Legal Question in Real Estate Law in New York
I have a rental house in New York State that I am in the process of selling because I'm moving out of the area. I have a potential buyer who wishes to trade me a large piece of land for the house. In reality, the land is worth more than my house but the buyer has a child support lien that makes him unable to obtain a traditional mortgage. I am partial to this trade because the land's taxes are half of what I'm paying now and it's easier to have a piece of land for sale 1500 miles away than a house that requires upkeep that I will have to pay for someone to do.
Here's the rub...I owe approximately $56,000 on the $115,000 house that is, due to a bank's possible paperwork error, not in the form of a mortgage however it is listed as security on a line-of credit loan. The land for swap is worth approximately $150,000. I "soft" asked the bank loan officer if I could sell with a land contract on the house and she said that there was nothing preventing it but they would prefer that I didn't. Yeah, that sounds dangerous to me.
The question...is there a way to write this sale up where I'm protected and the buyer has full legal right to the house while I continue to make the monthly loan payment until the raw land sells? I would be in full possession of the land and the buyer would be fully responsible for taxes and insurance on the house? I would expect that the buyer would also reap the federal and state benefits of home ownership while I would be somehow safeguarded that they are paying the taxes and insurance to prevent the house falling out from under me while it's still in my name until paid off by the land sale.
Too complicated and risky? The home market where the house is located is very soft and I really need it gone before I leave the area.
Thank you for your input!
1 Answer from Attorneys
you need to actually engage counsel for this transaction. You have a non-trivial transaction and if you're not prepared to commit $1000 or so to get the answer done correctly, you will not be taken seriously. Also, if the owner of the land has a child support lien that you know about, whether or not the lien is correctly docketed, then you are buying the lien as well as the land.
Stop. Think. Do it right or don't do it.
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