What kind of contract do I need to purchase property from an individual on a monthly payment plan?

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What kind of contract do I need to purchase property from an individual on a monthly payment plan?

My boss bought a house from someone that had been sitting abandon for years. the house need alot of work floors and walls were rotten. The electrical very out of date, the yard was overgrown and full of trash. We had verbally agreed that I’d purchase it for the tax assessment price minus the cost of materials and labor to get it up to code within a year, then we would have final price transfer all over. Well the damage and repairs need were a lot more than anticipated, plus we can’t get a permit as long as it’s not in our name. I want to just offer half price of tax assessor price and do a contract so that I can finish the work and not have to put my money and time into a house that I won’t have.

Asked on October 7, 2018 under Real Estate Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

What you need is basically owner financing--a "private mortgage" from your boss--whereas he will carry the financing for you, which you will pay off over time. Example with obviously made up numbers: say the house is worth (you feel) $50k given its condition. You could buy it from him for, say, $5k down and a 10 year mortgage for the other $45k at 3%; you'd use a mortgage amortization/payment program (easily available on the internet) to calcualte the monthly payments. So this would be like buying a house with a regular mortgage, except that the "mortgage" is held by your boss, the owner; he doesn't need to actually pass the money over to you--you simply incur a debt to him for the balance of the purchase price--and you and he have more flexibility to negotiate interest rate and terms (e.g. length) than you would have with a bank.


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