There is no such thing as a "handshake deal" if you have anything to do with real estate. Not only that, but you might have to prove what "position" you have in the purchase.
1. If you buy a piece of real estate, get it recorded. Or the seller might try to sell it again; then you have to prove that you are the rightful owner (by having your deed/contract recorded) and the erstwhile seller has no right to sell it (again).
2. If you sell a piece of real estate and you finance any part of it, get it recorded. Sellers used to do some owner financing, in essence, being the 2nd in line to get paid. In either case, 1st, 2nd or 3rd in line, WHO records first is 1st in line to get paid. Nowadays with so many foreclosures and short sales, the homeowner who is not in 1st position has a hard time to collect on his loan. In case of a foreclosure, he probably gets nothing. My suggestion? Only lend money towards a property if you are in 1st position!
3. If you loan someone money so he/she can purchase a piece of real estate, get it recorded. As in #2, above, I suggest you only lend money towards a property if you are in 1st position.
4. Family members often assist with the down payment of a home of their children. If this is considered a "gift", it does not need to be recorded. If it is considered a loan, it should be recorded. However, keep in mind that the one purchasing the home may not get a loan because lenders want to be in 1st position. That means the personal loan will have to take a lesser position.
I AM NOT AN ATTORNEY NOR AN ACCOUNTANT.
Before you make any decisions, make sure you get legal and professional advice, because all of the above situations will have an impact on your legal and tax situation for years to come.
IF YOU WANT SOMETHING, GET IT IN WRITING.
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