Contract/Hold on a mortgage loan.......

[Luis Medina]

Hi all, 

Had been reading a lot, but this is actually my first post. I have a family member moving outstate(early next month) for work reasons. He bought house two year ago as Brand New construction, value of house has gone up 40/50K (CMA done by my realtor). With the short time to move out state, I offer to take care of house. This include cleaning, painting and doing any repairs to get the house ready to sell and I can hold selling rights for 90 days. The owner dont care about the equity on it, his goal is to clear out the loan balance. I offer the option to pay 3 months of mortgage as long I hold the right/benefits to sell the house. Any money over the mortgage/note balance is mine.

Does anyone has done this kind of business before? Any lawer than can do this kind of contract? Its in the Atlanta area.

[Don Konipol]

In reality you have an option to purchase.  Legally, you would have to purchase the property for the mortgage balance and resell it to the ultimate buyer.  If you don't first purchase the property, and you receive any amount over the mortgage for selling the property, you have acted as an agent for the seller, which you need to have a real estate broker license for.  A gray area is to place the property under contract for the loan balance, and then sell the contract for the difference between the sales price and the option price (loan balance).  Obviously you can also operate outside of real estate law by just having an agreement to act as a broker, as you originally intend to do.  Be aware that if your family member decides not to pay you all or part of the agreed fee, you will have no legal recourse because only a licensed broker can collect a fee for brokering a real estate transaction.  Further, even if you do collect as per your agreement, should the seller decide to sue you in the future, you will lose for the same reason.  Also, the amount of time he has to sue you after the transaction will be lengthy since it will be determined by the statute of fraud rather than any real estate statute.