Installment Sale Gone Bad

[TaoWanderer]

I sold an improved piece of land in California in August of 2007 for $195,000 and received $20,000 down payment and the remaining $175,000 to be paid to me in monthly installments of principal and interest amortized over 7 years. She’s paid $74,490.93 so far of which $25,175.49 went to interest and $49,315.44 went to principal, leaving a balance of $145,684.56. After waiting for and not receiving the 20th payment of $2,905.21 which was late as of 4-10-2008 the lady I sold it to sent this email:

As you can tell, the payments to you are coming late. As of today, I am still waiting for the payment that is due to me, and I have no guarantee of any payment at all. I am falling more and mor delinquenty and it is with regret I will not be able to fulfill my obligation to you.

However, I have had the good fortune of befriending a benefactor whom has offered me a lump sum payment which I in turn can use to pay off your loan!!

Would you consider taking a cash payment to settle in full? With the $20,000 down and the 18 payments of $2,905.21, I have paid $72,292.15 to you to date. I am prepared to offer you $65,000 cash to settle the debt in full.

Please take this offer under serious consideration. Should you not accept, then I will have choice but to default on the loan. I will await your written response.
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She says her payment to me is dependent on a monthly payment she receives from the sale of her business. I haven’t responded yet. What do you make of this email? Do you think she is just bluffing to try to get the property for cheaper? Should I offer to lengthen the term so that the monthly payments are less? What are my options? What is the best option?

Thank you in advance.

 

[Mass_Shyster]

I sold an improved piece of land in California in August of 2007 for $195,000 and received $20,000 down payment and the remaining $175,000 to be paid to me in monthly installments of principal and interest amortized over 7 years. She’s paid $74,490.93 so far of which $25,175.49 went to interest and $49,315.44 went to principal, leaving a balance of $145,684.56. After waiting for and not receiving the 20th payment of $2,905.21 which was late as of 4-10-2008 the lady I sold it to sent this email:

As you can tell, the payments to you are coming late. As of today, I am still waiting for the payment that is due to me, and I have no guarantee of any payment at all. I am falling more and mor delinquenty and it is with regret I will not be able to fulfill my obligation to you.

However, I have had the good fortune of befriending a benefactor whom has offered me a lump sum payment which I in turn can use to pay off your loan!!

Would you consider taking a cash payment to settle in full? With the $20,000 down and the 18 payments of $2,905.21, I have paid $72,292.15 to you to date. I am prepared to offer you $65,000 cash to settle the debt in full.

Please take this offer under serious consideration. Should you not accept, then I will have choice but to default on the loan. I will await your written response.

She says her payment to me is dependent on a monthly payment she receives from the sale of her business. I haven’t responded yet. What do you make of this email? Do you think she is just bluffing to try to get the property for cheaper? Should I offer to lengthen the term so that the monthly payments are less? What are my options? What is the best option?

Thank you in advance.

What is the property worth right now? If it worth more than $65K, you're probably better off foreclosing.

 

[TaoWanderer]

What is the property worth right now? If it worth more than $65K, you're probably better off foreclosing.

My friend thinks $125K-$195K
Zillow.com says Low: $131,555, Estimate: $158,500, High: $237,750
Eppraisal.com says Low:$65,143, Estimate: $76,639, High: $88,135

 

[Mass_Shyster]

My friend thinks $125K-$195K
Zillow.com says Low: $131,555, Estimate: $158,500, High: $237,750
Eppraisal.com says Low:$65,143, Estimate: $76,639, High: $88,135

When I was selling real estate, we used to get calls from a bank for a Brokers Pricing Opinion (BPO) . They would pay $25 to $50 and get a best guess as to the value. This was done without the knowledge of the owner, and without entering the property. Whatever public records are available, along with photos from the street. If you can supply details about the property, you'll get a better estimate.

Call a few brokers in the area and explain the situation.

In any event, you have a statement that she will default unless you accept her offer. You should contact a lawyer.

 

[Some Random Guy]

Respond back with a nicely worded letter that says you would be happy to amend the contract so that she relinquishes all claims to the property in exchange for cancelling her remaining mortgage. That way you won't have to incur the expense of foreclosing and evicting her and she won't have a foreclosure on her credit.

While she ponders that, get a good lawyer to help you with the foreclosure.

 

[TaoWanderer]

Just another idea I got that I need to run it by you guys please, urgently.

I got this letter from her (the buyer) via her T-Mobile cell phone emailing me.

I accidentally found this email in my junk mail and obviously there is no signature legally attesting / proving that she actually is making this proposal to me, legally or holds water at all or could be someone else playing games with my note behind the stage, such as the nuisance neighbor, who has had secret interest / intention to grab my property for nothing price or by hook or crook.

This letter of hers cannot be legally holding water and is not legally binding therefore can I sell my note to a note buyer right away?

A note buyer was offering me $120,000 for my note to buy it a few months ago. Of course now if I were to sell my note, obviously he would be offering me less than $120,000. Can I go ahead and sell it to the note buyer, without any legal problems, legally? Can she legally object to me selling my note to the note buyer now after she has made this proposal to me via email from her cell phone? Am I free to sell my note to the note buyer without her knowing or her future objections legally, after she sent me an email wanting / planning / bluffing to default on my note to grab my property for steal price?

 

[TaoWanderer]

Do I need an attorney to do a foreclosure or is that something I can do myself?

 

[Some Random Guy]

For the foreclosure:
You want an attorney to get it done quickly and correctly. Find one experienced in foreclosures who can give you a price range for what it will cost.

As for the person wanting to buy the note:
I am sure that they will want to know if the payments are current, the value of the property (may need an appraisal), and whether your buyer has told you they will be defaulting. Failure to disclose this information may be grounds for a suit against you.

 

[TaoWanderer]

If it goes to foreclosure auction, do I have to have actual money to bid on my own property or can I use the principal still owed to me to bid?

 

[Some Random Guy]

If it goes to foreclosure auction, do I have to have actual money to bid on my own property or can I use the principal still owed to me to bid?

Go see a real estate lawyer who will explain the process to you. Foreclosure means that you take the property back because they didn't pay as agreed. You should not have to bid on anything.

 

[TaoWanderer]

Talked to her today and it looks like she’s willing to do a “Deed in lieu of Foreclosure”. I talked to my escrow person and they said that they hadn’t done one before, but if they could get the form then they would fill it out and notarize it for me for free. Would this be good or should I hire an attorney to draw up the documents.