Posted on: 31st Mar, 2007 09:46 pm
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?
What risk do I have in doing this? would he have any rights to my equity?
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.
If later on tenant does not pay, you will not be able to put any sort of claim.
"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.
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.
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.
When both of you are sure that mortgage wil be approved then the house can be given to him.
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.
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.
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.
8)
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.
8)
Yes Mcole,
A lease option is no doubt helpful but what is a land contract?
A lease option is no doubt helpful but what is a land contract?
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.
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.