Real Estate Contract Question - Sign away title, close later?

Question

I have a buyer for my house. She has a title company and mortgage company and is very familiar with "creative financing." She was to purchase my house but with a 6 month closing date. She would like me to sign over the title. She would pay the mortgage for 6 months and refinance. She says that most banks look for 6 continous months of payments before financing. All this would be on the contract. In return she would pay full price for my house(15K is in equity) and pay about 15K cash. 7.5K upfront and the other 7.5K when I close. She is basically taking over my debts minus 15K. Only concern is handling over my title to her.

I have never heard this before. I have bought and sold a few homes but this is very new. Is this legal? Can she sell my house if I still own the mortgage? Is that a lein that must be paid first? Any thoughts? Any help would be appriciated.

Answer 1

Run, don't walk from that deal! She gets the deed at closing and not a day before or there's NO DEAL.

Exception: You take back a wrap mortgage from her with a first trust deed. If she then fails to complete the deal you foreclose on that and take back possession and legal title.

Whever you work with "creative" financing such as this, you need an attorney to structure the deal to protect your rights. Don't do anything other than a straight sale without the services of an attorney! (And even then, an attorney is money well spent.)

Answer 2

Since you won't hire a Realtor, let me stand in.

Creative financing means that her credit is so bad right now that a lender will not approve her for financing. Nothing much will change in 6 months.

If you rent to her for 6 months, then YOU won't have a place to live. If you sign away your title, you will have given your house away without any renumeration. If you have a mortgage on the property, your lender won't allow this anyhow.

Tell her to come back in 6 months or whenever a legitimate LENDER can give you a loan commitment letter. Not a prequalification, nor a pre-approval letter.

In the meantime, smile and walk away. Let her find unsuspecting home owner.

Answer 3

Why can't you get a Realtor? What so hard about that? Looks like this person you are talking to is very informed. She knows what's good for her. I will not sell to her. What's up with that 6 months closing date? What's up with that creative financing? That sounds like coming from a person who really knows what good for themselves only. When she refinance, to whom will the loan go to? To you? That's bull. Compare how much will be the loan she is talking about borrowing to the amount of 6 months she wanted to pay the house for? I bet you the loan will be bigger and it will be going to the house that you are trying to sell. There goes your money saying goodbye to you. Don't sell to her. Don't sign any contract.