I want to sell my house but thebuyer has bad credit, what kind of purchase arrangement can we set up that best protects me?

Get Legal Help Today

 Secured with SHA-256 Encryption

I want to sell my house but thebuyer has bad credit, what kind of purchase arrangement can we set up that best protects me?

She wants to draw up papers with my bank lawyer and just deposit money in my account every month until it is paid for. Is this legal and what is the risks for me?

Asked on August 26, 2011 Texas

Answers:

Richard Weaver / The Weaver Law Firm

Answered 10 years ago | Contributor

If your potential buyer cannot obtain a loan, you camn seller-finance or enter into a contract for deed, all depending on certain factors. Visit www.WeaverLawyers.com for futher real estate information.

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you own the property free and clear (no loan on it) you can sell the property to the buyer at a set price evidenced by a promissory note for the amount you are loaning for the set period of time at an agreed interest rate. You will need to make sure that this loan is secured by a mortgage (or trust deed) in first position on the property.

The buyer then needs to make the agreed upon monthly payments to you and if not, you then have the option to foreclose upon your former home. You need to make sure that as part of the mortgage agreement the buyer agreed to keep insurance in place on the property naming you as an additional insured.

If you have a loan in place on the property and sell it to the buyer taking a second secured position, you will need to be prepared to cure any default of the first trust deed to protect any junior secured interest in the home.

If you want to explore the above, you should have a real estate attorney assist you.

Good luck.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption