Use a Memorandum of Agreement to Protect Your Deal
By Pierre Mouchette | Real Property Experts LLC
A memorandum of agreement is a legal affidavit that states that you agree with the owner agree to the sale of the property. When properly notarized, the testimony may be recorded on the land records to protect all parties to the transaction. The memorandum is helpful if you want to prevent the seller from going around you and selling to another investor while agreeing with you.
When you record the memorandum, it creates a “cloud on title,” which makes it difficult for a buyer to insure title since it creates uncertainty about ownership interests in the property. A title company/settlement attorney trying to close the property would need to cure the defect by obtaining a quit claim deed from the Affiant to clear the cloud.
A memorandum of agreement may help protect your profit by allowing you to