2 Questions regarding seller financing in california

Member since 2023 · 1 post · 0 votes

Hey guys my name is Nathaniel Ponce and I’m a real estate agent here in California working Orange and LA county’. I have been watching Pace Morby’s videos on creative financing seller financing and things like that and I am completely inspired and fascinated. I just had 2 questions and I am hoping somebody could answer them.

1. When the IOU is made and the monthly payment is established where does the the monthly payment get sent to and how do commissions get disbursed ?

2.In california is there any specific law or anything that affects seller financing ?

0 Reply

13 views

Most Popular Reply

Jeff CopelandBusiness Member

Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes

It's a bit more formal that an IOU. Seller financing normally includes a recorded mortgage, and a promissory note (or a deed of trust in some states). Realtor commissions on the sale are paid out at closing. The type of financing the buyer uses does not affect the realtor commissions. Bank of America could be the lender (n the case of a conventional of commercial mortgage), Joe The Seller could be the lender (in the case of seller financing), or Hard Money Mike could be the lender (in the case of the hard money loan or any other type of private financing), or the buyer could pay cash. None of this affects the commission.

As a realtor, you don't really need to be intimately concerned with the state laws and types of documents used - These will be prepared by an attorney (often in conjunction with a title company) just like they are for any other type of financing.

You just need to negotiate the seller financing terms in broad strokes.

Check out https://www.biggerpockets.com/... for a more in-depth overview.

Copeland Morgan LLC4.770 Reviews

Website View Page

1 Reply

See this reply in the discussion

3 Replies

Jump to latestLatest

Sort by

Jeff CopelandBusiness Member
Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
3y
It's a bit more formal that an IOU. Seller financing normally includes a recorded mortgage, and a promissory note (or a deed of trust in some states). Realtor commissions on the sale are paid out at closing. The type of financing the buyer uses does not affect the realtor commissions. Bank of America could be the lender (n the case of a conventional of commercial mortgage), Joe The Seller could be the lender (in the case of seller financing), or Hard Money Mike could be the lender (in the case of the hard money loan or any other type of private financing), or the buyer could pay cash. None of this affects the commission.
As a realtor, you don't really need to be intimately concerned with the state laws and types of documents used - These will be prepared by an attorney (often in conjunction with a title company) just like they are for any other type of financing.
You just need to negotiate the seller financing terms in broad strokes.
Check out https://www.biggerpockets.com/... for a more in-depth overview.
Copeland Morgan LLC4.770 Reviews
Website View Page
1 Reply
Caroline Gerardo
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
3y
IOU is not seller financing and if you are licensed and advising this you need a chat with your broker.
Dodd Frank, Truth in Lending Laws, Disclosures, SAFE Act, Fraud are a few topics to research...
0 Reply
Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
@Nathaniel Ponce
You will want to use a licensed servicer to handle payments and all tax forms
7e investments53 Reviews
Website View Page
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.