Recovery of principal owed on note.
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Recovery of principal owed on note.
In 2005, we sold a house in Hemet, CA. As part of the sale, we agreed to loan back $39,500 to the buyer. He was to pay interest only (5.5%) on the loan for 3 years, then repay the principal in full. His interest payments stopped just 2 months short of the 3 years, and all attempts to contact him have gone unanswered. How do we proceed to get paid? We now live in Washington state.
Asked on June 2, 2009 under Real Estate Law, Washington
Answers:
B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
I hope for your sake that the buyer hasn't sold the house, or lost it in foreclosure. You need to contact a lawyer who practices near your old house, and arrange for him to sue the buyer on whatever document you have with the repayment agreement, since it sounds like there was no mortgage (recorded document giving you a lien on the property). You need to have this done with all possible speed! One place to look for qualified attorneys is our website, http://attorneypages.com
If you don't have a mortgage from the buyer, which is how your question sounds, then I'm guessing that you did this sale without a lawyer. You might have saved $1,000.00 at most, I would think, by that -- and now you may be out nearly $40,000. It's easy to make mistakes in real estate, doing it yourself -- and the mistakes tend to be expensive.
J.M.A., Member in Good Standing of the Connecticut Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
Did you execute a promissory note which was supported with a mortgage on the property? if so, you can sue on the note and foreclose on the property to get your cash. If you did not secure the note with a mortgage, then you can get prejudgment remedy and place the lien on the property so that you can then foreclose on the property after you get a judgment. I suggest hiring a lawyer to review the note and determine what options you have.
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