| Question:
How do I protect myself after going under
contract with a Seller? I have a situation
where the Seller doesn't want to honor our
deal. I brought his loan current with the
bank, but he's dragging his feet on selling!!!
Answer: Good question.
First of all, please know that we would
NEVER recommend bringing a note current
and making his back payments on his mortgage
(depending on the amount), without first
getting a Warranty Deed to the property.
Beyond that, the best
way to protect yourself if youre going to
put money out before the closing is to get
a fully executed Security Deed on the property
for that amount of money (assuming theres
enough equity in the deal so you are truly
protected).
Further, the best way
to protect yourself against an unscrupulous
Seller who may renege on the sale of the
property is to file an AFFIDAVIT AND MEMORANDUM
OF AGREEMENT FOR PURCHASE AND SALE. You
can legally file (we strongly recommend
that you pay for a Rush Recording at the
courthouse) this Memorandum once you have
a properly executed Sales Agreement with
the Owner. Of course, file it in the Real
Estate Records for the County where the
property is located. The document tells
the world that you have an equitable interest
in the property. It acts as a cloud on the
title so anyone conducting a title search
for a closing would have to contact you
prior to clearing the title. It may be weeks
or months before you hear something, but
you can then negotiate for some appropriate
compensation from the Seller/Owner.
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