Absolutely not! Why would you even think of an AITD on a property that is worth less than the amount owed? There is no protection for a buyer on an AITD. You make your payments to the seller and what he does with the money is his business, the loan is still in his name. This is also not a market for lease option because you could entered into an agreement on an amount and then property values decline again and when your option is due you will not be able to get a loan. You need to seriously get legal advice before you get caught up in something you are going to regret. Seek out a real estate attorney.... more
You as a 2nd trudtee holder can foreclose and take control of the property, but the 1st has to be paid, which you can negotiate with them on payments and proceeds. You should check with an attorney so that you can be advised of your rights. If you want to check the comparable sales for this property, call me at 714-264-5890 (email: Jessmend@yahoo.com) or you can go to http://www.TheOcmls.com in this site you can check the comps for your property.
In the Purchase Agreement there is a standard loan contingency period of 17 days. (This can be modified depending on how fast your lender can provide underwriting approval) Like the others have said, unless it is an all cash purchase, that contingency period is there to protect you from liquidated damages if the loan does not go through during that time. Therefore, keep the loan contingency.