Updated over 7 years ago on . Most recent reply
Seller Financed Offer help
I’m looking to try to put together my first seller financed deal and looking for some guidance / advice. I know there isn’t a cookie cutter way of putting together these deals, but looking to cover some of the steps and how they should be approached. I have a good feel for the numbers, and presenting them, but would like to know the following:
Seller’s mortgage amount / title work. Prior to signing any paper work, do you run title work like you would on any other conventional deal? I would assume this to be the case to make sure everything is legit and without issue, but this is my first transaction and wanted to get information on how others handle the “closing” and verifying of information.
Refinance. My initial proposal I'm planning is a short term deal (5 – 10 years) with payments of P&I to the seller. After "X" amount of years I would like to refinance to pay the balance to the seller (once I'm at the LTV % for refinance). The issue I'm running into is the lenders I've spoken to say I have to have title in my name in order to refinance. Makes sense, but not sure what type of contract to propose to the seller since a land contract doesn't seem like it will allow me to accomplish what I want to with my refinance. Not sure if some lenders will refinance if the deal is a land contract, if I need to research alternate contract types, or if there is a clause I can use at a certain point in time title is transferred, etc.
Please feel free to share any additional steps you take in doing seller financed deals, as well as input to my questions. Thank you for any advice provided.
Most Popular Reply
@Greg Neuman If you do what you're proposing on land contract, you wouldn't be technically refinancing in the bank's eyes, you would be purchasing at that point.
Personally, when purchasing with seller financing, I don't like to ever purchase without deed transfer, or at least using a deed of trust. So, I do not like to use a land contract.
Just contact a local real estate attorney and they will be able to help you. I wouldn't recommend trying to do this on your own without an attorney, especially your first seller financed deals.
Good luck!!