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 escobar_fossati
Joined: 31 Mar 2007
Posts: 1
1.29 Dollars($)
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 Posted: Sat Mar 31, 2007 9:46 pm Post subject: What happens to my equity if I quit claim my house? |
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I own a house that has been leased for 2 years with a purchase option.(We had difficulty selling the house) The lease is expiring and the tenant is having problems getting a loan approved due to a divorce situation, he still wants to buy the house, he sugested I quit claim the house to him until he can improve his credit rating and get a loan. I have a substantial equity in the house.
What risk do I have in doing this? would he have any rights to my equity? |
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sasha
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0.10 Dollars($)
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| Posted: Sun Apr 01, 2007 11:39 am Post subject: |
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After you quit claim the house it will become your tenants property and you will not have any rights over it.
If later on tenant does not pay, you will not be able to put any sort of claim. |
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mth
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0.10 Dollars($)
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| Posted: Sun Apr 01, 2007 11:54 am Post subject: |
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| Quote: | he sugested I quit claim the house to him until he can improve his credit rating and get a loan. I have a substantial equity in the house.
What risk do I have in doing this? would he have any rights to my equity? |
If you have faith in your tenant then you can quit claim to transfer property to him believing that he will give you the money when he is able to get the mortgage, otherwise do not give away your house.
After quit claim deed is made out he will become the legal owner of the house. |
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garry c
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0.10 Dollars($)
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| Posted: Sun Apr 01, 2007 12:07 pm Post subject: |
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I suggest you make out a new lease for the time being his divorce completes and he can qualify for mortgage.
When both of you are sure that mortgage wil be approved then the house can be given to him. |
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helping_user
Joined: 31 Mar 2006
Posts: 720
Location: Hawaii
134.62 Dollars($)
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| Posted: Mon Apr 02, 2007 2:31 am Post subject: RE: lease to purchase option |
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Hi Escobar,
If you quit claim the house to him, he will get the ownership rights on the property. So, it is better that you quit claim and at the same time, make him sign a written statement that he will pay the purchase price once he gets a loan approval. And, also mention in the statement that he will have to quit claim the property back to you if he is not able to get a loan and pay you the money within a certain time period.
You may consult an attorney and get your statement checked by him legally.
Thanks. |
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mcole
Community Experts
Joined: 11 Oct 2006
Posts: 53
18.36 Dollars($)
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| Posted: Mon Apr 02, 2007 7:05 am Post subject: |
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As others have indicated, if you quitclaim the house to your tenant, they own it. They can borrow against it, sell it, whatever they want to do.
I might suggest rather than quitclaiming it, or doing another Lease Option, that you do a Land Contract or Contract for Deed. That way they have equitable interest, but title does not transfer until they fulfill the terms of the agreement, get their own loan, and pay off what they owe you.
Also, doing it with a Land Contract or Contract for Deed, and with them having equitable interest and being able to show payment history, they would be able to apply for a REFI loan rather than a purchase loan, which would be a lot easier for them to qualify.
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amanda
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0.10 Dollars($)
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| Posted: Tue Apr 03, 2007 3:13 am Post subject: |
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Yes Mcole,
A lease option is no doubt helpful but what is a land contract? |
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langevin
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| Posted: Tue Apr 03, 2007 2:08 pm Post subject: |
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Hi Amanda,
Land contract also called as installment sale agreement or contract for deed is made between buyer and seller in which seller holds property title until all agreed payments are made in full by the buyer. |
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