Get A Home Get A Special Deed
When you buy property at auction in a state that has redemption laws, you get a special deed or special title. Because the owner has a number of months in which they can repay the purchase price and redeem their property, it's called a defeasible title. That is, one that can be defeated, which means that you don't have clear title yet.
Securing Redemption Rights
More or less, the owner you'll be buying the property from will be under a lot of stress -making them unaware of their own property's equity values. Equity factors in the price of redemption rights. Ethics dictate a minimum of $1500 for perusing redemption rights; should the owner demand more, again, consult your real estate attorney.
Furthermore, there's a good chance that the owner you're buying redemption rights from is currently handling a great deal of stress -their property is being auctioned off! It's likely that they're not aware of the equity. You however, as the buyer, should be aware of such. Tradition and, well, ethics pertain to the rule of thumb: $1500 for redemption rights. Should they ask for more, check the property's equity and again, consult your attorney.
This note is used to buy property, and comes with a security instrument -a binding legal contract that ensures you pay the note in full. This is called a deed of trust, or more popularly, a mortgage (though the two are different things). Should the borrower be unable to pay the note in full, the lender can take the borrower to court, or even put the property under foreclosure -the process of taking the property as collateral for the money borrowed.
Relationship of Notes to Mortgages and Deeds of Trust
In any foreclosure process, there are 3 key players:
Trustor = Borrower
Beneficiary: Whoever lends the money (aka mortgagee)
Trustee = Party handling the transaction
These two are separate and different documents, yet serve a single purpose: ensuring that the loan is paid in full, and should the Trustor fail to do so, securing the perused property as collateral.
In the event of a foreclosure, there are usually 2 major ways to handle it:
Short Sale
Equity Split
There may also be another option, a "subject to" transaction for more expensive properties. - 23199
Securing Redemption Rights
More or less, the owner you'll be buying the property from will be under a lot of stress -making them unaware of their own property's equity values. Equity factors in the price of redemption rights. Ethics dictate a minimum of $1500 for perusing redemption rights; should the owner demand more, again, consult your real estate attorney.
Furthermore, there's a good chance that the owner you're buying redemption rights from is currently handling a great deal of stress -their property is being auctioned off! It's likely that they're not aware of the equity. You however, as the buyer, should be aware of such. Tradition and, well, ethics pertain to the rule of thumb: $1500 for redemption rights. Should they ask for more, check the property's equity and again, consult your attorney.
This note is used to buy property, and comes with a security instrument -a binding legal contract that ensures you pay the note in full. This is called a deed of trust, or more popularly, a mortgage (though the two are different things). Should the borrower be unable to pay the note in full, the lender can take the borrower to court, or even put the property under foreclosure -the process of taking the property as collateral for the money borrowed.
Relationship of Notes to Mortgages and Deeds of Trust
In any foreclosure process, there are 3 key players:
Trustor = Borrower
Beneficiary: Whoever lends the money (aka mortgagee)
Trustee = Party handling the transaction
These two are separate and different documents, yet serve a single purpose: ensuring that the loan is paid in full, and should the Trustor fail to do so, securing the perused property as collateral.
In the event of a foreclosure, there are usually 2 major ways to handle it:
Short Sale
Equity Split
There may also be another option, a "subject to" transaction for more expensive properties. - 23199
About the Author:
Want to know more about real estate? Log on to Don Burnham's website http://www.weknowthewayback.com and know everything from redemptions and foreclosure all under one roof.
posted by X - Men @ 1:51 AM
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