Giving back owner financed home... We are in Kansas

This is a discussion on Giving back owner financed home... We are in Kansas within the Buying & Selling Property forum, part of the REAL ESTATE & PROPERTY LAW category; We went through owner financing to purchase our home 3 years ago. We could not qualify for a loan as ...

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Old Mar 15th, 2012, 09:10 AM   #1
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Default Giving back owner financed home... We are in Kansas

We went through owner financing to purchase our home 3 years ago. We could not qualify for a loan as our income was not enough so the owner, being desperate to get someone in, let us buy. We have not been able to make payments and I still cannot qualify for a loan big enough to refinance the home. The home is appraised above what we owe. We have offered the house back to the seller for what we owe. He refuses to take it. What are our options? I have explained our budget is at a deficit each month and we need to move. He doesn’t want to deal with the house. Should I let him foreclose? I’m offering to move and give him the property back, worth more than I purchased it for. Please help! Our family is struggling to make ends meet and cannot afford this house. The seller wants us to stay because we take care of the house and he doesn't want to deal with it. We just cannot affort to stay. How do I get out if he won't accepted the property back? And it's been appraised at more than we purchased it for.

Also, the deed, insurance policy and county taxes were never changed to my name. We are in Kansas.

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Old Mar 15th, 2012, 10:08 AM   #2
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Default re: Giving back owner financed home... We are in Kansas

I wish to inform you that if you are owner of the property then you can sell the property and from sale proceeds you can pay the money owed to original owner. As owner has financed the property thus he is the seller and the property must be registered in your name. As a owner you can sell the property whenever you desire. As the property is under loan thus if the loan is in the form of mortgage where house is security then you may have to inform all parties about loan but if the house is not mortgage then you can sell the house without informing original owner and can repay the amount. As you are repaying the loan from sale proceeds thus you may not be restricted from sale.

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Old Mar 15th, 2012, 10:30 AM   #3
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Default Re: Giving back owner financed home... We are in Kansas

The seller does have a mortgage attached to the house. The deed, insurance policy and county taxes are all still in his name after 3 years.
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Old Mar 15th, 2012, 10:33 AM   #4
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Default Re: Giving back owner financed home... We are in Kansas

That was me above as I forgot to sign in. If he refused to take back the house and we cannot pay is there anything I can do with the fact that he knew we could not afford the house and just wanted someone in it? I feel like I got trapped. Wouldn't you think he would want the asset back?
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Old Mar 18th, 2012, 07:25 PM   #5
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Default Re: Giving back owner financed home... We are in Kansas

What you are talking about is deeding the house back to him in lieu of foreclosure. You can force him into foreclosing on the contract by just not paying. Since you need to move, he will be in a poor position with the house vacant and subject to neglect, vandalism and heaven knows what horrors.

Why not just tell him point blank that you can no longer afford the house and MUST leave, let him have it back. What you can do is talk with him about arranging for sale to another buyer or lease-option it so it does not sit vacant. His posture of denial is going to smack him right in the face once you are gone and he has an empty house he has to deal with, like it or not.

You can give a deed in lieu of foreclosure to clear your name off title, presuming he has recorded the contract. He can refuse to accept it if he wishes, but if it recorded, it will be more difficult for him to institute foreclosure proceedings since he will have the house back.

If you have a lawyer who can intercede for you with him to bring him down to earth and reality, that might help him see the wisdom of your proposal.

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Old Mar 19th, 2012, 09:10 AM   #6
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Default Re: Giving back owner financed home... We are in Kansas

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Originally Posted by Friend In Court View Post
What you are talking about is deeding the house back to him in lieu of foreclosure. You can force him into foreclosing on the contract by just not paying. Since you need to move, he will be in a poor position with the house vacant and subject to neglect, vandalism and heaven knows what horrors.

Why not just tell him point blank that you can no longer afford the house and MUST leave, let him have it back. What you can do is talk with him about arranging for sale to another buyer or lease-option it so it does not sit vacant. His posture of denial is going to smack him right in the face once you are gone and he has an empty house he has to deal with, like it or not.

You can give a deed in lieu of foreclosure to clear your name off title, presuming he has recorded the contract. He can refuse to accept it if he wishes, but if it recorded, it will be more difficult for him to institute foreclosure proceedings since he will have the house back.

If you have a lawyer who can intercede for you with him to bring him down to earth and reality, that might help him see the wisdom of your proposal.

.
Thank you so much for your reply. I have told him we will be moving no matter what. The deed and everything else IS in his name. It never was transferred to me. So I can't "give the deed back" as it's already his. I have made an appt with a lawyer who will write him a letter. I believe I need to just file a Quitclaim? Can you believe I actually signed one at the same time I took over the house so all he would need to do is file that and I have no rights to the home at all. Except on paper maybe. Wow, I have never felt so stupid in my entire life! I knew this person and trusted him. Since everything else is already in his name, deed, county taxes and Insurance policy, there is no record anywhere of me actually owning the house except my contract with him. He also has an existing mortgage on the home, which the contract states I should have had the deed free and clear of any leins. So I think I will be OK. I hope people read this and avoid this situation! I will never purchase a home every again without some kind of representation.
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Old Mar 20th, 2012, 12:20 PM   #7
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Default Re: Giving back owner financed home... We are in Kansas

Yes, your story is quite educational for anyone intending to buy on contract. The seller should have placed the contract with an institution for collection, recorded the contract and also placed a fulfillment deed in escrow so that when the contract was paid off, the deed would be there to be recorded.

A quit claim deed would do the job for you would be deeding back any interest you MIGHT have in the property, guaranteeing nothing.

Good luck to you on your upcoming move.
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