The risk for you is low: if your buyer stops paying, then you can foreclose, and sell that property again to someone else. You'd also earn a much higher ROI selling with seller financing than you would with selling for cash and depositing your proceeds into your bank account (to earn that measly < 1% annually). Plus, there are some potential tax benefits that you could gain by selling with seller financing (which you'll need to consult with a decent CPA on that).
Court costs are likely to eat up the whole 20k unless some miracle happens. I would personally do everything you can to stay out of court.
Good luck and call me next time you want to sell something.
Please let me know how it turns out via email. TheOahuAgent@me.com
The Oahu Agent
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The management costs will run 10-20% unless they are local and managing it themselves.
The taxes will be both TAT and GET, so more than 16%. That's a lot of money going out. Who is managing it now, you?
When you say "there was no contingency in the contract" what do you mean? Normally there is a contingency for financing.
I hope it works out well for you.
I was just thinking the same thing. Is it called Agreement of Sale? Anyway, I calculated the case of owner financing. By the way, this sell is for an investment property (short team rent). According to my calculation, the buyerâ€™s monthly rent income can be negative with smaller down payment than 35-40% down (TAT tax is higher etc). I see he has 15% down (which is in escrow now) and I am not sure if he has another 20% in cash. If monthly rent income becomes negative for him, I can easily imagine that the monthly pay back to me can be tough for him which is risky for me. But thank you so much for the idea. I was thinking of it too and was studying about it. If he can find another lender or third buyer in 3-5 years, and if he can keep paying to me by time (balloon payment?), it may work- Am I correct?
Thank you very much for your advice. I know a good real estate professional. Probably his advice would not be cheap, but I will consider to see him if the buyer dose not sign. But I notice that the buyer put a lot of money in escrow besides the deposit. If the buyer dose not sign for cancellation, he cannot take out the fund either. I do think, the buyer will sign. I will be more careful next time.
First, I am very sorry about your situation. To veterans in the business of real estate "Cash Buyers" always send up red flags...just as you have found.
1. The only person who can advise you should be a real estate professional, preferably an attorney, who has reviewed all the documents.
2. Because you started this on your own, without professional representation, you should know that you may have to pay for the advice.
As a note for future transactions, Realtors are worth their compensation, otherwise we would not have been in business as long as we have.
Good luck to you.
Note: Good advice is not cheap, and cheap advice is rarely good.