Owner Financing Musts

2013 July 27

Here are a few things you want to do when you owner finance the sale of your home or commercial property.

  1. Don’t be shy about the terms. Charge an above market interest rate. I would shoot for 7 or 8%. Set as short an amortization rate as you can. Also, get as much down payment as you can, even if you have to give some on the interest rate.
  2. Check credit. Even if the buyer doesn’t have great credit, you can still offer the owner financing. Poor credit will help you get better terms. Just keep in mind that if your buyer has very poor credit, you may not can sell your note.
  3. Find an attorney knowledgeable in not just real estate but in owner financing transactions.
  4. If you are selling a commercial property and the buyer is buying through a corporation or LLC, get personal guarantees.
  5. No side agreements.
  6. Be sure the Mortgage, Deed of Trust and Note are recorded immediately after closing.
  7. Have your buyer pay for a Lender’s Title policy.
  8. Be sure they have a paid up homeowners insurance policy at closing listing you as the mortgagee.

That about it. If you want to sell your note shortly after closing, check with me before finalizing the terms. We are no seasoning note buyers. You can often sell a note with no seasoning. However due to banking regulations, we require one payment to be made. We are available 7 days a week at 1-877-655-5625. Ask for Ron.

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