Title:
Lessons Learned
About Selling Investment Properties On Mortgages
Word Count:
444
Summary:
Lessons Learned
About Selling Over 2000 Investment Properties On Mortgages
Keywords:
real estate, hard
money, title work, title insurance, ralph maupin, mark maupin, wheeler dealer,
mr lease option,
Article Body:
Copyright 2006
National Real Estate Network LLC
Over the years I have learned that almost all investors want mortgages that
will give them loans that include dollars for rehabilitation and renovation of
investment properties.
There are many investor programs offered by thousands of mortgage companies.
Some Mortgage Companies have programs that will loan funds as part of the loan
package money for rehab and renovation. Some have programs where they set up
escrows for rehabilitation and renovations and have inspections on the work in
process in order to get the next draw.
Due to the vast number of rules and with lenders all having different policies
we are now adding disclosures in all of our real estate purchase agreements and
related forms to assure buyers are using lenders that have programs that work
for borrower (buyer), seller, realtor, wholesaler and lender.
We now use the following disclosure language in our purchase agreements,
addendums, assignments, and buyer broker agreements:
Lender and Title Company Restrictions. The buyer (s) and seller (s) agree that
buyer (s) will disclose to buyer’s lender all relevant considerations regarding
the purchase of this property. Due to the nature of this transaction, buyer (s)
will only use a lender that allows buyer to receive funds from the seller to
cover allowable closing costs, permissible allowances and expenses of
rehabilitation and renovation. This purchase agreement is void if buyers (s)
and/or their choice of lender knowingly violate state or federal laws that
govern this transaction. If found in violation of applicable law, buyer agrees
to forfeit their good faith deposit.
Title Insurance Companies, as part of the services they perform, carry out the
terms and conditions of the purchase agreement and any other relevant sales
documents. They make sure that the purchase agreement and other documents you
use in your real estate transactions are complying with what the lender, Title
Insurance Company, and laws ask you to do. They review and check to make sure
they put all charges on the HUD statement so the lender can see all expenses
that are being paid at the closing. For example, the following should appear in
the closing statements: commissions, rehabilitation and renovation escrows,
builders allowance, wholesaler’s fees, and assignment fees.
If the Title Insurance Company does not place an expense on the HUD or other
closing documents, ask them to amend their closing statements. If they cannot
do so and/or if the closing must proceed as scheduled, then make sure all
parties to the transactions sign off and are advised of the changes. It goes
without saying the mortgage company must be advised of the omissions by the
Title Insurance Company.