I entered into a real estate purchase contract with seller financing. Ooops. The seller is willing to let me out of the deal now that I can't pay. I don't even know if they can, but the seller doesn't report my payments to any credit agency or anything. If I give the seller a deed in lieu of forfeiture, will the fact that I gave a deed in lieu and it is public record impact my credit?
Real Estate Attorney
The seller can agree not to report the credit information and most private parties would not do so. You should be careful about debt forgiveness which can result in tax liability. Have an accountant review the transaction. Especially if the property was commercial.
If you can get the seller to cancel, its up to the seller to report it. Generally, a deed in lieu, while better than foreclosure will negatively impact your credit if reported.
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If seller is not reporting to CRAs, then cancellation will not be reported. Good solution, if it can be done.
This is general legal information, not intended to apply to your specific case. And I may not be licensed to practice in your particular state. Under Federal Law, I am a debt relief agent.
I agree with my colleagues. That is a point you can address to the seller - and can be part of the agreement. I give you the deed, you don't report to the credit reporting agencies. Get the agreement in writing.
I hope this helps.
Steven A. Leahy
Please note that the above is not intended as legal advice, it is for educational purposes only. No attorney-client relationship is created or is intended to be created hereby. You should contact a local attorney to discuss and to obtain legal advice.
Family Law Attorney
Anything that is recorded at the recorder's office is public record. The credit bureaus gather practically all public records.
You and the seller likely should be careful in what is written on the documents being recorded.
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