 satisfied customers
Re: Hawaii Real Estate law I have been asked to consider
Re: Hawaii Real Estate law I have been asked to consider offering Seller financing on an (improved) vacant residential lot I am selling on Kauai (I live on the mainland East coast). My broker sees a l… read more
Ely
Ely
Counselor at Law
Juris Doctor
4,998 satisfied customers
I am owner of a condo which I am trying to sell and I was approached
I am owner of a condo which I am trying to sell and I was approached by some people with an "offer" they want to take owe my condo (they already sent me some contract) and they want to send me money f… read more
Dimitry Esquire
Dimitry Esquire
Attorney
Doctoral Degree
5,526 satisfied customers
We are considering buying a house that has been foreclosed
We are considering buying a house that has been foreclosed via a non-judical sale (a bank who was NOT the original mortgage holder on the first mortgage bought the loan). How should I assess the risk … read more
Roger
Roger
Litigation Attorney
Doctoral Degree
26,935 satisfied customers
I have a interesting situation and wish to get another opinion.
I have a interesting situation and wish to get another opinion. We are selling our business and have looked at the Land Sale Contract because that is how we acquired the business to start and it seems… read more
J.Hazelbaker
J.Hazelbaker
Doctoral Degree
4,367 satisfied customers
Im in Michigan, my mortgage promissory note is in my ex-husbands
I'm in Michigan, my mortgage promissory note is in my ex-husbands name and is being foreclosed on. I owned the property and original house solely prior to a fire in 2006 at which time financing was ob… read more
Infolawyer
Infolawyer
Lawyer
Doctoral Degree
8,377 satisfied customers
Hi, I want to buy a property going on sheriffs sale. Ive
Hi, I want to buy a property going on sheriff's sale. I've done title search and found an interesting situation... The property is being foreclosed by a private mtg.company that issued a note on the h… read more
JD
JD
Doctoral Degree
1,328 satisfied customers
is there such a law that states that when a buyer for a owner
is there such a law that states that when a buyer for a owner take back pays off 20 percent of the mortage the deed should be signed over to the buyer without a loan being put in place.… read more
Attorney_Lodge
Attorney_Lodge
Doctoral Degree
18 satisfied customers
how can I sell my real estate to someone and finance
how can I sell my real estate to someone and finance it. I want to protect myself, what forms do I need to have and what has to be notorized. Can they have the deed or title (mobile home) and I can pu… read more
RealPropertyLawyer
RealPropertyLawyer
Doctoral Degree
we sold a home in wisconsin on land contract and the buyers
we sold a home in wisconsin on land contract and the buyers are in default on the payments. It doesn't look like they will ever get caught up. What do we need to do to get the house back. thanks, Sue… read more
FlaRealEstateLawyer
FlaRealEstateLawyer
Partner
Post-Doctoral Degree
40 satisfied customers
i have a home for sale and have a buyer interested. I would
i have a home for sale and have a buyer interested. I would like to hold the mortgage what steps do I take at this time,buyer has down payment and agreed with idea.… read more
Real Estate Expert
Real Estate Expert
Juris Doctor
1,970 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x