QUESTION
What documentation do we need to lower an existing land contract principle by $15000, & receive payoff now?
Asked on Apr 02nd, 2017 on Real Estate - Michigan
More details to this question:
We DO want to do this! We want it to be executed and documented correctly for them and us. They made a down pmt at closing and monthly payments since 11/2008. Do we prepare an addendum to the land contract (orig. sale price $98,000) to reflect an agreed upon altered sale price of $83000? Does the Addendum need to be recorded, or can the Release of the land contract indicate an agreed upon reduction of debt? Then does the warranty deed reflect the altered sale price of $83,000. Or do we treat the $15000.00 as 'debt forgiveness' and document that in what way? What price would the warranty deed reflect then? We DÒ want to waive the $15000.00 and get a payoff from them now.
2 ANSWERS
Real Estate Law Attorney serving Holland, MI
at
Cunningham Dalman
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I would do an addendum documenting the reduction in price and reason for it and then have the warranty deed reflect the reduced purchase price. While a title insurance company may prepare the deed if you are providing an owner's policy of title insurance or title search upon the payoff, you may need an attorney to prepare the addendum
Answered on Apr 03rd, 2017 at 6:12 PM
Administrative Law Attorney serving Ann Arbor, MI
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David J. Hutchinson
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It would seem that you would be forgiving debt, but the specifics and reasons are important. You should discuss them fully with a good local real estate attorney to be sure you are doing the right thing, Good Luck.
Answered on Apr 03rd, 2017 at 7:12 AM