Owner Finance Agreement

[Tom Palmieri]

I have not used an owner finance deal in the past and have a question on a possible deal I am working. The deal is an owner finance proposition for 10 acres of land. Asking price is 330,000.00. Owner wants 10% down at 6% interest for 24 months whern a balloon payment will be due. 

My question is, would this be amortized or straight 6% monthly? And, will I receive deed on the property so I can subdivide it?

Thanks for your input.

[Chris Seveney]

@Tom Palmieri

These are questions for the lender on how they structured it. I would not do a contract for deed I would want it in my name like a traditional closing

[Ben Zimmerman]

With an owner financed deal there are really are no rules, its simply a matter of what the two of you can agree on.  

If you both agree that it is amortized then that's exactly what it is.  If you both agree that it is straight 6% interest only followed by a full balloon payment then that's what it is.

Just make sure the contract is clearly worded such that both parties fully understand the terms and conditions.

[Tom Palmieri]

Thank you for your reply. My concern is that I will need to divide the 19 acres into 10 lots. Which I assume the deed will have to be in my name? I haven't done an aquistition like this so I am not clear if the seller holds the deed?

And if the seller wants to hold the deed, I assume I need a contract with them so i can pay the surveyor, record the deed of the divided property, while the deed is still in their names? In other words, I have one contract for purchase and another for land division with everything transfering to me at the ballon closing? 

[Eliott Elias]

The title company you work with should have an attorney to draft up all this paperwork.