Transfer of deed w/out making real estate transaction?
Help!! We need to know how to transfer a deed without making a real estate transaction. The property was purchased in foreclosure by our friends who want to sell the house to us for a small profit. In order for us to get a loan the house needs to be in our name to use as collateral. But, we don't know how to do this without making a real estate transaction. Any advice or suggestions would be truly appreciated. Thanks!
Pats,
Go to a title company and have them execute a deed and have them sign it over to you. But before you do that speak to your mortgage broker and see if you would have a seasoning issue with it.
Would a quit claim work in this scenario?
Kristen
Maybe I'm missing something here.
Any transfer of real estate is a "real estate transaction". Unless its an outright gift and even then it is done by deed.
I don't understand what you are trying to accomplish.
Why don't you want a "real estate transaction".
If your friends bought a property in foreclosure, they own it. If they want to sell it to you, by deed, for a small profit your are going to buy it. Right?
So get a contract for sale from the seller, go to the bank and apply for conventional financing using the contracted for property as collateral.
This is a normal everyday real estate purchase.
Or: clarify what you are concerned about and what you are trying to do so we can be of more help.
Quote:
On 2003-02-20 13:10, rse2 wrote:
Maybe I'm missing something here.
Any transfer of real estate is a "real estate transaction". Unless its an outright gift and even then it is done by deed.
I don't understand what you are trying to accomplish.
Why don't you want a "real estate transaction".
If your friends bought a property in foreclosure, they own it. If they want to sell it to you, by deed, for a small profit your are going to buy it. Right?
So get a contract for sale from the seller, go to the bank and apply for conventional financing using the contracted for property as collateral.
This is a normal everyday real estate purchase.
Or: clarify what you are concerned about and what you are trying to do so we can be of more help.
No, your not missing anything, that I know of anyway. We just know, given our lack of credit history, that we would not be able to get a loan unless we could use the house as collateral. Sooo, we thought the house would have to be in our name BEFORE applying for the loan. But it seems the way your explaining it we only need a "contract for sale" to show the lendor? As proof of future ownership? Is that correct? As far as the "w/out a real estate transaction" part. I was not really sure about that aspect, this is what our friend said to my husband. Quote: I would like to transfer the house into your name without making a real estate transaction. End quote. I did not know what that was thus, the post here. I'm a complete novice where real estate is concerned so please forgive my ignorance on the subject.
Yes. Your contract with the bank and the seller would be contingent one on the other. The bank doesn't give the loan unless it is secured on the particular real estate. Now you may still not "qualify" for a conventional loan but there are other lenders that will look more to the real estate collateral than to you for repayment. They usually are more expensive both in interest and upfront fees so be careful with how much monthly pmt you can really afford along with all the other expenses of owning the property.
But this need assumes that your seller needs cash.
Quote: I would like to transfer the house into your name without making a real estate transaction."
What does that mean exactly?
You might ask if this friend will take back the mortgage, in essence he be the bank. You pay him the monthly pmts. He gives you the deed and holds the mortgage until you pay him off by resale or refinance when your credit is better.
This is a confusing offer from your friend. I'd suggest you read as much as you can on real estate dealings so you don't make a really big mistake here. This might also be a really good opportunity for you as well, it is just hard to tell with such sketchy info.
Find out more.
the thing is that my friend bought the house for 90k.we agreeded on 30k profit for him and he put out $$$$ for repairs.total coming to around 147k. the house was apraised at 190k before any improvements were made. his lender said he would only give 75% which comes to about 147 minus closing fees leaves about 136. my problem is that i do not want to start out in the hole. question is can the house be put completely in my name w/out any extra closing fees or taxes?this way i can possibly get aloan for myselfand square up w/him and have a couple x-tra $$
I'm not sure what you mean by starting out in the hole. Are you going to occupy this propety?
If so you will always be in the "hole" that is the nature of owning what you live in. You may make out with increased equity on your investment but you'll always have a "negative".
That being said I'll take a stab at the non-real estate transaction problem.
Consider:
1. Owner transfers the property, by deed, into either a land trust or LP or LLC that he creates and owns.
2. Owner, as the LLC/trust, refinances based on appraisal, for 130K or so to take his profit and return of initial investment and any costs of closing and ocumentaiton. He now has all his money, he has cashed out.
3. Owner then sells/transfers his beneficial interest or share in the LLC to you, subject to the financing, for 1$. This is NOT a real estate transaction it is personal property transfer and not recorded anywhere public unless you choose to. No closing costs unless you hire a lawyer for the paper work, which is not a bad idea.
4. The property is not in your name but in the Trust/LLC's name. You own the trust/LLC.
5. You make the loan payments until such time as you can refinance on your own and get your friend off the note.
6. IMHO you should keep the property in the Trust/LLC unless you want the primary/personal residence tax treatment.
5. Live long and prosper.
[ Edited by rse2 on Date 02/22/2003 ][ Edited by rse2 on Date 02/22/2003 ]
My husband posted that reply, when he said "starting out in a hole" he meant that the loan our friend could get would put us $6000.00 under what we now owe. However, if we get (and take) the loan we applied for (using the house as collateral) we would have about that amount in excess of what we now owe. (Higher interest and points though.) This would allow us to make enhancements to the house, thus, increasing it's monetary value not to mention it's comfort level.
Thank you for all the advice. In particular, number 5. I plan on doing both and I wish the same to you. I didn't have a clue, now I have a vague understanding, that's progress. I'm printing out all the replies and studying them like a final exam. One thing is for sure if we are able to get a loan in our name in a year I want to refinance and use that money to make a down payment on a second (perhaps rental) property. One thing is for sure, before we sign anything, we'll be considering all the options. Thanks again.
Hello rse2.. Hyperthetically, I was to receive a house a s a gift, how would I transfer the deeds and exsiting morgage while avoiding all those sales tax, financing fees, etc..? Thanks in advance.[ Edited by pufferfish on Date 11/09/2004 ]
borrow the 75% LTV from the bank and the difference owed can be owner financed in the form of a second mortgage. This is one way on closing on the house and squaring away with your friend. The second mortgage can be negotiated. ie no interest, loan to be paid within one year in 12 equal installments or a balloon.[ Edited by lp1 on Date 11/11/2004 ]
Just understand that your telling a lender, on a HUD 1 form, that you own the property, IF YOU DON'T, is Fed fraud and a big-time felony.
So if this is really your motive, don't do it.