Creative financing??

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insider
Member
@insider
Join Date: 2002
Post Count: 64
December 26, 2002 - 3:33 pm
When doing a creative deal and terms have been finalised between you and the seller do you normally have some simple contract written up which prevents the other party from pulling out of the deal. Because if you do get contract’s drawn up and the seller pulls out you will incur costs. Is there a standard form that one normally signs when these sought of deals are negotiated but contracts have yet to be drawn up by solicitors.
Eg.Market Value $150,000
Purchase Price $130,000
Mortgage $90,000
Note $40,000
The seller agrees for you to take over his mortgage and to carry the remaining equity in the form of a note with 10% accrueing interest with the baloon due in 5 years. Thanks in advance David.
Steve McKnight
Keymaster
@stevemcknight
Join Date: 2001
Post Count: 1,763
December 28, 2002 - 1:54 am
David,
There will be two legal documents in a 2nd mortgage.
The first will be the normal sale of land agreement.
The second will be the 2nd mortgage agreement.
Re: the issue of being left high and dry… I would either include a clause in the sale of land agreement saying that if the seller pulls out then s/he must pay all legal costs for both parties.
Or, if this is not the appropriate leagl form (that is, procedure) – then draw up another agreement that outlines the intent.
If you are worried about collecting the money then ask for the funds to be held in Trust by a solicitor as a sign of good faith.
Bye
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com
Success comes from doing things differently
insider
Member
@insider
Join Date: 2002
Post Count: 64
December 29, 2002 - 2:10 am
Steve I am curious as to where I get these forms from (are they in your buyer beware product)?? Do you draft them up yourself and if so are they legally binding??
Steve McKnight
Keymaster
@stevemcknight
Join Date: 2001
Post Count: 1,763
December 29, 2002 - 3:19 am
Hi,
A solicitor would normally draw them up on your behalf.
I’d imagine that it is just a standard Word document on their system that is tailored for your particulars… but nevertheless, it would be smart in the first instance to have a solicitor advise you as it will need to comply with the relevant Consumer Credit Code and other financing parameters.
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com
Success comes from doing things differently