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If I sold a house and did an owner finance agreement with the buyer, what happens if I have to repo it?
I sold a house 15 years ago in the state of Texas. Some things have happened and it looks like I'm going to be forced to repossess the house. I'm in the process of getting a lawyer. I now live on the other side of the country so it's going to take some time. My question is, I know how bank foreclosures work where you auction off the property and pay the mortgage off plus any other lien holders. How would this work? There's no mortgage to pay off, there is one other lien holder but I have first place.
I'm having to repossess because they allowed their home owners insurance to laps. When I spoke to the company about it they said they would not reissue them a policy and that since they had committed insurance fraud nobody else will issue them a policy either. It's written in the contract they must have insurance or I can repossess. I'm not comfortable with my property not having insurance.
2 Answers
- ?Lv 77 years agoFavorite Answer
Just leave it up to your lawyer to handle. However, be careful. Insurance companies track claims based on the HOUSE, not the OWNER. There are plenty of true stories out there about people who found out they couldn't insure a house because a previous owner (or previous tenant) had filed multiple claims.
You didn't say what the fraud was. However, if homeowner insurance companies are saying they're not going to insure it (for the current occupant), you may have trouble getting insurance even with a new occupant (or owner if you decide to sell). That's something you've got to look into.
Good luck.
- A HunchLv 77 years ago
Most banks don't auction the property. The bank hires a real estate agent and sale the property.
But you definitely need to have a real estate attorney involved. I don't think your clause in the contract is legal. Yes, they definitely have to have insurance. But typically if they lapse, you buy the insurance and they have to pay you the cost.
