first off, I appreciate all help. I'm entering into my first seller finance transaction. I'm the seller. With the potential buyer, we've verbally agreed to a purchase price, length of term for seller financing (less than 1 year), down payment amount, and monthly payment amount. I intend to take the house back if the purchaser misses a payment or doesn't payoff the loan in the agreed upon time frame (purchaser forfeits all funds at that time). Is that the normal expectation? Also, what more needs to be in the written paperwork to cover my rear?
I have a realtor Friend who I asked about this. They are adamant the purchaser needs to provide a proof of funds letter when we sign the seller finance agreement. That seems odd to me. Purchaser says they are closing on another property right now, and as a result won't have financing until the agreed upon time for purchaser to payoff the remaining balance.
Anyone experienced individuals want to throw in their two cents?
Thank you in advance.
helping another investor through something like this now. it is not going well. while these deals can often go well please remember that if they miss a payment it is not as simple as evicting them. you may have to do a foreclosure to get back possession which can take multiple months so if you owe anything on the property make sure to have money set aside for the months it could take and if things go smoothly you will just have some extra cash for your next purchase.