Why offer owner financing when you sell? A higher price, to start with. Add to that a good return on your money, a faster sale, and an easier sale of a “problem property.” Good reasons, but how do you do it safely?
1. Ask for a large downpayment. This is the most obvious way to be safe, but not always possible. The point of owner financing is to help the buyer get the property, and downpayment is one of the areas most buyers need help.
2. Ask for other security. If a buyer wants it with little down, and you like the return you’ll get, make it safe by putting a mortgage on other property that the buyer owns. Agree to release the mortgage when they’ve paid down the balance to a certain level.
3. Credit checks. Ask them to pay for and bring you a credit report. Bad credit might be okay, but type of bad credit is important. An unpaid hospital bill they’re disputing is obviously not as relevant as their unpaid loans.
4. Use your instincts. Are you usually right about people? If so, give some weight to your judgement of your buyer’s character. Personally, I’d trust a man who felt morally obliged to pay his debts over a playboy that happens to have decent income at the moment.
5. Look at the whole picture. Let’s suppose that a bank will loan your buyer 90%, and is okay with you taking back a second mortgage for up to 5%, allowing the buyer to get in with only 5% down. If you’re getting 6% more than you expected by accomodating the buyer’s needs, where’s the potential loss? You’re okay if he never pays, right?
6. Talk to a lawyer. In some areas it may take two years to foreclose on a mortgage through the courts, and only six months to foreclose on a “contract for sale.” Knowing these things can help you structure the deal in the safest way.
Owner financing makes it easier to sell, and to get a higher price. You just have to be safe about it. Let a real estate lawyer review your paperwork, and use the tips here.
'The attention to detail and professionalism that Troy and his staff brings to our contract drafting process is unmatched. It’s a rare occurrence to find a law firm that cares as much about your legal protection as you do. But, Doucet Co. LPA is that law firm."
Mr. Doucet and his staff handled two foreclosures and a related matter for me. I found everyone in his office to be professional, effective and responsive. Everything he handled for me got me the results I expected. I highly recommend Doucet Co., LPA.
As an attorney and former client of Doucet Co., LPA, I was very impressed with the representation of Troy Doucet and his firm. I would recommend him to all who face difficulty in saving their home or getting cooperation with their mortgage companies.
If you need legal assistance regarding foreclosure, I urge you to consider putting your complete trust in Doucet Gerling. They will employ their vast knowledge and expertise on your behalf and work to attain a great outcome for your individual needs and situation.
"Troy Doucet is one of the most gifted attorneys that we have ever had the pleasure of dealing with. He treated us with kindness and generosity. We were most impressed with his integrity and high sense of duty to us. If you are looking for an attorney to get the job done we highly recommend Troy Doucet. Our family can never thank him enough for getting our foreclosure problem solved."
My company has worked with multiple law firms in the past, but none have come close to matching the quality we are seeing from Doucet & Associates. If you want an attorney who has a deep understanding of both the legal system AND business, hire them – you won’t be disappointed.
"Mr. Doucet worked wonders in my case. He stood up for me when I felt overwhelmed and helpless and kept my credit rating and future intact. Thanks you so much for helping me and my family."
"My family and I would like to send a thank you with sincere gratitude for all the time, hard work, and long hours set a side daily to represent and speak on our behalf during a very challenging time in our life. Our success is a reflect of your commitment. Thank you Troy Doucet & law firm."