TitleProblem
Junior Member
What is the name of your state? OK
A family member wishes to have a home built on a piece of property for sale by an individual rather than held by a developer. We foresee that the builder would not want to purchase the lot outright prior to the start of construction. The family member does not have the full purchase price of the lot available nor the ability to fund the construction phase of the project. He has been preapproved for a mortgage which exceeds the value of the completed home and the lot.
I would be willing to hold title to the property until sale of the structure to the family member and receive payment from the mortgage on the completed home 8-10 months from now. I suspect that a builder would not construct a house on a lot that he did not "own".
I would be willing to grant the builder a minor (<50% ownership) interest in the property equal to the value of the ernest money in the contract (i.e property value $50,000, ernest money $10,000 = 20% interest in the lot). The $10,000 amount is greater than the amount of ernest money normally sought. What problems might crop up in this?
Is it possible and feasible for us to purchase the lot from the current owner and sell the lot to the builder such that payment for the lot would come due at the time of closing of the sale of the home (and no later than some specific time period) and protect our investment?
I am concerned about the construction beginning and the builder declaring bankruptcy prior to completion of the home. If that were to happen, we would want to have title to the property and any improvements to that time immediately return to us (a secured loan that could not be discharged by bankruptcy and the property could not be attached to be used as payment of other debts). I would be willing to "lose" the ernest money. I would be willing to complete the house using another builder and pay the mechanics liens from the mortgage.
What is a better/safer process to accomplish this?
Thanks!
A family member wishes to have a home built on a piece of property for sale by an individual rather than held by a developer. We foresee that the builder would not want to purchase the lot outright prior to the start of construction. The family member does not have the full purchase price of the lot available nor the ability to fund the construction phase of the project. He has been preapproved for a mortgage which exceeds the value of the completed home and the lot.
I would be willing to hold title to the property until sale of the structure to the family member and receive payment from the mortgage on the completed home 8-10 months from now. I suspect that a builder would not construct a house on a lot that he did not "own".
I would be willing to grant the builder a minor (<50% ownership) interest in the property equal to the value of the ernest money in the contract (i.e property value $50,000, ernest money $10,000 = 20% interest in the lot). The $10,000 amount is greater than the amount of ernest money normally sought. What problems might crop up in this?
Is it possible and feasible for us to purchase the lot from the current owner and sell the lot to the builder such that payment for the lot would come due at the time of closing of the sale of the home (and no later than some specific time period) and protect our investment?
I am concerned about the construction beginning and the builder declaring bankruptcy prior to completion of the home. If that were to happen, we would want to have title to the property and any improvements to that time immediately return to us (a secured loan that could not be discharged by bankruptcy and the property could not be attached to be used as payment of other debts). I would be willing to "lose" the ernest money. I would be willing to complete the house using another builder and pay the mechanics liens from the mortgage.
What is a better/safer process to accomplish this?
Thanks!