Is owner carry financing a good idea in this market?

Asked by Kathleen Dunn, Riverside, CA Sun Aug 3, 2008

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6
Mike Kelly A…, Agent, Santa Rosa, CA
Mon Aug 4, 2008
I'd be very suspect about owner financing in the Riverside area. I just think it is rife with all sorts of con games. Even in our area of Santa Rosa we've been seeing the vultures come in, talk a family facing foreclosure into deeding over the property to them only to find out they quickly rented out the property, didn't really "record" the deed, collect first,last, "option money" to some unwitting first timer on a "lease-option" at a super price, not make one payment, and then try to do a short-sale while all the time stalling the Notice of Default to keep getting rent!!
Or just trying to sell a property with an All-inclusive-deed-of-trust or "Contract of Sale" just to generate "cash" in the form of higher than normal payments with the enticement of homeownership. I'd be VERY CAREFUL!! Every market has the vulture which knows how to lure its prey into their trap.
0 votes
Mia Gloor, Agent, Mariposa, CA
Sun Aug 3, 2008
Absolutely!!!!!!!!!!!!!!!!! What could be a more attractive and positive outcome for all involved.
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Keith Sorem, Agent, Glendale, CA
Sun Aug 3, 2008
Kathleen
Particularly in your market, yes, I think it is a great option. I would suggest that you discuss details with your CPA and Realtor. You may also want an attorney to review legal documents drawn up to arrange the financing.
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Leonardo Mon…, Agent, Rancho Mirage, CA
Sun Aug 3, 2008
Hi Kathleen,

That depends on if you are the seller or the buyer and what qualifications the buyer has or does not have. If the buyer has trouble getting a loan then an owner carry back financing is a good idea because it makes it easier for both parties to get into contract. In one hand they buyer can get in the home he or she wishes and on the other hand the seller can sell the property faster then otherwise. Again both parties should be fully aware and advised when getting in such a deal. Good luck!
Leonardo
Web Reference:  http://www.leonardoteam.com
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Sean Giorgia…, , 92553
Sun Aug 3, 2008
If you're the Seller, seller financing is a great option.

But if you're the Buyer, Seller financing in this market is a lot like charging $49.95 for parachute pants in the 90's. At first it sounds great, but you pay more than you thought for something that's worth less than you thought.

Seller financing solves two problems: (1) the Buyer can't get a better loan; or (2) the Seller can't get the house to appraise so she finances the difference. If you're okay with either - or both - of those possibilities then it might be something to consider.

Thanks for the opportunity to help. You can contact me directly at 951-571-9229 or sean.giorgianni@gmail.com if you need anything else.
Web Reference:  http://www.frclsrtv.com
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Homa Moaddel, Agent, Foothill Ranch, CA
Sun Aug 3, 2008
Hi Kathleen,

Yes, it could be if you could get a great interest rate and if you can not get a better loan somewhere else. Seller with equity are started carring financing because it is getting more difficult for buyer to get loans.

Homa
Broker Associate
Prudential California Realty
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