[WSBAPT] Real Estate Contract conundrum

Mon Jun 15 12:14:52 PDT 2015

Thank you everyone for the answers!

Although I've been in practice for 11 years, this is the first time it has come up for me!  Definitely unusual these days.

Amy Pivetta Hoffman
Ph. 253.720.3020/F. 253.200.0855
PO Box 73040, Puyallup, WA  98373
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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Mike Winslow
Sent: Saturday, June 13, 2015 8:15 AM
To: cole-gilday at stanwoodlaw.net; 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] Real Estate Contract conundrum

Bob has  it right on. Here is a sample form from the LPO form site at the WSBA.
Also, the link to the LPO forms. You probably want the LPB 44. The 45 is for commercial and farms.
http://www.wsba.org/Licensing-and-Lawyer-Conduct/Limited-Licenses/Limited-Practice-Officers/LPO-Forms
If you have questions about completing the form, or how to structure these, call me.

Your clients should also use a contract collection service to receive and track payments. The do it yourself approach to collecting payments results in poor payment tracking, improper calculation and tracking of actual receipt of principal and interest and then incorrect reporting of interest received for income tax purposes.
Check out INCS for collection of payments. The typical setup fee is only $125, or $150 if the Fulfilment Deed is held in true escrow (which is beneficial to the buyer  if the seller dies), and the monthly service fee is only $10. I am handling a quiet title for a buyer who did not receive a fulfilment deed because they paid off 20 years ago and thought that was that. Sad story. True escrow avoids that problem.

http://incsnoteservices.com/

Full disclosure: My wife and I own this collection service. We have a full time Operations Manager, Tracey Lockwood. Feel free to call her.

Mike Winslow

Michael A. Winslow
1204 Cleveland Ave.
Mount Vernon, WA 98273
Ph. 360-336-3321
Em. Mike at winslegal.com<mailto:Mike at winslegal.com>

This message is from an attorney, so it's confidential. If you are not the intended recipient, it's too late to stop reading this message, but you may not use it for any improper purpose. Huge Disclaimer available upon request.

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Robert R. Cole
Sent: Friday, June 12, 2015 4:49 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Real Estate Contract conundrum

It is called a "wrap around" contract.  New REC with the New Buyer paying both the Original Seller and the Old Buyer their equity.  It is actually on the standard REC form as an "Assumed Obligation", and there will also be Payment of Amount Financed by Seller.  It is actually rather straightforward. Us old codgers did it all the time in the 80s.
Very Truly Yours,
Robert R. Cole
Law Office of Cole & Gilday, P.C.

10101 - 270th St. NW
P.O. Box 249
Stanwood, WA 98292
(360) 629-2900 (Telephone)
(360) 629-0220 (Fax)

This message contains confidential and privileged information that is intended only for the named recipient(s).  Unless you are the named recipient or authorized agent thereof, you are prohibited from reading, copying, distributing or otherwise disseminating such information.  If you receive this communication in error, please notify the sender immediately.

On 6/12/2015 4:26 PM, Amy Pivetta Hoffman wrote:
All,

Seller and Buyers enter real estate contract ten years ago for 20 year term.  Now, a new buyer has arisen and old buyers and seller want to sell.  Seller and old buyers are close family.  New buyer unrelated.

The problem is that old buyers want to recoup what they've paid-new buyer has agreed to price that would cover remainder on contract plus what old buyers have paid.

I have gone around and around about how to handle this properly.  All parties tentatively agree on terms, I just can't figure out how to structure this properly.

My thoughts are:

1.       Seller gives Old Buyers Partial Fulfillment Deed.  No excise consequence.  Now Seller and Old Buyers are all Sellers with title, but Contract remains partially unpaid as to old buyers.

2.       If I draft a Deed and Purchaser's Assumption of Real Estate Contract, we don't get to modify for new price, etc. and Old Buyers are cut out without a separate agreement (Unsecured Promissory Note)

3.       If I draft a Fulfillment Deed, original Seller is cut out because he no longer owns and no way to get the rest of his money.

4.       If I draft an entirely new Real Estate Contract with new terms for all Sellers and New Buyer, the old contract hangs out there and clouds title.

Can anyone suggest a document path that will allow both Seller and Old Buyers to recoup their share of the new purchase price and not compromise title?

Help please!

Amy Pivetta Hoffman
Ph. 253.720.3020/F. 253.200.0855
PO Box 73040, Puyallup, WA  98373
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CONFIDENTIAL COMMUNICATION:  This email is intended only for the use of the individual(s) or entity(ies) to whom it is addressed and may contain confidential, privileged information.  If you have received this communication in error, please immediately notify the sender electronically, return the email to the above email address and delete it from your files.  Thank you.

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