Have been renting house for 7 yrs and now owner would like to sell it to us with owner financing. I know the place inside and out. Where do we start?

Asked by Jinak, Sand Point, AK Fri Jan 13, 2012

There is no current mortgage. It is a rural area, and the owner built it over the years himself. Since living in the house I have done enough repairs in exchange for rent that I know the place inside and out. There is a small studio apt where the owner stays when he comes to the area for work, however he is semi-retired now. He would like to structure a purchase agreement that will allow him to continue to stay in the apt periodically if he comes to the area for work. Which is okay with us, although we would also like to be able to use the studio for guests if he is not there. It has been very difficult to find information about doing a private deal such as this. We have a great long term relationship with the owner and want to act on this immediately.

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allan erps,A…, Agent, Pearl River, NY
Fri Jan 13, 2012
The CMA can best dertermine a fair market value for the home and surely the owner at whatever price will save commission off of that number. Both sides if acting fairly can surely make the deal!
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Anna M Brocco, Agent, Williston Park, NY
Fri Jan 13, 2012
If you don't plan on working with an agent, do consider consulting with an attorney who specializes in real estate for all related paperwork...
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Roland Vinya…, Agent, Sprakers, NY
Fri Jan 13, 2012
If your relationship is as good as you say, I don't think you need an agent - assuming you have already agreed upon a fair price for both of you. But you will need an attorney. You might even ask the attorney if he would represent both parties. Some will, some won't, and both have their reasons. The attorney will guide you through the process. Get a Purchase Contract form from him, fill it out, run it by him for corrections before you sign it. Make sure everything you have agreed upon is in writing and is down there or in an Addendum.

Many years ago, I nearly applied for a job in Unalaska - thought it would be a neat address (among other things).
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Marge Bennett, Agent, Fort Myers, FL
Fri Jan 13, 2012
If you use a Realtor, offer to pay for the market analysis, since they won't be making a commission off the sale or hire an appraiser. Ask them to determine market rent for the studio too.Then have an attorney draw up the contract once you have come to an agreement on price and terms with the seller. You can use one of the market calculators to determine monthly payments based on interest rate and term length. Sounds like it could be a sweet deal for both of you or a potential nightmare if you both want the studio at the same time.
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Kathi Olmste…, Agent, Eagle River, AK
Fri Jan 13, 2012
Because of the rural nature of this property, I would recommend that:
1. See if there is a local attorney who can structure this sale as both of you require.
2. See if a local agent can do a market analysis so you are confident on agreed price.
3. Allow the seller access to the studio if you like but you should talk to the attorney about a specific time frame so if it ever becomes necessary to rent or use it for your own purposes you don't end up with a conflict. As he is semi-retired he may only need it for a few years but you need to limit that I would think. Talk it over with him and determine his long term needs and if it will work for you. Once you are totally in agreement that the information ..an attorney can incorporate in your contract. 1st National Bank has a branch out there and you can set up you escrow account through them. Your local title company can do docs and be sure you have a Title search and policy that guarantees you free and clear title to the property.
As you have a great long term relationship with the seller good communication about your mutual goals should be your priority and while owner financing can be a perfect option for you... be sure you know beforehand about your ability to resell down the line. Once you totally agree to how to structure it be sure its all in writing as your attorney will advise and good luck!
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Chrissy Dou…, Agent, Cabot, AR
Fri Jan 13, 2012
If you would like to purchase the home then I would suggest getting a local realtor to do a market analysis to make sure you are not paying more than market value for the home or you can always pay for an appraisal also.
Once you determine a price that is acceptable to you and the home owner I would contact a local attorney or Title Co. to handle the paper work and legal aspects of the closing.
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Melia and Ol…, Agent, Rancho Santa Fe, CA
Fri Jan 13, 2012
Hi Jinak,

Is there a Realtor you can talk to in your area? The first place you can start is sitting down with your Realtor and discussing the home's value, getting a comparative market analysis, and putting together an offer. Then present the offer to the owner.

Good luck!
Web Reference:  http://www.theindras.com
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