sel with take over payments on the house turned sour

Subscriber Phillip: Alex, I had health issue and sold my house to an investor subject too! The investor couldn’t make the payment and fail to notify me.

The house was sold to another investor and went into forclosure. I think subjedt to deals leave the seller in a terrible fix if the investor/buyer fails to make the payments. It my goal to have a law made againt this.

Alex:

Phillip,

I hate to disagree, but I will in this case.

Most homeowners take “subject-to” route because they can’t sell the house any other way and are nearing a foreclosure. Getting someone else to step in and take over payments on a house often is the only solution out of the problem.

I think you didn’t research the strings attached to the subject-to sale well enough before entering the transaction with the investor-buyer. If you did, you’d know that you have the right to (a) monitor investor’s payments on your loan, and (b) foreclose on him and take the property back to resell or rent it out yourself when he misses the payments.

Even after the property has been transferred to the 2nd investor, you still have the same rights and remedies against him too, and any subsequent buyer who doesn’t pay off your loan at the time of purchase.

You still have a phone number to your lender, your loan number and your SSN to be able to access the loan information via the phone any time you want.

To check that the payments are constantly being made is your responsibility, if you’re concerned about the buyer falling behind and hurting your credit. Even if you didn’t have at your fingertips something like Bill Bronchick Alternative Real Estate Financing course that covers the nuances and paperwork for buy houses subject to  strategy, as well as several other creative financing techniques, you always have an option to get the contract reviewed by a lawyer.

Paying $200 to a real estate attorney to review the docs prior to closing is a small price to insure you’re not being taken advantage of, and you have the proper rights reserved that survive the closing.

Hopefully your next deal, buying a home with subject-to as an investor, is going to work out a lot better and will make you some money. It’s a lot better use of your time than trying to change laws.

Best,

Alex