The property is worth much less than the mortgage, is AITD good for me (buyer)?

Asked by Alr1948, California, San Bernardino, CA Sun Feb 12, 2012

The seller is asking for 150K downpayment and 60K payable in 2 years. The loan is $378K plus about $40K seconds. What can you advice?

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Sabrina Simpson’s answer
Sabrina Simp…, Agent, Moorpark, CA
Thu Feb 16, 2012
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.
0 votes
, ,
Thu Feb 16, 2012
This does not sound like a good deal at all to me. If you are having problems getting financing give me a call. Do not pay off this person's lost equity.
0 votes
Ludy Ivonina, Agent, Corona, CA
Mon Feb 13, 2012
Run away!!!
I'll be glad to help you with . I live and work in San Bernardino area. Please give me a call at (909)731-7124 or email me at

Thank you.
Ludy ivonina.
0 votes
Sabrina Simp…, Agent, Moorpark, CA
Mon Feb 13, 2012
Buyer Beware! This is not a market to do an AITD or a Lease Option if you are a buyer. If you do either, whose to say that the current owner doesn't continue to make the payments, even if you are paying. I say run the other way and find yourself and good realtor to assist you with buying a home.
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Harold Sharpe, Agent, LAKE HAVASU CITY, AZ
Mon Feb 13, 2012
So let me get this straight?
You want to buy a house that has an upside down mortgage, and give the person 150,000 and pay 60 grand in 2 years. Can you show me the math where you benefit at all here?
What happens with the mortgage? You pay that as well correct?
I mean the loan is not going to magically disappear.
The loan is on the property not the person. I'm sorry I meant loans.
Please telling me I am missing something here.
Are you Bank of America being forced to buy countrywide for 15 billion and all their bad debt?
Sounds to me like you are being taken for a ride on a one way trip.
Whatever you do don't hitch hike, I don't think you will make it back.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
California Department of Real Estate Broker License # 01312992
0 votes
John Arendsen, Agent, Leucadia, CA
Sun Feb 12, 2012
People get taken everyday on bogus RE deals. Do your homework. Check out this seller thoroughly before you plunk down any of you r150k.
0 votes
James Trapas…, Agent, Highlands, CA
Sun Feb 12, 2012
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Rick Frissell, Agent, Brandon, FL
Sun Feb 12, 2012
Is this owner financing you are speaking about? You would give the owner $150K and an note for $60K. If I understand your question correctly, there is only one major problem. The bank will take the house away from you. An owner cannot sell their house without clearing all leans. For that to happen, the owner would have to pay both the first and second mortgage off in full along with any other leans placed against the property.

If the owner is not willing to pay off the current leans, run, run, run!
0 votes
Ron Thomas, Agent, Fresno, CA
Sun Feb 12, 2012
If you are felling rich and altruistic, go for it.
But it sounds like you really doing him the favor,
Can't see the numbers, but it seems like you are paying too much.

Good luck and may God bless
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