Buy W/ Sub-2, Sell W/ Contract, How To Insure?
If I buy a house subject to, then get the insurance in my name, what happens with insurance if I now sell the home by a Contract for Deed (unrecorded)?
Should I just keep my policy and have the new buyer added as additional insured? Or would my policy technically be voided since the property was sold, even though nothing is to be recorded on the public records of the sale?
[ Edited by beachmaster on Date 06/30/2006 ]
Whomever owns the property should insure it. If you maintain an interest in a CFD, you should obtain a loss payee endorsement relative to your interest (value) and an additional insured endorsement to cover your liability exposure...
This is probably too much detail, but should help your understanding:
http://www.thecreativeinvestor.com/modules.php?name=Articles&file=article&articleid=472
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beachmaster,
I have another question for you. What happens if your tenant on the contract for deed sublets and collects rents from his tenant, then stops paying you but keeps collecting rents? Are you prepared for such an event?
Da Wiz
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Oh, by the way wizzy, he asked about how to insure a sub2 property when/if he sold it CFD.
There you go again.
...typical.
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Beachmaster,
Sorry for late reply.
Is this something that I can just turn over to a new insurance company and they will know what to do with the lender?
Yes. They should know how to appropriately handle the billing issues.
Also, what does "Future to Mortgagee" mean?
It means that future billings are going to the mortgagee, not the insured.
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Best regards,
Tim[ Edited by norrist on Date 07/30/2006 ]
You could offer the equity only after the property is re-sold.
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