Just Answers - Real Estate

There are cases when a home does not appraise for the contract price, especially when a bidding war results in high offers. Your real estate agent may have mentioned that the potential buyer is asking for a

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

second trust. What does this mean?

Many lenders will not loan on more than 80% of the appraised price of a property. If the property appraises for less than the contract price, the borrower must often find

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

way to make up the gap.

For example, the contract sales price on a property is $300,000. The purchaser is originally looking at a loan in the amount of $240,000, 80% of the purchase price. The appraisal on

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

y came in at $275,000. The lender will only lend 80% of the appraised value, or $220,000. The purchaser still wants to buy the property, but is now $20,000 short of the contract price. He or she may ask you

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

o take back a second trust in this amount.

The first trust puts a lender in top priority position. If the mortgage (also called deed of trust) is recordered among the land records, the property cannot be so

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

d without the lender's permission and the lien paid in full. This is normal when you have a mortgage. If the borrower goes into bankruptcy or forfeits on the property, the lender will get the property. The f

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

rst trust lender is secure in the property.

A second trust is basically asking you to finance the second trust, or the $20,000. You will hold the second deed of trust, which means if the property is foreclo

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

ed on, you will be paid off after the first trust. For example, if the property only brings $220,000, that money will pay off the first trust holder -- leaving nothing to pay you off with. This is a higher r

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

sk. Second trust holders usually charge slightly higher interest rates.

Of course, you could always sue the person who owes you money, but if they have none, your judgement will be pretty meaningless. The c

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

ances of collection are slim.

You have to decide how much risk you are willing to assume. Clearly, a second trust can help you in selling your home, and may be the only way to get more than the appraised va

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

ue for the property. A second trust can make sense, if you have the proper protections in place in the form of legal documents for the second trust.

It is important that you follow each step of preparing a

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

second trust to the letter. Each state has different rules governing second trust financing, and you should have an attorney handle the usury laws, recording details and other requirements that state law may

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

impose on a second trust.

To protect yourself, make sure that you investigate the credit-worthiness of your buyer. Verify the buyer's income and get written permission to perform a credit search. If the cre

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

it bureau report shows a history of slow or delinquent payments, you may want to reject extending any credit to an already over-extended purchaser.

You may want to make sure that enough security be placed i

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

the property to protect against a foreclosure. In the above example, selling your home for $300,000, and the buyer will obtain a first trust of $220,000. You will take back a second trust of $20,000 and the

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

borrower will put down $60,000 of his own money to close the deal. This seems to be a significant amount of money put in equity, making the buyers reluctant to walk away from the property and lose the money.

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

In this example, if the house must be sold, it could go for $240,000 -- giving enough money to pay off the first trust and the second trust.

When you take back financing, you are lending money to your buye

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

s. They will need to sign two pieces of paper: a promissory note and a deed of trust (the mortgage document). You will also want to make sure that the first trust lender will advise you if the borrower is in

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

default on payments.

You want to make sure that someone visits the property regularly. If the property appears rundown, its value could be diminishing and taking your security away. Most standard deeds of t

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

ust require the borrower to maintain the property in decent condition.

A second deed of trust can be a valuable tool for a seller. Make sure that it is property drafted and protects your valuable investment

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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