So owner financing is like I would still have a rental property? Bummer! Really wanted to get out of that.

Asked by Genevieve, 78237 Fri Nov 11, 2011

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BHHS- Don Jo…, Agent, San Antonio, TX
Mon Nov 21, 2011
No, seller financing is an agreement in which the seller is a lien holder. In Texas you get the deed and their is a deed of trust created that allows the seller to foreclose if you default on the terms agreed upon.
2 votes
Greg, Both Buyer And Seller, San Antonio, TX
Sat Jun 30, 2012
Kelsey, Brian, & Jason make very good points. Just make sure you do your due diligence and any background checks on the potential buyer. Jim has a good point in that the transaction "may" or may not trigger the mortgage company's "due on sale" clause, however, there is no "due on sale jail"--meaning there's no threat of jail time if the clause is exercised by the mortgage company, it just means that they're now expecting the entire balance due as it appears to them that you're trying to resell the property. Another consequence (if mortgage co. was not informed, the transaction could be seen as trying to conceal the transaction which could be looked upon as mortgage fraud--and at that point there could be stiff fines brought about).
The process can still be done successfully and legally (with the help of a knowledgeable & ethical Real Estate attorney who is well-versed in "asset protection"). I happen to work with one of the best.
I can help you out. Give me a call.
0 votes
Jason Campbe…, Agent, San Antonio, TX
Mon Apr 23, 2012
Actually... seller financing is only similar in that you will be receiving payments... which I hire a third party to do for me.. a company like Note Collection Services will take care of all of that for you. Worth every penny.

You are earning interest now, front loaded like the banks do. If you carried the note for 30 years, you would earn pretty close to 3 times the value of the home.

My grandfather used to say... "Rich people earn interest, and poor people pay it." Now you get to be the bank making all the money.

And if they don't pay... you foreclose on the property... and sell it again.

But, unlike the landlord... when the toilet does not flush at 2:00am... you won't be getting a phone call. :)

It's not a bad deal at all. It almost makes you wish you had a ton of homes that you are owner financing... doesn't it :)

Jason C Campbell
Option One Real Estate
210-389-5266 .
0 votes
, ,
Mon Nov 21, 2011
Actually owner financing is nothing like being a landlord. And it has its own set of problems. If you already have a mortgage on the property an owner financed transaction may trigger the due on sale clause in your existing mortgage. Problem #2, do you really want to finance a buyer that has been turned down by the bank? Do you have more money to lose than the bank?
0 votes
Brian Rayl, Agent, Dallas, TX
Fri Nov 11, 2011

Owner financing is not like having a rental property. You still have to collect the payment each month, but you are now the LENDER instead of the LANDLORD. You are not responsible for repairs or any of that fun stuff. You just collect the payment (with interest). If they default on the note, then you foreclose on them (as opposed to eviction).

Owner financing can be quite lucritive and there are many investors who make a lot of money doing that. You sell the home for more than what it is worth, and charge a high interest rate and collect a big down payment.

Lets say market value for your home is 90k. Sell it for 100k, require a minimum of 10k-20k in cash as down payment, then finance the balance over 20 years at 12% interest rate. Just make sure you do your own credit, background, and employment checks. Your real estate agent should be able to help you with everything except for drafting the loan documents. A real estate attorney would have to help you with that.

Best of luck!

Brian Rayl
Keller Williams Elite - Dallas
0 votes
Ron Thomas, Agent, Fresno, CA
Fri Nov 11, 2011
Someone is trying to talk you into carrying the paper on your home?

You shouldn't have to do that: They probably can't qualify for a Bank loan and they want you to carry them.
If you don't want to do that; tell your Realtor "NO".

Good luck and may God bless
0 votes
Joseph Runfo…, Agent, Staten Island, NY
Fri Nov 11, 2011
Seller financing, when an owner offers a buyer a mortgage on the property being purchased. As lending conditions have tightened and the market has slowed seller financing is a great alternative to traditional methods. Typically the owner agrees to transfer title in exchange for a note and interest in the property. The seller takes the place of the bank. It can be simple and straightforward. It is NOT the same as a rental property. You need to consult an attorney.
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0 votes
Heather Wrig…, Agent, The Dalles, OR
Fri Nov 11, 2011
Have you received a market analysis of your property? You should speak with a real estate agent regarding the option to sell. That would get you out of being a landlord. Just an option. Not sure if you have explored the option of a property management company. They handle everything for you. That could be a great relief if selling is just not an option. I wish you the best of luck!
0 votes
Johnny Huang,…, Agent, Walnut Creek, CA
Fri Nov 11, 2011
Owner financing basically makes you become a lender. If you want out, sell your note and position for cash.
0 votes
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