David Saks: September 2014

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Real Estate Practice : Lesson 3726

exculpatory

The word means to "clear from blame or remove guilt".

One of best things about the exculpatory clause is that it allows a buyer to purchase a property without any personal liability.

In an exculpatory clause, the liability may be limited to the property itself and may not extend beyond the liability which involves the property.

If a buyer defaults on a loan with an exculpatory clause and the seller of the lender forecloses and they take the property back, with the exculpatory clause that might be all they can take from the buyer.

A buyer's credit might be spared with the inclusion of such a clause in their contract.

If the seller is going to carry some of the financing for the buyer and the note is secured by the real estate with the seller this clause may be included.

As an example, if the seller is listing the property for 200 thousand dollars and the first mortgage has an existing balance of 75 thousand dollars on it, and the seller is willing to sell the property for a downpayment, (with the buyer taking over the first mortgage and the seller accepting a note for the difference) if the buyer signs for the property subject to the existing first mortgage, and includes an exculpatory clause that says " ...the liability shall be limited to the property itself and shall not extend beyond the liability of the property", the buyer is relinquished of any responsibility in the case of a default to the seller and their credit spared.

The buyer is absolved. (maybe)

Chime in legal eagles !




David Saks



Time&Temp Memphis

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Comment balloon 2 commentsDavid Saks • September 29 2014 08:11AM
Real Estate Practice : Lesson 3726
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The word means to "clear from blame or remove guilt". One of best things about the exculpatory clause is that it allows a buyer to purchase a property without any personal liability. In an exculpatory clause, the… more
Real Estate Practice : Lesson 3725
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We're not talking about funny little furry, creatures here. We're actually talking about a little paragraph that you could actually insert into the body of your contract that could help you break the deal. You might consider the… more
Real Estate Practice : Lesson 3724
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If you tell the lender that you make 115 thousand dollars at the car wash and work four days a week somebody's going to start asking questions. I suppose one of the most important things you can do is provide truthful details regarding… more
Real Estate Practice : Lesson 3723
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Hold on Whoa Nellie This is a biggie The lender might really have only one question if you don't have a credit file with the bureaus : Who are you Don't give up yet Maybe you can do something about it … more
Real Estate Practice : Lesson 3722
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When you put together a plan to purchase real estate, especially for investment purposes, you might be looking for a bargain because of title problems which include: 1. Federal, state or local tax liens 2. Mechanics Liens for… more
Real Estate Practice : Lesson 3721
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The geographic trade area in which a bank will lend is usually defined as the trade area from which a high percentage, such as 75 or 80 percent, of their loan and deposit business takes place. When the bank or lender defines it's trade… more
Real Estate Practice : Lesson 3720
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Here's another one that just seems to summon that part of the mind that we refer to as common sense. Usually, after the lender reviews your application the lender will request additional information from you if they need it to assist… more
Real Estate Practice : Lesson 3719
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Excessive accounts might be like having excessive bad checks to a lender if those accounts are delinquent or mismanaged. With a plethora of accounts on the books the lender might wonder whether or not all of those excessive obligations… more
Real Estate Practice : Lesson 3718
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Here are just a few: 1. Falsification of your employment record. 2. Falsification of your income. 3. False financial statements. 4. Intentional misrepresentation of your bank statements, funds or assets. 5… more
Real Estate Practice : Lesson 3717
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When someone else puts their name on that loan application with you whether or not their putting their credit on the line for you, or just acting as a partner in the deal, the lender wants to know as much about the co-signer as they can and… more