Expert: Diann Tonnesen - 2/28/2011

Question
My mother who is elderly lives with me and wants to sell her home located on an acre of land south of Las Vegas in Nevada.  She has a contract with the original owner, not a mortgage through a bank and still owes 34,000. on the loan.  She has not had many offers in this market.  Recently a young man has asked if he can put money down and make payments to her to buy the property.  The original owner has written in the contract that the loan is assumable but does not want to do that if avoidable since she has had good fortune with my mother and does not want to take any risk at her age.  We would rather have the loan assumed... can we do this??  If we cannot what are the options available in Nevada?

Answer
Dear Jaime,

Whether or not the loan is assumable depends entirely on how the original contract for sale was written. Is there a provision that the current lien holder must approve the assumption? If not, it would seem that your mother would be able to sell the property with an assumption of the original loan. An all inclusive trust deed could be offered to the new buyer which would include both the remaining balance of the original loan and the difference between the new buyer's down payment and the amount of your mother's equity. An escrow company could help you prepare such a document.

Something else to take into account is whether or not the double wide was actually conveyed as part of the real property. It has to be permanently affixed to the land as per the county tax assessor's records. If it is not part of the real property, the loan would only apply to the real property (the land) and a separate bill of sale would need to be prepared for the double wide as personal property. We often see private contracts for sale that were done on mobile homes where this distinction was not made and, in reality, only the land was conveyed by the contract. You will need to check this out before proceeding further. It could easily be that the double wide still technically belongs to the original seller if a bill of sale was not prepared.

Your best course of action would be to consult a Nevada real estate attorney who can review the entire contract for you and determine whether or not the double wide is actually real property. He/she could also help you prepare documents to sell the property to the new buyer as per the guidelines of the original contract. Hope this helps and best of luck to you!