The decision to sell one’s land is indeed not an easy process. Unless you are in the business of real estate, the processes that are involved till the transaction gets through could be appalling. The seller of the land should be in possession of certain crucial documents which have been listed below:
Purchase agreement: This document will be signed by the buyer when an offer is made on the land up for sale. This legal document confirms the intent of the buyer based on all the clauses in the purchase agreement. Once signed, the document becomes legally binding on both parties. The crucial points of the sale, including terms of sale, agreed price, and other deliverables of the deal need to be mentioned in the purchase agreement.
Disclosure documents: The owner is bound to disclose all liabilities and defects of the property. These disclosure requirements vary from state to state, and hence it would be advisable to draft the document with the guidance of a real estate attorney. This form needs to be filled completely and honestly based on the seller’s experience of the property.
Land contract: This document becomes necessary if the seller offers self-financing. This is a separate legal contract that specifies the terms and conditions between the buyer and seller. This document will include the location of the land with its address and detailed description. This document will list out the price agreed on, the initial payment, the monthly payment schedule, the amounts worked out, the dates of payment, grace period, and mode of payment. Once the contract is signed, the buyer will be treated as the property owner, and he would become responsible and liable to pay all bills and taxes for the said land on sale.
Sale deed: This is the document which transfers the ownership from the seller to the buyer. If the buyer pays cash, a deed is made and filed with the appropriate government agency at the time of closing the deal. If the seller provides financing, the deed will be held in escrow till the last payment is made.
Closing statement: This is required to document the financial transactions between the buyer and the seller. This can include an amortization schedule.
The above-mentioned documents certainly ensure a hassle free sale process when you are selling your land.
A reverse mortgage is a type of loan that allows homeowners to receive payments on their house as opposed to them making payments to the lender. At first glance, this option seems too good to be true. But, before committing to it, there are some nitty-gritty details that people must consider when opting for this type of financing. So, here is some information regarding the pros and cons to consider when getting a reverse mortgage.
Advantages
Disadvantages
A reverse mortgage is a loan that allows individuals older than 62 to improve their financial well-being. They can convert part of their home equity into lump sum cash, fixed monthly payments, or line of credit, according to their preference. The money can be used to pay for medical bills, in emergencies, or to pay off a mortgage. Here’s what you should know about reverse mortgages in case you’re looking for one.
How much can you borrow?
For reverse mortgages, the loan amount can’t exceed the value of the property against which it is borrowed. Federal regulations require lenders to ensure that the loan amount doesn’t exceed the value of the house by structuring the transactions accordingly. Additionally, these regulations state that the owner/borrower is not liable to pay off the balance amount in case it exceeds the property value.
How are reverse mortgages paid for?
A reverse mortgage is payable when the borrower sells the house, relocates permanently, or dies. Unlike forward mortgages, reverse mortgages don’t need the borrower to make any monthly payments. They are only liable to pay interest on the money received, which is rolled back into the loan balance. While the owner gets to keep the title to the home, their home equity reduces over the loan tenure.
Who can take a reverse mortgage?
This type of loan is ideal for seniors and retirees whose net worth comes mostly from the value of their home. Seniors who don’t qualify for a home equity loan or can’t refinance due to limited cash flow or poor credit can opt for reverse mortgages. Home Equity Conversion Mortgage (HECM) for purchase is a reverse mortgage that allows seniors to buy another property. That said, it is complex, and you should study the risk factors before getting one.
What are the risks associated with reverse mortgages?
Reverse mortgage scams are not unheard of. Unreputable vendors could offer to help seniors secure reverse mortgages by undertaking house repairs. They don’t provide quality results and get away with the homeowner’s money instead. For spouses living together in a home with only one spouse named as a borrower on a reverse mortgage, the other spouse can lose the home if the borrowing spouse dies first. Besides, reverse mortgage lenders charge fees and closing costs and may also charge mortgage insurance premiums for federally-insured HECMs.