All Forum Posts by: Jessica Zolotorofe

@Adnan H. If he intends to do a "simultaneous closing" because he needs your funds in order to pay the bank for the short sale, then you need some sort of guaranty or collateral to ensure that he doesn't sell it from under you within the 30 days. So, first, I would have your lawyer request of copy of the short sale approval letter to make sure that it actually contains the 30 days restriction. I would then make sure that the title company confirms receipt of an original recordable deed from the current owner to your seller that expressly contains that 30 day restriction BEFORE any money is released from escrow to close. Again, I would also have a fully executed deed to you from your middle-man seller held in escrow with the title company before closing is authorized or money is released. You would have an escrow agreement with the title agent and your seller that provides that that deed will be automatically and unconditionally released and recorded on the 31st day. And to be extra careful, if possible, see if you can get a mortgage on the property recorded at closing of the sale from the current owner to your seller so that you have a lien during the time period that your seller, who used your money to buy the property, retains title, there will be far less risk that he can lien the property or try to pull anything in those 30 days that can be harmful to you or put your investment in jeopardy. 

@Henry Li ok, that's good news. If it says mortgage and it is recorded, it is in the chain of title and you are protected. A note is a personal obligation of an individual or entity. It's a promise to pay someone back and usually contains the terms of repayment, so it would have the term and maturity date, the rate of interest, default interest, etc. A mortgage is an instrument that secures the note or loan agreement. You can't personally sue someone based on a mortgage, but it provides you with security as a lien against real property so that you can foreclose if the terms of the note (or the mortgage itself) are breached. So even if the mortgage says John Smith is getting your loan, if he defaults, you can't take his car and bank accounts, which you can probably do with a note (once you sue and get a judgment and execute on the judgment), BUT you can foreclose on the mortgaged property, or wait for him to sell and you'll be repaid then. He can't sell for a profit but not repay you. Each has it's benefits. Ideally, you get both. Especially if the loan is in connection with property investment or development. Hope that helps!

@Wayne Brooks yes he can. If there is any litigation involving the property one can be filed. If there is a dispute over the sale of the property, for example, the contract purchaser can have zero interest in the property by deed, mortgage or otherwise, and still file one. If he believes the agreement was that the property was collateral for repayment, and litigated that cause of action, he is entitled to put the public on notice.

Wait, you do have a mortgage or no??? If not, you should have! You said note and PG, but you wouldn't need a PG if you have a note (unless they're different people/entities?) but you would get a PG or Note with a mortgage... anyway, if you don't, what's done is done. I would file suit and put a lis pendens in title so that arguably no one can purchase the property without you getting paid so that he doesn't sell it from under you. Then I would definitely seek a judgment against him personally, which, if you are successful, will also reflect in title and you can foreclose on the property (sort of a back way of getting a "mortgage") or any other property he owns. Has to be handled carefully though, since sounds like there were some verbal agreements and other potentially grey areas depending on the laws of the state the property is located in, so definitely work with a lawyer. Hopefully though, it is resolved without the need for any of this! Good luck!!

Henry Li That's exactly what I was going to ask. If the property is worth enough to cover both liens, then you wouldn't be wiped out and you definitely have a decent shot at getting paid back. Though it is still easier to get a judgment and see if there are any bank accounts or anything you can levy. Do you know of the first loan is current or in default?

Stephen D. also, if you prorated taxes based on your period of ownership, wouldn't you be entitled to the benefit of your homestead exemption amount for the period you owned? I'm not sure how it works in Texas, but if you were the owner as of January 1 of 2016, you would have been entitled to the exemption for your entire period of ownership, wouldn't you?

Stephen D. does your contract allow for post closing re-adjustment? Some do, some don't. Contracts sometimes actually say that tax prorations will be based on previous year's assessments, others say once updated info is available it must be remedied post-closing if incorrect at time of settlement. Did you double check?

Sure. If you have someone you feel you can trust. Especially now with reports emailed and all of the facetime and ability to snap and send photos so quick, it's definitely easier than it was in the past. I would probably visit at least once to drive the neighborhood and see how you feel before purchasing, but as far as the inspections and even the actual closing (we do most in escrow so you can close out of state properties without physically flying in), people do it all the time. NJ is really hot right now! So is Maryland, FL, Nevada, Delaware, even CT. Now is the time to pick up properties while the market throughout the country is still recovering. 

I agree with William Joseph . First sue personally and see if he has any bank accounts or other houses or assets you can levy on. If not, you CAN foreclose a second mortgage, it's just a bigger pain.

Hi @Juan Gisone! Sorry to hear about your attorney. It is always my #1 priority to remain in contact and get back to clients quick. I could never imagine a client losing a deal because I took too long. 

Is the closing Time of the Essence in the contract? If so, that could be a real problem. Is the buyer ready to close? Your lawyer would have to prepare closing documents and have them approved by the title company, get a closing statement completed... the likelihood of closing tomorrow if you're not getting much in the way of communication from your attorney is pretty slim. Happy to discuss further if you want to message me. Best of luck!