Legal Question in Real Estate Law in North Carolina

Re: rsidential property seller financing

First you need to have the Buyer sign the note and deed of trust - you should have your own attorney prepare these documents and then ask him any further questions. But basically, the following applies:

By virtue of your accepting a Balance of Purchase Money Promissory Note and Deed of Trust, you are bound by the following legal constraints (under current state of North Carolina law):

1. If the Buyer/Borrower fails to make the payments required pursuant to your Balance of Purchase Money Promissory Note and Deed of Trust, your only (sole and exclusive remedy) remedy is to foreclose your Balance of Purchase Money Promissory Note and Deed of Trust and expose the subject property to public foreclosure sale.

2. You have the right to attend and bid at the foreclosure sale.

3. If at the foreclosure sale of your Balance of Purchase Money Promissory Note and Deed of Trust, the property brings sufficient sums, the first money will be used to pay administrative cost(s) of foreclosure (court costs, attorneys fee, trustee�s commission, etc.), and thereafter the balance will be applied to any sum(s) due you under the Balance

of Purchase Money Note and Deed of Trust. If the foreclosure sale fails to bring sufficient money to pay the administrative expenses and the amount due you, you will have no further right(s) against the Buyer/Borrower.

Now if the Buyer fails to make payments on the first mortgage, then they will likely foreclose which will also wipe out your deed of trust. You should record a Notice of Sale as well so that you are sure to get notice from the first lender in the event of a foreclosure.