Buying or Selling a Home/Buying a house in installments
Hello, I would like to structure an agreement with a home owner to buy their property in installments. I do not want to be in debt to this individual; rather i would like to come to an agreed upon price for the property and make installment payments until I reach the agreed upon price and then the deed is transferred into my name.
1) What is this type of agreement called?
2) Is there a generic contract for these types of deals?
3) Could we approach banks with REOs to see if they would be willing to work with this type of purchase agreement?
4) Other than the above mentioned contract type, can you think of any other methods to buy a house without going into debt?
I don't know where you got this idea, Jess, but the only time this may happen is if your parents sell you a property, and then that is a very, very bad idea.
1. + 2. There are "contracts for deed" and there are "land contracts." With either one of these, you do not get a deed for the property until you have completely paid for it according to the contract. However, you do have an interest in the property which is expressed as a cloud on the title or a lien, depending on how the contract was written. Actually, it's not such a good idea for the seller either for that reason. And it is not good for the buyer because should the seller be sued for any reason, the buyer could lose his interest in the property. To expand on this, it would be a good idea to talk with a real estate attorney. There's all kinds of reasons.
3. As far as banks and their REOs are concerned, after they have stopped laughing at you (they would want to know who to assess or lien if the title is not in your name), if you have a very good credit record and/or a huge bank account, then they just might consider letting you buy the property with a contract for deed or land contract. But then, why would you want to do that if your credit is so good or your bank account equity is so large? People with that kind of net worth don't take chances buying property that way.
4. Even if you should buy a property with an option and lease/option, you would want to protect your interest in the property by recording your interest in county records, because what would stop to seller from selling the property to someone else if your name is not on the title in any way? That's what frauds and scams are made of.
It boils down to this, Jess: You don't want to buy a property that is structured with installments and you're not in debt to the seller and you do not have your name on the title. The seller could walk away with your down payment (such as it is) and you would be SOL. And to be quite candid, I doubt if you'll find a seller willing to do this with you. He obviously knows your credit is poor or you have very little net worth. I do wish you well.
California R.E. Broker 41 years