Realtor & Sub2

[golexcap]

Have a good deal out on Long Island, which is a prime sub2 candidate. The only issue is that the homeowners currently have an exclusive listing agreement with a realtor for 3 months. Therefore, if I do a sub2 with the homeowners am I violating their contract with the realtor? Can anyone think of a better idea to either circumvent the realtor or negotiate with them?

[mtnwizard]

golexcap,

I don't run into that problem doing a "subject to" with land trusts.  I either talk directly with the seller or tell the realtor:  "Here's the deal.  I'm making your client an offer contingent upon them leaving the existing financing and equity in place for a 2-3 years.  The deal is written up similar to a lease option, and your commission is deferred.  However, in all of my transactions involving a Realtor, your commission is paid on a monthly basis for the term of the Lease."
 
"You are required by law to show my offer to your client.  All I ask is that I be present when the offer is made, either in person or by phone.  If you wish, you can dissuade them from entertaining my offer, but remember, I don’t have to involve you at all.  There is no law that prevents your client from placing their property into their own trust, naming co-beneficiaries, and having one of those beneficiaries reside in and make the mortgage payments for a few years."  

Da Wiz

[TonyDiCorpo]

Have a good deal out on Long Island, which is a prime sub2 candidate. The only issue is that the homeowners currently have an exclusive listing agreement with a realtor for 3 months. Therefore, if I do a sub2 with the homeowners am I violating their contract with the realtor? Can anyone think of a better idea to either circumvent the realtor or negotiate with them?

see what the cxl pol is.  u can always negotiate a payoff with the realtor.  every contract is different.

[Roger J]

Geez, Doc.  If I post a thread about my backside itching, would a land trust solve that problem, too?  I mean, it apparently can solve any potential perceived problem that it is simply dumb-founded to think that it could solve practically anything at all!  :

If you get the seller's to sign a contract to sell without going through the agent, THEY are violating the terms of the contract, not you.  However, IF you found this property through the advertising efforts of the RE agent and then tried to 'go around' the agent, you could be sued for damages.

IF it is truly a deal, though, it is highly unlikely that the agent will put up a big fight IF it's in the best interest of the seller.  Most will see that it's better to get a small commission fee as opposed to none.  And contrary to the PACtrust groupies' philosophy, you would rarely have to resort to threats to get this accomplished.

Raj

[kdhastedt]

<<If I post a thread about my backside itching, would a land trust solve that problem, too?  I mean, it apparently can solve any potential perceived problem that it is simply dumb-founded to think that it could solve practically anything at all!>>

Step 1:  Roll the NARS paperwork in a tight roll...

Step 2:  Use it to scratch...

Yeah, I guess it will!

Keith

[Roger J]

dang it all!  And I thought that I had finally found something that it couldn't do!!  

Raj

[mtnwizard]

"If you get the seller's to sign a contract to sell without going through the agent, THEY are violating the terms of the contract, not you.  However, IF you found this property through the advertising efforts of the RE agent and then tried to 'go around' the agent, you could be sued for damages." - Roger J. (realtor).  

Don't you just love it when your critics don't know much about the subject?

This is NOT a sale.  Placing your propertry in a trust is NOT a sale.  Naming a beneficiary to live in the property and make the payments is NOT a sale.  I'm doing the agent a favor by paying a commission where none is necessary.  

As for versatility, yes.  Managing your property is more flexible with a land trust because you can accomplish any goal -- triple net lease, wrap, lease purchase, equity share, etc., with all the benefits of home ownership for your tenant.  And, it's shielded from liens and encumbrances.  Perfect for your little backsides and you just learned something.  I always enjoy educating realtors.

Da Wiz

[TonyDiCorpo]

This is NOT a sale.  Placing your propertry in a trust is NOT a sale.  Naming a beneficiary to live in the property and make the payments is NOT a sale.  I'm doing the agent a favor by paying a commission where none is necessary.  

the beneficiary is just making pmnts for the heck of it, i reckon

[mtnwizard]

Tony,

It is a sale, only at the end of three years at which time the tenant has first right of refusal to purchase at FMV, not an option.  In the meantime, it's simply a lease -- i.e., no sale.  The beneficiary is getting the tax and mortgage interest writeoffs and sharing in future appreciation if he decides to buy.

Da Wiz

[TonyDiCorpo]

Tony,

It is a sale, only at the end of three years at which time the tenant has first right of refusal to purchase at FMV, not an option.  In the meantime, it's simply a lease -- i.e., no sale.  The beneficiary is getting the tax and mortgage interest writeoffs and sharing in future appreciation if he decides to buy.

Da Wiz

i was tongue and cheek (not the backside i need to scratch with the rolled up trust, sorry) but what u describe as a lease with 1st right of refusal is another way to say lease with option to purchase.  any way u slice it bubs

Da T

[mtnwizard]

Almost, Tony.  Rights of first refusal and options are different things. A right of first refusal means that if a seller receives a bona fide confirmed offer from a third party, the person holding the right has the opportunity to match that bona fide offer, however, there is no obligation by the seller to sell to the person holding the right for any amount other than the bona fide amount. An option is a contractual right held by the optionee that requires the seller to sell the property for a certain price dictated by the option.

In our scenario, the beneficiaries only have rights of first refusal, not options.

Da Wiz

[Roger J]

Doc, personally I just love it when the reading impaired try to [mis]quote me.

The quote that you used had nothing to do with your land trust theories.  The original poster had asked if he was violating any agreement with the agent.  In case you missed it, the answer was no, the investor doesn't have any agreement with the seller.

And I've learned also that it is a complete waste of my time to debate the land trust groupies like you and Ali and other lesser knowns, simply because regardless of whatever facts, evidence, legal issues, etc that point to the contrary, you guys are always RIGHT (at least to yourselves), and your reasoning is usually simply because "I am" (hardly debatable standpoint).

What does continually amaze me about you all is the complete lack of ethics and morals that you seem to have about how to handle yourselves.  Sure, you hide behind the "legal" terms of what you do, but can't bring yourselves to face the truth of what you're actually doing.

For instance, the standard response to what is the purpose of the landtrust is for you guys to say, "it's for asset protection."  Well, let me ask, when was it created?  Answer: We tell the seller (oops, homeowner) to put the property into a land trust before we buy (oops, assume a beneficary position) the property.  Did the seller know anything about a land trust before the investor can into the deal?  Did the seller have any "asset protection" in place before the investor came into the deal?  Was the seller trying to sell the property before it was put into a land trust?  Will the seller say that it's for "asset protection" (without coaching) or because the buyer would only buy the property if they put the property into a land trust?

BTW, these are the questions that the NC AG uses to determine if the land trust was used for loan fraud.  IF the purpose of the trust was to conceal a sell of the property, then it is considered loan fraud.  BUT, I know, it was setup for asset protection.

The easy answer to why the land trust is formed is, as a buyer, would you still buy the property IF the seller doesn't put it in your land trust?

Now, you're saying that establishing a land trust and assigning interests is NOT a sale, and therefore the agent isn't entitled to any commission.  Forget about arguing that point on legal grounds (and there are legal grounds), let's look at it from a moral standpoint.  IF you were the agent and someone "went around" you to (let's use "acquire") the property would you consider them an ethical person?

Raj

[TonyDiCorpo]

gary i have been curious as to exactly how u get a homeowner to do this in this manner?  maybe it's easy, maybe it's not but if it were me i'd be less histitant of someone taking over my pmnts the original way.

my other question is like, Raj, when are u going to admit the reason behind doing a trust method?  u know just becuz the law says it's legal, the reason u an ur croanies use it is NOT done for asset protection.  the law says it does not violate the DOSC during a transfer of ownership...whoopie.

[mtnwizard]

Tony,

It's the best way to protect all parties when doing a "subject to", including the seller.  I have no trouble getting sellers to do it once they are aware of and understand the protection they have.  As to intent, it doesn't make any difference.  The law simply says you have the legal right to protect your property by placing it into a land trust.  It says nothing about the reasons for doing so, and asset protection is a great reason.

Da Wiz

[Framer35]

Intent doesn't make any difference in the eyes of the Law? I accidently kill someone so it is the same as Premeditated murder?

As far as the Realtor issue.
Simple, Did the seller contact you? yes then he can if he is unsatisfied with the results of the Realtor ask that they cease and quit any contract. Actually he would do this with the Broker. A bad name does no one any good, and if a Broker was to fight anything like this, he would eventually make a bad name for himself. So unless he had the time to track down and see if the house does sell and hire a private investigator to see how the house buyer found out about the house he will most likely just cancel the contract and move on to the next.

There is paper work you can get, sometimes at an office supply store that the seller can use to inform the Broker officially that they wish to cancel the contract. A lawyer can draft a simple letter to do this, some of these lawyer club services could even do that I suppose. You might even be able to get it from a title company or on line from your state gov under forms and contracts.

Art

not Piled so High or so Deep