I need some quick and specific help on how to sell a property using owner financing. There are tiny details that I want to be clear on. The questions I have:
- Is their an addendum that reflects the terms needed to go along with the contract?
- How would you require the buyer to make the payments every month? (send a check, direct deposit, escrow company, etc.)
- What documents get recorded? The buyer should not get a deed since I am financing, right?
- If the buyer gets the deed, how can I place a lien on it? Do I even place a lien on it?
Thanks for your feedback.
You will want some help from a local attorney to get the documents setup - at least the first time. Then, it's always nice to find someone that will do the payment processing.
With seller financing, the buyer get's the deed, and depending on your state, a lien will be filed. If you want to hold onto the deed itself, then you are looking for a similar arrangement called "contract for deed". Sometimes that is a better alternative since you can evict for non-payment instead of going through the foreclosure process.
Dang Jean, you were doing so well.....until you got to land contract. That's how things worked in the old days, file a deed and tell them to get out. No more! Even in states that use that contract, the buyer can put you in court for a wrongful foreclosure circumventing foreclosure laws, such as in Missouri. Since you don't have a trustee agreement for a foreclosure you end up in a judicial foreclosure, even worse. Some states require a judicial foreclosure. Land contracts or contracts for deed are also mentioned in the installment contracts under the Dodd-Frank and SAFE Acts, can't write these like we use to in the old days.
Jean was right about you seeing an attorney, in Mo. you will have a note and deed of trust, have the attorney advise on servicing the loan, that can get you into trouble to, to the extent that if you mess up in collections you can lose the note and get fined. Let your attorney take care of collections and a servicer take care of the payments.
Plenty to read in the forums on the questions you asked, dig a little, we can't keep repeating the same ultra basic stuff over and over, thanks. :)
Join the Largest Real Estate Investing Community
Basic membership is free, forever.