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Selling With Assumption |
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Dear Ms. Lank: My parents own a home that is need of repair. They have been contacted by a company that buys "ugly" homes. They were told the company would assume the loan, give them about $25K, and settle this in a week. It doesn't sound legit to me, but I can't seem to convince my father. Could you provide some insight on how these companies work? I think my parents would be better off just putting the house on the market |
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Companies who buy to re-sell can't offer full market value. They must buy at a discount, else why do it? That's okay as long as it's understood. Such an arrangement can be useful to sellers who are in a hurry, or who don't want the fuss of dealing with the buying public. What concerns me more is that mortgage. Are you sure that company said they'd take over the loan? Not many mortgages are assumable these days. Even if theirs can be assumed, your folks might remain liable if anything went wrong. Sometimes original borrowers are left holding the bag if payments aren't made. The company your folks are talking to may be legitimate, but it's prudent to be cautious. They should have their own real estate lawyer investigating before they sign anything. In the meantime, it won't cost anything to call a few nearby real estate firms and ask if a broker would come over. The agents will estimate of what their house is worth as-is and offer advice. It won't obligate your parents. After that they'll be in a better position to make a decision. |
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Edith
Originally published on June 13, 2005 |
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