Succinctly Put: NO! Now, let me tell you a story:
“Wally” and I are working to refinance a home he bought on Contract for Deed. He and his wife divorced in 2002 and over five years later, he purchased his current home on Contract for Deed (CD). When he signed the CD, it listed him and his wife as a married couple. He asked about it and was told to simply sign it to avoid from having his closing delayed.
If he didn’t sign, he would be stuck trying to find a place to live for 3-4 days as well as juggle scheduling the movers to name a few of the biggest stresses. So, he goes ahead and signs the form as-is and moves in that afternoon.
Flash forward to present and he is finally at a point to officially move this CD into a mortgage in his own name and own the home outright. Here’s the rub: A Contract for Deed is a legally filed and binding document. This means that his ex-wife, is now signed into title as his now current wife, giving her full ownership rights to the new home. HIS EX-WIFE NOW OWNS HALF OF HIS HOUSE!
In an amiable situation like this one, this can be resolved by having her sign a Quit Claim Deed that relinquishes her ownership rights. Fortunately for Wally, She was willing to sign a QCD. If she hadn’t, Wally would have a potential legal battle on his hands and I’m sure the topic of ‘Fraud’ would be brought up as well for knowingly signing a document he knew was not accurate.
Simply put, making moving arrangements or postponing them can be a huge hassle, but if there is something incorrect on your final mortgage documents, you need to take a step back and consider the long term issues that can end up being much more damaging.
Image courtesy of phanlop88 / FreeDigitalPhotos.net
Image courtesy of phasinphoto, / FreeDigitalPhotos.net
There are many ways to sell a house and for most of them, I highly recommend a licensed Realtor. Every once in a while, a client of mine will bring up a situation that’s unique. I enjoy these one off situations because it’s a exercise in creativity as well as a chance to offer direction and education. “Cody and John” were very recently married when I first met them. They were also expecting their first baby soon and needed to move out of the tiny home that John owned. Here was the problem: John bought his home at the peak of the market. Three years later, he owed more than the home was worth and wanted to avoid a Short sale with the bank to protect his credit. Fortunately, Cody had a friend looking to buy a house but couldn’t get approved for a traditional mortgage with her credit history anyway. This left both sides with an obvious solution: Having Cody’s friend buy the house from John on Contract for Deed. This was when John called me to see how to go about this. I am not an expert on Contract for Deed’s. My expertise is in Mortgage’s themselves. Fortunately, I have worked with many different professions and situations over the past fourteen years and sent them to a former client of mine who specializes in real estate law. Scott could walk Cody and John through every portion of the Contract for Deed, ensure they had every legal protection in place that they would need and complete the transaction for them. This is when I got to do my job and walk them through buying a new home for their budding family. Cody, John and their little daughter are happily set in their new home. I still get to check in with each of them for pictures of their growing daughter and share parenting stories. It sounds like #2 won’t be too far off either… Have a great week! -Matt