Question About Subject To Deals
Suppose I pay the seller money and he gives me a deed and then leaves town.
Now the mortgage payment I make to the bank covers taxes and insurance?
So I am paying for insurance but I AM NOT REALLY INSURED. There is no hint of MY name on the policy.
A new policy will ask if there is other insurance.
Do I call the bank and ask them to stop paying Insurance and then get a new policy?
PART TWO OF QUESTION:
Even if I get the seller to put my name on his policy as "Additionally Insured", how do proceeds get divided if the house burns down?
Hi Neill,
Couple of ways to handle this.
1. Have the seller change his policy to a landlord policy before you give him the cash, naming the trust you create to hold title as beneficiary. Now your trust has a valid insurance policy and your property is insured.
2. Leave the policy as you said and get a new one. If they ask if there is already coverage, say no. There isn't valid coverage is there? If there is a claim, you will file on the valid policy, not the one in escrow anyway, right? No problem.
2. If you do name the seller as additional insured, you will use you power of attorney (you got one, right?) to sign all the needed docs to get your check.
Simple isn't it?
WilliamGA
William Tingle
William,
Just to clarify, you wrote if I add SELLER as additionally insured. We really mean if the SELLER ADDS ME, right?
And if he does and there comes a time to make a claim, he will be gone and I will use his power of attorney to make claims & collections?
Sounds good.
Previous part of your answer you said that if I get a new policy and leave the other in place. Why is it not valid because the deed is in MY NAME now?
If you are right and there is Only one valid policy so there will only be 1 claim, but I STILL WOULD BE PAYING FOR BOTH policies.
Seems there would be a way to do it without wasting money.
I'm thinking I should have the policy change form with me at the contract signing.
It's only one more piece of paper we should probably have ready at EVERY signing.
That way we are sure the change was filed with Insurance co.
PLEASE, feel free, I am fairly new. I am trying to answer my own questoin because I am formulating a game plan as we write these posts.
If you know of a better way, just let me know. I appreciate any expertise you guys could offer.
N.