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Asked by MN/FL HOMEOWNER, Andover, MN Fri Jul 30, 2010

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Answers

9
Susan Hoffla…, Agent, Shoreview, MN
Mon Apr 4, 2011
Hi, JD!
Seller financing might work for you to BUY another property, but not for you to sell. Is that what you meant to ask about? Just want to make sure. Let us know how you did!!!
Web Reference:  http://www.homestosellmn.com
0 votes
Eric Redling…, Agent, Maple Grove, MN
Wed Mar 30, 2011
Sell the house to someone else but you do the financing for it. Try to get some money down to make it worthwhile.
0 votes
Tamara Schus…, Agent, Naperville, IL
Sat Mar 26, 2011
Seller financing is usually when the seller plays the bank and holds the " Mortgage note" and you do not receive title to the home until it is completely paid off. They use to call it land contract. However this is not in a forecosure situation.
0 votes
Scott Hutchi…, Agent, Lakeville, MN
Fri Aug 13, 2010
What some people in default are doing is selling their house on a short-sale and buying it back from the investor via contract for deed or rent-to-own. With this said, there are some concerns about how you do this, so be careful.

Scott Hutchinson
Edina Realty
scotthutchinson@edinarealty.com
http://www.scotthutchinson.edinarealty.com (search all "MLS" listed properties)
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Real Estate Blog: http://www.trulia.com/blog/scott_hutchinson/
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0 votes
Keith Manson-…, , Milwaukee, WI
Tue Aug 3, 2010
Not sure why someone would suggest seller financing if your worried about foreclosure. Seller Financing is where the person selling the home provides the financing and typically does this with a contract for deed which has little to safety clauses for the buyer. The typically contract for deed can start foreclosure with one missed payment and does not have the same regualtions as a mortgage. Also if the seller has a loan and sells the property with a land contract, the underlining lender can inforce the due on sale clause in the mortgage to start a foreclosure.

Best to stay with a normal transaction unless you have credit issues that prevent you from getting a loan.


Keith Manson
First Weber Group
Certifed Distressed Property Expert
Metro Milwaukee

http://www.milwaukeebailout.com
0 votes
Susan Hoffla…, Agent, Shoreview, MN
Sat Jul 31, 2010
John,
I was going to answer you last night about your dilemma. I think what Rachel means is the "buyer" pays to you not the "seller". In this instance, YOU'RE the seller.

Seller financing does mean the seller is like the bank, allowing the new buyer to provide you with a downpayment amount and then pay you monthly payments, which creates a new mortgage. It's called Contract for Deed. This mortgage must be registered with the county when the closing happens.

The problem for you, as the seller, is that if your current bank says you can't do that without paying them in full. There are some loans (most loans) that have a Due on Sale clause. That means you cannot create a new mortgage for the property with someone else (meaning you holding the mortgage) while this current mortgage still exists. So, if you're going to do that and you have that clause in your current papers, you will need to pay off the current mortgage to create your CD. I think that might not be possible for you right now since you're talking about foreclosure, right?

Good luck, John!
Web Reference:  http://www.homestosellmn.com
0 votes
CCC, Home Owner, San Diego, CA
Sat Jul 31, 2010
Seller Financing: Seller playing to be a Bank. There is an interest rate and payment schedule.

Contract for deed froms for Minnesota: (middle of the page)
http://www.state.mn.us/portal/mn/jsp/content.do?id=-53688135…

A great link from U of M:
http://www.extension.umn.edu/distribution/businessmanagement…

Most of the time a Contract for Deed most be done when there is no Note lien on the property or Seller must ask the bank if they will allow to "Sell" the property in a contract for Deed. No Note means paid off. The reason is because some or most Mortgage will have an acceleration clause to request Seller to pay off the Mortgage/debt.

Also, this is done mostly because Buyer can not get Mortgage Financing and is in need to buy a property.
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Rachel Luckow, Agent, Savage, MN
Fri Jul 30, 2010
It means the seller is making payments to you and then you make payments to your bank. There are some hurdles though depending on your loan documents, whether there is a due on sale clause, that your bank might be willing to discuss rather than take the house back in foreclosure. Another option is a short sale and that will still mar your credit. This is rather complicated and you should seek the advice of a Realtor trained in distressed sales, I am a CDPE and have been trained to help hoomeowners in distress.
Web Reference:  http://www.RachelLuckow.com
0 votes
Ryan Smith, Agent, Murrieta, CA
Fri Jul 30, 2010
Hi John doe,

Seller financing is when the seller holds the note on the property, kind of like a private bank. You and the seller negotiate the terms and you pay them just like you would the mortgage to the bank.

Hopefully this helps!

Chris Blasic
Realty World & Associates
0 votes
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