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If you were looking to buy a house, and the deed said this, would you buy?

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If you were looking to buy a house, and the deed said this, would you buy?

Old 02-03-06, 12:28 PM
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If you were looking to buy a house, and the deed said this, would you buy?

GRANTEE HEREIN SHALL BE PROHIBITED FROM CONVEYING CAPTIONED PROPERTY TO A BONAFIDE PURCHASER FOR VALUE FOR A SALES PRICE OF GREATER THAN $___________________ FOR A PERIOD OF SIX MONTHS FROM THE DATE OF THIS DEED. GRANTEE SHALL ALSO BE PROHIBITED FROM ENCUMBERING SUBJECT PROPERTY WITH A SECURITY INTEREST IN THE PRINCIPAL AMOUNT OF GREATER THAN $________________ FOR A PERIOD OF SIX MONTHS FROM THE DATE OF THIS DEED. THESE RESTRICTIONS SHALL RUN WITH THE LAND AND ARE NOT PERSONAL TO GRANTEE.



THIS RESTRICTION SHALL TERMINATE IMMEDIATELY UPON CONVEYANCE AT ANY FORECLOSURE SALE RELATED TO A MORTGAGE OR DEED OF TRUST.
It's a new one on me, but seems to be happening more and more.
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Old 02-03-06, 12:31 PM
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I have an English degree from an excellent school and deal with business/legal writing every day in my job. That said, looking at your post makes me feel like a complete moron. Could you translate that into "dumb-talk"? Thanks.

And bold, please.
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Old 02-03-06, 12:32 PM
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It sounds to me like "please don't buy my house and then turn around tomorrow and sell it for way more than you paid for it, or take out a big loan against it."
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Old 02-03-06, 12:33 PM
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What bullshit.
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Old 02-03-06, 12:34 PM
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It's the second part that confuses me most, about the "security interest."
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Old 02-03-06, 12:35 PM
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Originally Posted by Vibiana
It sounds to me like "please don't buy my house and then turn around tomorrow and sell it for way more than you paid for it, or take out a big loan against it."

Yep. That's what it says. I wouldn't agree to it.
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Old 02-03-06, 12:37 PM
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Originally Posted by Vibiana
It sounds to me like "please don't buy my house and then turn around tomorrow and sell it for way more than you paid for it, or take out a big loan against it."
uh why do they care what you do to it after you buy it? they dont want you to make a profit on something they sold you?
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Old 02-03-06, 12:37 PM
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Yep, quite stupid.
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Old 02-03-06, 12:37 PM
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I'd probably still buy it. Six months is hardly a long time. I know that for new construction projects that seems to be a bit more common as the builders don't want a lot of investors fleeing the market when it tanks. But this deed actually seems to work the opposite way.

As far as the security interest, that is not an issue for 90% of people buying a home. Even if you wanted to refinance, you often have to wait 6 to 12 months to do use the appraised value of the house (as opposed to the sales value). Usually for over-equity transactions, you need to wait 6 months as well.

I only see this being a problem for fix-and-rehab investors that want to turn property around quickly. Although again, for the right opportunity, 6 months does not seem to be an unreasonable timeline.

Now, here's my question though:

What power do you have over implementing those types of restrictions if you own a home. Can I put in the deed that this house cannot be sold for under $1,000,000?

It seems that this might be a way to control giving property in wills to prevent heirs from selling a home (intended for them to live in) or getting in and over their heads (financing a free-and-clear home just to get cash, etc.). But I don't understand it's purpose.
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Old 02-03-06, 12:40 PM
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If you're not a flipper, why care?
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Old 02-03-06, 12:46 PM
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It's another way to keep investors from buying up the neighborhood in attempt to slow redevelopment and keep it more owner occupied.
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Old 02-03-06, 12:49 PM
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Originally Posted by atari2600
uh why do they care what you do to it after you buy it? they dont want you to make a profit on something they sold you?
I didn't say I agreed with it, I was just translating.

Also, I'm not sure how enforceable such a clause would be, but I'm not a lawyer, so whatever.
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Old 02-03-06, 12:50 PM
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I have heard of these on builder properties but now they are coming up on bank owned properties as well. I deal with a lot of banks, and this is creeping in.
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Old 02-03-06, 12:54 PM
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Originally Posted by Trigger
It's another way to keep investors from buying up the neighborhood in attempt to slow redevelopment and keep it more owner occupied.
Bingo! I don't know how successful these efforts really are, though.
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Old 02-03-06, 02:13 PM
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Originally Posted by Vibiana
I didn't say I agreed with it, I was just translating.

Also, I'm not sure how enforceable such a clause would be, but I'm not a lawyer, so whatever.
i know - my reply wasnt directed to you but rather the idea of the deed. seems fucked up to me.
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Old 02-03-06, 02:16 PM
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Apparently I'm the only smart one here because it makes perfect sense. Any time you buy a horse, they don't want you to sell it right away because they will develop a complex about getting attached to their owners.
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