Posted by Maranga Ink Resources on 11/21/09 2:11am
Msg #311764

ASAP need advise on this TN land purchase

Here is a sales contract on a 1 Acre of land over TN.
As soon the purchase docs are signed, they should be recorded right?
And the developer should release that piece of land.

In this case, I am quoting "As far as recording when the note is paid off we will have our attorney record the deed, at that time you can have it set up with your names on the actual deed."

Is this legal? wait 8 years when the note is paid in full ? Paying directly to the developer is not a problem, correct?

Please, anyone that knows what's going on, reply asap
Thanks

Reply by desktopfull on 11/21/09 2:14am
Msg #311765

Suggest you hire a real estate attorney in TN n/m

Reply by Latrina Conaway on 11/21/09 5:50am
Msg #311769

Re: Suggest you hire a real estate attorney in TN

I dont think you need an attorney ,it sound like a solid deal to me. You drawed up the P/A or contract and all information and purchasing parameters have been included w/i the contract. therefore, have purchaser and buyer sign aggreement after a title search has been complete and file with city records.

Reply by Linda_H/FL on 11/21/09 6:38am
Msg #311770

Agree with dtf - consult an attorney

The way I read your post I'm assuming this is a personal situation, so, in my experience, no, something sounds off - if seller is financing the deal the mortgage/security goes to the seller and will be released when loan is paid in full (same as any loans we close from brick and mortar lenders)...however, title to the property should vest in buyer's names upon consummation of the deal. It's not like motor vehicles when lender holds title til paid - Grant Deed/Warranty Deed is recorded first vesting title in buyer, then mortgage/security instrument. Again, this is in my experience.

Now, if you're asking this in your role as a notary, this is beyond your scope and you really don't need to concern yourself with it. Remember, you notarize and don't get involved with the body and contents of the docs- unless you suspect some fraud is being perpetrated, in which case don't help them with their deal. Have them find another notary.

MHO

Reply by Julie/MI on 11/21/09 6:50am
Msg #311771

"As far as recording when the note is paid off"

So this sounds to me like the seller is financing the land. Here in Michigan we call those land contracts or they could be set up as a mortgage with deed. It's the norm here for land contracts that the deed is executed at the time of closing and they record the land contract. After the land contract (note) is paid, the escrow company records the deed.

TN probably has totally different laws than my state, and as the other stated, an attorney should be consulted.

Reply by Linda_H/FL on 11/21/09 7:00am
Msg #311772

Julie...I have a question..

If buyers are financing the land through the seller by way of a mortgage - the property has to be conveyed to them first correct? How can they sign a security instrument in favor of the seller if they don't own the property? You can't mortgage something you don't own or have a valid, vested interest in....

Maybe I'm missing something here.

Reply by PAW on 11/21/09 7:06am
Msg #311773

Re: Julie...I have a question..

TN uses a DoT as a security instrument, not a Mortgage. Therefore, in many seller financed land deals, the DoT is in favor of the seller. A final Warranty Deed is provided at the same time the Discharge of Mortgage (similar to the Florida Satisfaction of Mortgage) is recorded.

Reply by Linda_H/FL on 11/21/09 7:07am
Msg #311774

Okay...disregard these questions...

Got an e-mail explaining it a bit - vVery different from anything I've ever seen/heard in my career, but you learn something new every day, right?

Reply by Julie/MI on 11/21/09 6:56pm
Msg #311829

Re: Okay...disregard these questions... n/m

Reply by Julie/MI on 11/21/09 7:00pm
Msg #311831

Re: Okay...disregard these questions...

what happens is that the land contract is recorded at the county. These are usually for acreage, when the seller is in no hurry for the $$$$. Usually some deposit is made to the seller/vendor. The seller then signs a Warranty Deed and an escrow agent holds the deed. (A lot of the sellers were older and if they died, there was no easy way for the purchaser to get title so that's why they execute the deed and have a neutral third party hold it). The buyer (vendee) makes payments directly to the vendor and the interest rate is determined in the land contract. Sometimes a balloon is due at the end of 10 years, for example, and the vendee has to secure a mortgage or whatever means to get the "note" paid off.

If the vendee defaults, the seller has no problem because the title was never transferred and the seller keeps the property.

Reply by Les_CO on 11/21/09 11:08am
Msg #311797

Sounds like an “Installment Land Contract” If they are legal in TN, it’s probably okay. It’s just a way of selling/financing property. But JMO…best to seek legal advice from TN attorney.

Reply by Maranga Ink Resources on 11/22/09 9:09pm
Msg #311895

Thank you to all
Yes, we learn something new every day.
This TN Land contract, definitely, is my first time.Nothing similar before.

Happy Thanksgiving !!!