Expert: Dick Dennis - 6/17/2009

Question
We are currently selling a house to our son. He is unable to get a loan so he is paying us monthly like rent. We have no contract or anything signed.  We are wanting to get him homeowners ins.  How should we go about getting some kind of contract for him to be able to have ins.

Answer
First of all, Delores, I think you are being foolish and are asking for trouble in the future if you do not put your agreement on paper. The old adage, "In real estate, if it is not in writing, it was never said," applies very well here. All it takes is for either party to forget what was agreed to. Everything seems valid now, but agreements have a way of becoming blurred as time passes.

As long as he is paying you "like rent," Delores, he should execute a note and mortgage/trust deed (depending what state the property is located) to you stipulating how much the monthly payments are to be and for how long and at what interest rate. That will satisfy the insurance company.

To make sure this is all going down properly, I strongly recommend you consult with a local REAL ESTATE attorney. This will also make sure that all parties interests are protected and the property transfer is done correctly. I do wish you well.

Dick Dennis
dixiedee13@aol.com