[Lilia Russell]

Lilia Russell

Hello everyone, hope all have a great day and doing well.
I have a single-family house on Lease With Option To buy with the owners of the house since 2016 and my tenant-buyer is ready to buy in a few months. (Sandwich Leae Option, where my company is in between seller and tenant-buyer.)
I have 2 questions:
1
Do I need to do a double closing with 1-day daugh to purchase from sellers 1st and then have another closing with tenant-buyer purchasing this property from my company? Will I have to be on title and will I need to do title insurance?
2
I did not record the Notice of Option in the courthouse. Will I still have a right to purchase a home from the seller and sell it to the tenant-buyer?
Please help me out, as it is my first Sandwich Lease Option deal.

Thank you much in advance and wish everyone a great day.

[DON WEDE]

DON WEDE

Lilla,
Just sell your position in your option with the seller for your expected profit. No need to go into title.

[Lilia Russell]

Lilia Russell

Hello Don,

Thank you so much for your suggestion. I only need a little bit more details on how to structure this transaction.
Would you be kind enough to elaborate on it? Do I need to have a Notice Of Option recorded to do this?

Thank you once again for your knowledge and willingness to help.

[DON WEDE]

DON WEDE

Lilia,
You do not have to record anything. Tell the attorney or title company that you are assigning or selling your position in your unrecorded option position. You can do either what ever they are comfortable with. Have it show on the HUD-1 as option consideration, payment to clear title flaw, what ever they are comfortable with.

[Lilia Russell]

Lilia Russell

Don,

Thank you very much for your suggestion. I fill much more confident now:)
That is a blessing from the sky having knowledgable people like you, Don, helping here.

[Jackie Lange]

Jackie Lange

Lilia

You can certainly sell your option to the new buyers. But then the buyers and the seller will know what your profit it. You might give everyone a heads up about it prior to closing so there are no last minute surprises. It is much better if the whole transaction is handled AT closing. Don’t sell your option outside of closing! If the buyers are getting a mortgage to buy the house, they will need to disclose this to their lender. It is better if the sale of the option shows up on the HUD-1 because the buyers will be required to sign a document swearing that there were no agreements or transactions outside of closing.

The lenders could kill the deal when they realize that the seller (you) is not on title. By assigning the option, you solve that problem.

Another way you can close — only works with a title company you have a good relationship with — is to close on the sale with the sellers, then do a different close with the buyers. The pros of doing this is that no one knows what your profit is AND the lenders will not know. The cons of doing it this way is that you will have additional closing costs and you will be title for a few hours. This is called a Double Closing. Some title companies will do them and some will not.

[Lilia Russell]

Lilia Russell

Jackie,
Thank you kindly for your suggestions. Now I have more input from you to move forward with confidence.
I think I will go and see attorney who will do the closing and make a plan for a closing of this deal.