What documents are typically requred at closing for a Tenant/Buyer?

[Adam 0]

Hi All,

 

Quick question... When the Tenant/Buyer is getting ready to get a mortgage for a Cooperative Assignment, what documents are typically required at closing? I'm in a title company state. Here is the list I was thinking...

 

-- Lease Agreement

-- Option to Purchase Agreement

-- Purchase Agreement

-- Assignment of Lease and Option Agreements

-- Anything else?

 

Stupid question, but I'll ask anyway... Would a Purchase Agreement AND an Option to Purchase Agreement be required at closing? Seems like I would only need to use an Option to Purchase Agreement, but I'm not totally sure. Just askin'...

 

Thanks in advance,

 

~Adam

[MichaelC 160]

Adam, make it easy on yourself. Contact the title company and ask them what they require to close on this type of deal. They want your business and they'll be happy to work with you.

[pilot76180 51]

Sometimes the lender will require a sales contract drafted, sometimes they just take the option to purchase and assignment.

[Adam 0]

Thank you for the quick replies MC and JJ! I appreciate it!

 

Update on this.... Today, I spoke with the title company I've used in the past to close some wholesale deals and they are wanting to see an actual purchase and sale agreement at the time of closing. I get the sense from John's post that some title companies and lenders may want to see a signed purchase and sale agreement and for others it might not be that big of a deal.

 

In an effort to reduce the amount of upfront paperwork to sign, I think I'll add some sort of wording to my option to purchase agreement that says something like... If needed at the time of closing, Seller and Tenant/Buyer to sign a purchase and sale agreement that match the terms and conditions set forth in the option to purchase agreement... yadda, yadda, yadda.

 

MC, what documents do your Sellers and Tenant/Buyers typically take to the closing table?

 

Thanks again Gentlemen,

 

~Adam

[MichaelC 160]

I spoke with the title company I've used in the past to close some wholesale deals and they are wanting to see an actual purchase and sale agreement at the time of closing.

Maybe they didn't understand you? You won't have a P&S agreement when you go to them. You'll have a lease and option to purchase agreement. The title company should look at your paperwork and provide the necessary P&S docs.

 

In an effort to reduce the amount of upfront paperwork to sign, I think I'll add some sort of wording to my option to purchase agreement that says something like... If needed at the time of closing, Seller and Tenant/Buyer to sign a purchase and sale agreement that match the terms and conditions set forth in the option to purchase agreement... yadda, yadda, yadda.

Unnecessary, in my opinion. I can all but guarantee that for the deal to go down a standard purchase and sale agreement are going to be required. No need to reference it in writing.

 

MC, what documents do your Sellers and Tenant/Buyers typically take to the closing table?

Whatever docs the title company, or attorneys, or lenders require. It will vary with each deal.

[moveright 0]

Spoke to my mortgage guy yesterday. When I told him that I needed rent credits to count toward closing costs he stumbled on it for a second and said "FHA allows for a seller to contribute up to 6% in closing costs, is the seller actually paying any closing costs?" I told him "TECHNICALLY, the seller is not paying closing costs, BUT this needs to be set up creatively and the numbers of the deal are just that, numbers. What can we do?"

 

His answer... Addendum to the Option Agreement. He told me that if the rent credits are say $3600, then we just simply need an addendum to the Option Agreement which states "Seller will contribute $3600 toward closing costs".

 

Genius. That's when it dawned on me that this truly IS creative. Fair game and totally legit, the numbers are what they are. It's how you write them down that matters.

 

Moral of this story: One document that is required for ME is Addendum to Option Agreement.

[<Steve> 82]

I like that Michaeld. Good idea.