DEAR BOB: About three years ago, we bought the house we were renting. We didn’t get the deed because we agreed to buy on an installment land contract. Our credit wasn’t good at the time and we didn’t have down-payment cash so we were satisfied. We have made all the payments to the seller on time. My wife recently came into an inheritance, which will enable us to pay off the seller’s land contract and obtain the title. However, he has now encumbered the property with a mortgage for more than our purchase price. He admitted he shouldn’t have done this but he didn’t expect us to pay off the land contract so soon. He doesn’t have the approximate $12,000 extra cash to pay off all his debt secured by our house. What should we do? –Bryan H.
DEAR BRYAN: Please consult a local real estate attorney. Your situation shows why installment land contracts can be so dangerous, especially for buyers when sellers can’t deliver marketable title.
Purchase Bob Bruss reports online.
Perhaps the seller has other assets he can sell to raise the $12,000 cash to pay off the mortgages, which exceed your land-contract purchase price.
One way or another you are entitled to obtain marketable title at the purchase price specified on your land contract for sale. Unfortunately, your situation occurs far too frequently when a land-contract-sale seller can’t deliver marketable title to the buyer.
MANUFACTURED HOMES ARE ELIGIBLE FOR REVERSE MORTGAGES
DEAR BOB: I applied for a reverse mortgage but was refused because I own a manufactured home in a condominium community. I own the land under my house. I have the deed. Can you tell me why I was refused? –Maggie H.
DEAR MAGGIE: Just because you own a manufactured home is not the reason your reverse-mortgage application was denied. I presume you are 62 or older.
However, you say it is in a “condominium community.” That has me puzzled.
If you are subject to a homeowner’s association, which owns the common areas of the development, but you own the land under your manufactured home, you should be eligible for a reverse mortgage. I suggest you contact the reverse-mortgage originator to find out more details.
HOW TO GIVE VACANT LAND TO A CHARITY
DEAR BOB: My wife and I have owned a residential lot in Colorado City, Colo., since 1968. We had it appraised and were informed it will be difficult to sell because of the abundance of lots for sale just like ours. It is free and clear with the property taxes paid. We were unsuccessful in our attempt to donate it to a local church and an organization, which builds homes for the needy. Is there any other way to divest ourselves of this lot? –Will G.
DEAR WILL: I presume the organization you refer to is Habitat for Humanity. They are a wonderful organization, which I highly recommend. If Habitat rejected your generous donation, there must be a problem with your lot or perhaps they have no need for it.
In most communities, the Salvation Army will accept real estate donations if the lot has any sales value. Keep trying.
The new Robert Bruss special report, “Five Easy Ways to Buy Your Home and Investment Property for Nothing Down,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.
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