As a real estate investor, when there is a deal at hand, there is necessarily a contract involved. While real estate contracts may seem intimidating, taking the time to familiarize yourself with the terminology you’ll encounter is well worth the effort. You’ll want to have a full grasp of contracts or a trusted guide to review everything on your behalf before you enter into any agreements. This knowledge will help you feel confident and assist in making wise choices as your investment business grows. Understanding the different purposes of these styles of real estate contracts will be very beneficial to you in the long run. Here is our guide to Oregon real estate contracts.
While it may sound complicated, Oregon real estate contracts are often assigned to another buyer. In this way, real estate investors facilitate sales as a wholesaler between the seller and the end buyer. In other words, the original buyer has sold the rights to buy the house to another buyer. The end buyer pays an assignment fee, which is typically very small, and then proceeds with the purchase of the home from the seller.
Selling property as “subject to” an existing loan is yet another way that Oregon contracts may be written. This clause in a real estate contract allows a distressed seller, who may otherwise lose the property, to sell the house while keeping the existing mortgage in place. Although the loan remains in the seller’s name, the buyer begins making the monthly mortgage payments and becomes responsible for taxes and maintenance. Many people assume the seller takes on excessive risk in agreeing to this kind of arrangement, but Willamette Home Buyers specializes in buying property subject-to the existing mortgage. We can usually offer a higher sale price to sellers interested in this type of sale, and our contracts provide specific protections for the seller in the event we fail to make a payment (which has never happened).
A purchase agreement is what may be considered the most common style of Oregon real estate contracts. This is a fairly simple and straightforward sale between the seller and buyer and contains all the elements of a legally binding contract. If you are working with an agent, it will likely be a state or association contract. If the sale is directly between the seller and the buyer, then the general purchase agreement is typically used. As for properties other than single-family, you may need to make use of a property-specific form.
If your plans involve becoming a landlord in Salem, your real estate contracts will involve lease agreements. This guarantees the tenant the use of the property, for a specified period, while at the same time providing you with a guaranteed monthly income. These contracts are carefully laid out to avoid any confusion or misunderstanding of any issues that may arise and what exactly is expected from each party involved. You’ll want to be certain that you’re meeting all local, state, and federal guidelines.
Power of Attorney
While not commonly thought of, the power of attorney can be extremely useful in real estate contracts. Through the use of the power of attorney, you can convey your rights to conduct business to someone who is entrusted with your finances, an attorney, or an agent. They come into play when the owner is either not available to conduct business or is incapacitated, has had an accident, or is in seriously declining health and unable to conduct business any longer.
Rent to Own
The rent to own strategy is an advantageous real estate contract for Salem investors. As the seller, you collect monthly rent along with additional monies. The buyer has the ability to try the house out for a specified time period. There are two types of these contracts, the option to buy or the agreement to buy. The agreement to buy tends to be much more desirable to sellers, in general, given that the home must be purchased at the end of the agreement period by the renter. This strategy allows buyers time to build savings towards a deposit on a conventional loan and find financing. Should your buyers have chosen the option contract, they are not obligated as in the agreement to buy. Should they be unable to qualify for a mortgage loan the renter can simply walk away at the end of the agreement.
Do not let intimidating contracts stop you from success in your investment business. The professionals at Willamette Home Buyers are the best guide you could have to walk you through real estate contracts, we make your Salem real estate investment business easy. At Willamette Home Buyers, we take the time to listen to your dreams and help you make plans, and update plans as your life and goals change over time. When a great deal can be yours, you will know you’re using the contract that best suits your long term investment goals. Why not get started now? Just send us a message or call Willamette Home Buyers at 503-383-1686 today!